Forced labor is so widespread in China’s far western region of Xinjiang — and government control over information so absolute — that it’s impossible to establish whether forced labor is being used in supply chains there. But here’s what to know:
Esquel Group gins and spins cotton in Xinjiang.
In July 2020, the US government imposed trade sanctions 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.
After the cotton ban, a different Esquel subsidiary in Guangdong — hundreds of miles from Xinjiang — continued to export its clothes to brands in the US. But procurement documents and company statements reviewed by BuzzFeed News show that Esquel’s Guangdong branch works in tandem with its Xinjiang-based cotton spinning factories. When asked time and time again, Hugo Boss or Tommy Hilfiger or Ralph Lauren’s Esquel won’t say where the cotton comes from in their shipment.
Esquel’s own public statements make it clear that its Xinjiang cotton production is deeply intertwined with its worldwide clothing operations. The company describes itself as “vertically integrated,” meaning it has factories for every step of the cotton supply chain: Esquel’s gins separate the cotton fibers from the seeds, and those fibers are then spun into yarn in Esquel’s spinning mills. Esquel’s Guangdong factories knit and weave cotton yarn to make fabric, which is then used to make clothes that can be exported to the rest of the world through Hong Kong-based Esquel Enterprises. The company owns at least two cotton ginning companies in Xinjiang, where most of China’s cotton is grown — but makes no public reference to having any cotton ginning facilities outside the region.
Since the US ban on all Xinjiang cotton began last January, at least 16 Esquel shipments for Hugo Boss have arrived in the US, the latest in mid-December, trade records show. A shipment arrived at PVH, the parent company of Tommy Hilfiger, containing Tommy Hilfiger-branded merchandise; four for Ralph Lauren; and one for Polo, a subsidiary of Ralph Lauren. Guangdong Esquel, along with other Esquel companies, is still listed as a supplier in Hugo Boss’s most recently published supplier list. PVH included Guangdong Esquel on its list of suppliers, as 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 appeared on Ralph Lauren’s latest list, published in November.
Hugo Boss said in a statement that it contacted Esquel and the company replied that “all our specifications and standards, including compliance with human rights and fair working conditions, have been and are being followed.” Hugo Boss said his own audit of Esquel’s 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 he has never used and will never use forced or forced labor. It added that it complies with all national import and export laws and does not sell products prohibited in certain jurisdictions.
When asked from which regions other than Xinjiang it sources the cotton, Esquel did not give any specifics, saying only that it is sourced from “most cotton-producing countries globally”.
The Esquel shipments raise questions not only about whether these brands will continue to sell products that use cotton grown in Xinjiang, but also about whether the US ban is actually enforceable.
“Cotton is grown in Xinjiang, but then sold to warehouses, processors and suppliers across China,” said Laura Murphy, a professor of human rights and contemporary slavery at Sheffield Hallam University who has researched forced labor in Xinjiang. And then it moves to other parts of the world as raw cotton or yarn and cloth. “Every time it moves, its origin is more obscure. There are many ways to trace it, but until now most companies haven’t 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” to ensure their supply chains are free of forced labor. Asked what constitutes “reasonable care,” a spokesperson said companies are encouraged to “familiarize themselves with applicable laws and regulations” and work with the agency to protect consumers from “harmful and counterfeit imports.”
As part of its campaign to target Muslims, the Chinese government has implemented labor programs in which Uyghurs and other ethnic minorities work in plantations and factories. The US has labeled the campaign a genocide and has put more pressure on the Chinese government, including a diplomatic boycott of the 2022 Beijing Winter Olympics. The U.S. has continued to ramp up trade sanctions during that time: The U.S. banned cotton and tomato imports from the region in January 2021, but last month Congress passed a law requiring all goods from Xinjiang to be stopped at the border on suspicion. Made with forced labour, places the burden of proof on the importer.
The region has long been a top source of cotton for international companies. China is currently the world’s leading producer of cotton, with 87% of it coming from Xinjiang. Research shows that forced labor in the region is not limited to factory work – there is evidence of forced labor in cotton picking in southern Xinjiang.
The Xinjiang cotton ban has become a flashpoint in a larger diplomatic row between the US and China, with the Chinese government pressuring international clothing brands to continue sourcing in the region as a show of patriotic support, along with Chinese consumers and celebrities.
Human rights groups welcomed the ban but were skeptical that it would be fully enforced. Forced labor by Uyghurs and other predominantly Muslim minority groups, underpinned by government programs, is so widespread in Xinjiang that it is almost impossible for any company based there to ensure that their suppliers do not use it. The political sensitivity of the issue, combined with other repressive government 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 altogether in October 2020, citing a “largely unsustainable operating environment” in Xinjiang. Five institutions did the same.
Esquel is the world’s largest manufacturer of woven cotton shirts, supplying more than 100 million major brands each year, with the company generating more than $1.3 billion in annual revenue. Esquel operates two cotton ginning mills and three spinning mills in Xinjiang, where cotton is spun into yarn. BuzzFeed News was able to geolocate three spinning mills in Xinjiang and a garment factory in Guangdong, matching images of these facilities with satellite imagery on Esquel’s website and street-level imagery from Baidu Total View and confirming their locations. A book produced by Esquel to celebrate the company’s 40th anniversary describes how its spinning mill in Xinjiang’s Turpan Prefecture was set up to supply factories in Guangdong. As of 2018, Esquel’s investment in Xinjiang totaled $100 million, including charitable donations. The company did not answer questions about whether that supply line had been changed.