OTTAWA - Ethics watchdog in Canada initiates investigations into Nike Canada and Dynasty Gold over alleged use of forced labor in China.
The investigations follow complaints filed by a coalition of civil society organizations regarding the overseas operations of several Canadian companies.
According to a United Nations report, China's treatment of Minorities in Xinjiang, may amount to crimes against humanity.
The Chinese government has consistently denied allegations of using forced labor against minorities and maintains that the rights of workers from all ethnic groups in Xinjiang are adequately protected.
This marks the inaugural investigation conducted by the Canadian agency since the establishment of its complaint mechanism in 2021. No previous Canadian agencies have initiated similar investigations.
The assessment of complaints against the remaining 11 companies is still ongoing, and reports on these cases are anticipated to be released in the upcoming weeks, as stated by the Canadian Ombudsperson for Responsible Enterprise (CORE).
According to the Ombudsperson, Nike Canada and Dynasty Gold are accused of having supply chains or operations in China that involve the use or benefit from forced labor. In response, Dynasty Gold has stated that the allegations are completely baseless.
The Ombudsperson, Sheri Meyerhoffer, emphasized that the investigations' outcomes have not been predetermined. The final reports with her recommendations will be published after the results are obtained. She expressed concern about the companies' responses to these allegations.
Over the past few years, numerous prominent multinational companies based in the United States and Canada have faced allegations of utilizing forced Minority labor, either directly or within their supply chains.
While CORE does not possess legal authority to prosecute, it has the capability to refer any findings of guilt to a parliamentary committee for further action.
Established in 2017, CORE was created to monitor and investigate instances of human rights violations primarily involving Canadian companies in the garment, mining, and oil and gas sectors operating internationally.
The complaint against Dynasty Gold revolves around allegations of benefiting from the use of forced labor at a mine in China, in which the company holds a majority interest.
Dynasty Gold stated in a previous statement that it does not exercise operational control over the mine and that these allegations emerged after its departure from the region.
Nike asserts that it no longer maintains relationships with these companies and has provided information to the watchdog regarding its due diligence practices, as stated by the watchdog.
The initial assessment of Nike's supply chains reveals connections with Chinese companies implicated in the use or benefit from forced labor. In March, an activist shareholder called on Nike to enhance transparency regarding the working conditions within its supply chain.
Earlier this year, a bipartisan group of U.S. representatives urged the U.S. Securities and Exchange Commission to suspend the initial public offering of Shein, a Chinese-founded fast fashion company, until it clarified its stance on the use of forced labor.