Volkswagen Group faces mounting strain to deal with allegations of human rights violations within the Chinese language province of Xinjiang, the place the German automaker operates a automotive manufacturing facility.

Whereas there isn’t any proof that anybody has been mistreated on the VW plant, the corporate ought to rigorously study the accusations, mentioned supervisory board members Joerg Hofmann, a labor chief, and Stephan Weil, who represents VW’s key shareholder Decrease Saxony.

“We now have to concretely weigh the info and on this foundation reply the query if a termination of the exercise there can be the precise factor,” Hofmann advised the Braunschweiger Zeitung in an interview, citing potential harm to VW’s repute.

VW has fielded uncomfortable questions on its suppliers and operations in Xinjiang, the place human rights teams and a panel of United Nations consultants have raised issues about coercive labor practices.

China has repeatedly rejected criticisms of the work applications, calling allegations of compelled labor lies and defending its insurance policies as an effort to scale back poverty and unemployment.

VW Group CEO Herbert Diess has defended the corporate’s presence within the area, telling U.S. TV information program 60 Minutes in April he is “completely positive” there isn’t any compelled labor at VW’s plant, and that locals “are a lot better off” if the corporate stays put.

China is Volkswagen’s greatest market, accounting for roughly 40 p.c of gross sales.

Volkswagen is “firmly against compelled labor,” Nicolai Laude, an organization spokesman, mentioned Friday. “In our worldwide enterprise actions, we be sure that our values are lived and our requirements are upheld. We anticipate the identical from our native enterprise companions.”

The automaker can also be going through pushback from the German authorities. Berlin lately declined a Volkswagen request to resume danger insurance coverage for the corporate’s Chinese language operations over the human rights issues, in response to an individual aware of the matter.

It is the primary time Berlin has rejected such a bid and reveals a shift in tone on China, which turned Germany’s greatest non-EU buying and selling accomplice over the previous twenty years.

German Chancellor Olaf Scholz final month known as out alleged abuse at detention for ethnic Uyghurs in Xinjiang and known as on firms to do extra to diversify their provide chains and export markets.