Over the last several years the Chinese government has placed more than 1 million Uyghur Muslims in detention camps, prisons, and factories in the western Xinjiang Uyghur Autonomous Region (XUAR) in what has been referred to as “probably the largest internment of an ethno-religious minority since the Holocaust.”1 A release of leaked documents last year, the “China Cables”, outlined extremely repressive tactics including total surveillance, compulsory ideological training and psychological modification of prisoners.2 Additional reporting identifies campaigns of mass female sterilization, allegations that if true, would meet the United Nation’s definition of genocide.3
A report released by an Australian think tank this spring linked Chinese factories using Uyghur labor to the supply chains of 83 global companies, including many household names.4 The XUAR has produced roughly one fifth of the world’s cotton in recent years (over 80% of China’s cotton); as a result, apparel imports carry a high risk of being produced with forced Uyghur labor.5 Technology companies may be further implicated in this campaign by providing artificial intelligence and surveillance technology to Chinese companies thereby aiding in the intense surveillance of Uyghurs’ movements and work.6
The U.S. House of Representatives recently took sweeping action to address these practices passing the Uyghur Forced Labor Prevention Act (H.R. 6210) on a bi-partisan basis. The bill imposes severe restrictions on goods imported from the XUAR, presuming that any product manufactured in or using inputs from the XUAR was made using forced labor. Unless the corporation importing the goods can prove that no forced labor was involved, the product is considered illegal and is barred from entering the U.S.
Domini has a long history of analyzing and addressing companies doing business in regions with high risks of human rights abuses (see our work on South Sudan and the Rohingya Crisis in Burma), which we bring to bear on the current situation. Earlier this year, as a member of the Investor Alliance for Human Rights, we helped publish "Human Rights Risks in Xinjiang Uyghur Autonomous Region - Practical Guidance for Investors", a 32-page report to help investors assess potential risks and engaging companies and other stakeholders. The report recommends investors fulfill the UN Guiding Principles (UNGPs) by conducting enhanced human rights due diligence, assess and engage relevant companies and collaborate with other investors and stakeholders to build leverage.
Domini has been doing just that. Our research process allows us to scrutinize high-risk sectors and regions and take action. For example, we excluded a company from investment because another company, which controlled over 30% of the first company, was determined to have unacceptable exposure to labor issues in the XUAR, among other issues. We have also been actively engaging companies to address these risks and their potential connection to forced Uyghur labor. Earlier this year we contacted several apparel companies about their sourcing policies and practices including how they would address the allegations in the report. We will continue to push companies to uphold the UNGPs and address the interment of Uyghurs directly.
The XUAR is a harsh example of how the interconnectedness of global markets can tie each of us to human rights crises around the world. However, this connectivity can be a force for good. As responsible investors we can advocate for people’s rights in every corner of the world. At Domini we will leverage our years of experience supporting human rights in high risk regions to continue this fight.