Volkswagen considering future with Chinese partner over forced labour claims
Carmaker in talks with SAIC following reports in German newspaper
Volkswagen has confirmed it is in talks with its partner in China about the future business direction after a German newspaper reported alleged evidence of forced labour.
As is required by all non-Chinese carmakers who wish to operate in the country, Volkswagen has a joint venture with a local company to produce vehicles. Its partnership is with SAIC, which also owns the MG and Maxus marques, along with many Chinese car brands.
The resulting SAIC Volkswagen joint venture is not under full control of Volkswagen Group. However, any claims of slavery or other practices that go against its own corporate responsibility pledges would be of concern to the German carmaker.
Its discussions with SAIC follow a report in Handelsblatt, a business newspaper in Germany, which said that independent researcher Adrian Zenz had found evidence of the use of forced labour in the construction of SAIC Volkswagen’s test track in Turpan, Xinjiang.
Zenz told Reuters that he had found photos and statements online, including on the website of an engineering company hired by Volkswagen and SAIC in Xinjiang, which indicated that Uyghurs were employed to construct the test track under poverty alleviation programmes that United Nations experts have said often involve forced labour.
In August 2022, a UN report on the Xinjiang region found “serious human rights violations” that may amount to “crimes against humanity”.
Human rights groups have long highlighted alleged evidence of abuses against the ethnic minority Uyghur population, including forced labour in detention camps.
Sir Iain Duncan-Smith, the MP for Chingford and Woodford Green, who led the Conservative Party from September 2001 to November 2003, told Driving.co.uk in May 2023: “[China] is a terrible country. It’s run by an awful government that is brutal. It locks up dissidents and tortures them; we know very well that it’s committing genocide now in the Xinjiang region, getting rid of the Uyghur – an ethnically Muslim group. They put the kids into re-education camps and they’ve sterilised the women.
“The men have been shipped off to forced labour camps, and there they build all sorts of products that we buy without question, which are in the supply chains. Many of our solar arrays contain stuff that’s probably been mined and refined through slave labour.”
Beijing rejects such allegations and argues that its policies merely counter extremism and promote development.
In April 2023, China’s foreign ministry told the Financial Times that “anti-China forces” had “spread sensationalised lies and fallacies” about Xinjiang, where “people of all ethnicities live in peace and work happily”.
Following Duncan-Smith’s claims, Volkswagen told Driving.co.uk:
“The Volkswagen Group stands firmly against forced and child labour in connection with its business activities around the globe. The company takes its responsibility for human rights very seriously in all regions of the world, including China, adhering closely to the UN Guiding Principles on Business and Human Rights. These principles form part of the company’s Code of Conduct. We not only adhere to high standards within the Volkswagen Group, but also work to make sure that these values are upheld throughout the supply chains and do not tolerate any exceptions whatsoever.
“Even though in Chinese joint venture sites, the joint venture bears responsibility for the employees, all partners agree that basic values and rights must be respected and protected. Ensuring good working conditions for all employees is of top priority.
“Volkswagen and its partner SAIC are also in full agreement that human rights violations will not be tolerated in the Urumqi plant, which is operated by a subsidiary of the joint venture SAIC Volkswagen. Decisions affecting the joint venture’s subsidiary in the Xinjiang region cannot be made by Volkswagen AG alone, but only with the joint venture partner. This also applies to possible audits of individual production sites.”
A review of its Urumqi plant at the start of 2023 found “no indication of any human rights violations or general objections regarding working conditions at SAIC Volkswagen (Xinjiang) Automotive Co. Ltd.,” according to Volkswagen.
However, the test facility was not audited together with the Urumqi site, Reuters reported. When asked why, Volkswagen told the news agency “that would not have been possible because the two sites were owned by different operating companies,” though did not name the companies.
Regarding the Handelsblatt report, a spokesperson for Volkswagen told Driving.co.uk: “The Volkswagen Group is currently in talks with the non-controlled joint venture SAIC-Volkswagen about the future direction of business activities in Xinjiang province. Various scenarios are currently being intensively examined.”
The spokesperson declined at this stage to elaborate on what those scenarios might involve.
However, Zenz believes the revelations should force Volkswagen into taking unprecedented action. The reporter told Reuters that VW’s move to “review options” for the site was inadequate in light of the most recent revelations, given criticism of the carmaker’s Xinjiang engagement was not new.
“In my opinion Volkswagen has to publicly announce that they’re going to get out as soon as they can,” he said.
Driving.co.uk has attempted to contact SAIC but was not immediately successful. A previous attempt to contact MG’s press office about human rights claims was also unsuccessful.
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