The fashion industry has been told it needs to give up cotton from China’s Xinjiang region as a new law comes into force, giving US border authorities more power to block or confiscate forced labor in China.
The Uyghur Prevention of Forced Labor Act (UFLPA), which enters into force today, recognizes that any product, partially or wholly produced in Xinjiang, northwest China, is linked to labor camps in the region. Since 2017, Chinese authorities have detained more than a million Uighurs and subjected them to forced labor.
The fashion industry will be particularly affected by the new law. About 20% of the world’s cotton comes from China, and 84% of it comes from Xinjiang.
The UFLPA has identified cotton as a “high priority for implementation”, along with tomatoes and polysilicon. Any British or European fashion brand exporting to the US will also be subject to this, and failure to provide the appropriate certificate or supply chain details could result in fines of up to $ 250,000 (£ 205,000).
However, the ban poses major problems for the industry. Liv Simplichano of Fashion Revolution said Xinjiang cotton is ubiquitous in supply chains. “The difficulty is that at the stage of swamping [when fibres are separated from their seeds]”Cotton from different places is mixed, which makes it impossible to trace the origin,” she said.
A number of technology companies, including TrusTrace, SupplyShift and TextileGenesis, plan to use blockchain and artificial intelligence to track supply chains for fashion labels. Brands can use the platforms to register all their purchase orders and certificates.
To finally prove Xinjiang’s lack of cotton, brands will have to show “a complete digital custody chain,” said Shamik Ghosh, CEO of TrusTrace, “where the brand fully controls its farm supply chain.”
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Although in the past fashion has been notorious for its supply chains, there are now strong business arguments for full transparency. A recent report by the financial trust Planet Tracker said that the application of traceability “could improve net profits by an average of 3% -7% for clothing companies.” And this is before any fashion stocks are held back by the border forces.
Due to the General Data Protection Regulation, TrusTrace does not receive a warning if Xinjiang cotton is found in the brand’s supply chain. “Only the brand is informed,” Ghosh said. “They would not use a platform like this [if they’d be exposed]”
However, Blockchain technology is not without its problems. “If you rely on the brand’s discretion to ratify their procurement practices, then what will be the efficiency?” Asked Philippa Grogan of Eco-Age. “In addition, blockchain technology is not regulated, so it creates a risky environment – the lack of regulatory oversight makes it vulnerable to market manipulation.”
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