Amid increasing scrutiny over forced labor practices, the fashion industry is leveraging advanced AI tools to ensure supply chain transparency and uphold ethical standards.
Earlier this month, the U.S. Department of Homeland Security banned imports from three Chinese producers that have been accused of supporting forced labor programs in Xinjiang. The companies span several industries including fishing, aluminum production, and footwear.
“We are going to hold companies to account if they engage in forced labor practices,” Robert Silvers, an under secretary at the Department of Homeland Security (DHS), told the New York Times last month. It’s no small task. According to the Times, industries including agriculture, solar panels, electronics, and automobile production have all been linked to forced labor.
Imports coming out of Xinjiang were part of a ban called the Uyghur Forced Labor Prevention Act, which went into effect in 2022. It lists out a number of companies that have been tied to forced labor. But Silvers says it’s often difficult to identify offenders as clandestine operations run by the Chinese government, often billed as efforts to support at-risk communities, are instead perpetuating human rights violations. DHS has since redirected organizational resources to help support the Uyghur Forced Labor Prevention Act.
In May, more than two dozen companies with ties to the apparel and textile industries were added to the list. DHS says it will continue to add more manufacturers on a rolling basis.
TrusTrace’s Forced Labor Prevention solution
In an effort to combat forced labor in supply chains, one company, the Stockholm-based TrusTrace, a global leader in supply chain traceability and compliance, recently debuted an advanced AI-powered tool aimed at reducing forced labor by helping brands map their supply chains, identify risks, and gather necessary evidence to meet regulatory standards.
“Our comprehensive FLP solution is not just a tool, but a commitment to a world where transparency and ethical practices in supply chains are non-negotiable,” Shameek Ghosh, CEO of TrusTrace, said in a statement. “Ensuring that forced labor has no place in our global economy is critical, and with our solution, brands can proactively and confidently lead the way in this imperative transformation, instead of merely ensuring they have a solution for the release of detained shipments.”
The Forced Labor Prevention solution relies on AI to process vast amounts of data from complex supply chains. Unlike other systems that rely on third-party data, which can often be irrelevant, TrusTrace’s tool gathers primary data directly from suppliers. This, the company says, ensures accurate and relevant information about the origins and production processes of products.
TrusTrace says it has already seen significant success with this approach. More than two million purchase orders have been traced, and more than 55,000 suppliers and facilities have been mapped worldwide. FLP integrates with various risk screening databases and proactively checks data against the U.S. Customs and Border Protection entity list.
The FLP solution produces a tool called the AI-powered Chain of Custody Creation and Document Collection. This technology speeds up processes, improves accuracy, and reduces costs by allowing for the classification, extraction, and translation of large volumes of documents in more than 100 languages. This makes it easier for companies to manage their supply chain documentation and reduces the likelihood of human error.
Vera Bradley is one of the fifteen brands worldwide using TrusTrace’s FLP solution. Ayfer Yarcich, Director of Global Sourcing at Vera Bradley, highlighted the impact of the tool on the company’s operations. “At Vera Bradley, our commitment to sourcing responsibly is at the core of our business practices,” Yarcich said. According to Ghosh, meeting varying data reporting requirements can be challenging for brands. He says TrusTrace’s tool helps brands consolidate data collection to comply with multiple current and future regulations. “Spending less time and resources on compliance then frees up valuable time to focus on driving new business opportunities and – ultimately – impact.”
According to Yarcich, the FLP solution helps Vera Bradley work towards a transparent and forced labor-free supply chain while also aspiring to set a new standard in responsible and sustainable business practices. “This transformative step underscores our dedication to our public ESG commitments and our vision of leading the industry towards a more ethical and sustainable future.”
Shein skirts U.S. regulators with London IPO
The news comes as Chinese fast-fashion giant Shein, filed for an IPO on the London Stock Exchange, opting for confidentiality to avoid U.S. regulatory scrutiny over forced labor practices. Confidential filings are common, but Shein’s secrecy is notable. The company ignored the SEC’s offer to file publicly on the NYSE, missing a significant market opportunity. U.S. political pressure and allegations of human-rights abuses, including forced labor and child labor, influenced this decision. Sen. Marco Rubio (R-Fl) warned the U.K. against Shein’s listing.
“I now feel a duty of friendship to repeat these warnings and urge caution before the United Kingdom allows Shein to list in London,” Rubio wrote. “Slave labor, sweatshops, and trade tricks are the dirty secrets behind Shein’s success.”
Despite concerns, London, seeking high-profile IPOs post-Brexit, seems poised to accept Shein. The London Stock Exchange raised only $1 billion last year compared to $24.1 billion by U.S. exchanges. During Britain’s election cycle, Labour Party members courted Shein, but faced opposition from lawmakers over labor practices.
Labour’s Sarah Champion and Conservative Alicia Kearns both criticized Shein’s alleged exploitation. “Unless the allegations around Shein are addressed, we should not support their application,” she told Reuters.
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