Australian supply chains would benefit from addressing modern slavery issue
Australia’s Clean Energy Council and law firm Norton Rose Fulbright have published a white paper arguing that the country’s renewable energy supply chains could “benefit significantly” from a concerted effort to address forced labor.
A new report from the Clean Energy Council (CEC), in collaboration with law firm Norton Rose Fulbright, argues that efforts to address modern slavery in the clean energy sector could create opportunities for domestic supply chains in Australia.
According to the International Labour Organization, approximately 40 million people are victims of modern slavery throughout the world. The report identifies significant risk of modern slavery practices in the supply chains that support wind, solar and battery production.
Those risks include the mining of cobalt for lithium-ion battery production, which has been tied to child labor and forced labor practices in the Democratic Republic of Congo. Other risks include serious claims in polysilicon manufacturing about forced labor involving the ethnic Uyghur population in the Xinjiang region of China – allegations the Chinese government denies.
However, the report described the risk of forced labour entering into the supply chains of Australia’s solar energy industry as a result of Xinjiang manufactured polysilicon as “significant.”
Some governments have already taken legislative action on the basis of these allegations, most notably in the United States. The US Uyghur Forced Labor Prevent Act went into effect on June 21. This legislation assumes any goods produced or manufactured wholly or in part in the Xinjiang region are the product of forced labour and therefore banned.
CEC Policy Director of Energy Generation and Storage Nicholas Aberle noted that Australia is on its way to producing the vast majority of its electricity from solar, wind, hydro and batteries by 2030.
“But it’s important this shift happens in a way that is fair and equitable,” said Aberle. “As with many other modern products ubiquitous in everyday life, renewable energy technologies can have long supply chains that are linked at various points to modern slavery.”
Aberle suggested that one of the strategies which Australia can explore in order to play its part in addressing modern slavery in renewable energy supply chains “is the potential for establishing domestic supply chain capabilities. Australia has significant expertise in mineral extraction, so as a nation, we can be looking at developing our capacity to extract, process and manufacture materials and components for solar panels, batteries and wind turbines.”
“Australia would stand to benefit significantly from vertical integration in domestic production of clean energy raw materials and finished products, which will also reduce reliance on foreign supply chains,” the report states. And yet, the report’s authors concede that shifting Australia’s supply chains “does not necessarily lead to a reduction in overall forced labour as materials produced with forced labour may still be sold in jurisdictions that do not apply these standards or even used within the country of production.”
It is not yet clear whether Australia will follow in the legislative footsteps of the United States. With China as a major trading partner and Australia’s posture in recent decades as a low-tariff nation and supporter of free trade it could appear unlikely. However, Norton Rose Fulbright Partner Abigail McGregor said key nations can promote a globally recognized certificate of origin to certify products are not the product of modern slavery.
McGregor said that businesses and investors can also implement their own strategies to respond to human rights abuses, including supply chain due diligence.
To that end, the CEC has prepared a voluntary pledge of corporate responsibility in the sector. The pledge includes declarations to “adopt adequate procedures to manage the risk of modern slavery in our operations and supply chains,” and to “seek to contractually oblige our suppliers to have in place adequate procedures to manage their modern slavery risk.”
NSW Anti-slavery Commissioner James Cockayne said industry, government, the financial sector and civil society” must work together “to provide access to competitively costed, slavery-free renewable energy. If we don’t, modern slavery risks significantly complicating the just transition to a decarbonized economy.”