Pension funds may be contributing to Uyghur Muslim repression

12/9/2022 7:39 PM
Supporters of the East Turkistan National Awakening Movement rally in front of the White House to commemorate the 13th anniversary of the July 5th Urumqi Massacre, July 5, 2022 in Washington, DC.

A new report reveals that leading asset management firms and pension funds from the UK, US and Canada are invested in companies allegedly complicit in China's repression of Uyghur Muslims.

The report, by Hong Kong Watch and the Helena Kennedy Centre for International Justice at Sheffield Hallam University, found that three major stock indices have 13 companies that allegedly used China's forced labour or benefitted from its surveillance apparatus in recent years.

The ‘Passively Funding Crimes Against Humanity' report shows how leading asset managers, including BlackRock, HSBC, and Deutsche Bank, are exposed to index funds that include such companies.

The companies, identified in academic research and news reports as allegedly complicit in China's human rights abuse, are in the MSCI China index, MSCI Emerging Markets index and MSCI All Country World index.  

“Major institutional investors are funding companies known to be involved and benefiting from the crisis in the Uyghur region,” the report said.

“It is vital that firms take action and actually live up to the ethical commitments that they have made under ESG frameworks and through signing international human rights compacts.”

Forced labour  

China has been accused for years of detaining over a million Uyghurs and other Muslims in the Xinjiang region. In August, the UN said China’s treatment of its Muslim minorities was a possible crime against humanity, something many other rights groups and investigations had already concluded.

Of the companies mentioned in the report, seven allegedly used Uyghur workers that were obtained through state-sponsored forced labour, while the other six companies were allegedly involved in the construction of China's internment and surveillance infrastructure in Xinjiang.

The report recommends several measures, including governments creating a list banning investments in companies that are complicit in engaging in state-imposed forced labour.

Rushan Abbas, Executive Director of Campaign for Uyghurs, said: “This report should be a wake-up call to every asset manager and pension fund. Investors should require companies they are invested in to fully trace their supply chains and urgently divest from any links to the Uyghur Region or to forced labour transfers from the Region.

“Further, companies linked to forced labour transfers in this report should be delisted from the indexes so that average citizens do not need to worry that they are funding crimes against humanity.”

MSCI told the Guardian the only filters for inclusion in their indexes are accessibility and investability. “If an international investor is able to access the stock market and invest in the companies in the market, then the market and those companies are eligible for inclusion in our market indexes,” the company said.