By 
13-02-2025
Klaus M. Schmidt Flores
South and East Asia Researcher,
Global Human Rights Defence.
In 2024, the German automotive giant Volkswagen (VW), amid allegations of human rights abuses against Uyghur Muslim minority workers, announced the sale of the automotive plant in Urumaqi, Xinjiang. Despite attributing this decision to a restructuring of its business strategy and economic factors, the news raised international human rights concerns within China’s region of Xinjiang, emphasising the relationship business operations hold with fears of forced labour in this region.
As presented in Reuters’ expose of ‘Volkswagen’s audit of Xinjiang plant failed to meet international standards’ based on the Financial Times Article, before selling its manufacturing plant, Volkswagen commissioned an audit in September 2024 to assess these international allegations. An audit conducted by Löning Human Rights & Responsible Business GmbH, a global management consultancy organisation specialising in human rights, highlighted that international labour standards for supply chains, such as the SA8000 of fair working conditions, were not met. Additionally, further infringements of labour rights, as well as multiple breaches of confidentiality, were found. These breaches took place as confidential interviews, which were live-streamed to a law firm in Shenzhen, discovered only individuals holding managerial positions were questioned on the matter of forced labour.
Despite international pressure and the rise of controversies rising from the Xinjiang factory, on the November 27th, 2024, Volkswagen published a status under the name of ‘ESG Controversies’, in which it comments that the above mentioned audit did not detect any violations to the ILO Conventions C111, C155, or C029, nor were any incidents of forced labour detected. However, this redaction of the audit initiated a Financial Times Investigation into the audit itself. This revealed several truths, primarily that retrieving data on the human rights conditions within the Xinjiang region comes with challenges. Furthermore, the investigation indicated that the initial audit commissioned by Volkswagen was a business strategy to upgrade the company’s Global Compact Status from a score of zero indicating a Fail, to a one indicating ‘Watch List’- a business strategy implemented to incentivise ESG-focused investors into acquiring Volkswagen equity.
The aforementioned situation presents the complex challenges multinational challenges face when operating in regions with reported allegations of human rights violations. Additionally, this situation presents an advocating factor for the implementation of transparent and unbiased audits to deter companies from performing operational human rights infringing activities.
Sources and further readings:
‘ESG Controversies’ (Volkswagen Group) <https://www.volkswagen-group.com/de/esg-controversies-15846> accessed 13 February 2025.
White E and Nilsson P, ‘VW Audit of Xinjiang Plant Failed to Meet International Standards’ (Subscribe to read, 19 September 2024) <https://www.ft.com/content/ae25a633-1c5d-4268-8f22-1ab55ed51a58> accessed 13 February 2025
(Volkswagen’s audit of Xinjiang plant failed to meet international standard, FT reports | Reuters) <https://www.reuters.com/business/autos-transportation/volkswagens-audit-xinjiang-plant-failed-meet-international-standard-ft-reports-2024-09-19/> accessed 13 February 2025
‘SA8000® Standard’ (SAI, 19 September 2024) <https://sa-intl.org/programs/sa8000/> accessed 13 February 2025
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