A watchdog created by the federal government to probe corporate wrongdoing abroad says it is opening investigations into whether three clothing retailers, Walmart Canada, Hugo Boss Canada and Diesel Canada, are selling products made in China with Uyghur forced labour.
These are the fourth, fifth and sixth investigations announced by the Canadian Ombudsperson for Responsible Enterprise (CORE) since it began accepting complaints in March, 2021. Last month CORE announced
investigations into Nike Canada and Canadian mining company Dynasty Gold, and earlier in August it announced an
investigation into Ralph Lauren Canada.
The federal watchdog is investigating all of the companies in response to complaints filed last year by a coalition of human rights groups. Those organizations asked for a probe into allegations that some products sold by 14 Canadian companies – most of them subsidiaries of large U.S. businesses – are made with forced labour in
China. CORE is expected to decide whether to investigate the remaining complaints in the coming weeks.
China’s northwestern Xinjiang region, which produces one-fifth of the world’s cotton, has been the focus of reports by media, researchers and rights groups, who say Beijing has committed grave human-rights violations against the region’s largely Muslim Uyghur population, as well as other minorities there. Among the alleged abuses is the widespread use of forced labour.
Michele Bachelet, who was the United Nations high commissioner for human rights until August, 2022, visited Xinjiang last year. Her office’s report on the trip said China’s treatment of Uyghur Muslims in the region may amount to crimes against humanity.
The complaint to CORE cited a March, 2020 Australian Strategic Policy Institute (ASPI) report, which identified two Chinese companies the group had found were operating factories in Walmart Canada’s supply chain. Those facilities, the report said, were subjecting Uyghurs to work under conditions “that strongly suggest forced labour.” The report also cited a second report, published in November, 2020 by Laura Murphy, a professor at Sheffield Hallam University’s Helena Kennedy Centre for International Justice, that identified three China-based manufacturers allegedly linked to forced labour in Walmart’s supply chain.
CORE said Thursday in a statement that it plans to probe the matter further. “Walmart Canada generally denies the allegations, but fails to provide a specific response to the allegations. Given the company’s decision not to participate further in the CORE’s dispute resolution process, the CORE will conduct an investigation using independent fact finding to address the conflict between the allegations and the position of the company.”
Walmart Canada did participate in the CORE process, spokesperson Sarah Kennedy wrote in an e-mail Thursday, including confirming that the factories mentioned in the complaint are not part of the company’s “active disclosed supply chain.”
“As indicated in the report, Walmart made it clear to the CORE that we have developed and executed policies, standards, controls and supply chain monitoring systems that support Walmart Canada’s corporate mandate to prohibit the use of forced labour,” Ms. Kennedy wrote. “Our policies are diligently enforced.”
In the case of Diesel, the complaints draw on both Prof. Murphy’s report and the ASPI report, which alleges that the company’s supply chain includes Jiangsu Guotai Guosheng, a Chinese supplier where Uyghurs allegedly work “under conditions that strongly suggest forced labour.”
CORE said Diesel Canada denies that it purchases material from Xinjiang or is involved in human rights abuses. But the company did not participate in an initial assessment process after the complaint was lodged, according to CORE. The watchdog said this raised questions about the degree of transparency in the company’s human rights due diligence practices.
The complaint against Hugo Boss alleged the company has a supply relationship with Esquel Textile Co. Ltd., a Chinese company that ASPI identified as using Uyghur forced labour. Esquel owns several factories and subsidiaries in Xinjiang. To support their allegations, the complainants provided bills of lading, which show Hugo Boss as the consignee for multiple shipments from Esquel.
CORE noted that not all the receivers for these shipments were Canadian companies. “One of these shipments was received by Hugo Boss Ticino SA and originated in Singapore. The other, while received by Hugo Boss Canada Inc., originated from Esquel in Vietnam,” the watchdog said.
Hugo Boss Canada denies the allegations, but, CORE said, its “response does not appear to consider fully the complex nature of the garment supply chain.” The watchdog said it has decided to conduct an investigation “using independent fact finding to consider these complexities as well as the indicators of risk relevant to working in high-risk contexts.”
CORE ombudsperson Sheri Meyerhoffer said in a statement that her office hopes the investigations will provide opportunities for the companies to change their practices. CORE is able to recommend changes to businesses and the federal government, but does not have order-making power.
“As mediation between the parties is not currently an option, we will be launching investigations into the allegations outlined in these reports,” Ms. Meyerhoffer said. “The investigations will provide all three companies with an ongoing opportunity to provide further relevant information and mediation of the allegations remains open. We are hopeful that the investigation findings will provide the companies with information to support their ability to strengthen their due diligence practices.”
The Global Slavery Index, produced by the Australian philanthropic foundation Walk Free, estimated in a 2018 report that more than $18.5-billion in goods imported annually into Canada are at risk of having been made with forced labour at some point in their supply chains, including clothing, computers, smartphones, gold, seafood and sugar cane.
Three years after the federal government amended the Customs Tariff Act to prohibit forced-labour imports, none have been seized by the
Canada Border Services Agency.
In 2021, the United States enshrined in law a reverse-onus rule that puts the responsibility on those shipping goods from Xinjiang to prove the items are free of coerced labour. That means the U.S. government officially regards all goods produced in whole or in part in Xinjiang as being produced with forced labour and bars them from entry, unless importers can prove otherwise.
vancouversun.com
www.thestar.com
