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Update on Forced Labor and Hetian Taida Apparel

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To:WRC Affiliate Universities and Colleges
From:Scott Nova and Penelope Kyritsis
Date:October 11, 2019
Re:Update on Forced Labor and Hetian Taida Apparel

We write to share two updates related to Hetian Taida Apparel Co., Ltd., a Chinese garment producer where the WRC documented the use of forced labor in the production of university logo goods (see our report here). We will also be communicating with you shortly on the broader forced labor crisis in China, of which Hetian Taida is one manifestation.

US Government Bans Goods from Hetian Taida
On October 1, the US government banned the importation of goods produced by Hetian Taida. Specifically, Customs and Border Protection issued a Withhold Release Order, requiring authorities at all US ports to identify and seize any shipment from Hetian Taida and prevent the goods from entering the United States. The government took this action under the authority of the federal statute that makes it illegal to import goods made with forced labor into the United States.

WRC Identifies Hetian Taida Product Bound for Costco
A few days after the US government’s imposition of the ban on goods from Hetian Taida, the WRC uncovered evidence of two huge shipments of clothing from Hetian Taida, bound for Costco. The goods—pajamas, known as “blanket sleepers” for babies and toddlers—were imported by a Costco vendor called Centric Brands. (Note that this is not university logo apparel). Had the shipments arrived mere days later, the goods would have been seized at the port of entry in Los Angeles. However, because they arrived prior to the issuance of the government’s ban, Centric Brands was able to remove them from the port.

When the Associated Press questioned Costco about the shipping records identified by the WRC, the company claimed, incorrectly, that the Hetian Taida factory where the goods were made is not covered by the US government’s forced labor enforcement action. The factory is, in fact, covered by the ban. Costco also defended its business relationship with Hetian Taida and made no commitment to keep the Hetian Taida goods off its shelves. However, after AP’s story led to a firestorm of criticism about Costco’s response, the company changed course. While still insisting that it has “no reason to believe that any sleeper in its inventory was inappropriately sourced,” Costco announced that it is suspending sales of the product “pending further investigation and developments.” Costco’s action is the proper one, under the law and its own labor standards.

The Broader Crisis in Xinjiang
The US government’s action against Hetian Taida—the first such action against a Chinese exporter in the context of the burgeoning forced labor crisis in China’s Xinjiang Province—comes against the backdrop of a catastrophic and ever-worsening human rights situation. We will soon share a broader analysis of the implications of the Chinese government’s forced labor regime for garment industry, including the collegiate sector.