AAFA: Forced Labor Dragnet Captured More Than 1,000 Textile/Apparel Shipments
One measure of how much more common detentions over forced labor have become is that the withhold release order affecting cotton grown in Xinjiang has led to either the detention or diversion of more than 1,000 shipments, said Nate Herman, American Apparel and Footwear Association vice president for policy. Herman said the value of the garments or textiles in those shipments added up to hundreds of millions of dollars, "probably over a billion dollars at this point and only a handful of them have been released, maybe a dozen, maybe a little bit more."
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Herman spoke on a webinar on forced labor risk hosted by the Thompson Hine law firm Oct 5. Herman said that compliance professionals want to hear that there's a silver bullet for due diligence on cotton, but that there's no such solutions provider or technology that exists. He said companies have tried chemical isotope tracing, DNA tagging or DNA mapping to try to determine where the cotton came from in a shirt. "None of those are foolproof yet, " he said. "We don’t know if any of those are being accepted at this time by CBP."
If a shipment of tomato paste, apparel, solar panels or some other product is seized by CBP, importers will need to provide purchase orders, invoices, proof of payment, a list of suppliers, daily process reports, production records and transportation documents in hopes of proving that the shipment does not contain goods made with forced labor, the lawyers said. Many of these documents are not routinely collected from suppliers, and certainly not from suppliers to suppliers.
Francesca Guerrero, a partner in international trade at Thompson Hine, said that contracts need to include language about providing documentation if asked, either a carrot, or a stick, such as an ability to seek a claim against them if they don't respond promptly. "You don't want the supplier to think, 'What’s in it for me? That’s a lot of work,'" she said.
Herman said that companies have to be careful in how they word requests, too, as China passed a law that forbids Chinese companies from cooperating with sanctions that concern China's sovereignty or security interests, or interfere in China's internal affairs. These are all ways China has characterized its campaign against Uyghurs. So Herman said the contract should be careful to avoid the word "Uyghur" or "Xinjiang," so that vendors can comply. Herman also advised compliance professionals to read the news carefully, as CBP telegraphed its intention to go after polysilicon for a year before the WRO came down.
Guerrero said that when complying with disclosure laws, such as the one in California, it's important not to make claims you can't support about your due diligence efforts. "If they’re aspirational, then they should certainly be phrased in an aspirational way," she said.