Nike and Coca-Cola are among a number of American retail giants lobbying Congress effortlessly to weaken a proposed legislation aimed at banning importing goods manufactured from a region of China where products are being made through forced labor by minority Muslim groups, according to a report on Sunday.
Dubbed the Uyghur Forced Labor Prevention Act, the bill would forbid the import of goods produced through forced labor from China’s Xinjiang region do not enter the United States, in an effort “to hold the Chinese Communist Party accountable” and crackdown on human rights abuses.
Co-sponsored by Sen. Marco Rubio (R-FL) and Rep. James McGovern (D-MA), the legislation was proposed prior to the Coronavirus outbreak in the United States. The Act gained bipartisan support in the House and was passed overwhelmingly by a 406-3 vote in late September.
With the bill expecting a Senate vote in the coming weeks, multinational companies and business groups are forcefully pressuring lawmakers to dilute key portions of the legislation, highlighting the discordance of business imperatives and its apparent stance on human rights, the New York Times reported. Citing conversations with congressional aides and lobbying records, lobbyists are targeting stipulations of the Act, arguing that despite being vocal in condemning the use of forced labor, the legislation's "ambitious requirements" would seriously disrupt supply chains deeply embedded in the area.
According to the bipartisan Congressional-Executive Commission on China (CECC) report released in March, the Commission "observed credible reports" revealing products including food products, shoes, textiles, electronics, including cell phones and computer hardware that were "made at least in part using forced labor." It also points specifically to major retailers being "suspected of directly employing forced labor or sourcing from suppliers that are suspected of using forced labor." Apple, Nike, and Coca-Cola were amongst the many well-known global brands listed with suspected ties to forced labor.
Citing news reports, it links Coca-Cola to sugar sourced from Xinjiang as well as a think tank report from the Australian Strategic Policy Institute and a Washington Post investigation report documenting Uyghur workers in a factory in Qingdao that makes Nike shoes.
Nike, in a statement on their website, denies "directly sourcing" from Xinjiang, claiming confirmation from their "contract suppliers that they are not using textiles or spun yarn from the region." The company also emphasized its "Nike's Code of Conduct and Code Leadership Standards" requirements that forbid any use of forced labor, adding an independent audit confirmed that the Qingdao factory didn't have workers from Xinjiang in 2019.
However, the recent Australian Strategic Policy Institute published earlier this year reports the Qingdao factory employed around 800 Uighur workers at the end of 2019, producing over seven million pairs of Nike shoes each year.
The heart of the Uyghur Forced Labor Prevention Act is a "rebuttable presumption," shifting the burden of proof of reasonable evidence to automatically assuming all goods manufactured in Xinjiang were made with forced labor. This will ban and barred the importation of goods into the U.S. unless the commissioner of U.S. Customs and Border Protection certifies otherwise or companies prove to customs officials that their products were not made with forced labor. If companies are found to have used forced labor from the region, they could be prosecuted for securities violations.
It would also require companies to disclose information of their dealings with Xinjiang to the Securities and Exchange Commission.
With the new bill threatening companies to alter their substantial supply chains, forcing changes to how and where products will be manufactured in the name of human rights, companies in response are taking action in fighting back to protect their profits.
Apple, which has extensive business ties to China opposes the bill and was the first to hire outside lobbyist firms last month in an effort to "modify it in any way." Despite Apple disputing the claims that it tried to weaken the legislation, the Times reports "suggested edits to the bill included extending some deadlines for compliance, releasing certain information about supply chains to congressional committees rather than to the public, and requiring Chinese entities to be 'designated by the United States government' as helping to surveil or detain Muslim minority groups in Xinjiang."
Following Apple's footsteps, Nike is reported to have spent almost a million on in-house lobbying of Congress and other federal agencies in the first three quarters of 2020. They also spent almost half a million hiring outside firms to lobby on issues including the act. Coca-Cola has also invested heavily, spending almost $5 million on in-house and outside lobbying over the same time period.
A Nike representative said the company "did not lobby against this bill" and described the company's efforts as "constructive discussions with staff of the Congressional Commission aimed at eliminating forced labor and protecting human rights."
On the heels of the Times report, Rubio took a swipe at those leading foreign policy and national security agencies, saying America will never be safe and strong if it "led by people who just finished getting paid to help American companies do business with the Communist Party of China."
America will not be stronger or safer if its foreign policy & national security agencies are led by people who just finished getting paid to help American companies do business with the Communist Party of #China
— Marco Rubio (@marcorubio) November 30, 2020
The Florida Senator pinpointed Nike in another tweet, highlighting the company's double standards with a picture of Colin Kapernick, to show that the brand only cares about its profits over human rights.
— Marco Rubio (@marcorubio) November 29, 2020