Forced Labor is Ubiquitous in Global Supply Chains. What Can We Do About It?

Experts tell the Senate Finance Committee that strong enforcement is needed, which must include consequences for American companies that import products made with forced labor.

For 10 years, Joe Wrona worked at the Ferroglobe factory in upstate New York.

Alongside 100 other union members and management, Wrona helped manufacture metal silicate, which is needed to make everything from caulking to cosmetics. Metal silicate has become especially important in recent years, as it is a base component for polysilicon, which is needed in solar panel production.

In 2009, Ferroglobe invested $35 million to upgrade its plant in response to the growing demand for solar products. By 2016, it was looking to grow even further, as a solar panel company linked to Elon Musk was preparing to build a new factory nearby.

Instead, Ferroglobe shuttered the factory in 2018. The company simply could not compete with a surge of imports from China.

But as Wrona recalled while testifying before the Senate Finance Committee on Thursday, this wasn’t just an all-too-common case of an American factory facing unfair trade practices. China’s polysilicon industry is dependent on forced labor – and China’s government is utilizing it to dominate the global solar industry.

That leads to the loss of good-paying American jobs, as Wrona and his colleagues faced. But it is also a human rights crisis – experts say up to 10 million Muslim minorities in China’s Xinjiang region are now under lockdown control, more than 1 million Uyghurs are in internment camps, and at least 80,000 people have been forced to work in factories.

“There should be no debate. Eliminating forced labor from our country’s supply chain should happen today, and companies who have benefited should be held accountable,” Wrona told the committee.

Indeed, there’s strong bipartisan agreement in Congress that forced labor is happening in Xinjiang, and there’s agreement that the United States no longer can ignore it. The Uyghur Forced Labor Protection Act – which overwhelming passed the House last congressional session and has been reintroduced in both chambers this session – would ban all imports from Xinjiang in response, for example.

But experts told Senators that making sure supply chains in Xinjiang and around the globe do not utilize forced labor is easier said than done.

Forced labor is “a feature, not a bug” in supply chains and will require “system-wide solutions,” said Martina E. Vandenberg, president of the Human Trafficking Legal Center.

“A race to the bottom – to markets with the lowest wages – has cemented these abuses into global supply chains,” she said. “Forced labor is not an aberration. It is a direct result of policy – and pricing – decisions made by corporations around the globe.”

Companies that rely on overseas labor to make their products often say that they are committed to ensuring their products are made ethically. And there are some tools out there to help them, including Sourcemap, a digital platform that helps companies identify “all of the actors in in their supply chain,” according to founder Leonardo Bonanni.

Sourcemap doesn’t just depend on suppliers to self-report, Bonanni noted. The company analyzes the information they provide for “errors and omissions, and for patterns of fraud, waste and abuse.”

“Is this a panacea? No,” Bonanni said. “But it represents a step change in the degree of supply chain transparency businesses and governments can expect in support of their ongoing fight against forced labor.”

Indeed, much of the problem is that both the federal government and corporations know forced labor is going on, but haven’t taken action to stop it.

Vandenberg noted that “there are almost no prosecutions” of forced labor in fiscal year 2019. There were just 1,024 forced labor prosecutions around the world, while in the United States, federal prosecutors indicted just 12 cases that same year. The United States has never brought forth a single forced labor supply chain case that invoked extraterritorial jurisdiction.

Meanwhile, many corporations insist they are committed to ethical supply chains while working hard to water down legislation aimed to address it. Sen. Elizabeth Warren (D-Mass.) noted that Apple, Nike, and Coca-Cola were among the American brands that lobbied against the Uyghur Forced Labor Protection Act, for example.

The United States has a “moral obligation to stamp out these despicable violations,” Warren said, adding that companies that utilize forced labor to make their products should face consequences.

“American consumers are unwittingly buying products made with forced labor at their local clothing stores. American workers are being placed in the impossible position of competing against forced labor and child labor,” Warren said. “And big American corporations, which have spent decades moving jobs overseas, are taking advantage of forced labor to improve their profitability.”

Vandenberg recommended that the United States fine companies that import products made with forced labor, and use that money to create a fund to help foreign workers. These workers continue to suffer when import bans take place because they are left without any support or resources to rebuild their lives.

And while some cooperation between the public and private sector is appropriate, the government needs to take the lead on tracking and enforcing these violations. It’s hard for the United States to lead the way on ending forced labor when ultimately it is American corporations selling many of these products.

There are other things the United States can do to address forced labor, including taking steps to strengthen its own manufacturing capabilities.

Sen. Rob Portman (R-Ohio) recalled that the United States found itself in dire straits at the start of the coronavirus pandemic because it was so reliant on China for personal protective equipment (PPE). Many of those products were also linked to forced labor.

Now there are companies across the United States ethnically making PPE like face masks. The federal government should make it a priority to buy these products, but hasn’t done so.

“What we should be doing is incentivizing the return of PPE production to the United States,” Portman said. “It frustrates me that our federal government will not give them long-term contracts.”

If these American manufacturers do not have a long-term purchasing commitment in place, they may go out of business, and the United States will have no choice but to buy Made in China products manufactured via forced labor once again.

This applies to the climate crisis as well, Senate Finance Committee Chairman Ron Wyden (D-Ore.) noted, because China now dominates the global polysilicon and solar industry.

There are growing calls to ban polysilicon from Xinjiang, which is a start to addressing the forced labor taking place there. The United States also needs to do more to take on China’s litany of unfair practices.

But at the same time, we must prioritize investment in our own industries. Wrona, who now works at a tire factory, noted that while his plant closed, his United Steelworkers colleagues still make polysilicon at a facility in West Virginia.

“[Ferroglobe] itself has spent millions and millions and millions of dollars fighting cheap Chinese products,” Wrona said. “If they were to spend that money on their factories, they would run more efficiently, and maybe we would still be open.”