Electric buses used in Wellington and Auckland and diesel trains purchased by KiwiRail were manufactured by a company effectively banned from the US and reportedly linked to forced labour practices in China, Marc Daalder reports
National security concerns and allegations of forced labour have cast a pall on the deployment of 12 new electric buses for Auckland’s CityLINK bus route.
The buses were purchased from a Chinese train manufacturer, CRRC, which has been effectively banned in the United States over concerns around “spy trains”, and which was implicated in a March 2020 report in forced labour practices.
Other New Zealand departments and councils have also used buses from CRRC. Wellington’s Metlink service relies on dozens of electric buses purchased from CRRC by operator NZ Bus, KiwiRail recently ordered 10 new diesel locomotives from the company (topping up 63 it has bought since 2009) and the Government’s Low Emission Vehicles Contestable Fund has subsidised the purchase of at least one CRRC bus for Tranzit to the tune of $370,000.
Forced labour concerns
The deployment of the buses in Auckland and Wellington and KiwiRail’s decision to purchase 10 more trains came after the Australian Strategic Policy Institute (ASPI) found CRRC was one of 82 companies “potentially directly or indirectly benefiting from the use of Uyghur workers outside Xinjiang through abusive labour transfer programs”.
The ASPI report detailed transfers of Uyghur workers out of Xinjiang province to work in factories elsewhere in China.
“The Chinese government has facilitated the mass transfer of Uyghur and other ethnic minority citizens from the far west region of Xinjiang to factories across the country. Under conditions that strongly suggest forced labour, Uyghurs are working in factories that are in the supply chains of at least 82 well-known global brands in the technology, clothing and automotive sectors,” the report found.
This includes the July 2019 transfer of 41 Uyghurs to the KTK Group, which produces speciality parts for CRRC and other companies.
In a legal letter to Newsroom, KTK Group’s Australian subsidiary disputed this characterisation. Representatives told Newsroom that ASPI relied on a local Chinese media report which merely said the company “employed workers from Xinjiang This local Chinese media report did not say that these workers were from the Uyghur ethnic minority, nor were they forced labour.”
In statements to Australian media last year, KTK Australia said its parent company “has never used slave labour, nor hired workers from the Uyghur ethnicity”.
Last year, the United States Department of Commerce banned KTK Group from purchasing certain components from American companies without explicit approvals, over allegations of forced labour.
American officials have also cracked down on CRRC, though more out of concern for national security. In 2019, the New York Times reported on concerns that a US$100 million CRRC factory in Chicago might produce “spy trains”.
“Lawmakers – along with CRRC’s competitors – say they are concerned that subway cars made by a Chinese company might make it easier for Beijing to spy on Americans and could pose a sabotage threat to American infrastructure, though CRRC says it surrenders control of all technology in the cars to its buyers,” the Times reported.
“Nonetheless, critics speculate that the Chinese firm could incorporate technology into the cars that would allow CRRC – and the Chinese government – to track the faces, movement, conversations or phone calls of passengers through the train’s cameras or Wi-Fi.”
That year, provisions forbidding the US government from purchasing trains or buses from CRRC were passed by Congress with bipartisan support. And at the end of 2020, then-President Donald Trump issued an executive order banning any American citizen from investing in CRRC.
Australian states launched reviews
The March 2020, ASPI report raised alarm in Australia, where high-profile public transport projects have also been implemented with CRRC trains and buses and KTK components. While Victorian premier Daniel Andrews said he had received assurances that the state’s trains had not been built with forced labour, New South Wales and Queensland launched reviews into the issue.
The use of CRRC trains in New Zealand has met a more muted reaction, however. A spokesperson for the Greater Wellington Regional Council declined to comment, saying staff were away for the school holidays and that the council didn’t choose whom to buy the buses from, the operator did. That operator, NZ Bus, didn’t respond to a request for comment.
Auckland Transport spokesperson Mark Hannan told Newsroom the agency “relies on government direction on banned or restricted entities. AT has not been advised of any government concerns that would potentially limit the supply of electric buses for the New Zealand market”.
However, he added, “Auckland Transport has introduced a Supplier Code of Conduct, which we will require all new suppliers to comply with as part of our due diligence. We are currently working with existing suppliers, including the bus operators, to become part of this agreement.”
This code of conduct would allow the agency to exclude suppliers over human rights violations in the supply chain or “a threat to national security or the confidentiality of sensitive government information”.
Hannan said that the 12 buses revealed last week are the only ones built by CRRC in the city’s fleet, and that they too were operated by NZ Bus.
Modern slavery law mooted
A KiwiRail spokesperson similarly told Newsroom that the state-owned company “does not have the skills or experience required to carry out comprehensive human rights assessments of any overseas corporations. Instead we rely on government policy as advised by agencies such as [the Ministry of Foreign Affairs and Trade.
“Similarly, assessments of any security implications related to our suppliers are more appropriately made at a government level, and we would follow government advice on such matters.”
Anne-Marie Brady, a University of Canterbury professor who has extensively studied China’s influence in New Zealand and the broader Pacific, said the news underscored the need for New Zealand to pass a Modern Slavery Act, which would “support the creation of a robust, country-agnostic, mechanism to prevent forced labour products entering the New Zealand market and supply chain”.
While Labour committed during the 2020 election to investigate modern slavery legislation, advocates say it has been too slow and that New Zealand is falling behind as a country without these human rights protections.
The Government should also “ask to join the emerging D10 (Democracy 10) group of countries who are proposing jointly producing strategic technology, to deal with the security and ethical risks of purchasing such technology from the People’s Republic of China,” Brady added.
Transport Minister Michael Wood, who has responsibility for modern slavery issues as Workplace Relations and Safety Minister, did not answer Newsroom’s questions about CRRC. However, he did comment generally to say he would “work with officials to better understand any procurement issues that relate to the transport sector.
“The government has expressed its grave concerns about credible reports of human rights abuses in Xinjiang,” he added.
“We are currently considering the option of modern slavery legislation, but it’s not an issue we can combat alone and will require partnering with councils, businesses and foreign governments.”
CRRC did not respond to a request for comment.
This article has been updated to reflect comments from KTK Australia.