The textile industry is a key driver of Uzbekistan’s economy, reflected in the country’s rank as sixth largest cotton producer in the world. In 2021, the country accelerated the battle against its child and forced labor violations in cotton harvest according to a new International Labour Organization (ILO) report, which found no systemic and systematic use of government-imposed child and forced labor for the first time in more than a decade. The conference and workshop of the Confederation of Employers of Uzbekistan (CEU), the Uzbekistan Textile and Garment Industry Association (Uztextileprom Association) and UNECE in Tashkent, held in conjunction with the first Tashkent International Investment Forum, provided a platform to discuss such progress and strengthen partnership and technical cooperation to accelerate action towards sustainable and circular business models in the country.
Over two days, government authorities, the business sector, international organizations and donors (UNECE, ITC, ILO, WB-IFC, UNDP, ADB, UNRC, GIZ, EU) convened to discuss how the UNECE toolbox “The Sustainability Pledge” can drive decent work, sustainable consumption and production patterns and circular approaches on a wide scale in the national textile industry, which would enable increased market access and investment opportunities. Participants agreed to drive action towards enhanced traceability and transparency in textile value chains to gain a competitive advantage and delved into the UNECE cotton blockchain pilot - as crucial transparency and traceability effort led by the UNECE initiative. In July 2021, the International Finance Corporation (IFC) Tashkent office of the World Bank Goup, brought together key actors of the cotton sector (Indorama Agro), who since then have engaged in this pilot to disclose sustainability claims in a blockchain environment and trace forward the “real” life cycle of a T-shirt, from field to shelf, with support of DNA markers provided by Haelixa.
The important role of the textile industry in Uzbekistan
The agri-business sector in Uzbekistan, of which cotton harvest is a significant part, offers major industrialization, exports and investments potential in the country and the whole region. It is reported to account for 25% of the GDP and is the largest source of employment. Notably, the agri-business was one of the few sectors that kept generating GDP growth during the COVID-19 pandemic in 2020. Particularly, the cotton sector, as foundation of the entire textile industry, contributes to Uzbekistan’s participation in regional and global value chains and accounts for 30% of its exports. However, raw cotton exports are heavily decreasing as the crop is turned into textile products instead. In 2020, the exports of textile products generated almost 3 billion dollars and could generate up to 7 billion in 2025 if the issues in the textile value chain are successfully addressed.
The use of state-led forced labour was a feature of the cotton harvest for decades. It characterized the lives of almost 2 million people who were recruited annually to pick cotton in the fields, and resulted in the world’s biggest seasonal labour mobilization. As such, the country has experienced years of isolation with the establishment of a ban on cotton exports by more than 300 clothing brands and retailers worldwide.
On 10 March 2022, the global boycott of Uzbek cotton was finally lifted by the human rights group Cotton Campaign. It followed the Uzbek Forum for Human Rights of 2021, which reported significant progress on the country’s labour and human rights. Additionally, agricultural and economic reforms have driven the eradication of systemic child and forced labor in 2020, according to several reports, including ILO’s. It highlights that 96% of workers participated voluntarily in the cotton harvest and the systematic recruiting of schoolchildren, teachers and nurses has completely ended. The report states the country’s transition to a more market-based model within production systems, including fair wages and adequate recruitment processes. Further, Uzbekistan is taking steps to to address environmental impacts, such as soil degradation through efficient resource utilization, and to engage in global economic opportunities through foreign direct investments.
“The end of the cotton ban allows Uzbekistan to increase its collaboration with actors around the world. Now, our strategy is to move Uzbekistan up the value chain and focus more on the exports of value-added products, such as textiles and garments instead of raw cotton or yarn. This has the potential to create a multitude of jobs and generate significant revenue streams, as well as attract increased investments”, stressed Ilkhom Khaydarov, Chairman of CEU and Uztextileprom Association.
Uzbekistan’s way forward with UNECE to develop a strategy for sustainability and circularity in the textile industry
UNECE has welcomed the lifting of the cotton boycott and has expressed its assistance at the joint event as a step towards accelerating sustainable textile production in Uzbekistan. Dmitry Mariyasin, Deputy Executive Secretary of UNECE highlighted, “UNECE stands ready to offer its support for advancing the sustainable, circular and digital transition, and the compliance with environmental, social and governance requirements, through enhanced traceability and transparency of value chains, in the textile and leather sector in the country”.
While Uzbekistan has already achieved significant progress, e.g. through the EU GSP+ arrangement for preferential access to global markets, traceability and transparency remain crucial requirements to demonstrate compliance with the underlying set of ESG Conventions. Therefore, it is critical to put in place accompanying measures for Uzbek businesses and SMEs as well as support in the technical assistance to trace environmental and social impacts along the supply chain to harness the full potential of such trade arrangements.
In this respect, the event reached a milestone with the exchange of letters under the Sustainability Pledge Call to Action which expresses the commitment of national key industry actors, including the Uztextileprom Association (with its 1989 member enterprises), to develop a strategy for ESG traceability and transparency in the textile industry in the country.
In particular, the action aims to support the environmental, social and business integrity of management systems, by improving the prevention and mitigation of environmental and social risks, and introducing formal procedures for the certification of such management systems in line with best international standards. And to support this commitment, four work streams were laid out: 1) the creation of an independent textile testing laboratory for sustainable and safe textile materials testing; 2) the ogranization of educational workshops and seminars and qualification development trainings; 3) the development of an action plan to strengthen ESG traceability and transparency; and 4) The establishment of a multi-stakeholder advisory board for ESG traceability and transparency.
This strengthens the continued partnership and cooperation between UNECE and Uzbek actors, including the CEU, ILO, WB-IFC, and GIZ and will advance their participation in the UNECE blockchain pilots.
Looking ahead, UNECE will engage in the development of a strategy for sustainability and circularity in the textile industry of Uzbekistan through additional pilots, training and capacity building, as well as exploring advanced technologies and innovation. In this respect, tech transfer and inclusiveness will play a critical role to accelerate circular economy and green transformations in the industry.
Photos of the event: Click here.