US bans import of key solar panel material from Chinese companies

In a significant development, the Biden Administration has banned U.S. imports of a key solar panel material from China’s Hoshine Silicon Industry Co over forced labor allegations, said two sources.

In a separate move, the U.S. Commerce Department has also restricted US exports to Hoshine, Xinjiang Production and Construction Corps (XPCC) and two other Chinese companies citing their kinks with forced labor of Uyghurs and other Muslim minority groups in Xinjiang where China runs modern concentration camps.

The three other companies added to the U.S. economic blacklist include Xinjiang East Hope Nonferrous Metals Co, Xinjiang Daqo New Energy Co, and Xinjiang GCL New Energy Material Co.

The US Commerce Department said the companies and XPCC “have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, forced labor and high-technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups in” Xinjiang.

Many of the companies listed by the Commerce Department are major manufacturers of monocrystalline silicon and polysilicon that are used to produce solar panels.

Neither the Chinese companies, nor their parent companies, responded to requests for comments.

China’s embassy in Washington dismissed accusations of genocide and forced labor in Xinjiang saying they are “nothing but rumors with ulterior motives and downright lies.”

Incidentally, the ‘Withhold Release Order’ by U.S. Customs and Border Protection only blocks the import of the material from Hoshine. According to a source familiar with the order, it does not impact the majority of U.S. imports of polysilicon and other silica-based products.

According to a second source, the import ban does not conflict with Joe Biden’s climate goals and support for the domestic solar industry.

The United States is continuing to investigate allegations of forced labor by Chinese companies who supply polysilicon.

A report by solar industry analysts state that the Xinjiang region accounts for approximately 45% of the world’s solar-grade polysilicon supply.

“The White House sees the actions as a natural continuation of the G7 agreement earlier this month to eliminate forced labor from supply chains”, said two sources familiar with the policy. “We view these three actions as putting that commitment into action. We believe these actions demonstrate a commitment to imposing additional costs on the PRC for engaging in cruel and inhumane forced labor practices.”

The XPCC, a paramilitary organization sent to Xinjiang in the 1950s to build settlements and farms continues to dominate in the region’s energy and agriculture sectors, operating almost like a parallel state. 

In 2020, the U.S. Treasury Department sanctioned XPCC for “serious rights abuses against ethnic minorities.”

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy, Sustainability

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