UYGHUR
FORCED LABOR PREVENTION
ACT, united states
Why did the United States pass legislation around Uyghur forced labor?
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.
Customs and Border Protection is planning to hire 300 full time personnel to enforce UFLPA.
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.
US Department of Labor suggests eight steps to help stay in compliance:
(1) Engage stakeholders and partners;
(2) Assess risks and impacts
(3) Develop a code of conduct
(4) Communicate and train across supply chain
(5) Monitor compliance
(6) Remediate violations
(7) Independent review
(8) Report performance and engagement.
Global supply chain mapping with FRDM software
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.
Document due diligence
Once you know more about your suppliers and have a high degree of confidence in your data, you can choose to amplify that information by sending your suppliers a Self Assessment Questionnaire (SAQ) that gathers more information about how they do business. A subscription to FRDM gives you unlimited SAQs, so you can consistently send, assess, and report on your suppliers.
When completed, SAQs are added to your supplier file along with any other certifications or documents that you’ve collected. You can also share your insights with the supplier to work together toward addressing any gaps in the data and mitigating risks. Having a shipment seized isn’t good for you or your supplier, and by working together you can prove that you’re both doing your due diligence to combat forced labor wherever it happens.
While we don’t know exactly what evidence will be required to show that imported goods didn’t come from forced labor in Xinjiang, building this kind of paper trail is always helpful when documenting due diligence on both sides of the buyer-supplier relationship.
Real time alerts for your supply chain
Supply chains aren’t static, and neither is risk. Whether it’s new information that’s continually uncovered by researchers, the latest WROs, or top-tier media revealing a scandal, risk signals are ongoing. Monitoring those risks is a priority for any organization, but with hundreds, thousands, or even hundreds of thousands of suppliers, you might not be able to stay on top of the latest information.
That’s why FRDM provides real-time alerts. Our crawler leverages machine learning to accurately cut through the noise and provide only the most reliable information about your suppliers so that you can be the first to know when situations change in a region, industry, or with a specific company. Then you can use custom workflows to address these alerts, ensuring that the right people are looped in as you collect any new documentation or close the alert.
The Uyghur Forced Labor Prevention Act is going to have an impact on businesses. No one will know exactly which evidence to prepare to keep shipments moving through border protection until the strategy is presented to Congress. By being proactive and mapping your supply chain, you can work closely with your suppliers to build a more transparent and resilient supply chain. This will ensure that your business thrives, regardless of the severity of enforcement of this legislation, or the passage of any future regulations.
