Uyghur: U.S. Uyghur Forced Labor Prevention Act will impact solar panels and clothing – companies must respect human rights: Michael H. Posner

Michael H. Posner teaches ethics and finance at NYU’s Stern School of Business. Speaking to Srijana Mitra Das, he explains why companies need to care about human rights:


Q. What is the core of your research?

A. I created the Center for Business and Human Rights at NY U Business School a few years ago. We focus on how global companies operate around the world and the human rights challenges associated with their activities. Much of this research focuses on global supply chains in manufacturing, agriculture, mining, etc., and the risks they pose for vulnerable people like workers. We also study how big tech companies operate in terms of privacy, free speech, misinformation and harmful content and how the investment community influences all of this.

Q. Geopolitics aside, what is the significance of the Uyghur Forced Labor Prevention Act that was passed by the US Congress?
A. The situation in Xinjiang, China has deteriorated quite dramatically — by many accounts over a million people are detained, with massive forced labour, especially in agricultural production. The law, which comes into effect in June, presumes that any product made in Xinjiang province or including raw materials from there is the result of forced labor – the presumption is that such goods should not be allowed into the states -United.

Q. What will be the likely impacts of this law on the various industrial sectors?

A. About 80% of the cotton produced in China comes from Xinjiang province. The polysilicon used in solar panels is also overwhelmingly sourced from Xinjiang – and most solar panels arriving in the United States come from China. Thus, the clothing, textiles, solar panels and electronics sectors are the most affected by this law. The question now is how to apply it and what to do, especially about solar panels which are so badly needed in the global effort to reduce carbon – if you don’t have an alternative source of generation, what should you do in the short term? These are challenges for industry and government. This law was passed with huge bipartisan support in the US Congress, 406 to three – now its practicalities need to be addressed.

Q. Do companies have a deeper responsibility to respect human rights and, if so, why?

A. I think they certainly do. Consider the origins of the United Nations and the Universal Declaration of Human Rights in 1948 – all of these early discussions were about government accountability. The assumption was that if governments respect human rights, that solves the problem. We now know that many governments are unwilling or unable to protect their own people — there is a “governance vacuum” to ensure individuals are protected. Along with that we have big global companies trying to make money by operating where the labor is cheaper and the regulations less stringent. But companies shouldn’t outsource responsibility for how they make money – and governments are starting to make laws about it. European governments are passing mandatory due diligence laws, telling companies operating around the world that they have a responsibility to human rights, social and labor issues. We are currently in the process of creating rules of conduct on how companies should operate in these areas. We need to develop industry standards to assess corporate behavior, so that companies are both encouraged and compelled to do the right thing.

Q. Do any companies voluntarily avoid forced labor or child labor in global supply chains?

A. I chair the Fair Labor Association which includes about 60 clothing and footwear companies and many agricultural companies. It is 20 years old and includes Adidas, Nike, Hugo Boss, Patagonia, etc. These companies have committed to a set of nine labor standards, on child labor, working hours, workplace safety, forced labor, etc., and are assessed every three years on compliance. This is an example of companies coming together voluntarily to work towards greater accountability, overseen by a board made up of NGOs, universities, civil society groups, etc. This points to a way forward to develop concrete industry standards and get competitors to accept a common framework they can be measured against.

Q. Can consumers support fair labor practices?

A. The consumer is very important here, but companies have also become very savvy about showing how good they are doing, even when they are not. We lack independent data for consumers to make truly informed decisions. However, many consumers around the world want to do the right thing and look at brands from this angle – but there is considerable confusion in this space, fueled also by companies spending on marketing, showing that they are green , that they treat the workers well, etc. We need more public data that allows consumers to evaluate these claims and reward companies that live up to their trust. Once these standards are developed, companies will pay much more attention to these issues, as their ability to succeed in the market will be affected by the fact that consumers will make purchasing decisions based on their performance in environmental measures. and social. Opinions expressed are personal