New Research Details How Investors May Be Funding Forced Labour In The Uyghur Region
November 21, 2022
Asset managers and pension funds should divest from companies connected to the government of China’s system of state-imposed forced labour and crimes against humanity committed against Turkic and Muslim-majority peoples in the Xinjiang Uyghur Autonomous Region (Uyghur Region), said the Coalition to End Forced Labour in the Uyghur Region. A new report by Hong Kong Watch and Sheffield Hallam University documents that leading investment funds such as BlackRock, Vanguard, Fidelity, and numerous US, Canadian, and UK pension funds, have invested in companies, including Foxconn Technologies, Hoshine Silicon Industry Co. Ltd., and Xinjiang Goldwind Science & Technology Co. Ltd., that, according to the report, have been identified in research and media as using Uyghur labour through state-sponsored transfers.
Governments around the world should ban investments in companies that are complicit in Uyghur forced labour, the Coalition said. UN experts have found that systematic abuses against Uyghurs, including forced labour, may constitute crimes against humanity. The US government and several parliaments have recognised the government of China’s abuses against Uyghurs as crimes against humanity and genocide.
“The brands called out in this report stand as a cautionary tale for what can happen when companies do business in opaque or high-risk geographies without appropriate and continuous human rights due diligence. Millions of Uyghur and other Turkic, Muslim-majority peoples are subject to egregious human rights abuses, and the financial and human rights performance of companies and their investors are put at risk. When it comes to respecting human rights, there can be no such thing as a passive investor,” said Anita Dorett, Director of the Investor Alliance for Human Rights.
The report, Passively Funding Crimes Against Humanity, analysed the component stocks of three major global indexes, Morgan Stanley Capital Investment (MSCI) China Index, MSCI Emerging Markets Index, and MSCI All-Country World Index ex-US, and identified 13 companies listed in the indexes that had been, according to the report, identified in media and research as engaged in placing Uyghurs in their workforce through state-sponsored forced labour transfers or have been involved in building internment camps or the system of surveillance and repression in the Uyghur Region. Reports in 2020 revealed that the forced labour of Uyghurs has been expanded beyond the Uyghur Region, with at least 80,000 people transferred to factories across China where they cannot leave, are under constant surveillance, and must undergo “ideological training” to abandon their religion and culture.
The report also identified workers’ pension funds in the US, Canada, and UK as holding equities linked to forced labour transfers of Uyghurs.
“This report should be a wake-up call to every asset manager and pension fund. Investors should require companies they are invested in to fully trace their supply chains and urgently divest from any links to the Uyghur Region or to forced labour transfers from the Region,” said Rushan Abbas, Executive Director of Campaign for Uyghurs. “Further, companies linked to forced labour transfers in this report should be delisted from the indexes so that average citizens do not need to worry that they are funding crimes against humanity.”
The companies discussed in the report are major exporters on the world market: Foxconn Technologies is the world’s largest contract electronics manufacturer and a major supplier to some of the most popular consumer brands; Hoshine Silicon Industry Co. Ltd. is the top Chinese producer of metallurgical-grade silicon and is on the U.S. Uyghur Forced Labour Prevention Act’s Entity List, banning the importation of its products; and Xinjiang Goldwind Science & Technology Co., Ltd is China’s largest wind turbine manufacturer.