A research firm contracted by the U.S. Department of Homeland Security (DHS) has issued a report on forced labor in the global supply chain, the role it plays in international trade and how the U.S. can prevent importing goods made by slaves.
The report by the Rand Homeland Security Research Division – which operates the Homeland Security Operational Analysis Center – estimates that 28 million people around the world are bound by forced labor, including some 3 million children.
The research was sponsored by the DHS Science and Technology Directorate and U.S. Customs and Border Protection with goals of eliminating U.S. imports of goods made with forced labor and ending the use of forced labor globally.
The 197-page report, published on Jan. 8, can be read here.
Forced labor around the globe
Section 307 of the U.S. Tariff Act of 1930, cited in the report, defines forced labor as “all work or service which is extracted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily.”
The Rand report stated that Asia and the Pacific, which includes China and India, has the most people in forced labor – around 15 million – though it does not have the highest share of population in forced labor per 1,000 people.
The Arab States region, though having the fewest people in forced labor (around 1 million), has the highest share of population in forced labor with five per 1,000 people.
The report stated that the U.S. accounts for a disproportionately large share of all direct imports that may have been produced by forced labor.
“In 2021, for example, the United States accounted for about 23 percent of those imports, by value, but it accounted for only about 13 percent of all global imports,” the report stated. “The United States’ shares are substantially higher for some product categories than others (e.g., more than 90 percent for tomatoes and 65 percent for fireworks). Still, for most of these goods, alternative sources of direct supply might exist already, which implies that the goods might be obtainable from sources that present little or no risk of having used forced labor in production.”
Xinjiang and China
The Rand report stated that since 2017, China has used forced labor as a “coercive policy tool in its political campaign against the Uyghur people.”
The Uyghurs are one of several predominantly Muslim ethnic minority groups in China’s Xinjiang region, which borders Mongolia, Russia and Kazakhstan. Formally called the Xinjiang Uyghur Autonomous Region (XUAR), this area of western China has garnered increased attention due to evidence of state-mandated forced labor for local ethnic minorities.
“In July 2022, the United Nations (UN) Human Rights Council’s special rapporteur on contemporary forms of slavery reported that a system of state-mandated labor existed in the XUAR targeting Uyghur, Kazakh, and other ethnic minorities,” the report stated. “This conclusion has been corroborated by firsthand accounts of abuse, satellite imagery, academic research, nongovernmental organizations (NGOs), the U.S. government, and other stakeholders.”
The report said that despite the U.S. Uyghur Forced Labor Prevention Act of 2021 (UFLPA), which bans U.S. imports on goods mined, produced or manufactured in the XUAR, such goods still flow into the country through global supply chains.
“The evidence from our trade and supply chain models, coupled with insights from our discussions with stakeholders, suggests that U.S. importers are trying to reduce their ties to the XUAR and are making measurable progress, but they are not necessarily succeeding beyond their most-direct relationships,” the report stated. “All told, we estimated that the value of direct imports of at-risk goods from China fell by about 12 percent, on average, after the UFLPA was signed into law and that import prices of those goods might have risen by about 4 percent.”
“Although U.S. businesses no longer have direct – first-tier – relationships with XUAR suppliers, they likely still face exposure deeper in their supply chains, especially in their supply chains for some complex products, such as motor vehicles, that rely on global suppliers,” the report continued.”
Recommendations
The Rand report offers several recommendations for the U.S. to combat forced labor in the global supply chain including:
Encouraging active participation from stakeholders for a greater impact on trade enforcement.
Addressing impediments to identifying forced labor via third-party auditors at worksites in China, and better informing consumers about what products are being made with forced labor.
Enforcing trade laws.
Expecting inevitable costs that may come with trade enforcement, such as increased compliance costs for U.S. businesses and costs related to mitigating environmental harm caused by emissions and waste.
Working to better track performance of progress and unintended consequences of trade enforcement.
Granting DHS necessary funding, staffing and information to do its job.
Increasing DHS’ visibility.
“[U.S. trade enforcement] appears to be making a difference in U.S. imports, but it can also do more, even if it cannot meet all the aims of U.S. policy,” the report concluded. “Early evidence on UFLPA enforcement suggests that, through a combination of mechanisms of change, including DHS’s interventions and businesses’ behavior, direct imports of tainted goods from the XUAR have declined. Deeper ties to that region would be difficult to root out and expunge, and reducing the use of forced labor globally might be yet more difficult. But those difficulties do not negate the value of trying.”
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