Home EVENTS Canada Investigates Allegations That Nike Canada Corp. Used Uyghur Forced Labor

Canada Investigates Allegations That Nike Canada Corp. Used Uyghur Forced Labor

Canada Investigates Allegations That Nike Canada Corp. Used Uyghur Forced Labor


(ANALYSIS) On July 11, the Canadian Ombudsperson for Responsible Enterprise — the human rights watchdog reviewing complaints about possible human rights abuses by Canadian companies working outside Canada in the garment, mining, and oil and gas sectors — announced the launch of two separate investigations into allegations of Uyghur forced labor in the supply chains and operations of two Canadian companies.

The two companies, Nike Canada Corp. and Dynasty Gold Corporation, stand accused of having supply chains or operations in China identified as using or benefiting from the use of Uyghur forced labor.

Nike Canada Corp.

The investigations follow the completion of the Initial Assessment reports by the ombudsperson. The Initial Assessment Report for the Nike Canada Corp., suggests that Nike has supply relationships with Chinese companies identified as using or benefiting from the use of Uyghur forced labor, identified in the complaint as Qingdao Taekwang Shoes Co. Ltd., Haoyuanpeng Clothing Manufacturing Co. Ltd., Esquel Textile Co. Ltd., Qingdao Jifa Group, Huafu Fashion Co. Ltd. and Texhong Textile Group.

Nike provided a response to the complaint and declined to attend an initial assessment meeting with the Canadian ombudsperson.

It expressed a commitment to ethical and responsible manufacturing and stated it does not source products from Xinjiang and that they have confirmed with its contract suppliers that they are not using textiles or spun yarn from the region.

The Initial Assessment Report concluded, “It appears that there is a conflict in the available information that may warrant an investigation.

While Nike notes that the bills of lading referenced in the complaint document shipments from an Esquel facility in Vietnam and that the Complainants have not alleged the use of forced labor in that facility, the complex nature of garment supply chains may warrant investigation of the relationship between Nike and Esquel. An investigation may, for example, explore the existence of due diligence processes adopted by Nike to ensure that its products are not manufactured using Uyghur forced labor.

While Nike has provided its response to the ASPI report and its statement on forced labor, human trafficking and modern slavery, it has provided limited detail about the nature and scope of its HRDD including whether it uses fiber tracing technology.”

Dynasty Gold Corp.

The Initial Assessment Report for the Dynasty Gold Corporation, a Canadian mining company, looked into the claims that it benefited from the use of Uyghur forced labor at a mine in China in which Dynasty Gold holds a majority interest. According to the complaint, DYG operates a Qi-2 gold mine (“the Hatu mine”) in Hatu, Karamaym — a mining district in northwest Xinjiang located close to “detention” or “reeducation” centers.

The Canadian ombudsperson made multiple unsuccessful attempts to obtain a response to the complaint from DYG and to engage DYG in an initial assessment meeting.

The letter and complaint were successfully delivered to DYG by a process server on Oct. 27, 2022. In its response, DYG reported that its mineral exploration activities in Xinjiang terminated in 2008, which is, according to them, prior to the admissible period. It further suggested that it does not have operational control over the mine.

The Initial Assessment indicated that while it is to proceed, an investigation based on independent fact-finding might be challenging considering the availability of the necessary information from Xinjiang and uncertain cooperation from DYG.

Commenting on the decision, Sheri Meyerhoffer, the ombudsperson, indicated that the investigation is to establish the facts and recommend the appropriate actions. The ombudsperson is further looking into 11 other complaints and will publish the Initial Assessment reports in the coming weeks with the ombudsperson’s decision on how to move each complaint forward.

This is the first investigation into the issue of forced labor in the supply chain in Xinjiang. The findings of the investigation may be key to similar investigations being triggered in other parts of the world.


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