IFC Hit For Lending Money To Firms Using Forced Labor In Xinjiang

The International Finance Corp. (IFC), one of the world's leading development banks, has for decades touted its success in funding companies it says can help end extreme poverty in developing countries, CNN Business reported.

Photo Insert: The IFC headquarters

But new research suggests the organization, which operates under the World Bank Group, has been providing hundreds of millions of dollars in loans to companies that may be relying on forced labor from Uyghur and other ethnic minority groups in China's western Xinjiang region.

The report, titled "Financing and Genocide: Development Finance and the Crisis in the Uyghur Region," presents evidence that in recent years the IFC has loaned money to four Chinese companies that have been linked to forced labor and land expropriation in the region, along with environmental damage and the destruction of indigenous cultural heritage sites.

The four companies named in the report — Chenguang Biotech Group, Camel Group, Century Sunshine, and Jointown Pharmaceutical Group — have received loans and equity investments from the IFC valued at $439 million. Including loans sourced from institutional investors via the IFC, that figure rises to around $485 million.

The loans could contravene the IFC's own internal guidelines — known as its Performance Standards — which function entirely to "prevent IFC from financing projects that will have adverse environmental and social impacts that jeopardize [its] development aims," according to the report.

CNN Business was granted exclusive, advance access to the report, which was led by the Helena Kennedy Center for International Justice at Sheffield Hallam University in the United Kingdom and published by the Atlantic Council, a Washington-based think tank.

The Helena Kennedy Center for International Justice researches modern-day slavery, gender-based violence, and hate crime and has previously published reports alleging the use of forced labor in Xinjiang to produce cotton and solar panels.

They say the four named companies are not the only businesses receiving IFC funds in the region.

"I think it's clear that the IFC needs to divest from all their investments in the Uyghur region," said report author Laura Murphy, a professor in Human Rights and Contemporary Slavery at Sheffield Hallam University, who added that it is "incumbent on the IFC based on their own standards that they ensure that their clients are not involved in forced labor."

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