Uzbekistan: Korean trading company POSCO Intl. seeing rapid increase in profit from Uzbekistan cotton sales after Uyghur Forced Labor Prevention Act
[Unofficial Korean-English translation provided by Business & Human Rights Resource Centre]
The Uyghur Forced Labor Prevention Act (UFLPA) is a United States federal law that prohibits imports of goods produced in Xinjiang, China on the basis that they are products of forced labor. Since the UFLPA was enacted on June 21, 2022, the value of cotton produced in Xinjiang plummeted while prices of cotton produced in other regions such as Uzbekistan increased rapidly.
POSCO International, South Korea’s largest trading company and a subsidiary of POSCO, began their operation in Uzbekistan in 1996, registered as Daewoo Textile Company. After the ban on the import of Xinjiang cotton for global companies came into effect, the local cooperation of POSCO International recorded 190.3 billion Won in sales and 37 billion Won in net profit, an increase from 129.7 billion Won in sales and 4.9 billion won in profit in 2020.
Uzbekistan was also the subject of restrictions from the international society due to forced labor until early 2022. POSCO International announced a ‘Modern Slavery and Human Trafficking Statement’ to prevent any issues related to forced labor.