Zara Canada Investigated After ‘Serious’ Labor Allegations
Ottawa’s corporate ethics watchdog has opened what it describes as an independent fact-finding investigation into allegations of Uyghur forced labor within Zara Canada’s supply chain.
The Canadian Ombudsperson for Responsible Enterprise, better known as the CORE, said on Monday that it made the decision following an initial assessment report on the Spanish-operated retailer, which in turn 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, last June.
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The same coalition previously made similar filings against the Canadian arms of Nike, Levi Strauss & Co., Ralph Lauren, Diesel, Hugo Boss and Walmart, triggering corresponding investigations into their business relationships with Chinese companies identified as using or benefiting from the persecution of Uyghurs and other Muslim ethnic groups in China’s Xinjiang Uyghur Autonomous Region.
“Inditex does not have any commercial ties with any factory in that region and the allegations contained in the report are unfounded,” a spokesperson for the company told Sourcing Jouranl. “Our group has a zero-tolerance policy towards any kind of forced labor.”
The world’s No. 1 apparel purveyor also told the CORE that it maintains no commercial links with any factory in Xinjiang, rendering the complaint inadmissible.
But the complainants allege that Zara has ties with Huafu Top Dyed Melange Yarn Co., Shandong Zoucheng Guosheng and Xinjiang Zhongtai Group, three Chinese companies singled out by the Australian Strategic Policy Institute (ASPI) in 2020 and Sheffield Hallam University’s Helena Kennedy Centre for International Justice in 2022 for their involvement in the exploitation of Uyghurs through state-sponsored labor transfers and work placements.
Complainants charge that Huafu Top Dyed Melange Yarn Co., which ASPI claimed counted Zara among its “long-term customers,” citing a Chinese media source, was among 15 factories that received a percentage of 2,000-plus Uyghur laborers who were taken from Xinjiang’s Hotan prefecture and into Anhui province between April 2017 and June 2018. They also point out that a satellite factory of Shandong Zoucheng Guosheng, whose parent company, Jiangsu Guotai Guosheng Co. was identified by Texworld U.S.A. as a Zara supplier, reported in November 2019 that it had “brought over 3,500 jobs to Xinjiang.”
Aral Fulida, a subsidiary of Xinjiang Zhongtai Group and a supply chain partner of Zara’s, per the Helena Kennedy Centre, they add, likewise harbors a “high risk” of Uyghur forced labor.
Inditex has been questioned before about its role in Uyghur repression, which several human rights organizations and the U.S. government consider genocide. In July 2021, French prosecutors opened a probe into Inditex, Sandro and Maje owner SMCP, Skechers and Uniqlo after a Uyghur woman and the human rights groups Sherpa, the Collectif Ethique sur l’étiquette and the Uyghur Institute of Europe accused the companies of profiting from “crimes against humanity” in Xinjiang. The investigation was dropped in May after the office said it lacked “jurisdiction to prosecute the facts contained in the complaint.”
Inditex referenced the French complaint in December 2021 after complainants wrote to Zara asking it to ensure “beyond a reasonable doubt” that it does not benefit from Uyghur forced labor. Because the retailer doesn’t harbor commercial relations with any factory in Xinjiang, the Bershka and Pull&Bear operator said, it considers legal complaints made against it on the issue of forced labor in France “completely unfounded.” The complainants insist, however, that ASPI and the Helena Kennedy Centre’s findings directly contradict Inditex’s statement.
When the CORE reached out to Inditex in October 2022, the Cycora partner said that the agency similarly lacked jurisdiction to review the complaint, since “the Chinese entities and/or any manufacturing processes…are not the ‘operations abroad’ of ITX Canada, and…the alleged abuses do not ‘arise from’ ITX Canada’s operations abroad…”
Inditex also argued, with respect to the allegations regarding Huafu, that the time frame during which Uyghur workers were purportedly taken predates the appointment of the CORE in May 2019, meaning that the allegation is inadmissible. Inditex furthermore declined to participate in mediation, telling the CORE that by proceeding with the initial assessment of the complaint, it had violated Zara’s right to procedural fairness.
“In order to address the allegations raised in the complaint, and to assess whether the allegations arise from the operations abroad of Zara Canada, the Ombud has decided to launch an independent fact-finding investigation,” the CORE wrote in the conclusion of its report.
The watchdog said that despite Zara Canada’s comments on the draft report, it did not provide a “satisfactory response” to the complaint.
“On its face, the complaint raises serious allegations regarding the possible abuse of the international human right to be free from forced labor,” it added. “Closing the file before conducting an investigation would prevent the Ombud from considering every process available to them to pursue their mandate of promoting human rights and preventing human rights abusees.”
