The U.S. Uyghur Forced Labor Prevention Act comes into force from today (June 21, 2022) – but very few businesses are ready for the changes, according to a leading non-profit consultancy.
Supply chain consultancy and social enterprise Slave-Free Alliance, part of global non-profit Hope for Justice, has warned of low levels of engagement and understanding among global businesses of the new prohibitions on importing goods from China whose supply chains might have been tainted by forced labor.
The U.S. Uyghur Forced Labor Prevention Act (UFLPA), signed into law in December 2021 and in force from June 21, 2022, could catch out many businesses who import from China but do not have a detailed understanding of their entire supply chain. Absolutely everything that is mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region, or by certain legal entities, is now presumed by the U.S. Government to be made with forced labor and prohibited for import – unless very detailed documentary evidence can be provided to challenge this presumption.
Marc Stanton, Director of Slave-Free Alliance, which has operations in the UK, USA, Norway and Australia, said: “We work with many of the world’s largest multinational businesses, who employ more than 1.2 million people and turn over hundreds of billions of dollars, and we have been startled how few of them are prepared for the implementation of this complex and wide-ranging legislation.”
Three commodities are assessed as being high-risk: cotton, tomatoes, and polysilicon, which is critical to the solar panel industry. All three have previously been subject to Withhold Release Orders, used by U.S. Customs and Border Protection (CBP) to detain suspect shipments. While there is evidence that the polysilicon industry is beginning to shift processing to less-contentious regions of China, in 2021 Xinjiang accounted for about 40-45% of global output of the ultra-conductive material.
The main question for importers is how strict enforcement will be across other product areas. CBP guidance warns importers that they may be asked for evidence that “goods originating in China were not mined, produced or manufactured in part by forced labor,” which means that in principle, anyone importing anything from China could need to map their supply chain and provide detailed documentation on worker wages, output, recruitment processes and audits for every stage of the process. This would be hugely demanding, especially since often such documentation is available only for review by appointed auditors, but not permitted to be transmitted or copied for any other use outside China.
Marc Stanton added: “In reality, we do not yet know if enforcement will be so strictly enforced as to demand this evidence for all imports, but it does demonstrate the level of preparation that businesses will need to do if they want to ensure compliance.”
The CBP guidance says it will also seek due diligence information from importers. This includes demonstrating engagement with suppliers to assess and address forced labor risk; mapping the supply chain; written supplier codes of conduct forbidding forced labor and outlining the risk of using of Chinese government labor schemes; training on forced labor risks for employees and agents who select and interact with suppliers; and monitoring of supplier compliance.
Slave-Free Alliance’s experts are well-placed to assist businesses with all of these important areas and more.
Separate to the CBP guidance, the Department of Homeland Security has just released its ‘Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China’.
Link to press release: NASHVILLE, Tennessee, USA – WEBWIRE – Monday, June 20, 2022