A heated discussion on Xinjiang cotton has taken place recently. Fashion brands, including H&M, Nike and Adidas, have come under fire on Chinese social media because of their provocative allegations on Xinjiang affairs and banning Xinjiang cotton. Better Cotton Initiative (BCI), a Swiss based organisation has been thrust into the limelight due to its decision to discontinue licensing cotton from the region.
What are the facts about Xinjiang’s cotton industry?
In the winter of 2020, journalists from Southern Weekly conducted a field investigation in Xinjiang, carried out in-depth interviews with cotton farms, ginning mills, cotton seed companies, garment factories and other companies in the cotton supply chain. Many Xinjiang cotton companies are mired in trouble. And behind the plight, it is a “dark war” around the international cotton discourse.
A sudden “cease the cooperation” email
It was the coldest time of the year, the daytime temperature was well below zero. The midday heat given off by the sun could not melt the ice in the depressions.
ZHANG Biao is a young entrepreneur. After graduation, he returned to Xinjiang’s Yuli County to take over the cotton factory built by his family in the 1990s. Now he is the boss of Xinjiang Yuli Zhongwang Textile Company (Zhongwang Textile).
In December, the acquisition of cotton in Xinjiang ended, and the major ginning mills would set out to sell lint cotton. However, Xinjiang’s long-staple cotton, which has always been popular in the past, did not sell very well in 2020.
“In October 2020, the company suddenly received a notice of suspension from BCI, who had a long cooperative relationship with ZHANG’s company. It made a negative impact on this year’s lint sales.”
“We buy seed cotton from cotton farmers, process into lint and sell it to companies in the downstream sector.” ZHANG said, they always purchase tens of thousands of tons of seed cotton. The cost of capital invested reaches tens of millions of Chinese Yuan (CNY). If having no stable cooperative customers, or encountering price fluctuations over the year, it is very likely we will make a great loss.
In 2015, ZHANG encouraged hundreds of farmers to set up the Zhongwang Cotton Growers Cooperative, which later became an executive partner of BCI. On a daily basis, ZHANG had to guide farmers through training, planting and harvesting, and reporting cotton data quarterly, in accordance with the requirements by BCI. Additionally, BCI would send staff to its corporate partners for regular inspections.
BCI is a non-profit organization, and its members are among the world’s leading cotton suppliers and buyers. BCI is currently an important access for the international textile trade. In addition to BCI, major cotton producing countries such as Australia, Brazil and India have also developed their own standards for sustainable cotton, however, there is still a void in the Chinese market for these kinds of local standards.
BCI-certified cotton has a higher degree of market acceptance. ZHANG Biao also said, “Compared with ordinary cotton, the price per ton of cotton with BCI certification, is tens or even hundreds CNY higher. Moreover, retail companies of the cotton industry can also be BCI members. Joining BCI can help networking and expand business.”
LIU Zhi (assumed name), a BCI China employee, said that there are many international standards for judging sustainable cotton, and BCI has the advantage of having both a systematic standard for accessing sustainable cotton and a large volume of cotton production. Today, BCI has thousands of members around the world and with great diversity, covering the up and downstream sectors of cotton industry chain.
Every year, around March, cotton farmers in Xinjiang begin to grow their cotton. As is customary, ZHANG Biao also has to report the cotton field data. However, in March 2020, ZHANG Biao unexpectedly received an email written “suspension of certification” from BCI China.
According to the email, “In view of the complexity of the current international environment, BCI Board of Directors has finally decided to suspend giving licenses or certificate from 2020 to 2021 in China’s Xinjiang region. At the same time, BCI will further upgrade its standard during the suspension period to better cope with the complex and changing external environment.”
In the next six months, ZHANG Biao found that many activities of BCI in Xinjiang had not ceased, thus he continued to report relevant data in accordance with BCI requirements and to liaise with his BCI counterpart in South Xinjiang. “At that time, I thought the certification was suspended only for a year and it was still possible to look for cooperation in the future.” ZHANG Biao said.
Six months later, more bad news arrived.
In October 2020, ZHANG Biao received an email from BCI’s China office, “In view of the current complications regarding the upgrade work, BCI has decided to temporarily cease the implementation of the partnership agreement.”
“The situation has deteriorated further.” Zhang Biao said.
“Decisions from BCI’s Head Office in Switzerland”
A few weeks after the “cease the cooperation” email was sent, BCI unfolded the mystery.
On 21 October 2020, BCI’s Head Office in Swiss released a statement on its website saying that it had stopped issuing certificates for cotton in China’s Xinjiang Uyghur Autonomous Region (XUAR) since March 2020.
The statement noted that “sustained allegations of forced labor and other human rights abuses in the XUAR have contributed to an increasingly untenable operating environment, and BCI has, therefore, taken the decision to cease all field-level activities in the region effective immediately, including capacity building, data monitoring and reporting.” This was despite having no finding to support these allegations from their people on the ground in China.
In another statement on December 18, 2020, BCI’s Head Office stated, “Researchers have found ….an increasing risk of forced labor at the farm level in Xinjiang.”
Faced with the allegations, many people, including employees in China, were puzzled: why did the BCI issue such a statement?
According to Liu Zhi, a BCI China employee, currently BCI has more than ten partners in Xinjiang, such as cotton companies in Bole, Kuerle and Aksu. In the mid-2020, BCI China had sent staff to Xinjiang to conduct field research in many places. “This research did not cover all partners but selected a few of them. According to the information I already know, the visit did not discover any forced labor,” said Liu.
Lee Chengjun, general manager of Bazhou Taichang Agricultural Development Company also confirmed that a number of BCI China staff arrived at Taichang in May 2020 for a two-day research trip, asking about the factory’s operations and labor situation. “There were no unpleasant experiences at that time, no violations were found and no feedback was received later that the farm was found to be in breach of any BCI regulations.” Lee Chengjun recalled.
In fact, as early as when the company first worked with BCI, ZHANG Biao had already realized that employment was an important item in BCI’s assessment of cotton companies. Since 2020, BCI has also asked cotton farmers to take photos and videos of planting to prove compliance with BCI requirements in the production process. In ZHANG Biao’s view, “We started receiving certification in 2015 and have had no problems since then. Why did the problem arise in 2020? “
On 1 March 2021, the BCI Representative Office in Shanghai issued a statement on its official WeChat account stating that it had recently received a letter of enquiry from some of its previous partners in Xinjiang. The statement also declares that BCI China strictly followed BCI’s audit principles and has not found a single case of forced labor in the second-party credibility audit and third-party verification carried out in Xinjiang since 2012.”
The statement also indicates that BCI Shanghai will continue to communicate with its partners in Xinjiang to maintain a sustainable supply chain.
How BCI’s Head Office in Switzerland came to the conclusion that there was a “risk of forced labor” remains unknown. This risk has never manifested itself into any situation where forced labour has been encountered. However, the negative impact of BCI’s suspension of cooperation on cotton in Xinjiang is already visible.
Xinjiang Haoxing Cotton & Sisal Company is located in Bole, Bortala Mongol Autonomous Prefecture and has eight cotton farms, processing approximately 100,000 tons of lint cotton per year. The company joined BCI in 2013 and had been working with them for seven years.
“Because BCI discontinued its cooperation, the sales of our company’s lint cotton for 2020 is not good, prices and sales have been impacted.” Gao Ruinan, business manager of Haoxing, said that the company had only sold an estimated 10,000-20,000 tons of lint cotton by the end of December 2020. With reference to the sales volume in recent years, the regular standard should be 30,000-40,000 tons. “We now have a rough estimate of losses of more than 14 million CNY, or about a third of annual profits.”
The panic is still spreading through retail companies in the cotton industrial chain.
Gao said that many of his company’s customers are engaged in import and export of cotton textiles. After learning that Xinjiang cotton was delisted by BCI, they are all in panic. In order to secure export orders, some companies must stop cooperating with companies in Xinjiang, and purchase a large amount of cotton through companies outside Xinjiang and even China, but go to countries such as the US or Australia to solve the problem of raw material supplies.
ZHANG Biao said the company’s business was not heavily impacted by this in 2020, but the future impact is difficult to assess. “The area and farmers that our cooperative promoted before would not be able to obtain BCI certification. This also means that the cotton we produce cannot go through BCI’s channels to be distributed. And the relevant buyers or yarn mills we used to work with won’t be willing to use the raw material we supply.”
Disappearing workers in the cotton fields
Accused of ‘forced labor’, many workers in the cotton fields in Xinjiang feel aggrieved.
“Cotton farming uses labor mainly in the picking process. In the past, there were few employment opportunities, thus picking cotton became a side business for farmers to make money.”
Lee Chengjun, general manager of Xinjiang Taichang Farm, can be considered as a “cotton veteran”, experienced from farm establishment to mechanization of the entire process. His company is located in Xinjiang Yuli County, first created in 1994. At present, the company’s cotton field is about 195 hectares. The cotton ginning mill has an annual output of ten thousand tons of lint cotton.
In the 1990s, the farm recruited cotton pickers with a payment of 0.6 CNY per kilogram. At the cotton harvest time, “cotton pickers” from Gansu, Qinghai, Sichuan, Henan and other provinces enter Xinjiang.
According to Lee Chengjun, around 2003, the price of Yulin’s hand-picking cotton labor was over 2 CNY per kilogram. The average pick was 80-100 kilograms of cotton flowers per capita one day, totaling 200-300 CNY per day. “It is possible to pick 150 kilograms a day and earn tens of thousands of CNY a month”.
In recent years, the mechanization of cotton production in Xinjiang has accelerated. The number of workers has been greatly reduced. Every harvest time, “cotton pickers” from all over the country have been withdrawn from the vast Xinjiang cotton fields compared to the past, replaced by professional and efficient mechanized operations.
Compared to the earlier mechanization of North Xinjiang, farms in southern Xinjiang entered into the “cotton mechanization” era later.
“In 2015, our farms had a difficult time recruiting workers during peak seasons. Even with high payment, there were few cotton pickers so we also began to try harvesting machines.” According to Lee Chengjun, Taichang tried machine picking for the first time in 2016 and achieved a 40 percent machine picking rate, which has been increasing every year since. By the cotton harvesting season in 2020, the machine picking rate on the farm will basically reach 95%. “Planting cotton in the past relied mainly on workers, but now it also relies on machines.”
Whether it is a big farm of more than 500 hectares, or small farms with a few dozen hectares of land, mechanized picking of cotton in Xinjiang has become an unstoppable trend. ZHANG Biao said that from 2018-2020, the proportion of machine-picked cotton the company bought has rapidly risen. “In these last three years, the proportion of machine-picked and hand-picked was thirty-seventy, fifty-fifty and ninety nine-one respectively.”
From cotton plantation, to spinning mills, all procedures in the cotton production chain in Xinjiang are actively adapting to the machine picking trend. According to WANG Hongzhe, Director of quality inspection department of Xinjiang Guoxin Seed Company, in recent years more cotton farmers inclined to buy seeds suitable for mechanized operations.
“When cotton farmers select seeds, they will always ask whether the cotton seeds are suitable for machine harvesting. For example, seeds like fruiting branches with high nodes and compact seedlings are more popular. Practice has also proven that these types of seeds sell well in southern Xinjiang.” Wang Hongzhe said.
Several years ago, many textile mills in Xinjiang were not very welcoming to machine picked cotton. This is because compared to hand-picked cotton, machine-picked cotton has more impurities, less yarn output and a lower weaving rate. “But now, textile mills also welcome machine picked cotton, because of the low cost of machine picking. The price is preponderant, forcing yarn mills to improve the process.” Zhang Biao said.
As cotton enterprises in the North Xinjiang, Haoxing cotton business manager Gao Ruinan said each mu (1 mu equals to about 666 square meters) of land produces about 400 kg of cotton, whereas the current machine picking costs only 100 RMB. If it is hand-picked, the cost per mu will rise up to 800 RMB, which does not include the cost of food and accommodation of laborers. “Machine picking is efficient and low cost, so why use hand picking? Now in the North Xinjiang cotton fields, it is rare to see people working in the fields.” Gao Ruinan said.
Recruitment advertisements on Baidu Posting and research reports
The accusations of ‘forced labor’ in Xinjiang’s cotton industry did not begin with BCI, but were preceded by a number of statements and ‘investigation reports’ published by a ‘think tank’ or media in Australia, the US and the UK.
On 18 December 2020, BCI’s Head Office in Switzerland issued a statement, which cited a report by CENTER FOR GLOBAL POLICY, a Washington DC based “think tank”. The author of the report, Adrian Zenz, has been described by a Chinese Foreign Ministry spokesperson as “the backbone of an anti-China research agency controlled by the US intelligence agencies”.
The report, entitled “Labor Transfer and the Mobilization of Ethnic Minorities to Pick Cotton”, states that “more than half a million ethnic minority workers are deployed each year to work in seasonal cotton picking, and their working conditions can be highly coercive.”
At the same time, the report questioned efforts to alleviate poverty in China’s Xinjiang region.
For example, “training for workers organized by local governments” is considered as “forced labor”, “encouraging villagers to work hard to get rich” is seen as “brainwashing”. In addition, the “one-stop employment service” is regarded as “close surveillance”. The “centralised childcare for workers” is regarded as “slavery education”. However, the report is silent on the evidence of payment and information from alleged victims, important factors in distinguishing whether it is ‘forced labor’.
Similar ‘academic reports’ or ‘human rights reports’ on the Xinjiang region are not rare.
On 1 March 2020, the Australian Strategic Policy Institute (ASPI) released a study “Uyghurs for Sale by Vicky Xiuzhong: ‘Re-education’, forced labour and surveillance beyond Xinjiang”. The report alleges ‘forced labor’ in the Xinjiang region and, in a rare move, lists “foreign and Chinese companies that may be involved in forced labor, whether intentionally or unintentionally”, several of which have since issued statements denying any involvement in any of the companies mentioned in the report.
As the report shows, it draws its data from “publicly available Chinese documents, satellite image analysis, academic research and field media reports” but fails to include any human intelligence.
Journalists sourced the report and found that there is a lot of misinformation.
For instance, the report states that “multiple sources suggest that many Uighur workers in factories across China live harsh, segregated lives under the so-called ‘militarized administration’.” However, the conclusion only cites a recruitment advertisement from a Chinese social media platform Baidu Posting. The advertisement reads in Chinese, “the contract should be signed on the premise that the employee work for more than one year! …… Semi-military administration, able to endure hardship, no turnover, work for as long as the contract lasts! Directly set off once 100 people are gathered!” In the real context of Chinese language, such online recruitment advertisements do not have authority and authenticity and are generally viewed, as they are written, with a sense of sarcasm or irony, usually well understood by the reader who is familiar, but, like sarcasm and irony, easily misunderstood by those who are culturally unaware or linguistically challenged.
In recent years, these subjective and even biased non peer reviewed “academic reports” produced, not from academia, but from US government supported and funded bodies, have become the source of data cited by some Western media and organizations, which in turn, given the appearance of approval from organisations such as the US Senate, has been widely spread.
On 15 December 2020, BBC released a video report citing data from the above-mentioned report, suggesting that forced labor may exist in Xinjiang cotton companies. In the meanwhile, it was reported that a BBC reporter was prevented from conducting an interview at the Xinjiang Kuche Pomegranate Seed Garment Company. From the video footage, the factory was surrounded by high walls and appeared to be full of secrets.
A Journalist of Southern Weekly visited the company and found it to be a functioning garment processing factory. Ouyang Zhijun, who was in charge of the company, introduced the company, which was set up on 25 March 2020. There are three buildings in the factory, including a garment factory, a luggage factory and a shoe factory. Workers were mostly recruited openly after job advertisements were issued in the villages and towns.
“Take the garment factory for example, after the workers are recruited, we will train them. During the training period, they have a guaranteed salary of 1,540 CNY per month. After being officially accepted by the factory, we will sign a formal labor contract with the employee.” Ouyang Zhijun introduced.
He showed the employees’ labor contracts and resignation forms to the journalist. According to Ouyang, the factory has had a high turnover of employees since its establishment. “Because all our employees are recruited from the countryside, they definitely need an adaptation process to learn some skills. During, and sometimes after training, those who are suitable will stay; those who are not, will leave or be dismissed.”
Gulinisanmu Nuerdong is a native of Kuche. She joined Pomegranate Seed Garment Company in April 2020. After training, she has become skilled in the garment-making process. She became a workshop team leader from an ordinary female worker in just a few months.
“I have been looking after the elderly and children at home since I got married. In April 2020, my husband heard about a new garment factory here and encouraged me to try it out.” Gulinisanmu Nuerdong said.
She lives and eats in the factory during the weekdays and has a one-and-a-half hour noon break every day. At weekends, she takes the bus home, which takes about half an hour each way. “The standard of living has improved significantly with an extra person who makes money at home. Life is very agreeable at the moment and my next goal is to become an instructor in the factory.”
“Dark war” behind the cotton
Why was Xinjiang cotton “delisted” by the BCI this time?
The General Assembly, consisting of all BCI Members, is the ultimate authority of BCI and elects a Council to represent it and handle its daily work. According to BCI’s official website, up to January 20, 2021 there are currently 11 members of the BCI Board of Directors and two independent Board members. Most of these companies or institutions are from India, Pakistan, Australia, the USA. Nevertheless, despite being the world’s number one producer of cotton, none of them are from China.
Currently, Marc Lewkowitz is the Chairperson of the BCI Council, who is also the President and CEO of Supima, a US-based company that operates and promotes PIMA Cotton, a premium cotton from the US. It also contributes to a competitive relationship with Xinjiang cotton in China to some extent.
In addition, three European and American retailer brands are on the Council: British retailer Marks and Spencer (M&S), Swedish brand Hennes & Mauritz (H&M) and American denim brand Levi Strauss & Co (Levi’s).
Currently, among thousands of BCI global members, Chinese members are mainly concentrated in the upper and middle part of industrial chain, including mostly cotton farmers, ginning mills, yarn mills and so on. There are only two Chinese members categorized into brands, namely Anta (which has started the process to quit BCI) and Les Enphants.
In the cotton ecosystem built by BCI, Chinese companies and European and American companies do not have equal voice or power. The natural advantage of the brands in downstream sector of the industrial chain, who control the purchasing volume, further breaks the balance from the Chinese side.
“Except for the years when there is a great demand for cotton, the cotton market is a buyers’ market most of the time.” ZHANG Biao said that many international cotton brands will use BCI sustainable cotton as a “highlight” and traceability of the supply chain. If the raw material is not sustainable cotton, the brand will refuse to buy it.
“So, if you want to work with big brands in Europe and the US, you have to get a BCI sustainable cotton quota. In order to get the certification, you have to follow BCI’s instruction and grow cotton in a certain way. Conversely, if you do not work with BCI, not only cotton farmers cannot sell at a good price, even yarn mills, fabric mills, garment factories also have to weigh the pros and cons, which in turn causes the whole cotton industrial chain will be affected.” ZHANG Biao said.
Since 2020, Nike, H&M, Adidas and many other European and American retail giants have publicly boycotted Xinjiang cotton.
European and American brands publicly distance themselves from Xinjiang cotton, so that Chinese cotton textile trade companies face a “dilemma”.
An anonymous manager of a company said, “Many brands know clearly that there is no ‘forced labor’ in my company and in Xinjiang as well. But due to public pressure, they have to draw a line with us and refuse to use our company’s raw materials, causing huge losses to the company’s revenue.”
Cotton companies call for Chinese standards
A number of cotton companies in Xinjiang believe that China should establish its own sustainable cotton standard.
In the cotton industrial chain, cotton farmers and farms are situated in the most upstream region, followed by the processing, such as ginners, yarn mills; then finished products, such as cloth factories, garment factories; moving through to the sales end with traders, cotton retail brands and so on. BCI as one of the sustainable cotton initiative institutions, links the various processes upstream and downstream.
According to several managers of cotton companies, after being certified by BCI, cotton farmers get a quota valuation of “sustainable cotton” every year and the data is constantly updated. At harvest time, cotton farmers sell cotton to downstream companies in accordance with the quota value in the trading system provided by BCI.
“The quota value is subject to BCI’s audit estimates. Not all the cotton we grow and process can be certified by BCI.” ZHANG Biao said, despite the growing and processing stages being exactly the same.
On the other hand, downstream brand owners purchase certified cotton from BCI membership companies and pay the corresponding fees to BCI according to the purchase volume. To maintain their corporate image, giant international brands stick to certain standards for raw materials, such as no child labor, decent work and conditions for cotton farmers and sustainable soil use. Based on concepts such as environmental protection and human rights in BCI’s sustainable cotton standard, downstream brand owners often use sourcing BCI cotton as a company highlight.
Lee Jiagang, general manager of Yuli County Zhongliang Cotton Industry, said, “Some of the terms of BCI are not suitable for our development. I hope the relevant state departments can take the lead and develop a China Brand Standard for the production processes.”
Yuli County Zhongliang Cotton Industry [Photo/Southern Weekly]
In July 2020, the U.S. launched the U.S. Cotton Trust Protocol(UCTP), declaring that ” the U.S. Cotton Trust Protocol will set a new standard for sustainable cotton farming in a time of increasing supply chain scrutiny and growing demand for transparency. “
LIU Zhi is concerned that once the UCTP gains control of the international cotton textile sector, it will require countries to use the US version of the “certification standard” and “traceable systems for the supply chains”. Coupled with the original control the United States has in the field of international trade, the development of China’s textile industry will fall into an even greater dilemma.
In fact, the formation of the concept ‘forced labor’ has been of strong connection to some US media and institutions.
On 18 December 2018, the Associated Press launched a news report titled “US sportswear traced to factory in China’s internment camps” which triggered an investigation on imports from China by the U.S. Customs and Border Protection.
In March 2019, Wall Street Journal claimed that BCI member companies had forced labor issues and questioned the credibility of BCI, all claims were denied and remain unproven.
In January 2020, U.S. Fair Labor Association released a report on “Forced Labour in Xinjiang, China”, further claiming that workers may be sent to factories and forced to work without pay. Also unproven claims which are strenuously denied.
Cao Wei, a professor of the School of International Relations in Lanzhou University, pointed out that the US current focus on ‘forced labor’ or human rights in Xinjiang is really a disguise.
“Talking about human rights without solving the problem of basic living needs is just pie in the sky. We are now providing training and employment to the poor people in Xinjiang, but it is being mistakenly interpreted by the West as ‘forced labor’, which means China is being criticized and misunderstood internationally.”
According to Cao Wei, Xinjiang’s cotton production makes up a quite large proportion of China’s cotton production. If China’s exports of textiles, domestic sales of foreign investment, joint venture brands cannot use Xinjiang cotton, the development of both the cotton textile industry in Xinjiang and national cotton textile industry will be limited and even stalled.
(Thank TANGOU Yangming for her contribution to this article)