Nasdaq listed Universal Electronics Inc admits to employing Uyghur workers at its Qinzhou plant

In a significant development, Universal Electronics Inc, a U.S. remote-control maker said, it has struck a deal with Chinese authorities in Xinjiang to transport hundreds of Uyghur workers to its factory in Qinzhou, in the first confirmed case of a US company participating in a transfer program in what has been described by human rights group as forced labor.

According to Universal Electronics, as well as local officials in Qinzhou and Xinjiang, local state media and government notices, the US Nasdaq-listed company, has employed at least 400 Uyghur workers from Xinjiang as part of an ongoing worker-transfer agreement.

Xinjiang authorities had even paid for a charter flight that delivered the Uyghur workers under police escort from Xinjiang’s Hotan city, to the UEI plant, according to officials from Hotan and Qinzhou.

At the time of the transfer of the Uyghur workers, a notice was posted on an official Qinzhou police social media account in February 2020.

In response to observations made on the transfer, a spokeswoman from UEI said the company currently employs 365 Uyghur workers at its Qinzhou plant. She went on to add, the company treats them the same as other workers in China and did not regard any of its employees as forced labor.

Universal Electronics Inc, which supplies components to Samsung Electronics Co Ltd, Sony Group Corp, Microsoft Corp and LG Corp said, they prohibit the use of forced labor in their supply chains and are taking steps to prevent it.

Sony declined to comment on specific suppliers but said, if any supplier is confirmed to have committed a major violation of its code of conduct, which prohibits the use of forced labor, then “Sony will take appropriate countermeasures including request for implementing corrective actions and termination of business with such supplier.”

A spokesperson for Microsoft said, the company takes action against any supplier that violates its code of conduct, including termination of business relationship; it also clarified that UEI was no longer an active supplier.

“We have not used hardware from the supplier since 2016 and have had no association with the factory in question,” said Microsoft’s spokesperson.

In a statement Samsung’s spokesman said, the company prohibits its suppliers from using all forms of forced labor and requires that all employment be freely chosen.

He declined to comment on UEI.

LG did not respond to requests for comments.

According to UEI spokeswoman, the company pays for the cost of the transfer of workers to its Qinzhou factory from a local airport or train station in Guangxi. She went on to add, the company is not aware of how the workers are trained in Xinjiang or who pays for their transport to Guangxi.

Despite the denial of forced labour by these companies, is is lucidly clear that the conditions faced by the workers, bear the hallmarks of standard definitions of forced labor, including working in isolation, under police guard and with restricted freedom of movement.

During transit, the Uyghur workers are under surveillance by police; they are also under police surveillance at the factory, including where they eat and sleep in segregated quarters, according to details in Qinzhou government notices and local state media.

Human rights advocates, including Human Rights Watch, Amnesty International, and other rights groups, have said citing leaked Chinese government documents and testimony from detainees who say they were forced into such jobs, that the Chinese government’s programs are coercive and part of Beijing’s overall plan to control the majority-Uyghur population in Xinjiang.

“This so-called ‘forced labor’ is a completely fabricated lie,” said China’s Ministry of Foreign Affairs. “Xinjiang migrant workers in other parts of China, like all workers, enjoy the right to employment in accordance with the law. The right to sign a labor contract, the right to labor remuneration, the right to rest and vacation, the right to labor safety and health protection, the right to obtain insurance and welfare rights and other legal rights.”

Xinjiang authorities did not respond to requests for comment.

In a statement the U.S. Department of State said, it has found “credible reports of state-sponsored forced labor practices employed by the (Chinese) government in Xinjiang, as well as situations of forced labor involving members of these groups outside Xinjiang.”

A spokesperson for the State Department said, wittingly benefiting from forced labor in the U.S. was a crime under the U.S. Trafficking Victims Protection Act.

This act “criminalizes the act of knowingly benefiting, financially or by receiving anything of value, from participation in a venture, where the defendant knew or recklessly disregarded the fact that the venture engaged in forced labor”, said the Statement Department spokesperson in a statement.

The law imposes criminal liability on individuals or entities present in the United States, said the US State Department while adding, this is applicable even when the forced labor occurs in another country.

Under Section 307 of the Tariff Act, 1930, the import of goods into the United States made wholly or in part by forced labor is a crime.

UEI has admitted that “a very small quantity” of products made at its Qinzhou factory are exported to the United States but did not specify who purchases the goods.

The Tariff Act is enforced by U.S. Customs and Border Protection, which is empowered to seize imports and start a criminal investigation of the importer.

According to legal experts, there have been very few forced labor prosecutions in the United States over abuses overseas, given the difficulty of proving an offense.

“As the law currently stands, there’s very little that the U.S. government can do to hold American companies accountable when they build, manage and profit from supply chains that engage in forced labor and other human rights abuses outside the United States,” said David McKean, deputy director of the International Corporate Accountability Roundtable.

The Uyghur Forced Labor Prevention Act, before the US Congress, has been designed to toughen up restrictions by creating the legal presumption that any products made in Xinjiang are the result of forced labor, putting the burden on importers to prove they are not. The latest version of the legislation has been passed by the Senate and is awaiting approval from the House of Representatives.

Uyghur laborers, who are typically young, sleep in UEI’s plant in separate dormitories and eat in a segregated canteen under the watch of managers assigned by Xinjiang authorities. Non-Uyghur laborers are not subject to such monitoring.

According to state media, the managers reside with the Uyghur workers throughout their employment.

Categories: Creativity, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

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