Ottawa害羞草研究所檚 corporate-ethics watchdog says a Vancouver-based mining company has allowed forced labour to occur at its gold mine in the Xinjiang region of China, even though the firm lost control of the project before the alleged slavery took place.
The company cited, Dynasty Gold Corp., says it害羞草研究所檚 being tarnished by baseless allegations on timelines that make no sense, but ombudsperson Sheri Meyerhoffer said companies are responsible for holdings they jointly control.
The finding Tuesday is the first determination the Canadian Ombudsperson for Responsible Enterprise has made since the office was created by the Liberals in 2018.
害羞草研究所淓vidence gathered through this investigation suggests that Uyghur forced labour likely took place at the Hatu Qi-2 gold mine,害羞草研究所� ombudsperson Sheri Meyerhoffer wrote in a report released Tuesday.
China denies all allegations of slave labour in its Xinjiang region.
Tuesday害羞草研究所檚 finding has Meyerhoffer recommending that Canada bar Dynasty from access to trade services and financial support. The company says it has never received those services.
害羞草研究所淭hey don害羞草研究所檛 have any evidence of us using forced labour 害羞草研究所� they extrapolate, but where is the hard evidence,害羞草研究所� Dynasty CEO Ivy Chong said in a lengthy interview. 害羞草研究所淲e tried to explain, but I think their mind was closed; the decision was made.害羞草研究所�
Chong added that nobody in the federal government or its Beijing embassy had informed the company of human-rights concerns while they were operating the mine, despite frequent contact at the time. The company buys mines and contracts out work like exploration and extraction.
The issue surrounds labour that stems from Muslim citizens whom China has sent to what it calls 害羞草研究所渄etention害羞草研究所� centres or 害羞草研究所渞e-education害羞草研究所� camps. China insists those centres are meant to weed out Islamic radicalization after several deadly domestic attacks, and lift regions out of poverty.
But since 2017, there have been widespread concerns that China is using forced labour and coercion to exploit its Uyghur minority. The United Nations found in mid-2022 that China had committed 害羞草研究所渟erious human rights violations害羞草研究所� against Uyghurs and other Muslim communities that 害羞草研究所渕ay constitute international crimes, in particular crimes against humanity.害羞草研究所�
A report that same year by Global Affairs Canada found China 害羞草研究所渋s using otherwise legitimate programs for retraining and relocation of unemployed workers as instruments of a broader campaign of oppression, exploitation, and indoctrination of the Uyghur Muslim population into Han (majority) Chinese culture.害羞草研究所�
Meyerhoffer害羞草研究所檚 report says Beijing has cracked down on those trying to investigate the issue in general.
She found that Dynasty害羞草研究所檚 mine near Kazakhstan had sourced labour through Chinese state-run corporations, including one that was later sanctioned by Canada.
The report notes publications from Chinese state corporations and media about Uyghur workers brought to the mine between 2015 and 2020 as part of programs that have attracted scrutiny from human rights groups. Their concerns include non-consensual psychological counselling, language lessons and physical training.
Yet Dynasty lost control of the mine in 2008. Chinese court filings cited in Tuesday害羞草研究所檚 report show the public company had been unsuccessfully fighting the Chinese government to maintain ownership while repeatedly listing ownership of the mine in its corporate statements.
Meyerhoffer said that means it remains linked to hiring decisions later taken at the mine.
害羞草研究所淐ompanies do not need to have operational control in order to be involved in human-rights abuse,害羞草研究所� Meyerhoffer said.
害羞草研究所淒ynasty may have lost operational control, that害羞草研究所檚 true. But they remain a majority shareholder of Terraxin, the joint-venture entity (with Chinese state companies). And this relationship is sufficient to find that they are linked to the use of Uyghur forced labour at the mine.害羞草研究所�
She said Dynasty had not been co-operative in the investigation, and that even a company with a handful of staff needs to uphold Canadian corporate standards.
害羞草研究所淒ynasty害羞草研究所檚 disregard for the complaint process and casual response to the complaint itself is disconcerting and falls far short of the CORE害羞草研究所檚 standard of good faith participation,害羞草研究所� reads the report.
Chong said the finding is a blow to a company that has already spent years in Chinese courts trying to recuperate its investment.
She hasn害羞草研究所檛 been surprised that Chinese judges have sided with state companies, but she said she害羞草研究所檚 shocked a Canadian regulator would brand a company as complicit in atrocious acts that occurred while others were in control.
害羞草研究所淚 do not know what is their objective by doing that; I have no idea. We don害羞草研究所檛 have any avenue to defend ourselves; we害羞草研究所檙e a small company,害羞草研究所� she said.
She took umbrage with Meyerhoffer害羞草研究所檚 report saying her company should have pushed Beijing to end forced labour.
害羞草研究所淭he investigation did not uncover any evidence that Dynasty took steps to assess its potential involvement in Uyghur forced labour abuse at any point,害羞草研究所� the report reads.
It says because the company was still part of a joint venture running the mine, it needed to come up with human-rights policies when news spread of possible forced labour in Chinese mines in 2017.
The report said Dynasty hasn害羞草研究所檛 published any due-diligence processes to detect and remediate human-rights abuses, and did not 害羞草研究所渢ry to prevent or mitigate risks and impacts by using its leverage to bring the issue up with its business relationships.害羞草研究所�
Chong said it害羞草研究所檚 a laughable idea that a small, foreign company would have leverage over the Chinese Communist Party.
害羞草研究所淭he small guys have no way to fight back,害羞草研究所� Chong said. 害羞草研究所淭hey are trying to damage our reputation.害羞草研究所�
Meyerhoffer said in an interview that she would have accepted a confidential plan from Dynasty for an eventual exit from China, or one outlining actions to advance human rights if it did get control over its mine.
She is planning to issue a follow-up report on the case in 12 months, and hopes Dynasty will reach out for help in following her recommendations.
害羞草研究所淚t害羞草研究所檚 not too late for Dynasty to start acting to better respect human rights,害羞草研究所� she said. 害羞草研究所淭here害羞草研究所檚 still an opportunity for a good-news story down the road.害羞草研究所�
Meyerhoffer announced the probe into Dynasty last July, which along with an unrelated investigation were the first since her office launched in 2018.
The case stems from a complaint brought by two-dozen human-rights groups, including Uyghur groups. Those groups said they would have been open to an outcome in which their complaints were resolved privately, without the companies being named publicly.
Meyerhoffer害羞草研究所檚 office has faced sustained criticism by advocates, MPs and Meyerhoffer herself, arguing that the Liberal government did not give the ombudsperson enough teeth to hold companies to account.
Advocacy groups such as the Canadian Network on Corporate Accountability have long called for the ombudsperson to have the legal right to compel documents and witnesses from companies. That point was raised in an external legal review Ottawa commissioned, and the NDP has tried to address the issue through legislation, which has sat untouched for two years.
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