Canada probes Nike, Dynasty Gold over alleged use of forced labour in China

People walk past a store of the sporting goods retailer Nike Inc at a shopping complex in Beijing, China March 25, 2021. REUTERS/Florence Lo/File Photo

OTTAWA: Canada's corporate ethics watchdog on Tuesday (Jul 11) launched separate investigations into Nike Canada and mining company Dynasty Gold to probe allegations that they used or benefited from forced Uyghur labour in their supply chains and operations in China.

The investigations were launched after an initial assessment of complaints about the overseas operations of 13 Canadian companies filed by a coalition of 28 civil society organisations in June 2022.

A report by the UN human rights chief said last year that China's treatment of Uyghurs, a mainly Muslim ethnic minority that numbers around 10 million in Xinjiang, in the country's far west, may constitute crimes against humanity. Beijing has repeatedly denied the use of forced labour against Uyghurs.

This is the first such investigation launched by the Canadian agency since it launched its complaint mechanism in 2021. No other Canadian agencies in the past have launched investigations of this kind.

Complaints against the other 11 companies were still being assessed, with reports expected in the coming weeks, according to a statement from the Canadian Ombudsperson for Responsible Enterprise (CORE).

Nike Canada and Dynasty Gold are alleged to have or have had supply chains or operations in China identified as using or benefiting from the use of Uyghur forced labour, the Ombudsperson said in the statement.

Dynasty Gold said in an emailed response that the allegations are "totally unfounded".

Nike Canada did not immediately respond to Reuters' requests for comment.

"I have not pre-judged the outcome of the investigations. We will await the results and we will publish final reports with my recommendations," Ombudsperson Sheri Meyerhoffer said in the statement, adding that the watchdog is "very concerned" about how these companies have chosen to respond to these allegations.

CORE was launched in 2017 to monitor and investigate human rights abuses mainly by Canadian garment, mining and oil and gas companies operating abroad.

Core has no legal powers to prosecute and if companies are found guilty, the watchdog said it could refer the findings to a parliamentary committee for further action.

In the last couple of years, several large US and Canadian multinational companies have been accused of using Uyghur forced labour either directly or in their supply chains.

Earlier this year Reuters reported that a bipartisan group of US representatives called on the US Securities and Exchange Commission to halt the initial public offering of Chinese-founded fast fashion firm Shein until it clarified that it does not use forced labor.

The Chinese embassy in Ottawa did not immediately respond to a Reuters request for comment.

The initial assessment of Nike details supply relationships with Chinese companies identified as using or benefiting from the use of Uyghur forced labour. In March, an activist shareholder called on Nike to offer more transparency on the working conditions of its supply chain.

Nike maintains that they no longer have any ties with these companies and provided the watchdog information on their due diligence practices, according to the watchdog's statement.

The complaint against Dynasty Gold is that it benefited from the use of Uyghur forced labour at a mine in China in which the company holds a majority interest. In a statement last year, Dynasty said it does not have operational control over the mine and that these allegations arose after it left the region.

This article was originally published on ChannelNewsAsia. Its inclusion on this website is solely for education purposes.