Much of the world’s polysilicon, used to make solar panels, comes from Xinjiang, where the United States has accused China of committing genocide through its repression of Uyghurs.The White House announced steps on Thursday to crack down on forced labor in the supply chain for solar panels in the Chinese region of Xinjiang, including a ban on imports from a silicon producer there. More
The U.S. trade representative called for stronger worker protections in trade policy as the administration looks to curb the negative impact of globalization.Katherine Tai, the United States trade representative, emphasized in a speech on Thursday that America is focused on protecting workers through trade policy and that it would try to push trading partners to lift wages, allow collective bargaining and end forced labor practices.The speech, Ms. Tai’s first significant policy address, highlighted the Biden administration’s goal of re-empowering workers and minimizing the negative effects of globalization, which has encouraged companies to move jobs and factories offshore in search of cheaper labor and materials.Less clear is how the administration will, in practice, accomplish those goals.“For a very long time, our trade policies have been shaped by folks who are used to looking at the macro picture — big economic sectors,” Ms. Tai said in an interview ahead of the speech, which she delivered at an A.F.L.-C.I.O. town hall. “We’ve lost sight of the impact of these policies, the really real and direct impact they can have on regular people’s lives, and on our workers’ livelihoods.”Ms. Tai, who spoke from prepared remarks, portrayed the administration’s push as trying to correct for decades of trade policy that put company profits ahead of workers and helped erode worker power in the United States.“A worker-centered trade policy means addressing the damage that U.S. workers and industries have sustained from competing with trading partners that do not allow workers to exercise their internationally recognized labor rights,” she said. “This includes standing up against worker abuse and promoting and supporting those rights that move us toward dignified work and shared prosperity: the right to organize and to collectively bargain.”Ms. Tai emphasized that the United States is already enforcing worker protections in the new North American trade agreement and trying to curb forced labor in the fishing industry at the World Trade Organization.On Wednesday, the Biden administration made its second request in a month for Mexico to review whether workers at two separate auto facilities were being denied the collective bargaining rights that were agreed to under the terms of the United States-Mexico-Canada Agreement.“These enforcement actions matter,” Ms. Tai said in her speech, noting the aim is to “protect the rights of workers, particularly those in low-wage industries who are vulnerable to exploitation.”Last month, the administration submitted a proposal to the World Trade Organization aimed at curbing “harmful subsidies to fishing activities that may be associated with the use of forced labor, such as illegal, unreported, and unregulated fishing.”Still, it remains to be seen how — or whether — the United States will effectively push for stronger labor standards outside of North America. Ms. Tai’s speech did not say directly how the administration would try and encourage some of its biggest trading partners, like China, to adjust trade practices.Asked what the plans are for other continents, Ms. Tai said, “In every direction that we have opportunities to formulate trade policies, we see opportunities to bring this worker-centered spirit to our work.”When it comes to China, she suggested that the goal was to work with other countries that have economic structures similar to the United States’, pairing with allies to “put ourselves on stronger competitive footing, to compete for the industries of the future.” More
President Biden’s vow to work with China on issues like climate change is clashing with his promise to defend human rights.WASHINGTON — President Biden has repeatedly pledged to work with China on issues like climate change while challenging Beijing on human rights and unfair trade practices.But those goals are now coming into conflict in the global solar sector, presenting the Biden administration with a tough choice as it looks to expand the use of solar power domestically to reduce the United States’ carbon dioxide emissions.The dilemma stems from an uncomfortable reality: China dominates the global supply chain for solar power, producing the vast majority of the materials and parts for solar panels that the United States relies on for clean energy. And there is emerging evidence that some of China’s biggest solar companies have worked with the Chinese government to absorb minority workers in the far western region of Xinjiang, programs often seen as a red flag for potential forced labor and human rights abuses.This week, Mr. Biden is inviting world leaders to a climate summit in Washington, where he is expected to unveil an ambitious plan for cutting America’s emissions over the next decade. The administration is already eyeing a goal of generating 100 percent of the nation’s electricity from carbon-free sources such as solar, wind or nuclear power by 2035, up from only 40 percent last year. To meet that target, the United States may need to more than double its annual pace of solar installations.That is likely to be an economic boon to China, since the United States still relies almost entirely on Chinese manufacturers for low-cost solar modules, many of which are imported from Chinese-owned factories in Vietnam, Malaysia and Thailand.China also supplies many of the key components in solar panels, including more than 80 percent of the world’s polysilicon, a raw material that most solar panels use to absorb energy from sunlight. Nearly half of the global supply comes from Xinjiang alone. In 2019, less than 5 percent of the world’s polysilicon came from U.S.-owned companies.“It’s put the Democrats in a hard position,” said Francine Sullivan, the vice president for business development at REC Silicon, a polysilicon maker based in Norway with factories in the United States. “Do you want to stand up to human rights in China, or do you want cheap solar panels?”The administration is increasingly under pressure from influential supporters not to turn a blind eye to potential human rights abuses in order to achieve its climate goals.“As the U.S. seeks to address climate change, we must not allow the Chinese Communist Party to use forced labor to meet our nation’s needs,” Richard L. Trumka, the president of the A.F.L.-C.I.O., wrote in a letter on March 12 urging the Biden administration to block imports of solar products containing polysilicon from the Xinjiang region.China’s hold over the global solar sector has its roots in the late 2000s. As part of an effort to reduce dependence on foreign energy, Beijing pumped vast amounts of money into solar technology, enabling companies to make multibillion-dollar investments in new factories and gain market share globally.China’s boom in production caused the price of panels to plummet, accelerating the adoption of solar power worldwide while forcing dozens of companies in the United States, Europe and elsewhere out of business.A solar equipment factory in China’s Jiangxi Province in January. China’s hold over the global solar sector has its roots in the late 2000s, when Beijing began pumping vast amounts of money into solar technology.CHINATOPIX, via Associated PressIn the past few years, Chinese polysilicon manufacturers have increasingly shifted to Xinjiang, lured by abundant coal and cheap electricity for their energy-intensive production.Xinjiang is now notorious as the site of a vast program of detention and surveillance that the Chinese government has carried out against Muslim Uyghurs and other minority groups. Human rights groups say the Chinese authorities may have detained a million or more minorities in camps and other sites where they face torture, indoctrination and coerced labor.In a report last year, Horizon Advisory, a consultancy in Washington, cited Chinese news reports and government announcements suggesting that major Chinese solar companies including GCL-Poly, East Hope Group, Daqo New Energy, Xinte Energy and Jinko Solar had accepted workers transferred with the help of the Chinese government from impoverished parts of Xinjiang.Jinko Solar denied those allegations, as did the Chinese government. Zhang Longgen, a vice chairman of Xinjiang Daqo — a unit of one of the companies cited by Horizon Advisory — said that the polysilicon plants were not labor intensive, and that the company’s workers were freely employed and could quit if they wanted, according to Global Times, a Chinese Communist Party-owned newspaper. The report said that only 18 of the 1,934 workers at Xinjiang Daqo belonged to ethnic minorities, and that none were Uyghur.The other companies did not respond to requests for comment.Experts have had difficulty estimating how many laborers may have been coerced into working in Chinese solar facilities given restrictions on travel and reporting in Xinjiang. Many multinational companies have also struggled to gain access to the region’s factories to rule out the risk of forced labor in their supply chains.Mark Widmar, the chief executive of First Solar, a solar panel maker based in the United States, said exposure to Xinjiang was “the unfortunate reality for most of the industry.”“How the industry has evolved, it’s made it difficult to be comfortable that you do not have some form of exposure,” he said. “If you try to follow the spaghetti through the spaghetti bowl and really understand where your exposure is, that’s going to be tough.”The revelations have attracted attention from lawmakers and customs officials, and prompted concerns among solar investors that the sector could be destined for tougher regulation.Under the Trump administration, American customs agents took a harder line against products reportedly made with forced labor in Xinjiang, including a sweeping ban on cotton and tomatoes from the region. Those restrictions have forced a reorganization of global supply chains, especially in the apparel sector.The Biden administration has said it is still reviewing the Trump administration’s policies, and it has not yet signaled whether it will pursue other bans on products or companies. But both Mr. Biden and his advisers have insisted that the United States plans to confront China on human rights abuses in Xinjiang.A spokeswoman for the National Security Council said that the draconian treatment of Uyghurs “cannot be ignored,” and that the administration was “studying ways to effectively ensure that we are not importing products made from forced labor,” including solar products.Congress may also step in. Since the beginning of the year, the House and Senate have reintroduced versions of the Uyghur Forced Labor Prevention Act, which would assume that imports from Xinjiang were made with forced labor and block them from American ports, unless the importer showed proof otherwise. The House version of the bill singles out polysilicon as a priority for enforcement.The legislation has broad bipartisan support and could be included in a sweeping China-related bill that Democrats hope to introduce this year, according to congressional staff members.Amid the threat of new restrictions, the Solar Energy Industries Association, a trade group, has led an effort to help solar companies trace materials in their supply chain. It has also organized a pledge of 236 companies to oppose forced labor and encouraged companies to sever any ties with Xinjiang by June.Some Chinese companies have responded by reshuffling their supply chains, funneling polysilicon and other solar products they manufacture outside Xinjiang to American buyers, and then directing their Xinjiang-made products to China and other markets.Analysts say this kind of reorganization is, in theory, feasible. About 35 percent of the world’s polysilicon comes from regions in China other than Xinjiang, while the United States and the European Union together make up around 30 percent of global solar panel demand, according to Johannes Bernreuter, a polysilicon market analyst at Bernreuter Research.John Smirnow, the general counsel for the Solar Energy Industries Association, said most solar companies were already well on their way toward extricating supply chains from Xinjiang.A high-security facility that is believed to be a re-education camp in the Xinjiang region of China in 2019. President Biden and his advisers have said that they plan to confront China on human rights abuses in Xinjiang.Greg Baker/Agence France-Presse — Getty Images“Our understanding is that all the major suppliers are going to be able to supply assurances to their customers that their products coming into the U.S. do not include polysilicon from the region,” he said.But it is unclear if this reorganization will quell criticism. Episodes of forced labor have also been reported in Chinese facilities outside Xinjiang where Uyghurs and other minorities have been transferred to work. And restrictions on products from Xinjiang could spread to markets including Canada, Britain and Australia, which are debating new rules and guidelines.Human rights advocates have argued that allowing Chinese companies to cleave their supply chains to serve American and non-American buyers may do little to improve conditions in Xinjiang and have pressed the Biden administration for stronger action.“The message has to be clear to the Chinese government that this economic model is not going to be supported by governments or businesses,” said Cathy Feingold, the director of the A.F.L.-C.I.O.’s International Department.Chinese companies are also facing pressure from Beijing not to accede to American demands, since that could be seen as a tacit criticism of the government’s activities in Xinjiang.In a statement in January, the China Photovoltaic Industry Association and China Nonferrous Metals Industry Association condemned “irresponsible statements” from U.S. industries, which they said were directed at curbing Xinjiang’s development and “meddling in Chinese domestic affairs.”“It is widely known that the ‘forced labor’ issue is in its entirety the lie of the century that the United States and certain other Western countries have concocted from nothing,” they said.On Monday, Secretary of State Antony Blinken warned that the United States was falling behind China on clean energy production.But bringing solar manufacturing back to the United States could be a challenge, analysts said, given the time needed to significantly bolster American production, and it could also raise the price of solar panels in the short term.The United States still has a handful of facilities for manufacturing polysilicon, but they have faced grim prospects since 2013, when China put retaliatory tariffs on American polysilicon. Hemlock Semiconductor mothballed a new $1.2 billion facility in Tennessee in 2014, while REC Silicon shut its polysilicon facility in Washington in 2019.China has promised to carry out large purchases of American polysilicon as part of a trade deal signed last year, but those transactions have not materialized.In the near term, tensions over Xinjiang could be a boon for the few remaining U.S. suppliers. Ms. Sullivan said some small U.S. solar developers had reached out to REC Silicon in recent months to inquire about non-Chinese products.But American companies need the promise of reliable, long-term orders to scale up, she said, adding that when she explains the limited supply of solar products that do not touch China, people become “visibly ill.”“This is the big lesson,” Ms. Sullivan added. “You become dependent on China, and what does it mean? We have to swallow our values in order to do solar.”Chris Buckley More
A user’s guide to the latest cross-border social media fashion crisis.Last week, calls for the cancellation of H&M and other Western brands went out across Chinese social media as human rights campaigns collided with cotton sourcing and political gamesmanship. Here’s what you need to know about what’s going on and how it may affect everything from your T-shirts to your trench coats.What’s all this I’m hearing about fashion brands and China? Did someone make another dumb racist ad?No, it’s much more complicated than an offensive and obvious cultural faux pas. The issue centers on the Xinjiang region of China and allegations of forced labor in the cotton industry — allegations denied by the Chinese government. Last summer, many Western brands issued statements expressing concerns about human rights in their supply chain. Some even cut ties with the region all together.Now, months later, the chickens are coming home to roost: Chinese netizens are reacting with fury, charging the allegations are an offense to the state. Leading Chinese e-commerce platforms have kicked major international labels off their sites, and a slew of celebrities have denounced their former foreign employers.Why is this such a big deal?The issue has growing political and economic implications. On the one hand, as the pandemic continues to roil global retail, consumers have become more attuned to who makes their clothes and how they are treated, putting pressure on brands to put their values where their products are. One the other, China has become an evermore important sales hub to the fashion industry, given its scale and the fact that there is less disruption there than in other key markets, like Europe. Then, too, international politicians are getting in on the act, imposing bans and sanctions. Fashion has become a diplomatic football.This is a perfect case study of what happens when market imperatives come up against global morality.Tell me more about Xinjiang and why it is so important.Xinjiang is a region in northwest China that happens to produce about a fifth of the world’s cotton. It is home to many ethnic groups, especially the Uyghurs, a Muslim minority. Though it is officially the largest of China’s five autonomous regions, which in theory means it has more legislative self-control, the central government has been increasingly involved in the area, saying it must exert its authority because of local conflicts with the Han Chinese (the ethnic majority) who have been moving into the region. This has resulted in draconian restrictions, surveillance, criminal prosecutions and forced-labor camps.OK, and what about the Uyghurs?A predominantly Muslim Turkic group, the Uyghur population within Xinjiang numbers just over 12 million, according to official figures released by Chinese authorities. As many as one million Uyghurs and other Muslim minorities have been retrained to become model workers, obedient to the Chinese Communist Party via coercive labor programs.Burberry created signature check “skins” for characters in the Honor of Kings video game, which its owner, the Chinese technology company Tencent, removed over the company’s stand on cotton produced in the Xinjiang region.via Honor of KingsSo this has been going on for awhile?At least since 2016. But after The New York Times, The Wall Street Journal, Axios and others published reports that connected Uyghurs in forced detention to the supply chains of many of the world’s best-known fashion retailers, including Adidas, Lacoste, H&M, Ralph Lauren and the PVH Corporation, which owns Calvin Klein and Tommy Hilfiger, many of those brands reassessed their relationships with Xinjiang-based cotton suppliers.In January, the Trump administration banned all imports of cotton from the region, as well as products made from the material and declared what was happening “genocide.” At the time, the Workers Rights Consortium estimated that material from Xinjiang was involved in more than 1.5 billion garments imported annually by American brands and retailers.That’s a lot! How do I know if I am wearing a garment made from Xinjiang cotton?You don’t. The supply chain is so convoluted and subcontracting so common that often it’s hard for brands themselves to know exactly where and how every component of their garments is made.So if this has been an issue for over a year, why is everyone in China freaking out now?It isn’t immediately clear. One theory is that it is because of the ramp-up in political brinkmanship between China and the West. On March 22, Britain, Canada, the European Union and the United States announced sanctions on Chinese officials in an escalating row over the treatment of Uyghurs in Xinjiang.Not long after, screenshots from a statement posted in September 2020 by H&M citing “deep concerns” about reports of forced labor in Xinjiang, and confirming that the retailer had stopped buying cotton from growers in the region, began circulating on Chinese social media. The fallout was fast and furious. There were calls for a boycott, and H&M products were soon missing from China’s most popular e-commerce platforms, Alibaba Group’s Tmall and JD.com. The furor was stoked by comments on the microblogging site Sina Weibo from groups like the Communist Youth League, an influential Communist Party organization.Within hours, other big Western brands like Nike and Burberry began trending for the same reason.And it’s not just consumers who are up in arms: Influencers and celebrities have also been severing ties with the brands. Even video games are bouncing virtual “looks” created by Burberry from their platforms.Backtrack: What do influencers have to do with all this?Influencers in China wield even more power over consumer behavior than they do in the West, meaning they play a crucial role in legitimizing brands and driving sales. When Tao Liang, otherwise known as Mr. Bags, did a collaboration with Givenchy, for example, the bags sold out in 12 minutes; a necklace-bracelet set he made with Qeelin reportedly sold out in one second (there were 100 made). That’s why H&M worked with Victoria Song, Nike with Wang Yibo and Burberry with Zhou Dongyu.But Chinese influencers and celebrities are also sensitive to pleasing the central government and publicly affirming their national values, often performatively choosing their country over contracts.In 2019, for example, Yang Mi, the Chinese actress and a Versace ambassador, publicly repudiated the brand when it made the mistake of creating a T-shirt that listed Hong Kong and Macau as independent countries, seeming to dismiss the “One China” policy and the central government’s sovereignty. Not long afterward, Coach was targeted after making a similar mistake, creating a tee that named Hong Kong and Taiwan separately; Liu Wen, the Chinese supermodel, immediately distanced herself from the brand.The actress Zhou Dongyu, the actor Wang Yibo and the singer and actress Victoria Song, all Chinese influencers who had deals with Western brands that they then repudiated when their products were said to disrespect the Chinese people and government.VCG/VCG, via Getty ImagesAnd what’s with the video games?Tencent removed two Burberry-designed “skins” — outfits worn by video game characters that the brand had introduced with great fanfare — from its popular title Honor of Kings as a response to news that the brand had stopped buying cotton produced in the Xinjiang region. The looks had been available for less than a week.So this is hitting both fast fashion and the high end. How much of the fashion world is involved?Potentially, most of it. So far Adidas, Nike, Converse and Burberry have all been swept up in the crisis. Even before the ban, additional companies like Patagonia, PVH, Marks & Spencer and the Gap had announced that they did not source material from Xinjiang and had officially taken a stance against human rights abuses.This week, however, several brands, including VF Corp., Inditex (which owns Zara) and PVH all quietly removed their policies against forced labor from their websites.That seems squirrelly. Is this likely to escalate?Brands seem to be concerned that the answer is yes, since, apparently fearful of offending the Chinese government, some companies have proactively announced that they will continue buying cotton from Xinjiang. Hugo Boss, the German company whose suiting is a de facto uniform for the financial world, posted a statement on Weibo saying, “We will continue to purchase and support Xinjiang cotton” (even though last fall the company had announced it was no longer sourcing from the region). Muji, the Japanese brand, is also proudly touting its use of Xinjiang cotton on its Chinese websites, as is Uniqlo.Wait … I get playing possum, but why would a company publicly pledge its allegiance to Xinjiang cotton?It’s about the Benjamins, buddy. According to a report from Bain & Company released last December, China is expected to be the world’s largest luxury market by 2025. Last year it was the only part of the world to report year on year growth, with the luxury market reaching 44 billion euros ($52.2 billion).Is anyone going to come out of this well?One set of winners could be the Chinese fashion industry, which has long played second fiddle to Western brands, to the frustration of many businesses there. Shares in Chinese apparel groups and textile companies with ties to Xinjiang rallied this week as the backlash gained pace. And more than 20 Chinese brands publicly made statements touting their support for Chinese cotton. More
AdvertisementContinue reading the main storySupported byContinue reading the main storyU.S. Bans All Cotton and Tomatoes From Xinjiang Region of ChinaThe sweeping ban, which was based on concerns about forced labor in the region, could compel companies to reorganize their multinational supply chains.Cotton fields in the Xinjiang region of China. A new ban on imports of cotton from the area could have sweeping implications for apparel makers.Credit…Agence France-Presse — Getty ImagesJan. 13, 2021Updated 6:32 p.m. ETWASHINGTON — The Trump administration on Wednesday announced a ban on imports of cotton and tomatoes from the Xinjiang area of China, as well as all products made with those materials, citing human rights violations and the widespread use of forced labor in the region.The measure could have sweeping implications for makers of apparel and food products, many of whom have sought to distance themselves from atrocities in Xinjiang but have struggled to ensure their supply chains are free of all raw materials from the region. The area is a major source of cotton, coal, chemicals, sugar, tomatoes and polysilicon, a component in solar panels, that are then fed into factories around China and the world.The ban allows customs officials to stop imports that they suspect are made with raw materials from Xinjiang, regardless of whether they travel into the United States directly from China or through another country.China has carried out a vast crackdown on predominantly Muslim minority groups in the far west Xinjiang region, including detaining a million or more Uighurs, Kazakhs and other groups in camps and closely surveilling the rest of the population, human rights groups say.Forced labor also appears to be widespread in the region. The U.S. Customs and Border Protection said an investigation found numerous indicators of forced labor in Xinjiang, including debt bondage, restriction of movement, withheld wages, and abusive living and working conditions. The Chinese government denies the existence of forced labor in Xinjiang, saying all arrangements are voluntary.Scott Nova, the executive director of the Workers Rights Consortium, a labor rights group, called the ban “a high-decibel wake-up call to any apparel brand that continues to deny the prevalence and problem of forced-labor-produced cotton” in the region.“This ban will redefine how the apparel industry — from Amazon to Nike to Zara — sources its materials and labor,” Mr. Nova said. “Any global apparel brand that is not either out of Xinjiang already or plotting a very swift exit is courting legal and reputational disaster.”The Workers Rights Consortium estimates that American brands and retailers import more than 1.5 billion garments that use Xinjiang materials every year, representing more than $20 billion in retail sales. China is also the world’s largest tomato producer, with Xinjiang accounting for most of that production, the group says.Independent researchers and media reports have linked dozens of the world’s most prominent multinational companies to workers or products from Xinjiang, including Apple, Nike, Kraft Heinz and Campbell Soup. Campbell said it no longer sources products from the Xinjiang region.Some textile and apparel companies that used cotton or yarn from Xinjiang have announced that they are severing ties, including Patagonia, Marks and Spencer and H&M. But many firms have found it difficult to trace the origins of all the products used by their Chinese suppliers, especially given the lack of access for independent auditors to facilities in Xinjiang.The order will “send a crystal-clear message to the trade community: know your supply chains,” said Mark Morgan, the acting commissioner for U.S. Customs and Border Protection. Importers are required to ensure that their own supply chains are free from forced labor, he added. “It’s the law.”The Trump administration has added increasingly restrictive measures on Xinjiang, including placing sanctions on dozens of companies and individuals over alleged human rights violations.In December, customs officials announced a ban on cotton products made by the Xinjiang Production and Construction Corps, an economic and paramilitary group that produces much of the region’s cotton. U.S. Customs and Border Protection has already detained 43 shipments valued at more than $2 million under that ban, officials said Wednesday.Congress is also considering sweeping legislation that would block imports from Xinjiang, unless companies are able to prove that supply chains that run through the region are free of forced labor.While the United States has taken the most forceful action on this front, both Canada and Britain introduced rules this week to limit goods linked to Xinjiang from entering their countries.Despite growing concerns over Chinese practices in the region, exports from Xinjiang to the United States and Europe grew significantly from 2019 to 2020, according to the Center for Strategic and International Studies.But trade experts say the new measures will raise questions about whether customs officials are equipped to fully enforce such a wide ban, which will require tracing Xinjiang materials through supply chains around the world.A report published in October by the U.S. Government Accountability Office found that customs suffered from staff shortages and other issues despite a new division and resources devoted to blocking goods made with forced labor.In a call with reporters on Wednesday, Brenda Smith, the executive assistant commissioner at Customs and Border Protection’s Office of Trade, said it was “a challenge to be able to link what we see arriving in a port of entry back to the raw materials produced in Xinjiang.” The department is applying new tracking methods to uncover products made with forced labor, she said.The department is increasingly making use of new technologies, like pollen analysis, to try to identify cotton and other materials from Xinjiang in foreign products, officials said.AdvertisementContinue reading the main story More
AdvertisementContinue reading the main storySupported byContinue reading the main storyChinese Solar Companies Tied to Use of Forced LaborA new report shows some of the world’s biggest solar companies work with the Chinese government to absorb workers from Xinjiang, programs that are often seen as a red flag for forced labor.Solar panels in Clovis, Calif. Together, the solar companies named in the report supply most of the raw materials for solar panels on rooftops and utility energy projects in the United States, Europe and elsewhere.Credit…Chang W. Lee/The New York TimesAna Swanson and Jan. 8, 2021, 1:47 p.m. ETIn a flat, arid expanse of China’s far west Xinjiang region, a solar technology company welcomed laborers from a rural area 650 miles away, preparing to put them to work at GCL-Poly, the world’s second-largest maker of polysilicon.The workers, members of the region’s Uighur minority, attended a class in etiquette as they prepared for their new lives in the solar industry, which prides itself as a model of clean, responsible growth. GCL-Poly promoted the housing and training it offered its new recruits in photographs and statements to the local news media.But researchers and human rights experts say those positive images may conceal a more troubling reality — the persecution of one of China’s most vulnerable ethnic groups. According to a report by the consultancy Horizon Advisory, Xinjiang’s rising solar energy technology sector is connected to a broad program of assigned labor in China, including methods that fit well-documented patterns of forced labor.Major solar companies including GCL-Poly, East Hope Group, Daqo New Energy, Xinte Energy and Jinko Solar are named in the report as bearing signs of using some forced labor, according to Horizon Advisory, which specializes in Chinese-language research. Though many details remain unclear, those signs include accepting workers transferred with the help of the Chinese government from certain parts of Xinjiang, and having laborers undergo “military-style” training that may be aimed at instilling loyalty to China and the Communist Party.The Chinese government disputes the presence of any forced labor in its supply chains, arguing that employment is voluntary. The companies named in the report either did not respond to requests for comment or denied any role in forced labor.In a statement, a representative for the Chinese Embassy in Washington called forced labor in Xinjiang “a rumor created by a few anti-China media and organizations,” adding that all workers in Xinjiang enter into contracts in accordance with Chinese labor law. “There is no such thing as ‘forced labor,’” the representative said.The report adds to a growing list of companies that have been accused of relying on coerced labor from Uighurs and other ethnic minorities in China, either in their own factories or those of their suppliers.The United States and other governments have become increasingly vocal about forced labor in Xinjiang, including naming and shaming major corporations that operate in the region. The Trump administration has imposed sanctions on dozens of companies and individuals for their role in Xinjiang, including banning some exports from the region, which is also a major producer of cotton. On Dec. 2, it banned imports made with cotton produced by the Xinjiang Production and Construction Corps, a paramilitary group that American officials say uses forced labor.Congress is also considering sweeping legislation that would ban all products with materials from Xinjiang unless companies certify that the goods are made without forced labor.John Ullyot, the spokesman for the National Security Council, said that China’s campaign of repression in Xinjiang involved “state-sponsored forced labor” and that the United States would “not be complicit in modern day slavery.”“The administration has taken unprecedented actions to prevent China from profiting off of its horrific human rights abuses,” he said.Together, the solar companies named in the report supply more than a third of the world’s polysilicon, which is refined from rock and turned into the solar panels that end up on rooftops and utility energy projects, including those in the United States and Europe.Government announcements and news reports indicate that solar companies often take in assigned workers in batches of dozens or fewer, suggesting that the transfers are a small part of their overall work force. Still, the assertions from Horizon Advisory imply that much of the global solar supply chain may be tainted by an association with forced labor. Such charges could hurt its progressive image and risk product bans from Washington.GCL-Poly, Daqo New Energy, Xinte Energy and East Hope Group did not respond to multiple requests for comment.Ian McCaleb, a spokesman for Jinko Solar, said the company “strongly condemns the use of forced labor, and does not engage in it in its hiring practices or workplace operations.” He said that it had reviewed the claims in the Horizon report and “found that they do not demonstrate forced labor in our facilities.”Business & EconomyLatest UpdatesUpdated Jan. 7, 2021, 12:58 p.m. ETElon Musk has become the world’s richest person, as Tesla’s stock rallies.Simon & Schuster drops Senator Hawley’s book.Daimler responds: ‘We depend on a reliable and stable political framework.’China carries out a vast program of detention and surveillance of Uighurs, Kazakhs and other minorities in Xinjiang. Up to a million or more minorities may have been detained in indoctrination camps and other sites where they are forced to renounce religious bonds, and risk torture, assault and psychological trauma, Uighurs abroad and human rights groups say.The Xinjiang government has promoted the labor transfer programs in parallel with the re-education camps, efforts that have ramped up drastically under the current leader, Xi Jinping. The government has uprooted many from farms to work in factories and cities, in the belief that steady, supervised work can pull minorities out of poverty and break down cultural barriers. Workers may have little choice but to obey local officials who oversee their move to distant towns and industrial zones to fulfill government-set quotas.An internment camp in Xinjiang that local officials have portrayed as a vocational training center.Credit…Thomas Peter/ReutersThe growing scrutiny of the region has already prompted changes among some companies whose supply chains are entangled in these programs. Many textile and apparel companies that use cotton or yarn from Xinjiang have severed ties, including Patagonia, Marks and Spencer and H&M.The solar sector could face similar pressure. The industry has deep ties to Xinjiang, which accounts for about 40 percent of global polysilicon production, said Jenny Chase, the head of solar analysis at BloombergNEF. Xinjiang’s polysilicon production increased rapidly over the past decade, mostly because of cheap electricity from local coal plants and other government support, Ms. Chase said.That expansion has helped Chinese companies dominate foreign competitors, including in the United States. China produced 82 percent of global polysilicon in 2020, up from 26 percent in 2010, according to data from IHS Markit, while the U.S. share of production shrunk to 5 percent from 35 percent.“I am concerned that forced labor may have been used in Xinjiang,” said Francine Sullivan, the vice president for business development at REC Silicon, a Norwegian polysilicon manufacturer with operations in the United States. The company shut a facility in Washington State, despite surging overall U.S. demand.Xinjiang is known for low safety and environmental standards, Ms. Sullivan said, and forced labor “may be just part of the incentive package.”Xiaojing Sun, a senior research analyst at Wood Mackenzie, said solar companies were starting to investigate their exposure to Xinjiang and reconfigure their supply chains to avoid the region if possible.In a note to investors in October, analysts at Roth Capital Partners said the solar sector faced a “heightened risk of disruption” because of its ties to Xinjiang.“Investors are getting nervous,” Ms. Sun said.The Solar Energy Industries Association, the largest industry association in the United States, has called human rights abuses in Xinjiang “reprehensible” and strongly encouraged companies “to immediately move their supply chains out of the region.”Since unfettered on-the-ground access to Xinjiang for foreign journalists and researchers is virtually impossible, the Horizon Advisory researchers do not provide direct testimony of forced labor. Instead, they present signs of possible coercion from Chinese-language documents and news reports, such as programs that may use high-pressure recruitment techniques, indoctrinate workers with patriotic or military education, or restrict their movement.The report documents GCL-Poly accepting “surplus labor” from a rural region of Xinjiang last year. In 2018, according to an article on China Energy Net, a local news site, one of GCL-Poly’s subsidiaries also accepted more than 60 such workers.A local subsidiary of Jinko Solar, Xinjiang Jinko Energy Co., received state subsidies for employing local Xinjiang labor, including at least 40 “poor workers from southern Xinjiang” in May, according to a local government announcement from July 2020 cited by Horizon Advisory.On its public WeChat account, East Hope Group said that it had “responded to the national Western Development Call and actively participated in the development and construction of Xinjiang,” including constructing a polysilicon project in Changji prefecture in 2016, the Horizon report said.That same year, according to a Chinese news report cited by Horizon, Xinjiang’s Yarkand County signed a “labor export cooperation framework agreement” with a subsidiary named East Hope Group Xinjiang Aluminum Company.Another subsidiary of East Hope, Xinjiang East Hope Nonferrous Metals Co., “accepted 235 ethnic minority employees from southern Xinjiang,” who were given training to make up for “low educational qualifications, weak national language skills and insufficient job skills,” according to a report on the company’s website.According to Horizon Advisory, several solar companies also have ties to the Xinjiang Production and Construction Corps, which has been penalized by the Trump administration. In its 2018 financial report, Daqo New Energy said its Xinjiang facilities benefited from a lower cost of electricity because the regional grid is operated by a division of the Xinjiang Production and Construction Corps.Amy Lehr, the director of the Human Rights Initiative at the Center for Strategic and International Studies, said that work programs that draw on Xinjiang minorities and offer companies subsidies for employing them are a “red flag” for forced labor.These programs may restrict workers from quitting, traveling or participating in religious services, pay less than minimum wage, and involve harsh or unsafe work conditions, as well as the threat of detention, according to Ms. Lehr’s research.“The concern is that there is a potential for coercion, because of the level of surveillance and fearfulness,” Ms. Lehr said. Companies that source products from the region have “no way of knowing that you’re not being connected to forced labor,” she said.Nathan Picarsic, a founder of Horizon Advisory, said what the firm had documented was likely “just the tip of the iceberg.” If Americans are buying solar panels made with materials from these Chinese companies, he said, “I would say you are complicit in perpetuating this Chinese industrial policy that suppresses and disenfranchises human beings.”AdvertisementContinue reading the main story More
AdvertisementContinue reading the main storySupported byContinue reading the main storyChinese Companies to Face More Scrutiny as Bill Clears HouseThe House voted to approve legislation that will increase oversight for Chinese companies listed on American exchanges, making the bill almost certain to become law.The United States Capitol in Washington. The House of Representatives on Wednesday passed legislation that would create more oversight of Chinese companies operating in American markets.Credit…Oliver Contreras for The New York TimesBy More
WASHINGTON — Nike and Coca-Cola are among the major companies and business groups lobbying Congress to weaken a bill that would ban imported goods made with forced labor in China’s Xinjiang region, according to congressional staff members and other people familiar with the matter, as well as lobbying records that show vast spending on the legislation.The bill, which would prohibit broad categories of certain goods made by persecuted Muslim minorities in an effort to crack down on human rights abuses, has gained bipartisan support, passing the House in September by a margin of 406 to 3. Congressional aides say it has the backing to pass the Senate, and could be signed into law by either the Trump administration or the incoming Biden administration.But the legislation, called the Uyghur Forced Labor Prevention Act, has become the target of multinational companies including Apple whose supply chains touch the far western Xinjiang region, as well as of business groups including the U.S. Chamber of Commerce. Lobbyists have fought to water down some of its provisions, arguing that while they strongly condemn forced labor and current atrocities in Xinjiang, the act’s ambitious requirements could wreak havoc on supply chains that are deeply embedded in China.Xinjiang produces vast amounts of raw materials like cotton, coal, sugar, tomatoes and polysilicon, and supplies workers for China’s apparel and footwear factories. Human rights groups and news reports have linked many multinational companies to suppliers there, including tying Coca-Cola to sugar sourced from Xinjiang, and documenting Uighur workers in a factory in Qingdao that makes Nike shoes.In a report issued in March, the Congressional-Executive Commission on China, a bipartisan group of lawmakers, listed Nike and Coca-Cola as companies suspected of ties to forced labor in Xinjiang, alongside Adidas, Calvin Klein, Campbell Soup Company, Costco, H&M, Patagonia, Tommy Hilfiger and others.In a statement, Coca-Cola said that it “strictly prohibits any type of forced labor in our supply chain” and uses third-party auditors to closely monitor its suppliers. It also said that the COFCO Tunhe facility in Xinjiang, which supplies sugar to a local bottling facility and had been linked to allegations of forced labor by The Wall Street Journal and Chinese-language news media, “successfully completed an audit in 2019.”Greg Rossiter, the director of global communications at Nike, said the company “did not lobby against” the Uyghur Forced Labor Prevention Act but instead had “constructive discussions” with congressional staff aides aimed at eliminating forced labor and protecting human rights.Asked about the allegations of forced labor, Nike referred to a statement in March in which it said that it did not source products from Xinjiang and that it had confirmed that its suppliers were not using textiles or yarn from the region.Nike said that the Qingdao factory had stopped hiring new workers from Xinjiang in 2019, and that an independent audit confirmed there were no longer employees from there at the facility. (According to a report published in March by the Australian Strategic Policy Institute that cited state media, the factory employed around 800 Uighur workers at the end of 2019 and produced more than seven million pairs of shoes for Nike each year.)China’s vast campaign of suppressing and forcibly assimilating Uighurs and other minorities in Xinjiang has attracted the scorn of politicians and consumers around the world.But for many companies, fully investigating and eliminating any potential ties to forced labor there has been difficult, given the opacity of Chinese supply chains and the limited access of auditors to a region where the Chinese government tightly restricts people’s movements.The Uyghur Forced Labor Prevention Act would require companies sending goods to the United States to scrutinize those supply chains, or perhaps abandon Chinese suppliers altogether. It would impose high standards, barring imports of goods made “in whole or in part” in Xinjiang unless companies prove to customs officials that their products were not made with forced labor.The bill also targets so-called poverty alleviation and pairing programs that ship Muslims from impoverished areas to work in factories elsewhere, which human rights groups say are often coercive. Companies would be required to disclose information on their ties to Xinjiang to the Securities and Exchange Commission.Richard A. Mojica, a lawyer at Miller & Chevalier, said that for many companies, convincing the authorities that they have no involvement with forced labor could take months. Firms were already responding by trying to find sources for products outside Xinjiang, he said.“Rebutting a presumption of forced labor is going to be a very challenging endeavor,” he said.Companies and groups lobbying on the bill have been pushing for various revisions, including easing disclosure requirements, people familiar with the conversations said.Apple, which has extensive business ties to China, has also lobbied to limit some provisions of the bill, said two congressional staff members and another person familiar with the matter.Disclosure forms show that Apple paid Fierce Government Relations, a firm led by former staff aides to Senator Mitch McConnell of Kentucky and President George W. Bush, $90,000 to lobby on issues including Xinjiang-related legislation in the third quarter. Apple’s lobbying was previously reported by The Washington Post.Apple also paid outside firms this year to lobby on another bill, the Uyghur Forced Labor Disclosure Act of 2020.Apple disputed the claim that it had tried to weaken the legislation, saying it supported efforts to strengthen American regulations and believes the Uyghur Forced Labor Prevention Act should become law.According to a document viewed by The New York Times, Apple’s suggested edits to the bill included extending some deadlines for compliance, releasing certain information about supply chains to congressional committees rather than to the public, and requiring Chinese entities to be “designated by the United States government” as helping to surveil or detain Muslim minority groups in Xinjiang.In its March report, the Australian Strategic Policy Institute identified Apple and Nike among 82 companies that potentially benefited, directly or indirectly, from abusive labor transfer programs tied to Xinjiang.That report said that O-Film Technology, a contractor for Apple, Microsoft, Google and other companies, received at least 700 Uighur workers in a program that was expected to “gradually alter their ideology.” It tied other Apple suppliers, including Foxconn Technology, to similar employment programs.Apple said in a statement that it had the strongest supplier code of conduct in its industry and that it regularly assessed suppliers, including with surprise audits.“Looking for the presence of forced labor is part of every supplier assessment we conduct and any violations of our policies carry immediate consequences, including business termination,” the statement said. “Earlier this year, we conducted a detailed investigation with our suppliers in China and found no evidence of forced labor on Apple production lines and we are continuing to monitor this closely.”Lobbying disclosures show that companies have spent heavily to sway Congress on Xinjiang-related legislation, though they reveal nothing about their specific requests.In the first three quarters of 2020, Nike spent $920,000 on in-house lobbying of Congress and other federal agencies. Disclosures do not break down expenditures by topic, but show Nike lobbied on matters including physical education grants, taxes and climate change, as well as the Uyghur Forced Labor Prevention Act.Nike also paid outside firms like Cornerstone Government Affairs, Ogilvy, Capitol Counsel, GrayRobinson, American Continental Group, DiNino Associates and Empire Consulting Group more than $400,000 this year to lobby on issues including the act.Mr. Rossiter said that Nike had these firms on retainer long before the Xinjiang legislation was introduced, and that the company actively worked with lobbying firms to engage Congress on a variety of subjects it cares about.Coca-Cola has also invested heavily, spending $4.68 million in the first three quarters of 2020 on in-house lobbying and hiring Empire Consulting Group and Sidley Austin to lobby on issues including the act.Coca-Cola said in a statement that it complies with all laws associated with its political activities and has “adopted best-in-class disclosures practices.”The U.S. Chamber of Commerce declined to comment on lobbying, instead providing a letter it sent to Congress in November with seven other industry groups. The letter said the groups had long been working to combat forced labor, and urged the government to take a comprehensive approach that would mobilize the administration, Congress and foreign governments to address the problem, in addition to industry. More
