I am posting and providing brief reflections on the essays that make up the excellent new online symposium organized by the marvelous Caroline Omari Lichuma and Lucas Roorda and appearing on the blog site of the Business and Human Rights Law Journal. Entitled Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe. The essays (and the symposium) means to expand the conversation about human rights from out of its hub in the UN apparatus in Geneva and begin exploring in more depth the sometimes extraordinary developments occurring outside the highest reaches of elite curation in the Global North.
The tenth of the essays is Erika George and Enrique Samuel Martinez's, "The Uyghur Forced Labor Prevention Act: An Assessment Of Enforcement Efforts"
The marvelous contribution of Erika George and Enrique Martinez follows below and may be accessed as originally posted here. Among the important points raised in their essay the following resonated particularly strongly and may be worth deeper reflection:
1. While in some ways the United States stands at the peripheries of the BHR enterprise (nicely discussed in the Symposium here), especially where a significant part of global norm drivers have committed to mandatory measures built around expectations of business conduct in their economic activities.These effectively seek to implement the UNGP's 1st Pillar State duty through projects of legalizing the corporate responsibility to respect human rights, converting them into compliance measures overseen by a (eventually) well trained administrative apparatus (eg here). However, there is one area in which it remains a global driver--in the deployment of State authority (UNGP Principle 3) more directly. In this case that is undertaken through the use of the use of sanctions as a means of enforcing international rights and expectations, including but not limited to human rights in the economic domain (discussed eg here, here, here, here). Other States have developed their own versions (e.g. here and here), though for some, substantial human rights questions remain, especially of targeted sanctions regimes (eg discussed here, and here) in addition to questions of effectiveness (eg from the libertarian perspective here). Sanctions regimes have also produced anti-sanction legislation, for example in China (eg here ¶2.1). Sanctions regimes tend to be highly targeted, even in the human rights context--against specified individuals, entities, and places. They are sometimes deployed only with respect to breaches of certain rights. On the other hand, they can have an indirect effect on the practice of human rights due diligence by delegating to enterprises the duty to conform to sanctions regimes within their production chains. At the same time they may be both imposed and limited to reflect national policy objectives, effectively instrumentalizing international law and expectations int he service of national interest--but then that has been the form of other human rights efforts that interlink the public and private spheres (see discussion here and here in the context of Sovereign Wealth Funds).
2. It is in this context that one might better appreciate the excellent analysis of one of the current "signature" sanctions regimes marvelously analyzed by Erika George and Enrique Martinez. They outline the basic requirements of the Uyghur Forced Labor Prevention Act of 2021 (UFLPA), assessing enforcement and compliance efforts of this effort. One of the critical elements of the analysis reminds us of the importance of nexus issues. In this case UFLPA occupies a space at the center of several critical trajectories. One of them is the human rights and sustainability positive efforts at "just transitions" to non-carbon based transport. Another is the collision of human rights impacts assessments where there may be substantial disagreement about the measuring stick--this is especially acute with respect to Chinese policy in Xinjiang, and intensified because of the passions invested in the principles and judgments from all stakeholder sides. And the third is the effects of national interests in the calculation of human rights impacts as well as the choices of sanctions focus. In the latter case, it is interesting, for example, that though the allegations range across a broad set of human rights impacts, UFLPA focuses on forced labor.
3. George and Martinez analysis of the regulatory requirements suggest both the power and the powerful inefficiencies of administrative oversight of economic activity (and thus provides a glimpse of the much large though similar issues in more comprehensive mandatory measures such as those emerging in Europe). Compliance under UFLPA is built around the creation of a rebuttable presumption that goods from Xinjiang are produced with forced labor. Compliance, then, involves one of two choices--(1) procure goods or services elsewhere (and ensure there are no connections to Xinjiang); or (2) rebut the presumption. Without irony, UFLPA provides that one way to rebut the presumption is to show that the goods etc. have no connection to Xinjiang. The other is to conduct due diligence on products that have a connection to Xinjiang, including inquiries from the relevant administrative agency to show that the goods were not produced with forced labor.
Overall, the government’s enforcement strategy counsels that to comply businesses should engage in heightened due diligence in order to identify potential supply chain exposure to companies operating in XUAR and connected to abuse of Uyghur and other Muslim minority laborers.Another irony, this one not lost on George and Martinez, of the apparently intimate connection between the administration of sanctions regimes and its operationalization through systems of mandatory due diligence. They note that
"the UFLPA is well positioned to incentivize the creation of more robust due diligence tools to detect human rights violations in global supply chains. The UFLPA could be developed to serve as models but unfortunately no transparency into inner workings of the XUAR region make conducting due diligence difficult.(ibid.).And yet, that is precisely why the U.S. might have focused on sanctions regimes, rather than on regimes of mandatory human rights due diligence measures--to limit the use of mandatory measures to those specific and functionally differentiated activities with respect to which the State may have a special interest. With respect to the rest, guidance, incentives and policy measures would serve as the default rule (see Symposium essay HERE on the US NAP).4. This US approach suggests another variation in human rights and business hybridity, the guidance of but markets driven 2nd Pillar with limited direct intervention by the State in matters of special national interest.At the time of the introduction of the legislation that became UFLA I noted what appeared to be the adoption in the US of what I called a two thrust policy, one that leveraged the public and private pillars of the UNGP:
CECC engaged in a two track approach to projecting power and asserting pressure against Chinese policy and policy implementation in Xinjiang. It has done this by announcing a two thrust campaign. The first seeks to affect the societal sphere by putting pressure on market actors to evidence fidelity to national (and perhaps international) human rights values in accordance with a specific application, in their market transactions. * * * Simultaneously CECC's leaders have introduced legislation, the Uyghur Forced Labor Prevention Act (UFLPA) HR 1155 (117th Cong. 1st Sess. 2021), which does two things. First it serves to develop an authoritative narrative embedded in law (through the preamble and its findings).* * *Second, it serves to enhance a legal framework for decoupling trade that is connected to "all goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of China" (The US Two-Thrust Campaign Against Chinese Policy in Xinjiang: The Congressional-Executive Commission on China (CECC) Coordinates Use of Markets (NBA Endorsements) and Statutes (Uyghur Forced Labor Prevention Act))
One sees variation of this approach in Brazil, Taiwan, and South Korea, for example. If the European approach with mandatory measures represents the center, then the periphery becomes all the more interesting precisely because its approaches are so variegated. Beyond the core distinction between regimes grounded in mandatory versus guidance measures, other differences emerge, One focuses on the nature of mandatory measures. In this case between mandatory measures that are compliance centered (eg, the European CSCDDD) or sanctions centered (eg UFLPA). But sanctions-related mandatory measures may have compliance based consequences--a connection that George and Martinez astutely analyze in the UFLPA. Another focuses on comprehensive versus targeted measures. Again against the comprehensive reach of European measures, one encounters targeted approaches of periphery states. But the reasons and the scope of that targeting are contextually driven--quite different, for example, among the state approaches considered in this BHR Symposium. Lastly, guidance and policy themselves can vary greatly in size, scope, and direction. In the background, of course, the role of capacity and capacity building ought not to be underestimated as substance and as a disciplinary device--that appears to be a lesson in the context of the Balkans (here).
5. Lastly, the role of civil society is nicely underscored in the analysis. That is particularly important when one considers the varying roles and effects of civil society participation in the BHR debates (and consequent policy) in the States considered in the Symposium. For me, contrasting the role of civil society in the Brazilian context, and in that of the US, was particularly instructive. George and Martinez explain how in the US context, " individual states, NGOs, and business groups have stepped up to push for greater accountability. The Coalition to End Uyghur Forced Labor has gathered civil society organizations (CSOs) and trade unions to put pressure on businesses, governments, and most importantly China to end forced labor." (Ibid.). At the same time civil society has also refined its focus on advocacy directly to the private sector. Capacity, and capacity building, then, may be as important for civil society as it may be for States and business.
6. But each of these is essentially context dependent especially where the localization of international expectations becomes the touchstone for compliance. That may require advocacy in two keys--on the one hand civil society may wish to advocate for convergence under a single regime; at the same time it may have to develop modalities of advocacy that maximize human rights positive behaviors in national context. Building bridges between the two, of course, becomes the challenge but also a substantially important role for both business and civil society. The UFLPA, then, reinforces the insight that peripheries may play a vital role in the discourse and development of BHR under the broad framework of the UNGPs, and that coordination, rather than coherence--BHR pluralism under a core set of values-objectives rather than a presumption of a singular path to BHR objectives--may better serve the BHR project as it has been developing to date.
Links to all Essays in the BHR Blog Symposium here:
Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe: Part 7: Sang Soo Lee--"BHR Regulations in South Korea: Achievements and Limitations"
Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe: Part 9: Cristiane Lucena Carneiro and Nathalie Albieri Laureano --"Regulatory Initiatives on Business and Human Rights in Brazil – From the Domestic to the International and Back? "Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe: Part 10: Lisa J, Laplante, "The United States 2024 National Action Plan on Responsible Business Conduct"
Symposium on Business and Human Rights (BHR) Regulatory Initiatives Outside Europe: Part 11: Erika George and Enrique Samuel Martinez, "The Uyghur Forced Labor Prevention Act: An Assessment Of Enforcement Efforts"
The Uyghur Forced Labor Prevention Act: An Assessment Of Enforcement Efforts
The Xinjiang Uyghur Autonomous Region (XUAR) of northwest China is populated primarily by ethnic and religious minorities including Muslim Uyghurs, Kazakhs, and Kyrgyz. Sharing borders with eight other nations and rich in natural resources, the XUAR is strategically and economically significant for China as part of the country’s “Belt and Road” infrastructure initiative. Documented widespread and systematic human rights abuses committed in XUAR by the Chinese government, ostensibly to fight terrorism and extremism, from the mass detention of religious minorities held indefinitely in assimilation camps without due process to forced labor have drawn international criticism and concern. Goods manufactured in XUAR are exported internationally. Under the Uyghur Forced Labor Prevention Act of 2021 (UFLPA) goods produced in XUAR are presumed to be made with forced labor and are banned from the United States (US). After a brief overview of some salient business and human rights risks in XUAR, this contribution outlines the basic requirements of the UFLPA and assesses enforcement and compliance efforts to date.
I. Rights Abuses and Corporate Responsibility
Risks of forced labor occurring in the clean energy transition are salient in the solar energy and electric vehicle supply chains due to suspected connections to forced labor in Xinjiang. As home to 60% of the world’s rare earth elements (REE) and responsible for refining 90% of the world’s REE, China is significant to the world’s clean energytechnology transition. China dominates the world’s production capacity of the most mass-manufactured technologies essential for the clean energy transition and is a net exporter of clean energy technology. Because most the world’s lithium-ion batteries are made in China, electric vehicle batteries currently necessarily entail Chinese involvement.
Similarly, given China’s central role in the solar industry sector, the rapid growth of energy projects increases the expected risks of forced labor in the solar energy supply chain. Efforts to ensure that production supply chains are not tainted with coerced and captive labor are complicated by China’s lack of transparency and demands that businesses comply with domestic policies that violate international standards.
II. Regulatory Requirements: A Rebuttable Presumption
Congress passed the Uyghur Forced Labor Prevention Act (UFLPA) in 2021 to “address gross violations of human rights XUAR.” Under the UFLPA, US Customs and Border Patrol must presume that goods from XUAR are made with forced labor and exclude them from the US market. The Act creates a rebuttable presumption that “goods, wares, articles, and merchandise” that are “mined, produced, or manufactured wholly or in part” from the Xinjiang region are prohibited products of forced labor under the Tariff Act of 1930. The presumption covers goods made by entities outside of XUAR and China that source materials from XUAR.
There are two ways an importer can successfully rebut the forced labor presumption. First, an importer can show by clear and convincing evidence that “the goods and its inputs are sourced completely from outside Xinjiang and have no connection to [identified] entities” proving the goods at issue are outside the scope of the Act. Second, where goods are covered by the UFLPA the importer must show that it has conducted due diligence, that it has responded to agency inquiries, and that the goods at issue were not produced, even in part, with forced labor.
Overall, the government’s enforcement strategy counsels that to comply businesses should engage in heightened due diligence in order to identify potential supply chain exposure to companies operating in XUAR and connected to abuse of Uyghur and other Muslim minority laborers.
III. Enforcement Action and Exclusion from US market
The Forced Labor Enforcement Task Force (FLETF), responsible for creating policies to prevent the import of UFLPA covered goods, has published two strategies—one in 2022 and an update in 2023—clarifying requirements and providing guidance to importers. The UFLPA is enforced by the U.S. Customs and Border Protection (CBP). The CBP tracks and compiles data on shipments subjected to UFLPA reviews and enforcement actions. Since June of 2022, 8,142 shipments have been detained under the UFLPA with only 3,469 having been released to date. These shipments subjected to the UFLPA hold the approximate value of $3.17 billion USD.
UFLPA enforcement through detention has reached a range of different industries, which include agriculture products, electronics, lithium-ion batteries, automobile components, and “[d]ownstream products of vinyl, copper, aluminum and steel.” FLETF has targeted four “high-priority sectors for enforcement” that include: cotton products, silica-based products, tomatoes, and apparel.
In 2024, exemplifying enforcement of the UFLPA, Volkswagen had thousands of vehicles detained by CBP for containing a Chinese subcomponent that breached UFLPA requirements. Although China has had its fair share of shipments detained under UFLPA enforcements, most shipments have come from other countries, which include Malaysia, Vietnam, and Thailand, but contain components that violate UFLPA. The US Congress recently allocated additional funding for enforcement. Increased investment in enforcement signals a strong level of bipartisan commitment on the part of the US government to restrict imports from China connected to human rights abuses. One US based law firm advising business clients on compliance has aptly characterized the current state of UFLPA enforcement as “vigorous.” Appropriately, successful UFLPA compliance substantially and practically aligns with the due diligence methods articulated in the United Nations Guiding Principles on Business and Human Rights.
Despite relatively aggressive enforcement, barriers to fully effective enforcement of the UFLPA to stop forced labor for the Xinjiang region remain. For example, the House of Representatives Select Committee on the Chinese Communist Party in a letter to the Department of Homeland Security detailed several concerns that complicate effective enforcement. Among barriers to enforcement are companies transferring forced labor workers to other regions to avoid inspection by obscuring their ties to forced labor, and transshipment of forced labor goods through third-party countries. The barrier that has proved most problematic is a $800 de minimis provision under U.S. trade law. The de minimis provision has been used to move products in small packages. Specifically, the de minimis exception accounted for approximately 1 billion packages, of which Shein and Temu—companies accused of “selling goods with forced labor”—account for about a third. These companies and their operation under the de minimis exception provide a barrier for enforcement—one that has caught media attention due to the “likely significant violations of U.S. [forced labor] law.”
IV. Advocacy and Accountability
Despite these enforcement challenges, the UFLPA is well positioned to incentivize the creation of more robust due diligence tools to detect human rights violations in global supply chains. The UFLPA could be developed to serve as models but unfortunately no transparency into inner workings of the XUAR region make conducting due diligence difficult.
Nevertheless, individual states, NGOs, and business groups have stepped up to push for greater accountability. The Coalition to End Uyghur Forced Labor has gathered civil society organizations (CSOs) and trade unions to put pressure on businesses, governments, and most importantly China to end forced labor. The Coalition has a call to actionfor buyers and corporations. They say (1) buyers should assume that all products produced in the region are tainted by forced labor and (2) corporations should remove their supply chain from the region. They further provide a “company commitment” through which corporations can agree to take certain actions the coalition recommends in order to prevent corporate complicity.
The Fair Labor Association (FLA), “an international network . . . that promotes human rights at work,” provides a case in point. The multistakeholder initiative has made numerous statements regarding human rights concerns in Xinjiang from 2019 to present. In 2019, prior to enactment of the UFLPA, FLA encouraged additional due diligence measures be added related to Xinjiang. In 2020, it encouraged textile supply chains be rerouted based on the presumption that Xinjiang was using forced labor. However, by the end of 2020, FLA determined for the first time ever that it was necessary to ban sourcing (direct and indirect) from an entire region because due diligence processes were impossible and insufficient. Consistent with the Coalition’s call to action, the FLA’s policy is now that affiliates should identify potential human rights abuses in their supply chain and either “fix the problem if it can [or] change its sourcing relationships if it cannot.”
The lesson to be drawn from the US experience with UFLPA is that advocacy remains essential and moving toward mandatory due diligence is a tool in the “smart mix” of measures necessary to better align business practices and policies with respect for the human rights of everyone, everywhere as envisioned in the UNGPs and the OECD Guidelines for Multinational Corporations.
No comments:
Post a Comment