The federal corporate ethics watchdog says a Vancouver-based mining company allowed the use of forced labor at its Xinjiang gold mine even though the company lost control of the project before alleged forced labor takes place.
The targeted company, Dynasty Gold, claims it is being tarnished by baseless allegations about an ownership timeline that makes no sense. But Canada’s Corporate Responsibility Ombudsman, Sheri Meyerhoffer, maintains that corporations are responsible for the stakes they control — even jointly.
The finding, released Tuesday, is the first decision issued by the Office of the Canadian Ombudsman for Corporate Responsibility since its creation by the Liberals in 2018.
“Evidence collected in this investigation suggests that Uyghur forced labor likely took place at Hatu’s Qi-2 gold mine,” Ms.me Meyerhoffer in his final report.
China denies all allegations of forced labor in its Xinjiang region.
In his conclusions on Tuesday, Mme Meyerhoffer recommends that Ottawa cease all support for commercial advocacy and all financial support for Dynasty. The company claims to have never benefited from these services.
“They have no proof that we used forced labor […] They extrapolate, but where is the concrete evidence? “, said Ivy Chong, CEO of Dynasty, in a lengthy interview. “We tried to explain to them, but I think their minds were closed: their decision was already made. »
Mme Chong added that no one from the federal government or its embassy in Beijing informed the company of its human rights concerns during the mine’s operation, despite frequent contact at the time. The company buys mines and subcontracts activities, such as exploration and extraction.
“Re-education camps”
The issue concerns the labor of Muslim citizens whom China has sent to what it calls “detention” centers or “re-education” camps. China insists that these centers are intended to eliminate Islamist radicalization, after several deadly attacks in the country, and to lift regions out of poverty.
But since 2017, widespread concerns have spread about China’s use of forced labor and coercion to exploit its Uyghur minority. The United Nations found in mid-2022 that China had committed “serious human rights violations” against Uyghurs and other Muslim communities that “may constitute international crimes, in particular crimes against humanity “.
A report released the same year by Global Affairs Canada revealed that China is using “otherwise legitimate programs of re-education and relocation of the unemployed in the Xinjiang region as instruments of a broader campaign of oppression, exploitation and of indoctrination of the Uyghur Muslim population to integrate them into the majority Han Chinese culture.
Mme Meyerhoffer discovered that the Dynasty mine near Kazakhstan had obtained labor from Chinese state-owned companies, including one that was later targeted by Canadian sanctions.
The report notes publications by Chinese state-owned companies and media about Uyghur workers brought to the mine between 2015 and 2020 under programs that attracted the attention of human rights bodies. Their concerns include non-consensual psychological counseling, language classes and daily physical training.
More control
Yet Dynasty lost control of the mine in 2008. Chinese court filings cited in Tuesday’s report show the state-owned company had unsuccessfully fought the Chinese government to retain ownership, while repeatedly listing ownership of the mine in its corporate disclosures.
Mme Meyerhoffer believes that means Dynasty remains tied to subsequent hiring decisions made at the mine.
“Dynasty has a responsibility to respect human rights in its activities and business relationships, whether or not it has operational control of the mine,” the report reads.
“Dynasty may have lost operational control, it’s true,” says the ombudsman. But it remains the majority shareholder of Terraxin, the joint venture (with Chinese state-owned enterprises). And this relationship is enough to see that Dynasty is linked to the use of Uyghur forced labor at the mine. »
Mme Meyerhoffer also specifies that Dynasty did not cooperate with the investigation and that even a company with a handful of employees had to respect Canadian business standards.
“Dynasty’s disregard for the complaint process and its casual response to the complaint itself are disconcerting and far from meeting the Office of the Ombudsman’s standard of good faith participation,” the report reads.
Mme Chong said the finding was a blow to a company that has already spent years in Chinese courts trying to recoup its investment.
She is not surprised that Chinese judges sided with state-owned companies, but she said she was shocked that a Canadian regulator would characterize a company as complicit in atrocious acts that occurred while others controlled the ‘business.