Initial Assessment Report for a complaint filed by a coalition of 28 organizations about the activities of Hugo Boss Canada Inc.

File number: 220846
Complaint filed on: June 21, 2022
Report published on: August 24, 2023

About the CORE

The Canadian Ombudsperson for Responsible Enterprise (CORE) is a business and human rights grievance mechanism established by the Government of Canada. People can file complaints with the CORE about possible human rights abuses arising from the operations of Canadian garment, mining, and oil and gas companies outside of Canada.

For more information, see the Canadian Ombudsperson for Responsible Enterprise website.

What is the purpose of this report?

The CORE is reporting on the initial assessment stage of a complaint filed by a coalition of 28 Canadian organizations on June 21, 2022, about the activities of Hugo Boss Canada Inc.

Pursuant to section 16 of the CORE’s Order in Council, the parties had an opportunity to comment on the facts contained in the report. A summary of the comments received is at Part 5 of the report.

Who are the parties to the complaint?

The Complainants are a coalition of 28 Canadian organizations listed in Annex 1.

Hugo Boss Canada Inc. is a Canadian garment company. It was incorporated under the Ontario Business Act on June 19, 1991, under the corporation number 946585.

What is the complaint about?

The complaint alleges that Hugo Boss Canada Inc. has a supply relationship with a Chinese company that the Australian Strategic Policy Institute (ASPI) has identified in its report Uyghurs for Sale as using or benefiting from Uyghur forced labour.^{Footnote 1}

According to the complaint, Hugo Boss Canada Inc. has a supply relationship with Esquel Textile Co. Ltd. (“Esquel”), a Chinese company which ASPI identified as using Uyghur forced labour and which owns several factories and subsidiaries in Xinjiang, China. To support their allegations, the Complainants provided bills of lading which indicate Hugo Boss as the consignee for multiple shipments from Esquel. The CORE notes, however, that one of these shipments was received by Hugo Boss Ticino SA and originated in Singapore. The other, while received by Hugo Boss Canada Inc., originated from Esquel in Vietnam.

In addition, the complaint alleges a link between Hugo Boss Canada Inc. and Texhong Textile Group. To support their allegations, the Complainants refer to a report by Sheffield Hallam University, Laundering Cotton.^{Footnote 2} According to the complaint, there is evidence that Texhong Textile Group uses or benefits from Uyghur forced labour. In particular, it alleges that the company owns a subsidiary in Xinjiang, purchases Xinjiang cotton, engages in state-sponsored labour transfers, and purchases cotton from the Xinjiang Production and Construction Corps (XPCC).

Further, the complaint also notes that Hugo Boss is currently the subject of a criminal complaint in Germany. According to the complaint, the European Center for Constitutional and Human Rights, which reportedly filed the case, has accused Hugo Boss of illegally benefiting from Uyghur forced labour.

According to the complaint, in March 2021, Hugo Boss’ Weibo account stated that it would “continue to purchase and support Xinjiang cotton”. While that post was removed, the Complainants allege that Hugo Boss’s current statement on Xinjiang fails to satisfactorily address their use of Uyghur forced labour. The statement asserts that “Hugo Boss has not procured any goods originating in the Xinjiang region from direct suppliers”. According to the complaint, not only is this assertion contradicted by the findings presented in the complaint, the continued emphasis on “direct suppliers” fails to satisfactorily address the use of Uyghur forced labour at earlier stages of the supply chain.

The Complainants indicate that by way of letter dated November 12, 2021, they asked Hugo Boss Canada Inc. to conduct human rights due diligence (HRDD) to ensure that they do not benefit from Uyghur forced labour. Specifically, they asked that Hugo Boss Canada Inc. cut off relations with Esquel, and take reasonable steps to ensure beyond a reasonable doubt that none of its materials is sourced from Xinjiang. According to the Complainants, Hugo Boss Canada Inc. did not respond.

Part 1 — Summary of the intake stage (or admissibility stage)

1. On July 20, 2022, on the basis of the information provided by the Complainants, the Ombud decided that the complaint was admissible pursuant to section 6.1 of the Operating Procedures. This means that the Ombud decided there was sufficient information for the Complainants to form a reasonable belief that each of the three admissibility criteria was met. The threshold for admissibility is a low one. The admissibility criteria are that:
   • The complaint concerns an alleged abuse of an internationally recognized human right;
   • The alleged abuse arises from the operations abroad of a Canadian company in the garment, mining or oil and gas sector; and
   • The abuse allegedly occurred after May 1, 2019, or, if it allegedly occurred before May 1, 2019, is ongoing at the time of the complaint (Section 5.7, Operating Procedures).
2. The Ombud’s decision was communicated to the Complainants on July 27, 2022.
3. The Ombud’s decision was communicated to Hugo Boss Canada Inc. by priority post on July 29, 2022. At that time, it was the practice of the CORE to request information regarding a company’s policies, procedures and practices relating to the protection of personal information prior to sharing details of the complaint. Hugo Boss Canada Inc. did not provide the requested information. Subsequently, the CORE changed this practice and a copy of the complaint was provided to Hugo Boss Canada Inc. on October 12, 2022. The complaint was then moved from the intake stage to the initial assessment stage of the complaint process.

Part 2 — Initial assessment

Background

4. Initial Assessment is the process for deciding how to proceed with an admissible complaint including how to address any objections from the respondent (the company named in the complaint). The Ombud does not make a decision on the merits of the complaint during initial assessment.
5. The objectives of the initial assessment process are to:
   • Develop a better understanding of the parties’ positions regarding the allegations including any objections to the complaint from the respondent;
   • Begin to identify the parties’ underlying needs and interests;
   • Provide information regarding the role of the CORE and the different dispute resolution processes; and
   • Work with the parties to decide what dispute resolution process may best address the issues raised by the complaint including the allegations and any objections from the respondent.
6. During initial assessment, the Ombud meets with the parties to learn about their views regarding the allegations, respond to their concerns and questions, and seek their agreement to participate in early resolution or mediation. If the parties do not agree to participate in a consensual dispute resolution process, the Ombud will decide how to deal with the complaint including whether to begin an investigation.

The initial assessment process in this complaint

7. The steps taken by the CORE during the initial assessment of this complaint were as follows:
   1. Desk review of the complaint.
   2. Virtual meeting with the Complainants’ representatives on November 18, 2022.
   3. Correspondence with Hugo Boss Canada Inc. regarding confidentiality.
   4. Phone call with counsel for Hugo Boss Canada Inc. on March 27, 2023.
   5. Desk research on academic reports and corporate statements.

What the Complainants told the CORE

8. During the initial assessment meeting on November 18, 2022, the Complainants expressed their willingness to participate in early resolution or mediation including agreeing to terms of confidentiality. The Complainants are willing to work towards a systemic resolution that does not name Hugo Boss Canada Inc. and that finds solutions to address the possible use of Uyghur forced labour and that would help Canadian garment companies to undertake appropriate HRDD in this high-risk context. The Complainants also indicated that given the complexity of tracing the origin of textiles, particularly from Xinjiang, it is preferable that garment companies use fibre tracing technology to map their supply chains from fibre to retail.

Hugo Boss Canada Inc.’s response to the complaint

9. Prior to receiving the complaint on October 12, 2022, counsel for Hugo Boss Canada Inc. expressed “substantial concerns that its privacy will not be respected by the complainant”. In particular, counsel noted that the Complainant shared the complaint with reporters which resulted in media coverage in the Globe and Mail. Counsel requested written assurances that the Complainant will maintain strict confidentiality. CORE responded by letter to these concerns and requested a response to the complaint which did not include information that Hugo Boss Canada Inc. considers confidential. It further noted that if Hugo Boss Canada Inc. has concerns that the Complainant’s conduct has had a negative impact on the integrity of the CORE’s complaint process, to provide information and views about that negative impact in their response to the complaint.
10. Upon receiving the complaint in October 2022, Hugo Boss Canada Inc. was invited to provide a response and to meet with the Ombudsperson for an initial assessment meeting. Hugo Boss Canada Inc. did not provide a response which addressed the allegations in the complaint and did not respond to multiple requests to meet. In a letter dated December 15, 2022, Hugo Boss Canada Inc. set out eight questions with respect to confidentiality. Hugo Boss Canada Inc. noted that they are interested in participating in the process, including an initial assessment meeting, but that they are “not satisfied that the Complainants are conducting themselves in good faith, that the integrity of the CORE process is assured, that confidentiality can and will be maintained and that transparency is evident”. In this regard, they expressed concern that the CORE’s complaint process is subject to Canada’s Access to Information Act.
11. Hugo Boss Canada Inc.’s December 15, 2022 letter raises questions with respect to the timing of the filing of the complaint, the communication that took place between CORE and the Complainants, the potential sharing of information and communications with the Complainant, and the confidentiality rules provided to both parties. Hugo Boss Canada Inc. noted that it would respond to the CORE’s request for an initial assessment meeting once their questions were addressed. The CORE responded to Hugo Boss Canada Inc.’s questions in a letter dated January 19, 2023. As outlined below in Part 4 — Participation in the Complaint Process, the CORE subsequently received a request for a call with counsel for Hugo Boss Canada Inc., who requested that the CORE enter into a non-disclosure agreement with their client prior to an initial assessment meeting. The CORE confirmed that it would be possible to enter into a non-disclosure agreement with Hugo Boss Canada Inc., but that, regardless, the CORE is bound by the Access to Information Act. The CORE requested that Hugo Boss Canada Inc. confirm its interest in proceeding with such an agreement and provide a draft. Hugo Boss Canada Inc. did not respond.

Part 3 — How to deal with the complaint?

12. The Ombud must decide how to deal with the complaint. The Ombud may decide to:
    1. Close the file — The Ombud may decide not to deal with the complaint and to close the file after publishing this report pursuant to section 14(2) of the Operating Procedures; or,
    2. Proceed to mediation — The Ombud may decide to proceed to mediation if both parties are in agreement; or,
    3. Conduct a review using independent fact-finding — The Ombud may decide to review the complaint using independent fact-finding pursuant to section 7(b) of the Order in Council.
13. In deciding whether to review a complaint, the Ombud considers the overall context of the complaint and relevant factors including whether:
    1. The complaint is frivolous or vexatious;
    2. The complaint is being reviewed or has been reviewed, in another forum.
    3. The Canadian company has already provided a satisfactory response or remedy to the allegations in the complaint;
    4. Relevant information is likely to be available;
    5. Effective remedy is likely to be available: and
    6. An investigation is likely to lead to unacceptable risk to the complainant or others.
14. In considering whether relevant information is likely to be available, the cooperation of the Canadian company named in a complaint is not determinative. The CORE may consider the availability of information from all reasonably accessible sources. As well, in any final report, the CORE may comment on how the cooperation of the parties impacted on the availability of information and other aspects of the investigation.
15. In considering whether any practical or effective remedy is available, the Ombud will weigh the scope of the review i.e., who would be covered by the review, possible remediation options, and other competing factors including institutional capacity (public resources) and the desirability and effectiveness of launching a public review.

Analysis

16. On their face, the allegations made by the Complainants raise serious issues regarding the possible abuse of the internationally recognized right to be free from forced labour, referred to in following instruments:
    1. Right to be free from slavery or servitude (Article 4, Universal Declaration of Human Rights, 1948);
    2. Right to work, to free choice of employment, to just and favourable conditions of work (Article 23[1], Universal Declaration of Human Rights, 1948; Article 6.1, International Covenant on Economic, Social and Cultural Rights, 1966);
    3. Freedom from forced or compulsory labour (Articles 1 & 2, ILO’s Forced Labour Convention, 1930 [No. 29], Article 8[3][a], International Covenant on Civil and Political Rights, 1966; The Protocol of 2014 to the Forced Labour Convention 1930);
    4. Freedom from forced or compulsory labour as a means of political coercion or of racial, social, national or religious discrimination. (Article 1, ILO’s Abolition of Forced Labour Convention, 1957 [No. 105]).
17. The seriousness of the human rights impacts arising from the possible use of Uyghur forced labour is underlined by the report OHCHR Assessment of human rights concerns in the Xinjiang Uyghur Autonomous Region, People’s Republic of China issued in August 2022. The report finds that far-reaching, arbitrary and discriminatory restrictions on human rights and fundamental freedoms were imposed on Uyghurs and other predominantly Muslim communities living in Xinjiang “in violation of international laws and standards” and calls on states, businesses and the international community to take actions in order to end the abuses.
18. Recognizing the seriousness of the possible use of Uyghur forced labour in Xinjiang, the Canadian government requires Canadian companies that source directly or indirectly from Xinjiang or from entities relying on Uyghur labour or who seek to engage in the Xinjiang market to sign the Integrity Declaration on Doing Business with Xinjiang Entities before receiving services and support from the Trade Commissioner Service (TCS). In addition, the Canadian government’s 2023 budget signaled its commitment to reducing supply chain vulnerabilities and its intention to strengthen Canada’s supply chain infrastructure by shifting critical supply chains away from dictatorships and towards democracies.
19. The complaint raises questions about Hugo Boss Canada Inc.’s due diligence activities. Principles 14 and 17 of the Guiding Principles on Business and Human Rights (PDF) indicate that HRDD in high-risk areas such as the Xinjiang region in China be tailored according to the nature and context of a company’s operation, types of vulnerable groups and the intensity and severity of human rights risks, and that a company may need to adopt more robust measures in a high-risk operating context.
20. As well, the UNGPs provide guidance regarding the responsibility of companies to be transparent about their HRDD activities. Companies whose business operations or operating context pose risks of severe human rights impacts are required to report formally about how they identify and address those serious human rights impacts (Principle 21 and its commentary of OHCHR Assessment of human rights concerns in the Xinjiang Uyghur Autonomous Region, People’s Republic of China). When concerns are raised by or on behalf of affected or other relevant stakeholders, a company needs to provide sufficient information and ensure that its reporting/communication is accessible to the intended audiences.
21. As mentioned above, Hugo Boss Canada Inc. did not provide the CORE with a substantive response to the complaint. Considering the information contained in the ASPI report and the bills of lading which link Hugo Boss Canada Inc. with a factory that the report identifies as using Uyghur forced labour, it appears that there may be grounds to warrant an investigation. While the CORE notes that the bills of lading referenced in the complaint document shipments from Esquel facilities in Singapore and Vietnam to Hugo Boss and that the Complainants have not alleged the use of forced labour in those facilities, the complex nature of garment supply chains may mean that those facilities use Xinjiang cotton. An investigation may be warranted to examine, for example, the extent to which the due diligence activities Hugo Boss Canada Inc. consider whether the lower tiers of its supply chains use or benefit from the use of Uyghur forced labour. Given that it did not respond to the complaint, the nature and scope of Hugo Boss Canada Inc.’s HRDD, including whether it uses fibre tracing technology, is unknown. More information is required to consider whether Hugo Boss Canada Inc.’s HRDD is consistent with the robust due diligence required by a high-risk context such as the cotton supply chain that widely includes Xinjiang cotton.
22. Furthermore, Hugo Boss Canada Inc. failed to respond to the November 12, 2021, letter sent by the Complainants. As referenced in the complaint, the ‘Hugo Boss Statement on the Chinese Region of Xinjiang’ does not satisfactorily respond to the concerns put forth by the complaint. It notes that Hugo Boss ‘[scrutinizes] all direct suppliers’ and ‘[identifies] sub-suppliers and the production facilities they use for [their] goods.’ The reference to ‘direct suppliers’ is an area of concern, as the responsibility to conduct due diligence extends throughout the whole value chain.
23. If the Ombud decides to investigate the complaint, there will be an ongoing opportunity for Hugo Boss Canada Inc. to respond and participate including providing additional information regarding its HRDD activities.
24. Given the broader context of the complaint and challenges in gathering information on an in-country basis, independent fact-finding may be limited. The availability of information would need to be assessed as the investigation progresses and would be considered in any final report.
25. The complaint does not name individuals or make individuals identifiable thereby reducing the potential for an investigation to increase risk to individuals. If the Ombud decides to investigate the complaint, an assessment of risk will be ongoing throughout the investigation.

Part 4 — Participation in the complaint process

26. As outlined in paragraphs 9 to 11, Hugo Boss Canada Inc. did not provide a substantive response to the complaint. [Hugo Boss did provide comments on the draft initial assessment report; see paras 37–45 below.] While confidentiality concerns appear to be the basis for the lack of response, Hugo Boss Canada Inc. did not respond to the CORE’s indication that a nondisclosure agreement would be possible. Given this, the reason for Hugo Boss Canada Inc.’s lack of response is unknown.
27. The CORE’s Operating Procedures provides that full and active participation in the complaint process is part of good faith:
    
    Section 11.1 requires the parties to fully participate in the complaint process including by providing the Ombud with relevant information and documents and making witnesses available on reasonable notice, according to the timelines established by the Ombud.
    
    Section 11.2 provides that where a Canadian company does not participate actively in the complaint process, including refusing to provide relevant information and documents, the Ombud may draw appropriate negative conclusions or adverse inferences during fact-finding.
    
    Section 12.4 provides that the Ombud may consider a party not to be acting in good faith if the party does not actively participate in a review without reasonable explanation.
    
    
28. Given the refusal of Hugo Boss Canada Inc. to meet with the CORE for an initial assessment meeting while the concerns of the Complainants do not appear to have been fully addressed, the Ombud may consider that Hugo Boss Canada Inc. is not acting in good faith. If the Ombud decides to proceed with the complaint, Hugo Boss Canada Inc. will have the full opportunity to participate in the complaint process before any decision is made regarding the merits of the complaint or a settlement of the complaint may be reached.
29. The Ombud may exercise their discretion to make a recommendation to the Minister under section 10 of the Order in Council which provides that the Ombud may make recommendations to the Minister on implementing trade measures including any of the following:
    1. Withdrawal or denial of trade advocacy support provided to the Canadian company by the Department of Foreign Affairs, Trade and Development (known as “Global Affairs Canada”);
    2. Refusal by the Department of Foreign Affairs, Trade and Development to provide future trade advocacy support to the Canadian company; and
    3. Refusal by Export Development Canada to provide future financial support to the Canadian company.

Part 5 — Comments from the parties

Comments from the Complainants

30. On June 12, 2023, the Complainants provided their comments on the draft initial assessment report. The Complainants assert that the CORE should conduct an investigation using independent fact-finding. To support their assertion, the Complainants apply the following factors:
31. First, the Complainants assert that the complaint is not frivolous or vexatious. They reiterate the evidence provided in the complaint, namely from the Australian Strategic Policy Institute (ASPI) and research by Laura Murphy. In particular, ASPI documented a link between Hugo Boss and Esquel Textile Co. Ltd., a Chinese company that it identified as using Uyghur forced labour. With respect to Laura Murphy’s research, links were identified between Hugo Boss and Texhong Textile Group, a Chinese company which the research identifies as using or benefiting from Uyghur forced labour. The Complainants also highlight bills of lading which indicate that Hugo Boss imported multiple shipments from Esquel Textile Co. Ltd. While the Complainants acknowledge that one of these shipments was received by Hugo Boss Ticino SA and the other originated from Esquel in Vietnam, they assert that the complex nature of garment supply chains means that Uyghur forced labour may still be implicated.
32. Second, the Complainants note that the complaint is not being reviewed in another forum, nor has it been reviewed in the past in another forum.
33. Third, the Complainants assert that Hugo Boss Canada Inc. has not provided a satisfactory response or remedy to the allegations in the complaint. They note that Hugo Boss Canada Inc. did not respond to multiple requests to meet for an initial assessment meeting and failed to respond to the Complainants’ communications. The Complainants assert that the failure of Hugo Boss Canada Inc. to meet with the CORE demonstrates that the company is not acting in good faith, which militates in favour of conducting an investigation.
34. Fourth, the Complainants argue that relevant information is likely to be available in the public domain, including through the ASPI and Laura Murphy reports, and import data. They assert that research conducted by both parties already provides significant evidence of the ties between Hugo Boss Canada Inc. and Chinese companies that use or benefit from Uyghur forced labour. They further note that if the CORE was to close the file, this would incentivize Canadian companies to not cooperate with the CORE in the future.
35. Fifth, the Complainants note that effective remedies are available, citing the trade measures outlined in paragraph 29 of this report. They assert that such measures would encourage not just Hugo Boss Canada Inc., but also all Canadian companies operating abroad to ensure that they are not profiting from Uyghur forced labour.
36. Sixth, the Complainants note that conducting a review is not likely to lead to unacceptable risk to the Complainants or others.

Comments from Hugo Boss Canada Inc.

37. On June 19, 2023, Hugo Boss Canada Inc. provided its comments on the draft initial assessment report, asserting that their response will clearly demonstrate that the allegations are either false, out of date, not accurately researched or misleading. While the company did not previously provide a response to the complaint, their response to the specific allegations set out in the complaint was detailed in their comments on the draft version of this report.
38. In regards to confidentiality, Hugo Boss Canada asserts that they provided two examples where the press had information about the company and the CORE that could only have come from the Complainants. Assuming that the source of the confidentiality leak can only be the Complainants despite the Complainants being made aware of the CORE’s “strict confidentiality policies”, Hugo Boss Canada states that it has struggled in how to meaningfully engage in the complaint process. Especially after the CORE stated that even if a confidentiality agreement was signed that all information provided would be subject to access to information.
39. First, Hugo Boss Canada Inc. addressed the criminal complaint in Germany brought forth by the European Center for Constitutional and Human Rights (ECCHR) alleging that Hugo Boss benefits from Uyghur forced labour. Hugo Boss Canada Inc. asserts the company is not currently subject to a criminal complaint in Germany. According to Hugo Boss Canada Inc., the German public prosecutor reviewed the complaint and the Attorney General dismissed it in its entirety on October 4, 2021, due to a lack of concrete evidence. Hugo Boss Canada Inc. explained that the ECCHR was provided with the written decision, but that the Complainants omitted it from the complaint.
40. Second, Hugo Boss Canada Inc. addressed its supplier relationship with Esquel Textile Co. Ltd. Hugo Boss Canada Inc. noted that the CORE identified that the bills of lading provided by the Complainants in support of their allegations originated in Singapore and Vietnam. They note that the forced labour allegations in the complaint are against Esquel’s Xinjiang facilities and not its Singapore and Vietnam facilities. Furthermore, Hugo Boss AG realigned its supplier portfolio globally and “began winding down its relationship with Esquel in 2020/2021. As a result, Hugo Boss Canada Inc. concluded its exit of Esquel shipments in 2022”.
41. Third, Hugo Boss Canada Inc. addressed the link established by Laura Murphy between Hugo Boss and Texhong Textile Group. Hugo Boss Canada Inc. cites Texhong’s response (in Annex D of the Sheffield Hallam University report) to the allegations, which asserts that the Tiananmen [sic] factory referred to in the report was sold to an unaffiliated third party in 2021.^{Footnote 3} Hugo Boss Canada Inc. explained that the company conducted its own research in 2022 and could not find any factories owned by Texhong in Xinjiang.
42. Fourth, Hugo Boss Canada Inc. addressed the statement on its Weibo account that the company would “continue to purchase and support Xinjiang cotton.” Hugo Boss Canada Inc. explained that this post was unauthorized and does not reflect Hugo Boss’s policy, practices, or company position. They further explained that when the post was discovered, it was removed without undue delay and the company’s official statement was shared on Weibo to clarify the company’s position. They then took measures to prevent such unauthorized conduct from occurring in the future. Hugo Boss Canada Inc. confirmed that it does not tolerate forced labour, any other violation of human rights or ethical working conditions and its responsible business conduct is publicly available on its website.
43. Fifth, Hugo Boss Canada Inc. addressed the Complainant’s assertion that the company failed to respond to their November 2021 email. The email was sent to Leslie Minion, former president of Hugo Boss Canada Inc. Hugo Boss Canada Inc. explained that they conducted a thorough search and do not have a record of an email or letter from the Complainants to Leslie Minion. Furthermore, they explained that Leslie Minion has not been employed with Hugo Boss Canada Inc. for approximately 10 years.
44. Sixth, Hugo Boss Canada Inc. explained that Hugo Boss is subject to the US Uyghur Forced Labour Prevention Act, Magnitsky legislation, and other sanctions related to Uygur forced labour and the Xinjiang region. As a result, the company has put in place measures to comply with the various requirements, and their compliance with these requirements addresses the allegations made in the complaint. Furthermore, Hugo Boss Canada Inc. explained that the company collaborates with key stakeholders on a regular basis to review compliance and create new strategies, including collaborating with the Fair Labor Association and Partnerships for Sustainable Textiles. They pilot isotope testing to increase supply chain oversight, evaluate the use of third-party tools to independently certify and research supply chains, and will continue to evaluate and implement supply chain oversight tools.
45. Finally, on May 31, 2023, after receiving the draft report sent on May 30, Hugo Boss Canada Inc. indicated that they were prepared to meet with the CORE for an initial assessment meeting. Given that it was very late in the initial assessment stage and a draft report had already been disclosed, the CORE refused and again invited Hugo Boss Canada Inc. to provide its comments on the draft report. If the Ombud decides to proceed with the complaint, Hugo Boss Canada Inc. will have a full opportunity to participate in the complaint process before any decision is made regarding the merits of the complaint.

Part 6 — Ombud’s decision

46. In order to address the allegations raised in the complaint, the Ombud has decided to launch an investigation using independent fact-finding. In reaching their decision, the Ombud considered the factors addressed in paragraph 13 of this report and, in particular, whether there is a conflict in the information currently available that warrants investigation.
47. The Ombud acknowledges that Hugo Boss Canada Inc. has responded to the complaint and denied the allegations, and reiterated its commitment to complying with domestic and international laws related to forced labour and increasing the effectiveness of its supply chain management programs. However, Hugo Boss’s response does not appear to consider fully the complex nature of the garment supply chain. Specifically, with respect to the allegation that Hugo Boss Canada Inc. has a supplier relationship with Esquel Textile Co. Ltd., the Ombud acknowledges that the bills of lading referenced in the complaint point to shipments from Esquel facilities in Singapore and Vietnam, not Xinjiang. However, the prevalence of cotton from Xinjiang and the reality that cotton frequently travels through a supply chain that is more complex, it is possible that Esquel factories in other countries use Xinjiang cotton. The investigation will consider this and related indicators of risk, as well as mitigation strategies relevant to robust HRDD in such a high-risk context.
48. While the availability of relevant information may be limited given the broader context of the complaint, the Ombud will seek assistance from investigators with expertise in researching and analyzing publicly available data. If available information is limited—or Hugo Boss’s cooperation limits the availability of information, the Ombud can comment in the investigation report on how the availability of information affects her ability to make findings.
49. Hugo Boss Canada Inc. will have an ongoing opportunity to provide further relevant information during the investigation, including information regarding its HRDD activities.
50. While the CORE will proceed with an investigation through independent fact-finding, mediation is available at any stage of the complaint process at the Ombud’s discretion and with the agreement of the parties. The Ombud encourages the parties to consider mediation and the related confidentiality that it can provide including with respect to commercially sensitive information.

Annex-1

Complainants: A coalition of 28 organizations

1. Canadians in Support of Refugees in Dire Need (CSRDN)
2. Alliance Canada Hong Kong
3. Anatolia Islamic Centre
4. Canada Tibet Committee
5. Canadians Against Oppression & Persecution
6. Canadian Council of Muslim Women (CCMW)
7. Canadian Council of Imams (CCI)
8. Canada-Hong Kong Link
9. Doctors for Humanity
10. East Turkistan Association of Canada
11. End Transplant Abuse in China (ETAC)
12. Human Rights Research and Education Centre, University of Ottawa
13. Human Concern International (HCI)
14. Islamic Circle of North America Canada (ICNA)
15. Islamic Society of North America (ISNA)
16. Justice for All
17. Lawyers for Humanity
18. Muslim Association Canada (MAC)
19. National Council of Canadian Muslims (NCCM)
20. Raoul Wallenberg Centre for Human Rights
21. Canadian Security Research Group
22. Share 2 Care (S2C)
23. Stop Uyghur Genocide Canada
24. Toronto Association for Democracy in China
25. Union of Medical care and Relief Organizations-Canada (UOSSM)
26. Uyghur Refugee Relief Fund
27. Uyghur Rights Advocacy Project
28. Vancouver Society in Support of Democratic Movement