From managing new regulations and arrests to success stories, forced labor was a top topic at the Fashion Industry Association of the United States’ 2022 Apparel Importers Trade and Transportation Conference.
Most important for the industry is the Uyghur Forced Labor Prevention Act (UFLPA), which came into force in June and targets products linked to China’s Xinjiang Uyghur Autonomous Region (XUAR). But the general problem is global. Citing the Department of Labor’s 2022 report on child and forced labor, Janet Labuda, head of compliance at Maersk Customs Services, said 78 countries are involved. She added that supervision of forced labor has now extended from finished products to component production. These findings and more were discussed at the Fashion Industry Association of America’s 2022 Apparel Importers Trade and Transportation Conference earlier this month.
Labuda expects “more compliance activity” in the new year. “There is bipartisan political pressure to strictly enforce the law,” she said.
Mark Jaeger, Vice President of Stakeholder Engagement at WRAP (Worldwide Responsible Accredited Production), noted that Germany’s Supply Chain Law will soon come into effect, requiring companies to do due diligence and take action. to fix any issues across your entire matrix and more broadly. in Europe, an EU directive will establish similar sustainability responsibilities for companies.
“If I were to say what is the transformational trend that I see for the fashion space, I would say…it’s the movement from voluntary to mandatory compliance when it comes to issues of social compliance and forced labor,” Jaeger said.
AnnMarie Highsmith, executive deputy commissioner for commerce at US Customs and Border Protection, explained in a keynote address that the agency’s efforts to address forced labor go beyond the seizure of assets. “If violative or inadmissible merchandise reaches the border, we have already lost that battle,” she said. “Our goal is to prevent that merchandise from reaching the border in the first place, but really to prevent that merchandise from being manufactured in the first place.”
Earlier this year, CBP worked with civil society organizations to address forced labor at a garment factory in India. In line with its mission to change manufacturing practices, CBP also restarted its factory visits last fiscal year.
UFLPA
UFLPA established a rebuttable presumption that all goods manufactured, at least in part, in the XUAR are prohibited from entering the US.
Customs attorney Arthur Bodek, a partner at Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, said forced labor has gone from something that rarely came up in his three-decade career to an issue that now occupies half of his workday.
Bodek noted that a “pragmatic problem” with the UFLPA is that when Customs detains goods, it focuses on an entire entry line. However, in fashion, that line could span dozens of SKUs, all of which potentially have different manufacturing processes. “We have had some back and forth with Customs as to whether there is any rational way to segment risk. Even within that line, maybe half has no connection to China at all, we don’t need to look at that, and just give us the other half,” he said. “And that is an ongoing conversation. But certainly, CBP has not made any concessions in that regard.” He added that to improve efficiency, “it would be in everyone’s best interest if CBP identified which link in the chain caused them to stop.”
Robert Chin Quee, SVP of US Customs Brokerage Products at Geodis, noted the three options companies have when holding goods: they can contest the hold, export the goods, or destroy them. He cautioned that companies need to ensure that the Manufacturer Identification Code (MID) is unique and truly signifies their factory supplier, as it is possible that the formula used will generate the same code for different carriers. “You don’t want your MID to represent someone that Customs was targeting for detention or for any other issue,” he said.
To help the industry navigate the new requirements linked to this law, Customs is developing digital aids. One will be an interactive tool, expected to launch in early 2023, that will display data on the quantity and value of target goods in each industry, allowing importers to see where there is higher risk and compliance. Other additions will include a chatbot, videos and expanded information on forced labor on the agency’s website.
CBP received $8.3 million in funding to implement UFLPA-related technology, $5 million of which was allocated to agency laboratories for DNA genotyping of cotton. Genetic fingerprinting is already being used for other crops, such as saffron, but CBP is exploring how effectively it will translate into apparel, even if it can meet scale, speed and cost requirements.
The agency is also testing artificial intelligence and machine learning solutions that could help improve its targeting.
traceability
Supply chain visibility is now critical to navigating the UFLPA, as well as other due diligence laws. “You have to know and understand your supply chain. You have to be informed about where you are manufacturing and buying products,” Jaeger said. “It won’t stop at Level 1; it will have to go upstream and you will need efficient processes to do it.”
Labuda also pointed to the need for a better understanding of the supply chain. “There is very little ability to track trade data through supply chains,” she said. “I think we are going to start to see some changes, as we usually do when we have a legal dynamic. We know that people try to circumvent, and I expect an illegal transshipment to occur. And we need something that gives us information about how the goods are moving.”
One solution that aims to bridge this data gap is Altana AI, a platform that combines shipping and logistics information with corporate record data to give entities a better understanding of supply chains. For forced labor in particular, geolocation details can help identify which facilities might be located in the XUAR and which providers are connected to them.
“We are really working very closely with regulators as well as with companies to really break down the divide between the public and private spheres, so they can more proactively mitigate forced labor and have productive conversations regarding trade,” he said. Kristen Daniels. , Business Development Lead at Altana AI.
uzbekistan
Since 2007, the Cotton Campaign has worked to eliminate forced labor in Uzbekistan’s cotton harvest. At the time of the organization’s founding, around 1 million adults and children were being forcibly recruited to pick cotton. One of the efforts of the Cotton Campaign was the Company Pledge Against Forced Labor in Uzbekistan’s Cotton Sector, which was signed by 331 retailers, including American Eagle Outfitters, Gap Inc., Levi Strauss & Co. and VF Corporation, who agreed to boycott Uzbek cotton. .
In the 2021 harvest season, the Uzbek Forum for Human Rights found no evidence of systemic forced labor in the country. As a result, the Cotton Campaign has ended the compromise, opening the door for companies to once again source cotton from the country.
“That boycott that you joined played an absolutely critical role in getting the message across to the government of Uzbekistan that it would not be able to fully participate in and benefit from the global cotton trade, investment flows, industry and would not have full access to markets. . in certain countries, especially the United States,” said Bennett Freeman, co-founder of the Cotton Campaign, in a virtual address to the audience.
Abby McGill, program officer at the workers’ rights organization Solidarity Center, which is a member of the Cotton Campaign, warned that despite success in Uzbekistan, state-imposed forced labor remains a problem in Turkmenistan and orders exist retention for the cotton produced there.
In Uzbekistan, the Cotton Campaign continues to work to improve working conditions and human rights. This includes engaging the government on issues such as freedom of association, collective bargaining, and creating channels for workers to file grievances. “There is still a long way to go to create the fully enabling environment that responsible apparel brands and others in the industry expect to start sourcing from a new country,” Freeman said.
“WRAP is already working to provide social compliance verification in Uzbekistan for those factories that are very interested in meeting global standards to export to the US,” Jaeger said.
McGill suggested building from the “bottom up,” first by making sure workers understand their rights. Another piece of the puzzle in establishing more responsible material sourcing, including traceability, is demand. She noted: “Growers on the ground need reassurance that there will be a market for those products that will probably be a bit more expensive to have all these monitoring mechanisms in place.”
Source: news.google.com