Canadian Retail Company Pulls Products Made In China Due to Forced Labor Concerns

In response to a story by the Canadian Broadcasting Corporation (CBC), the Canadian company Reitmans has pulled certain products from its shelves due to concerns that they were made in a Chinese factory that used forced labor from North Korea. In its press release, Reitmans said it decided to pull all remaining inventory of the products in question.

The CBC report began this way: "Retail giant Reitmans brought more than 100 shipments of clothing into Canada from a Chinese factory suspected of secretly using North Korean forced labour, a months-long CBC Marketplace investigation has found." The factory in question was Dandong Huayang Textiles and Garment Co. Ltd. The CBC report noted that: "experts say the city of Dandong, located on the border of North Korea and China, has a history of employing North Korean workers at their factories, and Dandong Huayang is no exception."

Reitmans responded to the CBC report as follows:

For several years, we purchased products from Dandong Huayang Textiles and Garments Ltd. All past audits of the Dandong Huayang Textiles and Garments Ltd. factory, including the most recent unannounced audit conducted by an independent and accredited third-party auditing firm in December 2020, did not identify any guest workers or forced labour. Verification of employee contracts, payroll and ID documentation, as well as worker interviews indicated that all workers were Chinese and not North Korean. We are aware that there are several factories within the same compound, however we are only authorized to audit the factory from which our products are manufactured.

Having said that, at the end of 2020, we were made aware through credible media coverage of allegations surrounding Dandong Huayang Textiles and Garments Ltd. We took these allegations about North Korean guest workers seriously and decided to act prudently. At the end of 2020, we proactively decided to end our business relationship with Dandong Huayang Textiles and Garments Ltd., and it is no longer a Reitmans (Canada) Limited supplier.

The story outlined by CBC has brought new information to light. We are shaken by these new allegations about the presence of North Korean guest workers in what appears to be Dandong Huayang Textiles and Garments Ltd. factories.

As such, we believe that we made the right decision at the end of 2020 to proactively stop issuing new business purchase orders with this supplier.

Furthermore, we have decided to pull all remaining inventory of the 4 Penningtons styles and 2 Reitmans styles originating from this supplier and which were ordered over one year ago. We will donate them to local charities. ...

These actions against allegations of forced labor were taken by a private company, but the CBC report also raises questions about whether the Canada Border Services Agency (CBSA) may be likely to take actions on its own in the future related to products that may have been made with forced labor:

when [the CBC] asked the CBSA why it failed to stop shipments into Canada from the same Dandong factory, the agency responded that it requires "legally sufficient and defensible evidence" in order to stop a shipment on suspicion of forced labour, but admitted that it's never actually done that before.

There has been pressure within Canada for the government to take stronger action in this regard.