BASF, the German chemicals producer, has announced its decision to withdraw from its two joint ventures in Xinjiang, China, following allegations of human rights abuses. The move comes after media reports surfaced regarding the company’s partner, Xinjiang Markor Chemical Industry, also known as Markor Chemical, engaging in activities inconsistent with BASF’s values. While regular due diligence measures did not find evidence of human rights violations, recent reports have raised concerns.
The decision to withdraw from Xinjiang was prompted by a letter from a group of politicians urging BASF to sever ties with the region. Xinjiang has been plagued by widespread reports of state-sponsored human rights abuses, particularly targeting the Uyghur population. German media revealed that employees of Markor Chemical accompanied Chinese state officials on home visits to Uyghur households, a practice that human rights groups claim is used for surveillance and indoctrination purposes. These visits allegedly occurred during the Chinese government’s campaign to suppress Uyghurs and other minorities in Xinjiang.
BASF stated that it had decided to divest from the joint ventures due to the market environment and product carbon footprints of the chemicals produced in Xinjiang. The company plans to expedite the divestment process following the recent reports about Markor Chemical. Although BASF’s projects in Xinjiang are limited to these two joint ventures, it does have facilities in other parts of China.
BASF’s CEO, Martin Brudermüller, met with a group of legislators, including German MEP Reinhard Bütikofer and British MP Iain Duncan Smith, to discuss the situation. The meeting was coordinated by the Inter-Parliamentary Alliance on China, a cross-party group focused on China-related issues. Brudermüller acknowledged that previous audits conducted since 2019 did not reveal any wrongdoing or compromises in standards. However, he emphasized that the allegations against BASF’s partner company crossed a red line. When questioned about reports of rape, forced marriage, forced consumption of pork and alcohol against Uyghurs, as well as the home visits, Brudermüller expressed disbelief, stating that such descriptions were unimaginable to a normal mind. He stressed that BASF was not involved in these abuses.
While Brudermüller did not provide a specific timeline for the withdrawal, he expressed hope that it would occur within the next few months. The decision has been hailed as groundbreaking and historically significant by Japanese politician Arfiya Eri. Bütikofer commended BASF’s actions, stating that the company’s withdrawal removed any excuses other companies may have had to remain in Xinjiang.
BASF’s companies in Greater China accounted for 14% of its total sales in 2022, according to its most recent financial statements. The company has been approached for further comment on the matter.
In conclusion, BASF’s decision to withdraw from its joint ventures in Xinjiang reflects growing concerns over human rights abuses in the region. The allegations against its partner company and the pressure from politicians prompted the company to take action. While BASF maintains that its audits did not uncover any wrongdoing, it acknowledges that the recent reports are inconsistent with its values. The withdrawal is expected to occur in the coming months, and BASF’s move has been praised as significant in holding companies accountable for their associations with regions implicated in human rights violations.
