Where does the XML contain that? That is the so called XML declaration
and an XML document is supposed to start with the XML declaration so the
parser shouldn't give an error if that is the start of the XML document.

If it occurs later in the document then the parser is right, it is an
error and not allowed as it would then be a processing instruction but
the name xml is not allowed for a processing instruction.

The XML declaration must be the *very first* thing in the XML file (per
the XML spec).  No blank lines, whitespace, control characters, etc. may
precede it.  In other words, the '<' must be at offset 0 from the
beginning of the file.  The error message you describe is typical when
this is not the case.

If you have files that do not conform to the XML specification in this
regard then they are syntactically incorrect, and Xerces is right to
reject them.  Fix the files.  If you somehow handle correct XML files in
a manner that makes them appear to violate the spec, then fix your
handling.  If you think there is some other problem then you'll need to
provide more details, and probably enough code to demonstrate the
problem and allow us to duplicate it.