- The solar industry must act urgently to address concerns about modern slavery in its supply chain, a major new research report led by James Cockayne, Professor of Global Politics and Anti-Slavery at the University of Nottingham Rights Lab, argues.
The report from the University of Nottingham’s Rights Lab, ‘The Energy of Freedom’?: Solar energy, modern slavery and the Just Transition, warns that the rapid increase in demand for solar energy risks fuelling demand for products made with forced labour, including the polysilicon used in solar panels and cobalt used in lithium-ion batteries.
The research has been funded by the British Academy’s “Just Transitions within Sectors and Industries Globally” programme that provides UK and internationally-based researchers – at any career stage and active in the humanities and social sciences – with funding to pursue research focused on just transitions in sectors and industries globally.
It also warns that the solar market may split into ‘slavery-free’ and ‘slave-made’ value-chains, raising costs, lengthening roll-out times and slowing decarbonization – without necessarily addressing the underlying drivers of modern slavery. The industry needs a global roadmap to transition to a slavery-free footing, the report argues.
The report takes its title from a comment last month by the German finance minister, Christian Lindner, who described renewables as ‘the energy of freedom’ and said they could aid energy security in response to the war in Ukraine. As governments move to free themselves from Russian fossil fuels, demand for solar power is set to grow massively.
A key element of the work is that it sets out a new method for estimating the forced labour risk in countries’ on-grid, photovoltaic (PV) solar energy production, along with ideas for international collaboration to combat that risk.
‘The industry needs a clear plan to transition rapidly to slavery-free supply-chains, or those buying ‘slavery-free’ solar may simply end up cross-subsidizing slave-made solar energy sold by the same suppliers to other customers. Whether solar energy will prove to be ‘the energy of freedom’ for consumers alone, or also for workers and producer communities, is yet to be decided’ – Professor James Cockayne, University of Nottingham Rights Lab
Modern slavery risks
Around 40 per cent of the global supply of polysilicon – a critical component of solar panels – comes from Xinjiang Uyghur Autonomous Region, where it is reported to be made with state-sponsored forced labour. And between 15 and 30 per cent of the cobalt in lithium-ion batteries used widely to store solar energy, including in electric vehicles (EVs), comes from informal mines in Democratic Republic of Congo, where forced and child labour are common.
Governments worldwide are beginning to take action to exclude goods made with forced labour from their markets. From June 2022, the US will ban import of any goods that incorporate components made with Xinjiang forced labour, under the Uyghur Forced Labor Prevention Act passed in December 2021. Some analysts believe millions of USD worth of solar energy projects may be at risk. Acting under the Tariff Act of 1930, US Customs and Border Protection has already detained over 40 million USD worth of Chinese solar panels thought to have been made with forced labour under. The European Union is considering a similar ban.
Solar energy investors have called for more clarity on solar energy supply-chain due diligence and remediation, and for transparent timelines for disengagement from suppliers tainted by slavery. Some development finance institutions and multilateral development banks have been working to develop common approaches to these risks.
‘The Energy of Freedom’? identifies a shift from policies aimed at enforcing labour rights to approaches focused more narrowly on increasing ‘slavery-free’ production capacity. It says this risks a split in the global market, with one supply chain providing ‘slavery-free’ solar products to clients who want them and another serving others. That split, the report argues, will not only do little to help enslaved people who make polysilicon and mine cobalt, but will also raise costs, reduce innovation and slow the transition to renewable energy.
The report calls for new, collaborative approaches to estimate and manage these risks as they cascade down the energy value-chain. It sets out a new way of estimating the forced labour risk per kilowatt hour of solar energy that a country produces, accounting for all the risks earlier in the value-chain. This will help solar energy stakeholders better identify and manage these risks and could help regulators and investors create benchmarks and risk thresholds, for example by restricting public contracts or capital funding to those companies which can demonstrate they have managed forced labour risks in their supply-chain down to required levels.
The report argues manufacturers and developers, buyers, investors, governments and civil society should come together to address modern slavery risks by acting along the value-chain. It sets out a series of questions that will need to be answered to address modern slavery risks effectively. Forums for such a discussion could include the International Solar Alliance, the OECD and the US-EU Trade and Technology Council, as well as industry associations or a bespoke multistakeholder collaboration.
Author: Bryan Groenendaal
Download the full report here
Download a short policy brief here