On Occasion Of 70th Year Of Aggression Of China Into Tibet: Big Corporations Doing Business With China To Be Indirectly Blamed? (Part 3 of 3)

(This is in continuation of part 1 and part 2 of the article “On The Occasion Of 70th Year Of Aggression Of China Into Tibet: Big Corporations Doing Business With China To Be Indirectly Blamed?” Part 1 was published on February 15, 2021, and Part 2 was published on February 28, 2021.)

In 1949, Tibet was invaded by 35,000 Chinese soldiers who systematically raped, tortured, and murdered some 1.2 million Tibetans, one-fifth of the country’s population. According to different sources, an estimated 260,000 people died in prisons and labor camps between 1950 and 1984.

Records show that between 1949 and 1979 the following 1.2 million deaths occurred:
173,221 Tibetans died after being tortured in prison.
156,758 Tibetans were executed by the Chinese.
432,705 Tibetans were killed while fighting the Chinese occupation.
342,970 Tibetans have starved to death.
92,731 Tibetans were publicly tortured to death.
9,002 Tibetans committed suicide[1].

HUMAN RIGHTS CONDITIONS IN CHINA AND USA RESPONSE

 The current debate over corporate responsibility vis-a-vis human rights in China has been driven by three principal developments:

1) The persistence of systematic violations of basic rights in China since the June 1989 crackdown near Tiananmen Square;

2) The inadequacy of U.S., as well as multilateral, sanctions in addressing those violations; and

3) The surge in U.S. business investment in China in recent years, and the correspondingly significant leverage that U.S. businesses have to promote improvements in China’s human rights record. With violations persisting on a massive scale, U.S. companies that have substantial investments in China are being pressed to account for the human rights consequences of their China operations[2].

HISTORY OF THE US CORPORATIONS INVESTMENTS IN CHINA

George Bush Sr., Administration’s policy of renewing political and economic ties with China that had been suspended following the Tiananmen incident of 1989, relying on what it termed “a constructive policy of engagement with China” to address human rights concerns[2].

Renewal of China’s most-favored-nation (MFN) trading status, which gives China the lowest possible tariffs on its exports to the United States.

First, the granting of MFN status is far and away the most significant economic lever available to the U.S. government to promote human rights in China. The United States is China’s largest overseas market, giving China a surplus of some $18 billion in its trade with the United States in 1992. The loss of MFN status would thus have a substantial impact on China’s exports[2].

Second, the U.S. business community regards the continuation of China’s MFN status as vital to its own economic interests. In its view, China’s MFN status is the keystone of the U.S.-China economic relationship, and U.S. companies fear that nonrenewal of that status would imperil their access to China’s vast and expanding market, as well as the continuation of investment and other business opportunities in China. In consequence, the U.S. business community has mobilized strong opposition to both congressional and Executive efforts that could threaten the continuation of China’s MFN status[2].

Third, by law, the President is required to notify Congress whether he plans to renew China’s MFN status on June 3 of each year-almost to the day the anniversary of the massacre near Tiananmen Square. This coincidence has, together with the first two factors, lent special prominence to the annual debate over the continuation of China’s MFN status[2].

US CORPORATIONS ROLE IN GETTING CHINA MFN TRADING STATUS

 While views within the business community have not been monolithic, U.S. companies that invest in China have, on the whole, strongly opposed efforts to attach human rights conditions to the renewal of China’s MFN status. The loss of MFN status would directly affect some U.S. companies engaged in joint venture operations in China, resulting in some cases in a multi-fold increase in tariffs for joint-venture products destined for a U.S. market. But the chief concern of U.S. companies is that termination of China’s MFN status would provoke retaliation against U.S. companies that invest in and send exports to China. U.S. companies have already experienced significant difficulties penetrating the China market when faced with competition from exporters in Japan and Europe, who enjoy a substantial advantage by virtue of their governments’ export-assistance programs and often more flexible pricing policies. U.S. companies fear that political tension between China and the United States could only exacerbate this endemic commercial problem [2].

As the MFN debate approached, Chinese trade delegations went on a buying frenzy throughout the United States, spending more than $800 million for jetliners, $160 million for cars, and $200 million for oil exploration equipment. After years of favoring French and other non-American telecommunications companies for entry into this key part of the China market, China concluded a major agreement with AT&T, worth several billion dollars, for telecommunications equipment and technology. China reached a tentative agreement with Hughes Space Communications Co. to build communications satellites worth $750 million. Though characteristically frugal, Chinese representatives offered to buy U.S. steel at slightly higher prices than those charged in Japan and Korea.”7 Throughout this process, China made it clear that it expected U.S. companies to lobby for the continuation of its MFN status in return for its purchases. U.S. companies are “regularly threatened with cancellation of orders or loss of future deals if China loses its preferred status,” according to business sources cited in The Washington Post[2].

By letter dated May 12, 1993, some 370 companies and business associations, representing virtually every U.S. company active in China, stated their case to President Clinton:…

 “We represent companies that exported products to China worth nearly $7.5 billion in 1992, and that employ an estimated 157,000 American workers producing those goods. We represent the aerospace industry which exported products to China worth over $2 billion in 1992, and which expects China to purchase approximately $40 billion in new aircraft over the next twenty years. We represent the farmers whose largest market for wheat is China …. America’s economic stake in maintaining trade relations with China is high. Withdrawing or placing further conditions on MFN could terminate the large potential benefits of the trading relationship, lead the Chinese to engage in retaliatory actions that would harm U.S. exporters, farmers, laborers, and consumers…. “

US CONGRESS CODE OF CONDUCT LEGISLATION

The code of conduct bill asks companies with a significant presence in China to adhere to a set of basic human rights principles, on a “best efforts” basis, in the course of their operations. In this way, the proposed law seeks to assure that U.S. business activities in China do not inadvertently encourage or themselves contribute to repressive practices, but instead make a constructive contribution to human rights.

The general tenor of substantive objections by members of Tus corporations is that the code would require U.S. companies to take action that may be “impractical” or provocative, and that could jeopardize their position in China. This line of objection, which is more pronounced with respect to some provisions of the code than others, has often been backed by the claim that compliance with the bill’s principles would require U.S. companies to violate Chinese law or policy[2].

The bill grants companies wide leeway to avoid taking action that could imperil their business relationships in China, urging only that they endeavor, on a “best efforts” basis, to comply with and promote basic international standards in their Chinese operations[2].

PROPOSED LEGISLATION[2]

(1) Pursuant to Section 941(b)(1), U.S. Economic Cooperation Projects in China Should SEEK TO ENSURE THAT DECISIONS CONCERNING EMPLOYMENT IN THE UNITED STATES ECONOMIC COOPERATION PROJECT DO NOT ENTAIL DISCRIMINATION BASED ON SEX, RELIGION, ETHNIC OR NATIONAL BACKGROUND, POLITICAL BELIEF, NONVIOLENT POLITICAL ACTIVITY, OR POLITICAL PARTY MEMBERSHIP.

(2) Pursuant to Section 941(b)(2), U.S. Economic Cooperation Projects in China Should’ ENSURE, THROUGH CONSULTATION WITH RELEVANT GOVERNMENT AUTHORITIES WHERE APPROPRIATE, THAT METHODS OF PRODUCTION USED IN THE UNITED STATES ECONOMIC COOPERATION PROJECT DO NOT POSE AN UNNECESSARY PHYSICAL DANGER TO WORKERS, TO NEIGHBORING POPULATIONS AND PROPERTY, AND TO THE SURROUNDING ENVIRONMENT.

(3) Pursuant to Sections 941(b)(3) and (4), U.S. Economic Cooperation Projects in China Should ENSURE THAT NO CONVICT OR FORCED LABOR UNDER PENAL SANCTIONS IS KNOWINGLY USED IN THE UNITED STATES ECONOMIC PROJECT, and ENSURE THAT NO GOODS THAT ARE MINED, PRODUCED, OR MANUFACTURED, IN WHOLE OR IN PART, BY CONVICT OR FORCED LABOR UNDER PENAL SANCTIONS ARE KNOWINGLY USED IN THE UNITED STATES ECONOMIC COOPERATION PROJECT.

(4) Pursuant to Section 941(b)(5), US. Economic Cooperation Projects in China Should UNDERTAKE TO PROTECT FREEDOM OF ASSEMBLY AND ASSOCIATION AMONG THE EMPLOYEES OF THE UNITED STATES ECONOMIC COOPERA61 The Joseph E. Seagram company reportedly was dismayed to discover in March 1991 that prison labor was used by the contractor it had hired to assemble boxes for its wine coolers produced in China. A number of other companies have had similar experiences. China’s Ugly Export Secret: Prison Labor, Bus. WEEK, Apr. 22, 1991, at 42. 62 See discussion infra part III. Northwestern Journal of International Law & Business 14:66 (1993) TION PROJECT, AND TO FOSTER POSITIVE AND CONSTRUCTIVE CONSULTATION BETWEEN EMPLOYEES AND MANAGEMENT OF THE UNITED STATES ECONOMIC COOPERATION PROJECT.

(5) Pursuant to Section 941(b)(6), U.S. Economic Cooperation Projects in China Should PROMOTE THE TRAINING OF EMPLOYEES OF THE UNITED STATES ECONOMIC COOPERATION PROJECT, IN PARTICULAR THE TRAINING OF CHINESE EMPLOYEES IN MANAGERIAL POSITIONS IN THE PRINCIPLES OF MARKET-ORIENTED BUSINESS MANAGEMENT.

(6) Pursuant to Section 941(b)(7), U.S. Economic Cooperation Projects in China Should UNDERTAKE TO PROTECT FREEDOM OF EXPRESSION FOR THE EMPLOYEES OF THE UNITED STATES ECONOMIC COOPERATION PROJECT, INCLUDING THE FREEDOM TO SEEK, RECEIVE, AND IMPART INFORMATION AND IDEAS OF ALL KINDS.

(7) Pursuant to Section 941(b)(8), U.S. Economic Cooperation Projects in China Should DISCOURAGE COMPULSORY POLITICAL INDOCTRINATION ON THE PREMISES OF THE OPERATIONS OF THE UNITED STATES ECONOMIC COOPERATION PROJECT.

(8) The Final Principle Seeks to Assure that U.S. Economic Cooperation Projects ATTEMPT TO RAISE WITH THE RELEVANT AGENCIES OF THE CHINESE GOVERNMENT THOSE INDIVIDUALS DETAINED, ARRESTED, OR CONVICTED SINCE MARCH 1989 SOLELY FOR NONVIOLENT EXPRESSION OF THEIR POLITICAL VIEWS, AND TO URGE THE OFFICIALS CONCERNED TO RELEASE PUBLICLY A LIST OF THE NAMES OF THOSE INDIVIDUALS.

US CORPORATIONS RESPONSIBILITY DOING BUSINESS IN CHINA

The most important U.S. efforts to promote human rights in China have substantial implications for U.S. companies that export and invest there. In consequence, the business community simultaneously has emerged as a central voice in the domestic debate about U.S. human rights policy toward China and has become the focus of debate about its own human rights responsibilities in China[2].

1. Do Businesses Have Human Rights Responsibilities?
2. Regulating Private Actors to Enforce Public International Law
3. Business Initiatives to Promote Human Rights in China and Elsewhere

Several companies come up with a human rights policy, as for example Sears policy which was adopted by other companies. Sear Policy was adopted by Levi Strauss & Co. that it would apply human rights and related criteria in its selection of business partners. Also, Reebok International Ltd. adopted a human rights policy that responded to specific concerns raised by the human rights situation in China and subsequently adopted a more comprehensive set of human rights principles governing workplace conditions in all of its overseas operations, including those in China. 1. Reebok will not operate under martial law conditions or allow any military presence on its premises. 2. Reebok encourages free association and assembly among its employees. 3. Reebok will seek to ensure that opportunities for advancement are based on initiative, leadership, and contributions to the business, not political beliefs. Further, no one is to be dismissed from working at its factories for political views or non-violent involvement. 4. Reebok will seek to prevent compulsory political indoctrination programs from taking place on its premises. 5. Reebok reaffirms that it deplores the use of force against human rights.

Frank Wolf, US Congresses-man (R-VA), was involved in a number of World Human Rights issues and had traveled in August 2017 to Tibet with a home video camera and an interpreter. He talked to many Tibetans during his visit, which has estranged the Chinese Communist Party. After his visit, in an interview to the question of “Here is also the China business lobby. What are you up against?” Wolf answered

“Well, there are a lot of business people that are seeing trade at any cost and I think that's wrong. I am a free trader, I'm a conservative Republican member with a very pro-free trade record. But I think there are some things that that are beyond trade and its morality, it's speaking up -- as I said earlier, I think God has blessed this country because if we have stood firm for these fundamental values and once, we cease to stand firm for them that blessing may not always be here -- be with us”.                               
So as a pro-business person, fine, but if -- would you want to sell uh barbwire to the comandante of Dachau? Would you want to sell poison gas to Auschwitz? Or would that be the type of trade and that's in essence what we are doing-- we're selling poison gas and barbwire and the products of that t are going to these people that are torturing people. So, I think trade is fine but there are some things that free trade ends and you have to stand basically on mortality[3]

ARE US CORPORATIONS ABIDING TO THE PROPOSED LEGISLATION?

BIG ANSWER IS “NO”, AND FACT IS AS BELOW

The recent report mentions that China Sells Minorities Into ‘Forced Labor’ to Benefit Apple, Foxconn, Others. Ongoing human rights violations in China were a significant topic of discussion at the end of 2019. The country has sought to block criticism of its policies towards Tibet, the still-ongoing Hong Kong protests, and its imprisonment of a million or more ethnic minority groups in forced re-education camps. A new bombshell report from Australia-based institute “Australian Strategic Policy Institute”, indicates that “the minorities like Tibetan and Uighurs aren’t just being subjected to forced re-education — they’re being used as slave labor after completing their terms of “STUDY”.” The report doesn’t use the term “SLAVERY,” preferring to rely instead on the euphemism of “FORCED LABOR.[4]”

The ASPI estimates include three case studies focused on factories producing goods for Nike, Adidas/Fila, and Apple. A total of 83 companies have been identified as benefiting from these practices:

Abercrombie & Fitch, Acer, Adidas, Alstom, Amazon, Apple, ASUS, BAIC Motor, BMW, Bombardier, Bosch, BYD, Calvin Klein, Candy, Carter’s, Cerruti 1881, Changan Automobile, Cisco, CRRC, Dell, Electrolux, Fila, Founder Group, GAC Group (automobiles), Gap, Geely Auto, General Electric, General Motors, Google, H&M, Haier, Hart Schaffner Marx, Hisense, Hitachi, HP, HTC, Huawei, iFlyTek, Jack & Jones, Jaguar, Japan Display Inc., L.L.Bean, Lacoste, Land Rover, Lenovo, LG, Li-Ning, Mayor, Meizu, Mercedes-Benz, MG, Microsoft, Mitsubishi, Mitsumi, Nike, Nintendo, Nokia, The North Face, Oculus, Oppo, Panasonic, Polo Ralph Lauren, Puma, Roewe, SAIC Motor, Samsung, SGMW, Sharp, Siemens, Skechers, Sony, TDK, Tommy Hilfiger, Toshiba, Tsinghua Tongfang, Uniqlo, Victoria’s Secret, Vivo, Volkswagen, Xiaomi, Zara, Zegna, and ZTE.

The ASPI doesn’t make any damning accusations that any specific Western company knew that its products were being built by slave labor. There are multiple diagrams attached to each case report that make it clear how intricate some of these supply chains are. When looked at the supply chains for companies like O-Film, it can be immediately seen that how many major firms could be buying products tainted by the use of slave labor:

The ASPI does not argue that Apple or any other company has been aware of what has been going on within their supply chains. But the web of connections between these firms implies many companies have benefited from this practice and need to take immediate action to address it.

“Past that immediate problem, this is another area where we as a society have to choose whether we want to stay quiet so cozy with a nation with an increasingly awful human rights record“?

The clashes over issues in the past couple of months like freedom of speech between the United States and China have made it very clear that China isn’t just attempting to control what is said within its borders. In multiple instances, the Chinese have targeted low-level employees or minor embarrassments with hostility beyond all proportion to the alleged offense. This overreaction is not an accident. It’s part and parcel of how the nation is demonstrating its willingness to enforce its own cultural and social norms on minorities and force the Slaves Workers to adapt to its norms.

TO CONCLUDE I WOULD LIKE TO NOTIFY CHINA AND WEST CORPORATIONS

[1] Genocide in the 20th Century: Massacres in Tibet: 1966-76 – Tibet post International (thetibetpost.com)

[2] Public Law, Private Actors: The Impact of Human Rights on Business Investors in China Symposium: Doing Business in China (northwestern.edu)

[3] Interviews – Frank Wolf | Dreams Of Tibet | FRONTLINE | PBS

[4] Report: China Sells Minorities Into ‘Forced Labor’ to Benefit Apple, Foxconn, Others – ExtremeTech

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