July 12 (UPI) — Canadian regulators announced Wednesday parallel probes of Nike Canada and miner Dynasty Gold over claims the companies’ supply chains and operations used or benefited from minority-Uyghur forced labor.
The investigations were launched off the back of initial assessments published Wednesday of two of more than a dozen complaints about the overseas operations of Canadian companies filed by a coalition of 28 human rights groups in 2022, the Canadian Ombudsperson for Responsible Enterprise said in a news release.
The assessments detail allegations that Nike Canada has supply relationships with several Chinese companies identified as using or benefitting from the use of Uyghur forced labor and Dynasty Gold gained from the use of forced Uyghur labor at a mine in northwest China.
“I have decided to launch investigations into these complaints in order to get the facts and recommend the appropriate actions,” said ombudsperson Sheri Meyerhoffer. “I have not pre-judged the outcome of the investigations. We will await the results and we will publish final reports with my recommendations.”
“It is our mission to resolve human rights complaints in a fair and unbiased manner in order to help those impacted and to strengthen the responsible business practices of the companies involved,” added Meyerhoffer who said assessments of a further 11 complaints would be published in the coming weeks with decisions on next steps.
Both companies deny the allegations with Nike saying it no longer had ties with the Chinese companies in question while Dynasty Gold argued it did not have operational control of the mine and that the allegations were made after it ceased operating in the region.
The complaint against Nike alleges it has relationships or supply chain links to six Chinese suppliers that the Australian Strategic Policy Institute and Sheffield Hallam University have identified as using or benefiting from Uyghur forced labor and has taken no concrete steps to “ensure beyond a reasonable doubt” there is no forced labor in its supply chain.
Nike is the primary customer, the complaint states, of Qingdao Taekwang Shoes which employs Uyghur workers who attend after-work “vocational training” and “patriotic education” classes. The allegation is backed by bills showing Nike received at least three shipments from QTS in July 2019.
Another company, Haoyuanpeng Clothing Manufacturing, which advertises its relationship with Nike, exports Uyghur workers to its headquarters in Anhui province and uses them in its factory in Xinjiang. It alleges that the workers transferred to Anhui were all “graduates” of the Jiashi County Secondary Vocational School, which has operated as a “re-education” camp for Uyghur people since 2017.
Nike is alleged to have imported to Canada six documented shipments in 2020 from Esquel Textile, a company that has been identified as using Uyghur forced labor, months after Nike denied having any relationship with Esquel.
The complaint also alleges a link between Nike and Huafu Fashion which owns a subsidiary in Xinjiang, purchases Xinjiang cotton, engages in state-sponsored labor transfers, and assists with the paramilitary Xinjiang Production and Construction Corps on labor transfers. The same allegations are made against Texhong Textile, which also purchased cotton from the XPCC.
Nike failed to respond to a request to conduct human rights due diligence to ensure Uyghur forced labor was not being used and to cut ties with three of the Chinese companies. But in a 2020 statement, it denied any relationship with three of the Chinese companies and said it took “reasonable steps to ensure beyond a reasonable doubt that none of its materials are sourced from Xinjiang”.
The complaint against DYG states that Uyghurs were among the workforce of its Hatu gold mine in northwest Xinjiang province close to Uyghur “detention” or “re-education” centers and that the company had failed to respond to a 2021 request to conduct human rights due diligence to ensure Uyghur forced labor was not being used.
The complainants accepted that while DYG’s ongoing legal battle over ownership and operational control of the mine with its state-owned local partner meant it was possible it did not, as it claims, have control over the mine this did not absolve it of its responsibility to ensure that forced labor is not present in its overseas mining operations.
In the absence of a detailed answer from DYG regarding its due diligence activities in the Hatu mine, the complainants believe it is likely that these risks have not been mitigated and that DYG has not attempted to bolster the human rights due diligence of its business partner.
