The Canadian Ombudsperson for Responsible Enterprise (CORE) has published Initial Assessment reports in line with the complaints about Walmart Canada, Hugo Boss Canada and Diesel Canada.

These complaints, filed by a coalition of 28 civil society organisations in June 2022, allege that the three companies have operations or supply chains in the northwestern Xinjiang region of China that have used or benefitted from Uyghur forced labour.

Walmart Canada

The Walmart Canada Initial Assessment report relies on two reports from complainants: The Australian Strategic Policy Institute (ASPI) Uyghurs for sale report from March 2020 and Laundering Cotton by Dr Laura Murphy (the Murphy Report) dated November 2021.

The reports identify factories and manufacturers linked to Uyghur forced labour that are linked to Walmart’s supply chain.

The Complainants allege forced labour is used in the earlier stages of Walmart Canada’s supply chain and add while Walmart has reportedly removed products made in Xinjiang from its stores, questions persist regarding its due diligence practices and those of its suppliers.

While Walmart denied the allegations, it did not supply further detail to CORE which is now investigating the retailer using independent fact-finding to address the conflict between the allegations and the position of the company.

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What Walmart told Just Style

A spokesperson for the retailer said it had responded and participated in CORE’s process, providing information about its supply chain procedures and controls in place.

“Through this process, we also confirmed that none of the entities in the complaint are in our active disclosed supply chain. Walmart Canada does not tolerate forced labour of any kind in our supply chain, and we take allegations of human rights violations seriously.

“As indicated in the report, Walmart made it clear to the CORE that we have developed and executed policies, standards, controls and supply chain monitoring systems that support Walmart Canada’s corporate mandate to prohibit the use of forced labour. Our policies are diligently enforced.”

They highlighted that the company respects CORE’s mandate and will continue to ensure its standards and corporate mandate are being upheld.

Hugo Boss Canada

The Hugo Boss Canada Initial Assessment report details the allegation that the Canadian garment company has a supply relationship with a Chinese company as identified in the Australian Strategic Policy Institute (ASPI) report Uyghurs for Sale.

Based on the complaint, ASPI identified a Chinese company for using Uyghur forced labour as well as owning several factories and subsidiaries in Xinjiang, China. To support their allegations, the Complainants provided bills of lading that indicate Hugo Boss as the consignee for multiple shipments from one Chinese factory with reported links to Xinjiang.

In addition to this, the complainants refer to a report by Sheffield Hallam University, Laundering Cotton and suggest there is evidence that the company linked to Hugo Boss Canada owns a subsidiary in Xinjiang, purchases Xinjiang cotton, engages in state-sponsored labour transfers, and purchases cotton from a Xinjiang based cotton provider.

The complaint highlights that Hugo Boss is currently the subject of a criminal complaint in Germany for illegally benefiting from Uyghur forced labour.

CORE is now investigating the German fashion brand on concerns its response suggests it does “not appear to consider fully the complex nature of the garment supply chain.”

What Hugo Boss told Just Style

A spokesperson for Hugo Boss said the allegations are “baseless” and do not take into account the information it provided to CORE.

“Hugo Boss does not source any goods in its direct supply relationship that originate from the Xinjiang region. As a matter of principle, we do not tolerate forced or compulsory labour or any form of modern slavery. CORE based its decision to investigate Hugo Boss Canada, Inc. on the incorrect fact that Hugo Boss Canada, Inc. might still be ordering products from other Esquel Entities, not necessarily located in China.”

Hugo Boss also highlights that the Group generally realigned its supplier portfolio globally and thus began winding down its relationship with Esquel in 2020/2021. As a result, HUGO BOSS Canada, Inc. concluded its exit of Esquel shipments in 2022,

The company believes it is wrong to launch an investigation based on an alleged supplier relationship which no longer exists.

Esquel could not be reached at time of press.

Diesel Canada

As part of Diesel Canada Initial Assessment report the complainants cite the Australian Strategic Policy Institute’s (ASPI) Uyghurs for Sale report identifying a Chinese supplier in Diesel’s supply chain where Uyghurs allegedly work “under conditions that strongly suggest forced labour.”

CORE clarifies that while some of the information provided and the reports referred to in the complaint refer to Diesel, it is not clear whether it refers to Diesel Canada, Diesel Inc. (the US-based parent of Diesel Canada) or Diesel as an international brand or retailer.

The Complainants refer to the Laundering Cotton report which provides evidence that five leading textile companies in China use or benefit from Uyghur forced labour by establishing subsidiaries in the Uyghur region, purchasing Xinjiang cotton through intermediaries and/or engaging or cooperating in forcible labour transfer programmes.

Additionally, the complaint also alleges that Diesel has not addressed the issue of forced labour inputs at the early stages of its supply chain.

CORE shares Diesel Canada denies the allegations, stating it has reviewed its supply chain, and it is not involved with any human rights abuse nor does it purchase material from the Xinjiang region. But it says Diesel Canada did not participate in the CORE’s initial assessment process raising questions related to the degree of transparency in its human rights due diligence practices.

In line with this, CORE says it has decided to conduct an investigation into Diesel Canada’s business relationship with one of the Chinese companies alleged to be using or benefitting from Uyghur forced labour.

What Diesel Canada told Just Style

“Diesel is deeply committed to ethical sourcing. We respect global human rights and comply with international laws across our supply chain. Our Company has no evidence that our products are produced in whole or part by factories that use forced labour. Diesel has zero tolerance for forced labour of any kind. We take immediate remedial and disciplinary action if we find that any supplier is not acting in accordance with our code of conduct.”

Ombudsperson Sheri Meyerhoffer adds: “As mediation between the parties is not currently an option, we will be launching investigations into the allegations outlined in these reports. The investigations will provide all three companies with an ongoing opportunity to provide further relevant information and mediation of the allegations remains open.”

Last week, CORE launched a probe into the Canadian unit of US premium lifestyle brand Ralph Lauren on its supply chain and operations link to Uyghur forced labour.

While last month, it launched an investigation into Nike after a coalition of 28 organisations filed a complaint on concerns the sports giant has supply relationships with Chinese firms identified as using or benefitting from Uyghur forced labour.