Reel is pursuing a zero-tolerance blanket policy towards Chinese solar manufacturers with operations in Xinjiang (as recommended by the Breakthrough Institute and the Coalition to End Forced Labour in the Uyghur Region), with the aim of working exclusively with a diversified value chain in regions that uphold the most stringent labour standards and governance practices.
Establishing a diversified solar PV supply chain outside of China is a multi-stakeholder endeavour that will take time. In the interim, Reel will use its influence to encourage its developers to source from suppliers outside of China (or, if not possible, from suppliers outside Xinjiang), pursue strategic partnerships with the solar supply chain, and advocate for the development of a diversified solar supply chain. This includes regular participation in industry discussions in forums such as the Danish Chamber of Commerce, Solar Power Europe and RE-Source Europe.
Over the past decade, solar photovoltaic (PV) manufacturing companies and their upstream raw material suppliers operating in Xinjiang China have faced mounting allegations of involvement in potential human rights abuses, specifically, forced labor.
The emergence of forced labour allegations in the solar PV industry is rooted in the Chinese Communist Party’s wider systematic campaign of oppression against Uyghurs, Kazakhs, Kyrgyz, and other minorities in the Xinjiang region. Since 2014, Chinese authorities have significantly intensified the persecution of these groups, aiming to suppress their cultural and religious practices. This campaign has resulted in the detainment or imprisonment of a high proportion of Uyghurs in a harsh prison camp system.
Detainees from Xinjiang’s prison camps are often transferred to state-sponsored labour programs against their will. These workers are forced to work on farms, in mines, workshops and factories within Xinjiang and across China. They receive low wages, undergo mandatory political indoctrination, and work long hours under potentially unsafe conditions.
There is now extensive evidence linking these labour transfer programs to various industries, including the upstream solar supply chain in Xinjiang, particularly at three key points: raw material production, coal mining and power generation, and solar-grade polysilicon manufacturing. Researchers and journalists, including analysts from Horizon Advisory and S&P Global Market Intelligence, Bloomberg reporters, and human rights scholars such as Adrian Zenz, Nyrola Elimä, and Laura Murphy, have independently documented this evidence (find additional evidence here). The solar industry has also come out in force to denounce the use of forced labour in solar supply chains (e.g., Solar Power Europe and Solar Energy Industries Association).
The unfolding human rights crisis in the Xinjiang region has prompted a global response. In 2021, the United Stated issued a de facto ban on imports from the Chinese region of Xinjiang. The European Union’s forthcoming Corporate Sustainability Due Diligence Directive will force companies to map out sustainability and workers' rights issues in their import supply chains, and engage with suppliers to improve practices. ****Industry leaders like the Solar Energy Industries Association have also issued guidance to track and exclude specific batches of products manufactured in areas at risk of forced labour. Larger developers are enhancing transparency by demanding detailed Bills of Materials from their suppliers, specifying the sources and factory locations of solar module components, up to the polysilicon level. However, these measures may be insufficient due to several key factors:
Xinjiang’s market importance: In 2021, Xinjiang housed 42% of the world's solar-grade polysilicon factories. Additionally, the production capacity of materials like aluminum and glass, integral to solar module production, is growing in Xinjiang.
Intertwined supply chain: Even when factories are located outside Xinjiang, it is difficult to ensure that no forced labour has been used. Virtually every major Chinese module manufacturer in the industry has some connection to Xinjiang, either through their investments in solar energy power plants or through their suppliers. Moreover, materials produced in Xinjiang may be blended or combined with materials sourced from factories outside of Xinjiang, complicating efforts to trace the sources of materials. Consequently, the majority of the Chinese solar supply chain faces a high risk of exposure to forced labor.
For those manufacturers based in Xinjiang, avoiding forced labour is even more unlikely. In an attempt to appeal to more concerned customers, solar manufacturers in the region may offer ‘sanitized, Xinjiang-free,’ while continuing to profit off of forced labour to produce products for the less scrupulous customer. Even if the manufacturer does not outrightly ‘employ’ workers from labour transfer programs, much of Xinjiang’s (coal) energy powering solar manufacturing processes is linked to forced labour.
Regulatory barriers to transparency: In 2021, China enacted an anti-sanction law prohibiting suppliers from disclosing information about their sub-suppliers. This means that even with diligent efforts, European developers may not achieve full transparency up to the polysilicon level. Moreover, the Coalition to End Forced Labour in the Uyghur Region states that ”there are no valid means for companies to verify that any workplace in the [Xinjiang] region is free of forced labour or to prevent the use of forced labour in these workplaces in line with human rights due diligence.”
Reel is pursuing a zero-tolerance blanket policy towards Chinese solar manufacturers with operations in Xinjiang (as recommended by the Breakthrough Institute and the Coalition to End Forced Labour in the Uyghur Region), with the aim of working exclusively with a diversified value chain in regions that uphold the most stringent labour standards and governance practices.
Currently, China accounts for over 79% of global polysilicon production, the starting material for crystalline polysilicon PV modules - the most popular solar technology. Chinese firms also dominate manufacturing capacity at each stage of the solar PV supply chain (for example, Chinese manufacturers are responsible for over 95% of global production of monocrystalline silicon ingots and wafers).