In a report from April 2022, Washington, DC based-firm Horizon Advisory investigated the Xinjiang aluminum sector and reported how – alongside the textile, apparel, agriculture, and solar energy sectors in the region – this sector is at high-risk of forced labor exposure. The report found that the eight major aluminum companies operating in Xinjiang – one of which, Xinjiang East Hope Nonferrous Metals, is already on the Forced Labor Enforcement Task Force’s (FLETF) UFLPA Entity List – are exposed to indicators associated with forced labor. In addition, the report emphasizes how forced labor at such an upstream node can have implications across a multitude of other sectors’ supply chains, including the automotive, aerospace, rail, information technology, electronics, and polysilicon industries.
The report states that 17% of China’s aluminum production, which already makes up 60% of the world’s primary aluminum production, comes from Xinjiang. This is a result from the Xinjiang Production and Construction Corp’s (XPCC’s) identification of the heavy industry as a sector of high importance. As noted in the report, the XPCC in its 14th Five Year Plan called “for ‘the extension of the industry chain for ferrous metals such as aluminum.’ ” In looking at the top eight aluminum producers in the region, the report identified how each of the eight companies had exposure to at least one forced labor indicator. These eight companies include:
- Xinjiang Sixth Division Aluminum Co., Ltd.
- Xinjiang East Hope Nonferrous Metals Co., Ltd. (currently on the UFLPA Entity List)
- The Eighth Division of the XPCC Tianshan Aluminum Co., Ltd.
- Xinjiang Qiya Aluminum & Power Co., Ltd.
- Xinjiang Jiarun Resources Holdings Co., Ltd.
- Xinjiang Shenhuo Coal and Electricity Co., Ltd.
- Xinjiang Tianlong Mining Co., Ltd.
- Xinjiang Zhonghe Co., Ltd.
Of these eight entities, the first seven were identified as being associated with government-led transfer of labor programs. Three of the eight – Xinjiang Sixth Division Aluminum Co., Ltd, The Eighth Division of the XPCC Tianshan Aluminum Co., Ltd., and Xinjiang Zhonghe Co., Ltd. – were also identified as subordinates of the XPCC. Lastly, the report found that two of the eight – Xinjiang Jiarun Resources Holdings Co., Ltd. and Xinjiang Tianlong Mining Co., Ltd. – participate as “ethnic policy” leaders, while four of the eight – Xinjiang East Hope Nonferrous Metals Co., Ltd., The Eighth Division of the XPCC Tianshan Aluminum Co., Ltd., Xinjiang Qiya Aluminum & Power Co., Ltd., and Xinjiang Zhonghe Co., Ltd. – coordinate labor transfer subprograms.
In addition to these specific companies, the report notes that the entire aluminum industry in Xinjiang is under systemic risk of exposure to forced labor. A major indicator of risk identified in the report is the XPCC’s heavy emphasis on the aluminum industry over the past decade as well as the two largest Xinjiang aluminum companies’ affiliation to the XPCC. The second major indicator is the fact that many of the major aluminum companies in Xinjiang operate in industry parks that have been associated with forced labor risks. As an example, the report states that three of the eight identified companies are based in the Zhundong Economic and Technological Development Zone. The Zhundong Zone has been recognized by the Xinjiang government as a contributor to Beijing’s “ethnic policies” in the region.
The report concludes that while the findings are not intended to be conclusive, the indicators used “mirror those that have been monitored and applied in assessments of other Xinjiang-based supply chains found to be benefiting from forced labor (e.g., textiles, agriculture).” In addition, due to the fact that aluminum is one of the most commonly used metals around the world, and due to China’s aluminum sector’s deep integration in many industries’ supply chains, global industries “from aircraft fuselages to utensils” are at risk to exposure.
Horizon Advisory’s report can be found here.
For more information on actions addressing human rights and forced labor abuses, contact our team and see previous posts below.
Department of Homeland Security Releases the Uyghur Forced Labor Prevention Act (UFLPA) Strategy Report | International Trade Law (cmtradelaw.com)
CBP Issues its Uyghur Forced Labor Prevention Act (UFLPA) Operational Guidance for Importers | International Trade Law (cmtradelaw.com)