Uyghur Compliance Audits 'Fig Leaf'

US businesses with suppliers located in China’s Xinjiang region cannot rely on social audits to confirm whether forced labor in being used in their supply chains, a top Administration labor official told lawmakers in an April 30 hearing.

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“Social audits in China should not be seen as an authoritative source for companies reflecting on-the-ground human rights conditions,”Deputy Undersecretary of Labor for International Affairs Thea Lee said.

“The business community needs to be aware that any audits, and frankly any business operations undertaken inside China, carry heightened labor and human rights risks,” she told members of the Congressional Executive Commission on China at a hearing on audit fraud.

The audits are required under the Uyghur Forced Labor Prevention Act to ensure that products made with forced labor are not finding their way into US supply chains.

But the reliability of such audits are questionable, Ms. Lee said.

Reprisals Feared

“Any audit occurring in Xinjiang cannot be conducted without government oversight, making objective worker interviews free from reprisal an impossibility,” she said.

“As the US government highlighted in the Xinjiang Business Advisory2F3, published in 2021 and updated in September of 2023, auditor interviews with workers cannot be relied upon given pervasive surveillance, the threat of detainment, and evidence of workers’ fear of sharing accurate information.

"Moreover, auditors have reportedly been detained, harassed, threatened, or stopped at the airport. That is why dozens of major audit firms have not operated in Xinjiang for years; the fear of reprisal for both workers and auditors remains high.”

Committee co-chair Rep. Chris Smith (R-NJ) agreed. “Today, using the fig leaf that audits provide, corporations seek to convince consumers, regulators and perhaps even their own consciences that their supply chains are clean and compliant with US law,” he said.

Rep. Smith said he intends to hold an additional hearing with audit companies. He is hoping to receive input on what regulatory or legislative actions Congress might need to take.

The Administration and Congress had hoped the UFLPA would persuade China to end the practice of forced labor and human rights abuses of the Uyghur ethnic minority, but Beijing has not budged, Ms. Lee said. With other countries, including the European Union, adopting similar measures, hopefully at some point it will become untenable for China to continue its actions.