Jag and Saba parent company APG & Co has spent the last few years tackling an ongoing risk of human rights abuses entering its supply chains, particularly around its sourcing of cotton - the business’ most-utilised fibre.
This is according to the group's latest modern slavery statement covering 2023.
In one instance, an order via its brand partner Apparel Group from a shared APG & Co supplier was selected for forensic testing as it was flagged as containing cotton of Xinjiang, China origin.
APG & Co has a strict policy banning the sourcing of cotton from Xinjiang, a region where various reports claim extreme risk of forced labour.
According to the fashion company, global consultancy firm Verisk Maplecroft has listed the North-western province of Xinjiang as a region of ‘extreme’ risk of forced labour, due to allegations that at least 100,000 Uyghurs and other Muslim minorities are being subjected to forced labour in re-education camps - including cotton-picking.
The United States Department of Agriculture reported that approximately 20 per cent of the global cotton supply is cultivated in Xinjiang and many of the yarn producers located in the region are assumed to be utilising forced labour.
Regarding the order by its brand partner Apparel Group, APG & Co revealed that buyers for whom product must adhere to the Uyghur Force Labor Prevention Act (UFLPA) are using both forensic analysis and PCR-technology to analyse the DNA of materials to detect fibre origins.
“We conducted the [above] due diligence process and investigation in collaboration with our suppliers, which resulted in the product being cleared of its initial high risk origin status,” APG & Co reported. “As soon as the supplier was alerted to the forensic result they contacted us, and we advised them we would need to cease all business while we commenced our investigation.
“The supplier provided us with their traceability documents and a product supply chain map, and informed APG & Co that their fibre certificate of origin indicated the US as the country of origin, not China. They believed the manufacturing country of origin may have been conflated with the fibre country of origin, and were adamant they had followed all requirements of our sourcing policy.”
Then APG & Co’s compliance team reviewed traceability documents, which included raw cotton certificate of origin, commercial invoices, packing lists, bulk yarn invoices and customs declaration, bill of lading, sales and purchasing contracts and delivery receipts from both the Malaysian spinner and the Chinese fabric manufacturer.
“From this traceability exercise, we identified a previously unknown intermediary trader between yarn purchasing and delivery of goods to the mill,” APG & Co confirmed. “While the received traceability documents did not show evidence of cotton products being sourced from China, having unknown trading intermediaries in China may increase this risk.
“We requested the mill procure yarn directly from the spinner in Malaysia, and extended this requirement to all other suppliers. Our relationship with this supplier is friendly and transparent, having been partners for a number of years.
“It had been our plan to increase orders with this supplier due to the positive and mutually-sustaining nature of the relationship. As such, we worked from the basis that they had followed correct chain-of-custody due diligence to verify the origin of the fibre, and they were happy to comply with our traceability investigation.”
After requesting the forensic testing body retest the same product, the result came back showing the cotton was of US origin, APG & Co claimed. “This experience demonstrated that our compliance processes are robust, but that expanding traceability through the Retraced platform and sourcing against our Responsible Material Sourcing Policy would be crucial in preventing modern slavery risk in our supply chains.
“The supplier involved has also become one of our most collaborative and transparent partners. Their willingness to meet our traceability requirements means that they will be one of the first we take through Retraced’s product tracing and supply chain mapping function.”
In addition to the above case, APG & Co also arranged several supplier meetings with both its tier 1 and 2 suppliers to inform and educate its policy around Xinjiang.
The fashion business has mapped and audited its entire tier 1 factories, and mapped 97 per cent of its tier 2 factories and audited 62 per cent of those in China, as of December 31, 2023.
The group claims this awareness campaign will also be increased through the introduction of its Supplier Modern Slavery Training Module.
“We are aware that this will not provide a complete solution to addressing the risks of cotton picked using forced labour entering our supply chains, however we see it as a critical part of our action, monitoring and improvement processes as we continue to deepen the visibility in our supply chains through our tracing programs and partnerships.
“In addition to ceasing relationships with some businesses that may present a modern slavery risk, we have also implemented and continued our focus on gaining full visibility over our purchasing from fabric agents and traders. Our aim is to have our suppliers share the information they have about their suppliers.
The business developed a Supplier Confidential Information Sharing Agreement to protect the intellectual property rights of the agent and trader to facilitate the above process, and to allow suppliers to be more comfortable with the level of information sharing APG & Co requires.
“This has allowed us to obtain the information we need for transparency over as many tiers of our supply chain as possible, whilst reinforcing our commitment to equitable and trust-based relationships with all trading intermediaries.”
Outside of China, which makes up 55.7 per cent of APG & Co’s tier 1 factories and 68.6 per cent of its tier 2 factories, APG & Co also sources from countries including Vietnam, India, Indonesia, Bangladesh and Sri Lanka.