Forced labor is so pervasive in China’s far west region of Xinjiang – and government control over information is so absolute – that it is almost impossible to establish if forced labor is being used in supply chains there. But here’s what is known:
Esquel Group gins and spins cotton in Xinjiang.
In July 2020, the US government placed trade restrictions on one of its Xinjiang subsidiaries, Changji Esquel Textile Co., citing concerns over forced labor.
In January 2021, US regulators banned all Xinjiang cotton from entering the US, again citing forced labor.
Since the cotton ban, a different Esquel subsidiary located in Guangdong – hundreds of miles away from Xinjiang – has continued exporting its clothes to brands in the US. But procurement records and company statements reviewed by BuzzFeed News show that Esquel’s Guangdong branch works together with its Xinjiang-based cotton spinning factories. When asked repeatedly, neither Hugo Boss nor Tommy Hilfiger nor Ralph Lauren would say where the cotton in their Esquel shipments comes from.
Esquel’s own public statements make it clear that its Xinjiang cotton production is deeply intertwined with its worldwide clothing operation. The company describes itself as “vertically integrated” meaning that it owns factories for each stage of the cotton supply chain: Esquel’s gins separate cotton fibers from seeds, and those fibers are later spun into yarn in Esquel’s spinning mills. Esquel’s Guangdong factories knit and weave cotton yarn to make cloth, then use this to manufacture clothing that can be exported to the rest of the world via the Hong Kong – based Esquel Enterprises. The company owns at least two cotton ginning companies in Xinjiang, where the bulk of China’s cotton is grown – but makes no public reference to owning any cotton ginning facilities outside the region.
Since the US ban against all Xinjiang cotton began last January, at least 16 Esquel shipments have arrived in the US for Hugo Boss, trade records show, the latest one in mid-December. One shipment has arrived addressed to PVH, the parent company of Tommy Hilfiger, containing Tommy Hilfiger – branded goods; four for Ralph Lauren; and one for Polo, a Ralph Lauren subsidiary. Guangdong Esquel, along with other Esquel companies, is still listed as a supplier in Hugo Boss‘s most recently published supplier list. PVH had included Guangdong Esquel on its supplier listas well as Esquel subsidiaries in Vietnam and Sri Lanka, but in late December – after BuzzFeed News reached out for comment – PVH released an updated version of its list, and no Esquel subsidiaries were on it. No Esquel companies appear in Ralph Lauren’s latest list, which was published in November.
Hugo Boss said in a statement that it had contacted Esquel, and the company had replied that “all our specifications and standards, including the observance of human rights and fair working conditions, have been and are being complied with.” Hugo Boss also said its own audits at Esquel production facilities revealed no evidence of the use of forced labor.
PVH and Ralph Lauren did not respond to requests for comment.
In response to a list of questions, Esquel said it had never been used and would never use coerced or forced labor. It added that it follows all national import and export laws, and that it does not sell products banned in specific jurisdictions.
Asked what regions it sources cotton from other than Xinjiang, Esquel did not give any specifics, saying only that it sources from “most of the key cotton producing countries globally.”
The Esquel shipments raise questions not only about whether these brands continue to sell products that use cotton grown in Xinjiang but also about whether the US ban is truly enforceable.
“Cotton is grown in Xinjiang, but then it is sold to warehouses, processors, and suppliers all over China,” said Laura Murphy, professor of human rights and contemporary slavery at Sheffield Hallam University, who has conducted research on forced labor in Xinjiang. And then it moves on as raw cotton or as yarn and fabric to the rest of the world. “Every time it moves, its provenance is increasingly obscured. There are many ways to track it, but so far most companies don’t seem invested in knowing where their raw cotton comes from. ”
A Customs and Border Protection spokesperson told BuzzFeed News that under US law, importers must take “reasonable care” in ensuring their supply chains are free of forced labor. Asked what constitutes “reasonable care,” the spokesperson said companies are encouraged to “become familiar with applicable laws and regulations” and work with the agency to protect consumers from “harmful and counterfeit imports.”
As part of its campaign targeting Muslims, the Chinese government has put in place labor programs in which Uyghurs and other ethnic minorities are made to work on farms and in factories. The US has labeled the campaign a genocide and has applied to increase pressure on the Chinese government, including a diplomatic boycott of the 2022 Beijing Winter Olympics. The US has continued to escalate trade prohibitions during that time: The US banned cotton and tomato imports from the region in January 2021, but last month Congress passed a law mandating that all goods from Xinjiang must be stopped at the border on suspicion that they are made with forced labor, placing the burden of proof on importers.
The region has long been a top source of cotton for international companies. China is currently the world’s leading producer of cottonwith over 87% of that coming from Xinjiang. Research shows that forced labor in the region is not restricted to factory work – there is also evidence of forced labor in cotton picking in southern Xinjiang.
The Xinjiang cotton ban has become a flashpoint in the larger diplomatic row between the US and China, with the Chinese government, along with Chinese consumers and celebrities, pressuring international clothing brands to continue sourcing in the region as a show of patriotic support.
Human rights groups welcomed the ban but were skeptical it could be fully enforced. They say forced labor by Uyghurs and other mostly Muslim minority groups, underpinned by government programs, is so widespread in Xinjiang that it’s almost impossible for any companies that source there to ensure their suppliers don’t use it. The political sensitivity of the issue, combined with the other government repressive measures targeting minority groups, has made it even more difficult for foreign companies to audit their supply chains..
The Better Cotton Initiative, an industry group that promotes sustainability by auditing its supply chains, stopped its reviews in Xinjiang altogether in October 2020, citing “An increasingly untenable operating environment.” Five firms did the same.
Esquel is the world’s largest maker of woven cotton shirts, providing major brands with more than 100 million every year, earning the company more than $ 1.3 billion in yearly revenue. Esquel operates two cotton ginning mills in Xinjiang and three spinning mills, where cotton is spun into yarn. BuzzFeed News was able to geolocate the three spinning mills in Xinjiang and the garment factories in Guangdong, matching images of these facilities on Esquel’s website with satellite imagery and street-level imagery from Baidu Total View and confirming their locations. The book Esquel produced to celebrate the company’s 40th anniversary describes how its spinning mill in Xinjiang’s Turpan prefecture was established specifically to supply the Guangdong factories. By 2018, the book adds, Esquel’s investment in Xinjiang amounted to $ 100 million, including charitable donations. The company did not answer a question about whether that supply route has changed.