Volkswagen says Xinjiang plant audit finds no evidence of forced labour

Volkswagen has said that an audit of its plant in Xinjiang, the region of China at the centre of accusations of human rights abuses, has found no indications of the use of forced labour.

The German company this summer announced it would commission an independent review of the plant, following persistent complaints from investors and human rights groups. The facility carries out quality checks for cars sold in the region and is run by VW’s Beijing-owned joint venture partner SAIC.

“We could not find any indications or evidence of forced labour among the employees,” said Markus Löning, managing director and founder of the German human rights and corporate responsibility consultancy Löning, which accompanied an unnamed Shenzhen-based law firm that carried out “the actual audit execution”.

Löning, who used to serve as Germany’s human rights commissioner, said the team had conducted 40 interviews at the Urumqi-based factory that employs 197 people and been allowed to “freely” inspect the factory, but added that “the situation in China and Xinjiang and the challenges in collecting data for audits are well known”.

Critics of VW’s decision to maintain its plant in Xinjiang — a region where China has been accused of using forced labour as well as the mass internment of local populations in detention camps — have questioned how freely any auditor would be able to carry out a politically sensitive job at a plant run by a Chinese state-owned company.

China has recently cracked down on consultancy and auditing firms, and in March raided due diligence firm Mintz, partially because of its work in Xinjiang.

Löning noted the employees of the Xinjiang plant have “little to do”, highlighting how VW has found itself in a position where it would risk angering Beijing and Chinese consumers by walking away from the factory. These have in the past boycotted brands that respond to reports of human rights abuses in Xinjiang.

VW, which was one of the first western companies to enter China in the 1970s, is fighting for its position amid growing competition from domestic brands such as BYD.

Manfred Döss, VW’s board member responsible for integrity and law, said the audit had been carried out with the “necessary consent” of SAIC.

“We will continue to take any indications of human rights violations very seriously in the future,” he added.