Coalition to End Forced Labour in the Uyghur Region- Written evidence (MSA0064)

1.        Urgent need to address modern slavery in global supply chains

1.1.   The Transparency in Supply Chains (TISC) provision of the Modern Slavery Act 2015, an annual reporting requirement, has not had the impact that was envisioned by lawmakers at the time the law was enacted.

1.2.   Support for stronger legislation that goes beyond disclosure has steadily increased over the years among policymakers, business, investors and the general public. This includes support for forced labour import bans and legislation that would require business to address actual and potential modern slavery risks in supply chains.

1.3.   In state-imposed forced labour contexts, a much stronger legal mechanism than a disclosure requirement is needed to ensure businesses are taking the necessary steps to address their risk to such abuses.

2.        Context: state-imposed forced labour in the Uyghur Region

2.1.   The Government of China is perpetrating human rights abuses on a massive scale in the Uyghur Region targeting the Uyghur and other Turkic and Muslim-majority peoples on the basis of their religion and ethnicity. This includes mass arbitrary detention and systemic state-imposed forced labour.[2]

2.2.   The extreme levels of repression and surveillance in the Uyghur Region make human rights due diligence a practical impossibility, and, due to the high risk of forced labour,  companies must operate on the assumption that all products produced in part or in whole in the Region are tainted by forced labour.[3]

2.3.   UN human rights experts have determined the forced labour abuses against the Uyghur people may constitute crimes against humanity.[4] The US government and legal and human rights experts have declared that the abuses amount to genocide. Many other governments have passed in kind parliamentary resolutions.[5]

2.4.   State-imposed forced labour involves both detainee labour inside internment camps and multiple forms of involuntary labour at workplaces across the Region and even in other parts of China.[6] Given the widespread and systemic use of Uyghur forced labour and the breadth of production and manufacturing in the Uyghur Region and throughout China, there are significant risks of Uyghur forced labour in numerous global supply chains.

3.        Exposure of UK business to Uyghur forced labour

3.1.   The UK Overseas Business Risk guidance highlights the risk of Uyghur forced labour in key industries such as cotton, textiles, automobiles, electronics, and polysilicon.[7] UK brands like Tesco and River Island have been named as allegedly at risk of using Uyghur Region cotton.[8] The proportion of the UK’s solar industry linked to Uyghur forced labour is estimated at 40%, potentially higher.[9] Furthermore, automobile supply chains, including vehicle battery production, face substantial risks. Supply chains of prominent companies like Daimler, London Electric Vehicle Company, Aston Martin, Bentley, Jaguar Land Rover, and Rolls-Royce are allegedly exposed.[10]

3.2.   The House of Commons Business, Energy and Industrial Strategy (BEIS) Committee in 2020 held an inquiry into the issue of Uyghur forced labour based on “compelling evidence that many major companies…with large footprints in the UK are complicit in the forced labour of Uyghurs in [the Uyghur Region],” and made a series of recommendations to ensure UK business does not profit from human rights abuses.[11] The government has not enacted these recommendations.[12]

3.3.   The House of Commons Foreign Affairs Committee held an inquiry in 2020 to examine the ways in which the government could, among other things, prevent UK companies from benefiting from Uyghur forced labour, and made a series of recommendations to the government.[13] The government has not enacted these recommendations.[14]

4.        Failure of the TISC provision to effectively address forced labour in the Uyghur Region

4.1.   The TISC provision of the Modern Slavery Act was intended to create a race to the top by encouraging companies to be transparent about their efforts to address modern slavery. However, years after the law was enacted, there remains a wide disparity in business approaches.

4.2.   Analysis over the years has consistently shown that the TISC reporting requirement has failed to drive tangible systemic change of business practices, including in high-risk sectors, and has not resulted in significant improvements in the majority of companies’ policies, practices, or performance.[15]

4.3.   The BEIS Committee stated in its inquiry report on Uyghur forced labour and UK value chains, “The Transparency in Supply Chains legislation in the Modern Slavery Act was important when it was first introduced, but it has not kept pace with changes in business supply chains. The Modern Slavery Act is out of date, has no teeth, and we do not accept that businesses should be excused from doing basic due diligence to guarantee that their supply chains are fully transparent and free from forced labour and slavery.”[16]

4.4.   Furthermore, the Modern Slavery Act assumes companies carry out due diligence and report on these steps in their annual statement, but does not legally require any due diligence to be carried out. In situations of state-imposed forced labour, however, there is no way for companies to carry out credible due diligence efforts and report on those steps taken. For example, conducting labour rights audits is a practical impossibility due to the extreme levels of repression and surveillance in the Uyghur Region.[17]

4.5.   A smart mix of complementary measures that go beyond reporting obligations is urgently needed to ensure that companies identify and take appropriate steps to address state-imposed forced labour in the Uyghur Region. 

5.        Prohibition on the import of forced labour-made goods

5.1.   We recommend the government implement standalone legislation that prohibits the import and sale of goods made in whole or in part with forced labour in the UK market. Import controls are particularly powerful in cases of state-imposed forced labour, where there is systemic forced labour across an entire industry or region, as with the Uyghur Region. Further, such a mechanism would help to level the playing field among business, as it would place a legal obligation on all companies to ensure their supply chains were not exposed to, and therefore not benefiting from, systemic forced labour in specific regions or supply chains.

5.2.   Where products come from regions or supply chains identified as using state-imposed forced labour, the burden of proof to disprove the use of forced labour should be shifted to the importer. This reversal would require companies and retailers to map their entire supply chain to identify suppliers that are located in the Uyghur Region, have operations there, benefit from state subsidies or state-provided labour, or source from the Region, and end those business relationships.

5.3.   The Foreign Affairs Committee recommended in its inquiry that the Government should explore the possibility of banning the import of all cotton products known to be produced in whole or in part in the Uyghur Region, in line with World Trade Organization rules, and that a ban should be extended to other industries.[18]

5.4.   The US Uyghur Forced Labor Prevention Act, enacted in 2021, establishes a rebuttable presumption that all products from the Uyghur Region, or from specific suppliers, are made with forced labour and bans them from importation into the US.[19]

5.5.   The upcoming EU Forced Labour Regulation will ban products made with forced labour both produced in and imported into the EU.[20]

5.6.   Canada’s customs tariff prohibits imports produced by forced labour, and Mexico’s Forced Labour Regulation includes an obligation to prohibit the importation of goods produced in whole or in part by forced or compulsory labour.[21]

5.7.   There is precedent in UK law for such an import ban. An amendment to the Health and Care Act bars the National Health Service (NHS) from using goods and services linked to slavery or human trafficking. The law came about after it was brought to light that the government had awarded contracts worth billions to Chinese firms with links to forced labour abuses in the Uyghur Region.[22] A subsequent review by the Secretary of State for Health and Social Care in December 2023 identified Uyghur forced labour as a “specific area of concern” for the NHS supply chain, noting, “Serious ongoing concern has also been raised over human rights violations in [the Uyghur Region] with allegations of forced labour of Uyghur populations in the production of a wide range of goods, including those sourced by the NHS. The region is a significant hub for global supply chains and is the source of a considerable portion of the world’s cotton.”[23]

5.8.   To improve enforcement and efficacy of an import ban, UK customs-related regulations should be amended to require all companies that import goods into the UK to disclose important information to customs authorities, including the name and address of manufacturers of goods and products, and to make this information publicly accessible.

6.        UK Business, Human Rights and Environment Act

6.1.   We also recommend the introduction of legislation that imposes a duty on companies, the financial sector, and public bodies to prevent human rights and environmental abuses.[24] As part of this duty to prevent, a company would be required to address risks and impacts through human rights due diligence, in line with the UN Guiding Principles on Business and Human Rights (UNGPs). The law should include effective and deterrent sanctions, liability provisions for failure to take appropriate measures to prevent harms, and provide for effective access to justice for victims including remediation of the harm caused.

6.2.   The UK’s Joint Committee on Human Rights called for a law such as the one described above, in 2017.[25]

6.3.   The Foreign Affairs Committee recommended, as part of its Uyghur forced labour inquiry, that the Government introduce new legislation to legally require businesses and public sector bodies to take concrete measures to prevent and remove the use of forced labour in their value chains. This new duty should be backed up by meaningful sanctions and penalties for non-compliance.[26]

6.4.   A Private Member’s Bill[27] was recently introduced in the House of Lords, titled the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill. The Bill reflects broad support for such a law among members of Parliament and Peers, business, investors, and the public, and is the closest representation of the legislation described in paragraph 6.1 above that has been proposed in government.[28]

6.5.   For Uyghur forced labour, mandatory human rights due diligence would entail companies identifying the risks of being linked to Uyghur forced labour through supply chain mapping and traceability, employing all reasonable measures to do so, and ceasing relationships where such links are found; other prevention, mitigation, and remediation measures are not effective.[29]

6.6.   The duty to prevent should hold UK companies of all sectors and sizes liable if they fail to take all reasonable and appropriate measures to prevent harmful human rights or environmental impacts. This scope is needed as modern slavery occurs in all sectors and taints products and services we use every day. Due diligence efforts would be expected to be proportionate to a company’s size and the severity of its adverse impacts.

6.7.   The law should extend to the financial sector and public sector. As noted above in paragraph 5.7, PPE procured by the UK government during the Covid-19 pandemic was at risk of being manufactured with Uyghur forced labour.[30]

7.        Additional measures

7.1.   We support the BEIS recommendation from its inquiry that the BEIS Department, in collaboration with the Foreign, Commonwealth & Development Office, and the Department of International Trade, fully assess the options for introducing targeted sanctions against Chinese and international businesses implicated in human rights abuses and the exploitation of Uyghurs in the Region. These Magnitsky-style sanctions could be issued under the Global Human Rights Sanctions Regulations 2020.

8.        Developments on modern slavery in the UK and internationally

8.1.   Research into extractives,[31] the auto industry,[32] renewables,[33] solar,[34] electric vehicles,[35] and seafood processing[36] evidence the extent and breadth to which state-imposed forced labour taints consumer goods.[37]

8.2.   A law prohibiting the import and sale of forced labour goods is now in place in the US and will shortly be enacted in the EU.[38]

8.3.   Due diligence legislation is already in place or under development in several European states, including the Netherlands, France, Switzerland, Germany, Norway, and Finland.

8.4.   A survey by the British Institute of International and Comparative Law[39] indicates that most UK businesses support new legislation due to anticipated benefits such as providing legal certainty and levelling the playing field — holding competitors and suppliers to the same standards.

8.5.   More than 50 UK businesses[40] and investors with £4.5 trillion assets under management[41] support a new UK law mandating human rights and environmental due diligence for companies and investors. Thousands of businesses showed unprecedented support for the EU Corporate Sustainability Due Diligence Directive when it faced uncertainty.[42]

8.6.   The UK government must protect the domestic market from becoming a dumping ground for tainted goods. Goods that are suspected to be made with forced labour and detained by U.S. authorities can be re-exported to other markets. Without an import ban on forced labour-made goods, the UK could become a safe haven for tainted products, particularly now that the EU is no longer a viable market for such goods.

27 March 2024