Apple imported clothes from Xinjiang firm facing US forced labour sanctions

Apple has imported clothes – probably uniforms for staff in stores – from a company facing US sanctions over forced labour at a subsidiary firm in China’s western Xinjiang region, shipping records show.

The details come a week after Apple’s chief executive, Tim Cook, told the US Congress he would not tolerate forced labour or modern-day slavery in the company’s supply chains.

An Apple spokesman said the company had confirmed none of its suppliers currently source cotton from Xinjiang, but declined to comment on whether they had done so in the past.

The US government in July imposed sanctions on Changji Esquel Textile, a unit of the Hong Kong garment group Esquel, along with 10 other Chinese companies for alleged human rights violations in the Xinjiang region, including forced labour.

The sanctions bar the companies from buying US technology and other goods. The US commerce secretary, Wilbur Ross, said they aimed to prevent US products being used in “the Chinese Communist party’s despicable offensive against defenceless Muslim minority populations”.

Esquel has denied allegations of abuse. “We absolutely have not, do not, and will never use forced labour anywhere in our company,” it said in a statement, pledging to appeal its inclusion on the list, and adding that an international audit in 2019 confirmed there was no modern-day slavery at the factory.

A month before the sanctions were announced, Esquel had sent a shipment of women’s cotton and elastane knit shirts to “Apple Retail stores” in California, the database run by the global shipping information provider Panjiva showed. Those records were identified by the Tech Transparency Project.

Esquel supplies many major US clothing companies including Patagonia, Nike and Tommy Hilfiger. But Apple’s relationship with the firm has not received much public scrutiny, even though it stretches back years.

Documented in trade publications, and confirmed by shipping databases and Esquel itself, it appears to have mostly focused on uniforms worn by staff in Apple stores.

Until recently, Esquel’s website listed Apple as a “major customer”, according to a report published in March by the Australian Strategic Policy Institute (ASPI) into Chinese companies using forced labour in Xinjiang to supply global brands.

In 2014 Apple and Esquel agreed to produce more sustainable uniforms using 100 metric tonnes of recycled cotton waste, the industry publication Just Style reported.

That same year Esquel shipped more than 50,000 units to Arvato Digital Services, a logistics company that works with Apple, Panjiva records show. Apple was listed on shipping records as the “contact party”.

In 2018, a presentation at an industry conference by Esquel’s chief executive, John Cheh, highlighted Apple as a “major customer” of the firm’s Vietnam arm, providing pictures of blue and red staff uniforms produced in its factories.

Those units are not on the sanctions list, but the shirts they produced likely included cotton grown in Xinjiang, the region where Chinese authorities’ persecution of mostly Muslim minorities has included forced labour.

Apple said in a statement: “Esquel is not a direct supplier to Apple but our suppliers do use cotton from their facilities in Guangzhou and Vietnam. We have confirmed no Apple supplier sources cotton from Xinjiang and there are no plans for future sourcing of cotton from the region.”

But the spokesman declined to say where those factories source their raw cotton. Guangzhou is a major Chinese city where there is no cotton farming, and Esquel’s public documents do not refer to any cotton farming in Vietnam.

The garment company prides itself on “vertical integration”, producing much of the cotton used in its garments itself; the same presentation by Cheh listed factories across Asia, and offices around the world – but only Xinjiang as a site for “cotton farming, ginning and spinning”.

Further notes listed five locations where the firm operated inside Xinjiang. One was Changji, the location of the sanctioned subsidiary.

Related: US imposes sanctions on Chinese 'state-within-a-state' linked to Xinjiang abuses

Another was Kashgar, where for more than two decades Esquel had a joint venture with the Xinjiang Production and Construction Corps (XPCC), a paramilitary government organisation that was also sanctioned by the US government in July, over its alleged role in the perpetration of abuses.

Esquel sold its stake in the Xinjiang White Field Cotton Farming company in April, three months before XPCC was sanctioned. It has not said how it will replace the particular type of high-quality cotton (extra-long staple cotton) that the joint venture provided. The XPCC produces about one-third of China’s cotton.

James Millward, professor of history at Georgetown University in Washington DC and the author of Eurasian Crossroads: A History of Xinjiang, said the entire region’s economy had been contaminated by Chinese communist party policies, with at least 1 million people held in internment camps, many pushed into forced labour.

“They’ve tainted supply chains, have tainted the very idea of Xinjiang,” he said. “It is such a deeply entrenched, and broadly enmeshed system of oppression they have created, that has involved hundreds of companies in China and outside of China.”

Even if the companies’ own factories can be certified free of forced labour, they are often working with – or with authorisation from – the local governments managing the abuse.

“They’re doing business with the province, they’re doing business with local administrations, they’re doing business with the XPCC, all of which are running concentration camps and all of which are involved in moving people in concentration camps into one kind of coerced or involuntary labor or another,” he said.

Apple came under the spotlight over alleged use of forced labour by a supplier when the original sanctions list came out because of its relationship with the tech firm Nanchang O-Film Tech, which makes cameras for some iPhones. Cook visited a company factory in southern China in 2017, according to the ASPI report.

Testifying to Congress last week, Cook described forced labour as “abhorrent”. “We wouldn’t tolerate it [slave labour]. We would terminate a supplier relationship if it was found,” he said, adding that he would be keen to work on legislation to ban forced labour.

Millward said foreign companies would need to “ramp up due diligence” to keep forced labour out of their supply chains, particularly in the garment industry.

“The way corporates have been thinking about it generally is, ‘Well, I don’t have any factories in Xinjiang, so I cannot be involved’,” but that is no longer enough.

“You have to see if any of the companies you’re dealing with are themselves dealing with Xinjiang. And maybe take it, you know, two or three steps removed because that’s how particularly the textile industry is. You go from from fibre to filament to fabric to clothing, and it’s very hard to trace all of that all along the way.”