China thwarts accurate audits of Xinjiang supply chains, US lawmakers hear
- Forced Uygur labour is impossible to properly document because of Beijing’s intentional moves, official tells the Congressional-Executive Commission on China
- Biden administration message to US businesses: ‘Since you cannot do due diligence in Xinjiang or with Xinjiang workers, then you cannot responsibly operate there’
Conducting due diligence in Xinjiang supply chains over the use of forced Uygur labour is “impossible” under the conditions set by the Chinese government, and the “only responsible thing to do is not to operate” there, an official of US President Joe Biden’s administration told a congressional panel on Tuesday.
Thea Lee, the deputy undersecretary for international affairs at the US Department of Labour, told the Congressional-Executive Commission on China that ethnic minorities in Xinjiang “live in fear”.
Despite legislative efforts to prevent companies from profiting from suspected forced labour in the region, auditing supply chains has become an increasingly difficult task.
In 2020, the US Congress passed the Uygur Forced Labour Prevention Act, which imposes strict requirements on American companies to prove that their supply chains in China are free of forced labour involving Uygurs, a Muslim ethnic minority living mainly in Xinjiang province.
The US and human rights groups have pointed to satellite imagery, leaked government documents and eyewitness accounts as evidence that more than 1 million Uygurs have been subjected to mass detention, political indoctrination and forced labour to make cheap goods. Beijing denies the claims.
To comply with the law, companies often rely on external audits to certify the absence of forced labour in their supply chain.
However, experts contend that these inspections are susceptible to manipulation by Chinese companies and government officials. Some constraints also prevent people from freely reporting potential violations.
Lee emphasised that no audit can occur without government oversight, which makes “objective worker interviews free from reprisal an impossibility”.
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Workers face labour and legal repercussions if they are candid with auditors, and inspections are often manipulated by managers who only authorise employees to discuss their conditions “when they already know what will be said”.
She said that, unlike unions, “social audits parachute in and out”. The absence of structured organisations that protect workers’ rights not only during auditor visits but also in their daily lives leads many workers to “anticipate trouble if they answer questions honestly”.
“When a company operates in China, it knows that workers do not have the ability to have an independent organisation because it’s not allowed. The laws to enable the ‘empowering piece’ of the worker’s voice isn’t there,” she said.
“But authoritarian repressive governments can’t tolerate independent democratic unions because they are a threat to authoritarianism.”
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In addition to violations in Xinjiang, Lee said the Chinese government promoted forced transfers of Uygur workers to other parts of China.
This strategy, she added, serves both to hinder independent analysis of labour violations and to depopulate the province, which has been experiencing a constant influx of migration from Han Chinese, the majority ethnic group in the country.
“I think that at the end of the day – and that was our message [to US companies operating abroad] in 2021 and 2023 – since you cannot do due diligence in Xinjiang or with Xinjiang workers, then you cannot responsibly operate there.”
Representative Jim McGovern, a Democrat from Massachusetts, said the Chinese government could have responded to international concerns and used them as an opportunity to abolish forced labour, but instead “adopted laws, regulations or practices that appear designed to limit the effectiveness of audits and detect” violations.
“One example is an anti-foreign sanctions law that has been used … to go after US due diligence firms collecting Xinjiang-related sensitive information,” he said.
“A second is a broadened definition of espionage that came into play when PRC authorities detained staff and another due diligence firm that was reported to be conducting investigations,” he added, referring to an incident in March 2023, when the Chinese police closed the Beijing office of the consulting firm Mintz and detained employees in charge of Xinjiang inspections.
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Representative Chris Smith, a Republican from New Jersey and the commission’s chair, said US lawmakers were not trying to “punish companies simply for doing business in China”.
“Our goal is to improve the human rights situation in China, so that businesses can certify that their supply chain is free of forced labour, and that their suppliers provide good working conditions and wages to their workers,” he said.
“And we ask these companies to partner with us in working towards that goal.”
Liu Pengyu, the spokesman for the Chinese embassy in Washington, said allegations of forced labour in China were “nothing but a lie concocted by the US side in an attempt to wantonly suppress Chinese enterprises”.
