A Canadian solar company that built a photovoltaic plant in China’s Xinjiang region is promising an independent investigation of whether any workers in its supply chain are there against their will, after telling a shareholder activist firm it was impossible to do such an assessment and accusing those raising forced labour concerns of “battering the victims.”
Canadian Solar Inc., with headquarters in Guelph, Ont., has partnered in China with GCL-Poly Energy Holdings Ltd., whose network of companies in that country has employed people from a Chinese government program to transfer people, many of them Uyghurs, to industrial workplaces. Treatment of the largely Muslim Uyghur community by Chinese authorities has been called “genocide” by Canada’s Parliament.
Canadian Solar also built a solar generating project in Tumxuk, Xinjiang.
But the company now says it sold that project last year and is promising to request board approval in the next two weeks to hire a third party “with the qualification and willingness to implement a due diligence audit on human rights and forced labour issues in our operations and supply chain,” director of investor relations Isabel Zhang said Monday in a written response to questions from The Globe and Mail.
Ms. Zhang provided no further information on what might be involved in such an assessment, or whether it might be made public.
Anthony Schein, director of shareholder advocacy at Share, a Toronto-based research and advisory firm that works with large investors to promote sustainability and inclusivity, said it’s unclear how much the company can accomplish if it does not make clear what it intends to do.
“Without knowing the details of what they’re actually proposing to do here, it is hard to feel satisfied that the review planned is going to be sufficiently in-depth and transparent and have the right kinds of safeguards and design in place to make sure that it’s adequate,” he said.
The promise nonetheless marks a shift from Canadian Solar in the face of growing investor pressure – led in part by Share – over its reliance on companies in China with links to Xinjiang, where authorities have been accused by Western governments and human-rights groups of widespread use of forced labour.
In April, Canadian Solar executives rejected Share’s request for a shareholder proposal calling for an independent and transparent assessment into whether forced labour exists in the company’s operations, supply chains and business relationships.
“This work is not capable of being completed,” Canadian Solar general counsel Jianyi Zhang wrote in an April 20 e-mail to Share provided to The Globe.
“We have tried the approach but couldn’t find one consultant,” Huifeng Chang, the company’s chief financial officer, said in a separate April 19 e-mail. Mr. Chang faulted Western advocacy groups, saying they “mistakenly regard any employment of Uyghurs as forced labour, which has caused severe harm to the Uyghurs we all love.” Canadian Solar does not employ any Uyghurs, he said, and “has no presence in Xinjiang.”
“It is unfortunate that people are battering the victims because they can’t reach the culprits,” he wrote.
Researchers have raised concern about Canadian Solar’s long-standing partnership with GCL-Poly Energy Holdings Ltd., which has “employed coerced surplus labourers” in Xinjiang, according to In Broad Daylight: Uyghur Forced Labour and Global Solar Supply Chains, a report published last year by Sheffield Hallam University.
Canadian Solar maintains a solar cell production joint venture with GCL-Poly “which may be affected if that facility is importing polysilicon from the GCL subsidiary in Xinjiang,” said the report, published in May, 2021. Canadian Solar says it has terminated its joint venture with GCL.
Chinese authorities have designated many Uyghurs as “surplus labour.” Such workers have been sent to work in factories away from home, some thousands of kilometres away, as part of a sweeping campaign in Xinjiang that has included incarcerating large numbers of people in schools for political indoctrination and skills training, and imposing strict constraints on Uyghur births. China has been widely condemned by Western governments and human-rights groups for its actions.
Canadian Solar has strengthened its policies against forced labour and “is committed to ensuring that modern slavery does not take place anywhere in our business, including our supply chain,” Shawn Qu, the company’s chief executive, said in March.
But for industry claims of eliminating forced labour to be credible, they need to be buttressed with more information, said Laura Murphy, a professor of human rights at Sheffield Hallam University and one of the authors of the In Broad Daylight report.
Across the sector, “there is very little in the way of details regarding how sourcing has changed and who the new suppliers are,” she said. “Without transparency, consumers and stakeholders should not simply trust that the work is done.”
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