What's Going On With First Solar Stock Tuesday?

First Solar, Inc FSLR stock is trading lower Tuesday after findings from its internal audit revealed instances of forced labor among migrant workers in its Malaysian operations. 

The audit, part of the company’s sustainability report, identified that four subcontracting firms in Malaysia had imposed recruitment fees on these workers in their native countries and had unjustly retained their salaries and passports.

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These revelations come at a time when concerns about forced labor in the solar panel manufacturing sector, predominantly based in Asia, are escalating, the New York Times reports.

Forced Labor in Solar Manufacturing

Global solar panel supply chains have traditionally been dependent on China, especially for polysilicon, a vital component in most solar panels. However, recent bans on products from Xinjiang, a region accused of human rights violations, including forced labor, have prompted a shift away from China.

First Solar’s Stance

Based in Tempe, Ariz., First Solar manufactures a unique solar panel that doesn’t use polysilicon, seemingly insulating it from Xinjiang-related supply chain issues.

However, the company’s decision to publicize the audit results aims to spotlight hidden modern slavery risks. Mark R. Widmar, First Solar’s CEO, emphasized the industry’s responsibility to uphold human rights, stating, “Our industry’s work to power the energy transition... does not serve as credits to offset its social and human rights obligations.”

Corrective Measures

First Solar has mandated the implicated subcontractors to amend their practices and consent to regular reviews to eradicate forced labor. The company also plans to collaborate with third-party firms and has joined the Responsible Business Alliance to safeguard workers’ rights.

Broader Industry Implications

The surge in demand for renewable energy sources, like solar panels, has heightened concerns over potential links to forced labor. Recent reports have spotlighted the renewable energy supply chain’s vulnerability to such practices. Despite focusing on Xinjiang, relocating supply chains from China doesn’t necessarily eliminate challenges, as investigations into other Malaysian factories have also uncovered forced labor.

First Solar’s Global Operations

Beyond Malaysia, First Solar operates factories in Ohio and Vietnam and is expanding its manufacturing footprint, including new facilities in India, Alabama, and Louisiana. 

Price Action: FSLR shares traded lower by 1.88% at $207.66 on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.