A new report documenting “the automotive industry’s reliance on forced labor and other exploitation” in China’s Xinjiang Uyghur Autonomous Region could presage related enforcement actions against imports of automotive products and parts.
The report from Sheffield Hallam University’s Helena Kennedy Centre for International Justice states that mining, refining, and manufacturing in China undergirds much of the global automotive industry. A large and growing share of this work is undertaken in the XUAR, where auto parts manufacturers have expanded production in recent years due to the increased availability of processed raw materials, “extraordinary government incentives,” and lax implementation of labor and environmental protection laws.
As examples, the report notes that (1) the world’s biggest supplier of steel is the largest producer in the XUAR, (2) aluminum production in the XUAR represents about a tenth of global totals, (3) one of the world’s largest copper processors is active in the XUAR, (4) China processes 60 percent of the world’s lithium, with a growing percentage of that activity in the XUAR, and (5) the sewing of interior cushions and floor mats is taking place in factories adjacent to some of the XUAR’s most repressive internment camps. “Between raw materials mining/processing and auto parts manufacturing,” the report states, “practically every part of the car would require heightened scrutiny to ensure that it was free of Uyghur forced labor.”
The report identifies 96 companies relevant to the automotive sector operating in the XUAR, more than 40 auto sector manufacturers in China that are sourcing from the XUAR or from companies that have accepted Uyghur labor transfers across China, more than 50 international auto parts or automobile manufacturers sourcing directly from companies that are operating in the XUAR or have accepted Uyghur forced labor transfers, and more than 100 international auto parts or automobile manufacturers that have some exposure to forced Uyghur labor-made goods.
According to Elise Shibles, who heads ST&R’s forced labor practice, reports like this one have typically been precursors to U.S. Customs and Border Protection enforcement activity against named industries and entities. Companies should therefore expect CBP to begin detaining shipments of automotive products at U.S. borders (Shibles said detentions of aluminum products are already being seen) and requesting that importers prove no connection to the XUAR. Automotive importers may also anticipate CBP audits on the topic of forced labor.
Sandler, Travis & Rosenberg has a robust program to assist companies on forced labor issues. ST&R also maintains a frequently updated web page offering a broad range of information on forced labor-related efforts in the U.S. and around the world. For more information, please contact ST&R at email@example.com.
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