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TAIPEI TIMES: US ban on cotton from forced labor comes into force

The below article was published by the Taipei Times, photo credit: Reuters

EAST TURKISTAN EXPORTS: The Uyghur Forced Labor Prevention Act designates cotton a ‘high priority for enforcement,’ along with tomatoes and polysilicon

The fashion industry has been told it must wean itself off cotton from China’s Xinjiang region, as a new law comes into force giving US border authorities greater powers to block or seize goods linked to forced labor in China.

The Uyghur Forced Labor Prevention Act (UFLPA), which came into force yesterday, assumes that any product partly or wholly made in Xinjiang is linked to the region’s labor camps.

Since 2017, the Chinese authorities have detained as many as 1 million Uighurs and subjected them to forced labor.

The fashion industry would be particularly affected by the new law. About 20 percent of the world’s cotton comes from China and 84 percent of that comes from Xinjiang.

The UFLPA has designated cotton a “high priority for enforcement,” along with tomatoes and polysilicon. Any fashion brand exporting to the US would also be subject to it and failure to provide adequate certification or supply-chain details could result in fines of up to US$250,000.

However, the ban poses big problems for the industry.

Liv Simpliciano of Fashion Revolution said Xinjiang cotton is ubiquitous in supply chains.

“The difficulty is that at the ginning stage [when fibers are separated from their seeds], cotton from disparate locations is mixed together, making it impossible to trace the provenance,” she said.

A number of technology companies, among them TrusTrace, SupplyShift and TextileGenesis, plan to use blockchain and artificial intelligence to trace supply chains for fashion labels. Brands can use the platforms to log all their purchase orders and certifications.

To prove conclusively an absence of Xinjiang cotton, brands would need to show a “complete digital chain of custody, where a brand is fully in control of its supply chain from the farm onwards,” TrusTrace chief executive officer Shameek Ghosh said.

While fashion has historically been notoriously cagey about its supply chains, there is now a strong business case for full transparency.

A report by the financial think tank Planet Tracker said that implementing traceability “can improve net profit on average by 3 to 7 percent for apparel companies.”

That is before any fashion stock has been impounded by border forces.

Because of General Data Protection Regulation, TrusTrace is not alerted if Xinjiang cotton is found in a brand’s supply chain.

“Only the brand is informed,” Ghosh said. “They wouldn’t use a platform like this [if they’d be exposed].”

However, blockchain technology is not without its problems.

“If you’re relying on brand discretion to ratify their sourcing practices, then what’s the efficacy going to be?” Philippa Grogan of Eco-Age asked.

“Also, blockchain technology is not regulated, so it creates a risk environment — the lack of regulatory oversight makes it vulnerable to market manipulation,” she said.

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