UN report on Xinjiang ups pressure on brands from Nike to Airbnb

Kuala Lumpur, Malaysia – A United Nations evaluation that China’s therapy of Uighurs might quantity to “crimes towards humanity” is the newest damning report to lift strain 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 potential measures” to respect human rights, together with by way of “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 corporations concerned in safety and surveillance, recommending a strengthened “human rights danger 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 “affordable to conclude” that compelled labour was going down within the area.

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

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

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

Authorized and reputational dangers

Main worldwide corporations, together with family manufacturers similar 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 implementing the Uyghur Compelled Labour Prevention Act, which bans the import of products from Xinjiang except it may be proved that they weren’t produced utilizing compelled labour.

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

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

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

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

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

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

Apart from focusing on imports tainted by compelled labour, the US and different Western nations have in recent times additionally sanctioned dozens of Chinese language corporations, a lot of them tech corporations similar to Hikvision and Dahua that produce surveillance expertise, 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 corporations suppose twice about beginning operations in Xinjiang, it could have little impact on Chinese language tech corporations already working within the area.

“China is just not just like the US the place some corporations or CEOs actively criticise sure authorities insurance policies,” Rollet advised Al Jazeera. “This dangers arrest, retaliation towards the corporate, or each. Folks’s Republic of China tech and surveillance corporations are closely concerned in authorities surveillance already, in order that they haven’t any actual qualms with Xinjiang.”

Whereas international manufacturers similar to Nike have pledged to beef up their auditing procedures towards compelled labour, worldwide corporations 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 beneath hearth 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 vehicles 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 influence”.

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

Whereas coming beneath strain for working in Xinjiang, worldwide manufacturers that do acknowledge issues about alleged human rights violations danger 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 issues 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 scenario, stated corporations working in Xinjiang had been in a bind.

“The UN report is prone to place further strain on corporations like Tesla and Airbnb who’ve already obtained destructive publicity for his or her operations in Xinjiang,” the lawyer stated.

“I might suspect that no matter remaining corporations are in Xinjiang will take into account 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 towards China.”