UN report on Xinjiang ups pressure on brands like Tesla, Airbnb | Business and Economy


Kuala Lumpur, Malaysia – A United Nations evaluation that China’s therapy of Uighurs might quantity to “crimes in opposition to humanity” is the newest damning report to boost stress on multinationals like Nike and Tesla to rethink their operations in Xinjiang.

In a long-awaited 45-page report launched on Thursday, the UN Excessive Commissioner for Human Rights (OHCHR) known as on companies in China’s far-western area to take “all doable measures” to respect human rights, together with via “enhanced human rights due diligence”.

The OHCHR report, launched on the final day of rights chief Michelle Bachelet’s time period, made explicit point out of firms concerned in safety and surveillance, recommending a strengthened “human rights threat evaluation” for the sector. China’s Everlasting Mission to the UN rejected the report as “disinformation” and “lies fabricated by anti-China forces and out of presumption of guilt”.

The UN’s damning evaluation comes after Tomoya Obokata, the UN particular rapporteur on slavery, stated earlier this month that it was “cheap to conclude” that compelled labour was happening within the area.

Justine Nolan, an professional on the intersection between enterprise and human rights on the College of New South Wales, stated the report meant it was “not doable for any state, enterprise or particular person to have believable deniability in regards to the wide-ranging human rights abuses which have, and are persevering with to happen, in Xinjiang.”

“This poses a problem for a lot of firms who’re persevering with to supply merchandise from Xinjiang,” Nolan instructed Al Jazeera, including that companies ought to assume their “provide chains are tainted with trendy slavery and shouldn’t be sourcing from the area until they’ll disprove this”.

“Pulling out of a area or manufacturing unit ought to at all times be a final resort however whether it is merely unimaginable to independently confirm working circumstances in your manufacturing amenities, then based mostly on this report an organization ought to assume there are ongoing human rights abuses based mostly on manufacturing popping out of Xinjiang.”

Authorized and reputational dangers

Main worldwide firms, together with family manufacturers corresponding to Nike, Airbnb, Tesla, Siemens and Volkswagen, have confronted blowback from rights teams and Western governments in recent times for doing enterprise in Xinjiang, a significant producer of the worldwide provide of cotton and polysilicon, the important thing uncooked materials for photo voltaic panels.

A 2020 report by the Australian Strategic Coverage Institute, a Canberra-based think-tank, recognized 82 worldwide manufacturers as benefitting from Uighur labour.

In June, United States customs authorities began imposing the Uyghur Pressured Labour Prevention Act, which bans the import of products from Xinjiang until it may be proved that they weren’t produced utilizing compelled labour.

Regardless of the sweeping scope of the laws, which some multinational firms and enterprise teams opposed on the grounds that it could upend provide chains, US officers have indicated that enforcement shall be initially targeted on 4 high-risk sectors – attire, cotton, tomatoes and polysilicon – in addition to shipments coming instantly from Xinjiang and firms sanctioned for utilizing compelled labour.

“China continues to dominate the worldwide manufacturing of clothes and textiles, and so the provision chains of many world manufacturers have been marred by associations with Chinese language compelled labour,” stated Nolan, the UNSW professional.

“It is a drawback not just for manufacturers with direct manufacturing connections to factories or fields in Xinjiang.”

Julien Chaisse, an professional in funding and commerce at Metropolis College of Hong Kong, stated he anticipated additional “decoupling and isolation” between China and Western nations.

“Though many nations had began as early as 2018 to request their firms to carry out tighter due diligence on the dangers of doing enterprise in Xinjiang, the UN report is probably going going to require these nations to evaluation and additional tighten the due diligence obligations,” Chaisse instructed Al Jazeera.

“Virtually, it means from a pure enterprise angle that firms sourcing instantly – and even not directly – from Xinjiang or partaking within the Xinjiang market shall be scrutinised much more than earlier than; they are going to be uncovered to authorized and reputational dangers of their nations of origin.”

Volkswagen has operated a manufacturing unit in Xinjiang’s capital Urumqi since 2013 [File: China Daily via Reuters]

Moreover concentrating on imports tainted by compelled labour, the US and different Western nations have in recent times additionally sanctioned dozens of Chinese language companies, a lot of them tech firms corresponding to Hikvision and Dahua that produce surveillance know-how, for his or her alleged complicity in human rights violations in Xinjiang.

Charles Rollet, an analyst at surveillance analysis group IPVM, stated that whereas the UN evaluation may make some multinational firms assume twice about beginning operations in Xinjiang, it could have little impact on Chinese language tech companies already working within the area.

“China shouldn’t be just like the US the place some firms or CEOs actively criticise sure authorities insurance policies,” Rollet instructed Al Jazeera. “This dangers arrest, retaliation in opposition to the corporate, or each. Individuals’s Republic of China tech and surveillance companies are closely concerned in authorities surveillance already, so that they don’t have any actual qualms with Xinjiang.”

Whereas world manufacturers corresponding to Nike have pledged to beef up their auditing procedures in opposition to compelled labour, worldwide companies have nonetheless proven an urge for food for sustaining and even increasing operations within the area.

In January, Tesla, the Texas-based electrical carmaker, got here underneath fireplace from US lawmakers and rights activists when it introduced the opening of a brand new showroom in Xinjiang.

In June, Volkswagen’s outgoing China CEO Stephan Wollenstein stated the corporate deliberate to maintain making automobiles within the area and was open to a go to by a company-nominated human rights specialist to its plant within the capital, Urumqi.

The German auto big has repeatedly stated that its operations don’t depend on compelled labour and insisted its presence in Xinjiang has a “constructive impression”.

Nike, Airbnb, Volkswagen, Tesla, and Siemens have been contacted for remark.

Whereas coming underneath stress for working in Xinjiang, worldwide manufacturers that do acknowledge considerations about alleged human rights violations threat invoking the wrath of Chinese language nationalists.

Final yr, Nike and style retailer H&M confronted boycotts by shoppers, e-commerce websites and celebrities in China after expressing considerations about allegations of compelled labour of their provide chains.

A Hong Kong-based commerce lawyer, who requested anonymity as a result of sensitivity of the state of affairs, stated companies working in Xinjiang had been in a bind.

“The UN report is more likely to place further stress on firms like Tesla and Airbnb who’ve already obtained unfavorable publicity for his or her operations in Xinjiang,” the lawyer stated.

“I might suspect that no matter remaining firms are in Xinjiang will think about this report, and stability the ESG/reputational dangers for persevering with to do enterprise there with backlash from Chinese language authorities and the Chinese language public for showing discriminatory in opposition to China.”

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