As of: February 16, 2024, 6:10 p.m
By: Christiane Kühl
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VW and BASF are facing growing criticism over their factories in Xinjiang, as China is accused of a system of forced labor there.
BASF is now withdrawing, VW could follow.
Volkswagen and BASF have been under pressure for some time.
Both companies operate factories with joint venture partners in the Chinese province of Xinjiang.
These have long since become a burden for them since reports emerged about a camp system for the Muslim minorities in Xinjiang, in which hundreds of thousands of members of the Uighurs in particular were temporarily interned.
Many were later sent to companies for forced labor.
BASF has now pulled the ripcord and will withdraw from Xinjiang.
Volkswagen initially remained silent.
But VW is now also examining a reorganization of its activities in Xinjiang, as the German Press Agency reported on Wednesday.
Until now, VW had stubbornly held on to the car factory in Xinjiang's capital Urumqi, which opened in 2013.
The Wolfsburg-based company always pointed out that the plant was a joint venture with the Chinese car company Shanghai Automotive (Saic), in which Saic had the majority control.
Is the turnaround now coming?
The Volkswagen Group is currently in talks with Saic-Volkswagen “about the future direction of business activities in the Xinjiang province,” a company spokesman told the dpa on Wednesday.
“Various scenarios are currently being intensively examined.” The spokesman left it open whether a withdrawal from the region would also be under discussion.
But it is a first signal that a rethink is beginning in Wolfsburg.
At the same time, Handelsblatt
reported
on Wednesday about new evidence from Xinjiang researcher Adrian Zenz about the use of forced labor in the construction of a VW test track that opened in 2019 near the oasis town of Turpan in Xinjiang.
According to Zenz, there is “clear evidence of this on the website of the companies that built the VW Saic test track”.
That is likely to increase the pressure further.
BASF as a pioneer: The withdrawal from Xinjiang has been implemented since the end of 2023
BASF, however, has already made the decision.
On Friday, the group announced that it was selling its own shares in the two joint ventures BASF Markor Chemical Manufacturing and Markor Meiou Chemical in Korla in central Xinjiang.
The sales process was initiated in the fourth quarter of 2023.
In the statement, BASF referred to media reports about the joint venture partner Markor from Korla, which contained "serious allegations" that are "incompatible with BASF's values."
Markor is accused of actively participating in the surveillance of Uyghurs in the region.
According to reports from ZDF and
Spiegel,
employees of the company are said to have spied on Uighurs.
BASF has been producing the chemical butanediol (BDO) with Markor in China since 2016, a precursor for, among other things, technical plastics, polyurethane, solvents and elastic fibers.
BASF's decision to completely withdraw from Xinjiang marks a turnaround for the company, said Renata Alt, chairwoman of the Human Rights Committee in the Bundestag.
“The international companies no longer want to become involuntary accomplices in China’s human rights violations with their presence in Xinjiang, even if it means additional costs,” said the FDP politician to
IPPEN.MEDIA
.
“It is also time for VW to withdraw from Xinjiang.
Xinjiang must finally become a 'no-go' for Western companies." The umbrella organization of critical shareholders (DKA) has also been calling on VW to move away from the location for months.
Controversial VW plant in Urumqi: Now Wolfsburg is apparently negotiating with its partners about the future © Stephan Scheuer/dpa
Xinjiang should disappear from supply chains because of the human rights situation
BASF and VW have long tried to separate the human rights situation in Xinjiang from their own factories.
In its statement on Friday, BASF emphasized that regular external and internal audits had “not revealed any evidence of human rights violations in the two joint ventures.”
In fact, the new allegations relate to Markor's activities outside of the cooperation.
But this also shows how difficult it is for a company in Xinjiang to isolate itself from the overall situation.
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VW also commissioned a company in the summer to investigate working conditions in Urumqi for human rights violations.
The auditors announced in December that they could find no evidence or evidence of forced labor among employees at the plant.
BASF: balancing act to protect China business
After withdrawing from Xinjiang, BASF would like to continue all other activities in China.
And so the chemical company is faced with the challenge of pulling out without angering the Chinese government.
Beijing denies the forced labor allegations and describes the camps as training centers;
The government always reacts extremely sensitively to company criticism.
In its announcement on the Xinjiang exit, BASF first of all referred to the high CO₂ footprint of the Korla plants.
“Coal is used there as a raw material and the production process is energy-intensive.” In view of high competitive pressure and global overcapacity, BASF wants to adapt its global BDO portfolio “in order to make competitive offers with a low CO₂ footprint.” The careful choice of words shows how This tightrope walk is tricky.
It would be no different at VW.
(with material from dpa)