Hawzah News Agency- Many of the world’s largest asset managers and state pension funds are passively investing in companies that have allegedly engaged in the repression of Uyghur Muslims in China, according to a new report.
The report, by UK-based group Hong Kong Watch and the Helena Kennedy Centre for International Justice at Sheffield Hallam University, found that three major stock indexes provided by MSCI include at least 13 companies that have allegedly used forced labour or been involved in the construction of the surveillance state in China’s Xinjiang region.
In recent years, China has come under increased scrutiny over what the UN has called “serious human rights violations” against Uyghur Muslims in the region, including systemic discrimination, mass arbitrary detention, torture, and sexual and gender-based violence. The Chinese government has denied repeated claims that Uyghur Muslims have been held in detention or re-education camps and rejected the UN report as an anti-China smear.
“If the average Briton or American realised that hundreds of millions of pounds or billions of pounds were being invested in Chinese technology firms with close ties to the state, they would be outraged,” said Johnny Patterson, an author of the report and co-founder of Hong Kong Watch.
“So few of us know where our money is invested,” he added.
The report includes a list of major asset managers, including BlackRock, HSBC and Deutsche Bank among others, exposed to index funds that include companies accused of engaging in labour transfers and the construction of repressive infrastructure in the region, according to The Guardian.
It found public pension funds across the UK, Canada and the US and funds in New Zealand and Japan exposed by the investments.
Of the companies listed in the report engaged in the alleged use of forced labour or construction of camps and surveillance infrastructure, four are on the MSCI All-Country World Index ex-US, 12 are on the MSCI China Index and 13 are on the MSCI Emerging Markets Index. The companies were identified in academic research or media reports.
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.
“So many people’s pensions, retirement funds and savings are invested passively because, as average consumers, we don’t have time to investigate each and every investment,” said Laura Murphy, one of the report’s authors and professor of human rights and contemporary slavery at Sheffield Hallam University.
“Investing in companies operating in the Uyghur region is a serious ethical risk, but it’s also a financial risk, since these companies have been targeted by government sanctions and international advocacy campaigns,” said Murphy.
The report’s recommendations to governments include creating a list of banned entities, banning investments in companies complicit in engaging state-imposed forced labour and passing legislation banning the import of goods with ties to forced labour.
Rahima Mahmut, Uyghur activist and director of the World Uyghur Congress, said the UK is not doing enough to protect her people.
“Recent years have revealed the true extent of the UK’s complicity in Uyghur forced labour through public procurement, imports and, as this report details, investments,” said Mahmut, who is living in exile in the UK.
“The UK government has the responsibility to ensure that the British consumer and taxpayer is never inevitably funding genocide,” added Mahmut.
“It is simply unacceptable for UK companies to be complicit in crimes against humanity,” Labour MP Afzal Khan said of the report. “If it means we need to name and shame companies, then so be it.”
In October, a high court heard arguments that UK government agencies have broken the law by not investigating the import of cotton products manufactured by forced Uyghur labourers in China.
The agencies said the decision to investigate was a discretionary decision of law enforcement agencies and that there was currently insufficient material to warrant a criminal investigation, although that position could change in the light of new information.
BlackRock, HSBC and Deutsche Bank have been approached for comment.