First Solar Finds Forced Labor in Malaysia Operations

First Solar, a leading U.S. solar panel manufacturer, has disclosed the findings of an independent audit revealing that migrant workers in its operations in Malaysia were victims of forced labor. The audit included in the company’s corporate sustainability report found that four subcontractors in Malaysia charged workers recruitment fees, withheld their pay, and held onto their passports.

The use of forced labor in the manufacturing of solar panels has raised concerns among U.S. officials and human rights activists, particularly as most manufacturing takes place in Asia. Supply chains for solar panels have long relied on China, particularly for polysilicon, a key component in solar panels. However, due to concerns over human rights violations in Xinjiang, there has been a shift away from China.

First Solar produces a solar panel that does not use polysilicon and therefore appeared immune from the supply chain concerns related to Xinjiang. The company made the audit public to raise awareness of the practices it discovered and is requiring the four subcontractors to change how they treat workers and undergo periodic reviews to ensure they are no longer using forced labor.

The demand for renewable energy resources like solar panels has increased concerns about equipment produced from forced labor. Reports have highlighted the potential exposure of the renewable energy supply chain to forced labor. Walk Free, an international human rights group, estimates that in 2021, around 50 million people worldwide lived under forced labor conditions, with an increase of 10 million since 2016.

While much of the concern has focused on Xinjiang, investigations have also found evidence of forced labor in factories in Malaysia that produce high-end clothing. First Solar’s audit highlights the need for companies to conduct due diligence to identify and address forced labor in their supply chains.

In addition to Malaysia, First Solar has factories in Ohio and Vietnam and is expanding its manufacturing operations, with plans for research and development centers and factories in India, Alabama, and Louisiana. The company will continue to use a third-party firm to ensure its partners do not engage in forced labor practices and has joined the Responsible Business Alliance to support the rights and well-being of workers. The Solar Energy Manufacturing for America Coalition has also emphasized the need for more domestic production to address forced labor concerns in foreign countries.