Canada investigates Nike, Dynasty Gold for alleged use of Uyghur forced labor

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Nike Canada is one of two companies being investigated by the Canadian watchdog

Canada’s ethics watchdog has launched investigations into allegations that Nike Canada and a gold mining company benefited from Uighur forced labor in their China operations.

The watchdog’s investigations stem from complaints filed by a coalition of human rights groups.

Nike says it no longer has ties to the companies accused of using Uyghur forced labor.

Dynasty Gold says these claims arose after they left the region.

A UN report in 2022 found that China had committed “serious human rights violations” against Uyghurs, an ethnic Muslim minority population living in the Xinjiang region, which “may amount to international crimes, especially crimes against humanity”. Beijing denies the accusations.

This is the first such investigation announced by the Canadian Ombudsman for Responsible Business (CORE) since it launched its complaints mechanism in 2021.

The agency alleges that Nike Canada Corp has supplier relationships with several Chinese companies that an Australian think tank has identified as using or benefiting from Uighur forced labour.

In 2020, the Australian Strategic Policy Institute (ASPI), a think tank, published a report estimating that over 80,000 Uyghurs had been transferred to work in factories across China.

The report says the company has taken “no concrete steps to ensure beyond reasonable doubt that forced labor is not involved in their supply chain”.

Nike says it no longer has ties with these companies and provided information about their due diligence practices.

According to the report, Nike declined meetings with the ombudsman, but sent a letter saying “we are concerned about reports of forced labor in, and related to, the Xinjiang Uyghur Autonomous Region (XUAR)”.

“Nike does not source products from XUAR and we have confirmed with our contract suppliers that they do not use textiles or spun yarn from the region.”

The report on Dynasty Gold suggests that it benefited from the use of Uyghur forced labor at a mine in China in which the gold mining company has a majority stake.

The mining company says it has no operational control over the mine and that these claims arose after it left the region.

Dynasty CEO Ivy Chong told the CBC that the initial report was “totally unfounded”.

CORE has a mandate to hold Canadian apparel, mining and oil and gas companies operating outside Canada accountable for possible human rights abuses arising from their operations, including in their supply chains.

“On their face, the allegations of the complainants raise serious questions regarding the possible abuse of the internationally recognized right to be free from forced labor,” Ombudsman Sheri Meyerhoffer said in a copy of her initial assessment, released Tuesday.

“It is our mission to resolve human rights complaints in a fair and objective manner to help those affected and to strengthen the responsible business practices of the companies involved.”

The watchdog looked into complaints filed by a coalition of 28 civil society organizations in June 2022.

There were 11 other complaints, besides those against Nike and Dynasty Gold, on which CORE will release reports soon.

The BBC has contacted both companies for comment.

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