Ulster University and the Uzbek Forum for Human Rights has released the first sector wide study on corporate integrity in Uzbekistan.
The report and associated policy brief focus on the cotton cluster system, a landmark privatisation initiative designed to improve agro-industrial productivity, and address the structural drivers of systematic forced labour in Uzbekistan. State-organised forced labour regimes in Uzbekistan’s cotton sector have attracted significant domestic and international criticism over the past decade.
The study finds that the cotton sector suffers from high levels of corporate risk. Opaque ownership structures, lack of managerial transparency, irregular public filings, the use of secrecy jurisdictions, close ties to politically exposed persons, and credible evidence of illegal or improper activity, were identified on a sector wide scale by the study. The report also presents a series of in-depth case studies focusing on red flags associated with some of the largest textile firms in Uzbekistan. These findings reveal the significant challenges which the government of Uzbekistan still faces if it is to achieve the international benchmarks expected by consumers and brands committed to responsible sourcing.
‘The government of Uzbekistan has commenced a bold initiative to address serious issues that have plagued the cotton sector for decades. However, the omission of corporate transparency and corporate good governance measures has left this experiment exposed to a range of risks, that will deter investors, worry international apparel brands, and threaten the labour gains observed over the past three years’, observed Professor Kristian Lasslett one of the report’s authors.
‘This is a critical human rights issue’, argues Umida Niyazova, Director of the Uzbek Form for Human Rights, ‘the Uzbek Forum has documented how cluster operators lacking key indicia of corporate integrity are being tied by farmers and workers, to a range of abusive practices’.
The report and policy brief recommend a series of measures which are critical for market integrity, corporate good governance, and Uzbekistan’s successful reintegration into international textile and garment supply chains.
