July 25,2023
Request advances committee’s inquiry into possible forced labor in auto supply chains
Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., requested in a new letter that Lear Co., the nation’s largest car seat manufacturer, explain how it oversees leather supply chains in Brazil to prevent the illegal importation of goods made with forced labor or deforestation. Environmental groups and journalists have documented widespread forced labor and human rights abuses at ranches sited on illegally cleared Amazon rainforest.
“These ranches evade supply chain monitoring by moving cattle repeatedly over their lifetimes from illegal to legal ranches in a process known as ‘cattle laundering,’” Wyden wrote. “In addition to encouraging deforestation, illegal ranching in the Amazon drives violent land-grabs and human rights abuses, subject to weak oversight by Brazilian law enforcement, which often fails to enforce environmental and human rights laws.”
The letter comes as part of Wyden’s ongoing inquiry into forced labor in auto supply chains. Wyden has written to major automakers and their tier 1 suppliers regarding evidence of parts made with forced labor in Xinjiang, China, as part of his investigation into the effectiveness of customs enforcement regarding forced labor. In June, he held a Finance Committee hearing investigating how cattle supply chains contribute to Amazon deforestation.
“The information I am requesting from Lear will aid the Senate Finance Committee’s investigation of the effectiveness of trade-based efforts by the United States to combat forced labor and environmental abuses in the supply chains of products sold in the United States,” Wyden wrote.
The full letter to Lear is available here.
Wyden requested responses to the following questions by August 7:
1) Does Lear conduct its own leather supply chain mapping and analysis of cattle production, beginning at birth and following transportation to all facilities at which the cow is held, through slaughter, processing, and finishing to determine whether any aspect of the supply chain is linked to forced labor? If so, please describe these efforts, the due diligence framework Lear applies to its leather supply chains, and whether these efforts involve tracking finished leather throughout the cow’s entire lifespan. Please specify whether Lear monitors both its direct and indirect suppliers.
2) Does Lear conduct analysis to determine whether its suppliers source cattle from ranches that were illegally occupied at the time of their transaction under Brazilian environmental laws, or from ranches that received amnesty grants following illegal occupation?
a. If so, please specify whether Lear makes uses of cattle transport permits and rural property registrations in evaluating the ranches its suppliers source from, and how it validates those documents.
b. In its 2022 10-K filing with the US Securities and Exchange Commission, Lear claims to use “georeferencing” technology to identify illegal deforestation in its direct suppliers. 12 Please describe the process of “georeferencing” utilized by Lear and whether its suppliers apply this process to both their direct and indirect suppliers.
c. Specifically, please describe how Lear makes use of serial numbers stamped into hides by its suppliers, including JBS, at their wet blue tanneries.
3) Does Lear require suppliers to perform due diligence analysis of their own sourcing to detect forced labor in their own supply chains? If so, how does Lear evaluate the validity of suppliers’ due diligence methodology?
4) Has Lear ever terminated or curtailed, or threatened to terminate or curtail, a commercial relationship with a supplier or sub-supplier, including ranches, cattle transporters, slaughterhouses, tanning facilities, finishing facilities, and any affiliated entities, because of its use of materials linked to forced labor? If so, please describe, for every such incident, the actual or threatened termination or curtailment and the ultimate outcome, and whether the outcome was reported publicly.
5) Has Lear ever terminated or curtailed, or threatened to terminate or curtail, a commercial relationship with a supplier or sub-supplier, including ranches, cattle transporters, slaughterhouses, tanning facilities, finishing facilities, and any affiliated entities, because of its failure to comply with supply chain mapping, auditing, or other diligence or compliance activities? If so, please describe the actual or threatened termination or curtailment and the ultimate outcome, and whether the outcome was reported publicly.
6) Has any shipment of any goods to Lear ever been detained, excluded, or seized by U.S. Customs and Border Protection (CBP) under any provision of Section 307 of the Tariff Act of 1930? If so, for each such instance, please:
a. describe the circumstances surrounding the CBP enforcement action;
b. describe any information provided by CBP regarding the enforcement action, including information about the suspected forced labor; and
c. describe Lear’s response to the CBP enforcement action.
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Press Contact: Keith Chu
