Last May, the U.S. Customs and Border Protection banned the import of cotton from Turkmenistan, sending one of its strongest messages yet to the apparel industry — the agency is watching how and where apparel, textiles and footwear are made.
Turkmenistan’s government compels its citizens to harvest cotton, according to the U.S. State Department, and the CBP considers indentured servitude, as well as work by children, enslaved people and convicts to be “prohibited” forms of labor.
The CBP is increasingly asking importers to list their foreign suppliers and manufacturers, and elaborate on how they monitor their supply chains, said trade attorneys. The agency wants to know, for instance, whether importers have contracts with suppliers spelling out prohibitions against forced labor and if they visit factories overseas to oversee labor conditions.
Responding to such questionnaires might be optional, unless the agency presents them through a so-called “Form 28” request for information. But this enforcement stance should alert the industry to step up its due diligence, said trade attorneys.
“This isn’t an instance where an importer can have a good heart and an empty head,” said Frances Hadfield, counsel in Crowell & Moring LLP’s international trade group, who has advised apparel companies. “Importing into the U.S. is a privilege, not a right.”
Congress and Customs have paid more attention to companies’ supply chains, with new legislation since 2015 aiming to tighten up the decades-old Tariff Act, and more oversight at the ports that receive apparel from around the world. In 2018, the U.S. imported nearly $83 billion in apparel, mostly from China and several Southeast Asian countries, according to data by the Office of Textiles and Apparel.
For much of the past century, the U.S. has nominally prohibited products made with forced labor from entering the country. The Tariff Act of 1930 contained the so-called “consumptive demand” exception, which allowed companies to justify imports of such products if the domestic production in the U.S. didn’t meet consumer demand here.
But in 2015, Congress passed the Trade Facilitation and Trade Enforcement Act to effectively remove that exception, and then further restricted such goods through the Countering America’s Adversaries Through Sanctions Act in 2017. The sanctions law, which targets Iran, North Korea and Russia, generally bans the import of goods made with labor from North Korean workers, even outside of North Korea.
The legislation empowers the CBP to monitor and confiscate violating imports, but practical difficulties often thwart enforcement, observers said. Cotton, for instance, can be grown in one place, made into thread in another, woven into fabric elsewhere, and finally sewn into a garment in yet another place.
“[The laws], in principle, should have made it easier to seize goods,” said Amy Lehr, director of the Human Rights Initiative at the Center for Strategic and International Studies, a bipartisan nonprofit. “But the reality is more complicated, because actually identifying and demonstrating that a particular shipment is affected by forced labor is quite difficult.”
The enduring problems in fashion’s global network of factories, mills and distribution facilities show an issue that’s tough to police. A 2018 list by the U.S. Department of Labor’s bureau of international labor affairs found child or forced labor, or both, still take place in countries including China, Vietnam, Bangladesh, Thailand and Cambodia.
But in the meantime, the new laws give human rights-oriented nonprofits and business rivals more tools to report potential violations by apparel companies, which the agency can act on.
CBP’s ban on Turkmenistani cotton came after a petition in 2016 by members of the Cotton Campaign, a group of human rights and business organizations opposing the use of forced labor in cotton production.
“It may not be the case that all, or even particular textiles or apparel, would be held up by enforcement,” said Gwendolyn Jaramillo, head of Foley Hoag LLP’s trade sanctions and export controls practice. “But what is happening is, there’s an increased effort by civil society and stakeholders to use this to reach out to CBP.”
EU regulators are also scrutinizing labor conditions more broadly in the global supply supply chain, and apparel companies are taking notice. In February, the EU said it was considering suspending Cambodia’s duty-free export privileges under the Everything But Arms agreement, saying it had found “evidence of serious and systematic violations of core human rights and labor rights in Cambodia.”
Cambodia’s garment sector accounts for 75 percent of its merchandise exports, and comprises nearly 700,000 workers, predominantly women, according to an April report by the U.N.’s International Labor Organization. In 2017, the country developed a program to eradicate violence against children, including child labor, which it defined in a 2017 report as work by children under the age of 18. But the U.S. Labor Department described the program only a “moderate advancement.”
This month, a group of apparel and footwear companies including Nike, Under Armour and New Balance, wrote to the Cambodian government along with the American Apparel and Footwear Association and Fair Labor Association. In their letter to Cambodian Prime Minister Hun Sen, they reiterated broad concerns about worker rights and political rights in the country, especially as trade arrangements like Everything But Arms appear to hang in the balance.
“We’ve been encouraging them to make improvements in their worker rights regimes, and a variety of areas,” said Stephen Lamar, AAFA’s executive vice president. “It’s been part of this ongoing dialogue.”