Some of the World’s biggest automobile manufacturers like BMW, General Motors and Volkswagen are linked through their suppliers with the controversial labour programme in China’s Xinjiang region which experts have blacklisted as pressing and indecent in the new report by Horizon Advisory, a US-based consultancy forum. China-based electric vehicle manufacturers including Nio and BYD are also linked to these controversial programmes in Xinjiang, according to the study.
These concerns are basically around the production of aluminium, also raising ample eyebrows on alleged human rights violations in its supply chain.
The modern complex supply chain is where raw materials would pass through multiple manufacturers or countries before being used in finished products, which is by all means not feasible for China since it would not make any definitive link between the plants in Xinjiang and all the other major brands. Moreover China has relentlessly discarded international criticisms of the work programmes, even branding allegations of forced labour ‘the lie of the century’. These actions are whitewashed by the Chinese officials as they refer to them as policies on reducing poverty and unemployment.
The US in a grand step to eradicate this system, has imposed sanctions on certain individuals and entities having ties with Xinjiang, also imports of cotton products, tomatoes and solar equipment have been restricted. Unless US importers and manufacturers can prove that the products are not a result of forced labour, the Uyghur Forced Labor Prevention Act will ban goods coming from Xinjiang, from July.
Volkswagen in reply to these heavy allegations, declared, it has no evidence of forced labour usage by its Xinjiang suppliers and is also not aware of any aluminium being used from the region in the production of their goods .
The company “takes its responsibility as companies in the field of human rights worldwide very seriously,” a spokesperson said, adding that any allegations are immediately investigated and contracts will be terminated if issues can’t be remedied. Though representatives for BMW, GM, Nio, BYD and China’s foreign ministry didn’t immediately respond to a request for comment.
“There’s going to be a huge challenge to a big swath of industries,” said Nathan Picarsic, a co-founder of Horizon who is scheduled to offer testimony on Friday at a hearing of the Forced Labor Enforcement Task Force. Company supply chains still depend on Chinese industrial policies which make “forced labour part and parcel of business as usual” for producers in Xinjiang, he said.
Xinjiang had never been on the radar for the production of aluminium until in 2020 when it shocked everyone by providing about 60% of the world’s aluminium requirements. Transportation including the automobile industry was its second largest consumer. Aluminium was never the metal of focus or discussion in China but Xinjiang attracted international attention by accounting for 9% of the global aluminium production.
Xinjiang Production and Construction Corps has been sanctioned by the US government over alleged human rights allegations yet the names of 8 eminent companies were revealed by Horizon who are directly linked with this labour programme.
Though documents alone cannot provide conclusive evidence of involvement in forced labour, the study on the aluminium sector found more indicators of complicity than in any previous case, said Emily de La Bruyere, also a co-founder of Horizon.
The report specified Xinjiang Zhonghe, a producer of high-purity aluminium, organising vocational programmes for rural migrant workers who are put in job transfer training which might be an extensive scheme to create forced labours.
According to its website and the Bloomberg data, Xinjiang Zhonghe is a supplier to auto companies including GM and BMW’s joint venture firms, Beijing WKW Automotive Parts and a supplier of car parts and exterior trims to VW’s China venture, BMW, BYD and Nio.
Xinjiang Zhonghe and Beijing WKW were not ready to comment on the allegations.
The report also identifies Shandong-based Xinfa Group, a wheel manufacturer with key sales networks in the US, Japan, South Korea and Canada, supplying to heavy duty trucks, luxury car and electric bus manufacturers. The company is also the owner of Xinjiang Sixth Division Aluminum, which was established through a 2009 agreement with the XPCC, filings reviewed by Horizon show. In one specific example as documented, the company is said to have sought 400 workers in 2020 from an employment transfer guidance station at Wugongtai town, identified by advocacy groups as a coordinator of forced labour programmes.
Xinfa didn’t immediately respond to a request for comment.
Human rights groups and a panel of UN experts for years now have raised their concern for the minority community in China being manhandled in such a way. Millions of labours are transferred every year to and from Xinjiang as a part of the government-sponsored labour programmes, as reported by the Bloomberg News media.
“For decades, the free world has dismissed the Chinese Communist Party’s outrageous slave labour practices to take advantage of its cheap manufacturing,” said Florida Senator Marco Rubio, who has pushed for tougher action on forced labour. The study on aluminium operations “exposes the pervasive nature of China’s forced labour abuses in Xinjiang and shows just how reliant major international companies are on slave labour,” he said.
Only Tianshan Aluminum Group is publicly held among the suppliers named by Horizon. The company’s Xinjiang-based unit is considered in government documents as an employment poverty elevation base, formulating its role in labour programmes, and according to Horizon, multiple local reports also detail specific transfers. Recruitment materials also describe the firm’s support for the XPCC, the consultancy said.
Tianshan didn’t immediately respond to requests for comment.
Tianshan’s biggest investors are mostly Chinese, according to data compiled by Bloomberg. Norges Bank Investment Management occupied a position in late 2021 and established itself among the company’s 50 biggest shareholders, according to Bloomberg data.
“As an investor, we expect companies to respect human rights and take human rights into account in their operations,” Norges Bank Investment Management refered in a statement, though it refuses to comment on individual investments or specifically on Tianshan.
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