Faced with a barrage of vitriol over its position on Xinjiang, the Better Cotton Initiative – an organisation that prides itself on “creating transparency” – has gone to ground.
Calls to BCI’s Geneva headquarters have gone unanswered over the past fortnight, spokespeople have stopped responding to emails, its Twitter account has been set to private, and at one point last week, its website was offline.
Its fall from grace has been dramatic and is being studied by industry groups, accrediting bodies, auditors, consultants and academics of what happens when you try to please both China and the West, but end up high and dry.
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In the West, BCI is accused of kowtowing to a state-orchestrated denial of alleged human rights abuses in Xinjiang, after wiping its websites of statements on forced labour.
Its earlier comments, meanwhile, have landed it in hot water in China. The public and state media are demanding that BCI substantiate allegations of forced labour in Xinjiang, where the organisation had been certifying and marketing cotton since 2012.
In October, BCI ceased all field-level activities in Xinjiang, citing “sustained allegations of forced labour and other human rights abuses”, which it said had “contributed to an increasingly untenable operating environment”.
This was in stark contrast to a statement in January 2020, when it told industry publication Apparel Insider that neither its own investigations nor third-party audits found “any evidence of incidences of forced labour on farms within BCI programmes”.
Then last month, a geopolitical row over tit-for-tat sanctions between the European Union and China led to an online army of angry Chinese dredging up the statements of any brands that had commented on Xinjiang cotton or forced labour.
Widespread boycotts, the burning of products and a number of sharp retractions from corporations terrified of losing the Chinese market ensued.
In the middle of it all was BCI, a major target for an aggressive online campaign over its withdrawal from Xinjiang last year.
In March, the head of BCI’s Shanghai branch Wu Yan told state broadcaster CCTV that the organisation had never found evidence of forced labour in Xinjiang – a return to its January 2020 position.
The Shanghai office also published two statements on the Chinese social media platform WeChat last month saying it had not found any evidence of forced labour in Xinjiang since audits began in 2012.
The contradictory messaging has not been explained, with detailed questions sent to BCI remaining unanswered.
But it is perhaps unsurprising, given the pressure from the West to tighten up positions on Xinjiang, as a steady stream of media reports drip-feed gruesome details of the suppression of Uygurs and other Muslim minorities in the region.
Having already faced boycotts in China, firms may have to contend with the same in the West.
Websites like Remake and Forced Labour Fashion have popped up to name and shame companies that retracted statements connected to alleged forced labour in Xinjiang.
One site has urged consumers to snub its list of “coward” companies that have doubled down on using Xinjiang cotton.
Meanwhile, the US has effectively banned Xinjiang cotton in a series of withhold release orders, meaning that importers must prove their products are not tainted by forced labour – a near-impossible task in the labyrinthine supply chains of Xinjiang.
Brussels is also cooking up supply chain due diligence legislation aimed at removing forced labour goods from the EU market.
Things will become more complicated. But for many in the industry, the past month saw a Rubicon moment, with organisations no longer able to make sweeping human rights-related statements on China while continuing to sell to its vast consumer market.
BCI – along with household names such as H&M, Hugo Boss and Burberry – may be canaries in the coal mine.
“Now we’re at a point where these organisations have to make real tough choices, we all know what they’re trying to balance first and foremost: remaining in the largest consumer market in the world, yet at the same time thinking about their reputations and, frankly, their own values,” said Bennett Freeman, US undersecretary for labour and human rights in the Clinton administration.
It is easy to see why BCI’s volume-obsessed founders were attracted to China. Its stated aim was to have “Better Cotton account for 30 per cent of global cotton production” by the end of 2020.
“With China accounting for about one-third of world cotton consumption at the textile mill level and about one-fourth of world cotton production, any effort to achieve scale in cotton, almost by definition, must include China,” wrote independent apparel industry analyst Veronica Bates Kassatly in a 2020 investigation of BCI’s Xinjiang ties.
In an aggressive push into the region to convert Xinjiang’s vast swathes of cotton farms to “Better Cotton”, BCI partnered with the Xinjiang Production and Construction Corps (XPCC), a paramilitary organisation that runs whole cities and which dominates the regional economy.
XPCC was sanctioned by the US Treasury Department in July for its connections to “serious human rights abuse against ethnic minorities in Xinjiang, which reportedly include mass arbitrary detention and severe physical abuse”.
The Chinese government denies the charges. Beijing has pointed to a 2014 white paper claiming that Han Chinese accounted for 87 per cent of the XPCC workforce, with Uygurs and people from 37 other ethnic minority groups making up the minority of the cotton picking industry.
Bates Kassatly’s research notes that to recruit one XPCC regimental commander to the BCI scheme would mean that “at a stroke, thousands of hectares and hundreds of the XPCC’s settled farmers followed”.
In an examination of BCI’s financial filings, she tracked millions of dollars of BCI funding going to XPCC-run farms, before the relationship was terminated by BCI in 2019.
So why the sharp change in direction?
In reality, it was not sudden at all. Even as media scrutiny of conditions in Xinjiang continued through 2019, sanctioning began and BCI dumped XPCC as a partner, it continued marketing Xinjiang cotton as a sustainable alternative.
In March 2020 – just months after its glowing appraisal of labour conditions in Xinjiang and under pressure from member brands – BCI set up an independent task force comprising six NGOs (the Responsible Sourcing Network, the Fair Labour Association, International Labour Rights Forum, Solidaridad, Anti-Slavery International and Human Rights Watch), three consulting firms (Impactt, Embode and Ergon), three brands (Nike, Adidas and M&S) and an independent adviser (Stephen McClelland) to, among other things, “prevent and mitigate against the risks of forced labour”.
Among the general language of the task force’s recommendations, released six months later, was a clear verdict that BCI “must immediately end all forms of operations and end all business relationships” in Xinjiang.
The report cited the work of “credible human rights experts, labour rights practitioners and academics” in identifying “alleged labour rights violations in the cotton industry in the region”.
It pointed to “the impossibility of conducting assurance activities to confirm the absence of forced labour due to the scale of restrictions to freedoms in the region, the risks posed to workers to speak candidly, and the specific interlinkages between the cotton industry and the unfolding human rights abuses”.
Again these recommendations jarred with BCI’s previous official positions on Xinjiang and came amid intense geopolitical tensions.
In the run up to the 2020 US presidential election, the Trump administration was outlawing Xinjiang cotton and sanctioning more officials. BCI finally cut ties in October, a month before the poll.
“The fundamental problem is that the entire sustainable apparel sector is just a great green washing machine, funded for and by the leading brands to generate materials/products that can be marketed as more sustainable,” Bates Kassatly said.
Industry experts say BCI was never set up to deal with a vast and opaque behemoth like XPCC.
Eddie Jernigan, editor of cotton industry bible, Jernigan Global Weekly, said BCI had success in places like Pakistan and Brazil on reducing pesticide use, tackling slave labour and increasing yields.
But in Xinjiang, it had to adapt its standards to deal with a top-down, state-run industry with no input on how things worked and poor visibility of labour standards.
“BCI was never set up to try to tell the government what to do. I think they got pushed into a situation where they were looking to be the turnkey solution for everybody involved, and they weren’t ever set up to be that,” Jernigan said.
Patricia Jurewicz, the founder of the Responsible Sourcing Network, took part in the task force and described BCI’s assessment processes in Xinjiang as “really weak”, partly due to the nature of the system, but also due to BCI’s “assurance processes not being designed to detect state-imposed forced labour”.
“You have this big machine that controls everything and so to think that you could have one little project come and make sure that the labour conditions are all correct … that’s trying to go upstream when the whole river is running downstream,” she said.
An ex-senior official at the International Labour Organization (ILO), who did not wish to be named, said BCI never stood a chance in Xinjiang.
“How can you engage in constructive dialogue with the government in a place where there is no civil society, no freedom of association and no trade unions?” the person asked.
Now, other organisations are concerned the storm could spill over into their sectors.
A consultant advising companies on how to deal with US sanctions is worried about a new law prohibiting firms from complying with foreign sanctions on Chinese soil – a statute yet to be wielded, but which is now on analysts’ radars.
“We’re helping companies that have put their ducks in a row in the supply chain. But we’re walking a fine line, because Beijing is saying, you’re helping companies comply with US law, which we think it’s an illegitimate law,” said the source, who also preferred not to be named.
The ex-ILO officer fears that as geopolitical tensions continue, BCI’s case is a sign of rockier times ahead.
“A decade ago when people talked about China being the next power, I couldn’t really see what it would look like,” the person said. “Now, I can see what China as a power looks like … it looks like this.”
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