Xinjiang’s solar industry casts an offensive charm as sanctions emerge

A Xinjiang supplier of the world’s leading solar cell manufacturers has rejected allegations of forced labor practices, as the U.S. is considering imposing sanctions that threaten China’s remote region’s dominance of solar supply chains.

Daqo New Energy, one of Xinjiang’s largest polysilicon manufacturers, has staged a public relations campaign to combat the allegations and last week hosted a media tour attended by the Financial Times. The campaign was the latest step in a broad Beijing propaganda effort to counter foreign allegations of human rights abuses and genocide in the region.

Over the past decade, the Xinjiang government has used subsidies, preferential fiscal policies, and economic energy to secure a central position in the global solar panel supply chain. The northwestern region produces about 45% of the world polysilicon, a refined quartz material used in the vast majority of photovoltaic cells, devices that convert sunlight into electricity.

But Xinjiang’s polysilicon manufactures are being examined by human rights groups and foreign governments, who have alleged that the industry benefits from a controversial state-run labor transfer scheme, which they argue amounts to forced labor.

During the tour of the plant, which is located in an industrial park surrounded by wetlands, about a 30-minute drive north of Shihezi City, Daqo executives said there was no “forced labor at its plant. “. Executives added that they intended to back up this claim with an independent third-party audit.

However, these efforts are unlikely to be facilitated pressure abroad, analysts said. Even if individual producers like Daqo were authorized by the auditors, the role of the region in all stages of the integrated solar power supply chain meant that any company with operations in Xinjiang would struggle to avoid international scrutiny.

The Communist Party of China has been accused internally arbitrarily more than a million Uyghurs, Kazakhs, Uzbeks and other predominantly Muslim people in the region. Many detainees are transferred to factory jobs, a practice that human rights groups have claimed to be forced labor, as workers often have no choice but to take office.

Days after the tour of Daqo, a report published by the Helena Kennedy Center for International Justice at Sheffield Hallam University, used official company documents and reports from Chinese state media to show, in the most granular detail to date, numerous links to work programs throughout the world. solar energy industry in Xinjiang, including Daqo suppliers and customers.

“[Module] Manufacturers who want to avoid producing goods potentially contaminated by forced labor in Xinjiang will have to thoroughly examine their supply chains, down to quartz raw materials, to determine whether they are produced by forced labor, ”the authors wrote. the report.

Michael McCaul, the top Republican on the U.S. House Foreign Affairs Committee, told the FT that growing evidence should put more pressure on President Joe Biden to act.

“Report after report provides evidence of slave labor in the solar panel supply chain,” McCaul said. “John Kerry admitted that the solar panel supply chain is tainted by slave labor in China. How many tests do the world and the Biden administration need before they finally act? “

Kerry, Biden’s international climate negotiator, said last week that the state department was evaluating whether The Chinese solar industry it should be “the target of sanctions.” It was the first time that the Biden administration raised the possibility of taking such actions.

The parliament of the United Kingdom voted unanimously last month it declared China’s treatment of Uighurs as “genocide,” following similar designations by the Canadian and Dutch parliaments and the U.S. State Department.

Asked about the report, John Smirnow, vice president of market strategy for the Solar Energy Industries Association of the United States, said it showed that “the risk to all companies in the solar supply chain associated with labor complaints forced is too high ”.

In Shihezi, a city 150 km west of Urumqi, the capital of Xinjiang, Yang Ming, Daqo’s chief financial officer, told the FT that he hoped the guided tour would help “clear up this misunderstanding.” forced labor.

Daqo, Yang said, wanted to “prove that nothing happens in our company.”

In a tour of the refinery, Daqo stressed that the process of converting silicon metal powder into high-purity polysilicon was a highly technical and largely automated process.

Aside from about 40 employees sitting in front of computer screens at a command center, only a handful of workers were visible on the grounds of the chemical plant. To minimize the risk of contamination by human contact during the later stages of the process, journalists were asked to wear strap suits, hair nets, and plastic shoe covers.

The company said it had a non-discriminatory hiring policy and employed more than 2,000 workers, none of whom were Uyghur.

Yang added that Daqo had received written assurances from its suppliers and customers that they did not use forced labor.

But Daqo’s efforts are unlikely to do so convincing American buyers of Chinese solar modules that the largest supply chain in Xinjiang is free of forced labor.

Daqo has a unique position compared to other polysilicon producers in the region, due to its listing in New York. A “net health score on a single facility is not a positive score for the entire supply chain,” said Nathan Picarsic, founder of Horizon Advisory, a U.S.-based consultancy that has investigated forced labor in Xinjiang. .

Xinjiang Hoshine Silicon Industry, one of Daqo’s suppliers and the region’s largest producer of solar-grade silicon, has received thousands of transfer program workers at its facilities near Turpan, a city 150 km from the city. southeast of Urumqi, according to a Chinese state media. article cited in the Sheffield Hallam report.

The proximity of Hoshine’s plants to detention facilities and their involvement in state-run labor schemes are enough to justify the concern, said Laura Murphy, a professor of human rights and contemporary slavery at Sheffield Hallam University. and one of the authors of the report.

Transfer programs to combat poverty are intrinsically problematic because they occur “in an environment where people who are not involved in poverty reduction are considered separatists and radicals. . .[and]they are sent to “re-education” camps, ”he added.