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Nike Canada is one of two companies being investigated by the Canadian regulator
Canada’s ethics watchdog has launched an investigation into allegations that Nike Canada and a gold mining company have benefited from forced Uyghur labor at their operations in China.
The regulator’s investigations are based on complaints from a coalition of human rights groups.
Nike says it no longer has any ties to the companies accused of using Uyghur forced labor.
According to Dynasty Gold, these allegations arose after they left the region.
A 2022 United Nations report found that China had committed “grave human rights abuses” against Uyghurs, an ethnic Muslim minority population living in the Xinjiang region, that could constitute “crimes of international law, particularly crimes against humanity.” Beijing denies the allegations.
This is the first such investigation announced by Canada’s Responsible Business Ombudsperson (CORE) since it launched its grievance mechanism in 2021.
The agency alleges that Nike Canada Corp has supply relationships with several Chinese companies that an Australian think tank has found use or benefit from forced Uighur labor.
In 2020, the Australian Strategic Policy Institute (ASPI) think tank released a report estimating that over 80,000 Uyghurs were transferred to work in factories across China.
The report said the company “has not taken any concrete steps to ensure beyond any doubt that forced labor is not involved in its supply chain”.
Nike said it no longer had any affiliation with these companies and provided information on their due diligence practices.
According to the report, Nike declined meetings with the ombudsman but sent a letter stating, “We are concerned about reports of forced labor in and related to the Xinjiang Uyghur Autonomous Region (XUAR)”.
“Nike does not source any products from the XUAR and we have confirmed to our contracted suppliers that they do not use locally sourced textiles or spun yarn.”
The Dynasty Gold report suggests that the company has benefited from the use of Uyghur forced labor at a mine in China in which the gold miner has a majority stake.
The mining company says it has no operational control over the mine and these allegations arose after it left the region.
Dynasty CEO Ivy Chong told CBC the initial report was “completely unfounded.”
CORE’s mission is to hold Canadian apparel, mining and oil & gas companies operating outside of Canada accountable for potential human rights abuses arising from their operations, including their supply chains.
“On the face of it, the allegations made by the complainants raise serious questions about possible abuses of the internationally recognized right to freedom from forced labour,” Ombudsman Sheri Meyerhoffer said in a copy of her initial assessment released on Tuesday.
“Our mission is to resolve human rights grievances fairly and impartially to help those affected and to strengthen responsible business practices by the companies involved.”
The regulator investigated complaints filed in June 2022 by a coalition of 28 civil society organizations.
In addition to the complaints against Nike and Dynasty Gold, which CORE will be reporting on shortly, there were 11 other complaints.
The BBC has reached out to both companies for comment.