No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Compliance

Where Does Your Cotton Come From? Dismantling Global Forced Labor Requires Pinpoint Supply Chain Transparency

New laws in U.S., Europe target modern-day slavery from the outside

by Erika Peters
August 10, 2022
in Compliance, Risk
Where Does Your Cotton Come From? Dismantling Global Forced Labor Requires Pinpoint Supply Chain Transparency

At any given time on earth, an estimated 25 million people are forced to work against their will. The human rights atrocities alleged in China’s Xinjiang Uyghur Autonomous Region have rightly generated outrage and political action. New laws coming into effect in the U.S. this year and Europe next year aim to strip the global supply chain of products made with forced labor. Erika Peters, head of supply chain risk management at Exiger, looks at the impact of the U.S. law.

Modern-day slavery is rife. An estimated 40 million people are affected at any given time, including about 25 million involved in forced labor, according to the most recent estimates from the International Labour Organization. One in four victims of modern slavery are children. 

Slavery affects every country in the world and is present at almost every stage of the supply chain — from the sourcing of raw materials to the manufacturing of goods, right through to shipping and delivery. It’s a critical issue that has demanded attention for the past several decades. 

But nothing has caught the world’s attention like the atrocities in China’s Xinjiang Uyghur Autonomous Region (XUAR), where allegations of torture, forced labor and genocide of around 1 million Uyghurs have emerged.

In response, leaders around the world have sought to attack this issue. The bipartisan Uyghur Forced Labor Prevention Act (UFLPA) went into effect in the U.S. in June 2022; the law subjects goods from China to stringent inspection and potential seizure, particularly if the goods originated wholly or in part from XUAR.

And in Europe, the UK Modern Slavery Act and German Supply Chain Act, which both ramp up expectations of organizations to understand their multi-tier supply chains and increase the penalties for not doing so, go into effect at the beginning of 2023.

The high human toll of cheap goods

Businesses often turn to suppliers with low production costs to maximize profit. Using offshore suppliers in regions where labor is exponentially less expensive than in their home country allows businesses to maximize profitability and meet consumer demand. 

However, the reality is that these low labor costs are often only possible due to a lack of human rights regulations — or at least regulations that aren’t enforced. Many workers who make the products we consume daily are not paid a living wage, if any wage at all. 

Many countries around the world are guilty of human rights offenses, but the situation in Xinjiang is extreme. China has been accused of committing crimes against humanity against the Uyghur population, with an estimated 1 million Uyghurs detained against their will in “re-education camps,” the same region where new factories have since been built. 

With cotton from XUAR accounting for 20% of the world’s cotton supply and 85% of Chinese production, it’s highly likely that most supply chains contain traces of products originating in the region.

Impact of UFLPA on business

Stringent enforcement of the UFLPA aims to reduce the role of American companies in these human rights offenses. Under the UFLPA, any goods labeled “Made in China” that are made of cotton, refined metals, circuit and polysilicon are subject to inspection and seizure upon their arrival in the U.S. If businesses fail to comply with UFLPA standards, U.S. Customs and Border Protection (CBP) are instructed to seize all shipments containing illegal products.

Companies should recognize that they must overhaul their supply chains and compliance practices to adhere to the new standards — or risk losing billions of dollars in confiscated products and being subject to sanctions by U.S. law.

The fashion, computing and alternative energy sectors will be the most affected as they have heavily relied on the low labor costs in XUAR to manufacture goods cheaply. The UFLPA means they will need to find new alternatives to production, possibly resulting in a massive reshoring of production methods in these industries and ultimately, higher product costs for the end user. 

A more ethical future for global commerce 

Because the UFLPA is sanctionable only  in the United States, some have questioned if it will be effective —  and the short answer is yes. 

But here’s the long answer: China accounts for a substantial portion of U.S. imports —  $542 billion in 2021 alone — so significant reduction of U.S. exports will cause China to lose one of its largest buyers. Not only will China’s export market suffer but the new regulations also create an opportunity for emerging markets in Asia, Africa and the Americas to take its place. 

The UFLPA is combating forced labor from a domestic standpoint. While the act was implemented by Congress to regulate U.S. imports, it also sets the tone for China and other countries to highlight where the U.S. stands on forced labor practices. This tone is in line with consumer expectations: A Barclays study on ethical business and sustainability in retail reported that 63% of consumers want to see more ethical practices from companies.

Compliance with these regulations will force companies to fully understand their supply chains, improving supply chain resilience while creating opportunities for growth and economic rebalancing. Today’s supply chains are multidimensional and complex, making it harder for companies to identify the origin of goods and labor. Without robust supply chain tracing, companies risk the seizure of billions in products and significant corresponding revenue loss. 


Tags: Supply ChainThird Party Risk Management
Previous Post

SEC Is Pushing Back Against Greenwashing; Bribery, Corruption Investigations Provide Valuable ESG Lessons

Next Post

What’s in It for Me? Gartner Says Workers Need to Be Convinced of Compliance’s Value Proposition

Erika Peters

Erika Peters

Erika Peters serves as Global Head of Third Party & Supply Chain Risk Management for Exiger. With two decades of expertise across Compliance, Regulatory Affairs & Internal Audit, at Exiger, Erika helps its largest clients solve critical risk management challenges with tech-enabled solutions to drive transparency, process efficiencies and output consistency — reducing time and providing actionable intel.

Related Posts

supply chain

Only 1 in 4 Manufacturers Have High Confidence in ESG Readiness of Their Supply Chains, Survey Finds

by Staff and Wire Reports
January 27, 2023

Ever-evolving regulatory requirements, consumer demand and investor expectations are all forcing manufacturers to increase the transparency of their supply chain,...

Build and Scope Better Vendor Due Diligence Questionnaires

Build and Scope Better Vendor Due Diligence Questionnaires

by Corporate Compliance Insights
January 18, 2023

Make sure you're asking all the right questions when onboarding new third-party vendors White Paper Build and Scope Better Vendor...

SWISS GRC DAY 2023

SWISS GRC DAY 2023

by Aarti Maharaj
December 15, 2022

The SWISS GRC DAY brings together interested parties from all over Switzerland and nearby countries. Topics include first-hand news, challenges...

16th Edition Third Party Vendor Risk Management for Financial Institutions Conference

16th Edition Third Party Vendor Risk Management for Financial Institutions Conference

by Aarti Maharaj
December 8, 2022

The GFMI 16th Edition Third Party Vendor Risk Management for Financial Institutions conference taking place in New York, NY on...

Next Post
What’s in It for Me? Gartner Says Workers Need to Be Convinced of Compliance’s Value Proposition

What’s in It for Me? Gartner Says Workers Need to Be Convinced of Compliance’s Value Proposition

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Code of Conduct Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT