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Supply Chain
In Response to Uyghur Forced Labor Scrutiny, Supply Chains Are Becoming More Opaque

Since the passage of the Uyghur Forced Labor Prevention Act in 2022, which banned US imports from companies linked to it, solar-industry sourcing is becoming 'less transparent.' Now, the results of inaction are affecting suppliers for car batteries and printers.

Last year, the USUyghur Forced Labor Prevention Act (UFLPA) came into effect, passed with bi-partisan support. The passage came after several reports linked many western brands to forced labor of Uyghurs — a Turkic people who have been living under Chinese control for decades. Proponents hoped that the legislation, which barred the entry of any goods made by companies that had links to the Uyghur homeland in far-western China, would spur a shift in supply chain transparency and put pressure on the Chinese government to end its campaign of oppression.

One industry at the center of this was the solar industry. China dominates the production of solar panels; and an estimated 45 percent of global supply of one of the key materials, polysilicon, comes from the Uyghur region. In the months following the passage of the UFLPA, huge amounts of solar panels were blocked at the US border and the industry saw significant financial impacts.

Has the solar industry cleaned up its act? According to a new report from Sheffield Hallam University, progress has been slow. While polysilicon sourcing from Xinjiang is down to 35 percent of global supply, researchers found that many solar producers are responding to the UFLPA by bifurcating their supply chains — only sending UFLPA-compliant solar panels and components to the United States, and those with forced-labor links to other countries.

But perhaps most concerning is that the report's authors found that solar industry sourcing is becoming “less transparent.”

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“We are seeing companies pretend to sell their Uyghur region factories,” Laura Murphy, a professor of human rights and contemporary slavery and one of the authors of the report, said in a press statement. “They change the names of their subsidiaries to obscure their identities or ship their products through other countries to mask their origin.”

In an ideal world, in which brands took forced-labor risks seriously and acted proactively, the response to initial reports about forced Uyghur labor — which came as early as 2018 — would have been met with swift action including the immediate cutting of ties with suppliers, the shifting of production away from China, and the sharing of data and sourcing information to allow for industry-wide action.

Instead, we’ve seen the solar industry not only fail to act, but even lobby for weaker enforcement. For Uyghurs and human rights advocates outside of China, this — along with the bifurcation of supply chains, and the fact that other major solar importers in Europe and Japan have yet to restrict imports linked to forced labor — is deeply disheartening.

“It is very possible to create alternative solar supply chains that do not rely on Uyghur forced labor; but globally, the solar industry has been slow to end its complicity in the crimes committed against Uyghurs,” Muetter Iliqud, head of communications for the Norwegian Uyghur Committee, told Sustainable Brands® by email.

Meanwhile, in the US, other industries are following the solar industry’s example by not taking proactive action and seeing their Chinese suppliers restricted due to sourcing from the Uyghur regions. In June and early August, two more companies were added to the UFLPA’s entity list — printer manufacturer Ninestar and automotive battery manufacturer Camel Group — in being banned from importing to the US.

Camel Group, Asia's largest car battery producer, is a major player in the growing electric-vehicle industry. It has a joint venture with EV sportscar maker Rimac, a major rival of Tesla; and has invested in the Croatian company’s expansion to China.

Meanwhile, Ninestar — the third-largest printer and printer cartridge manufacturer in the world — sells printers under many brand names, Pantum and Lexmark International in the US – which is now affected by the import ban.

“The move shocked the imaging supplies industry,” wrote IITC executive director Tricia Judge. “The full impact of the ban is yet to be seen, and it will likely unfold over the coming months.”

The solar industry has already paid a steep price for its inaction; but it doesn’t appear that the printing and battery industries are taking the proper steps to reduce their risk of sourcing from a region that continues its unapologetic assault on the Uyghurs and their culture.

It seems that, at least when it comes to dealings with China, many companies will only take forced-labor concerns seriously when they’re legally required to. And, soon, that might be the case: A bill that would strengthen the UFLPA — the Uyghur Genocide Accountability and Sanctions Act, which would expand sanctions and increase corporate reporting requirements — is currently being considered by Congress.

Europe, too, is debating strict Human Right Due Diligence regulations that would require proof that any products imported into the world’s largest market are free of forced labor.

For the long-suffering Uyghurs, anything that pushes brands to act — and puts pressure on China — cannot come fast enough. Let’s hope, brands, too, will learn to more proactively mitigate the reputational and financial risks of inaction.

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