Report: Driving Force - Automotive Supply Chains and Forced Labor in the Uyghur Region
"Driving Force - Automotive Supply Chains and Forced Labor in the Uyghur Region", December 2022
[...] This report describes the expansion of auto parts and materials production in the Uyghur Region, documents the abuses committed by some of the largest industry actors, and traces the products of those businesses to western car brands, through direct and indirect supply chain links.
Using publicly available sources, including corporate annual reports, websites, and publicity campaigns; government directives and state media, and customs records, we identified the following:
- 96 mining, processing, or manufacturing companies relevant to the automotive sector operating in the Uyghur Region, including at least 38 that have documented engagement in state-sponsored labor transfer programs.
- over 40 automotive-sector manufacturers in China that are sourcing from the Uyghur Region or from companies that have accepted Uyghur labor transfers across China.
- more than 50 international automotive parts or car manufacturers (or their joint ventures) that are sourcing directly from companies operating in the Uyghur Region or from companies that have accepted Uyghur labor transfers across China.
- more than 100 international automotive parts or car manufacturers that have some exposure to forced Uyghur labor made goods.
Several major international auto manufacturers—including Volkswagen Audi Group, Honda, Ford, General Motors, Mercedes-Benz Group, Toyota, Tesla, Renault, NIO, and Stellantis Group had several supply chain exposures to the Uyghur Region.
The first several chapters of this report zoom in on three base metals that are central to car part and whole car manufacturing— steel, aluminum, and copper—to demonstrate the central role the Uyghur Region plays in the making of our cars. [...]
We traced the customers of companies that mine, process, and manufacture products relevant to the automotive industry that have engaged in forced labor in the Uyghur Region. The results were startling—practically every major traditional automotive and electric vehicle manufacturer has significant exposure to forced labor in the Uyghur Region. The auto industry cannot wait another day to trace their supply chains back to the raw materials. To do anything short of full tracing would be an enormous legal, ethical, and reputational risk. [...]
Recommendations to Governments
- Governments and legislatures should enact and implement mandatory human rights due diligence laws and ensure the laws require companies to address human rights risks beyond first-tier suppliers, in recognition that abuses can easily be distanced from direct suppliers under state-controlled economic systems. [...]
- Governments and legislatures should enact and implement bans on imports linked to forced labor. [...]
- Governments should identify the automotive sector as a priority for the implementation of forced labor import bans. Governments should devote substantial resources to identifying automotive parts and materials linked to forced labor. The United States should, in particular, name the aluminum, steel, and automotive industries as high-priority sectors under the Uyghur Forced Labor Prevention Act (UFLPA).
- Governments should require that all procurement (including the purchase, lease, and rental) of automobiles for official use be free of parts made in whole or in part in the XUAR.
Recommendations to Car Companies
- Car companies should work individually and collectively to conduct or commission their own supply chain mapping and analysis of raw materials mining and processing and parts manufacturing in the XUAR.
- Corporations in the automotive industry and commodities trading firms should engage in both internal and cross-sector collaborative efforts to cease sourcing all products mined, made, or manufactured, in whole or in part, in the Uyghur Region. [...]
- In adherence to the UN Guiding Principles on Business and Human Rights, automotive companies conducting enterprise-wide human rights due diligence should prioritize links to the XUAR as a matter of urgency, as the human rights impacts are severe and pervasive in the region. [...]
- Auto manufacturers should publicly report on findings of supply chain links to the XUAR to facilitate knowledge of supply chain risks across the automotive industry and industries with related supply chains. [...]
- Car companies should not assume that suppliers or sub-suppliers, including mines, mineral processors, and other facilities, are free from links to forced labor in the XUAR, whether at their own facilities or in their supply chains, simply because they have made an attestation to that effect, received an industry certification, or conducted an audit pursuant to industry initiatives or supply chain due diligence schemes.
- Auto manufacturers should exit the Uyghur Region at every level of their supply chain and cease doing business with suppliers implicated in Uyghur forced labour in line with the demands of the Coalition to End Forced Labour in the Uyghur Region.
- Remediation of harms inside China is impossible at this time, so car companies are recommended to collaborate with raw metals industries and industry associations to implement reparations to Uyghurs and other minoritized populations in the diaspora working to address oppression and exploitation in the Uyghur Region.
Recommendations to other Stakeholders
- All financial institutions and other investors (e.g. commodities traders) should divest from all companies operating in the XUAR or using state-supplied laborers from the Uyghur Region. Passive investment index funds should de-list the companies identified in this report as engaging in state-sponsored labor transfers.
- The London Metal Exchange should suspend issuing warrants to and withdraw current warrants for any companies linked directly or indirectly to state-sponsored labor transfers in the Uyghur Region. [...]