BASF Speeds Xinjiang Exit Over Human Rights Abuse Reports

BASF Speeds Xinjiang Exit Over Human Rights Abuse Reports

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(Bloomberg) — BASF SE is accelerating a planned divestment from two joint ventures in China’s Xinjiang region following reports of alleged human rights violations.

The German chemicals company didn’t say when the sale of its stakes in the two companies — Korla-based Markor Chemical Manufacturing Co. and Markor Meiou Chemical Co. — would be complete, after having started the process during the last quarter.

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BASF said Friday that regular due diligence measures have not found any evidence of human-rights violations at the two joint ventures. But recently published reports related to the partner “contain serious allegations that indicate activities inconsistent with BASF’s values,” the company said, without naming the reports. 

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China’s northwestern Xinjiang region has long been scrutinized by human-rights activists, who have accused the government of coercing Uyghurs and other Muslim minorities to work. In January, a Human Rights Watch report said major carmakers in the region are not sufficiently mapping their supply chains to stamp out links to forced labor programs. 

German magazine Der Spiegel and broadcaster ZDF recently reported that BASF’s joint venture partner in Xinjiang has participated in measures to suppress the muslim Uyghur minority. According to the reports, employees of the joint-venture partner visited Uyghur families and collected information, which they passed on to Chinese authorities.

The reports triggered a letter to BASF Chief Executive Officer Martin Brudermüller signed by 30 members of parliament in Europe, New Zealand and Canada, pressing BASF to pull out of the region, according to a Spiegel report Tuesday.

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BASF noted that it has no indication that employees of the two joint ventures in Korla were involved in human-rights violations. 

The company also said its presence in China, its third biggest market, will remain unchanged otherwise, with the company being fully committed to planned investments and business activities in the country.

(Updates with abuse reports in fifth paragraph.)

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