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Munich-based MAN Truck & Bus, a subsidiary of Volkswagen-owned commercial vehicle manufacturer Traton, has ended a tyre supply deal with the Serbian plant of Chinese Shandong Linglong Tire Co., citing allegations of “human rights violations” in reports on working conditions at the plant, BIRN and Manager Magazin can reveal.
In cooperation with anti-trafficking organisation ASTRA and the Serbia-based Initiative for Economic and Social Rights, A11, BIRN [Balkan Investigative Reporting Network] has reported extensively since 2021 on the exploitation of Vietnamese and Indian workers at the Linglong site in Serbia, which is key to the Chinese company’s European ambitions.
The allegations included a raft of Labour Law violations, the confiscation of passports and cramped, dirty, unsanitary accommodation.
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Serbia has faced calls from the European Parliament and United Nations human rights rapporteurs to investigate allegations of exploitation, while since the start of 2023 German companies have been obliged to carry out due diligence with respect to human rights in global supply chains under Germany’s Act on Corporate Due Diligence Obligations in Supply Chains.
MAN Truck & Bus told Manager Magazin: “We have been following the reports on the working conditions in the Serbian plant of one of our suppliers. We take the allegations that human rights violations have occurred in this context very seriously and, in connection with this suspected case, stopped all delivery requests to the supplier in question at the end of November.”
However, German car giant Volkswagen, MAN’s ultimate owner, said it was still seeking to “clarify the facts”.
“We have followed the reporting on working conditions at the Serbian facility of one of our suppliers,” the company told Manager Magazin. “The allegations of human rights violations in this context are taken very seriously, and we have already taken appropriate steps to clarify the facts. Please understand that we cannot provide further details regarding our supplier relationships due to contractual confidentiality obligations.”
While underscoring that Volkswagen itself had not yet received any supplies from Linglong’s Serbia plant, the company said: “Serious violations of labour standards and human rights can lead to the termination of contracts with suppliers if corrective measures are not taken.”
Volkswagen specified that Linglong China supplies a 19-inch tyre first used on the VW Tiguan and Cupra Terramar models this year and manufactured “exclusively” in China. “In addition, Linglong China is a supplier of spare tyres that are used throughout the Volkswagen Group,” it added.
Alongside Volkswagen, Linglong is one of the sponsors of Bundesliga football club FC Wolfsburg, which grew out of a sports club for Volkswagen workers in the northern German city of Wolfsburg, where Volkswagen Group is headquartered.
The Linglong plant in the northern Serbian town of Zrenjanin is key to the company’s European market hopes. The factory officially opened its doors in September this year, when Linglong Tire general director Wang Feng listed Volkswagen as among the plant’s first customers, alongside Nissan, Audi, Ford, Stellantis, Hyundai, Kia and MAN Truck & Bus.
Labour legislation and human rights violations
For years, Serbian NGOs have been sounding the alarm about the exploitation and possible human trafficking of foreign workers engaged in building Linglong’s Serbian plant, the first Chinese tyre factory in Europe.
They alleged that passports had been confiscated from Vietnamese and Indian workers and that the workers were housed in dirty, cramped dormitories with just two toilets for hundreds of men and a lack of clean, warm water.
In two separate investigations, BIRN found that the contracts they signed with subcontractors of China’s Shandong Linglong Tire Co. violated multiple articles of Serbia’s Labour Law, from working hours to vacation days and financial penalties.
Under the terms seen by BIRN, the workers faced being fired if they tried to unionise or protest, while “regular working hours” could, if necessary, breach the legal maximum.
“The illegalities in the employment contract are such that it is easier to count what is legal than what is not,” Mario Reljanovic, an expert on labour law, told BIRN at the time.
Both the Vietnamese and Indian workers were hired through intermediaries, who charged them thousands of dollars to secure them employment in Serbia.
One Indian worker, Rafiul Bux, told BIRN in January 2024 that he had paid a recruitment agency $3,500, for which he had to take a bank loan.
He described dire working and living conditions in Serbia, a lack of medical support, unpaid salaries and having to surrender his passport to his employer for months on end.
Tomoya Obokata, the UN Special Rapporteur on modern slavery, told BIRN at the time that such fees are a kind of “debt trap”.
“They should not be paying that,” he said in an interview. “It should be employers who should be paying for all of this, and governments to monitor these practices.”
Serbia’s backing for Linglong
Construction of the Linglong factory began in 2019 as one of a number of Chinese projects in Serbia that have made the country a Balkan hub for Chinese investment.
The government handed over 95 hectares of land – valued at 7.6 million euros – free of charge and provided 75 million euros in subsidies from state coffers for the recruitment of 1,200 employees by the end of 2024, according to Serbia’s Commission for the Control of State Aid.
Critics in Serbia say the government, hungry for investment, has turned a blind eye to labour and living conditions facing workers engaged in major foreign projects, particularly Chinese.
Serbian President Aleksandar Vucic has regularly defended Linglong, despite mounting evidence of human rights violations.
Confronted with the allegations concerning Vietnamese workers in 2019, Vucic told reporters: “An inspection has been sent. What do people want? You want us to destroy an investment of $900 million dollars so that Zrenjanin does not progress?”
“You care about Vietnamese workers? Come on people, we know each other well; you’re not worried about Serbian workers and here you are worrying about Vietnamese.”
Serbian authorities said they were looking into the allegations based on criminal complaints made by ASTRA and the workers themselves, but nothing ever came of it.
Linglong has dismissed the accusations and, on occasion, tried to shift any responsibility onto its subcontractors. It denied ever employing workers from India and said its contract with another Chinese company, CEEG TEPC, which did bring in Indians, was terminated in September 2022.
Obokata said that neither Linglong nor the Serbian government had ever responded to the concerns he and his UN colleagues outlined in a letter to them regarding the case of the Vietnamese workers.
“There is a disturbing trend in your country, and it is up to the Serbian government to do something about it,” he said at the time. “If the Serbian authorities are not doing that, they should be held liable as a country and as a government for facilitating labour exploitation and human trafficking.”
Germany’s supply chain act
Germany’s Act on Corporate Due Diligence Obligations in Supply Chains has faced criticism from all sides, either as too soft on companies or as an unwanted brake on the country’s struggling economy.
The Act cites an exhaustive list of international human rights conventions, including the prohibition of child labour, slavery and forced labour, the disregard of occupational safety and health obligations, withholding an adequate wage, disregard of the right to form trade unions or employee representation bodies, the denial of access to food and water as well as the unlawful taking of land and livelihoods.
If enterprises fail to conduct due diligence when choosing suppliers, they risk fines of up to eight million euros or two per cent of annual global turnover. The latter is applicable only to enterprises with an annual turnover of more than 400 million euros. Companies ultimately risk being excluded from public contracts.