Verite had a Shenzhen partner that worked throughout China to review labor conditions on some factory floors. But according to the Journal, Beijing saw them as being part of a campaign to highlight forced-labor allegations in Xinjiang, the far western province that is home to hundreds of thousands of Uyghur Muslims living either in prison camps, or under 24-hour surveillance.
The Shenzhen Verite was closed following an April raid on its offices by Chinese security forces, according to people with knowledge of the matter who spoke to the Journal.
Companies including Walt Disney Co. and Apple used them to consult on labor issues at their Chinese partners’ factories. Verite has effectively lost its ability to operate in the Chinese market, depriving companies of a potential channel to conduct labor audits and research in China.
However, just as important, while Beijing may very well see Verite as part of some Western intel operation to smear their manufacturers, Washington is just as likely to see Beijing’s raid as evidence that the Chinese Communist Party is not transparent, isn’t interested in transparency, and has a lot to hide in terms of labor conditions along its supply chains, especially in Xinjiang.
Customs and Border Protection has issued numerous Withhold Release Orders against numerous product lines coming from Xinjiang. These include entire items, namely cotton and tomato-derived goods, to individual companies like Hoshine Silicon Technology. Hoshine makes polysilicon used in the manufacturing of solar cells that go into solar panels. China is the world’s leading manufacturer of all three of those items. Customs recently stopped shipments of at least two Chinese companies, including Canadia Solar (not really Canadian), due to suspicion that it counted Hoshine as part of its supply chain. Customs believes Hoshine uses forced labor at its Xinjiang factory.
“Multinationals like Nike as well as pro-China trade associations argue that we can rely upon audits to determine whether imported goods are made with forced labor,” said Michael Stumo, CEO of CPA. “We know that there are no independent auditors that report accurate results, and this is another example of why that is true.”
Verite also had a reputation for producing investigations that lent credibility to corporations grappling with labor rights-related issues, according to other auditors. The company has a product called the CUMULUS Forced Labor Screen, described as a technology-driven approach to identifying forced labor and human trafficking risk in global supply chains. Member companies can map their labor supply chains and proactively screen for forced labor risks introduced by supply chain partners’ recruitment practices and recruitment agents.