The Corner


Sustainable Industry Sustained by Forced Labor?

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“Sustainability” has become a mantra of “stakeholder capitalism,” an expression of corporatism that has been around for longer than often realized but is clearly now having a moment. Well, more than a moment: Its new ascendancy is not going to pass any time soon.

Companies now tell anyone who is willing to listen about their plans to operate in a sustainable manner. Others, better still, like to boast of how their products will be assisting in the fight against climate change or otherwise are helping the planet “heal,” a positioning that makes them the darlings of “socially responsible” investors, as well as attractive plays for investors who aren’t too bothered by the environment but like the look of a bandwagon, especially when it is being pushed along by government, regulators, and institutions wanting to green their portfolios.

It’s a commonplace that not all such investments are quite as ecologically friendly as they might at first seem, and nor are they as virtuous. But even so, if accurate, this . . .

New York Times:

In a flat, arid expanse of China’s far west Xinjiang region, a solar technology company welcomed laborers from a rural area 650 miles away, preparing to put them to work at GCL-Poly, the world’s second-largest maker of polysilicon.

The workers, members of the region’s Uighur minority, attended a class in etiquette as they prepared for their new lives in the solar industry, which prides itself as a model of clean, responsible growth. GCL-Poly promoted the housing and training it offered its new recruits in photographs and statements to the local news media.

But researchers and human rights experts say those positive images may conceal a more troubling reality — the persecution of one of China’s most vulnerable ethnic groups. According to a report by the consultancy Horizon Advisory, Xinjiang’s rising solar energy technology sector is connected to a broad program of assigned labor in China, including methods that fit well-documented patterns of forced labor.

Major solar companies including GCL-Poly, East Hope Group, Daqo New Energy, Xinte Energy and Jinko Solar are named in the report as bearing signs of using some forced labor, according to Horizon Advisory, which specializes in Chinese-language research. Though many details remain unclear, those signs include accepting workers transferred with the help of the Chinese government from certain parts of Xinjiang, and having laborers undergo “military-style” training that may be aimed at instilling loyalty to China and the Communist Party.

Let’s see what the truth turns out to be, but in the meantime, here (to take one of the companies named) is JinkoSolar’s sustainability statement:

Caring for the earth and future generations is an important and undisputable part of JinkoSolar’s corporate social responsibility. In 2019, in addition to continuing its existing plans and projects, JinkoSolar has combined the company’s resources with its employees’ love and wisdom to work together, show compassion, bring warmth and care.

Funding for our social impact activities is aligned with our strategic focus areas of education and supporting local community needs. Strategic giving includes charitable giving (cash and in-kind) as well as other investments, such as programs that empower employee giving and service, and adoption of solar energy to create positive impact. We also collaborate with other organizations, leveraging additional giving and resources to further scale our initiatives…

At JinkoSolar, we believe that corporate responsibility is simply good business. Doing the right things the right way creates value for JinkoSolar and strengthens our position as a global leading Solar PV products and energy provider. Deeply embedding corporate responsibility and a commitment to ethical behavior in all that we do helps us mitigate risk, reduce costs, protect our brand value, and develop new market opportunities.

And, to be fair, from S&P Global (October 2020):

JinkoSolar COO Zhiqun Xu said in a statement that the company “condemns the use of forced labor and does not use it in any of its facilities.” One of the leading solar-panel shippers to the U.S. during the third quarter, JinkoSolar operates a factory in Xinjiang and is on the board of the Solar Energy Industries Association, the U.S. lobbying group.

The whole S&P article, which covers the whole of Xinjiang’s polysilicon industry, not (it should be stressed) just JinkoSolar, is worth reading, but this caught my eye:

Without pressure from customers and investors, the solar market’s ties to Xinjiang have been overlooked or ignored by an industry that is laser-focused on cutting costs, said Dustin Mulvaney, a professor at San Jose State University who teaches courses on energy and sustainability.

“I think the climate conversation is just such a loud voice that no one’s really interested in playing this story out,” Mulvaney said. “I don’t think they’re giving it any attention.”

Priorities, priorities.

This caught my eye too:

By 2021, five companies in China and Hong Kong will control two-thirds of the world’s polysilicon market, according to Dennis Ip, an analyst at Daiwa Capital Markets Hong Kong Ltd.

One of those is Xinjiang-headquartered Daqo New Energy Corp., the only company in the group with a U.S. stock listing.

Drawn to Xinjiang by cheap electricity from coal-fired power plants….



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