Following allegations of ‘gross abuse’ of Uyghurs by employees of its joint ventures in Xinjiang, China, BASF announced today that it is divesting from BASF Markor Chemical Manufacturing and Markor Meiou Chemical, both based in Korla.
BASF frontloaded the announcement with concerns about the carbon footprint of the 1,4-butanediol (BDO) produced at the facilities, which uses coal as a base raw material and a source of energy.
However, BASF has been under fire since German news outlets ZDF and Der Speigel published a joint investigation on Feb. 2, revealing that employees of BASF Markor Chemical Manufacturing used a business trip to spy on Uyghurs, a Turkic ethical and religious minority in China. Human rights groups have extensively reported on the mass interment, surveillance, and torture of Uyghurs in Xinjiang, which the Chinese government denies.
The investigation found that in 2018 and 2019 employees of Markor accompanied Chinese state officials to home visits to Uyghur families. Human rights groups say this kind of ‘home visits’ are part of a Chinese government initiative called fanghuiju, used to spy and indoctrinate members of the predominantly Muslim minority group.
The ZDF-Spiegel investigation cited sources saying that reports from BASF’s joint venture reveal that ‘Markor employees not only participated in state security and surveillance, but also directly participated in activities that served the mass interment of minorities’.
BASF claims no knowledge of such activities. Since it started operating the two production joint ventures in 2016, it has put ‘regular due diligence measures’ in place and ‘internal and external audits have not found any evidence of human rights violations in the two joints ventures’, it claimed.
“Nonetheless, recently published reports related to the joint venture partner contain serious allegations that indicate activities inconsistent with BASF’s values,” the company said in a Feb. 9 statement. “Consequently, BASF will accelerate the ongoing process to divest its shares in the two joint ventures in Korla, subject to negotiations and required approvals of the relevant authorities. It is important to note that, also in the context of the public reports, BASF has no indication that employees of the two joint ventures in Korla were involved in human rights violations. The most recent reports relate to BASF’s joint venture partner, in which BASF does not have a stake,” it concluded.
BASF’s two joint facilities produce two chemicals – butanediol and poly-THF – and employ around 120 employees, of whom around 40 are employed by the BASF majority-owned joint venture BASF Markor Chemical Manufacturing.
On its website, BASF further says that it has taken ‘preventive measures to ensure compliance with its global Code of Conduct’ in the two joint ventures.
“A commitment to the BASF Code of Conduct, including a non-discrimination policy in the hiring of joint venture personnel, has been included in the joint venture agreements.”
In its statement announcing the divesting, BASF noted that its presence in China, which accounts for around half of the world’s chemical production, ‘remains otherwise unchanged’.