Sheri Meyerhoffer, the Canadian Ombudsperson for Responsible Enterprise, holds a news conference in Ottawa on July 11, 2023. Ottawa’s corporate-ethics watchdog has announced an investigation into fashion company Ralph Lauren over the possible use of forced labour in its supply chains.Sean Kilpatrick/The Canadian Press
A watchdog created by the federal government to probe corporate wrongdoing abroad says it is opening an investigation into whether fashion retailer Ralph Lauren Canada is selling products made with Uyghur forced labour in China.
It’s only the third investigation announced by the Canadian Ombudsperson for Responsible Enterprise (CORE) since opening its doors to receive complaints in March, 2021. Last month CORE announced investigations into Nike Canada and Canadian mining company Dynasty Gold.
The federal watchdog is investigating all of the companies in response to complaints filed last year by a coalition of human-rights groups. They asked for a probe into allegations that some products sold by 14 Canadian companies – most of them subsidiaries of large U.S. firms – are made with forced labour in China. The watchdog is expected to decide on the remaining complaints in the coming weeks.
Also Tuesday, CORE announced it decided not to investigate Canadian mining company GobiMin because the company had sold its Xinjiang subsidiary in 2022.
China’s northwestern Xinjiang region, which produces one-fifth of the world’s cotton, has been the focus of reports by media, researchers and rights groups who say Beijing committed grave human-rights violations against the largely Muslim Uyghur population, as well as other minorities. In the region, authorities have been accused by Western governments and human-rights groups of widespread use of forced labour.
Michele Bachelet, then the United Nations high commissioner for human rights, visited Xinjiang in 2022, and her office’s report was extremely critical, saying China has committed “serious human rights violations” against Uyghur Muslims in the region, which may amount to crimes against humanity.
Mehmet Tohti, executive director of the Uyghur Rights Advocacy Project, said the world is watching how Canada handles these investigations. He said to his knowledge this year marks the first time a government-affiliated body anywhere in the world has decided to investigate Nike and Ralph Lauren over alleged ties to forced labour in China.
“CORE’s announcement is a valued step in the right direction to hold Canadian companies accountable for their human-rights violations abroad, specifically those which profit the CCP’s [Chinese Communist Party’s] diminishment of Uyghurs’ basic human rights and their policies of genocide,” he said. “It is action time for CORE, the Canadian government, Canadian Border Services Agency and crucially, Canadian corporations, to conduct due diligence and educate themselves and their customers on their supply chains.”
The complainants had alleged that Ralph Lauren had supply relationships with eight companies that use, or benefit from, forced labour in China. CORE, however, opted only to investigate links between two of these companies – Youngor Textile Holdings Co. Ltd. and Jiangsu Guotai Guosheng – because “there is more information to suggest those are linked to Ralph Lauren Canada,” CORE ombudsperson Sheri Meyerhoffer said in an interview. “I only have jurisdiction over Canadian companies.”
Ralph Lauren said in a statement it will continue “in good faith” to address questions from the ombudsperson.
“Ralph Lauren is committed to responsible sourcing, trade compliance and conducting its global operations ethically,” the firm said. “Our company has zero tolerance for forced labor of any kind, and if we find that any facility, anywhere in the world, is not acting in accordance with our operating standards, we take appropriate remedial and disciplinary action. Over the years, we have invested significantly in supply chain traceability and due diligence, diversified our sourcing locations and prioritized responsibly sourced materials to create a more agile and sustainable supply chain.”
The Global Slavery Index, produced by the Australian philanthropic foundation Walk Free, estimated in a 2018 report that more than $18.5-billion in goods imported annually into Canada are at risk of being made with forced labour at some point in their supply chains, including clothing, computers, smartphones, gold, seafood and sugar cane.
Canada has failed to intercept any imports made with forced labour in recent years despite a commitment to stop such products from entering this country. Three years after it amended the Customs Tariff Act on July 1, 2020, to prohibit forced-labour imports, none have been seized by Canada Border Services Agency.
In 2021, the United States enshrined in law a reverse-onus rule that puts the responsibility on those shipping goods from Xinjiang to prove these items are free of coerced labour. That means the U.S. government officially regards all goods produced in whole or in part in Xinjiang as produced with forced labour and barred from entry unless importers can prove otherwise.
Emily Dwyer, policy director at the Canadian Network on Corporate Accountability, said CORE is taking too long to decide on investigations. “Those complaints were launched in June of 2022 and it’s now August, 2023, and we’re just seeing a report about the initial assessment. It’s taken over a year for the ombuds office to be making a decision in four of the 14 cases,” Ms. Dwyer said.
She also noted that when CORE was first announced, Ottawa said it would have the power to compel witnesses to give evidence and produce documents – but the government never followed through.
“The office was kind of gutted before it started,” she noted.
She said it’s also discouraging that CORE decided not to investigate GobiMin simply because it sold the subsidiary. “People who are harmed by all this – what are they getting out of the process?”