No evidence of forced labor at Volkswagen's Xinjiang plant, say auditors

External auditors hired by German carmaker Volkswagen found no evidence of forced labor at the company's plant in China's Xinjiang Uygur Autonomous Region, the company announced on Tuesday in statements.

"We could not find any indication or evidence of forced labor among the employees," said Markus Loening, founder and managing director of Loening Human Rights & Responsible Business.

The plant is operated by Volkswagen and its Chinese joint venture partner SAIC Motor Corporation Ltd..

"We checked the employment contracts and salary payments of all 197 employees over the last three years, conducted 40 interviews and were able to freely inspect the factory. The data collected was compared for consistency and plausibility," Loening underlined.

According to Volkswagen, a report by MSCI ESG containing allegations of human rights violations in Xinjiang is "factually incorrect and wholly misleading." Volkswagen said it was actively addressing this issue with MSCI.

Loening, a former politician from the Free Democratic Party (FDP), had been a member of the Bundestag before serving as the Federal Government Commissioner for Human Rights Policy and Humanitarian Aid until 2014.

Volkswagen said that the audit was carried out by two lawyers from a Shenzhen-based law firm with "extensive experience in social audits and international and Chinese labor law," accompanied by Loening.

Production at the factory started in 2013, but the number of employees went down from 650 to 197 by November 2023 as no production is currently taking place, only technical commissioning. Around 24 percent of the employees are ethnic minorities, including Uyghurs, according to the company.

Volkswagen said that the employees are well qualified, have worked for the company for a long time of up to 10 years, have a low work intensity and are being remunerated above average rates. Overtime work is next to non-existent, according to the German carmaker.