BCI Statement on Apparel Insider Article

The Better Cotton Initiative (BCI) is aware of an article published by Apparel Insider on 27 November 2019 about our relationship with a BCI Implementing Partner in Xinjiang, China. There are a few points related to the piece that are important for BCI to reiterate and for stakeholders to consider.

Socio-political context

Discrimination and forced labour, of all forms, are unacceptable within BCI programmes. BCI is aware of and concerned by the reports of the current situation in Xinjiang where “re-education” programmes target Uighurs and other ethnoreligious minorities. In considering the challenges presented by this operating context and in weighing up all the options, the BCI Council determined that a continued presence and engagement in the region implementing the Better Cotton Standard System (BCSS), and its principles of social, environmental and economic sustainability, would continue to serve the BCI mission and benefit local farmers. To that end, BCI has developed a concrete plan and roadmap to identify, and if necessary, mitigate and manage risks related to the credible implementation of the BCSS.

Xinjiang Production and Construction Corps (XPCC) Cotton & Linen Company

A key element of BCI’s mission is to deliver training and support to cotton farmers around the globe, and our approach is to engage with organisations that are best suited to provide training on sustainable agronomic and social practices. In doing so, BCI works with a variety of implementing partners around the world – from NGOs to supply chain actors and government bodies. BCI, in selecting with whom to partner and where, first and foremost evaluates the potential for contributing to driving more sustainable practices at field level. The BCI model is also built to link the global market with production, and therefore, another critical aspect that weighs into our evaluations is that of market demand and uptake.

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 focus of the review was on farm-level practices in accordance with the scope of the Better Cotton Standard System. The assessment generated a risk register to guide ongoing monitoring and management of the projects.

The BCI Multi-Stakeholder Council determined that collaboration should be initiated on a pilot-basis for one year, during which period extended monitoring would take place. The BCI Council, and the organisations in the governing bodies of the independent Better Cotton Fast Track Programme (BCFTP) who were directing BCI farm-level investments, were aligned that BCI’s mission must be to engage in challenging regions, including complex political environments, and be a force for good in delivering improved well-being to people and planet.

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. Beyond BCI’s standard risk management and assurance activities, one additional condition to continue forward with the partnership was the addition of a specific risk registry to continue monitoring adherence to Better Cotton Principles.

During the past 24 months, XPCC Cotton & Linen Company has been undergoing a significant restructuring. The re-organisation resulted in sweeping changes in internal management systems and altering approaches to working at farm level but also 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.

Huafu

In March 2019, the Wall Street Journal contacted BCI and alleged that a BCI Supplier and Manufacturer Member, Huafu, was involved in forced labour practices. BCI reached out to Huafu for a response, and they denied the allegations. Regular supply chain monitoring, beyond confirmation that our chain of custody requirements are met, is outside of BCI’s scope as we are a farm-level standard. Nonetheless, forced labour is incompatible with BCI’s values. All BCI Members – including suppliers and manufacturers, and retailers and brands – must adhere to the Membership Code of Practice, which requires members to act responsibly and to be transparent in their communications with BCI. Huafu 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.

We are conscious that the ability to conduct effective due diligence in the region, in general, is being called into question. We are continuously monitoring the situation and reviewing new information as it becomes available. BCI will continue to keep members updated.