Better Cotton Member Flagged on UFLPA Blacklist

The U.S. Department of Homeland Security (DHS) restricted imports from three more Chinese companies over their alleged complicity in the modern slavery of ethnic minorities in China’s Xinjiang Uyghur Autonomous Region on Friday, among them a member of two leading sustainable cotton standards that include fair labor as a key metric.

Effective Dec. 11, Anhui Xinya New Materials Co., headquartered in China’s Anhui Province, nearly 3,500 kilometers southeast of Xinjiang, will be presumptively barred from entering the United States as part of its inclusion in the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, which identifies entities said to be working with Xinjiang authorities to recruit, transfer or receive coerced labor from Uyghurs, Kazakhs and other persecuted Turkic groups. In so doing, it extends the purview of the UFLPA, which effectively bans the entry of any goods that are made in whole or in part in Xinjiang but doesn’t explicitly take into account the state-sponsored labor transfers outside of the region that experts say present as much of a red flag.

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“I think this is a very important signal because they are not just going after companies based in Xinjiang, but also those with relevant links in other provinces,” Adrian Zenz, a senior fellow in China studies at the Victims of Communism Memorial Foundation, told Sourcing Journal.

Anhui Xinya, which appears on the membership rosters of both Better Cotton and the U.S. Cotton Trust Protocol, produces fibers, yarns and textiles made with cotton, wool, Tencel and other products. Previously known as Chaohu Youngor Color Spinning Technology Co. and Chaohu Xinya Color Spinning Technology Co., it worked with an “established” government-sponsored work transfer program, Xinjiang Aid, to recruit and transfer Uyghurs from Xinjiang’s Pishan County to work at its facility in Anhui Province, according to DHS. This was enough for the multi-agency Forced Labor Enforcement Task Force, or FLETF, to determine that Anhui Xinya “satisfied the criteria” for addition to the UFLPA Entity List, it added.

“We have shown again through today’s enforcement actions that the United States will not tolerate forced labor in the goods that come into this country,” Robert Silvers, DHS’s undersecretary for strategy, policy and plans, as well as the chair of FLETF, said in a statement. “Companies must conduct due diligence and know their supply chains. The interagency Forced Labor Enforcement Task Force will continue to designate entities known to violate our laws, and U.S. Customs and Border Protection will continue its vigilant enforcement at our ports.”

Anhui Xinya, which was added to the Entity List alongside COFCO Sugar Holding Co. and Sichuan Jingweida Technology Group Co., is part of Youngor Group, a Zhejiang-based textiles enterprise whose Youngor Textile Holdings Co. subsidiary was named in Australian Strategic Policy Institute’s watershed 2020 study about fashion’s purported links to Uyghur forced labor.

Youngor Textile Holdings, according to the report, “welcomed” labor transfers at a Xinjiang Aid meeting with Anhui provincial government representatives in 2019 and expressed an interest in taking more transferred workers. Neither Youngor Textile Holdings nor Youngor Group, however, are on the UFLPA Entity List, which stands at 30 companies and has been facing calls from Senator Marco Rubio and others for greater and faster expansion. The Entity List was last updated in September with another three companies.

Many of the world’s biggest brands, including some that have come under scrutiny for alleged business relationships in Xinjiang, including Adidas, Levi Strauss & Co. and Ralph Lauren, participate in Better Cotton and the U.S. Cotton Trust Protocol. According to Better Cotton’s website, Anhui Xinya has been a member since 2020, the same year that the initiative suspended all licensing and assurance activities in Xinjiang, citing the forced labor allegations but also fueling backlash from China, which has repeatedly and vehemently denounced as “lies.” It also appears among nearly 2,000 mills and manufacturers under the U.S. Cotton Trust Protocol’s members page.

Better Cotton said that it is investigating whether any of the companies listed on the UFLPA Entity List are members. “In line with our member monitoring protocol, companies found on authoritative listings such as this one are subject to suspension,” a spokesperson said. The U.S. Cotton Trust Protocol and Youngor Group did not immediately respond to requests for comment.

DHS’s announcement comes on the heels of a report asserting that a “substantial volume” of apparel tainted by Uyghur forced labor from China is “flooding” into the European Union, in part because of the “failure” of voluntary corporate social responsibility initiatives and non-binding due diligence measures.

Better Cotton took issue with researchers’ characterization of private certifications, which they said have qualifications largely “predicated on social compliance norms that predate modern forced labor regulations,” telling Sourcing Journal that state-imposed forced labor is incorporated as a criterion in its “enabling environment” assessment of new country startups and in the annually updated decent work risk assessment tool for all countries where Better Cotton is produced. A spokesperson later clarified that this standard applies only to agriculture, not factories, which are outside its scope of monitoring. Non-field members, it said, are beholden to a code of conduct.

“I do think that we are once again seeing the limitations of licensing, certifications and other MSIs to provide any meaningful guarantees about labor rights,” Allison Gill, forced labor program director at the Global Labor Justice-International Labor Rights Forum, a member of the Coalition to End Forced Labour in the Uyghur Region, told Sourcing Journal, using an acronym for multi-stakeholder initiatives. “While supply chains are complex, supply chain solutions that don’t involve workers are clearly very risky.”

Better Cotton’s mass balance system, wherein brands pay farmers to grow a certain amount of sustainable cotton and then collect an equivalent amount of the fiber after ginning and spinning, which could have conventional fibers mixed in, also creates a risk that companies relying on it could be harboring Xinjiang cotton in their products, she said. Better Cotton has said that the scheme encourages stakeholders to buy and use more Better Cotton in a cost-efficient manner. But with 90 percent of Chinese cotton originating from Xinjiang, provenance can get muddled. In May, for instance, 27 percent of clothing tests conducted by Customs and Border Protection turned up positive for Xinjiang cotton.

“I think the emphasis in the last few years on traceability has [also] been a bit short-sighted,” Gill said. “It is not enough to know where the cotton is from. Brands also need to understand the labor conditions along the way.”