Tanzina: A piece of legislation with unusually strong bipartisan support is reportedly facing opposition from some of the biggest corporations in the world. The Uyghur Forced Labor Prevention Act aims to end the use of forced labor from China's Uyghur Muslim population in product sold in the United States, but reports from the Washington Post and the New York times say that companies including Apple, Nike and Coca-Cola are lobbying to weaken the bill before it passes in the Senate. Reports issued by government officials and human rights groups have linked all three companies to forced labor in China.
In statements to The Takeaway, both Nike and Coca-Cola denied lobbying against the bill. You can find their full statements on our website @thetakeaway.org. Joining me now is on Ana Swanson, who broke the story on Nike and Coca-Cola’s lobbying efforts for The New York Times. Ana, thanks for joining us.
Ana: Thanks so much for having me.
Tanzina: What are central components of the Uyghur Forced Labor Prevention Act?
Ana: This is really broad significant legislation, which basically would presume that all goods imported from Xinjiang, either made in Xinjiang or made with raw materials produced there, are produced by forced labor. It would put the onus on the companies to prove that their factories are actually free of forced labor, as well as any goods that come from factories elsewhere in China that use laborers from Xinjiang in these kinds of poverty alleviation and worker training programs that sometimes move people around the country.
Tanzina: We mentioned that some of the companies that you found out about have denied that they are lobbying against the legislation. In a statement to The Takeaway, Nike disputed the reporting saying, "That the company has not lobbied against the Uyghur Forced labor Prevention Act or any other proposed forced labor legislation. They also denied sourcing products from the Xinjiang region of China." How does that square with your reporting Ana?
Ana: Companies sometimes here quibble lobbying against. Lobbying records do show clearly that Nike Coca-Cola Apple, the US Chamber of Commerce and other entities have spent heavily lobbying on the legislation. They've lobbied on this issue in-house and then also hired outside firms to lobby Congress and other federal agencies on it as well. Speaking to congressional aides and other people familiar with the situation, they did characterize it as these companies lobbying to weaken or water down the bill, but it might depend a little bit on your perspective.
For Apple, I was able to obtain a document that showed their specific proposals to change provisions of the bill. Many of them make the scope of the bill more narrow in some respects. Defenders from Apple's perspective say that they're trying to make this bill more realistic, make it more likely for their suppliers to comply, but from some the perspective of some human rights groups they might see this as watering down as well. It's important to note that these companies do strongly deny. They say they're opposed to forced labor and that they carry out regular audits of their supply chains to eliminate it.
Tanzina: We're talking about the Uyghur Forced Labor Prevention Act with Ana Swanson. This is The Takeaway. Ana, how much evidence is there that some of these companies have ties to forced labor in their Chinese supply chains?
Ana: Some of this has been documented through think tanks and media reports. Often, it's the presence of, for example, in Nike's case there were reports about some Uyghur workers in a Nike factory in Eastern China. Nike did not, I believe, deny that actually, but said that that factory subsequently carried out an audit and that there are no longer any Uyghur workers there. For Coca-Cola it was an issue with a supplier farther up the supply chain. A Chinese company called COFCO that had been using sugar which was made with a Uyghur labor that some said was forced labor. The company has said that it also carried out an audit of that as well.
Tanzina: I should mention, Ana, here, that the Coca-Cola sent us a statement disputing saying that the Coca-Cola company was not lobbying against the bill, but also that they did not import goods into the US from the COFCO, or Xinjiang regions.
Ana: I see. often it's far up in the company supply chain. It could be an instance of raw materials. It could be forced labor that's happening at a contract manufacturer so not a factory that is directly under the brand but somebody that the company is contracting with in China.
Tanzina: Coca-Cola, in this case, is it feasible that they would be unaware of that or any of these companies would be unaware of these links in their supply chain?
Ana: There is quite a bit of opacity in Chinese supply chains. I think that that's something that people will argue about, whether or not these companies should have a better handle on their supply chains. If you do go farther up, you go several steps removed it's conceivable that companies might not you have a great grasp on what's going on there.
Tanzina: This is something that's coming out as having bipartisan support, which is, Ana, as you know, rare these days.
Ana: Absolutely. This bill is really interesting because it dovetails with some of the interests of Republicans who has taken an increasingly critical eye towards China, as well as the interest of Democrats who see forced labor as a big issue and definitely want to work with the incoming Biden administration on that. The bill, I do think stands a good chance of being passed by the Senate and could be signed into law either by the Trump administration or the incoming Biden administration.
Tanzina: Ana, how much leverage do companies or major corporations like Apple, Nike, and Coca-Cola have with the Chinese government when it comes to addressing labor issues within China?
Ana: That's a great question. I do think that their leverage is quite limited and, on the whole, you see companies not really wanting to be put in this position of having to choose between public relations issues in the United States and their relations with the Chinese government. That's why much of this lobbying around issues like this does go on in secret and companies are very wary of being outed but it definitely does not benefit these companies to be out publicly criticizing the Chinese government. It doesn't really benefit them in the United States to be in a position of seen as opposing regulations on forced labor. It is a tricky position for them.
Tanzina: The question is what would be something that would get these companies out of China ultimately, if these abuses were found to be true? Would it be enough to move the needle for them to leave the country altogether or is it just too enticing to want to stay in China?
Ana: That's a good question. I think what is likely to happen if this legislation does go through, it is really broad legislation that has very significant implications for supply chains in China. It could take companies many months to prove to the US government that their supply chains are free of forced labor. In the case of big companies, they probably have the resources to do that and they'll be able to do that. Maybe for smaller companies, it will be more difficult. One thing you see is companies trying to look at their supply chains, either ensure that they're free of forced labor and move out of Xinjiang.
Maybe move to other parts of China or just rejig things so that they know that the stuff they're importing to the United States comes from outside of China or places that are definitely free of forced labor but they can still use those Chinese factories to send stuff to the rest of the world. These are multinational companies, so they're supplying goods everywhere. They might just take the approach of cracking down on that part of the supply chain that actually touches the United States in response to this.
Tanzina: China's treatment of the Uyghur Muslim population is what is considered by many human rights atrocity and violation. The Biden administration will be taking office shortly, I'm wondering what their approach, if we know, to American companies doing business in China, given this would be?
Ana: I think that this is an issue that they're going to take on very seriously. There is momentum, bipartisan momentum really to take on more of this issue of recognition that, as you said, there are really some atrocities going on in Xinjiang, reports there of mass detentions. Also very tight restrictions on movement that really prevent companies and auditors from investigating supply chains there. The Chinese government says that's all about security, about poverty alleviation, but I think there's a growing awareness in the United States that companies and US buyers do not want to be associated with that.
Tanzina: Ana Swanson is a reporter covering trade and international economics for the New York times. Ana, thanks so much.
Ana: Thank you.
Tanzina: You can find Nike's and Coca-Cola's full statements on this story online at thetakeaway.org and we also reached out to Apple and have not heard back yet, but we'll add their comments to our website if we do. This is The Takeaway.
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