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Solar Industry Pushed to Examine Supply Chain After Reports of Forced Labor in China

Labor and resettlement programs targeting Uyghur populations in China’s Xinjiang region have been linked with companies producing a significant portion of the world’s polysilicon, according to a forthcoming report that draws a connection between the solar industry and forced labor in the region.

The report, written by consultancy Horizon Advisory, points to “indicators of forced labor” from companies such as Jinko Solar and some of the largest polysilicon suppliers in the world, accounting for well over a third of worldwide capacity. Forced labor associated with an essential raw material in manufacturing most solar panels, the authors write, implicates a significant swath of the entire industry.

The companies mentioned in the report have public ties to some of the largest manufacturing and development companies in solar, providing panels and modules to projects around the world.

“Exposure of this industry to polysilicon production in Xinjiang is pretty broad,” said Xiaojing Sun, a senior solar analyst at energy consultancy Wood Mackenzie. “My sense is up until a few months ago, not a lot of attention was paid to the upstream supply chain, so there is a chance for Xinjiang-based polysilicon to end up in the U.S.”

The report comes just before president-elect Joe Biden is to take office, pledging an unprecedented buildout of clean energies like solar in order to tackle climate change.

GCL-Poly, one of the companies Horizon cited as showing evidence of using some forced labor, in 2014 unveiled a joint venture with Canadian Solar, a manufacturer that owns developer Recurrent Energy. Recurrent has built projects in the U.S., Canada and elsewhere. Another polysilicon producer included in the report, Daqo New Energy, has publicly reported contracts with JA Solar and Trina Solar, two panel manufacturers that have supplied projects in countries such as Vietnam and Spain.

Jinko Solar is the largest solar panel manufacturer in the world and sits on the board of the U.S. trade group the Solar Energy Industries Association (SEIA). In 2019 it opened a U.S. factory in Jacksonville, Florida.

GCL, TBEA subsidiary Xinte and Daqo, polysilicon companies named in the report, did not respond to requests for comment on the report’s claims. Canadian Solar, JA Solar and Recurrent Energy also did not respond to requests for comment. 

Jinko spokesperson Ian McCaleb told Greentech Media the company “strongly condemns the use of forced labor and does not engage in it in its hiring practices or workplace operations.”

Jinko, along with solar companies including Trina North America and Hanwha Q Cells, said they had signed a pledge from SEIA opposing forced labor.

Forced labor practices under fire from U.S., other governments

The report relies on public-source materials including media reports to show company involvement in labor transfer and worker resettlement programs. Government facilitated “re-education” and work programs in Xinjiang, a region home to numerous ethnic minorities, have been linked with coerced labor by numerous governments, including the U.S. In January, an Australian Strategic Policy Institute report said those programs “strongly suggest” forced labor.

In July, the U.S. Treasury Department sanctioned the Xinjiang Production and Construction Corps, which the U.S. government identifies as a paramilitary group, “in connection with serious rights abuses against ethnic minorities in the Xinjiang Uyghur Autonomous Region.”

China has disputed such allegations. On January 14, after the U.S. banned the import of cotton and tomato products from Xinjiang, Zhao Lijian, China’s foreign ministry spokesperson, called reports of forced labor in Xinjiang “the biggest lie of the century,” while pointing to instances of prison labor in the U.S.  

Xinjiang accounts for the majority of China’s polysilicon production capacity. Overall, China accounts for 75 percent of the world’s polysilicon capacity, according to Wood Mackenzie.

The solar industry’s supply chain is also relatively opaque, with panel manufacturers often buying silicon solar wafers from companies that purchase polysilicon from other producers. Plants based in China manufacture the great majority of solar cells and modules.

The Horizon report stated that the structure of the solar industry suggests forced labor practices may be more widespread than the report catalogues.

“The problem seems like it may be fairly pervasive,” said Nathan Picarsic, a co-founder of Horizon. “Rampant is possibly the right term, just because of the consolidation of the upstream and midstream industry in China and the role of some of these Chinese champion firms.”

Solar companies react 

SEIA has been urging its members for months to move supply out of the Xinjiang region. The group has also said it’s working to create traceability protocols for the industry, which it expects to release before the end of March. Solar companies generally do not disclose their suppliers.

“Our understanding is that companies are actively taking steps to ensure that the panels that are imported into the U.S. do not contain any materials from the Xinjiang region,” said John Smirnow, SEIA’s general counsel and vice president of market strategy. 

In a Jan. 8 letter sent to customers and obtained by Greentech Media, Jinko General Manager Nigel Cockroft objected to the report’s contents as “false and misleading,” but said the company had worked to move supply planned for U.S. shipment outside of Xinjiang. The company also said it was working with “U.S.-based human rights and customs law experts” to create a “supplier qualification and traceability protocol.”

Other solar manufacturers, such as Hanwha Q Cells and Solaria, have said they are auditing their supply chains in response. Supply chain accountability in the solar industry is currently “quite self-regulated,” said Suvi Sharma, founder of California-based Solaria.

“The bigger you are, the more manufacturing facilities that are being utilized to make the product, the more complex that becomes,” said Sharma. Solaria’s solar feedstock does not come from any of the producers named in the report, he said. 

The reports from Horizon and the Australian Strategic Policy Institute, a think tank supported in part by the Australian government, suggests the issue of forced labor extends beyond Xinjiang into other parts of China. ASPI’s report estimates that 80,000 Uyghur workers were transported outside of Xinjiang between 2017 and 2019.

“The transfer of labor program itself is pretty extensive and it doesn’t just relate to resettling forced Uyghur labor,” said Emily de La Bruyère, a Horizon co-founder. “Albeit in different forms, it’s also a program that applies to largely ethnic minorities of workers throughout China.”

Source: Greentech Media