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18.10.2023 / uzbekistan

An Economist vs. Uzbekistan’s Silk Industry: Whose Facts Matter?

An Economist vs. Uzbekistan’s Silk Industry: Whose Facts Matter?

This article by Umida Niyazova was first published in the The Diplomat on October 5, 2023.

A coming court verdict on the admissibility of independently verified information could have lasting negative implications for labor rights reporting in Uzbekistan.

In late August, a civil court judge in Tashkent ordered independent economist Yuliy Yusupov to publish a retraction and apologize in the media to Uzbekipaksanoat, the Uzbek Silk Association, for an article he published in March this year, which revealed corruption and the use of coercion in the production of silkworm cocoons. Yusupov, director of the Tashkent-based Center for Economic Development, stands by his assessment of the silk sector and has filed an appeal.

The appeal court’s decision will be a key test of whether independent researchers in Uzbekistan are free to publish fact-based analyses, particularly when they are unpalatable to the state or the businesses it protects.

The Tashkent court has partially satisfied the lawsuit filed by the head of Uzbekipaksanoat, which demanded an apology and compensation for alleged reputational and financial damages it says it incurred as a result of Yusupov’s article. The article stated that Uzbekistan’s silk industry suffers from inefficient bureaucratic management and, despite privatization, de facto state quotas for cocoon production remain in place. This results in the coercion of farmers to cultivate and deliver silkworm cocoons to so-called “silk clusters,” newly formed private enterprises, many of which are registered overseas and connected to the families of government officials, including the former head of Uzbekipaksanoat himself.

Uzbekistan is per capita the world’s largest producer of silkworm cocoons, and by volume is the world world’s third largest producer after China and India. For local farmers, annual enforcement of cocoon production quotas is commonplace. Every spring, during the cocoon harvest period, farmers voice their complaints about coercion and corruption on social media. Those complaints are routinely ignored by Uzbek authorities, despite the criminalization of the use of forced labor.

For many years, Uzbekistan’s silk sector was overshadowed by the problems in the cotton sector, notorious for the use of child and forced labor, which was until recently boycotted by more than 300 international brands and retailers. Beginning in 2017, the Uzbekistan government finally gave way to international and economic pressure by introducing a reform process that eliminated its policy of government-orchestrated forced mobilization of cotton pickers. This success was widely acknowledged as a milestone in the country’s history by civil society groups who had long campaigned for an end to forced labor. It raised hope that the reform process would extend to civil and political changes that would ensure the sustainability of the progress.

The transformation of the cotton sector, however, did not affect the silk sector, which continues to exploit thousands of farmers who are forced to grow silkworm cocoons every year in order to provide raw material for private silk companies.

In its lawsuit, Uzbekipaksanoat, which unites Uzbekistan’s silk production and processing enterprises, refuted the existence of state quotas for cocoons and claimed that Yusupov cited information from “Uzbek Forum,” a human rights organization that it claims cannot be considered a reliable source of information because it is a German-based NGO and is not registered in Uzbekistan. [Editor’s Note: The author is director of the Uzbek Forum.] Uzbekipaksanoat also claimed that after Yusupov’s publication, two Vietnamese companies allegedly refused to sign export contracts with Uzbek silk enterprises, causing the association to suffer financial losses totaling $34,000, which it sought from Yusupov in damages.

Although the court dismissed Uzbekipaksanoat’s financial claims, the judge held that the findings of Uzbek Forum were unreliable since the organization was not registered by the Uzbek Ministry of Justice. According to the judge, Yusupov’s statements were therefore the result of “one-sided research based on unofficial materials and that he failed to consider official statistics, court materials, or request information from the judiciary, prosecutor’s office or Uzbekipaksanoat.”

Through its network of independent rights activists working inside Uzbekistan, the Uzbek Forum for Human Rights has been monitoring labor rights violations in the silk sector since 2015 when the situation was even worse, as quotas for cocoon production were imposed not only on farmers, but also on public organizations, including schools and kindergartens.

Between 2018-2022, Uzbek Forum interviewed hundreds of farmers, the vast majority of whom testified that they grew cocoons against their will. Coercion of farmers to grow silkworm cocoons for the needs of private enterprises under the threat of land seizure is a state policy. Farmers told Uzbek Forum monitors that although there is no legal basis for forcing farmers to grow cocoons, local district officials and/or prosecutors forced them to sign blank contracts under threat of penalty, such as termination of their land leases. If they fail to fulfill the imposed cocoon production quota, they are forced to pay fines or purchase cocoons to hand over to clusters.

This is not the first attempt by Uzbekipaksanoat to retaliate against those reporting on labor rights violations in the silk sector. In August 2018, a state-owned newspaper in Andijan also published a critical article on forced labor and extortion in the silk sector, resulting in a 100 million Uzbek som (approximately $8,000) defamation lawsuit against the newspaper, which was rejected by the Andijan Civil Court.

However, the Tashkent court ruling against Yusupov creates a dangerous precedent by basing its verdict on the “unreliability” of Uzbek Forum’s findings solely because it is not registered in Uzbekistan – at least this appeared to be the only reason why the judge did not accept Uzbek Forum’s findings. The judge is clearly unaware that the international boycott of Uzbek cotton was lifted by the Cotton Campaign based on Uzbek Forum’s monitoring of the 2021 cotton harvest in Uzbekistan. By the same logic, that would mean that the lifting of the boycott was also based on illegitimate data.

The notion that only data from organizations registered in Uzbekistan may be considered reliable is weak, given the plethora of international consultants offering studies and consultations to the Uzbek government and businesses. It also raises serious questions for independent labor rights monitoring in the country, which textile brands and retailers depend on to verify compliance with supply chain regulations and auditing certifications, such as Amfori and Better Cotton. Moreover, Uzbek Forum is not registered in Uzbekistan because, like most other independent human rights groups, an application to register in Uzbekistan is likely to be rejected by the Ministry of Justice. Even the few that do successfully register are subject to excessive oversight by government officials.

The response of Uzbekipaksanoat and the courts is reminiscent of the standard reaction to reports of child and forced labor during the Karimov regime, which were batted away as part of a global conspiracy to destroy Uzbekistan’s cotton industry. But it was acknowledgement of the existence of the problem by President Shavkat Mirziyoyev in his speech to the U.N. in September 2017 that truly opened the way for reform and ultimate lifting of the boycott.

On a more fundamental level, upholding the verdict against Yusupov and thereby effectively silencing a prominent, independent economist would also expose the failure of the Uzbek courts to adhere to rule of law and their continued resistance to an independent judiciary. This sends a further negative signal to businesses and investors who rely on a predictable and stable legal environment.