I. Introduction
As has now been well publicized, there is serious and credible evidence that Uyghur and other minority communities in China are being forced into internment or ‘re-education’ camps,Footnote 1 with strong links to subsequent forced labour in factories, particularly centred in Xinjiang province.Footnote 2 The use of forced labour (intimately connected to many international supply chains) as a hallmark feature of the Chinese state’s oppression of its Uyghur peoples requires a ‘business and human rights’ (BHR) lens to responses to the human rights violations in the region.
The responses in the European Union (EU), United States of America (USA) and United Kingdom (UK), as ‘home states’ of businesses whose products or services have been linked to Uyghur forced labour, highlight the lack of legal frameworks to address such systemic human rights issues. In order to effectively police companies who are benefiting from or directly linked to human rights violations, states must step up to meet their own obligations to implement robust legal regimes – including looking beyond human rights due diligence (HRDD) laws as the defining feature of BHR compliance and of formal legal regimes.
II. State Responses to Forced Labour in Xinjiang Province
The Chinese state’s treatment of the Uyghur peoples and other minorities in Xinjiang province involves systemic human rights abuses, if not rising to the level of genocide under the Genocide Convention.Footnote 3 Forced labour has been a hallmark of the Chinese state’s operations in Xinjiang and is linked to international supply chains for products ranging from cotton to solar panels to tomatoes.Footnote 4 Despite recognizing these relationships, major importing countries and regions have primarily avoided imposing human rights-centred obligations on businesses connected to Xinjiang.
A. European Union
In the EU, substantive responses to forced labour in Xinjiang have been minimal. Setting aside promised HRDD legislation (discussed further below), there are no specific obligations on companies with connections to Xinjiang other than reporting requirements.Footnote 5 The European Parliament, which has been at the forefront of condemnation of China’s actions in Xinjiang, has consistently called for legislation prohibiting goods made from forced labour from being brought into the EU market.Footnote 6 No such action has been initiated, despite the European Parliament also concluding that there were no reliable methods for businesses to verify that any workplace in Xinjiang was free of forced labour or to prevent forced labour there.Footnote 7 In terms of the United Nations Guiding Principles on Business and Human Rights (UNGPs),Footnote 8 the necessary implication is that HRDD cannot be credibly undertaken in Xinjiang. The hallmark of HRDD is identifying and then addressing adverse human rights impacts caused, contributed or directly linked to businesses’ operations and relationships. The inability to confirm whether any workplace in Xinjiang is free from forced labour cuts off the baseline analysis of HRDD. Most importantly, the Parliament’s resolution (albeit focused on prevention, not mitigation) calls into question the extent to which businesses can meaningfully address their connections to forced labour in the region at all. If this is the case, businesses are unlikely to be able to comply with the UNGPs. In those circumstances, the UNGPs indicate that businesses should consider ending their relationships to the adverse impact.
Despite these conclusions, alongside numerous other European Parliament resolutions, the EU has not acted to regulate links between European-domiciled businesses and Xinjiang. At best, in March 2021, the EU joined the UK, USA and Canada in co-ordinated sanctions against ranking Chinese officials.Footnote 9 Only after those sanctions did ongoing negotiations over a China–EU investment deal also stall.Footnote 10 Neither of these steps directly addressed the ongoing links between European businesses and products made by or linked to forced labour.
B. United Kingdom
While the UK Government has used strong rhetoric with respect to the Chinese treatment of Uyghurs, that has not been matched with action on the links between that treatment and UK businesses and supply chains. Like the EU, the UK has no legal bar on companies using or selling goods connected to forced labour. In January 2021, the UK Foreign Secretary announced a package of measures related to forced labour in Xinjiang and directly addressed the potential for British organizations to be linked to or complicit in those human rights issues.Footnote 11 However, the measures announced did not amount to enforceable obligations on companies operating in the region. They included: a review of export controls of products going into Xinjiang; guidance to UK businesses highlighting the ‘challenges of effective due diligence’ in Xinjiang; public procurement obligations on human rights violations in supply chains, and financial penalties for organizations failing to publish annual modern slavery statements under the Modern Slavery Act (MSA).
Only the latter two measures constitute specific legal obligations and, in the case of mandating compliance with the MSA, had been previously announced in September 2020.Footnote 12 Nor, given the scope of the MSA, do additional penalties create any enforceable obligations on companies to address their links to forced labour as the Act imposes only reporting requirements. Moreover, the UK’s specific guidance to companies considering operating in Uyghur regions is simply to recommend ‘careful and robust’ HRDD,Footnote 13 with no direct advice to limit UK businesses’ ongoing links to the region. Despite the rhetoric then, none of its new measures necessarily affect how UK businesses determine whether to work in, or with companies based in, Xinjiang province.
C. United States
Of the countries surveyed, the USA has taken the most direct action in responding to the forced labour allegations in Xinjiang. The central response (from a BHR perspective) has been to limit imports into the USA from Xinjiang or linked to Xinjiang labour.Footnote 14 This has been possible through an existing law, the Tariff Act of 1930, which bans the import of any product made wholly or partly with convict or forced labour.Footnote 15 The Act is enforced through the US Customs and Border Protection (CBP) impounding goods at ports where the CBP ‘reasonably but not conclusively’ suspects those goods of being made by forced labour.Footnote 16 This allows action on credible allegations, without requiring a judicial standard of proof.
The CBP has, unusually, issued a region-wide forced labour notice against all cotton products and tomato products produced in Xinjiang, given the systemic risks of forced and prison labour,Footnote 17 after issuing numerous notices in respect of specific shipments of goods. Importantly, and consistently with the UNGPs, the region-wide order applies to products directly imported from Xinjiang and to downstream products made using Xinjiang labour. There is therefore a direct burden on importers to understand their supply chains to avoid potential import bans. Furthermore, to release a shipment, the company must prove that their products are not connected to the suspected forced labour.Footnote 18 Alongside this, the CBP have offered specific advice to importers on carrying out due diligence in Xinjiang.
III. Situating States’ Responses to the Uyghur Crisis within Business and Human Rights Commitments
The varying responses to the credible allegations in Xinjiang province indicate the need for formal legal frameworks for responding to BHR issues, rather than relying on either political decision-making by states or the individual responses of companies. There is a clear disconnect between formal commitments to BHR principles, by both states and companies in the UK, USA and EU, and the actual responses to serious links between businesses and human rights violations.
The UK, USA and EU have all broadly recognized the UNGPs and OECD Guidelines for Multinational Enterprises as normative frameworks. However, only the USA currently has existing legislation which could be re-purposed to actually police those norms in response to the human rights abuse allegations in Xinjiang. In addition, the delegation of decision-making to CBP officials also, to some extent, bypasses that response being dictated by political decision-making. The US response has not, therefore, been reliant on reactive government decision-making to an emerging human rights crisis, but on officials within existing systems implementing laws and (relatively) objective standards. While these efforts may not be entirely decoupled from the USA’s political position towards China, the CBP’s measures have acted as an independent system of sanction for companies linked to Xinjiang forced labour. The system also operated seemingly separately from any commitments toward legalizing the UNGPs into a binding framework, given limited progress in the USA towards any such formalization.
By contrast, the EU and UK lack any over-arching legislation addressing widespread business links with human rights abuses. The gap between their responses to the Uyghur forced labour allegations and stated commitments to implementing the UNGPs indicates the political influence on decision-making. The EU have openly committed to implementing binding HRDD legislation at an EU-level, alongside action from various member states.Footnote 19 The European Commission has committed to implementing HRDD legislation, with a draft scheduled to be tabled in 2021,Footnote 20 and the European Parliament is tabling a relatively detailed draft proposal, with specific liability provisions.Footnote 21 There is, evidently, no inherent aversion in the EU toward implementing BHR obligations at a state-wide level, or even simply to recognizing BHR norms.
The UK government has shown limited enthusiasm for HRDD legislation, favouring issue-specific BHR legislation and primarily without penalties for non-compliance, such as the Modern Slavery Act. The government also recently rejected a proposal for a targeted human rights and environmental due diligence obligation in respect of commodities linked to deforestation, partially on the basis that (inter alia) the UK wanted to ‘maintain a legality-based approach … respecting the right of countries to determine their own policies’.Footnote 22 These comments sit uncomfortably alongside BHR norms, which take as a fundamental premise the universal applicability of internationally recognized human rights. In this light, the UK’s public responses to the human rights issues in Xinjiang are surprisingly robust, probably reflecting a particular political valence.
Both the UK and EU have instead relied on businesses acting on their own individual soundings on Uyghur forced labour allegations, supplemented to some extent by business guidance, high-level rhetoric and political sanctions. These are, necessarily, ad hoc responses, rather than reflecting a systemic approach to BHR or forced labour issues as a general category. Moreover, the seriousness of the allegations in Xinjiang and most businesses’ limited leverage over the Chinese state mean that businesses are unlikely to be able to respond to the risks in Xinjiang in line with the UNGPs, short of exiting the area entirely. Although many companies have issued responses and promised investigations using at least UNGP-compliant language,Footnote 23 others have rejected any responsibility to take action or separate themselves from Xinjiang-produced cotton, seemingly based on pressure from Chinese consumers.Footnote 24 In such circumstances, where the human rights issues are endemic to the region and directly linked to the deliberate actions of state actors (making them unavoidable for businesses operating in or connected to the area), there is clearly a role for home state-level guidance and co-ordinated action to shape businesses’ responses. The responses of the USA, UK and EU reinforce the need to place decision-making on BHR issues within legislative frameworks to the extent possible, rather than relying on ad hoc political decision-making by either the state or individual businesses.
IV. Where To From Here? Business and Human Rights and Systemic Human Rights Issues
The need for cohesive legal frameworks for BHR responses begs the question of what system would adequately address the links between businesses and widespread human rights allegations. Although the USA’s Tariff Act and HRDD provide helpful examples, both have limitations where particularly entrenched human rights issues exist in a given region or supply chain. A hybrid approach, or other more direct regulation, may better address more systemic human rights issues.
Attention to formalizing BHR obligations has focused primarily on legalizing companies’ obligations to carry out HRDD. This focus may reflect the comparable reticence of the UNGPs on state obligations. Principle 2 acknowledges that there is no legal requirement on states to regulate company behaviour (and links to human rights issues) beyond their own jurisdiction. As indicated by the UK and EU approaches in Xinjiang, it may also be politically preferable for states to outsource human rights issues to individual companies rather than taking responsibility for them as a matter of state policy. Viewed through this lens, the EU’s state-level response to the crisis in Xinjiang might in fact reflect its interest in individual company-centred HRDD legislation. However, HRDD does not provide a full answer to regulating company behaviour in respect of systematic human rights issues. HRDD is primarily directed at each company managing its own human rights risks, with significantly less guidance on how companies should combat systemic issues (and particularly those short of active conflicts). While HRDD legislation could incentivize individual companies to address issues in their supply chains, given the inherent specificity of HRDD processes to each businesses’ circumstances and relative influence, even stringent legislation would not necessarily lead to a clear standard of behaviour from all companies connected to Xinjiang. Instead, HRDD’s internal regulatory process allows for potentially subjective company decision-making. Although the adaptable, context-specific approach of HRDD is one of its core strengths, relying on individual companies’ decision-making is unlikely to adequately address situations where forced labour is embedded in a region (particularly under state supervision).
The USA’s import restrictions offer an effective alternative model. The CBP’s region-wide approach to import bans operates as a warning sign to all businesses working in certain areas and by extension, to all the manufacturers in those regions. The significance of the USA internal market makes this a particularly useful sanction. However, the emboldened enforcement of the Tariff Act does not (alone) represent a cohesive, UNGP-consistent legislative framework. Partially, this is because CBP enforcement must still be viewed through the political context of the well-publicized USA–China ‘trade war’ which has clearly shaped some of the robust US response on the Uyghur issue. More centrally, the Tariff Act is also a blunt tool. The Act focuses solely on forced labour (not other human rights issues) and does not share the same goals as the UNGPs and HRDD, particularly in respect of the distribution of obligations between importer and producer companies.Footnote 25 Import bans run the risk of sporadic implementation, and when used in isolation, of importers simply abandoning working in particular regions. Campaigning organizations have noted the potential for unintended negative flow-on effects for the workers in regions subject to CBP notices.Footnote 26 While ceasing any work might be appropriate in areas like Xinjiang, where the prospect of companies influencing the Chinese state to stop indentured Uyghur labour is likely to be low, other types of systemic human rights issues are likely to be more effectively combatted through the UNGPs’ emphasis on process and engagement with producer companies and countries. Even with these downsides, the US legislation provides a framework for states to address the ‘risk of business involvement in gross human rights abuses’ (consistent with Principle 7 of the UNGPs), an obligation that has been overlooked in the focus on states implementing HRDD laws.
Neither of these options is the sum of potential state regulation of companies operating in areas of gross human rights abuses. Well outside the scope of the UNGPs, in situations of severe state-backed human rights violations, states have historically used sanctions as a way of signalling to businesses that operating in certain areas is no longer approved. While sanctions are a particularly blunt method, they indicate that states are willing to draw lines in the sand over their citizens working in or with governments engaged in particularly egregious behaviour. The emergence of human rights-based sanctions indicates the potential for developing targeted and subject-specific sanctions, which could include focusing on areas where entrenched BHR risks are linked to deliberate state action. However, even targeted sanctions – while effective – would not eliminate the risks of politicized responses or retain the benefits of UNGP-inspired regulation. A middle ground between blunt sanctions and self-regulating company behaviour could involve more stringent, binding guidance to companies operating or with business connections in risky contexts, particularly in relation to systemic, state-backed abuses like in Xinjiang. Such guidance could serve to supplement HRDD laws, with greater political independence maintained through implementation in secondary legislation delegated to an appropriate agency. The precise mechanisms would obviously differ state to state, but this model could provide an option for greater state direction of business responses and would address some of the limitations of HRDD when dealing with severe and systemic human rights violations, such as those in Xinjiang. More directive HRDD obligations would also be compatible with operating alongside import bans in respect of specific issues, like child or forced labour. A complementary regulatory approach would allow import bans to support HRDD where using leverage or mitigation in an area was ineffective, rather than addressing BHR issues at the import end of international supply chains. In turn, this would maximize the real benefits of the UNGPs’ focus on embedding human rights responsibility within companies, with the added weight of formal state regulation to company decision-making in high-risk jurisdictions.
Legislative models for action on BHR issues should at least consider the full range of potential state action, from sanctions to import bans to HRDD, recognizing the benefits of other forms of state regulation towards achieving the goals of the UNGPs and the limits of HRDD. A wider view of the options for better BHR legal frameworks would produce more effective systems for state responses to links between import markets and systematic human rights issues as seen in places like Xinjiang.
V. Conclusion
The clear and pressing human rights issues associated with the pervasive, state-backed forced labour in Xinjiang province should mandate responses from both the associated businesses, and their home states. States must take a stronger role in regulating businesses’ connections to systematic human rights abuses and ensuring their domestic consumption is not inadvertently supporting such gross abuse. The UK and EU’s slow responses on Uyghur forced labour vindicates campaigners’ focus on legalizing BHR obligations and situating those responses outside of subjective political decisions. However, a critical evaluation also indicates the need to look beyond HRDD laws and the temptation to shunt decision-making onto individual businesses. States and BHR advocates should look beyond legalizing HRDD and towards complementary methods of state regulation to enforce BHR norms.