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Volkswagen faces further pressure over its links to Xinjiang as British MPs call on the UK government to investigate the carmaker’s compliance with slavery laws after a Financial Times investigation into an audit of its factories in China.
On Thursday, the FT reported that the audit that VW claimed cleared it of allegations of forced labor in Xinjiang actually failed to meet international standards.
“There needs to be an investigation not just into Volkswagen but into the supply chain of most major products,” said Sarah Champion, a Labour MP and chair of the international development committee.
Champion, who called on the UK to introduce stronger laws to crack down on forced labour in international supply chains, added that companies were turning a blind eye to human rights abuses in their supply chains because they prioritised commercial interests.
Liam Byrne, another Labour MP and chairman of the House of Commons business and trade committee, said the issues raised by the audit provided “new evidence of why we need to urgently reform the UK’s modern slavery laws to bring greater transparency through the supply chains of major companies”.
He urged the UK to introduce legislation similar to the US Uyghur Forced Labour Prevention Act or introduce a facility inspection regime to protect UK customers, suppliers and investors who “want and need protection against forced labour abuses”.
Conservative MP Sir Iain Duncan Smith, co-chair of the Intergovernmental Parliamentary Alliance on China, said he was planning to raise a question in parliament asking ministers to look into the German company’s compliance with the UK’s Modern Slavery Act.
“Following the FT report, I am calling on the government to conduct a full investigation into VW’s supply chain,” said Duncan Smith.
Human rights groups in Xinjiang have documented widespread abuses against the predominantly Muslim Uighur ethnic group, with hundreds of thousands reported to have been detained in the region between 2017 and 2019. Beijing has denied allegations of human rights abuses.
Under the Anti-Slavery Act 2015, companies providing services to UK customers must publish annually what actions they have taken to ensure no modern slavery exists in their business or supply chain.
After coming under pressure from human rights groups and investors, VW said in December it was conducting an audit of its factory in Xinjiang, which is run by a joint venture with state-owned SAIC.
The audit, conducted by Berlin-based consultancy Löning and an unnamed Chinese law firm, applied the world-renowned SA8000 standard and found “no indication of forced labour,” the report said.
But a leaked document, also reviewed by Der Spiegel and ZDF, shows that this standard is not followed.
The Xinjiang plant has become a headache for VW amid rising tensions between Beijing and several Western governments, including the United States. Earlier this year, thousands of Porsche, Bentley and Audi cars were retained at U.S. ports after finding a Chinese spare part in cars that violated the country’s anti-forced labor laws.
VW executives have been reluctant to close the plant, which no longer makes cars and employs just 197 people, because it risks damaging the company’s lucrative relationship with SAIC.
This could also hurt the company in China, where consumers have previously boycotted brands that acknowledge controversies in Xinjiang that Beijing vehemently denies.
Chinese consumers boycotted brands including H&M and Nike three years ago after they pledged not to buy Xinjiang cotton — a scenario that VW, which has lost market share in its most profitable market, has carefully avoided.
VW did not immediately respond to a request for comment on the developments in the UK. The automaker said on Thursday that it “has always complied with legal requirements in its communications,” adding that “investors or the public have never been misled.”
The UK Department for Business and Trade did not immediately respond to a request for comment.
