Following heavy criticism over its ineffectiveness and inability to crack down on human rights abuses abroad, Canada’s corporate watchdog has launched investigations into allegations that Nike Canada and mining company Dynasty Gold Corp. have been benefiting from the forced labour of Uyghurs in China.
These are the first official probes launched by the Office of the Canadian Ombudsperson for Responsible Enterprise (CORE), which was set up in 2019 to hold Canadian garment, mining, and oil and gas companies that operate outside Canada accountable for possible human rights abuses.
The investigations are based on complaints filed by a coalition of 28 civil organizations, led by the Uyghur Rights Advocacy Project, in June 2022. CORE says it received a total of 13 “admissible complaints” about the overseas operations of Canadian companies, and it has committed to releasing initial assessments on the remaining 11 “in the coming weeks.”.
“These are very serious issues that have been brought to our attention,” Sheri Meyerhoffer, CORE ombudsperson, said this week.
“Canadian companies are expected to respect Canadian standards for human rights and environmental protection when they work outside of Canada.”
Other corporate watchdogs are already warning of the serious limitations of CORE’s ability to get to the truth, something they have been calling on the federal government to change.
In 2022, the Office of the UN High Commissioner for Human Rights found far-reaching and arbitrary human rights abuses imposed on Uyghurs and other predominantly Muslim communities living in Xinjiang, an autonomous region of China located in the northwest of the country.
Nike is accused of having supply relationships with Chinese companies identified as using or benefiting from the use of Uyghur forced labour, while Dynasty Gold is accused of benefiting from the use of Uyghur forced labour at a mine in China in which it holds a majority interest.
In both cases, mediation is not an option, CORE said in a press release.
In the case of Nike Canada, the complainants zero in on six manufacturing companies with which the sport apparel company is alleged to have relationships or supply chains. The complainants cite findings by the Australian Strategic Policy Institute (ASPI) about factories that employ Uyghur workers who attended “vocational training” or “patriotic education” or “reeducation” classes and include in their evidence bills of lading that show that Nike Canada imported shipments from some of the Chinese companies. The complainants also provide the findings of an investigation by Sheffield Hallam University into the laundering of cotton from the region, detailed in CORE’s Initial Assessment Report, which was released this week.
In a separate report, CORE looks at allegations of forced labour at Dynasty Gold’s Hatu mine, located in northwest Xinjiang, near Uyghur “detention” or “reeducation” centres. Among the evidence cited by the complainants are public statements by the mine acknowledging that Uyghurs are part of their workforce. “Dynasty Gold’s response to the complaint is that it does not have operational control over the mine and that these allegations arose after it left the region,” CORE noted in its press release. “The Complainants claim that while it is possible that XNF and its subsidiary Western Gold have had operational control of the Hatu mine, this does not remove the responsibility from DYG to ensure that forced labour is not present in its mining operations abroad.”
Nike Canada responded to CORE by directing it to a response it had previously made to the 2020 ASPI report in which it denied having working relationships with three of the companies listed. It said that a fourth company no longer has employees from the Xinjiang region.
“Our ongoing diligence has not found evidence of employment of Uyghurs, or other ethnic minorities from the [Xinjiang Uyghur Autonomous Region], elsewhere in our supply chain in China,” it said in a statement. “Nike takes very seriously any reports about forced labor and we have been engaging with multi-stakeholder working groups to assess collective solutions that will help preserve the integrity of our global supply chains,” the company said.
[This] is a warning sign to other Canadian companies to review their business practices and investigate their supply chains for products tainted with forced labour.
– Uyghur Rights Advocacy Project
In its assessment report, CORE identified “conflicts” in the available information – noting, for example, that Nike claims that the bills of lading for one factory in question are from Vietnam, not Xinjiang – but added “the complex nature of garment supply chains” means that “more information is required to consider whether Nike’s [human rights due diligence] is consistent with the robust due diligence required by a high-risk context such as Xinjiang.”
Organizations such as Above Ground NGO, which is fighting for accountability from Canadian companies operating abroad, say they are encouraged by the CORE’s announcements, while still concerned about its hamstrung investigative powers.
“The office lacks the power to properly investigate wrongdoing; it still can’t compel witness testimony or force companies to share evidence,” the Canadian Network on Corporate Accountability wrote on Twitter.
In a statement, the Uyghur Rights Advocacy Project applauded the investigations, noting that they could have legal ramifications, in the form of recommendations from the ombudsperson regarding trade measures, or the withdrawal of government support of companies.
“CORE’s announcement is a warning sign to other Canadian companies to review their business practices and investigate their supply chains for products tainted with forced labour,” it said.
In a press release, Meyerhoffer said she launched the investigations to “get the facts” and recommend appropriate actions.
“It is our mission to resolve human rights complaints in a fair and unbiased manner in order to help those impacted and to strengthen the responsible business practices of the companies involved.”