Investment & Finance

UK companies face fines over ‘slave labour’ China suppliers

Financial Times
Raab lambasts Beijing on growing evidence of human rights ‘barbarism’ in Xinjiang

Dominic Raab told MPs: “Our aim is that no company that profits from forced labour in Xinjiang can do business in the UK and no UK business is involved in their supply chains” © PRU/AFP/Getty Images

Dominic Raab told MPs: “Our aim is that no company that profits from forced labour in Xinjiang can do business in the UK and no UK business is involved in their supply chains” © PRU/AFP/Getty Images

British businesses that fail to ensure their supply chains are free of slave labour could face fines, Dominic Raab announced on Tuesday, as the foreign secretary criticised China over mounting evidence of widespread human rights abuses. 

Addressing MPs in the House of Commons, Mr Raab said the UK had a “moral duty” to respond to the “far-reaching” evidence of human rights abuses being perpetrated in Xinjiang, where he said the Chinese government has detained more than 1m Uighurs Muslims and sent many to factories as forced labour.

“Barbarism we had hoped lost to another era, being practised today, as we speak, in one of the leading members of the international community,” Mr Raab said, in reference to China.

Beijing describes the facilities as training centres to curb extremism and promote the acquisition of new skills.

The foreign secretary said the measures would send a “clear message” that human rights violations were “unacceptable”.

He added: “Our aim, put simply, is that no company that profits from forced labour in Xinjiang can do business in the UK and no UK business is involved in their supply chains.”

Under the new rules, UK companies that do not meet their statutory obligations to publish annual modern slavery statements under the 2015 Modern Slavery Act could face financial penalties. Companies with an annual turnover of more than £36m are required by the law to show that their supply chains are free of slave labour. 

Muslim trainees at a garment factory in Hotan, Xinjiang. China has detained more than 1.8m Uighurs Muslims in Xinjiang since 2017 © CCTV/AP Video

The government will also produce “robust” guidance for UK businesses highlighting the risks of sourcing from Xinjiang and the difficulties of conducting effective due diligence within the region. 

The government will also ensure public procurement rules exclude any suppliers found to have links to human rights violations, Mr Raab added, including a specific review of export controls relating to Xinjiang.

Some Tory backbenchers criticised the measures as not going far enough. Sir Iain Duncan Smith, chair of the Inter-Parliamentary Alliance on China, asked why the government had decided not to use Magnitsky-style sanctions and target individual perpetrators of abuse.

Mr Raab said he did not rule out targeting individuals and said the UK was working with its allies on gathering evidence.

Nus Ghani, a Tory MP pushing for legislation that would allow English courts to make a judgment on whether countries are conducting human rights abuses before future trade deals are signed, said the government should have gone further in condemning China. “The government’s failure to call out these atrocities for what they are — genocide — is chilling.”

Members of the China Research Group, a group of Tory MPs wanting a harder line taken against Beijing, meanwhile called on the government to ensure the measures were enforced. 

“I am glad to see the UK leading the way in taking sustained action . . . It is essential that these new rules are comprehensively enforced,” said Tom Tugendhat, chair of the foreign affairs committee.

The opposition Labour party also criticised the government for failing to sanction individuals. Lisa Nandy, shadow foreign secretary, said Mr Raab had announced little that was new. “The strength of his words is once again not matched by the strength of his actions.”

Financial Times

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