Commentary on Political Economy

Wednesday 13 December 2023




The consultancy firm hired by Volkswagen to investigate allegations of forced labour in the carmaker’s Xinjiang plant in China is facing a staff rebellion after the report cleared the German company of human rights abuses, insiders said.

All of Löning’s 20 employees but the founder Markus Löning and another executive have requested to make it clear they were not backing the conclusions of the audit, which VW commissioned earlier this year after investor complaints over mounting evidence of human rights violations in the region.

The motor group last week released a one-page summary of the audit of its plant, run by its local joint venture partner SAIC, a state-owned company, and a statement from the consultant’s founder, who said the review did “not find any indications or evidence of forced labour among the employees”.

However, a few days later, on LinkedIn the consultancy appeared to distance itself from its own findings.

“The project was overseen and facilitated by Markus Löning and Christian Ewert,” the official LinkedIn account read, adding that “no other team member from Löning participated in, supported or backed this project”.

“The human rights situation in China and Xinjiang and the challenges in collecting meaningful data for audits are well known,” it said, adding that such challenges had been encountered.

The statement was issued to reflect the outrage among staff at the firm, said those close to the situation. “The whole team is distancing itself from [the audit],” said a person familiar with continuing talks, citing concern over the veracity of data collected in a region where the Chinese government has severely repressive policies in place.

“There’s a lot of anger,” the person added, pointing out that the firm was not accredited to conduct SA8000 audits, a human rights standard that VW said Löning applied to the review.

According to VW, the actual audit was carried out by an unnamed Shenzhenbased law firm, while the Löning consultancy had “accompanied on site”. Löning, the founder, said that SA8000 had been used as a “framework” for data collection and its audit was not a certification. He added the team member who oversaw the project had over 20 years experience of social audits in China.

VW’s announcement of an audit sparked questions as to how freely any auditor would be able to ask questions at a plant run by a Beijing-owned company in a region where the state has detained hundreds of thousands.

Löning said the statement posted on its LinkedIn page served to “share information about our individual roles” and that the audit had purely focused on the wellbeing of employees.

The issue reflects an increasingly tight balancing act for many German companies such as VW, which depend on China for a large proportion of their profits.

No comments:

Post a Comment