A major Canadian apparel company has cancelled a contract with a Chinese supplier and removed products from that source after a media expose showed that it was using forced North Korean labour.

The story was broken by broadcaster CBC, which, through undercover investigations, showed that the Dandong Huayang Textiles and Garment Co, was using North Korean “guest” workers, who worked under distressing conditions, potentially under a pilot project approved by Beijing in 2014.

The Canadian company, Reitmans, which has over 400 outlets in the country under multiple brands, issued a statement saying that it decided to “proactively stop issuing new business purchase orders with this supplier” at the end of 2020 and also decided to “pull all remaining inventory” of the styles originating from this supplier.

It added, “We are shaken by these new allegations about the presence of North Korean guest workers in what appears to be Dandong Huayang Textiles and Garments Ltd factories.”

The factory in question has refuted the allegation it was using “illegal workers”, according to CBC, in a televised report. The outlet also quoted experts as saying that using such labour was common practice in the city of Dandong, which lies close to the China-North Korea border.

It also said that using such labour could be in violation of a United Nations Security Council sanctions from 2017 that banned employing North Korean migrant labour and ordered their repatriation over concerns their earnings were helping to “to support” Pyongyang’s “prohibited nuclear and ballistic missile programmes”.

Reitmans, which is headquartered in Montreal, announced it will donate the unused clothing from the Chinese supplier to local charities.

This isn’t the first time that use of forced labour in Chinese factories has become an issue for a Canadian company as there has been criticism and condemnation of goods sourced from Xinjiang, where China has been accused of running alleged concentration camp-like facilities for the ethnic Uighur population.

Such reports led to the Canadian government announcing a policy this January “advancing measures to address the risk of forced labour from any country from entering Canadian and global supply chains and to protect Canadian businesses from becoming unknowingly complicit”.