Daewoo purchases 20% of all cotton processed in Uzbekistan

Daewoo purchases 20% of all cotton processed in Uzbekistan

A decision by the Korean Government not to investigate Daewoo International Corporation for sourcing cotton from Uzbekistan over forced labour concerns has broken with its responsibilities as a member of the Organisation for Economic Cooperation and Development (OECD), campaigners say.

Daewoo International, reportedly the largest cotton processor in Uzbekistan, has repeatedly admitted it uses forced labour cotton from the country.

Last year it was targeted by protesters demanding that the company cease the purchases, with campaigners saying they have persuaded international companies such as Nike, H&M, Ikea, C&A, Jones Group and Michael Kors to push Daewoo out of their supply chains.

The Cotton Campaign says Daewoo’s failure to fulfil its due diligence responsibilities presents investors with an unacceptable risk of complicity in human rights violations.

The human rights group added that the Korean government’s decision calls into question whether it is fulfilling its duties as a member of the OECD.

"Despite the continuous requests to abide by the international community's standards through Parliamentary Inspection, the decision from Korean NCP to simply dismiss the case was very disappointing," said Chun Soonok, Member of the National Assembly of the Republic of Korea. "I am sincerely concerned about the practice to dismiss the case without further examination by Korean NCP."

In December 2014, Korean Transnational Corporation Watch, Anti-Slavery International and the Cotton Campaign petitioned the Korean NCP to investigate Daewoo International’s admitted purchasing of forced-labour cotton in Uzbekistan and to facilitate mediation to address Daewoo’s breaches of the OECD Guidelines.

It is understood Daewoo has operated cotton processing facilities in Uzbekistan since 1996, and purchases 20% of all cotton processed in the country.

Last month, the Korean NCP closed the petition, claiming that Daewoo’s purchasing of forced labour cotton from the Uzbek government does not impact the government’s practice and that Daewoo has "performed due diligence duties on human rights required by the guidelines". The NCP cited reports from Daewoo that it conducts internal monitoring and has raised the issue with the Uzbek government.

KTNC Watch, Anti-Slavery International and the Cotton Campaign are now calling on the OECD to investigate whether the Korean government is fulfilling its duties to promote the guidelines through the NCP.

They are also urging investors to cease current and future investments in Daewoo, and its parent company Posco, until they suspend purchases of cotton from Uzbekistan, and establish independent monitoring and public reporting on human rights risks and violations in its cotton supply chain in Uzbekistan.