Germany’s top carmakers have been accused of using forced labour in their Chinese supply chains, in one of the first official complaints against domestic companies to be brought under the country’s new supply chain law.
On Tuesday, the European Center for Constitutional and Human Rights, a non-profit organisation based in Berlin, said it had filed a complaint with German regulators against Volkswagen, BMW and Mercedes-Benz alleging their links with forced labour in China’s region of Xinjiang.
The complaint was filed under a German law that came into effect at the start of 2023, which requires large companies to ensure human rights and environmental issues in their supply chains are monitored and addressed. Penalties range from a fine of up to 2 per cent of total annual global sales and exclusion from government contracts for up to three years.
European companies operating in Xinjiang now face political and regulatory pressures at home and abroad, as a wave of advocacy groups start to bring legal cases in European courts over products made in Xinjiang. The US has already banned imports from the territory.
Looming regulatory scrutiny adds to the growing controversy over Volkswagen’s factory in Xinjiang. Human rights protesters were among those disrupting the carmaker’s annual general meeting last month, while investors demanded an independent audit of its Xinjiang plant.
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