© Reuters. FILE PHOTO: FILE PHOTO: A Volkswagen logo is seen as it launches its ID.6 and ID.6 CROZZ SUV at a world premiere ahead of the Shanghai Auto Show in Shanghai, China on April 18, 2021. REUTERS / Aly Song
BERLIN (Reuters) – Germany’s Ministry of Economy has refused to give carmaker Volkswagen (ETR 🙂 guarantees to cover new investments in China due to concerns about human rights violations in the Xinjiang region, Der Spiegel reported on Friday.
The ministry confirmed that it had rejected four applications from a company due to human rights issues in Xinjiang, but refused to name the company. Der Spiegel said, without citing sources, that Volkswagen was the company in question.
“The human rights situation in Xinjiang has worsened in recent years and involves forced labor and mass detention of Uighurs,” the ministry said.
“The German government has therefore decided not to provide guarantees for projects in China that are 1) in Xinjiang or 2) have business relationships with entities operating there.”
Through a joint venture with China’s SAIC Motor, Volkswagen has a factory in Urumqi, located in the Xinjiang region, where Western countries and rights organizations say ethnic Uighurs are being tortured and detained.
China has repeatedly denied any abuse of Uighurs, describing alleged detention camps as vocational training facilities where people can “voluntarily” check themselves in to learn about law, Chinese language and professional skills.
A spokesman for Volkswagen confirmed that the company had submitted applications for investment guarantees in China, adding that it had not yet received an official decision from the ministry.
Volkswagen’s spokesman said the applications were not for direct investment in the group’s Xinjiang plant or anywhere near it, but that it could not be ruled out that a product manufactured at a plant elsewhere in the country could end up in the region.
Germany, which is struggling to free itself from Russian gas dependence after being captured by Moscow’s invasion of Ukraine, is now reassessing its ties with China and will place greater emphasis on human rights, Economy Minister Robert Habeck said earlier this week.
Volkswagen said it follows the UN’s guiding principles on business and human rights and that it is an integral part of the company’s code of conduct.
