Canada is Investigating Ralph Lauren After Forced Labor Complaint
Ottawa’s corporate ethics watchdog has another fashion company in its sights over Uyghur forced labor concerns.
Following the launch of an investigation into Nike Canada last month, the Canadian Ombudsperson for Responsible Enterprise, better known as the CORE, revealed Tuesday that it will be probing Ralph Lauren Canada’s supply chain relationships with companies that allegedly use or benefit from the persecution of Muslim minorities in China’s Xinjiang Uyghur Autonomous Region.
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As with Nike Canada, the inquiry was prompted by a complaint from a coalition of 28 organizations, including Stop Uyghur Genocide Canada, the Uyghur Refugee Relief Fund and the Uyghur Rights Advocacy Project, which provided as evidence a 2020 Australian Strategic Policy Institute report linking Ralph Lauren to Esquel Group’s Changji Esquel Textile Co. and Youngor Group’s Youngor Textile Holdings Co., both of which it identified as participating in Uyghur labor transfers through its subsidiaries in Xinjiang.
The complainants also supplied bills of lading indicating that Ralph Lauren imported more than two dozen unique shipments into Canada from Esquel Group subsidiaries, namely Esquel Garment (Vietnam) Co. in Vietnam and Esquel Enterprises in Hong Kong—between August 2020 and March 2021, saying that this contradicted an earlier Ralph Lauren statement denying that it was sourcing “any yarn, textiles or products from Xinjiang.”
While it isn’t clear how the facilities feed into one another, if at all, U.S. Customs and Border Protection has previously seized Esquel Group shipments that originated outside China under a pre-Uyghur Forced Labor Prevention Act Withhold Release Order against cotton products from Xinjiang. In 2021, then-CEO Marjorie Yang blamed the detention of its Vietnamese shipments on Changji Esquel Textile Co.’s listing on the Commerce Department’s Entity List, which it continues to publicly and legally dispute. The Department of Homeland Security has cited transshipment from third countries as an area of focus in rooting out forced labor from Xinjiang.
The CORE said that the complainants further referred to a 2021 report by Sheffield Hallam University’s Helena Kennedy Centre for International Justice connecting Ralph Lauren with companies it associated with forced Uyghur labor, including Jiangsu Lianfa Textile Co., Huafu Fashion Co., Luthai Textile Co.and Texhong Textile Group. A 2022 follow-up by the school named Xinjiang Zhongtai Group, an “avid participant in state-sponsored labor transfer programs,” as an indirect supplier of cotton and synthetic yarns to brands such as Ralph Lauren.
“I have decided that the Ralph Lauren complaint warrants an investigation,” Sheri Meyerhoffer, who has headed the CORE since it was established in 2019, said in a statement.
The CORE said that Ralph Lauren has raised a jurisdictional objection, asserting that Ralph Lauren Canada, as a subsidiary of its U.S.-based operations, is not responsible for decision-making or oversight of activities overseas. The company’s counsel laid out its policies and strategies, including zero tolerance for forced labor, increased human rights due diligence efforts and continuing engagement with industry associations to stay abreast of supply-chain transparency best practices.
Ralph Lauren, the counsel said, employs fiber-tracing technology by Oritain, a New Zealand-based forensic platform, and is expanding this capability to certify the country of origin for its sample products.
Still, the CORE said that Ralph Lauren’s “refusal” to participate in the initial assessment stage, which it followed with a “last-minute shift” indicating a willingness to collaborate, made it difficult to complete the assessment, including determining the timings and scopes of the strategies it had introduced. The brand’s stance and earlier failure to engage with the complainants, it said, also raised questions about how it deals with allegations of potential abuses of international human rights.
Even so, Ralph Lauren has indicated that it is willing the engage with the office in “good faith,” the CORE said, adding that it encourages parties to consider mediation as an option. It said that it will assess Ralph Lauren’s participation and, if appropriate, make a recommendation to the minister of international trade regarding the imposition of trade measures.
“Ralph Lauren is committed to responsible sourcing, trade compliance and conducting its global operations ethically,” a spokesperson told Sourcing Journal. “Our company has zero tolerance for forced labor of any kind, and if we find that any facility, anywhere in the world, is not acting in accordance with our operating standards, we take appropriate remedial and disciplinary action. Over the years, we have invested significantly in supply chain traceability and due diligence, diversified our sourcing locations and prioritized responsibly sourced materials to create a more agile and sustainable supply chain. We remain committed to advancing this work and will continue to assist CORE in good faith to address their questions.”
Canada is hardening its position against modern slavery, with new supply chain reporting requirements set to go into effect in January in line with enhanced labor obligations through the United States-Mexico-Canada Agreement.
