Slave labour claims halt US Volkswagen Group imports

THOUSANDS of US-bound Audi, Bentley and Porsche models have been impounded at ports across North America after a supplier to parent group Volkswagen found a Chinese-made subcomponent in the vehicles had breached forced labour laws.

According to a report published by the Financial Times, the delivery of the vehicles to customers has been delayed by between four and six weeks as the electronic component is replaced with an ethically sourced alternative.

The Financial Times says Volkswagen Group was not aware of the origin of the component, which was sourced by an indirect supplier further down the supply chain. As soon as the revelation was made, Volkswagen Group notified US authorities.

A letter from Volkswagen Group to customers awaiting vehicle delivery blamed “a small electronic component that is part of a larger control unit, which will be replaced”, but did not specify the origin of the component.

It is understood that swapping the module is a relatively straightforward exercise and does not require disassembly of the vehicles.

The article alleges that the suspect component was sourced from western China. The United States prohibits the importation of products produced with forced labour in the western Xinjiang region and other areas in China under the Uyghur Forced Labour Prevention Act of 2021.

The Uyghurs are a Muslim minority that China has actively oppressed for more than 20 years. Many Uyghurs have been detained and placed in so-called re-education camps where they are forced into labour for Chinese companies.

United States law aims to discourage the use of products produced in Uyghur re-education camps by eliminating these goods from its economy.

Volkswagen Group issued a statement to the publication saying it “takes allegations of infringements of human rights very seriously, both within the company and the supply chain” including “any allegations of forced labour”.

It added “as soon as we received information of allegations regarding one of our sub-suppliers, we have been investigating the matter. We will clarify the facts and then take appropriate steps. These may also include the termination of a supplier relationship if our investigations confirm serious violations”.

“We are working to rectify a delay in delivering certain Volkswagen Group vehicles from ports to dealers due to a customs issue,” said Volkswagen Group in a statement to affected customers.

“This relates to a small electronic component – part of a larger control unit – which is in the process of being replaced as parts arrive. Deliveries continue, however some unavoidable delays may occur, for which we apologise. We are contacting each customer to keep them informed.

“Volkswagen takes allegations of infringements of human rights very seriously, both within the company and in the supply chain. Of course, this also includes any allegations of forced labour. 

“We are constantly analysing our processes and improving them on an ongoing basis. When we receive information on human rights risks or potential infringements, we strive to remedy them as quickly as possible.

“As soon as we received information of allegations regarding one of our sub-suppliers, we have been investigating the matter. We will clarify the facts and then take appropriate steps. These may also include the termination of a supplier relationship if our investigations confirm serious violations.”

Questions surrounding forced labour found within Volkswagen Group’s Chinese supply chain are a sensitive matter, the Financial Times reports.

It says the German giant has been facing mounting pressure from human rights groups and investors alike over a facility it jointly owns in Urumqi, the capital of the Xinjiang region.

Volkswagen Group said it would discuss the future direction of business in the region with its joint venture partner SAIC (which also produces MG Motor and LDV models sold in Australia) following the publication of fresh allegations of forced labour in the German media.