Staff rebel at consultancy behind VW review of Xinjiang rights abuse

The consultancy firm hired by Volkswagen to investigate allegations of forced labour in the carmaker’s Xinjiang plant in China is facing a staff rebellion after the report cleared the German company of human rights abuses, according to insiders.

All of Löning’s 20 employees, except the founder Markus Löning and another executive, have asked to make it clear they were not backing the conclusions of the audit. VW commissioned it earlier this year in response to complaints from investors over mounting evidence of rights violations in the region.

The auto group last week released a one-page summary of the audit of its Xinjiang plant — which is run by its local joint venture partner SAIC, a state-owned company — and a statement from the consultancy’s founder Markus Löning, who said the review did “not find any indications or evidence of forced labour among the employees”.

However, a few days later, the consultancy issued a statement on LinkedIn that appeared to distance the firm from its own findings.

“The project was overseen and facilitated by Markus Löning and Christian Ewert,” the post by the firm’s official LinkedIn account read, adding that “no other team member from Löning participated in, supported or backed this project”.

“The human rights situation in China and Xinjiang and the challenges in collecting meaningful data for audits are well known,” the statement said, adding that such challenges had been encountered “in this project”.

The statement was issued to reflect the outrage among staff at the firm, according to people close to the situation. “The whole team is distancing itself from [the audit],” said one person familiar with continuing discussions, citing concern over the veracity of data collected in a region where the Chinese government has severely repressive policies in place.

“There’s a lot of anger,” the person added, pointing out that the firm was not accredited to conduct SA8000 audits — a human rights standard that VW said Löning decided to apply to the review.

According to VW, the actual audit had been carried out by an unnamed Shenzhen-based law firm, while the Löning consultancy had “accompanied on site”.

Löning, the founder, said that SA8000 had been used as a “framework” for data collection and its audit was not a certification. He added that the Löning team member who oversaw the project had over 20 years experience of social audits in China.

VW’s initial announcement of an independent audit of its plant in Xinjiang sparked questions as to how freely any auditor would be able to ask politically sensitive questions at a plant run by a Beijing-owned company in a region where the Chinese government has detained hundreds of thousands of people.

Löning said his firm encouraged “open dialogue within the team” and said the statement posted on its LinkedIn page served to “share information about our individual roles [ . . . ] in the project”.

He said that the main basis for the audit had been a review of documentation relating to the 197 employees at the plant rather than interviews adding that this could be “dangerous”. “Even if they would be aware of something, they cannot say that in an interview,” he said.

Löning added that the audit had purely focused on the wellbeing of the plant’s employees, explaining that his firm was not commenting on the “symbolism” of VW’s presence in Xinjiang.

The controversy reflects an increasingly tight balancing act for many German companies such as VW, which depend on China for a large proportion of their profits and try to stay clear of upsetting Beijing or Chinese consumers, which have in the past boycotted brands that respond to reports of human rights abuses in Xinjiang.

Rushan Abbas, a Uyghur American activist whose sister has been imprisoned by Chinese authorities, said in her view, the audit of VW’s plant in Xinjiang was “aiding and abetting the Chinese government’s crimes against humanity”.

“To think that such a sham was executed against the advice and vehement opposition of his own experts is not just irresponsible, it’s morally bankrupt,” she added.

Löning and VW declined to comment on the criticisms.