U.S. Solar Group Calls for Pulling Out of Xinjiang Over Abuses

(Bloomberg) -- The leading U.S. solar-trade group is calling on companies to move their supply chains out of a Chinese region, citing reports of human-rights abuses.

U.S. agencies including the State Department in July issued an advisory warning of forced labor in Xinjiang, which produces polysilicon used in American solar panels among other products. In September, the U.S. House of Representatives passed a bill seeking to block imports of goods made with forced labor in Xinjiang.

“We will not tolerate industry suppliers being involved in these types of abuses,” said John Smirnow, a vice president and general counsel at the Solar Energy Industries Association, in a statement Thursday. “We want to be crystal clear: human-rights abuses are abhorrent.”

The statement comes as the industry faces “heightened risk of disruption” because of the Xinjiang connection, according to a note this week by analysts at Roth Capital Partners.

“Recent checks suggest the industry has only recently started to quietly work in the background to try to reconfigure supply chains,” Roth analyst Philip Shen said in a note. Module pricing could rise ahead of an executive or legislative action, according to the note. Shen estimated that polysilicon producers in Xinjiang make up about 65% of China’s supply.

Washington-based SEIA is working on a protocol to establish either that solar imports don’t include Xinjiang-made products or, if produced there, are free of forced labor, Smirnow said.

China’s Foreign Ministry said on Friday that it opposed “politicizing economic cooperation.”

“If these companies do not want to operate in China in Xinjiang, then it’s their loss,” ministry spokesman Zhao Lijian told a daily briefing in Beijing.

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