Hundreds of Global Companies and Investors Linked to the Uyghur Region’s Gold Industry
Rapid expansion of mining in the Uyghur Region exposes numerous industries to state-imposed forced labour
November 9, 2023
Global retailers, financial institutions, and metals exchanges must take urgent action, including fully mapping supply chains to the raw material level, to cut all links to the Xinjiang Uyghur Autonomous Region (Uyghur Region). New research by C4ADS alleged that almost 1,500 companies, including Home Depot, Apple, NVIDIA, and American Eagle, are at risk of supply chain exposure to gold mines and refineries in the Uyghur Region. Further, governments that use gold as a store of value are exposed, and international investors are also at risk as publicly traded Chinese mining companies with operations in the Uyghur Region are included in investment portfolios and index funds.
Fractured Veins, by C4ADS, mapped the scale and locations of current and planned minerals extraction in the Uyghur Region and claims that resource extraction companies are participating in state-imposed forced labour programmes. Four of the top 10 gold companies in China — Zijin Mining, Shandong Gold Group, Zhaojin Gold Group, and Lingbao Gold Group — reportedly own gold mines and refineries in the Uyghur Region. All four are alleged to have received state-sponsored labour transfers. According to the report, global retailers of toys, automobiles, jewellery, apparel, electronic devices, and more are at risk of selling tainted goods due to their alleged supply chain links to these companies.
According to the findings, the mining and associated industries related to coal, natural gas, gold, iron, and steel alloying elements are expanding in the Uyghur Region, and a particular focus has been placed on lithium extraction and processing. Previous research has highlighted investment by the Chinese government into the expansion of the processing and production of materials such as polysilicon, aluminium, copper, steel, and bauxite in the Uyghur Region. This demonstrates the growing reliance of green technology and renewable energy on the Uyghur Region and, in turn, a growing risk of exposure to state-imposed forced labour in mining supply chains.
The report finds accreditation processes, like social audits, are failing to uphold their own human rights standards. Major Chinese mining companies’ operations in the Uyghur Region have successfully obtained accreditation by LBMA (London Bullion Market Association), including refineries owned by three of the top gold companies alleged to have received government-sponsored labour transfer of Uyghurs and other Turkic and Muslim-majority peoples, despite LBMA requiring accredited companies adherence to a mandatory responsible sourcing programme designed to counter human rights abuses.
The end users of gold and other minerals, including governments and companies alike, have the power and responsibility to immediately take action to eliminate reliance on Uyghur forced labour.
- Enact and robustly enforce import control legislation banning imports of goods made with forced labour. This legislation must include appropriate mechanisms to address state-imposed forced labour, such as the ability to restrict the importation of goods from a region or specific product groups.
- Impose targeted sanctions on individuals and entities that are responsible for, or benefit from, forced labour.
- Use all possible mechanisms to pressure the Chinese government to end forced labour and human trafficking in the Uyghur Region.
- Ban investments in companies complicit in systemic and egregious human rights abuses in the Uyghur Region.
- Urgently trace their entire supply chain, address any points of exposure to Uyghur forced labour, and fully exit the Uyghur Region including immediately terminating any direct or indirect relationships linked to Uyghur forced labour at every tier of their supply chain. This includes ceasing any sourcing from companies with mines in the Uyghur Region or from companies that source from the Uyghur Region.
- Conduct due diligence, including desk-based research in Chinese language, to identify whether any suppliers have participated in state labour transfer programmes. If participation in state-sponsored labour transfers of Uyghurs and other Turkic and Muslim-majority people is identified, the company must use any leverage it has to end those suppliers’ (or sub-suppliers’) participation in these programmes on an expedited basis. If a supplier is unwilling to end participation promptly and expeditiously, the only responsible option a company has is to end that business relationship.
- Individual and institutional investors should divest from companies that have mines in or procure minerals from the Uyghur Region, and financial firms should remove such companies from their index funds or other products.
- Global metals exchanges, including LBMA, should not accredit mining companies with a footprint in the Uyghur Region, as they do not meet minimum human rights standards.
Photo by Google Earth 2023 Maxar Technologies