Volkswagen under fire over Xinjiang plant after China chief visit By Reuters

By Victoria Waldersee and Jan Schwartz

BERLIN/HAMBURG (Reuters) -Volkswagen drew criticism from campaigners and a giant investor on Tuesday after the top of its Chinese language enterprise stated he noticed no signal of pressured labour throughout a go to to the carmaker’s Xinjiang plant.

The works council, which is represented on Volkswagen (ETR:)’s supervisory board, in a press release following Ralf Brandstaetter’s feedback stated the corporate should clarify the plant’s worth for the enterprise and take a stance on human rights violations in China.

Activists, a global group of lawmakers and the top of sustainability and company governance at top-20 Volkswagen investor Deka Funding stated verifying labour requirements within the area was inconceivable.

“Nonetheless a lot Mr Brandstaetter makes an effort, Volkswagen can’t be sure. That leads not solely to reputational threat, but in addition authorized points, for instance with provide chain legal guidelines,” Deka’s Ingo Speich stated.

Volkswagen depends on income from China to fund electrical automobile analysis and improvement in Germany and is preventing home rivals to maintain market share within the nation.

Brandstaetter stated in January it was necessary to behave from a “place of energy” inside China and keep sturdy available in the market whereas additionally ramping up gross sales elsewhere.

On Feb. 16-17, he toured the German group’s jointly-owned facility with China’s SAIC in Xinjiang, together with Volkswagen’s compliance and exterior relations chiefs in China.

Rights teams have documented human rights abuses in Xinjiang, together with mass pressured labour in detention camps that the U.N. stated may represent crimes in opposition to humanity. China has denied any abuses in Xinjiang.

Volkswagen says it has by no means discovered proof of pressured labour amongst its Xinjiang workforce and its presence is optimistic for locals. It denied studies it had stored the plant open as a result of Beijing had imposed a situation it needed to maintain producing throughout China.

“I can speak to individuals and draw my conclusions. I can try to confirm the info [from joint venture partner SAIC], and that is what I did. I did not discover any contradictions,” Brandstaetter stated, including it was his first go to however not his final.

REPUTATIONAL RISK

Brandstaetter stated he spoke at size to seven employees individually – together with Han Chinese language, Uyghurs and Kazakhs – some by way of a Volkswagen translator and a few in English, and held shorter discussions with different employees on his tour, which he stated occurred with out authorities supervision.

However Luke de Pulford of the Inter-Parliamentary Alliance on China, a gaggle of legislators from thirty democratic international locations together with Britain, Germany, and america, stated labour requirements couldn’t be verified as a result of members of the Uyghur minority couldn’t communicate freely with out fearing for his or her security.

The plant’s employees have been lower by 65% for the reason that pandemic and it solely conducts closing high quality checks and the set up of sure options earlier than handing over autos to sellers.

Deliberate output for this yr is 10,000, in distinction to the 50,000 focused when it opened.

The carmaker was initially praised for organising the plant, chief lobbyist Thomas Steg stated, evaluating the purpose of constructing infrastructure and boosting dwelling circumstances to Germany’s reunification.

However the environment shifted after quite a few lethal assaults in Xinjiang and elsewhere between 2009-2014 which the Chinese language authorities blamed on militants from the area, resulting in a “considerably extra repressive method”, he stated.

Nonetheless, as Volkswagen seeks new companions worldwide – partly to diversify its enterprise from the Chinese language market – breaking its settlement to maintain the plant till no less than 2030 would make Volkswagen an unreliable companion and was out of the query, Steg stated.

“VW is caught in a state of affairs of reputational threat in Xinjiang,” Speich of Deka stated.