BCI Update: The Better Cotton Programme in Xinjiang, China

Announcements Wednesday, January 22nd, 2020

Position Statement

Discrimination and forced labour, of all forms, are unacceptable within Better Cotton Initiative (BCI) programmes. BCI is aware of and concerned by the reports of the current situation in Xinjiang where “re-education” and forced labour programmes target Uighurs and other ethnoreligious minorities.

Over the past seven years, with the support of partners, BCI has reached over a hundred thousand farmers in China. We have also engaged the market and supply chains to ensure that efforts designed to deliver benefits to farmers and the environment could be sustained over time through sufficient demand. Development programmes operate in the most challenging regions of the world in order to deliver support and interventions where they will have the most impact. While these efforts are often not simple or easy to implement, the mission dictates that we work in areas where there is a large potential to promote tangible and continuous improvements in agricultural practices.

Recognising that a critical mass of farmers as well as their families and communities have benefited from BCI Programmes in Xinjiang, a decision to stay or walk away is not straightforward. Simply stepping out could cause more harm than good. However, in the current political context, and with new information emerging regularly, we need to ensure we are considering all options. For now, the BCI Council has determined that a continued presence and engagement in the region promoting the Better Cotton Standard System, and its principles of social, environmental and economic sustainability, can continue to benefit local farmers. It is important to note that, thus far and based on the results of our assurance efforts this season as well as from direct or indirect third-party sources, we do not have any evidence of incidences of forced labour on farms within BCI Programmes. Nonetheless, we recognise that due diligence efforts are being called into question in the region and have integrated this perspective into our approach moving forward.

Accordingly, the BCI Secretariat has, in consultation with the BCI Council, developed a two-phase roadmap to address the issues in the region. The first phase will deliver a third-party analysis of the situation. While detection of forced labour and discrimination are comprehensively integrated into the Standard, we regularly review all Principles and Criteria in the spirit of continuous of improvement. Therefore, the second phase of the roadmap is designed to use the initial report findings to determine and implement ways for BCI to reinforce the Standard and develop further its efforts to detect forced labour at farm-level.

Over the course of the next fifteen months, as activities of the roadmap are executed, the BCI Secretariat will share relevant progress updates.

Questions

BCI is in regular contact with international media representatives and civil society organisations. In the course of this ongoing dialogue, recurring questions have been asked, and we are herewith sharing our responses to the topic areas. This section will be regularly updated.

How does BCI avoid forced labour in general? Can BCI be 100% sure that cotton procured in the Xinjiang region has been grown and harvested free of forced or involuntary labour?

BCI’s approach to promoting more sustainable agricultural practices is unique amongst standard systems in that we prioritise farmer training and continuous improvement and do not solely rely on processes required to gain a license. By training farmers on Decent Work principles, including the issue of forced labour, we help make it less likely because farmers understand what the market expects from them, and in advance, what our Standard requires in order to gain a license to sell their cotton as Better Cotton.

The Better Cotton Standard promotes Decent Work principles as outlined by the International Labour Organisation (ILO) that prohibit all forms of forced labour. Discrimination and forced labour of all forms are unacceptable within BCI programmes.

Farmers are required to meet Core Criteria of the Better Cotton Standard System’s Principles and Criteria to gain a license to sell their cotton as Better Cotton. Criterion 6.3 states that, ‘All forms of forced or compulsory, including bonded or trafficked labour, are prohibited.’

As part of a broader assurance programme that also includes second-party checks, we use local third-party verifiers from international firms that have access to the region. It is important to reiterate that as of today, including the results from our assurance efforts this season as well as from direct or indirect third-party sources, we do not have any evidence of incidences of forced labour on farms within BCI Programmes.

Approximately 20% of the global amount of Better Cotton originates from Xinjiang. Would a withdrawal from the region endanger BCI’s operating model?

China is one of the largest producers of cotton in the world, together with India and the USA, and is a major consumer of cotton. Thus, China is a key piece of the puzzle to make global cotton production more sustainable.

Sustainable cotton production is a major challenge in China, with an estimated 24 million farmers depending on cotton cultivation to earn a living, and a corresponding environmental footprint. The BCI Programme shows positive impact on farmers, their families as well as on the environment in China.

BCI is a robust, well-established and well-managed multi-stakeholder organisation with strong governance bodies and related procedures. China’s 20% share of Better Cotton produced worldwide reflects its position on the world cotton market. BCI Programmes are implemented globally, and we are not dependent on Better Cotton from one single country or region.

What is your response to allegations against Huafu, a member of the BCI Council, of using forced labour in their supply chain operations?

It is important to reiterate that supply chain monitoring, beyond confirmation that our chain of custody requirements for traceability are met, is outside of BCI’s scopeas BCI is a farm-level standard. Nonetheless, forced labour is incompatible with BCI’s values.

After media reports alleged that Huafu, was involved in “re-education” and forced labour practices at one of their factories, BCI reached out to the company for a response. Huafu denied the allegations and subsequently commissioned an independent social compliance audit at their Aksu facility in Xinjiang. They shared the results of the audit with BCI and with their customers. The audit did not identify any instances of forced labour.

BCI has developed a two-phase roadmap to address the diverse issues in the region over the next 15 months. The first phase will deliver a third-party analysis of the situation. In alignment with the BCI Council, we have committed to this process and will share updates after the first phase has been completed.

Can you explain BCI’s relationship with XPCC, who used to be an Implementing Partner until autumn 2019?

Leading up to the start of BCI’s engagement with XPCC Cotton & Linen Company in Xinjiang, the BCI Secretariat carried out an enhanced due diligence process, including consultations with third party organisations with expertise on Decent Work. We oversaw an extended assessment, including several field visits and additional gap analyses of the XPCC division’s practices against all Better Cotton Production Principles with a specific focus on Decent Work. The assessment generated a risk register to guide ongoing monitoring and management of the projects.

Throughout the pilot-year, the BCI Secretariat reported back progress to both the Council and other relevant stakeholders who reviewed the reports coming from the pilot and carefully assessed the risks associated with XPCC Cotton & Linen Company and the region as a whole. At the end of the pilot year, the BCI Council determined that XPCC Cotton & Linen Company had successfully implemented the Better Cotton Standard System in compliance with our requirements.

During the past 24 months, XPCC Cotton & Linen Company has undergone a significant restructuring. The re-organisation resulted in challenges in implementing the Better Cotton Standard System in line with our requirements related to Principle 7 – Internal Management Systems. As a result, BCI terminated the Implementing Partner Agreement effective 16 October 2019.

Is the labour situation in Uzbekistan the same as in Xinjiang? BCI decided not to operate there but keeps its presence in China.

In Uzbekistan, there is clear and undeniable evidence that the Government has voluntarily mobilised parts of the workforce including teachers, healthcare professionals, and in some instances, children, to pick cotton during the harvest. These efforts have been classed as forced labour as outlined by the ILO’s core conventions on forced labour, and therefore, campaigning organisations have implemented a ban on Uzbek cotton. A critical mass of retailers and brands have signed the cotton campaign pledge to not knowingly source cotton from Uzbekistan.

While there are similarities, the situation in Xinjiang, from BCI’s perspective, is different. To date, there is no evidence that state orchestrated forced labour is happening at farm-level, the scope within which the Better Cotton Standard is applicable.

During the 2018-19 cotton season, the International Finance Corporation (IFC), a member of the World Bank Group, launched an independent sustainable cotton project in Uzbekistan based on the Better Cotton Principles and Criteria, which are publicly available to whomever wishes to consult or apply them.

We have started participating in IFC’s Sustainable Cotton Project Consultative Council as an observer member, in order to encourage multi-stakeholder dialogue. The Consultative Council is a multi-stakeholder forum in Uzbekistan including the Uzbekistan Government, relevant line ministries and local authorities.

Have BCI customers voiced concerns about Xinjiang-related issues?

BCI does not have or engage with “customers”, as in consumers who buy products. We are a global not-for-profit, multi-stakeholder organisation that aims to transform cotton production worldwide by developing Better Cotton as a mainstream sustainable commodity.

BCI works with on-the-ground Implementing Partners to provide training on more sustainable farming practice to more than 2 million cotton farmers in over 20 countries. Our approach is geared toward ensuring that as many farmers as possible gain access to knowledge and tools to improve the environmental, social and economic sustainability of cotton production.

We aim to promote more sustainable agricultural practices and ensure that the farmers as well as their families and communities benefit from improvements. We also maintain a keen focus on ensuring the credibility of the Better Cotton Standard System through assessment and monitoring.