Human rights violations off the rack: European brands allegedly rely on forced labor

According to research by organizations such as Amnesty International, the Chinese government forces the Uyghur population and other Muslim minorities in the Xinjiang Uyghur Autonomous Region (Xinjiang or XUAR) to work in the garment industry, either in the harvesting of cotton, or in the manufacture of yarn. This is allegedly part of a broader strategy to persecute these minorities.

At least since 2017, there have been increasing reports of human rights violations in Xinjiang. International multi-stakeholder initiatives, such as the Fair Labour Association, have warned as of April 2019 that there is high risk of forced labor in the region, and in December 2020, forbade their member companies to source products directly and indirectly from the region. In March 2020, the Better Cotton Initiative declared that, because of state surveillance in the region, it was no longer able to conduct independent visits there. Nevertheless, some companies did not stop their business practices in Xinjiang or only did so during the course of 2020 – thereby contributing to the profitability of a business model that is allegedly based on forced labor.

For this reason, the European Center for Constitutional and Human Rights (ECCHR) submitted a series of criminal complaints in 2021 in Germany and the Netherlands, supported an additional complaint in France, and called upon investigative authorities to examine the alleged complicity of European companies in these violations. The companies named in the complaint sourced or source their products directly or indirectly from the region.

With its criminal complaint from September 2021, ECCHR requests that the German Federal Prosecutor responsible for crimes against international law investigates the potential accountability of the management of German textile brands and distributors for alleged forced labor in supplier companies from the Chinese region of Xinjiang. Together with our partners, we also filed a similar case in the Netherlands in December 2021. In addition to Dutch brands such as State of the Art, the complaint focuses on international businesses whose European headquarters are located in the Netherlands, including Patagonia and Nike.

The companies investigated by ECCHR had or have various firms with production facilities in Xinjiang on their supplier lists. There are indications that these production facilities either employ former Uyghur camp inmates, or hire Uyghurs through state-organized job fairs. Due to the massive state surveillance and systematic repression in XUAR, it cannot be assumed that these people voluntarily took up their employment.

According to the International Labour Organization, such a situation corresponds to the criteria of forced labor: Article 2 of ILO Convention 29 says that forced labor is any work or service which is exacted from persons under the threat of penalty and which they have not offered to do voluntarily. According to available reports from the region, the Chinese government is cracking down on the Uyghur minority with massive surveillance and arbitrary detentions. People who are in detention or even so-called reeducation camps are forced to work in factories. After the reeducation camps, they are sometimes sent directly into industrial jobs, for example, in the textile industry. There is no question of a free choice of job here, nor do people who are brought to so-called job fairs by government agencies as part of the government’s plan to fight poverty have any choice. In light of the general climate of repression, it is also not possible for Uyghurs from rural areas to refuse employment.

The reported companies deny all allegations of forced labor in their supplier factories, and, according to their own statements, already terminated these supplier relationships by the end of 2019, in mid-2020 or at the end of 2020. In some cases, however, they are still ongoing.

Our cases aim to demonstrate that European textile brands, retailers, and their management may potentially expose themselves to criminal liability when sourcing from Xinjiang. The companies should assess human rights risks, as well as comply with international legal standards, if they entertain business relationships with facilities or companies active in the region. It is too often overlooked that forced labor, when it is part of a systematic attack on certain populations, can also be a crime against humanity. Corporate managers must review and adjust their purchasing policies accordingly. 

This has now become part of government-mandated human rights due diligence requirements, such as those which were recently established in the German supply chain law, which also apply to supplier operations abroad.

On the basis of their risk analysis, the brands must aim to identify and cease, prevent or mitigate human rights risks including forced labor. If this is not possible, as in the case of Xinjiang, they must break off their business relations.

Concerning the Netherlands, we would like to emphasize the importance of a law for business due diligence that also extends abroad, which is currently under discussion in the Dutch Parliament. One proposal, for example, requires companies to introduce their own risk analysis to prevent the occurrence of human rights violations within their supply chains.

Chinese government policies of arbitrary detention, mass surveillance and repression in Xinjiang are part of a broader scheme of persecution of the Uyghur population. Forced labor, as allegedly sponsored by the Chinese government and its subordinates, can be classified as a crime against humanity under Paragraph 7 I No. 3 of the Code of Crimes Against International Law (CCAIL). ECCHR has several indications of the use of forced labor in the Chinese supplier companies investigated. Even after many media and research reports have been published and multi-stakeholder initiatives flagged the high risk of forced labor, discounters and brands have allegedly continued to place orders with suppliers from the region until late 2019, mid- or end of 2020, or even after that. Therefore, in ECCHR’s view, the German discounters and textile brands are allegedly aiding and abetting the government forced labor program in the XUAR, as they help their suppliers’ business model to stay profitable. Due to the fact that the ordering process takes place within textile companies based in Germany, it is the duty of the German authorities to prosecute these acts.

State-sponsored forced labor has long been established as a crime against humanity. The precedent was set in the 1940s in the Nuremberg Follow-up Trials where businesses in particular were seen to perpetrate or aid and abet the Nazi crimes.

The responsible parties within the Dutch companies are also potentially complicit in the crimes in Xinjiang if they sourced products from the region in order to make a profit. The criminal complaint submitted to the Dutch Federal Prosecutor’s Office argues that the brands are thus aiding and abetting the crimes against humanity in Xinjiang. The complaint is also based on the specific crime of forced labor according to Art. 273f subsection 1 of the Dutch Criminal Code. Furthermore, by purchasing goods from suppliers allegedly involved with the Chinese governmental forced labor program, Dutch textile brands, in the eyes of ECCHR, could be accused of money laundering or receiving stolen goods produced by means of modern-day slavery according to Articles 416-417bis and 420bis et seq. of the Dutch Criminal Code. 

Because the Dutch companies that may have profited from forced labor – thus making them allegedly complicit in serious crimes – are at the center of the complaint, Dutch law enforcement authorities are in a position to take action. Moreover, crimes of this magnitude can be prosecuted in the Netherlands under the principle of universal jurisdiction, which means that Dutch authorities can prosecute these cases irrespective of whether the crimes were committed in Dutch territory. In addition, the fact that these companies have their (European) headquarters in the Netherlands means that they can and should be held accountable under Dutch law and before Dutch courts.

Forced labor has been classified uniformly as a grave human rights violation and, when in connection to a widespread and systematic attack on the civilian population, as a crime against humanity. Considering the severity of the alleged crimes, criminal justice authorities should investigate.

In the Netherlands, as recently as 2020, a law to halt the import of goods from Xinjiang did not pass due to the veto of the Minister of Foreign Trade. What the politicians failed to accomplish must now be resolved by the courts.

Workers who were brought into conditions of forced labor can also pursue civil claims against the companies. But given the highly repressive situation in Xinjiang, it is almost impossible for those affected to actually pursue such individual compensation claims: workers are simply unable to take legal action against companies along the supply chain while still under heavy surveillance in Xinjiang. They and their families would face severe repression. Even if some were able to leave the region, this would likely have dire consequences for their relatives who remain in XUAR.

Under the recently ratified German supply chain law, it is also likely that interventions similar to our complaint will follow after the law takes effect in 2023.

Our criminal complaints are based primarily on the supplier lists that the companies themselves published. However, this does not mean that companies that are more transparent than others are now “punished” by our legal interventions. If sustaining business relationships with companies that allegedly use forced labor is classified as criminal behavior, law enforcement authorities must investigate. Their investigations must be directed against both companies that have been transparent about their suppliers as well as those who have not. While being transparent is in itself a laudable act, it cannot exempt companies from criminal liability.

European governments cannot maintain double standards when it comes to China. If they criticize China on its human rights record, as they currently do, they also need to hold corporate actors legally accountable when they profit from alleged human rights abuses that happen there. It wasn't until February 2021 that the Dutch parliament passed a non-binding resolution stating that crimes against ethnic minorities in China are tantamount to genocide – in effect a strong directive for companies to act as well.

Our cases also demonstrate that companies need to consider the standards of international criminal law when engaging with repressive regimes. The garment sector is prone to labor rights abuses, both in direct contractual relations as well as further down the supply chain. Despite repeated promises to do better, fashion brands have not sufficiently taken steps to ensure that their products are free of forced labor and other labor rights violations, and that they respect workers’ rights around the world. When cases of forced labor reach the (high) threshold of international crimes, companies and law enforcement authorities need to act immediately.

These cases show once again just how careful companies must be when engaging in business relations with repressive regimes. Companies need to ensure that they neither encourage nor profit from forced labor through their actions or their failure to act.

Recently introduced or debated mandatory human rights due diligence legislation like the German supply chain law requires companies to conduct a human rights risk assessment concerning their supply chains. As our research shows, a proper human rights risk analysis should have revealed to the respective companies their problematic links to forced labor in the region. Mandatory HRDD laws then require companies to act appropriately upon the detection of risks.

As a first step, brands would need to identify any suppliers that are located, are active in, or have subsidiaries in the Xinjiang region. They would then need to assess the likelihood that these suppliers are linked to forced labor. They should address any actual or potential involvement of their supplier companies in state-sponsored forced labor programs. If this assessment process proves unsuccessful or there is no prospect for addressing forced labor, brands and retailers should disengage from business relationships with any suppliers, or those with subsidiaries, in the region. Brands should also endorse the call to action from the Coalition to End Uyghur Forced Labor, which provides detailed procedures on how to ensure that companies do not contribute to abuses in Xinjiang.

The reported companies have categorically denied their involvement in forced labor in the XUAR and have stated that they terminated their relationships with certain suppliers at various points in time. However, they did not outline the scope and accuracy of their verification procedures. Under the German supply chain law, they would have been obliged to do so. Furthermore, it must be determined whether the termination of supply relationships was early enough to avoid criminal liability. It is questionable whether, in light of the increasing reports of forced labor since 2018, a termination of supply relationships in the middle or at the end of 2020 is not too late to exclude criminal liability. The Supply Chain Act also requires companies to respond within a reasonable timeframe to human rights violations committed by their direct suppliers and, if there are concrete indications, their indirect suppliers as well. Whether the German textile companies did this needs to be clarified.

ECCHR conducted factual research into the case, developed the legal proceedings in Germany, and made its research results available to its Dutch partners. In April 2021, we supported a similar criminal complaint by our partner Sherpa in France. Already in July 2021, national authorities had begun investigations into several French fashion brands.

So far, we have had no direct contact with witnesses from the forced labor camps or those living in the XUAR region due to the precarious security situation in China.

We have previously worked on cases concerning corporate responsibility for international crimes (like Lafarge or Mercedes Benz Argentina) or cases in which certain products sold by a company were used to commit serious human rights violations (see the Yemen or Turkey cases).