Kuala Lumpur, Malaysia – A United Nations review says China’s crackdown on Uyghurs could amount to “crimes against humanity,” the latest damning report to pressure multinationals like Nike and Tesla to rethink their operations in Xinjiang.
A long-awaited 45-page report by the United Nations High Commissioner for Human Rights (OHCHR) released on Thursday urged businesses in China’s far western region to take “all measures, including enhanced human rights protections” to respect human rights. due care”
Rights chief Michelle Bachelet’s final OHCR report recommended a robust “human rights risk assessment” for the sector, specifically targeting companies involved in security and surveillance. China’s Permanent Mission to the United Nations dismissed the report as “disinformation” and “a falsehood concocted by anti-China forces and false presumptions”.
The United Nations special rapporteur on slavery, Tomoya Obokata, concluded earlier this month that it was reasonable to conclude that forced labor was taking place in the region, following a condemned assessment by the United Nations.
Justin Nolan, an expert on the nexus between business and human rights at the University of New South Wales, said the report meant “there can no longer be any plausible denial of widespread human rights abuses by any state, business or individual.” Those that have and are still happening in Xinjiang.
“This is a challenge for many companies that continue to source products from Xinjiang,” Nolan told Al Jazeera, adding that companies should consider their supply chains tainted by modern slavery and not source from the region unless they can disprove it. He said.
“Leaving a region or factory should always be a last resort, but if it is not possible to independently verify the working conditions in your production facilities, based on this report, a company should assume the existence of human rights violations based on production. Xinjiang”
Legal and reputational risks
Major global companies, including household brands such as Nike, Airbnb, Tesla, Siemens and Volkswagen, have faced fire in recent years from rights groups and Western governments for doing business in Xinjiang, a major producer of cotton and polysilicon supplies. Key raw materials for solar panels.
A 2020 report by the Australian Strategic Policy Institute, a Canberra-based think tank, identified 82 global brands benefiting from Uighur labor.
In June, U.S. customs officials began enforcing the Uighur Forced Labor Protection Act, which bars Uyghurs from entering the country from Xinjiang unless it can be proven that they are not produced by forced labor.
Despite the law’s broad scope, which some multinational companies and trade groups have opposed as it would boost supply chains, US officials have indicated that enforcement will initially focus on four high-risk sectors: apparel, cotton, tomatoes and polysilicon. – Also prohibited companies from using direct shipments and forced labor from Xinjiang.
“China continues to dominate global clothing and textile production, and so the supply chain of many global brands has been disrupted by working with Chinese forced labourers,” said UNSW expert Nolan.
“This problem is not limited to brands that have direct production links with factories or fields in Xinjiang.”
Julian Chaise, an investment and trade expert at the City University of Hong Kong, said he expects more “convergence and isolation” between China and the West.
“While a number of countries began to require their companies to conduct due diligence on business risks in Xinjiang in early 2018, the UN report may require these countries to review and further strengthen their due diligence obligations,” Chaise told Al Jazeera.
“In practice, it means that companies directly – or indirectly – from Xinjiang or participating in the Xinjiang market will be scrutinized more than before from a purely commercial angle. They will be at risk of legality and reputation in their home countries.”
In addition to targeting products tainted by forced labor, the United States and other Western countries have in recent years targeted dozens of Chinese companies, many of them tech companies such as Hikvision and Dahua, that have allegedly cooperated in human rights abuses in Xinjiang. .
Charles Rowlett, an analyst at watchdog research group IPVM, said that while the UN review might make some multinational companies think twice about starting operations in Xinjiang, it will have little impact on Chinese technology companies operating in the region.
“China is not like America, where some companies or CEOs actively criticize some government policies,” Rolet told Al Jazeera. “This risks arrest, retaliation against the company, or both. The People’s Republic of China’s technology and intelligence agencies are already heavily involved in government surveillance, so they have no problem with Xinjiang.”
While global brands such as Nike have pledged to strengthen their auditing practices against forced labor, global companies have expressed interest in maintaining and expanding operations in the region.
In January, Tesla faced fire from US lawmakers and activists when the Texas-based electric car maker announced the opening of a new showroom in Xinjiang.
In June, Volkswagen’s outgoing China chief executive Stefan Wallenstein said the company planned to build cars in the region and was open to company-appointed human rights experts visiting the factory in the capital, Urumqi.
The German auto giant has repeatedly said its operations are not based on forced labor and that its presence in Xinjiang has a “positive impact.”
Nike, Airbnb, Volkswagen, Tesla and Siemens were asked to comment.
As they come under pressure to operate in Xinjiang, international brands aware of their concerns about alleged human rights abuses are at risk of provoking the ire of Chinese nationalists.
Last year, Nike and fashion retailer H&M faced boycotts after consumers, e-commerce sites and celebrities in China raised concerns about allegations of forced labor in their supply chains.
A Hong Kong-based business lawyer, who asked not to be named because of the sensitivity of the situation, said firms operating in Xinjiang are under tight control.
“The UN report could put more pressure on companies like Tesla and Airbnb that have received negative publicity for their operations in Xinjiang,” the lawyer said.
“I believe the rest of the companies in Xinjiang will consider this report and balance the ESG/reputational risks of continuing to do business with the response from the Chinese government and the Chinese people for appearing to be biased against China.”
