China’s “Untenable Operating Environment” for Business in Xinjiang

Access for Auditors, Rights Investigators Critical

Sophie Richardson

China Director 

The Better Cotton Initiative (BCI), an independent organization that promotes sustainably grown and responsibly harvested cotton, announced last week it would cease all its activities in Xinjiang, the region of northwest China where millions of Turkic Muslims are subjected to serious human rights violations, including significant risk of forced labor. 

BCI has concluded that Xinjiang is “an increasingly untenable operating environment.” This is similar to decisions made recently by other independent auditing firms and major brands.  In September, apparel giant H&M cut ties to an indirect supplier in Xinjiang out of concerns about “forced labour and discrimination of ethnoreligious minorities.”   Days later, five firms that had been hired by companies to assess the integrity of their Xinjiang supply chains —Sumerra LLC, Bureau Veritas SA, TÜV SÜD, RINA SpA, and Worldwide Responsible Accredited Production—said they would no longer provide that service in that region. 

Last March, BCI suspended parts of its work, including ending licensing of farmers and its relationship with the Xinjiang Production and Construction Corps, a military-economic entity unique to the region’s repressive governance. 

Companies should be checking their supply chains for human rights abuses and taking steps to prevent or address them, in keeping with the United Nations Guiding Principles on Business and Human Rights. But this has become increasingly difficult for companies operating in Xinjiang.  Chinese authorities there are notorious for blocking independent investigators. Companies point to their positive influence creating jobs, and broadly assert that audits do not turn up strong evidence of forced labor despite growing indicators of its widespread use. 

But the ground may be shifting as auditors have started refusing the jobs, major brands started cutting ties for fear of reputational harm, and legislators in several countries are considering new laws to limit imports that may have been made with forced labor.

Apparel companies could take the step of joining a global coalition to end forced labor.  International firms with a presence in the region should urge Chinese authorities to not only permit independent auditors, but also give unfettered access to United Nations human rights inspectors, for which international momentum is growing. Auditors and companies should hear directly and freely from Turkic Muslims in Xinjiang about forced labor and other rights abuses and that a “tenable” operating environment exists before considering a return.