UPDATED at 8:49 A.M. ET on 10-10-2024
The global pharmaceutical industry relies on ingredients made in China’s far-western Xinjiang region using Uyghur forced labor despite efforts to eliminate this risk from supply chains, according to a new report.
The report by the Center for Advanced Defense Studies, or C4ADS, says that even two U.S. government agencies — the U.S. Food and Drug Administration and U.S. Agency for International Development via its contractor Chemonics International — have not cut ties with Xinjiang-linked drug suppliers.
This is happening despite U.S. laws that require American companies to ensure there is no forced labor in their supply chains.
“Our findings indicate that international governments remain tied to the Uyghur region, especially in the pharmaceutical sector,” Mishel Kondi, author of the report, told Radio Free Asia.
The use of Uyghur forced labor is one of the repressive measures the Chinese Communist Party has taken in Xinjiang, where about 12 million Uyghurs live, and it is deeply entrenched in the region’s economy, the report says.
The U.S. government and the parliaments of some Western countries have declared China's treatment of Uyghurs in Xinjiang, including forced labor, mass detentions and other serious human rights violations as genocide and crimes against humanity.
The Chinese companies mentioned in the report contribute to the oppression of the mostly Muslim ethnic group by benefiting from land that’s seized from Uyghurs and made available for corporate use, and from using Uyghur and Kazakh forced labor.
Also, Uyghurs detained in internment camps have been forced into drug testing and medical procedures, the report says.
Human guinea pigs
This is borne out by accounts from Uyghurs who have left China.
Qelbinur Sidik, who was forced to teach Chinese in separate detention facilities for Uyghur men and women in Xinjiang, and former “re-education” camp detainee Mihrigul Tursun both told RFA about authorities forcing girls and women to take pills that caused them to stop menstruating and nursing mothers’ breast milk to dry up.
“Nearly 90% of women in this camp were aged 18 to 40 years old. All of these women's menstruation ended after taking these pills and injections,” Sidik said. “Even the milk of the nursing mothers was depleted.”
Uyghur men had to take tablets or were given injections and later had blood drawn, she added.
“I am confident that the Chinese government used the detained Uyghurs for experiments to test their medicines,” she said.
Tursun said the small white tablets she had to take gave hersevere stomach pains and made her feel weak and drowsy. They also made her period stop for six months.
“I was given medicines once a week. I don't know what medicines they were,” she said. “They called your number from a book. When they called your number, you opened your mouth. They gave me small white tablets. They checked our mouths to make sure we swallowed them.”
Tursun said she then developed a bad stomach ache. “My whole body became weakened and drowsy, my head spun, and my legs shivered. It lasted 2-3 days.”
Liu Pengyu, spokesman for the Chinese Embassy in Washington, said the accusation of forced labor in Xinjiang is “a lie of the century fabricated by anti-China forces” and “a tool used by American politicians to undermine Xinjiang's stability and contain China's development.”
The United States created and implemented the 2021 Uyghur Forced Labor Prevention Act, which bans imports from Xinjiang unless they are certified as not made with forced labor, based on lies, and imposed sanctions on relevant entities and individuals in Xinjiang, he told RFA in an email.
“This is an escalation of the United States' suppression of China under the guise of human rights,” Liu said. “It is also a proof that the United States willfully undermines international economic and trade rules and undermines the stability of the international industrial chain and supply chain."
“The United States should immediately stop slandering China and stop interfering in China's internal affairs and undermining China's interests under the guise of human rights,” he said.
Acetaminophen granules, estrogen cream
Though Xinjiang is a minor player in the pharma production industry in China — the world’s largest active pharmaceutical ingredient producer and the second-largest drug market in the world — there are 43 licensed pharma companies in the region.
Among the 661 products they manufacture are acetaminophen granules, estrogen tablets and cream, and traditional Chinese and Uyghur medicine. Seventy-six pharma products exported from China are manufactured only in Xinjiang, exposing global supply chains to forced labor, the report says.
Eleven of the manufacturers are Chinese state-owned enterprises, 21 are owned by private individuals, nine are owned by companies with a known record of forced labor in other industries, and two are tied to Chinese defense contractors.
None of the manufacturers appear on the Entity List under the Uyghur Forced Labor Prevention Act, or UFLPA, the report says.
And foreign companies — including Citigroup and BlackRock — continue to hold shares in some of them, it says.
But implementation of the UFLPA remains weak, the report says.
“Supply chains and corporate structures are often opaque; enforcement agencies lack sufficient resources to track, monitor, and enforce regulations, and the diverse agencies responsible for implementing them are still in the process of translating how to most effectively do so,” it says.
Despite the UFLPA's rebuttable presumption — which assumes goods made in Xinjiang are produced with forced labor and thus banned under the U.S. 1930 Tariff Act — only one pharma producer from Xinjiang — Chenguang Biotech Group Co., Ltd. — has been added to the Entity List, the report notes.
Chemonics International
As recently as 2019, USAID contractor Chemonics International, based in Washington, purchased products from the Xinjiang Tianneng Chemical Ltd. Co., the report says, citing data from the 2023 Global Health Supply Chain Program Procurement and Supply Management Project.
Tianneng Chemical is owned by a subsidiary of the Xinjiang Production and Construction Corps, or XPCC, a state-owned enterprise and paramilitary organization operating in Xinjiang that has been added to the Entity List for perpetrating human rights abuses.
“Through this procurement, Chemonics International appears to have unknowingly financially supported (through trade) a company owned by a subsidiary of a paramilitary entity and perpetrator of human rights abuses,” the report says.
In response to C4ADS’ information, Chemonics said it had not ordered any other products directly or indirectly from Tianneng Chemical and did not plan to do so.
A USAID spokesperson told RFA that the agency prioritizes preventing the use of U.S. government funds for contract awards to companies that may use forced labor, and its partners are required to comply with legal requirements prohibiting the use of forced labor under federal acquisition regulations.
Chemonics confirmed to USAID that it has not purchased any products from Tianneng Chemical outside of one transaction in 2019, prior to the date the U.S. Office of Foreign Assets Control imposed sanctions, and said it has taken steps to avoid procurements from the manufacturer in the future, according to the spokesperson.
The report also says that the Food and Drug Administration, or FDA, has registered at least two Xinjiang-linked pharmaceutical producers, authorizing them to import to the United States, though the companies should be on the UFLPA Entity List.
A FDA spokesperson said the agency would be in touch when it had information to share.
The report said Japan’s Pharmaceutical and Medical Devices Agency registered four Xinjiang-based entities involved in biotech and pharma that conflicted with efforts to address human rights abuses in the region.
Specifically, Japan issued guidelines in 2022 urging businesses established there to monitor for human rights in their supply chains. The following year, the country’s parliament passed a resolution expressing concern about the treatment of Uyghurs and other human rights abuses in China.
Mexico and Canada have forced labor legislation in place, while the European Union this year passed a forced labor ban that will take effect in 2027.
Case studies
The 44-page report issued on Oct. 8 includes four case studies of companies that C4ADS says should be excluded from supply chains because of their ties to human rights abuses that have been overlooked by enforcement.
Sinopharm National Pharmaceutical Group Co., Ltd., a partially state-owned company, participated in Chinese Communist Party-led “work teams” believed to be main components of poverty alleviation programs that subject rural Uyghurs to forced assimilation and forced labor, the report says.
Xinjiang Deyuan Bioengineering Co. Ltd., a top manufacturer of drugs derived from human plasma operating exclusively in Xinjiang, appears to have directly benefited from forced displacement and government subsidies, it says.
“Unfortunately, we were unable to find smoking-gun evidence that the blood collected by Xinjiang Deyuan Bioengineering comes from people detained in camps,” Kondi said.
“While the company claims that blood donations are voluntary, we could not confirm or refute this. However, given the human rights abuses in the region, this remains a serious red flag for businesses involved with these entities.”
Another company, Xinjiang Nuziline Bio-Pharmaceutical Co., which manufactures conjugated estrogen, also relies on Uyghur laborers, while Xinjiang Huashidan Pharmaceutical Co. Ltd., a maker of Western and traditional Chinese and Uyghur herbal medicine, appears to have benefited from the displacement of the local population, the report says.
The report is based on production license data, corporate records, and trade data — all publicly available information — and local media reports.
Recommendations
C4ADS recommends that all U.S. federal agencies conduct assessments of their procurement practices’ compliance with anti-forced labor sanctions regimes.
The U.S. government, meanwhile, should increase resources for — and improve interagency cooperation — for better monitoring and enforcement of sanctions, the report says.
C4ADS further recommends that the U.S. government strengthen its existing trade agreements by improving multilateral coordination on monitoring Chinese imports and bilateral and multilateral monitoring by sharing intelligence with other countries that import pharmaceuticals from China.
“Governments should turn the ongoing conversations about combating Uyghur forced labor into actionable legal precedents,” Kondi said.
C4ADS has produced other reports on human rights abuses in Xinjiang. In August 2021, it published the findings of an investigation into how the global economy supports oppression in Xinjiang. In 2022, it issued reports on Xinjiang goods entering global supply chains and the Chinese government's industrial transfer into the region.
Additional reporting by Nuriman Abdureshid for RFA Uyghur. Edited by Malcolm Foster.
The story was updated to add comments by the spokesman for the Chinese Embassy in Washington.