Uyghur Forced Labor Prevention Act (UFLPA): What you need to know
On June 21 2022, the Uyghur Forced Labor Prevention Act came into effect after it was passed by Congress the previous December.
The Act is part of the US government’s response to suspected forced labor camps within China’s Xinjiang Uyghur Autonomous Region (XUAR) for members of Muslim minority groups. The Act’s purpose is to ensure that American entities are not funding the suspected forced labor through goods or services produced in the region.
The UFLPA assumes that products manufactured wholly or in part in China’s Xinjiang region (or by related named entities) are made with forced labor and therefore prohibited from importation to the US.
How does this affect businesses?
Many global industries source raw materials or components from the XUAR. Some of the most common materials sourced from the region include polysilicon for solar panels and approximately one-fifth of the world’s cotton.
Under the UFLPA, the US Customs and Border Protection (CBP) has the right to seize goods from any business whose products or raw materials have ties to China’s Xinjiang region. These businesses must prove that they have fully complied with guidance from the Forced Labor Enforcement Task Force and respond to all CBP inquiries to prove there are no forced labor crimes within their supply chain.
CBP also has the right to seize shipments with goods that appear on the UFLPA Entity List. The US government presumes all items on the entity list are produced with forced or indentured child labor; therefore, they are prohibited from entry into the US. It is expected that the UFLPA Entity List will grow over time.
Enforcement examples of the UFLPA
One industry that the UFLPA has significantly impacted is the solar panel industry. The silica-based products used to make solar panels are largely produced in China’s Xinjiang region. According to the Business and Human Rights Resource Centre, as much as 3 gigawatts of solar modules have been held by CBP since the law was enacted in June 2022 (as of August 2022). It is predicted that as much as 9-12 gigawatts could be prevented from entering the US by the end of the year.
Other CBP seized goods include downstream products of cotton and tomatoes that are produced outside of the XUAR, but that incorporate cotton and tomato products sourced from the XUAR in their final product. Some examples of these downstream products are apparel, textiles, tomato sauce, and canned tomatoes.
What does the law require of my business?
Businesses must demonstrate that their goods and materials are not produced in the Xinjiang region of China, by any company on the UFLPA Entity List, or that goods from that region were not produced in any part with forced labor.
If CPB seizes an importer’s goods, there are two paths to securing the release of the detained goods.
1. The first path is proving that the imported goods and their inputs are sourced entirely from outside the XUAR, and don’t have any connection to the UFLPA Entity List. This path requires businesses to map their full supply chains and have strong records of their suppliers.
2. The second path is by conceding that the goods or materials were produced in the XUAR but providing clear and convincing evidence that no part was produced by forced labor.
3. To prove the goods were not made with forced labor, businesses need to provide evidence that conditions of forced labor were not present in the facilities of the production of their goods, including the harvesting, collection or production or the raw materials or component parts. Collecting and reporting on this evidence requires companies to have a robust due diligence program, mapping their supply chain and maintaining strong records of supplier relationships and behaviors. Evidence to show that the 11 ILO indicators of forced labor were not present in the supply chain is required.
How can Sedex help?
Sedex’s tools and services can help US importers meet Forced Labor Enforcement Task Force guidance and develop strong supply chain due diligence programs for their global supply chains.
Here is how Sedex membership can support you with the UFPLA:
- Use our platform to map your supply chain and hold all your supplier sustainability data in one place to make informed business decisions.
- Identify and prioritize supplier risk (including forced labor) with our risk assessment tool.
- Use our world-leading social audit methodology, SMETA, to uncover forced labor indicators and other social or environmental risks at specific sites within your supply chain.
Sedex Consulting can help you address the Act with several actions, including:
- Designing thorough supplier due diligence programs.
- Conducting gap assessments between companies’ current approaches and the requirements of the law.
- Advising on supplier policies and procedures to communicate expectations to suppliers.
Are you interested in learning more about how Sedex can support your business with the UFLPA and other responsible business laws?