Uyghur Forced Labor

Prevention Act

What is it?

Customs and Border Protection is planning to hire 300 full time personnel to enforce UFLPA.

The genocide and forced labor have been thoroughly researched. As described in the US State Department’s fact sheet, the mass detention and political indoctrination campaign has been ongoing since 2017. The Uyghurs are predominantly Muslim and have been forced into state-run internment camps along with other ethnic and religious minorities. These camps are based throughout the Xinjiang Uyghur Autonomous Region. The Xinjiang region is about the size of six Californias, situated in northwestern China.

President Biden's historic passing of the Uyghur Forced Labor Prevention Act (UFLPA)on December 23rd 2021 serves to protect vulnerable workers by prohibiting any goods, wares, articles or merchandise mined produced in whole or part within China’s Xinjiang Uyghur Autonomous Region from entering into America, unless they are able to prove through clear and convincing evidence that these items were not subjected to forced labor practices as specified by Section 307 of the Tariff Act of 1930.The DHS is cracking down on the issue of forced labor. Chairman Robert Silvers of FLETF has described it as a "top-tier compliance issue", and CBP is dedicating significant resources to actively enforce UFLPA laws, with close examination into any areas where suspected exploitation may be playing a role. A recent Wall Street Journal article serves to bring attention to this important matter - one that Boards and management teams need not take lightly considering its severe implications for those affected by such abuse.

Who does it apply to?

We often say at FRDM that you can’t fix what you can’t find. This means that the first step towards complying with any legislation is to know what you are buying, and who you are buying it from. While this seems simple, our complicated global supply chain has made it opaque.

For example, you may think that your organization is above board when purchasing ethically sourced T-shirts for merchandizing. But Xinjiang cotton accounts for 85% of China’s cotton production, which accounts for 20% of the world’s supply. Even if you import from other countries in East Asia, there’s still a substantial chance that the raw cotton came from forced Xinjiang production.

Using proprietary first-party data and an innovative product genome, FRDM can analyze your spend data to provide a predictive bill of materials, including upstream commercial connections to your business. With more spend data, like purchase level details, the deeper our analysis can go, telling you where your supply chain may risk being complicit with forced labor. Additionally, FRDM’s Xinjiang module lets you effortlessly see which of your suppliers are based in the contentious region.

You can also use FRDM’s trading partners module to trace second and third-tier suppliers (or beyond) to determine connections to Xinjiang. For example, you may believe that your solar panels are coming from Malaysia, but the polysilicon used to create the panel might have originated in China, exposing you to unknown risks. Until you know more about your suppliers and subsuppliers, you won’t be able to address these concerns.

Engage stakeholders and partners

Zero Tolerance Policies will not be enough for this requirement. CPB wants empirical evidence of engagement. Companies should be consistently communicating their efforts against the requirements to their board of directors, executive management, procurement teams, suppliers and trade associations. FRDM can track your communications and training with your stakeholders and partners and support you with dynamic reporting tools.

Assess risks and impact

CBP is pushing companies to get off their heels and onto their toes to play a more proactive role in risk management. FRDM was built for this specific need. FRDM assesses the risk of your entire supplier base to the nth tier without needing to engage your suppliers. Risk is measured by severity and proximity to your business, along with several filtering and sorting options allowing for the most intuitive workflows.

Develop a code of conduct

Responsible Codes Of Conduct (CoC)now include supply chain transparency and risk mitigation practices embedded into standard operations. If called upon by the CBP your company may be required to produce evidence of supply chain mapping and risk mitigation. Your CoC should include asking the same of your suppliers.

Communicate and train across supply chain

Addressing human rights risk in your supply chain is likely a relatively new activity for most of your suppliers. Communicating your expectations and providing them with resources is key. FRDM offers your suppliers with risk assessments, corrective actions, and training to both inform and guide their own responsible supply chain journey.

Monitor compliance

CBP now expects companies to monitor their suppliers’ compliance to human rights standards. This has historically been a checkbox exercise through supplier questionnaires during vendor onboarding or audits. Compliance now extends beyond just direct suppliers to any supplier in your supply chain. FRDM maps your suppliers and sub-suppliers and beyond to identify high risk industries, products, and commodities allowing you to track any supply hidden chain shocks.

Remediate violations

If a supplier is in violation, such as using a subcontractor located in Xinjiang, then CBP expects evidence of remediation. FRDM offers remediation workflows along with activity tracking tied to each supplier in your supply chain. All remediation activities are logged and archived for quick reference. Activity can be exported via reporting functionality as well.

Independent review

It’s becoming increasingly difficult for companies to assess risk using their own methods and standards. FRDM’s risk algorithm was designed to offer companies a reliable and dynamic third party review of their supply chain. Suppliers are risk reviewed daily instead of yearly like solutions that rely solely on questionnaires, providing you with best in class dynamic third party analysis.

Report performance and engagement

CBP expects all companies to stay ahead of risk if they want to insure their shipments avoid being seized at the border. FRDM offers several scoring and ranking tools to help track progress across a number of different measurements such as supply chain transparency, supplier risk, supplier performance, ect. All engagement with suppliers is tracked and archived on FRDM for easy access. FRDM also offers quarterly and ad hoc reports demonstrating progress over time.