CORE Says Canada Shouldn't Support Dynasty Gold Exports Due to Forced Labor Allegations
The Canadian Ombudsman for Responsible Enterprise concluded that Dynasty Gold, a mining firm headquartered in British Columbia, allowed Uyghur labor transfers to its joint venture in Xinjiang during 2017-2020, and that such forced labor "may continue to persist" at the Hatu mine in Xinjiang.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
As a result, the Ombud has recommended that Foreign Affairs Canada refuse to advocate for the company, and that Export Development Canada should not provide financial support to Dynasty Gold unless it makes "a significant financial donation to one or more not-for-profit organizations working to combat Uyghur forced labour," and uses its leverage to either prevent or mitigate the use of forced labor at the mine, and if it cannot, "determine whether to exit responsibly from its business relationships in the XUAR."
The report cited a 2020 article that said the Hatu gold mine absorbed five laborers transferred from the southern Xinjiang Uyghur Autonomous Region in 2017 and 19 laborers from that region in 2019. It also cited a report by the Western Region Gold Co., which seemed to be operating the mine in 2019, saying that the company would continuously participate in labor transfer programs involving “'surplus labourers'” from southern XUAR," as the Chinese government terms rural Uyghurs it wishes to transfer to industrial work.
The report said the gold mine received 20 more laborers in 2020, who were given "Chinese language lessons, a daily two-hour 'physical training' session, as well as a daily psychological counselling session aimed at 'stabilising their emotions.'"
Dynasty Gold initially partnered with Xinjiang Non-Ferrous Metal (XFN), not Western Region Gold, and XFN described the forced labor transfers in 2020; Dynasty says it terminated its position in Xinjiang in 2008. The company said Canada never talked to it about forced labor in its joint venture when it was operating in Xinjiang. Dynasty told the CORE investigators "that the wages it paid to local workers were almost double the local wage, that workers received on-the-job training, and that workers were happy."
The report said there is some evidence to support that Dynasty was not involved in the mine at the time of the labor transfers, since its exploration license expired in October 2008, and since the Hatu Qi-2 gold mine was listed on the Shanghai Stock Exchange in January 2015, and there was no mention of a Dynasty ownership share. (Originally, Dynasty owned 70% and XFN owned 30%.)
However, there also is evidence that Dynasty did continue business in Xinjiang, the report said, such as when Dynasty's CEO Ivy Chong said in 2018 that Dynasty had three gold mining projects in XUAR. Also, they noted that Dynasty sued XFN and Western Region Gold and Yunlong mining, demanding that the joint venture be restored, and although it lost its case, it appealed in 2020. And, the report said, Dynasty asserted in April 2022 that it was the majority shareholder of the joint partnership with XFN, which was called Terraxin.
CORE only has the authority to investigate human rights abuses that happened after May 1, 2019.
The office complained that Dynasty Gold didn't produce the documents CORE asked for. "There is no evidence to suggest that Dynasty took any steps whatsoever to prevent or mitigate the use of Uyghur forced labour. Thus, Dynasty could be contributing by omission to the use of Uyghur forced labour at the Hatu gold mine," the report said.