EXCLUSIVE US electronics firm struck deal to transport and hire Uyghur workers

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QINZHOU, China, Oct 7 (Businesshala) – US remote-control maker Universal Electronics Inc (UEIC.O) told Businesshala it has agreed with authorities in Xinjiang to move hundreds of Uighur workers to its plant in the southern Chinese city of Qinzhou. made a deal. The first confirmed incident of a US company participating in a relocation program described by some rights groups as forced labor.

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The Nasdaq-listed firm, which has sold its equipment and software to Sony, Samsung, LG, Microsoft and other tech and broadcast companies, has laid off at least 400 Uyghur workers from the far-western region of Xinjiang as part of an ongoing workforce. Has appointed in- Qinzhou and Xinjiang, the transfer agreement according to the official notice and the company and local authorities in the local state media.

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In at least one instance, Xinjiang authorities paid for a charter flight that delivered Uighur workers under police escort from Xinjiang’s Hotan city – where the workers are from – to the UEI plant, officials from Qinzhou and Hotan. According to interview by Businesshala. The transfer is also described in a notice posted on an official Qinzhou Police social media account at the time of the transfer in February 2020.

Responding to Businesshala questions about the relocation, a UEI spokeswoman said the company currently employs 365 Uighur workers at the Qinzhou plant. It said it treated them the same way as other workers in China and said it did not consider any of its employees to be forced labour.

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Sony Group Corp (6758.T), Samsung Electronics Co Ltd (005930.KS), LG Corp (003550.KS) and Microsoft Corp (MSFT.O) each say in social responsibility reports that they are using forced labor in their supplies. prohibit the. chained and are taking steps to stop it.

Sony declined to comment on specific suppliers. In a statement to Businesshala, it said that if a supplier is confirmed to have committed a major breach of its code of conduct, which prohibits the use of forced labor, “Sony will make appropriate countermeasures including implementing corrective actions and includes a request to cease business with such supplier.”

A Microsoft spokesperson said the company takes action against any supplier that violates its code of conduct, up to the termination of its business relationship, but that UEI was no longer an active supplier. “We haven’t used hardware from the supplier since 2016 and have no affiliation with the factory,” the spokesperson said.

A Samsung spokesperson said the company prohibits its suppliers from using all forms of forced labor and requires that all employment be freely chosen. He declined to comment on the UEI.

LG did not respond to requests for comment.

A UEI spokeswoman said the company covers the cost of relocation of workers from Guangxi’s local airport or train station to its Qinzhou plant, the area in which Qinzhou is located. She said the company does not know how workers are trained in Xinjiang or who pays for their transportation to Guangxi.

Businesshala was unable to interview the plant workers and therefore was not able to determine whether they were being forced to work at UEI. However, the conditions they face identify standard definitions of bonded labor as working in isolation, under police guard and with restricted freedom of movement.

According to Qinzhou government notices and descriptions from local state media, UEI’s Uighur workers remain under surveillance by the police during their transportation and life at the factory, where they eat and sleep in separate quarters.

Such programs have moved thousands of Uighur laborers to factories in Xinjiang and elsewhere. Amnesty International, Human Rights Watch and other rights groups, citing leaked Chinese government documents and testimony of detainees that they were forced into such jobs, say the programs are coercive and that the majority-Uighurs in the region They are part of China’s overall plan to control the population. .

Responding to questions from Businesshala, China’s foreign ministry did not address employment at the UEI, but denied forced labor anywhere in the country.

“This so-called ‘forced labour’ is a completely fabricated lie,” the ministry said in a statement. “Xinjiang migrant workers in other parts of China, like all workers, enjoy the right to employment in accordance with the law. The right to sign a labor contract, the right to labor remuneration, the right to rest and leave, the right to labor protection and the right to health protection, insurance and welfare rights and other legal rights.”

Xinjiang officials did not respond to requests for comment.

The US State Department, which has criticized China and several other governments for condoning forced labor, said that the United States had “reconciled the conditions as well as the state-sponsored forced labor practices employed by the (Chinese) government in Xinjiang”. There have been reliable reports of forced labor outside Xinjiang involving members of these groups.”

A State Department spokesman declined to comment on the UEI, but said profiting from forced labor in the United States was a crime under the US Trafficking Victims Protection Act.

The law criminalizes participation in an enterprise where the defendant knew or negligently disregarded the fact that the enterprise “willfully gain, pecuniary or otherwise, the act of obtaining anything of value,” the spokesperson said in a statement. engaged in forced labour.” The law imposes criminal liability on persons or entities present in the United States, the statement said, even when forced labor occurs in another country.

The State Department referred Businesshala to the Justice Department for further comment on the UEI; Justice did not respond.

Goods imported into the United States wholly or partly by forced labor are also an offense under section 307 of the Tariff Act of 1930. UEI told Businesshala that “very small quantities” of products made at its Qinzhou factory are exported. United States of america. It did not specify who bought the goods.

The law is enforced by US Customs and Border Protection, which can seize imports and initiate criminal investigations of the importer. Customs said it did not comment on whether specific entities were under investigation.

Legal experts told Businesshala that there have been very few forced labor prosecutions in the United States over abuse abroad, given the difficulty of proving guilt. David McCain said, “As the law currently stands, there is little the US government can do to hold American companies accountable when they build, manage and manage supply chains that engage in forced labor and other human rights abuses outside the United States.” and profit.” , deputy director of the International Corporate Accountability Roundtable, a coalition of rights groups.

Legislation before the U.S. Congress, called the Uighur Forced Labor Prevention Act, was designed to tighten restrictions by creating the legal presumption that any products made in Xinjiang are the result of forced labor, requiring importers to prove burden that they are not. The latest version of the law was passed by the Senate this year, but has yet to be passed to the House of Representatives.

A UEI spokesperson told Businesshala that the company does not independently conduct due diligence on where and how it trains its employees in Xinjiang. She said the arrangement is investigated by a third-party agent working with the Xinjiang government, which brokered the deal. He declined to identify the agent. Businesshala could not determine whether the agent is an independent or works for the Xinjiang government.

‘Professional’ International Camp

China has detained more than one million Uighurs since 2017 in a system of camps as part of an anti-extremism campaign, according to estimates by researchers and UN experts. China describes the detention camps in the region as vocational education and training centers and denies allegations of rights abuses.

According to state media and government notices at the time, organized transfers of Uighur workers to other parts of China occurred in the early 2000s. The program has expanded since about 2016, Xinjiang officials said in late July, around the time the mass detention program began.

Xinjiang officials told reporters at a Beijing media conference in late July that relocation of workers outside Xinjiang is normal and voluntary. “Xinjiang has many labor-intensive industries that adapt to people’s skills,” said Xu Guijiang, a provincial government spokesman. “They go where the market needs them.”

Suppliers of some US companies have been accused of using forced labor brought from Xinjiang. The Australian Strategic Policy Institute (ASPI), a think tank, released a report last year identifying 83 brands linked to Uighur labor transfer programs, citing Chinese-language documents, satellite-imagery analysis and media reports. However, none of the US companies was directly involved in the transfer.

In addition to remote-control technology, UEI also manufactures home security products under the EcoLink brand. It has more than 3,800 employees in 30 countries and has a market value of approximately $670 million. It is headquartered in Scottsdale, Arizona, but the company has no plants in the United States.

The company’s two largest investors are funds operated by BlackRock Inc. and Eagle Asset Management, which is affiliated with Carillon Tower Advisors.

BlackRock declined to comment. A spokesperson for Eagle Asset Management said: “After becoming aware of alleged labor issues associated with one of our investments, we immediately contacted the company’s senior leadership and they have assured that labor is paid, humanely treated. is done and employed at will. Should we learn otherwise, we will take appropriate action.”

government funding

Six groups of workers were moved from Xinjiang to the UEI factory between May 2019 and February 2020, according to Qinzhou government notices confirmed to Businesshala by government officials in Xinjiang and Guangxi.

In early 2020, as the new coronavirus began to spread…

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