A German newspaper reported finding close links between China’s state-sponsored Uyghur labor transfer program and a regional partner of chemical giant BASF has sparked criticism that the company is ignoring the possibility of forced labor at the plant.
Xinjiang Markor Chemical Industry Co., Ltd., has operated a plant in Korla – the second largest city in China’s Xinjiang Uygur Autonomous Region – with German multinational BASF since 2016.
German economic newspaper Handelsblatt reported on November 5 that some of the ownership rights of the Xinjiang Markor Chemical Industry are held by the Xinjiang Zhongtai Group and its subsidiary, Zhongtai Chemical Company.
In the month of Septemberthe United States has banned the import of goods made by the Xinjiang Zhongtai Group due to the company’s “participation in trade practices that target members of persecuted groups, including Uyghur minorities.”
Xinjiang Zhongtai is now one of the 27 companies explicitly blacklisted under the Uyghur Forced Labor Prevention Act of 2021, or UFPLA, which also includes a general ban on the importation of any goods produced, including in part, through the forced labor of Uyghurs, a Muslim minority subjected to persecution and locked up in internment camps in China.
A statement from BASF said it regularly carries out background checks on its suppliers in Korla.
Investigations conducted at the Xinjiang Zhongtai plant in 2019, 2020 and earlier this year found no cases of forced labor or other human rights violations, BASF said.
Furthermore, the inclusion of Zhongtai Group in the US UFLPA Entity List has no legal implications on products made through BASF joint ventures in Korla, the company said.
“Regardless of the legal implications, we regularly conduct transparency measures, to the extent permitted by law, in response to the situation in Xinjiang, which also involves the joint venture partner and its shareholders,” BASF said in the statement.
The accusations are not a surprise
The German Bundestag, the US Congress and several other Western legislative bodies have declared that abuses in the region amount to genocide or crimes against humanity.
But BASF, the world’s largest chemical manufacturer, continues to invest heavily throughout China.
The German language HandelsblattThe report states that the Korla factory – “probably the most controversial facility” that BASF operates in the world – produces chemical precursors used in sportswear.
“We have highlighted in the past the risks involved in setting up the BASF joint venture in Korla,” said Tilman Massa of the German Association of Ethical Shareholders. “So it’s no surprise to us that there are new charges.”
The company has an obligation to comply with German supply chain laws, to investigate its suppliers and to make its latest investigation public, it said.
However, BASF’s latest external audit may not be an effective measure to investigate any supplier in the Xinjiang Uygur Autonomous Region, Massa said.
“It’s not a sufficient measure,” he told RFA. “Responsible withdrawal from the region should be what companies should do, given the local context.”
Furthermore, any audit conducted in a region that remains under the strict control of vigilant Chinese authorities cannot be trusted, said Hanno Schedler, a genocide prevention consultant based in Germany.
“There will be no external audit because they know that independent audits are not possible in that region,” he said.
“These companies need to realize that when you’re dealing with a system of internment camps, long prison sentences, family separations and forced labor, you can’t escape the system,” he said. “The only way to truly escape this system is to leave the region.”
Edited by Matt Reed and Malcolm Foster.
