Nike and Coca-Cola are prominent corporations actively lobbying Congress to dilute legislation that seeks to prohibit the import of goods produced using forced labor in China’s Xinjiang region, based on insights from congressional staff and individuals knowledgeable about the situation, along with lobbying records indicating substantial expenditure on the legislation.
The bill aims to ban large categories of products produced by oppressed Muslim minorities to combat human rights violations. It has received bipartisan backing, successfully passing the House in September with a vote of 406 to 3. According to congressional aides, it has enough support to move through the Senate and may be signed into law by either the Trump administration or the incoming Biden administration.
However, the Uyghur Forced Labor Prevention Act has drawn criticism from multinational corporations like Apple, which has supply chains linked to the far western Xinjiang region, and from business organizations such as the U.S. Chamber of Commerce. Lobbyists have worked to dilute certain provisions, claiming that although they vehemently oppose forced labor and ongoing atrocities in Xinjiang, the act’s extensive demands could disrupt supply chains intricately tied to China.
Xinjiang generates large quantities of raw materials, including cotton, coal, sugar, tomatoes, and polysilicon, and provides labor for China’s clothing and shoe manufacturing. Human rights organizations and news articles have associated numerous multinational corporations with suppliers in the region, notably linking Coca-Cola to sugar sourced from Xinjiang and recording the presence of Uyghur workers at a Qingdao factory producing Nike shoes.
In a March report, the bipartisan Congressional-Executive Commission on China identified Nike and Coca-Cola among companies suspected of connections to forced labor in Xinjiang, alongside Adidas, Calvin Klein, Campbell Soup Company, Costco, H&M, Patagonia, Tommy Hilfiger, and several others.
Coca-Cola stated it “strictly prohibits forced labor in our supply chain” and employs third-party auditors to monitor suppliers. The COFCO Tunhe facility in Xinjiang, supplying sugar to a local bottling facility and previously linked to forced labor allegations, “successfully completed an audit in 2019.”
Greg Rossiter, Nike’s global communications director, stated that the company “did not lobby against” the Uyghur Forced Labor Prevention Act but engaged in “constructive discussions” with congressional staff to combat forced labor and protect human rights. In response to forced labor allegations, Nike cited a March statement affirming it doesn’t source from Xinjiang and confirmed its suppliers aren’t using textiles or yarn from that region.
Nike stated that, starting in 2019, the Qingdao factory ceased recruiting new workers from Xinjiang, with an independent audit verifying that no employees from that region are currently at the facility. A March report from the Australian Strategic Policy Institute, referencing state media, revealed that the factory had approximately 800 Uyghur workers by the end of 2019 and manufactured over seven million pairs of shoes annually for Nike.
China’s extensive efforts to suppress and forcibly assimilate Uighurs and other minorities in Xinjiang have drawn widespread condemnation from politicians and consumers globally world. However, many companies find it challenging to thoroughly investigate and eliminate potential links to forced labor due to the opacity of Chinese supply chains and the restricted access auditors have to an area where the Chinese government imposes strict limitations on individuals movements.
The Uyghur Forced Labor Prevention Act mandates that companies exporting goods to the United States must thoroughly inspect their supply chains or potentially discontinue their relationships with Chinese suppliers entirely. It would establish stringent criteria, forbidding the import of goods produced “entirely or partially” in Xinjiang unless companies can verify to customs officials that their items were made without the use of forced labor. The bill also addresses so-called poverty alleviation and pairing programs that transfer Muslims from impoverished areas to work in factories elsewhere, which human rights groups claim are frequently coercive. Companies would be mandated to disclose information regarding their connections to Xinjiang to the Securities and Exchange Commission.
Apple, known for its deep business connections in China, has also advocated for restricting certain aspects of the bill, according to two congressional staffers and another source familiar with the matter. Disclosure forms reveal that Apple paid Fierce Government Relations, a firm managed by ex-staff aides to Senator Mitch McConnell of Kentucky and President George W. Bush, $90,000 to lobby on matters such as legislation related to Xinjiang in the third quarter. The Washington Post previously reported on Apple’s lobbying efforts.
This year, Apple engaged external firms to lobby for another piece of legislation: the Uyghur Forced Labor Disclosure Act of 2020. Apple refuted allegations of attempting to undermine the bill, asserting its commitment to bolstering American regulations and its belief that the Uyghur Forced Labor Prevention Act should be enacted.
In the March report, the Australian Strategic Policy Institute highlighted Apple and Nike as part of 82 companies that may have directly or indirectly profited from abusive labor transfer programs linked to Xinjiang. The report indicated that O-Film Technology, a contractor for Apple, Microsoft, Google, and other firms, accepted at least 700 Uyghur workers in a program intended to’ gradually change their ideology.” It also linked other Apple suppliers, such as Foxconn Technology, to comparable employment initiatives.
Lobbying disclosures indicate that firms have invested significantly to influence Congress regarding Xinjiang-related laws, yet they provide no details about their specific demands.
During the first three quarters of 2020, Nike allocated $920,000 for in-house lobbying efforts directed at Congress and various federal agencies. While disclosures do not specify spending by topic, they indicate that Nike lobbied on issues such as physical education grants, taxation, climate change, and the Uyghur Forced Labor Prevention Act.
This year, Nike allocated over $ 400,000 to external firms such as Cornerstone Government Affairs, Ogilvy, Capitol Counsel, GrayRobinson, American Continental Group, DiNino Associates, and Empire Consulting Group for lobbying on various issues, including this act.
Coca-Cola has made significant investments, spending $4.68 million in the first three quarters of 2020 on internal lobbying and engaging Empire Consulting Group and Sidley Austin to advocate on various related issues.
