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Costco CEO Cannot Disprove Reports of Chinese Slave Labor in Supply Chain

'A company the size of Costco should not sit back and wait for whistleblower complaints regarding forced labor to make its products...'

At a shareholder meeting on Thursday, Costco CEO Craig Jelinek could not provide “tangible evidence” that the “company’s products are all free of slave labor.”

Free Enterprise Project Associate Davis Soderberg attended the meeting and sent a direct question to Jelinek, the National Center for Public Policy Research reported in a press release.

“In March 2020, a bill advanced in the U.S. Senate that listed Costco as a company potentially profiting from these slave labor camps,” Soderberg wrote in the question he submitted.

“The Senate’s action followed a 2019 Associated Press report noting that Costco was selling clothing that was made by ‘ethnic minorities locked in an internment camp to sew clothes against their will.'”

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Costco gave a “tepid” response to these allegations.

“Has the company fully audited its supply chain, and what tangible evidence can you provide to shareholders that the company’s products are all free of slave labor?” Soderberg asked.

But the meeting’s organizers instead presented Soderberg with a watered-down question: “What is Costco doing to address the issue of forced labor in supply chains from China and other countries?”

The rephrased question seemingly implies that slave labor—discreetly referred to as “forced labor”—exists in Costco’s supply chain.

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“We take our code of conduct very seriously, and we do many audits—not only our suppliers, make sure that they’re doing audits—but we also, as a company, do audits,” Jelinek said. “We also have the ability for a whistleblower line for anybody to bring this to our attention.”

Jelinek assured shareholders, however, that any discovery of slave labor in the supply chain would cause the company to “discontinue the supplier.”

Soderberg said shareholders “deserve more coherent answers.”

FEP Director Justin Danhof called Jelinek’s reliance on whistleblowers “absurd.”

“Shareholders deserve actual evidence, not just lip service, regarding the company’s potential use of Uyghur slave labor in the company’s supply chain,” said Danhof, General Counsel at the NCPPR.

“A company the size of Costco should not sit back and wait for whistleblower complaints regarding forced labor to make its products, especially as it relates to the Chinese Communist Party and its record of dishonest dealings,” he said.

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