This project was supported by the International Women’s Media Foundation.
On a balmy day in March, a container ship called the One Munchen docked in Savannah, Georgia. On board was a shipment of button-down shirts made of “peached cotton,” a fuzzy fabric meant to feel as soft as the skin of the fruit. Embroidered on their pockets was the Hugo Boss logo.
Now on sale for $82, the shirts feature a slim fit, an embroidered placket, and a promise: Hugo Boss had not sourced its cotton from China’s Xinjiang region, where forced labor is rampant. But these button-downs — along with dozens of other clothing shipments brought into the United States within the last year by Hugo Boss, Tommy Hilfiger, and other clothing brands — were produced by a large Chinese company called Esquel Group. And that’s a red flag.
A logo-patch, slim-fit shirt in peached cotton sold by Hugo Boss
Forced labor is so pervasive in China’s far west region of Xinjiang — and government control over information is so absolute — that it is nearly impossible to establish if forced labor is being used in supply chains there. But here’s what is known:
Esquel Group gins and spins cotton in Xinjiang.
In July 2020, the US government placed trade restrictions on one of its Xinjiang subsidiaries, Changji Esquel Textile Co., citing concerns over forced labor.
In January 2021, US regulators banned all Xinjiang cotton from entering the US, again citing forced labor.
Since the cotton ban, a different Esquel subsidiary located in Guangdong — hundreds of miles away from Xinjiang — has continued exporting its clothes to brands in the US. But procurement records and company statements reviewed by BuzzFeed News show that Esquel’s Guangdong branch works together with its Xinjiang-based cotton spinning factories. When asked repeatedly, neither Hugo Boss nor Tommy Hilfiger nor Ralph Lauren would say where the cotton in their Esquel shipments comes from.
Esquel’s own public statements make clear that its Xinjiang cotton production is deeply intertwined with its worldwide clothing operation. The company describes itself as “vertically integrated,” meaning that it owns factories for each stage of the cotton supply chain: Esquel’s gins separate cotton fibers from seeds, and those fibers are later spun into yarn in Esquel’s spinning mills. Esquel’s Guangdong factories knit and weave cotton yarn to make cloth, then use this to manufacture clothing that can be exported to the rest of the world via the Hong Kong–based Esquel Enterprises. The company owns at least two cotton ginning companies in Xinjiang, where the bulk of China’s cotton is grown — but makes no public reference to owning any cotton ginning facilities outside the region.
Since the US ban against all Xinjiang cotton began last January, at least 16 Esquel shipments have arrived in the US for Hugo Boss, trade records show, the latest one in mid-December. One shipment has arrived addressed to PVH, the parent company of Tommy Hilfiger, containing Tommy Hilfiger–branded goods; four for Ralph Lauren; and one for Polo, a Ralph Lauren subsidiary. Guangdong Esquel, along with other Esquel companies, is still listed as a supplier in Hugo Boss’s most recently published supplier list. PVH had included Guangdong Esquel on its supplier list, as well as Esquel subsidiaries in Vietnam and Sri Lanka, but in late December — after BuzzFeed News reached out for comment — PVH released an updated version of its list, and no Esquel subsidiaries were on it. No Esquel companies appear in Ralph Lauren’s latest list, which was published in November.
Hugo Boss said in a statement that it had contacted Esquel, and the company had replied that “all our specifications and standards, including the observance of human rights and fair working conditions, have been and are being complied with.” Hugo Boss also said its own audits at Esquel production facilities revealed no evidence of the use of forced labor.
PVH and Ralph Lauren did not respond to requests for comment.
In response to a list of questions, Esquel said it had never used and would never use coerced or forced labor. It added that it follows all national import and export laws, and that it does not sell products banned in specific jurisdictions.
Asked what regions it sources cotton from other than Xinjiang, Esquel did not give any specifics, saying only that it sources from “most of the key cotton producing countries globally.”
The Esquel shipments raise questions not only about whether these brands continue to sell products that use cotton grown in Xinjiang but also about whether the US ban is truly enforceable.
“Cotton is grown in Xinjiang, but then it is sold to warehouses, processors, and suppliers all over China,” said Laura Murphy, professor of human rights and contemporary slavery at Sheffield Hallam University, who has conducted research on forced labor in Xinjiang. And then it moves on as raw cotton or as yarn and fabric to the rest of the world. “Every time it moves, its provenance is increasingly obscured. There are many ways to track it, but so far most companies don’t seem invested in knowing where their raw cotton comes from.”
A Customs and Border Protection spokesperson told BuzzFeed News that under US law, importers must take “reasonable care” in ensuring their supply chains are free of forced labor. Asked what constitutes “reasonable care,” the spokesperson said companies are encouraged to “become familiar with applicable laws and regulations” and work with the agency to protect consumers from “harmful and counterfeit imports.”
As part of its campaign targeting Muslims, the Chinese government has put in place labor programs in which Uyghurs and other ethnic minorities are made to work on farms and in factories. The US has labeled the campaign a genocide and has applied increasing pressure on the Chinese government, including a diplomatic boycott of the 2022 Beijing Winter Olympics. The US has continued to escalate trade prohibitions during that time: The US banned cotton and tomato imports from the region in January 2021, but last month Congress passed a law mandating that all goods from Xinjiang must be stopped at the border on suspicion that they are made with forced labor, placing the burden of proof on importers.
The region has long been a top source of cotton for international companies. China is currently the world’s leading producer of cotton, with over 87% of that coming from Xinjiang. Research shows that forced labor in the region is not restricted to factory work — there is also evidence of forced labor in cotton picking in southern Xinjiang.
The Xinjiang cotton ban has become a flashpoint in the larger diplomatic row between the US and China, with the Chinese government, along with Chinese consumers and celebrities, pressuring international clothing brands to continue sourcing in the region as a show of patriotic support.
Human rights groups welcomed the ban but were skeptical it could be fully enforced. They say forced labor by Uyghurs and other mostly Muslim minority groups, underpinned by government programs, is so widespread in Xinjiang that it’s nearly impossible for any companies that source there to ensure their suppliers don’t use it. The political sensitivity of the issue, combined with the government’s other repressive measures targeting minority groups, has made it even more difficult for foreign companies to audit their supply chains.
The Better Cotton Initiative, an industry group that promotes sustainability by auditing its supply chains, stopped its reviews in Xinjiang altogether in October 2020, citing “an increasingly untenable operating environment.” Five firms did the same.
Esquel is the world’s largest maker of woven cotton shirts, providing major brands with more than 100 million every year, earning the company more than $1.3 billion in yearly revenue. Esquel operates two cotton ginning mills in Xinjiang and three spinning mills, where cotton is spun into yarn. BuzzFeed News was able to geolocate the three spinning mills in Xinjiang and the garment factories in Guangdong, matching images of these facilities on Esquel’s website with satellite imagery and street-level imagery from Baidu Total View and confirming their locations. The book Esquel produced to celebrate the company’s 40th anniversary describes how its spinning mill in Xinjiang’s Turpan prefecture was established specifically to supply the Guangdong factories. By 2018, the book adds, Esquel’s investment in Xinjiang amounted to $100 million, including charitable donations. The company did not answer a question about whether that supply route has changed.
BuzzFeed News; Google Earth
Satellite images of Esquel’s facilities in Xinjiang. The cotton is ginned at mills in Aksu prefecture, then spun into thread at factories in Changji, Urumqi (Xinjiang Esquel), and Turpan.
A street-view screenshot of the entrances to Turpan Esquel and Xinjiang Esquel
Esquel has said publicly that it uses long-staple cotton, which is prized in the industry for its durability and luxe feel. About a fifth of the world’s long-staple cotton is produced in Xinjiang’s Aksu prefecture, and according to the company’s website, Esquel has two subsidiaries based in Aksu: Akesu Esquel Agricultural Development Company Ltd. and Akesu Esquel Cotton Industrial Company Ltd. Esquel’s own literature describes Awati County in Aksu as the “Home of China’s ELS Cotton,” referring to extra-long-staple cotton, and said it became “a major plantation site of Esquel’s quality cotton” starting in 2002. In addition to China, the company has cloth and garment production facilities in Vietnam and Sri Lanka.
Hugo Boss is a member of the Better Cotton Initiative and says that 86% of its purchased cotton is “sustainable,” citing environmental standards as well as “socio-economic factors.”
A street-view screenshot of the entrance to Changji Esquel Textile
In July 2020, following a report by the Australian Strategic Policy Institute on Uyghur forced labor, the US announced sanctions against 11 Chinese companies including Changji Esquel Textile, one of the five Esquel subsidiaries based in Xinjiang. The sanctions announcement described these companies as being “implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, forced labor and high-technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups.” These sanctions made it difficult, but not impossible, for US brands to trade with the companies outright — but the reputational damage meant that brands were reluctant to be seen working with them.
Nike, which the ASPI report had named as working with Changji Esquel, issued a statement denying any relationship to the company. Hugo Boss said that it was asking all of its suppliers whether they were using any products made in Xinjiang. (Esquel launched an appeal, saying that the company “does not use forced labor” and “never will use forced labor.” But in October, a federal judge refused to lift trade curbs on the company.)
VCG/VCG via Getty Images
Workers load cotton onto a truck in a field in Wujiaqu, Xinjiang.
The January 2021 ban on all Xinjiang cotton added a further layer of restriction and put major clothing brands under a fresh spotlight. Hugo Boss posted conflicting promises about what it would do next.
In Chinese, on the company’s official Weibo account, Hugo Boss said, “we will continue to purchase and support Xinjiang cotton … For many years, we have respected the one-China principle, resolutely defending national sovereign and territorial integrity.” Around the same time, the company said in an English-language statement that it had “not procured any goods in the Xinjiang region from direct suppliers.”
Hugo Boss later walked the Chinese language statement back, saying it had not been authorized. That led Chinese celebrities to cancel deals with the brand as part of a pressure campaign to keep it from backing down.
With the Xinjiang bans in force, Esquel continued to export clothes through its other subsidiaries based in Guangdong province and Hong Kong. Trade records on the Panjiva platform, the supply-chain research unit at S&P Global Market Intelligence, show 36 Esquel Enterprises shipments have arrived at US ports since the introduction of sanctions, including Seattle; Savannah, Georgia; Newark, New Jersey; New York; Los Angeles; Long Beach, California; Pittsburgh; Baltimore; and Boston. According to the trade records, their combined value was $1,473,490. Hugo Boss’s most recent shipment arrived at the Port of Seattle on Dec. 18, bound for Hugo Boss Canada.
Sixteen of those shipments went to Hugo Boss. BuzzFeed News was able to identify 30 different clothing products from these shipments — including white button-down blouses branded as “organic cotton poplin.” BuzzFeed News then found these items being sold under the Hugo Boss brand both by the brand’s own website and by other retailers, including ModeSens and Amazon. ModeSens did not respond to a request for comment, and Amazon declined to comment.
BuzzFeed News matched items of clothing sold online with those described in shipping records using the eight-digit numerical “style codes” associated with them, which also appear on the websites where they are being sold. Hugo Boss also named three Esquel factories in Guangdong in its most recently published supplier list in May 2021.
Information from the bill of lading showing the style code, and the corresponding style code on the Hugo Boss website. Source: Panjiva.
A document seen by BuzzFeed News shows how Esquel’s Xinjiang branch works with its Guangdong operation. At the start of August, Xinjiang Esquel issued a joint tender with the Guangdong branch, requesting bids for the transport of cotton materials. The winner of the bid would go under contract with the two Esquel branches between Aug. 1, 2021, and Jan. 31 of this year, according to the document. The companies sought suppliers that had recently gone through qualification inspections that year.
On Dec. 2, the European Center for Constitutional and Human Rights launched a criminal complaint in the Netherlands against Dutch apparel brands that source from Esquel companies among other Chinese suppliers with Xinjiang ties. The group argues that Esquel’s “vertically integrated” structure all but ensures that the cotton it gins in Xinjiang ends up with its other subsidiaries that export clothes to Western countries. “It is unacceptable that European governments criticize China for human rights violations while these companies possibly profit from the exploitation of the Uyghur population,” said Corina Ajder, a legal adviser at ECCHR. “It is high time that responsible corporate officers are investigated and — if necessary — held to account.” The group filed a similar complaint in France in April and in Germany in September. The German filing named Hugo Boss, along with other German-registered companies. Hugo Boss has said it rejects the claims made by ECCHR.
Tommy Hilfiger’s owner, the American apparel giant PVH, also owns brands including Calvin Klein. PVH told the New York Times in July 2020 that it would end its relationships with fabric producers in Xinjiang, as well as cotton suppliers from the region, within a year.
An examination of trade records shows that the Chinese Esquel factories exported at least 12 different styles of Tommy Hilfiger–branded clothing to the United States in February. Several of these items are still on sale on the brand’s website, albeit currently sold out.
Matching the products’ style codes to Tommy Hilfiger products sold on its website shows they range from sweaters and pullovers to knit skirts and dresses. One cream-colored crewneck sweater, which bears the brand’s logo, is advertised as being made with “organic cotton,” as were other products. The clothing sells for between $68 and $150.●
Source by www.buzzfeednews.com