Investor Statement On Turkmen Cotton

On behalf of 42 institutional investors representing over $50 billion dollars in assets under management, we encourage global home goods and apparel brands and retailers to take action to address the risk of grave human rights abuses in the cotton fields of Turkmenistan. Companies using Turkmen cotton face legal, financial, and reputational risk, and are confronted with a grave moral concern.

Background:

In Turkmenistan, the world’s seventh-largest exporter of cotton, the cotton industry is completely controlled by the government. Alternative Turkmenistan News, a civil media organization that tracks Turkmen cotton production, reported that the Turkmen government forces tens of thousands of adult citizens to labor in the harvest each year with the threat of dismissal or salary deductions from their normal jobs.

In May 2018, the U.S. Customs and Border Protection (CBP) agency issued a Withhold Release Order (WRO) stating the importation “all Turkmenistan cotton or products produced in whole or in part with Turkmenistan cotton” could be stopped from entering the United States. This is an unprecedented country-wide order for a specific commodity, which is unlike other CBP’s WRO decisions that reference specific suppliers and manufacturers. U.S. companies now are at risk of CBP stopping their products at the border if they do not take preventative measures to avoid sourcing Turkmen cotton harvested with forced labor. Responsible Sourcing Network’s recent blog post goes into this topic in more detail.

Turkmenistan’s state-sponsored system of forced labor is a concern internationally. In the 2018 U.S. State Department’s Trafficking in Persons Report, Turkmenistan is listed in Tier 3, the lowest possible ranking. Countries in Tier 3, demonstrate evidence they are not fully meeting the minimum standards for the elimination of severe forms of trafficking in persons, and are not making significant efforts to do so. In 2017, the United Nations Human Rights Committee expressed its concern about “...the reported widespread use of forced labour….during the cotton harvest under threat of penalties such as loss of land, expulsion from university, loss of wages or salary cuts, termination of employment and other sanctions.” Similarly, the ILO Committee of Experts on the Application of Conventions and Recommendations also noted with “deep concern the widespread use of forced labour in cotton production which affects farmers, businesses, and private and public sector workers.”

Responsible Sourcing Network (RSN) has created two initiatives to address forced labor in Turkmenistan. First, working with the Cotton Campaign—a multi-stakeholder coalition—RSN created the Turkmen Cotton Pledge, which commits companies to not knowingly sourcing cotton from Turkmenistan until forced labor in its cotton sector has been eliminated. This pledge is similar to the Uzbek Cotton Pledge, which has received unparalleled support with over 270 current signatories from retailers and brands. The Uzbek Cotton Pledge has played a major role in motivating the Government of Uzbekistan to commit to ending forced labor. For example, the government has increased pay for cotton pickers, made some efforts to demobilize government-directed labor sectors, has begun to engage with activists, and publicly acknowledged forced labor in the cotton harvest as a problem. Currently, the Turkmenistan government practices similar human rights violations that have been orchestrated by the Government of Uzbekistan. Along with the U.S. WRO, the Turkmen Cotton Pledge has the potential of contributing the needed pressure to create meaningful change in Turkmenistan’s cotton sector.

Second, RSN created and is developing the implementation of the initiative YESS: Yarn Ethically & Sustainably Sourced. This initiative is designed to train and verify cotton yarn spinning mills on implementing due diligence programs that prevent and eliminate cotton produced with forced labor from entering global supply chains. The YESS initiative provides a specific and practical framework for spinners to avoid forced-labor-cotton from high-risk countries, such as Turkmenistan. Thus, YESS can ensure that brands are not sourcing Turkmen cotton.

Investor Statement:

The signatories of this letter believe it is essential for companies and their industry associations to acknowledge and address the well-documented use of modern-day slavery in Turkmen cotton production. To do their part in stopping cotton produced with forced labor from entering supply chains, the undersigned investors recommend companies take the following steps:

1. Sign the Turkmen Cotton Pledge to prove their commitments to not knowingly sourcing cotton from Turkmenistan.

2. Assure implementation of the pledge by supporting the initiative YESS: Yarn Ethically & Sustainably Sourced.

Modern slavery in Turkmenistan is of concern to us all, and collective action must be taken by industry, government, investors, and consumers to eradicate it. We are asking that all organizations leverage their influence to solve this egregious problem.