Global carmakers including GM, Tesla, BYD, Toyota and Volkswagen are failing to minimise the risk of Uyghur forced labour being used in aluminium sourcing.
A report by Human Rights Watch said most OEMs have done too little to map their aluminium supply chains and identify the risks of forced labour, while some carmakers “have succumbed to Chinese government pressure to apply weaker human rights and responsible sourcing standards” at their Chinese joint ventures compared to their global operations, increasing the risk of exposure to forced labour in Xinjiang.
Xinjiang, an autonomous territory in northwest China, is home to the predominantly Muslim Turkic Uyghur people who have long been oppressed by the Chinese government. Human Rights Watch said the link between the region, the aluminium industry and forced labour is the Chinese government-backed labour transfer programmes which coerce Uyghurs and other Turkic Muslims into jobs in Xinjiang and other regions. The international organisation said it “found credible evidence that aluminium producers in Xinjiang are participating in labour transfers”. Almost a tenth of the world’s aluminium is produced in the Xinjiang Uyghur Autonomous Region (XUAR), and around 18% of all aluminium consumed globally is used by carmakers. While the material is used in many different automotive parts across EV and ICE vehicles, it is particularly important in EVs due to its light weight.
However, once aluminium has been melted down or mixed with other metals, it can be impossible to determine where it came from, allowing tainted material to enter supply chains undetected.
“Car companies simply don’t know the extent of their links to forced labour in Xinjiang in their aluminium supply chains,” said Jim Wormington, senior researcher and advocate for corporate accountability at Human Rights Watch.
In December 2022, the US Senate Committee on Finance sent letters to Ford, GM, Honda, Mercedes-Benz, Stellantis, Tesla, Toyota and VW Group to look into the use of forced labour in the automotive supply chain in XUAR. In the same year, the United States’ Uyghur Forced Labor Prevention Act (UFLPA) came into effect, prohibiting the importation of goods made with forced labour in the region.
VW
Three of the carmakers – GM, Toyota and VW – operate in China through joint ventures (JVs). Volkswagen’s 50:50 joint venture with Chinese carmaker SAIC, SAIC VW Automotive, operates a facility in Ürümchi, Xinjiang’s capital, but VW told HRW that it is no longer a manufacturing plant, functioning only as a distribution hub, and doesn’t source raw materials from the region.
A spokesperson for VW told Automotive Logistics that it takes its responsibility in the area of human rights “very seriously worldwide, including in China”. The statement from the spokesperson said the carmaker adheres closely to the UN Guiding Principles on Business and Human Rights, which are a part of the company’s Code of Conduct. The spokesperson added that VW has a risk management system for due diligence in the procurement of raw materials, and has a careful supplier selection process and monitoring measures in place. Suppliers in the Peoples’ Republic of China that are commissioned directly by VW are already in the scope of sustainable procurement measures, however, if VW does become aware of any allegations, it claims to investigate them via its Supply Chain Grievance Mechanism, with serious offences such as forced labour potentially leading to termination of the contract.
VW told HRW that the company is not legally responsible under Germany’s supply chain law for human rights impacts in their Chinese JV’s supply chain because the law only covers subsidiaries that have “decisive influence”, and SAIC has operational control of the JV. However, the HRW argued that under the UN Guiding Principles, companies have a responsibility to use whatever leverage they have in a JV to ensure the prevention and mitigation of risk of forced labour.
The carmaker told Human Rights Watch: “We have no transparency about the supplier relationships of the non-controlled shareholding SAIC VW.”
GM
GM did not respond to Human Rights Watch’s questions about the oversight of Chinese joint ventures, their supply chain mapping or the origin of their aluminium, but said: “GM is committed to conducting due diligence and working collaboratively with industry partners, stakeholders and organisations to address any potential risks related to forced labour in our supply chain.”
The carmaker has 10 joint ventures, two wholly owned foreign enterprises and more than 58,000 employees in China. In January, the carmaker’s truck and SUV brand, GMC, announced that it will begin sales of its SUV Yukon full-size model in China this year, however a GM spokesperson told Automotive Logistics at the time that the SUVs will not be built in the country, but instead at GM’s Arlington, Texas assembly plant.
GM did not respond to Automotive Logistics’ request for comment.
Toyota and BYD also did not respond to Human Rights Watch or to Automotive Logistics.
Tesla
While Tesla does not operate through joint ventures in China, the OEM does build cars for China’s domestic market and for export at its Shanghai Gigafactory.
The company told Human Rights Watch that it had intensified supply chain mapping for aluminium, “driven in part by global trade regulations to combat forced labour”. Tesla said that it had “in several cases” mapped its supply chain back to the mining level and had not found evidence of forced labour. The company did not, however, specify how much of the aluminium in its cars remains of unknown origin and so could be linked to Xinjiang.
Tesla did not respond to Automotive Logistics’ request for comment.
Recommendations to OEMs
In the report, the HRW has made many recommendations to automotive companies, to help them mitigate the risk of having forced labour in their supply chains:
- Companies should take measures to meet responsibilities under the UN Guiding Principles on Business and Human Rights to do this, and unless due diligence is possible in Xinjiang, should immediately disengage from any direct supplier in the region.
- OEMs should work with suppliers to identify alternative aluminium sources, including through renegotiating supply contracts and adjusting pricing if necessary.
- Suppliers and sub-suppliers to “responsibly disengage” from companies that produce or source aluminium in the region within the next 12 months.
- Require suppliers, including commodities traders, to disclose the source of their aluminum, including the location of the smelters that produced it.
- Require suppliers and sub-suppliers to, within a specified period not to exceed 12 months, responsibly disengage from companies that produce or source aluminum within Xinjiang.
- Work with suppliers to identify alternative aluminum sources, including through renegotiating supply contracts and adjusting pricing if necessary.
- When discussing and responding to forced labor risks, work with suppliers to develop procedures to respond to threats, risks, or actual instances of retaliation from the Chinese government or other actors against the company, its suppliers, or their staff.
- Responsibly disengage from any supplier unwilling to take the above steps.
- Map aluminium supply chains to the level of smelters, alumina refineries, and bauxite mines.
- Ensure that the company’s joint ventures implement supply chain mapping, disclosure, disengagement, and due diligence measures.
- Avoid reliance on certification initiatives, including the Aluminium Stewardship Initiative, as an indicator of whether suppliers are sourcing responsibly and addressing the risk of links to forced labor in Xinjiang.
- Do not conduct or commission audits in Xinjiang unless the human rights situation improves to such an extent that it is possible for auditors to have unfettered access to the region and freedom to conduct interviews with workers without risk of retaliation against workers or auditors.
- Establish and maintain an effective and accessible grievance mechanism that nongovernmental organizations can access to raise concerns about human rights abuses in the company’s supply chain, including forced labor in Xinjiang. Even if located and managed outside China, any such grievance mechanism should have procedures in place to address the risk of retaliation against complainants or other actors by the Chinese government.
- Establish ambitious, measurable, science-based targets for sourcing aluminum, inside and outside China, from renewable energy sources, consistent with limiting global warming to 1.5 degrees Celsius in line with the Paris Climate Agreement.
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