Watchdog investigation claims Nike Canada, a gold company, profits from forced Uyghur labour

Canada’s corporate crime watchdog says it has enough to launch an investigation into allegations that Nike Canada and a Canadian gold mining company are profiting from the forced labor of Uyghurs in China.

It is the first time that the Office of the Canadian Ombudsperson for Corporate Responsibility (CORE) has launched an investigation since the federal government appointed Sheri Meyerhoffer to the position in April 2019.

Meyerhoffer made the announcement Tuesday in response to complaints filed with her office by a coalition of 28 civil society organizations, including the Uyghur Rights Advocacy Project.

The complainants alleged that Nike Canada Corp. has supply relationships with six Chinese companies that use or benefit from Uyghur forced labor, according to the Australian Strategic Policy Institute (ASPI).

The think tank released a report in 2020 with an estimate of over 80,000 Uighurs had been transferred to factories all over China. It said some had been sent directly from detention camps.

Last year, the United Nations concluded that China had committed “serious human rights violations” against Uyghurs and other Muslim communities, particularly arbitrary detentions that could constitute crimes against humanity.

The coalition argued that there is no indication that the popular clothing company has taken concrete steps to ensure “beyond reasonable doubt” that forced labor is not involved in its supply chain.

In a separate complaint, the group alleges that the mining operations of Dynasty Gold Corp. in northwestern Xinjiang, China, use or benefit from Uyghur forced labour. The complainants point to a statement from the mine’s CEO in January 2021 that “many ethnicities, including Uighurs, were represented across all walks of life in the workforce.”

Meyerhoffer said she reviewed the complaints and decided there was enough to dig deeper.

“At first glance, the complainants’ allegations raise serious concerns regarding the potential abuse of the internationally recognized right to be free from forced labor,” Meyerhoffer said in a copy of her initial assessment, made public Tuesday.

“I have decided to investigate these complaints to establish the facts and recommend appropriate action. I have not pre-empted the outcome of the investigations. We await the results and will publish final reports with my recommendations. “

Nike Canada denies the allegations

The complainants allege that Nike Canada is the main customer of Qingdao Taekwang Shoes Co. Ltd., a factory reportedly employing Uyghur workers who attend evening classes for “vocational training” and “patriotic education”.

It also said the clothing company has relationships with five other companies accused of using Uyghur forced labour:

• Haoyuanpeng Clothing Manufacturing Co. Ltd.,
• Esquel Textile Co. Ltd.,
• Qingdao Jifa Group,
• Huafu Fashion Co., Ltd,
• Texhong textile group.

Meyerhoffer’s office said it had made several unsuccessful attempts to contact Nike Canada Corp. as of summer 2022.

Earlier this year, Nike Inc., the parent company, rejected the ombudsman’s request for a meeting, but sent a statement saying it is “committed to ethical and responsible manufacturing and that we uphold international labor standards,” the report said. of the ombudsman.

“We are concerned about reports of forced labor in, and associated with, the Xinjiang Uyghur Autonomous Region (XUAR). Nike does not purchase products from the XUAR and we have confirmed with our contract suppliers that they do not use textiles or spun yarn from the region.” said a copy of Nike’s statement.

Meyerhoffer said there is a conflict between what Nike says and what an Australian Strategic Policy Institute report said about the factories in the region.

For example, she said there is a contradiction regarding Nike’s claim that Qingdao Taekwang Shoes Co. Ltd. stopped hiring new workers from Xinjiang after human rights abuses were reported by the ASPI in 2019.

CORE said it will continue to investigate Nike’s allegations through independent fact-finding, but added that mediation is available at any stage of the complaint process.

“Given the high-risk context, there is a need for increased human rights due diligence to identify, prevent and mitigate the human rights-related risks of Nike’s operations,” the first assessment report said.

“In this regard, Nike Canada Corp. has not provided a satisfactory response or resolution to the allegations in the complaint, nor has it sufficiently demonstrated that it conducts human rights due diligence.”

Mining company ‘deliberately avoided’ participation: ombudsman

Meyerhoffer fared worse as he tried to get Dynasty to respond despite multiple attempts

“DYG [Dynasty Gold Corp.] commented only on the draft initial assessment report. Prior to this, DYG appears to have deliberately avoided participating in and cooperating with the CORE dispute resolution process without providing any explanation,” the report said.

The mining company eventually sent a comment denying it has operational control over the Hatu mine. Meyerhoffer said that may not be true.

“DYG’s claim that it ceased its mineral exploration activities in Xinjiang in 2008 does not appear to be supported by the January 25, 2021 and April 13, 2022 press releases,” the report said.

“Even if DYG has no operational control, DYG is still responsible for ensuring that no forced labor is present at the Hatu mine, which it owns 70 percent.”

In a statement to CBC News, Dynasty CEO Ivy Chong called the initial assessment “totally baseless.”

“Like many Western companies, the wages we paid to local workers were almost double the local wages. We gave them on-the-job training like how to use mining software etc. Everyone was happy to work for us ,” Chong said.

“We do not understand on what evidence and on what basis CORE is conducting its investigation into Dynasty Gold Corp.”

Meyerhoffer said her team cannot travel to the Xinjiang region to conduct their research.

China insists it is not committing genocide

The coalition filed 13 admissible complaints with the CORE office, Meyerhoffer said Tuesday. Her assessments of the remaining 11 will be made public in the coming weeks.

“It is our mission to resolve human rights complaints in a fair and impartial manner to help those affected and to strengthen the responsible business practices of the companies involved,” she said.

In January 2021, the federal government announced a series of new regulations to ensure Canadian companies are not complicit in human rights violations or the use of forced labor in China’s Xinjiang province.

Later that year, Canadian MPs passed a motion saying that China’s persecution of Uighurs and other Turkic Muslim groups amounts to genocide, as defined in the 1948 UN Genocide Convention. Prime Minister Justin Trudeau and most of his cabinet were absent from the vote .

China has called the genocide allegations “the lie of the century”.