It’s time to act on modern slavery in renewable energy supply chains

Last week’s visit to Canberra by global Uyghur leaders has brought an important spotlight to the issue of modern slavery. Modern slavery is, as a recent government discussion paper said, an abhorrent practice. The harrowing testimony of survivors confirms this.

Unfortunately, the practice is still widespread, with more than 40 million people worldwide in some form of modern slavery. It has been linked to many everyday products, which often have long and complex supply chains.

A recent Australian Human Rights Institute report highlighted garments from China, rubber gloves from Malaysia, seafood from Thailand and fresh produce from Australia as four sectors with known risks of modern slavery.

One of the many other sectors linked to modern slavery is renewable energy.

Renewable energy solutions such as wind, solar and batteries are essential ingredients in the global effort to combat climate change: around 75 per cent of global emissions are from energy usage – electricity, transport, and the production of heat for buildings and industrial processes. Renewable energy is the best solution for the vast majority of our climate crisis.

That does not mean the industry should be above scrutiny. Further, because the transition from fossil fuels to clean energy is rapidly accelerating, the window to address these issues is right now, as supply chains scale up and new mining and manufacturing capacity are developed.

This is why the Clean Energy Council, in collaboration with Norton Rose Fulbright, has just released a White Paper on how to address modern slavery in clean energy supply chains.

Two main points of exposure are the manufacture of key components and the extraction of raw materials.

With key raw materials such as cobalt and nickel, renewable energy is just one end-use market. Growth in renewable energy as the world increasingly tackles climate change means, however, that renewables will become an ever-larger share of these markets.

This creates an opportunity for the industry to exert leverage and demand greater transparency and better practices.

On the manufacturing side, one component of concern is polysilicon, which is processed into the cells that are an essential feature in 95 per cent of solar panels.

Almost half of the world’s polysilicon supply comes from the Xinjiang region of China, where there is evidence of forced labour in factories producing polysilicon, as well as in other industries in the region, such as cotton.

A key weapon against modern slavery is transparency. Supply chain due diligence that enables end purchasers to know whether the item is the product of modern slavery can help shift consumption patterns towards more ethical producers.

However, in situations such as Xinjiang polysilicon production, the inability to conduct independent audits puts significant practical constraints on being able to prove whether or not a particular batch of panels, or even a particular batch of polysilicon, is linked to modern slavery.

Collaboration across government, industry and civil society can help develop global certification schemes that start breaking through supply chain opacity.

Another approach is to create new supply chains. This is full of economic opportunity: Australia already produces many of the raw minerals needed for battery manufacturing, and we were early pioneers of solar technology.

Strategic investment in onshore production capability would provide greater oversight of labour standards, create jobs and more geographic diversification, the latter helping to manage a range of risks, not just modern slavery, associated with supply chains that are currently geographically concentrated. A recent International Energy Agency report on emphasised the vulnerabilities of highly concentrated supply chains and the risks these pose to the energy transition.

The wickedness of the problem, however, means that cleaning up supply chains feeding Australia does not necessarily reduce overall forced labour. Instead, the premium on “slavery-free” products may end up providing a cross-subsidy to firms engaged in ongoing forced labour practices, selling slavery-linked products into less discerning markets.

Carefully considered strategies and well-targeted interventions are needed. These should also aim to minimise disruption to the energy transition.

These challenges are not unique to renewable energy. And the exposure of renewable energy to modern slavery is not unique to Australia. But Australia’s renewable energy industry is committed to working collaboratively with others to deliver an energy transition that is both fast and fair.

 Dr Nicholas Aberle is the Clean Energy Council’s policy director for generation and storage