Maine Solar Power Project Linked to Chinese Forced Labor

Solar panel facilities under construction at two sites off of I-95 in Augusta, Maine, may have been produced in part by the forced labor of persecuted ethnic and religious minorities in the Xinjiang region of the People's Republic of China.

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The foreign firm supplying solar power modules for a Maine Department of Transportation (MDOT) project in Augusta has been linked by the Joe Biden administration to forced labor in the Xinjiang region of the People’s Republic of China (PRC), the Maine Wire can report.

Cenergy Power construction site, Augusta, ME (Photo Credit: Steve Robinson, All Rights Reserved)

The solar project is part of Gov. Janet Mills “Lead By Example” initiative, which included a 2019 executive order directing state agencies to install “renewable energy generation and energy storage on state property.”

Canadian Solar, a publicly traded company based in Guelph, Ontario, has supplied 8,000 solar modules for the MDOT project currently under construction in Maine’s capital city, near Interstate 95, at Exits 109 and 112.

Canadian Solar is one of the largest solar module manufacturers on the planet, but it has also has faced criticism in the Canadian media and from shareholders for not doing enough to ensure its supply chain is not connected to forced labor in Xinjiang.

One of the company’s longtime suppliers has also been blacklisted by the Biden administration for suspected ties to forced labor.

Although Canadian Solar is legally based in Ontario, company documents show just 3 percent of its workforce is in the Americas, while 95 percent of its employees are in Asia, with 79 percent in the PRC specifically. According to the Globe and Mail, Canada’s largest newspaper, Canadian Solar has built a large manufacturing operation in the Xinjiang region over the past two decades.

The United States, United Nations, and several non-governmental organizations have said the Chinese Communist Party (CCP) is systematically victimizing Uyghur Muslims and other minorities in Xinjiang, brutalizing the population at an industrial scale and compelling them to endure forced abortions, forced sterilizations, and forced labor.

That forced labor operation includes facilities that produce polysilicon and silicon wafer, a key ingredient of photovoltaic solar panels.

In 2021, President Joe Biden directed the U.S. Commerce Department to blacklist one of Canadian Solar’s largest suppliers, Xinjiang GCL New Energy Material Technology, a subsidiary of GCL New Energy, which is itself a subsidiary of GCL-Poly Energy.

In an official White House statement, the Biden administration accused GCL of “participating in the practice of, accepting, or utilizing forced labor in Xinjiang and contributing to human rights abuses against Uyghurs and other minority groups in Xinjiang.”

GCL’s Xinjiang operation employed people, many of them Uyghur Muslims, who were transferred to industrial facilities by PRC government programs against their will.

Prior to the White House directive targeting GCL, the polysilicon supplier and Canadian Solar had publicly advertised their mutually beneficial relationship as far back as 2008. The companies signed a $117 million deal in 2016, and GCL said in 2019 it had signed another major long-term deal to supply Canadian Solar.

In a reports released in 2019 and 2020, Canadian Solar again said GCL was its largest supplier of silicon wafer.

Those reports appear to have been scrubbed from Canadian Solar’s website, but are available in archive form.

Canadian Solar’s 2019 Sustainability Report shows GCL was the company’s top supplier of silicon wafer, a key component of solar panel modules

Canadian Solar also operates its own solar power facility in Tumxuk, Xinjiang, but the company has told Canadian media the employees at that facility are ethnic Han Chinese. The company has also said it plans to sell the facility.

As a result of the Biden administration’s directive, U.S. Customs and Border Protection seized some of Canadian Solar’s modules in August 2021, along with products from several other Xinjiang-linked solar manufacturers, thought the company maintains it was collateral damage in the enforcement action.

Canadian Solar’s top silicon wafer supplier in 2019 was blacklisted by the Biden administration for ties to forced labor, and the company has not been transparent since about how it sources the key solar panel ingredient. (Photo Credit: Steve Robinson)

Both Canadian Solar and GCL have insisted their businesses have no ties to forced labor. And the PRC has repeatedly denied the existence of forced labor camps in Xinjiang.

GCL’s English-language company website posted a statement in 2021 from the China Photovoltaic Industry Association and the Silicon Branch of China Nonferrous Metals Industry Association denying the existence of forced labor or internment camps in Xinjiang altogether.

“As is known to all, the issue of forced labor is a lie invented out of thin air by institutions and personnel of the United States,” the statement said.

Canadian Solar published “sustainability” reports in 2021 and 2022 that bore no mention of GCL, but the reports also omitted updated lists of suppliers like the ones that appeared in the 2018 and 2019 reports. Although its two most recent reports do not identify the companies from which it purchases polysilicon and silicon wafer, Canadian Solar claimed in a recent filing with the U.S. Securities and Exchange Commission (SEC) that it sources polysilicon and silicon wafer exclusively from Henan Province and Inner Mongolia for any modules sold into the U.S.

In public statements, SEC filings, and ESG reports, Canadian Solar has said it maintains a zero-tolerance policy for forced labor at its manufacturing facilities and in its supply chain. But the company has also resisted calls to allow an independent third-party audit of its supply chain that might verify its claims.

In the last three years, the U.S. government and human rights groups have increasingly sounded the alarm on potential human rights violations occurring in the Xinjiang region, including forced labor practices impacting multiple industries, but especially the solar industry.

Jenny Chase, head of solar analysis at Bloomberg New Energy Finance, has said, “Nearly every silicon-based solar module—at least 95 percent of the market—is likely to have some Xinjiang silicon in it.”

In a 2021 report, consulting firm Horizon Advocacy warned the entirety of the PRC’s rising solar manufacturing industry was inextricably connected to forced labor and human rights violations.

The Horizon report was covered extensively in western media, including the New York Times, but it appears not to have reached some American green energy advocates and firms.

“As long as we in the U.S. continue to build our solar industry on Chinese sources, we are building on a foundation of forced labor,” said Emily de la Bruyere, one of the report’s authors.

“Global consumers of Chinese polysilicon-based photovoltaic and semiconductor goods implicitly support the sustained abuse of ethnic and religious minorities in China,” said de la Bruyere.

GREEN ENERGY, FORCED LABOR

Xinjiang is widely regarded by western authorities as the location where the Chinese Communist Party (CCP), which has controlled the country since 1949, operates forced labor camps and reeducation camps for religious and ethnic minorities.

The United Nations has detailed systemic human rights abuses in Xinjiang, actions it says may constitute crimes against humanity.

The U.S. National Security Council has accused Xinjiang of employing “modern-day slavery.”

Amnesty International estimates that hundreds of thousands, potentially more than 1 million, religious and ethnic minorities in the region have been held in internment camps.

An analysis of satellite imagery by Rand Corporation has shown the rapid development of what it says are military-style detention facilities in Xinjiang, concrete buildings surrounded with walls of barbwire and illuminated at night by watchtowers.

Amnesty says CCP authorities have, under the guise of fighting terrorism, brutalized, tortured, raped, and murdered countless Uyghurs, Kazakhs, and other Muslim ethnic minorities.

President Donald Trump and President Biden have both drawn attention to the CCP’s widespread human rights violations, with Trump’s State Department going as far as to call the Chinese treatment of the Uyghur’s “genocide.”

On Dec. 23, 2021, President Biden signed into law bipartisan legislation aimed at keeping products out of U.S. markets if their production involved forced labor. But many large western corporations have been reluctant to end profitable business activities linked to the rights violations.

(Source: https://bhr.stern.nyu.edu/blogs/2018/12/20/what-forced-labor-in-xinjiang-factories-says-about-supply-chains)

That includes the solar industry, which is heavily dependent on polysilicon and cheap electricity, both of which are abundant in Xinjiang.

The PRC is the worlds largest producer of polysilicon, and Xinjiang is the top polysilicon-producing region of the country. Four of the worlds largest polysilicon producers, including GCL, have operations in Xinjiang, and all have ties to forced labor, according to the Horizon Advocacy report.

In January 2021, Canada’s largest newspaper, The Globe and Mail, obtained government intelligence documents that showed three Canadian companies, among them Canadian Solar, had invested hundreds of millions of dollars over the past two decades building out facilities in the Xinjiang region.

In response to the Globe and Mail report, Isabel Zhang, associate director for investor relations and strategic analysis at Canadian Solar, told the newspaper the company does not “support forced labour or engage in forced labour.”

To underscore this point, the company’s ESG reports include charts that track discrimination, child labor, and forced labor complaints.

Several representatives of Canadian Solar did not respond to The Maine Wire’s emails seeking comment for this story.

“Anti-Modern Slavery Task Force”

Canadian Solar has, in the past two years, embraced the ESG culture with uncommon vigor, touting the diversity of its workforce, its embrace of women and minorities, and its environmental sustainability. But it has consistently resisted calls for third-party auditors to examine its supply chains.

Canadian Solar has said in SEC filings it has a strict zero-tolerance policy for forced labor at its manufacturing facilities and in its supply chain, but a shareholder advocacy group has accused the company of failing to aggressively ensure that its subsidiaries and suppliers are not benefitting from forced labor.

Following widespread media coverage of Canadian Solar’s alleged ties to Xinjiang forced labor, the Shareholder Association for Research and Advocacy (SHARE), a non-profit that advocates for responsible corporate behavior, contacted Canadian Solar management in November 2021 and asked the company to allow a third-party human rights audit of its supply chain, similar to the the audits Biden called for in an Executive Order earlier that year.

Canadian Solar rejected the request, SHARE said.

In April of 2022, the group sent letters to dozens of the company’s largest shareholders, claiming Canadian Solar officials had improperly omitted SHARE’s request from official shareholder briefings.

Canadian Solar subsequently backtracked and said it would allow the third-party audit SHARE had requested, but it’s not clear whether that audit ever took place.

In Canadian Solar’s most recent ESG report, published in July 2022, Chairman and CEO Shawn Qu and Chief Sustainability Officer Hanbing Zhang said the company had established an “Anti-Modern Slavery Task Force.”

“[O]ur Board passed a resolution in May 2022 mandating a third-party assessment, at reasonable cost, on the extent to which Canadian Solar’s policies and procedures effectively protect against forced labor in its operations, supply chains, and business relationships,” said Qu and Zhang.

In a June 9, 2022 letter to shareholders, activist Canadian Solar shareholders affiliated with SHARE said the company had still not appointed a third-party supply chain auditor.

The company did not respond to The Maine Wire’s inquiries asking whether it has appointed a third-party auditor or whether that audit has taken place. (If the company provides the audit, Maine Wire will update this story to include it.)

Such an audit would help U.S. companies and policy makers determine whether the company is in compliance with the Uyghur Forced Labor Prevention Act (UFLPA). It would also provide potential customers or partners in the U.S. an added assurance that their business activities are not implicitly supporting human rights abuses.

Canadian Solar representatives have told the Globe and Mail that scrutiny of the company’s supply chains to see whether they’re contributing to human rights violations actually harms minorities in western China by making large firms less likely to hire Uyghur Muslims.

Since 2020, the company has not reported ongoing business with GCL in its public statements or SEC filings. But corporate structures in PRC are often opaque, with layers upon layers of subsidiaries and holding companies, and even technically separate companies often have deep relationships or ties to the same government or corporate structures. All of this prevents a serious challenge to western companies who must conduct due diligence on potential Asian partners and suppliers.

Another factor that complicates getting trustworthy information, like an audit, out of Xinjiang — or anywhere in PRC — is the vast surveillance state the CCP operates, and the CCP’s equally vast capacity for misleading and intimidating westerners.

According to The Globe and Mail, several audit groups have publicly said they will no longer inspect supply chains in the PRC because the CCP uses surveillance tools and state agents to interfere with visits by outsiders.

Without the third-party audit, it’s impossible for western journalists, rights advocates, businesses, or policymakers to determine whether and to what extent Canadian Solar, and any company with a major presence in Xinjiang, is connected to or benefiting from forced labor in China.

As politicians in Maine and elsewhere increasingly embrace solar energy as part of an ideologically motivated divestment from fossil fuels, the question of forced labor in solar supply chains will loom large.

Currently, companies like Cenergy Power, the Carlsbad, Calif.-based contractor that is building and will operate the Augusta facility, says Canadian Solar’s claim that it has a zero-tolerance policy for forced labor must be taken at face value.

LEADING BY EXAMPLE

Blossoming in the middle of MDOT land near I-95, circumscribed by highway interchanges, are two fields of solar panels.

On Wednesday, Canadian workers could be heard speaking French to one another as they trounced through sticky mud, working mostly on the metal fence surrounding the site.

When they’re completed this summer, the facilities will stand as high-visibility monuments to the progressive campaign for “green” energy — a fulfillment of Gov. Mills’ 2019 “Lead by Example” initiative.

Government officials have said the facilities will provide $3.3 million in combined benefits to Maine taxpayers over the next 20 years.

But perhaps more importantly for Maine elected officials, environmental activists, and mainstream journalists in the state is the reduction in carbon emission that will come from the project: 2,000 metric tons annually, says MDOT.

A spokesman for MDOT declined to comment on Canadian Solar’s involvement in the project or its alleged connections to forced labor in Xinjiang.

Although Canadian Solar has supplied the modules, the solar project is being developed by and will be operated by Cenergy Power, the developer that won MDOT’s competitive bidding process.

Bill Heck, a principle at Cenergy Power, said in a phone interview that his company was aware of allegations that Canadian Solar and its suppliers had been connected in the media to forced labor operations in China, but his company partnered with them anyways because of assurances they received from the company and an anti-forced labor policy it filed with the SEC.

“We took their affirmation and, I’m sorry but, an SEC filing is a disclosure document that can get them in big trouble if they violate that,” said Heck.

Asked whether he believe forced labor was occurring in western China, he said that wasn’t part of his job.

“I hear about it, but that’s not my job, to try to get into the weeds on that stuff,” he said.

He said accusations that Canadian Solar was connected to forced labor in western China had not been proven yet and that he had to take the company’s denials at face value.

“There are competing priorities here,” he said. “Everyone is trying to reduce carbon emissions.”

He said the tradeoff between Chinese forced labor and reducing carbon emissions was an “ethical moral question” and that Cenergy was just “trying to follow the rules.”

“Just try to put yourself in our shoes where we’re trying to run a business where we’re not getting slammed on multimillion dollar late charges,” he said. “We have to move forward with our business and, basically, as long as they’re in legal compliance and they certify to us that, ‘Hey, our modules are clean and you’re not going to get stopped,’ and they’re taking more risk on that front… like, we just gotta get these projects built,” he said.

Asked whether Maine officials offered any directives on procuring solar modules, Heck wouldn’t say.

“Look, I don’t want to get anyone in trouble, they just want us to be in full compliance, which we always have to,” he said.

Heck said Canadian Solar told Cenergy the modules were manufactured in Thailand. He said he had documents that showed the modules in Augusta did not come from China, and he said he would provide them to the Maine Wire after the phone interview. But he did not.

In a subsequent text message asking for the documents he said he had, Heck said he had been advised not to discuss issues further, though he did not specify who provided the advice.

“All I can say is that Canadian confirms that their modules do not violate any human rights protocols,” he wrote.

Heck did not respond to a follow up text asking whether he would provide the documents he said he had that showed the modules in Augusta did not originate in Xinjiang.

Canadian Solar does have a large manufacturing facility in Chon Buri, Thailand. But last month, the Biden administration alleged the company was one of many Chinese solar exporters attempting to obscure the origins of U.S.-bound solar modules by funneling shipments through other southeast Asian countries, including Thailand.

An MDOT spokesman did not respond to an email asking whether any state employees had contacted Cenergy Power representatives after the Maine Wire reached out for comment.

The MDOT project in Augusta has previously caused controversy in Maine, not because profits from the project are flowing out of Maine to foreign businesses with potential links to forced labor in communist PRC, but because city officials in Augusta say state officials didn’t properly inform them of the plan to use the 15 acres of undeveloped land to install the 8,000 solar modules.

Augusta officials have also bristled at the unsightly appearance of a chainlink fence surrounding the installation.

The project has been praised by liberal groups in Maine as aligning with Mills’ plan to build out green energy on state properties.

As part of that plan, Mills issued an executive order directing state agencies, like MDOT, to install “renewable energy generation and energy storage on state property.”

In that executive order, under a section titled, “responsible procurement,” Mills ordered state agencies to “reduce their impact on the environment and enhance public health by procuring environmentally preferable products and services whenever such products and services are readily available.”

Nothing in the executive order directs state agencies to perform due diligence on potential contractors and sub-contractors to ensure they are engaged in ethical business practices that respect international human rights.

“Agencies shall consider Maine-sourced products and services when total costs are competitive,” the order states.

The Cenergy Power project is just one of many solar facilities that have been built on or planned for state property under Mills, including a widely touted solar array at the Blaine House.

The addition of solar panels to the Blaine House property in 2019 was done by ReVision Energy, a Maine-based company. A representative of ReVision said both companies manufacture their solar panels in Georgia, USA, though that could not be independently confirmed.

Senate Minority Leader Trey Stewart (R-Aroostook), the top elected Republican in the state, said state officials must do a better job of conducting due diligence on potential contractors.

“I share Gov. Mills’ desire to modernize and diversify Maine’s energy grid, but these initiatives should not come at the cost of supporting and enabling the Chinese Communist Party’s human rights violations in Xinjiang,” said Stewart.

“If the Mills administration continues to promote solar energy, it must perform due diligence to ensure that the companies Maine partners with are not benefitting from, directly or indirectly, the subjugation and exploitation of the Uhygur people, or any peoples,” he said.

Gov. Mills did not respond to questions emailed to her about this story.

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