Rights group reports allegations of dozens of abuses in critical minerals supply chains

A human rights advocacy group says it found allegations of dozens of labor and environmental abuses by Chinese-invested companies involved in mining or processing minerals used in renewable energy.

The report released Thursday by the Business and Human Rights Resource Center in London says it found 102 cases of alleged abuses in all phases of using such minerals: from initial explorations and licensing to mining and processing.

The report studied supply chains for nine minerals — cobalt, copper, lithium, manganese, nickel, zinc, aluminum, chromium and the so-called rare earth elements. All are vital for high-tech products such as solar panels and batteries for electric vehicles.

Indonesia, with 27 cases, had the highest, followed by Peru with 16 and the Democratic Republic of Congo with 12, Myanmar with 11, and Zimbabwe with 7.

Over two-thirds involved human rights violations, with Indigenous communities the most affected.

Many projects invested in or operated by Chinese companies were located in countries that had mineral wealth but “limited options for victims to seek remedy.”

To limit global warming to 1.5 degrees Celsius, the global guardrail set by the 2015 Paris climate agreement, the world needs to triple its clean energy capacity by 2030 from where it was last year, according to the International Energy Agency. That has triggered a scramble for so-called “transition minerals” like cobalt, copper, lithium and zinc that are needed in clean energy technologies.

China isn't the only one — a separate tracker from the advocacy group notes similar alleged abuses by companies based out of the U.S., Australia, the U.K. and Canada — but it plays a vital role in mining, processing, and refining these minerals, as well as making solar panels, wind turbines and electric vehicle batteries. So its companies are central to ensuring equity and fairness in the world’s transition away from fossil fuels.

“The bottom line is if the energy transition is not fair, it will not be as fast as it needs to be and we will fail to meet our climate deadlines,” said Betty Yolanda, the organization’s Director of Regional Programs.

Climate change has an inordinate impact on the world's poor, who have done the least to contribute to warming and now are bearing the brunt of the negative impacts of mining the minerals needed for the transition to renewables, she said, speaking on behalf of the authors of the report.

The report's authors did not want to be identified publicly because of fears of retaliation.

Rich countries like Australia that have abundant mineral wealth don't need foreign investments for extraction, though projects often do involve foreign investors. But copper-rich developing nations like Peru and nickel-exporting countries like Indonesia and the Philippines increasingly rely on Chinese investment and know-how to mine and process those minerals, generally with fewer regulatory safeguards.

“This is the time to not do the same mistakes of the past. The renewable energy transition must be done in a just and equitable way,” said Eric Ngang, global policy adviser for the Natural Resources and Governance Department of Global Witness, a UK-based non-profit not involved in the report.

Weak legal safeguards against such abuses facilitate corrupt practices that benefit companies and dishonest politicians at the expense of the environment and human rights.

About 42% of the human rights allegations detailed in the report were concentrated in Asia & the Pacific, 27% were in Latin America and 24% in Africa. More than half were cases of environmental damage, often loss of access to safe water supplies. More than a third involved allegations workers’ rights were violated, with the majority linked to health and safety risks at work.

Those are likely the “tip of the iceberg,” Yolanda said, since the report relies on publicly available information about alleged abuses committed by companies, cases where civil society has taken action, or where attacks against activists have been reported. “It is most difficult to receive information from countries with very little civic freedom and from conflict zones,” she added.

The report noted that improved safeguards are crucial as countries increasingly try to keep some of the value from their mineral wealth at home by requiring miners and companies downstream in the supply chain to build smelters and other infrastructure. For instance, Indonesia, which has the world's largest nickel supply, is trying to set itself up as a hub for making electric vehicles and also make nickel-based batteries to create a complete nickel supply chain that involves Chinese investments.

Without safeguards, these ambitions “may be frightfully compromised” by the harm done to people and the environment, the report said.

Only 7 of the 39 Chinese mining companies mentioned in the report had published human rights policies and despite transparency commitments, only 4 of the 22 companies in the sector approached with the allegations responded to the Business and Human Rights Resource Center, the report said. The report doesn't explicitly state what those responses were, apart from a November 2022 response from China's Huayou Cobalt to allegations of environmental damage where it “responded by partly admitting social and environmental challenges and explaining its labor due diligence measures.”

China lacks laws to regulate the impacts of Chinese overseas businesses and supply chains and policies on such issues are mostly voluntary. Such problems are being addressed in the U.S. and Europe and the report said Japan and South Korea increasingly are making human rights and environmental due diligence a part of their regulatory frameworks.

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