Canada Initiating Forced Labor Investigations on Hugo Boss, Diesel, Walmart Canada
Allegations that Diesel Canada, Hugo Boss Canada and Walmart Canada purchase garments that were made in part with Uyghur forced labor -- complaints that rely on Australian Strategic Policy Institute reporting in 2020 and Sheffield Hallam University reports -- will progress to a fact-finding investigation after the Canadian Ombudsperson for Responsible Enterprise (CORE) found that the companies' responses weren't satisfactory.
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The complaints were filed by a coalition of 28 human rights organizations in Canada, the same groups that made allegations against Ralph Lauren (see 2308210048) and Nike and Dynasty Gold (see 2307130035). CORE initiated investigations against those firms earlier this year; all the complaints were initially filed in June 2022. CORE announced the latest investigations Aug. 24.
The agency's spokesperson said she couldn't say how far along the earlier investigations had progressed, or estimate how long the newest investigations might take.
"Investigating a complaint can involve a range of different techniques in order to gather data about the alleged human rights abuse and the circumstances, rights holders and stakeholders involved. This may include desk based research, document review, interviews and focus group discussions. Once all available data has been collected and analyzed, the investigator will draft a report. The Ombud will review the investigation report, and once finalized, it will be published along with recommendations for the company and or the Canadian government," she said.
Australian researchers said Hugo Boss buys from Esquel Textile Co. Ltd. -- one of the companies also identified in Nike's supply chain by the same researchers. Esquel is on the Uyghur Forced Labor Prevention Act entity list. Sheffield Hallam said Hugo Boss Canada does business with Texhong Textile Group, a company also identified as a Nike supplier by Australian researchers.
CORE noted that Hugo Boss' Canadian subsidiary only received one Esquel shipment, from Vietnam. Hugo Boss argued that the complaints of forced labor are against the Xinjiang location of Esquel, not others, and that it began winding down its relationship with Esquel in 2020. It hasn't received any Esquel shipments in 2022 or 2023, it said.
Hugo Boss didn't respond to a request for comment, but told CORE that its response to the investigation "will clearly demonstrate that the allegations are either false, out of date, not accurately researched or misleading."
With regard to the Sheffield Hallam report, Hugo Boss said, "the company conducted its own research in 2022 and could not find any factories owned by Texhong in Xinjiang."
"Hugo Boss Canada Inc. explained that Hugo Boss is subject to the US Uyghur Forced Labour Prevention Act, Magnitsky legislation, and other sanctions related to Uygur forced labour and the Xinjiang region. As a result, the company has put in place measures to comply with the various requirements, and their compliance with these requirements addresses the allegations made in the complaint. They pilot isotope testing to increase supply chain oversight, evaluate the use of third-party tools to independently certify and research supply chains, and will continue to evaluate and implement supply chain oversight tools."
The human rights groups cited Australian researchers' work identifying Qingdao Jifa Huajin Garment Co. Ltd and Jiangsu Guotai Guosheng Co. Ltd as suppliers in Walmart Canada's supply chain, and Sheffield Hallam's research that Jiangsu Lianfa Textile Co. Ltd, Luthai Textile Co. Ltd., Texhong Textile Group and Weiqiao Textile Co. Ltd. are in Walmart Canada's supply chain.
Walmart didn't respond to a request for comment, but told CORE that none of those firms are in "its active disclosed supply chain," nor were they suppliers to its suppliers. They also said the complaint didn't meet CORE's admissibility requirements.
CORE said that since Walmart's assertions and the reports from Australia and Great Britain were in conflict, it would start an investigation.
The allegation said Jiangsu Guotai Guosheng is in Diesel's supply chain, and Diesel told CORE it hasn't purchased anything from that firm since May 1, 2019. The law that set up CORE only applies to actions since that date. The company also said it hasn't purchased any material from Xinjiang since 2017.
CORE said it decided to investigate whether Diesel purchased goods from Jiangsu after May 1, 2019, because Diesel's denial didn't offer details on how it knows it had no purchases, and whether the review of its supply chain extended to suppliers past its direct suppliers, or "the specific findings of the review."
Diesel didn't respond by our deadline to a request for comment.