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MPs demand stronger laws to combat modern slavery

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A parliamentary committee has called for tougher enforcement of updated modern slavery legislation after concluding that many UK companies were displaying “wilful blindness” to the potential use of slave labour from China’s Xinjiang region.

The business, energy and industrial strategy committee said in a report released on Wednesday that there was “compelling evidence” that companies were “complicit in the forced labour of Uighurs in Xinjiang”.

More than a million Uighurs, a Muslim minority in China, are known to have been sent to detention centres since a crackdown began in 2017.

The committee contacted 15 companies, some of whom were featured in a 2020 report by an Australian think-tank alleging they were supplied by Chinese factories that used prison labour.

While all the companies confirmed they did not directly source products from Xinjiang, “none could guarantee definitively” that the raw cotton did not partly originate there, the report said. Xinjiang produces over four-fifths of China’s cotton.

The MPs said they were “appalled” by the admissions. “Many companies asserted they have robust procedures for prohibiting human rights abuses while failing to undertake the necessary and basic due diligence procedures to know that their supply chains are not implicated in slave labour or the abuse of minorities,” the report concluded.

Marks and Spencer, one of the companies that submitted evidence to the committee last year, said on Wednesday that it now sourced cotton through the Better Cotton Initiative.

“Sourcing ethically and sustainably is core to how we do business and the promise we make to our customers, that’s why we do not source cotton from Xinjiang,” said Richard Price, the company’s managing director for clothing and home.

The committee also urged the Department for Business, Energy and Industrial Strategy to “do more to meet its commitments to uphold human rights, particularly in relation to businesses with links to China”.

“The department has shown little sign that it is taking a proactive or meaningful lead on investigating UK business links to forced labour and other human rights abuses,” it said.

In response, Beis said forced labour was “one of the world’s most despicable practices and the government will not stand for it”.

It said the UK was first country to require businesses to report on how they are tackling modern slavery, adding “we are taking forward plans to extend that to certain public bodies and introduce financial penalties for organisations that don’t comply”.

The committee said the Modern Slavery Act, the UK’s main legislative tool for dealing with abuses in supply chains, was “out of date and has no teeth” and that it was “disappointed by the government’s refusal to commit to a clear timetable for making changes”.

The Ethical Trading Initiative, whose members include M&S, John Lewis, Next, Primark and Asos, said it welcomed the report: “The documented abuses [of Uighurs] are intolerable and abhorrent; no business should permit its activities to support them in any way”.

It added that responsible businesses “should be supported to overcome challenges such as opaque supply chains and constraints on freely conducting independent audits as is the case [in Xinjiang]”.

“We also welcome the call for government to accelerate and strengthen its plans to further develop the Modern Slavery Act,” it concluded.

The tone of the report also reflects a wider hardening of attitudes to China among British politicians. Nusrat Ghani, one of the Conservative MPs on the committee, in January co-sponsored an amendment aimed at preventing the UK from signing trade deals with countries found guilty of genocide. The amendment secured strong opposition support and was only narrowly defeated.

 



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Western unity is key to dealing with Russia

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In the army bases of southern Russia and the airfields of annexed Crimea, troops and tanks, helicopters and fighters are massing once again. The Pentagon says Russia’s military build-up on the borders of neighbouring Ukraine is bigger even than before its armed intervention in 2014-15; German chancellor Angela Merkel on Tuesday called the situation “extremely tense”. America’s ambassador to Moscow is flying home for consultations. What western countries say and do now may determine just how far Russian president Vladimir Putin is prepared to go.

The Kremlin critic Alexei Navalny, meanwhile, lies gravely ill in a prison hospital, after a three-week hunger strike. The opposition leader was jailed on a spurious pretext after his bold return to Russia from Berlin where he recuperated from an attempt to assassinate him using the novichok nerve agent. Half a million Russians have registered online to take part in protests in Navalny’s support on Wednesday, hours after Putin makes a State of the Union address.

Russia’s military manoeuvres near Ukraine, however, are far more than a diversionary tactic from the Navalny affair and domestic disquiet over a stagnant economy. The Kremlin is determined to prevent the integration into the west of what it views as a Slavic brother state and strategic buffer zone. The Minsk II accord that president Petro Poroshenko signed in 2015, his forces pinned down by Russian-led militias in eastern Ukraine, seemed to give Moscow leverage. It promised the breakaway Donbass republics a place in Ukraine’s power structures and an effective veto on its political course.

Six years on, much of the Minsk deal is unimplemented by either side, and Volodymyr Zelensky, the comic actor who succeeded Poroshenko as president in 2019, has proved less biddable than Moscow expected. Putin, some longtime Russia watchers suggest, wants closure. Only he and his inner circle know his real intentions, but Russia has proved ready both to rattle sabres to scare neighbours into concessions, and to use force directly — even in the heart of the European continent.

As they seek to respond to Russia’s challenges on multiple fronts, the first priority for western democracies must be clarity and consistency of messaging and action. French president Emmanuel Macron’s attempts at “trust-building dialogue” with Putin in recent years, though well intentioned, yielded little but muddied the diplomatic waters. For all Merkel’s concerns, her government still supports the Nord Stream 2 pipeline that will deliver more Russian gas direct to Germany.

It is vital the US and its allies are united in stressing that further Russian aggression towards its sovereign neighbour of more than 43m people would carry substantial costs. They should make clear their willingness to supply lethal and non-lethal military aid to Ukraine if it is attacked, including anti-tank and other defensive systems. Though Nato countries are rightly wary of being sucked into a conflict with a nuclear-armed Russia, they should be ready to strengthen their own forces in south-east Europe as a deterrent.

The US and EU should be ready, too, to step up economic sanctions. President Joe Biden last week banned US financial institutions from buying new Russian sovereign debt as punishment for alleged cyber hacking, signalling a willingness to use the US financial system against opponents. European countries should redouble efforts to reduce reliance on Russian fossil fuels, including finally blocking Nord Stream 2. If the west wants to appear serious about preventing Russia’s leader from trampling on international norms, it must be prepared to bear some costs.



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Toyota faces Thai bribery probe over tax dispute

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Toyota is under investigation in Thailand over allegations that consultants hired by the world’s largest carmaker tried to bribe local officials in a tax dispute, according to Thai authorities, court documents and a person with knowledge of the matter.

The probe followed a filing last month in which Toyota revealed that it had reported “possible anti-bribery violations” related to its Thai subsidiary to the US Department of Justice and Securities Exchange Commission.

Toyota is one of the biggest foreign investors in Thailand, where it makes a large range of cars, vans and pick-up trucks for the local market and for export. The country is Toyota’s biggest manufacturing hub in south-east Asia. Prior to the Covid-19 pandemic, car sales had been strong in a market, where it has a 31 per cent share.

This month, Thailand’s Court of Justice said in a statement that it would take action against any of its judges found to have taken bribes. The statement, which the court described as a move to “clarify facts” in a news report on a foreign website, directly referenced a tax dispute involving Toyota.

“If the Court of Justice has received information or explicitly found that any judge committed an act of corruption to their duty, whether it is about bribery or not, the Court of Justice will resolutely investigate and punish any action which dishonours judges, undermines the neutrality of the court, or causes society [to] lose faith in the Thai justice system,” it said.

According to the court, the case involved a tax dispute worth Bt10bn ($320m) between Toyota Motor Thailand and tax authorities over imports of parts for its Prius hybrid model. 

The affair dates back to 2015, when Toyota’s Thai subsidiary was accused by local customs authorities of understating taxes by claiming that the imported Prius vehicles were assembled from completely knocked down kits, or imported parts that were later assembled in Thailand.

CKDs would have been subject to a discounted tax rate under a Japanese-Thai free trade agreement, but if the cars were fully assembled before being imported they would have attracted a much higher rate. 

Toyota appealed against a decision by customs authorities to impose a higher duty in 2015, but lost. 

Thailand’s Court of Justice has said that it had accepted a petition to review the case, but had not yet begun hearing it.

In its regulatory filing last month, Toyota warned that the US investigations regarding its Thai subsidiary could result in civil or criminal penalties, but the company has not disclosed any detail on the allegations.

In a statement, Toyota said it was co-operating with the investigations and declined to comment on the tax dispute in Thailand. “We take any allegations of wrongdoing seriously and are committed to ensuring that our business practices comply with all applicable government regulations,” it said.

The SEC and the DOJ declined to comment.



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Boris Johnson cancels India trip after Covid cases surge in country

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UK prime minister Boris Johnson’s trip to India this month has been cancelled as the country battles a new variant and a surge in coronavirus cases that is overwhelming hospitals.

A joint statement by the British and Indian governments said the decision to scrap the visit scheduled for next week was prompted by the “current coronavirus situation”.

The trip, during which Johnson had hoped to discuss the prospects of a closer trading partnership with India, was initially planned to run for four days but had been scaled back. The two leaders will speak remotely instead, with plans to meet in person later this year.

The cancellation came as India’s capital city region has been put under lockdown and authorities have prohibited the use of oxygen except for essential services, as the country battles a surge in coronavirus cases that is overwhelming hospitals.

India continues to set single-day records of coronavirus cases, reporting more than 273,000 new infections and 1,619 deaths on Monday, with the number of new cases growing by an average of 7 per cent a day, one of the fastest rates in any big country.

The surge is believed to be linked to a new B.1.617 variant that was first discovered in the country.

British health officials are investigating whether the variant should be reclassified from a “variant under investigation” to a “variant of concern” following the discovery of 77 cases in the UK.

“To escalate it up the ranking we need to know that it’s increased transmissibility, increased severity, or vaccine-evading, and we just don’t have that yet, but we’re looking at the data on a daily basis”, Dr Susan Hopkins, a senior medical adviser at Public Health England, said on Sunday.

Officials in Delhi announced it would impose a strict lockdown for a week, following Mumbai and other cities that have already placed curbs on movement.

States are running short of beds, drugs and oxygen, leading the central government to restrict use of the gas. “The supply of oxygen for industrial purposes by manufacturers and suppliers is prohibited forthwith from 22/04/2021 till further orders,” the central government said.

Arvind Kejriwal, chief minister of Delhi, said “oxygen has become an emergency” in the region because its quota had been diverted to other states. He warned there were “less than 100 ICU beds” available.

The new restrictions have been imposed even as Prime Minister Narendra Modi and his ruling Bharatiya Janata party have hosted huge political rallies and allowed religious festivals attended by tens of thousands of maskless people in recent weeks.

Amit Shah, India’s home minister, told the Indian Express newspaper that he was “concerned” about the variant and the “surge is mainly because of the new mutants of the virus”. But he was “confident we will win” over the disease and said there was not yet a need to impose a national lockdown.

Bed shortages in India have forced authorities to re-establish emergency coronavirus hospitals in banquet halls, train stations and hotels that had been shut down following the previous peak in September. Crematoriums in the state of Gujarat and Delhi are running 24 hours a day, while cemeteries are running out of burial spaces.

Coronavirus patients have also been struggling to access medicines. More than 800 injections of remdesivir, an antiviral drug commonly used in India as part of Covid-19 treatment, were stolen from a hospital in Bhopal, Madhya Pradesh, at the weekend.

India is also facing a vaccine supply crunch and has frozen international exports of jabs to meet domestic demand. New Delhi pledged on Friday to increase monthly production of Covaxin, a vaccine made by Indian manufacturer Bharat Biotech, to 100m from 10m by September. The government also said last week that it would fast-track the approval of foreign vaccines in an attempt to boost supply and cleared Russia’s Sputnik V for use in the country.

The majority of the more than 120m Indians that have been vaccinated have received the Oxford/AstraZeneca jab manufactured by Serum Institute of India, the world’s largest manufacturer. The Serum Institute has struggled to increase its monthly capacity of more than 60m doses a month due to a fire at its plant earlier in the year and equipment supply shortages from the US.

Additional reporting by John Burn-Murdoch in London





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