The United Nations Economic Commission for Europe (UNECE) has developed a system that uses blockchain technology to provide all information and data related to cotton products. Starting from the cotton cultivation stage, and even offer these products on the market, So that the consumer can make informed decisions from all sides when buying cotton products. This system also supports the verification of the declared data about the product by the authorities and companies.

The European markets are among the most consuming markets for cotton products, or that includes cotton, Such as clothes and sneakers. Although European policies prohibit the import of products whose manufacturing stage constitutes a violation of human rights or harm to the environment, Especially with regard to the issue of employment such as child and forced labour, However, there are no clear laws prohibiting the import of such products. The main reason for this is the lack of a reliable mechanism by which to verify the authenticity of the data contained in the labels or product label. In essence, labels often have complex data. blurred, Or even misleading at times.

In 2016, the European Parliament adopted a set of recommendations that it first considered in 2010. With the aim of establishing social and environmental standards by which products that violate these standards are prohibited from entering Europe, Especially those related to child labor, forced labor and practices that pollute the environment and are harmful to societies. But turning those standards into law requires irrefutable evidence that cannot be questioned until they are enforced on the ground.

Thus, The United Nations Economic Commission for Europe (UNECE) examined possible solutions, It came up with an innovative proposal that uses blockchain technologies to track cotton products at all stages of manufacturing, “From the field to the store.” It is worth noting that the way this tracking system is used is similar to the way blockchain technology is used in the field of digital currencies. Which makes it a reliable system, No modification or manipulation of existing records is permitted; It ensures the transparency and traceability standards adopted by the United Nations.

However, the COVID-19 pandemic has challenged the implementation of the system, At the same time, she stressed the need to use it to ensure the success of tracking and verification. The garment industry has been greatly affected by the outbreak of the pandemic, This made the factories reconsider their priorities at the operational level, This negatively affected the tracking process and adherence to standards. But the biggest challenge during the pandemic was to bring all stakeholders in the value chain around one table to discuss and agree on the implementation of the project. The issue of privacy and confidentiality of industrial information was another obstacle to the disclosure and sharing of data with industry partners. But in the end, solutions to those challenges were found or circumvented.

The United Nations Economic Commission for Europe (UNECE) launched a blockchain pilot project in early 2020 within the framework of the initiative “Improving Traceability and Due Diligence for Sustainable Value Chains in the Cotton Apparel and Footwear Sector” launched by the Commission with the United Nations Centre for Trade Facilitation and Electronic Commerce (UN/CEFACT) in cooperation with the International Trade Centre (ITC) and with financial support from the European Union. To provide governments and companies with the tools to verify that the required standards are being met. The University of Applied Sciences and Arts of Southern Switzerland (SUPSI) designed the blockchain system according to the model of the Global Electronic Product Code Information Service (EPCIS) standards, Which requires accurate identifying information in the tracking process. Technology solution service providers also participated in the implementation of the project, standard-setting bodies, Legal Counsel, and a provider of DNA marker services.

The pilot project was implemented in cooperation with key stakeholders at the operational level in the cotton clothing industry, Including trademarks, and the bodies authorized to issue accreditations, and textile manufacturers in Germany, Italy, Switzerland and the United Kingdom, Some of the largest cotton producing countries such as the United States and Egypt. The cooperation between all partners and stakeholders revolved around four points that must be adhered to when entering data into the blockchain system, These are the requirements of sustainability, the designation of data principals, data sharing, and the cooperation of the concerned authorities.

Must include sustainability requirements, For example data on the origin or origin of cotton products, The composition and proportion of cotton in them, use of chemicals, Due diligence in accordance with the conditions of the Organization for Economic Cooperation and Development (OECD). These requirements must also be accompanied by official supporting evidence and documentation. This includes inspection and inspection reports, audit reports, and confirmatory shipping notes, invoices and receipts, and related contracts.

In addition, The system includes an additional chip to increase confidence in the validity of the data by linking the digital tracking process with the physical tracking of the product, This is done by providing biomarkers such as DNA markers.

Although this blockchain system is in its experimental stage, it has yielded positive results on several levels. Including proving the validity of the concept on which the project was based in terms of the ability and reliability of blockchain technologies to track the product industry at all stages, and save data, and link the transactions of all stakeholders in real time, and increased transparency, In addition to the possibility of expanding the scope of the system to include the entire clothing and footwear sector, not just cotton.

The expected benefits include increasing consumer confidence in sustainability data and taking into account the social considerations announced in the label. As for companies, the system helps them to make decisions based on facts and full knowledge of risks. and increase trust among all stakeholders. The system also provides regulators with easy access to reliable data on manufacturers’ compliance with sustainability and employment standards. It also helps investors make their decisions about impact investing.

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