First Solar, a leading U.S. solar panel manufacturer, said on Tuesday that an audit by the company had found that migrant workers in its operations in Malaysia were victims of forced labor.
The internal audit, which was included in a corporate sustainability report, found that four subcontractors in Malaysia had charged the workers recruitment fees in their home countries and withheld their pay and passports.
U.S. officials and human rights activists have become increasingly concerned about the use of forced labor in the manufacture of solar panels, most of which takes place in Asia.
Global supply chains for solar panels have for years relied on China, in particular for polysilicon, a crucial component in most solar panels made around the world. But a recent ban on products from Xinjiang, a region where the U.S. government and United Nations accuse the Chinese government of committing human rights violations, including forced labor, has led to a shift away from China.
[...] Still, Ms. Murphy said that there was a key difference between forced labor issues in Southeast Asia and in Xinjiang, where the Chinese government prevents companies from doing the type of audit First Solar had conducted.
“What First Solar has done is the critical due diligence that all companies need to do around the world to ensure they are identifying and remediating forced labor in their supply chains,” Ms. Murphy said. “It does happen, and companies have to be on the lookout for it.”
In addition to Malaysia, First Solar has factories in Ohio and Vietnam. The company is rapidly expanding its manufacturing operations, including the construction of a research and development center in Ohio and by building factories in India, Alabama and Louisiana.