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Volkswagen on the carpet with the main shareholder for human rights in China

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Volkswagen has been sued by trade union IG Metall and its largest shareholder, the German state of Lower Saxony, to account for human rights in China, British business newspaper reports Financial Times

Volkswagen’s main shareholder, the state of Lower Saxony, has joined Germany’s most powerful trade union by calling on the company to address allegations of human rights abuses in Xinjiang, the Chinese province where the carmaker has had a car factory since 2013. The unusual move by IG Metall union leader Jörg Hofmann and Lower Saxony Prime Minister Stephan Weil – who both serve on VW’s supervisory boards – come as the company faces mounting criticism from activists, the media and politicians. about its activities in China, the German carmaker’s largest and most profitable market.

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The statements are in stark contrast to VW CEO Herbert Diess’ words to the BBC in 2019 that he “was unaware” of detention camps in Xinjiang. Diess has also repeatedly defended VW’s presence in China. Hofmann wondered whether it would not be better for VW to end its activities in Xinjiang and warned that VW would become a ‘big screen’ for Chinese human rights violations. Weil echoed VW’s claim that no human or labor rights violations had been identified at the carmaker’s plant, but added that “this does not absolve the group of its duty to address the issue intensively and closely investigate allegations” .

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The state of Lower Saxony, where VW is headquartered in Wolfsburg, has a 12% stake in Volkswagen. An alliance with employee representatives effectively gives the state control over key decisions made by the company. VW, which runs the Xinjiang plant with its joint venture partner SAIC, said in a statement that they are raising “all key issues” in talks with the Chinese government.

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The intervention of the German state of Lower Saxony cannot be separated from the cold relationship between Germany and China. After decades of good relations, tensions between Beijing and Berlin have increased under Germany’s current coalition government, with China being criticized by Green Foreign Minister Annalena Baerbock and Economics Minister Robert Habeck. Last month, the German Ministry of Economy rejected four applications from companies for investment guarantees in China, citing concerns about human rights. Although VW was not mentioned by the ministry, media sources confirmed that the car manufacturer was one of the rejected.

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Reports have recently been published in the German media providing evidence of oppression against Uyghurs. In addition to VW, chemical group BASF has also been forced to defend their operations in Xinjiang. German companies are under legal pressure as a new law that comes into effect next year could make them responsible for human rights violations at suppliers or companies they do business with. Fines can be imposed up to 2% of a company’s annual turnover.

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