The use of odious forced labor practices is to be brought to an end, Chinese and other corporate offenders have to be identified publicly and face sanctions that they genuinely fear. That is clearly not the case today. The purpose of this initiative is to point out some of the key shortcomings of the EC's proposed legislation on banning products made with forced labor and an American law designed to do the same. In both cases, Chinese companies constitute, by far, the largest number of offenders. PSSI will be joining with the Uyghur Human Rights Project and the Forum For Human Rights to pursue this policy endeavor in Europe. In short, "forced labor companies" must be named and listed – not just their products – and the continued access of publicly traded Chinese and other corporate forced labor abusers must be denied.
While we are grateful that transatlantic action is finally underway, this initiative is dedicated to illuminating the glaring shortcomings of the European Commission “Proposal for a regulation on prohibiting products made with forced labour on the Union market” (COM(2022) 453) of September 14, 2022, as well as its American counterpart legislation, The Uyghur Forced Labor Prevention Act (UFLPA), signed into law by President Biden on December 23, 2021. In short, those Chinese and other companies responsible for producing products with the use of forced labor – must be identified publicly – not just the products themselves – and their access to European and American stock and bond exchanges terminated.
Not surprisingly, Chinese companies trafficking in forced labor are both calloused and arrogant but would be desperately concerned if their access to the European and American exchanges was at risk due to their heinous labor rights violations. As things presently stand, for example, Chinese forced labor companies, including the 50 publicly traded Chinese firms recently unearthed by the Coalition For A Prosperous America (CPA), are not required even to be identified, much less subject to capital markets sanctions.
Concerning the bigger picture, the fact is that there are hundreds, if not thousands, of Chinese companies presently included in the investment portfolios of European retail investors. In the United States capital markets, the number of CCP-controlled companies has swelled to over 5,000 (including Chinese "A share" companies). The financial risk exposure of American investors alone to Chinese enterprises and the government totals trillions of dollars.
The diligence supposedly performed by European and United States asset managers and index providers (not to mention government regulators) is virtually non-existent when it comes to Chinese corporate human rights and national security abusers. Even key tenets of “investor protection” are scandalously ignored by the U.S. and allied government regulators. PSSI is determined to help end this destructive fiduciary malfeasance.
To this end, PSSI has commented on the European Commission proposal and organized a public online discussion titled "Capital Markets Dimensions of Forced Labor Trafficking". PSSI will continue to inform the public and stakeholders via further research, publication and events.