Report alleges use of Uyghur Forced Labor in global auto supply chain

An aerial view shows manufactured vehicles before being loaded onto a cargo ship at the Yantai Port in eastern China's Shandong Province, Dec. 7, 2021. [AP Photo] A report issued this week alleges that the supply chain serving the global automobile industry is deeply intertwined with companies that either make direct use of forced labor in China's Xinjiang Uyghur Autonomous Region, or that purchase raw materials and other products from companies that do. Written by a team of researchers at Sheffield Hallam University in the United Kingdom, the report, titled "Driving Force," alleges that most auto manufacturers in the world use parts that are sourced either directly or indirectly from the Xinjiang region, and urges both carmakers and governments around the world to sever those connections. "Practically every major traditional automotive and electric vehicle manufacturer has significant exposure to forced labor in the Uyghur Region," the report finds. "The auto industry cannot wait another day to trace their supply chains back to the raw materials. To do anything short of full tracing would be an enormous legal, ethical, and reputational risk." Major U.S. automakers did not immediately respond to the report. China has long denied the existence of forced labor in Xinjiang amid substantial evidence backing accusations by the United Nations, major human rights groups and Western countries. In sometimes meticulous detail, the report illustrates the way in which specific automobile elements - tires, seat cushions, batteries, electronic components and more - can be traced to raw materials extracted in Xinjiang, companies doing business in Xinjiang, or companies that have participated in a Chinese government program through which workers from Xinjiang are forcibly relocated to other parts of China and required to work there. By documenting the connection of automobile components to Xinjiang, the report raises questions about whether car manufacturers are in compliance with a U.S. law, the Uyghur Forced Labor Prevention Act (UFLPA). 'Staggering' in scope VOA could not independently confirm all of the data in the report, but experts who have reviewed it say that it appears to present a clear picture of an automobile supply chain deeply reliant on components tied to Xinjiang. Cullen Hendrix, a nonresident senior fellow at the Peterson Institute for International Economics, said the report is "staggering in its scope." He added, "It tells a complicated story incredibly well, and in a compelling, straightforward fashion. One doesn't have to be a supply chain guru to see the challenges that this creates for the U.S. automotive industry and ultimately for the global automotive industry, at least the segment of it that would like to be present in the U.S. market." The report carries clear implications for other industries as well. Many of the car components linked to Xinjiang, including steel, copper, aluminum and silicon, are basic inputs for myriad other manufacturing sectors. Professor Laura Murphy, one of the authors of the report, pressed that point in an email exchange with VOA, writing, "It is becoming ever more apparent that the Uyghur Forced Labor Prevention Act is urgently necessary. We hope that this report is a wake-up call not only to the automotive industry but to all manufacturers sourcing steel or aluminum or copper or lithium or practically anything else from China. Why wait for us to produce another report? The time is now for companies to trace their supply chains to the raw materials." Enforcement challenge The UFLPA, which was signed into law by President Joe Biden in December of 2021 and took effect in June of this year, creates what is known as a "rebuttable presumption" that anything imported to the U.S. that originates wholly or partly in Xinjiang is the product of forced labor. That means it is legal for the U.S. to import only those items for which the importer presents "clear and convincing evidence" the product hasn't been made with forced labor. Absent that proof, imported goods are subject to seizure by U.S. Customs and Border Protection authorities. When the law took effect, it was widely expected to have the greatest impact on a few specific industries. For example, Xinjiang is a major producer of both cotton and the polysilicon used in solar panels, so the clothing and solar industries had braced for significant disruption. However, the report suggests that far more industries may be in peril. "This report, to the extent that it's accurate, demonstrates that this is a broader issue for the manufacturing sector, in ways that are really going to bedevil the ability of firms to rebut that presumption," said Hendrix. "By the time a car makes it to the dealer lot in the United States, it's likely passed through so many different stages of production in so many different places with parts sourced from so many different places, that it's very difficult to conclusively prove that none of those have been tainted by actual production in Xinjiang." A question that remains to be answered, Hendrix said, is whether the U.S. Customs and Border Protection agency is prepared, or even equipped, to enforce the law if it is applied as broadly as the report suggests it should be. Industry reaction VOA reached out to several major U.S. automakers for comment on the report. Neither Ford nor General Motors replied to emailed requests for comment. A spokesperson for Stellantis, a global company based in the Netherlands that owns major U.S. automakers Chrysler and Dodge, said that the company is "currently reviewing the report" and was not able to provide an immediate comment. The United Auto Workers union, which represents many of the thousands of workers employed at U.S. carmakers, put out a statement deploring the use of forced labor. "Forced labor and other human rights abuses are unacceptable in the modern global economy," UAW chief Ray Curry said in a statement. "The time is now for the auto industry to establish high-road supply chain models outside the Uyghur Region that protect labor and human rights and the environment. This includes significant re-investments in good union jobs in the U.S." China reacts The Chinese government, as it has in the past, rejected the idea that forced labor exists at all in Xinjiang, and suggested that the claim is an invention by the U.S. to hamper China's growth. In a statement issued in response to VOA's request for comment, Chinese embassy spokesman Liu Pengyu said, "As the Chinese side has stressed many times, the allegation of 'forced labor' in Xinjiang is nothing but a lie of the century. 'Forced labor' in Xinjiang is a lie deliberately made up and spread by the U.S. to shut China out of the global supply and industrial chains. "In the name of '[protecting] human rights,'" he added, "the U.S. is practicing unilateralism and protectionism, seriously undermining market principles and violating [World Trade Organization] rules. The U.S. approach is not conducive to the alleviation of global inflation and the recovery of the world economy. China will take necessary actions to safeguard national sovereignty, security and development interests, and resolutely protect the legitimate rights and interests of the people of all ethnic groups in the region." Government action urged The Driving Force report calls on governments to enact new rules that would require companies to look past the practices of their immediate suppliers and certify that forced labor is not part of any link in their supply chains. "Governments and legislatures should enact and implement mandatory human rights due diligence laws and ensure the laws require companies to address human rights risks beyond first-tier suppliers, in recognition that abuses can easily be distanced from direct suppliers under state-controlled economic systems," the report said. "Laws and enforcement should apply to the full supply chain, without exception." According to the authors, data supporting their conclusions come from "publicly available sources, including shipping data, corporate financial and media reporting, journalism, state propaganda, remote sensing data, and maps."

Report alleges use of Uyghur Forced Labor in global auto supply chain

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