This week, the AP reported that an estimated one million people, mostly Chinese Muslims, were being held in just one of multiple internment camps in the Xinjiang region of China, and producing sportswear for the US market. The Worker Rights Consortium pulled shipping data showing that over a nine month period this year, one company, Badger Sportswear imported almost 250,000 pounds of merchandise from the factory into the US. This is a violation of US customs law, the codes of conduct of the universities Badger supplies to, and a violation of Badger’s own code of conduct.
Massive internment of a religious minority, combined with making a profit off of their incarceration?! That is, and should be, shocking. But it is also true that forced labor is more prevalent of a global phenomenon than people may realize. Also, China has produced goods for the global market in various types of prison labor camps for years. The truth is, abysmal labor conditions and disregard for the environment are a feature—not a bug—of the global economy.
That said, this level of detailed reporting on forced labor in a global supply chain is rare. Even though we don’t find this case surprising, there is a lot we can learn from it. Here we lay out four key facts about this case that show how “business as usual” has failed to protect workers and the environment on a massive scale.
This company’s supply chains should be some of the cleanest supply chains in the world, as it is a university supplier. They weren’t—for two reasons.
Badger Sportswear is a supplier to the university market. That means they enter into supplier agreements with colleges and universities to produce apparel bearing the logos of those schools. Those universities are all affiliates of the Fair Labor Association (FLA) and/or the Worker Rights Consortium (WRC). As a result, their contracts should ALL contain codes of conduct that prohibit most serious labor violations, including minimum wage violations, health and safety violations, discrimination, and child and forced labor. Those codes are then enforced by the FLA and/or WRC.
Note that this is not a certification model: the monitors do not rubber stamp the source factories in advance, but they do get disclosure of factory names and addresses and access to those factories to monitor. But there are tens of thousands of factories around the world producing collegiate apparel, and these entities cannot do more than spot check.
All of this to say, reason #1 is that having a code of conduct, even if you put it in your contracts with your suppliers, is not good enough. Reason #2 is that Badger failed to disclose this factory to their university buyers. Maybe an oversight, maybe not, but the system relies on honest engagement from supplier companies. And when there is no honesty, there is no accountability.
But what is really amazing is that this supply chain was of the type that should have been cleaner, relative to the standard supply chain out in the wild west of the global economy. If the factories at issue here were producing, say, unbranded goods to sell in junk shops, component electronic parts, toys, Christmas ornaments or kitchen gadgets, this would be less surprising than in, as here, a sportswear manufacturer producing for universities. Though, if the prisoners were producing gadgets or components, this may never have been uncovered at all.
2. This internment camp was actually certified.
That’s right. While the FLA and WRC don’t certify factories, lots of “third party auditors” and other bodies do. According to the Worldwide Responsible Accredited Production (WRAP) website, WRAP is “the largest independent facility certification program in the world mainly focused on the apparel, footwear, and sewn products sectors.”
And WRAP actually certified a Muslim internment camp. Let that sink in.
Whether you are a consumer or an institutional buyer, let’s be clear: your hands are not clean because someone slapped a label on that product. And many companies have been instrumental in developing and scaling up certification schemes, as an attempt to absolve themselves for what happens up the chain. Certifications are often just greenwashing (however badly we want them to be real). And while we as consumers should be educated about this reality, some of us won’t be. Major companies who are in the business of managing global supply chains do not have that luxury, and should receive no lenience from the public for claiming to not understand this. Claiming certification as a defense is just bad faith.
3. Badger Sportswear representatives have not been bamboozled by the Chinese government—they actually visited the internment camp where their goods are produced.
There is a big myth that brands have no idea where their merchandise comes from: they are simply buyers in a long, complicated supply system. Why should they be responsible for things they didn’t do, in far away places?
The reality is that any company with a brand to protect exercised some control over that supply chain. They designed the clothing, worked with factory owners to make sure they could implement the designs, put very specific material and quality standards in the contract, and then demanded the factory produce the merchandise at a low cost.
That’s how it works. The corporate hand wringing that occurs when these articles come out is a little hard to stomach in cases like this, where Badger actually went to the factory. According to the Washington Post article, a researcher dug up a photo of Ginny Gasswint, Badger’s marketing director, posing with a group of young women at the factory in February 2018.
Now, you’re probably thinking that Gasswint could have gone to the factory without realizing it was an internment camp. This is also hard to believe, given that this same article describes the environment this way: “Barbed wire and hundreds of cameras ring a massive compound of more than 30 dormitories, schools, warehouses and workshops in China’s far west. Dozens of armed officers and a growling Doberman stand guard outside.”
Now, you may be thinking “but don’t a lot of factories look a lot like prisons?” Yes, yes they do. So the best defense we can give of Gasswint is that she mistakenly thought her company’s goods were being produced in a factory that just looked like a prison, rather than a prison that looked like a factory. Nice.
4. What is missing: how much did Badger Sportswear pay for the merchandise from this factory?
Why is this important? Well, let’s imagine a world in which all companies negotiating contracts with overseas suppliers set prices that were high enough that workers could earn a living wage, factories could be housed in buildings that complied with code, and all applicable labor and environmental standards could be complied with.
We don’t live in that world. We live in a world where buyers set prices that are unreasonably low, and only enforce their contract terms on price, quantity, quality and time. But at some point, for a factory owner whose profit margin is 1-3%, something has to give. Is that something the quality standards? Will it be giving less merchandise than contracted for?
No, of course not. What gets dropped is the 15 minute break, then the idea that overtime is optional. Then the idea that overtime is paid. Then the factory owner decides not to replace the broken fire alarm, but keeps the doors locked during the day to make sure all that uncompensated overtime still happens. And so on.
But here’s the real kicker: then the buyer, like Badgers, has the gall to act shocked when there are allegations of serious labor rights violations, or when workers die in a fire, or when their products are produced in an internment camp.
But didn’t Badger create this problem by demanding a price that was too low? It’s not just Badger--everyone does this. This is absolutely standard practice. And everyone in the business has known this FOR YEARS. But they haven’t fixed it.
There are lots of theories out there on why this is. A big one is that within a company, the Corporate Social Responsibility (CSR) people don’t talk to the business people. CSR is about scholarships and funding cancer research, not about changing the way supply chains operate, so these departments stay distinct. Another is that brands will do anything to avoid paying more, even if it costs them lots of money in other ways. That seems to be true in many cases, possibly because, as a practical matter, potential liabilities are a separate line item from manufacturing costs.
Yet another is that some brands adhere to an ideological commitment to free markets, in which they give the factory the “free choice” to take the job or not, and the factory gives the workers the “free choice” to take the job or not. Without getting into the weeds of that argument, I will just note that at least when we’re talking about an internment camp, this argument doesn’t hold much water.
But whatever the reasons, this problem—the way Global North companies squeeze the Global South factories that produce their goods—has brutal impacts on millions of low wage workers worldwide. Short of launching massive consumer campaigns to force companies to dramatically and meaningfully change the way they do business, where do we go from here?
For one idea, check out one of CAL’s new projects: providing workers with legally enforceable rights in global supply chains. Check out the initial results of our test case, and let us know what you think!
Charity Ryerson is a co-founder and Legal Director for Corporate Accountability Lab.