The World Bank’s private sector lending arm provided nearly half a billion dollars to four Chinese companies accused of using Uyghur forced labor in China’s far-western Xinjiang region, according to an investigative report issued Thursday.
The International Financial Corporation (IFC) has several investments in the region, where predominantly Muslim Uyghurs and other Turkic minorities have been subjected to severe human rights abuses that the United States and other countries have said constitute genocide and crimes against humanity.
The nearly 70-page report titled "Financing and Genocide: Development Finance and the Crisis in the Uyghur Region" says significant evidence suggests that four companies that are IFC clients — Chenguang Biotech Co. Ltd., Camel Group Co. Ltd., Century Sunshine Group Holdings Ltd., and Jointown Pharmaceutical Group Co. Ltd., — actively participate in China's repression of the Uyghurs through forced labor, forced displacement, cultural eradication, and environmental destruction.
The IFC currently has about U.S. $486 million in direct loans and equity investment in these four companies operating in Xinjiang, the report says.
IFC’s failure to adequately safeguard communities and the environment affected by its financing makes the institution complicit in the repression of Uyghur, Kazakh and other members of minority groups, says the report, which was written by U.S. think tank the Atlantic Council, the Helena Kennedy Centre for International Justice at Sheffield Hallam University in the U.K., and the nonprofit research organization NomoGaia.
The report’s findings are based on publicly available information from Chinese state media, satellite imagery, IFC’s own project documentation, corporate disclosures, and social media posts from local police and labor agencies.
“These four companies all use labor transfers that experts have identified as being forced, and they have all accepted people who have been designated as surplus labor,” said Laura Murphy, a human rights professor at Sheffield Hallam and one of the authors of the report.
Chenguang Biotech has been collaborating with the Chinese government to move Uyghurs off their land so that it can use the land for the production of raw materials, while Century Sunshine and Camel Group are responsible for significant environmental pollution in Xinjiang, Murphy told RFA.
The IFC has eight performance standards to ensure the upholding of the human rights of populations affected by its investment projects, according to the report. Among the standards are rigorous oversight of labor conditions, pollution prevention and biodiversity protection, community safety and security, indigenous and cultural rights, and protections against economic or physical displacement.
“IFC sets eight clear standards that all companies that receive loans from them must adhere to, and the companies are required to submit documentation, [and] to do monitoring to ensure that they maintain their conformity with those standards,” Murphy said.
Though IFC typically monitors and inspects investment projects, it has not been able to go to Xinjiang since 2019 to ensure that companies are maintaining its standards, she said.
“The concern we have is that starting in 2017, international governments knew what was happening in that region,” Murphy said. “And despite their knowledge of what’s happening to the Uyghur region [with] the internment of Uyghurs [and] the forced labor, the International Finance Corporation continued to send money into and release new loans to companies in the Uyghur region.
“We’re calling on the IFC to change those policies,” she said.
‘Financing China’s genocide’
World Bank spokesman David Theis referred RFA to the IFC for comment on the report.
An IFC spokesman said in an emailed response that the development financing institution takes allegations of forced labor and poor treatment of vulnerable groups seriously and works to verify and address the charges with its clients.
“Our work in China focuses on the transition to more environmentally sustainable growth and the reduction of inequality,” the spokesman said. “It is driven by the core principle of inclusion, with special consideration for the protection of vulnerable people and communities.”
He also said that while the COVID-19 virus pandemic and travel restrictions have made it difficult in the last two years for the IFC to assess projects on the ground, the institution has dedicated more resources to supervising the companies it works with regarding environmental, social and governance standards.
The standards are legally binding, include protections for workers, communities, and the environment, and expressly prohibit discrimination and the use of forced labor, he said.
China’s Foreign Ministry spokesman Wang Wenbin told a regular press conference on Thursday that the report was a false and “maliciously fabricated.”
“As we have learned, the institution that wrote the report has no staff in Xinjiang,” he said. “And before releasing the report, it did not conduct any field trips or carry out research in a real sense. The content thus lacks factual support and is full of lies and groundless accusations.”
Wang also said that the Chinese government attaches great importance to protecting human rights and worker’s rights and interests.
Dolkun Isa, president of the World Uyghur Congress, a Uyghur rights activist group, said it was unacceptable for the World Bank to provide financing to the four Chinese companies implicated with using Uyghur forced labor amid China’s genocide in Xinjiang.
“This is not simply a matter of financing Chinese companies but rather China’s genocide,” he said. He said the World Bank should immediately suspend its financing of the companies.
Translated by RFA’s Uyghur Service. Written in English by Roseanne Gerin.