HSBC's Online B2B Platform Allows Apparel Sellers to Trace Product Origins and Avoid Forced Labor

Serai, HSBC’s digital B2B platform, is making it easier for apparel companies to trace the origins of their products and avoid potential human rights violations, like those taking place in Xinjiang, China.

Xinjiang, one of the nation’s primary cotton hubs, has come under international scrutiny over the country’s alleged forced labor and internment of the region’s Uighur Muslim ethnic group.

The Serai platform allows apparel suppliers to put in supply chain details for each step of the manufacturing and distribution process, so companies that buy the products can see how and where they were made, from raw materials to the finished product.

“The platform adds greater visibility and transparency to the entire supply chain, and helps consolidate data at each stage,” Serai CEO Vivek Ramachandran told Yahoo Finance.

The U.S. has placed restrictions on apparel products coming from China due to the allegations of human rights abuse, so the level of transparency and documentation sets importers up for a smoother process once the products reach customs in America. Importers can submit certificates of origin and detailed documentation that the product was not made in the Xinjiang Region, which is subject to Withhold Release Orders.

“The U.S. Customs and Border Protection has asked for up to almost 44 documents,” Ramachandran said. “These documents can be shared by suppliers and supply chains over the platform.”

Suppliers can get third-party officials to validate data and publish it on the platform. From there, apparel brands buying the products can send those documents to CBP.

“We do not do any accreditation,” Ramachandran added. “We just provide a platform for buyers and suppliers to share data.”

Serai, which is a wholly owned subsidiary of HSBC, is a self-described “LinkedIn” network for apparel companies, with about 3,500 companies currently using it.

“What we want to do is build a platform that makes it easy for businesses to share information with each other, and get information from each other and build relationships with each other,” Ramachandran said.

Once more companies use the platform, and if they use this documentation feature as intended, it could create an increased level of transparency in the global apparel supply chain, making it easier for companies like Nike or Apple to avoid sourcing products from questionable facilities without their knowledge.