Should Publicly-Traded Companies Disclose Whether They Use Forced Labor From Chinese Concentration Camps in Their Supply Chains? (H.R. 6270)

What is H.R. 6270?

(Updated July 21, 2021)

This bill — the Uyghur Forced Labor Disclosure Act of 2020 — would require issuers of securities to publicly disclose their activities related to China’s Xinjiang Uyghur Autonomous Region. Specifically, issuers would have to disclose the importation of manufactured goods and materials that originated or are sourced from that region, as well as details about the commercial activity, gross revenue and net profits, and future import plans regarding these goods and materials. Additionally, issuers would have to disclose whether any of those goods or materials come from forced labor camps.

An annual report of compliance by covered security issuers with these requirements would be produced annually for Congress and the public by the Executive Commission on China. The Government Accountability Office (GAO) would also produce an annual report on compliance with this bill’s requirements.

Argument in favor

Companies that issue public securities in U.S. financial markets must be transparent with investors and the general public about whether their supply chains involve products made with forced labor from Uyghur Muslims and other ethnic minorities in Chinese concentration camps.

Argument opposed

Given that it’s already public knowledge that dozens of prominent global companies have supply chains that, in some form, rely upon forced labor from China’s concentration camps in Xinjiang, it’s unnecessary for this bill to establish a formal reporting process.

Impact

Uyghur Muslims and other ethnic minorities who are used as forced labor in China’s concentration camps in Xinjiang; publicly-traded companies that do business in Xinjiang and use goods or materials that come from forced labor camps.

Cost of H.R. 6270

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Rep. Jennifer Wexton (D-VA) introduced this bill to require issuers of publicly traded securities to provide public reports about their activities in China’s Xinjiang Autonomous Region, including the use of forced labor from Uyghur Muslims in concentration camps:

“I’ve met with members of the Uyghur community in my district who have told me heart-wrenching stories of family and friends in Xinjiang who have been brutally detained, pushed out of their homes, and pressed into forced labor. American companies should not be complicit in China’s abuse of its Muslim minorities. This legislation will help shine a light on these inhumane practices and provide needed transparency for investors. Once consumers see that the products we use every day -- from the shoes we wear to the phones we text on -- have been tainted by forced labor, I believe American companies will do the right thing and rethink their supply chains.”

Numerous global companies have been tied to the use of forced Uyghur labor in China, including sportswear companies like Nike, Adidas, and Puma and tech companies such as Lenovo and Samsung.

In early July, U.S. Customs & Border Protection seized a 13 ton shipment of hair weaves & beauty accessories shipped from China that was suspected to have been made from human hair taken from Uyghurs in a concentration camp.

This legislation has the support of five Democratic cosponsors. It’s similar to legislation known as the Slave-Free Business Certification Act, introduced by Sen. Josh Hawley (R-MO), which would require American companies to audit their supply chains and certify that there is no reliance upon forced labor or slavery. Hawley’s bill is somewhat broader in that it would apply globally, not just to Xinjiang, China.

Of Note: Human rights experts say that between 800,000 to 2 million Muslims have been detained indefinitely in reeducation camps since April 2017 because the Chinese Communist Party views them as a potential extremist or separatist threat. Detainees are interned without due process in the camps, where they are subjected to communist propaganda, forced to renounce Islam, and in some cases are beaten and tortured.

And the crackdown extends beyond the reeducation camps as well, with political and cultural indoctrination occurring in schools and authorities using compulsory collection of biometric data (like DNA & voice samples), artificial intelligence, big data, and movement restrictions to control the population. A Human Rights Watch report notes that the “human rights violations in Xinjiang today are of a scope and scale not seen in China since the 1966-1976 Cultural Revolution”, and explains the motivation behind it:

“Authorities have sought to justify harsh treatment in the name of maintaining stability and security in Xinjiang, and to “strike at” those deemed terrorists and extremists in a “precise” and “in-depth” manner. Xinjiang officials claim the root of these problems is the “problematic ideas” of Turkic Muslims. These ideas include what authorities describe as extreme religious dogmas, but also any non-Han Chinese sense of identity, be it Islamic, Turkic, Uyghur, or Kazakh. Authorities insist that such beliefs and affinities must be “corrected” or “eradicated.”

Media:

• Sponsoring Rep. Jennifer Wexton (D-VA) Press Release

• Causes (Context)