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Canadian corporate ethics czar launches probe of Ralph Lauren over alleged use of forced labour

Ottawa's corporate ethics watchdog has announced an investigation into fashion company Ralph Lauren over the alleged use of forced labour in its supply chains.

Watchdog also has asked Toronto-based mining company GobiMin to improve its policies

People pass the Polo Ralph Lauren store on Fifth Avenue, Tuesday, April 4, 2017, in New York. Ralph Lauren Corp. said that it is shuttering the high-profile store less than three years after opening it. The closure is part of the New York fashion company's plan to save $140 million annually. The company said it will close other stores, cut jobs and shut some corporate offices, but did not provide details. (AP Photo/Mark Lennihan)

Ottawa's corporate-ethics watchdog has announced an investigation into fashion company Ralph Lauren over the alleged use of forced labour in its supply chains, while putting a Toronto-based mining firm on notice.

Canadian Ombudsperson for Responsible Enterprise Sheri Meyerhoffer said it's not clear whether Ralph Lauren Canada LP is doing enough to weed out components linked to the alleged mistreatment of China's Uyghur minority.

Meyerhoffer also has asked Toronto-based mining company GobiMin Inc. to improve its policies to prevent the possible use of forced labour in its supply chains.

Her report says that in response to her inquiries, Ralph Lauren insisted last November that it's an American company that isn't subject to Canadian jurisdiction and provided information in June about measures it has in place to prevent mistreatment.

"Refusal to participate in the (ombudsperson's) initial assessment stage, followed by a last-minute shift indicating a willingness to participate and collaborate in the … process, has made it difficult to complete the assessment," reads a report issued Tuesday.

Meyerhoffer noted that corporate due diligence and policies aimed at lowering the risk of forced labour "should include an open, participatory and responsive space for addressing complaints or grievances raised by stakeholders."

China denies allegations that Uyghur citizens are being used for forced labour in what it has called "detention" centres or "re-education" camps. Beijing insists the centres are meant to weed out Islamic radicalization after several deadly domestic attacks.

But the United Nations found in mid-2022 that China had committed "serious human rights violations" against Uyghurs and other Muslim communities that "may constitute international crimes, in particular crimes against humanity."

The U.S. government has said that cotton and tomato products from China are at particularly high risk of involving Uyghur forced labour.

In her report Tuesday, Meyerhoffer cited two vendors that supply textile materials to Ralph Lauren. Both vendors have been accused by researchers of purchasing Xinjiang cotton through intermediaries, or co-operating in the transfer of workers subject to forced labour.

Meyerhoffer noted that Ralph Lauren has issued multiple corporate statements and conducted reports about human rights. The company also says it is undergoing a process to improve its data on upstream suppliers.

But she said it's unclear from those documents how thorough the company's efforts are in using fibre-origin tracing technology to ensure it is not using products of slave labour.

The ombudsperson opted not to include in her investigation 26 shipments into Canada of Ralph Lauren goods that involved a Chinese company accused of forced labour.

Canadian Ombudsperson for Responsible Enterprise (CORE), Sheri Meyerhoffer, holds a news conference in Ottawa on Tuesday, July 11, 2023. Ottawa's corporate-ethics watchdog has announced investigations into a mining corporation and the Canadian branch of Nike for possible forced labour in supply chains.

While the shipments occurred through August 2021 — well after Ralph Lauren announced in July 2020 that it does not use any yarn, textiles or products from Xinjiang — the goods that arrived in Canada had been ordered before the company cut ties with the supplier.

Meyerhoffer has encouraged the company to enter mediation with the complainants, a coalition of human-rights groups that include numerous Uyghur organizations. She said the process can happen privately, with the ombudsperson reviewing the final outcome.

If the company had played ball with her investigation early in the process, the complainants would have been OK with pursuing confidential mediation in the first place and not naming Ralph Lauren publicly, Meyerhoffer noted.

The ombudsperson also announced Tuesday that she has asked mining firm GobiMin to improve its corporate reporting, following claims that it engaged local companies that used forced labour at a gold mine in Xinjiang before selling the mine to a Chinese firm last year.

"GobiMin has not provided information that it took appropriate steps to ensure a responsible exit when it sold its interest in (the mine)," her report reads.

She noted that the sale of the Sawayaerdun mine limits her ability to launch an investigation, but maintained that the company could better explain its assertion that it has no Uyghur workers, and detail how it prevents forced labour.

Meyerhoffer said she has asked the company to send her draft guidelines this year on the future divestments of any more assets. A final version of the document would have to be posted publicly by mid-March of next year.

Office also investigating Nike, Dynasty Gold Corp.

The reports mark the third and fourth initial assessments by the ombudsperson. Meyehoffer reported last month on similar allegations regarding Nike Canada Corp. and Dynasty Gold Corp.

All four reports relate to China's Xinjiang region, where most of the country's Uyghur population lives.

The Chinese embassy in Ottawa maintains that Beijing does not allow modern-day slavery.

"The allegation of 'forced labour' in Xinjiang is a huge lie made up by anti-China forces to denigrate China for the sheer purpose of destabilizing Xinjiang and containing China's development, under the pretext of the so-called 'human right issues,"' a spokesperson wrote in response to earlier reports from Meyerhoffer last month.

"It is completely opposite to the reality of Xinjiang, where cotton and other industries rely on large-scale mechanized production, and the rights of the workers of all ethnic groups … are duly protected."

Meyerhoffer's office was opened in 2018, and critics say it lacks the tools it needs to be effective, such as being able to compel documents and testimony.

If she finds a company isn't acting in good faith, she can have them blacklisted from Canadian support, such as trade advice and trade advocacy abroad. But her mandate does not allow her to punish companies with fines or other punitive measures.

The Canadian Press has reached out to Ralph Lauren and GobiMin

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