China Northern Rare Earth is responsible for the processing of rare earth metals at the mine in Bayan Obo, Inner Mongolia, China. The mine is owned by a company in the same group as China Northern Rare Earth and is deemed to cause extensive environmental damage by not handling mining waste in an appropriate way and thereby minimizing the spread of toxic waste. It has caused serious adverse impacts on humans, animals and the environment. In addition, the company has limited transparency regarding relevant policies and has not been open to dialogue despite repeated attempts to contact them.
The Council on Ethics therefore recommends the exclusion of China Northern Rare Earth as it can be linked to violations of the environment and nature in accordance with principles 7 and 9 of the UN Global Compact and Chapter VI of the OECD Guidelines for Multinational Enterprises.