FLETF Struggling to Find Proof of Uyghur Labor Transfers, Labor Department Official Says

Sen. Jeff Merkley, co-chair of the Congressional-Executive Commission on China that convened the hearing where Lee testified, asked if it is possible to determine whether a given subcontractor in China is using transferred labor.

"It ought to be possible," she replied. "On FLETF, we faced a lot of difficulty trying to get verifiable information on forced labor transfers." She said there would be a blurb about a company employing transferred Uyghurs posted online, but then that would be taken down, and the information they did find was "not as fresh as we’d like."

The CECC's hearing was called "Factories and Fraud in the People's Republic of China: How Human Rights Violations Make Reliable Audits Impossible."

Lee said that social compliance audits anywhere in the world are a weak compliance tool, because they are often announced in advance, workers may be pressured to toe the company line, and time sheets are faked. But, she said, "objective worker interviews free from reprisal" are impossible in Xinjiang, with the "pervasive surveillance and threat of detainment" for Muslim minorities in that region.

Witness Adrian Zenz, director in China Studies at the Victims of Communism Memorial Foundation, said audits in other parts of China, in facilities where Uyghurs were transferred, are no better. He said that the Outlaw Ocean Project showed how many seafood processing plants had been audited, and those audits had not detected transferred workers; he said the journalists found Uyghur workers at one workplace the same day its clean audit was released.

"Forced labor is notoriously difficult to identify," he said. "Corporations face a sourcing dilemma even if they stop sourcing from Xinjiang's Uyghur Autonomous Region."

In his written testimony, Zenz said that while most labor transfers are within the Xinjiang Province, China had a 2023 goal to send 38,000 minority laborers to other provinces; in 2022, it transferred 27,600 workers outside Xinjiang.

Zenz said, in his written testimony, that China no longer uses re-education camps for Muslims in Xinjiang, and its focus on labor transfers to private companies makes "forced labor less visible."

Jim Wormington, a senior researcher on corporate accountability, Human Rights Watch, told the commission that the most important point he wanted to make was that audits outside the Uyghur region are also flawed, both because of labor transfers and because Chinese companies that source from Xinjiang companies are pressured by the Chinese government not to cooperate truthfully with supply chain due diligence audits.

Wormington said Congress should hold a hearing with audit firm executives, asking them to justify their products' reliability on Uyghur forced labor.

Rep. Chris Smith, chair of the commission, said they will do so, and will ask the witnesses for advice on who to invite.

Wormington said Congress also should hold hearings with executives from key industries that are exposed to Uyghur forced labor, such as solar and the auto industry. The latter, he said, could build on the Senate Finance Committee's ongoing investigation of auto companies' links to Uyghur forced labor. Workers Rights Consortium Executive Director Scott Nova also said auditors and solar, primary metals, auto and apparel executives should be called to a hearing.

Wormington also told the commission that aluminum should be named as a priority sector as soon as possible. Human Rights Watch detailed aluminum production in Xinjiang and its connection to the auto supply chain, but Wormington said in an interview after the hearing that in sectors that have been the subject of reports on forced labor, like aluminum and polysilicon, companies have taken down information they once put online about who they sell their goods to.

He also said, "We found that in our own research, the shift toward not mentioning labor transfers, in local government and especially in company materials, is very clear."

Nova suggested in his testimony that auditors who produce clean reports on forced labor should face prosecutions for fraud. He said the Trafficking Victims Protection Act could be the statute to use.

In an interview after the hearing, he said that under that law, "if a corporation has profited from forced labor in its supply chain, its executives knew about or should have known about, both the company and the individual executives can be prosecuted." He said while his group knows the Justice Department has done TVPA investigations, it has not prosecuted anyone in that sort of case. "The first time there is a meaningful prosecution of an executive ... you'll see significant changes in how all corporations operate," he said.

In his written testimony, he said "it must be assumed that the risk of complicity in this forced labor [transfer] scheme exists at virtually any production facility in the country," and questioned how auditors can do credible inspections at factories outside Xinjiang to be sure there are no transferred workers. He said those companies that employ transferred workers want to hide it, so their goods can be exported to the U.S., so in order to detect it, you'd have to interview "a facility’s employees offsite, without the knowledge of factory management, and gathering information from people not employed by a facility but living or working in its vicinity, who may have observed the presence of transferred workers."

In the hearing, he said, "It is inconceivable that any Han Chinese worker is going to tell an auditor, in a conversation arranged by factory managers, and occurring inside the workplace, that Uyghur workers are present at the facility and that management is hiding them."

He said that companies that import from China should have to show the government how they know their products do not either contain Xinjiang content or were made with transferred workers. (This is exactly what importers with detained goods under the Uyghur Forced Labor Prevention Act try to do in a scope review). "The leaders of any corporation that cannot so demonstrate must then explain how they know, on any given day, with respect to any given import, that they are not breaking the law," he said.

While Zenz said UFLPA isn't much of a punishment, since you can reexport the goods that are stopped, the other witnesses talked about what a difference it has made.

Wormington said in an interview after the hearing that it was impressive that Volkswagen identified such a small part voluntarily and worked with CBP to remediate the problem (see 2402230082). He acknowledged that with thousands of parts in each car, firms cannot map back to the raw material for every one. He said car companies should start with electric vehicle batteries, traditional batteries and alloy wheels made in China, all of which have the risk of Xinjiang aluminum content. He said cars made in China have the highest risk of containing Xinjiang aluminum, since most aluminum produced in China stays there.

Smith also asked Lee about forced labor in African cobalt mining, noting that while his rebuttable presumption bill hasn't moved, another bill he introduced with a request to develop a strategy about forced labor in the supply chain did pass out of the House Ways and Means Committee recently.

Lee said that the International Labor Affairs Bureau (ILAB) has been trying to trace cobalt from artisanal mines, where the bulk of the forced labor and child labor occurs, through the processing stage, which happens in China.

"It’s difficult," she said, as cobalt is comingled as it's sold to processors. "We’re working very slowly in that direction." However, she added, "We consider it very urgent and very serious," and she said it was a positive development that Congo, the world's largest cobalt supplier, has hired 2,000 labor inspectors.