Volkswagen must regularly check its operations in China to ensure its supply chains are safe and comply with human rights laws, two of the carmaker's investors said, after an audit of its jointly owned Xinjiang site found no sign of forced labour.

The demands made by Union Investment and Deka Investment on Wednesday reflect ongoing concerns over Volkswagen's engagement in the Xinjiang region, where rights groups have documented abuses including forced labour in detention camps.

Beijing denies any such abuses...

Volkswagen said on Tuesday that the much-anticipated audit, which was carried out by Germany's Loening Human Rights & Responsible Business GmbH and two Chinese lawyers from a firm in Shenzhen, had found no evidence of forced labour.

Loening, however, noted that the audit had been limited to the site, a joint venture with SAIC Motor, adding the situation in Xinjiang and the challenges in collecting data for audits were well known. Germany's Association of Critical Shareholders (DKA), which represents small investors on environmental, social and governance issues, said the audit was raising more questions than it answers...

While calling the audit a step in the right direction, Henrik Pontzen, who heads sustainability and ESG at Union Investment, said Volkswagen had not yet reached its goal.

"There is still a lot to do: In China, audits must not remain a one-off exercise. A functioning complaints management system must also be established," he said.

He also said that Volkswagen's corporate governance, which has drawn criticism from some of its smaller shareholders, remained the Achilles heel of Europe's top automaker.

Ingo Speich of Deka Investment, which according to LSEG data owns $99 million worth of Volkswagen's preferred stock, welcomed the results of the audit but demanded more transparency in Volkswagen's supply chain...