As record heatwaves and bushfires yet again coincide with devastating floods across Australia, the impacts of global warming feel very close to home. So, it is a welcome relief that the Australian economy seems to have finally reached a tipping point in its transition to renewable energy. The country’s two largest electricity grids are now powered by more than 40 per cent renewables, and sectoral plans are in place to expand wind power, rooftop and utility solar.
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Urgent action to reduce emissions is badly needed. But given that heavy reliance on renewables is a central part of Australia’s emissions reduction strategy, it is incumbent on the Australian government to ensure that the way we source these materials and technology is responsible.
There are many examples that illustrate the harsh reality of how an unfettered “green rush” to extract the critical minerals we rely on to build renewables can contribute to human rights abuses, such as forced labour, corruption, conflict and political repression.
Rare earth elements used in permanent magnets in wind turbines have been linked to illegal mining and conflict in Myanmar. Indonesian nickel used in batteries has been added to the US list of goods produced by child labour or forced labour. Across solar panel supply chains, from silicon production through to the assembly of ingots and wafers, there are documented connections to state sponsored forced labour in China. These wind turbines, batteries and solar panels are sold all over the world.
As Australia scales up clean energy, it is clear that these are not challenges that can be solved by any single business or organisation acting alone. Rather, complex problems require shared effort across government, business and civil society, directed at common goals, such as ensuring the transition to renewables happens quickly but also without being built on human rights abuses overseas.
Given competition laws, businesses are unlikely to act on these issues collaboratively, without clear government support. Recently, the Australian Competition and Consumer Commission (ACCC) updated its guidance on sustainability collaborations to include examples of where and how companies might work together to reduce modern slavery risk, without breaching competition laws. This provided a welcome signal that regulators are finally viewing modern slavery as a pre-competitive issue.
While the ACCC guidance is a step in the right direction, given the urgency and complexity of the issues at hand, we need to go much further and much faster than simply leaving these challenges to the market. It’s time for the Australian government to look at how governments in other OECD nations are proactively building the formal infrastructure that enables governments to collaborate with businesses and civil society to address human rights risk in renewable supply chains.
Notably, governments in both the Netherlands and Germany have launched initiatives that bring together businesses, industry associations, civil society, and government. By working collectively, rather than individually, these actors can build leverage and create practical solutions to uphold human rights during the transition to renewable energy.
Netherlands
Built to reflect international responsible business conduct standards, the Dutch government created an agreement that spans both the wind and solar industries, which businesses and civil society organisations can sign onto. This is the International Responsible Business Conduct Agreement for the Renewable Energy Sector. The initiative brings parties together with the aim of increasing supply chain transparency and addressing human rights risk. It provides a standing forum where industry, government and civil society can share experiences and develop practical solutions. The initiative assesses due diligence efforts, develops tools and guidance, convenes peer learning forums, and supports collective action projects.
Having just published its second annual impact report, the initiative provides numerous examples that are relevant to the sort of collaboration that could be undertaken usefully in Australia.
- Batteries and human rights risks: At the request of several companies that have signed onto the agreement, the Secretariat organised a series of small-group discussions on battery supply chains. In these sessions, companies exchanged knowledge on the human rights risks in the battery supply chain, shared tips on improving due diligence with one another and supported their peers in their engagements with their business partners. The lessons learned from these discussions fed into a due diligence tool, “guidance on engagement with suppliers on forced labour”.
- Collaborative projects on key supply chains: Under the Dutch Initiative, a collaborative project can be initiated by as few as two parties to the Agreement. One such example of collective action was initiated to help clean up a key source industry for Dutch companies, copper from Peru. A coalition of industry, standard setting bodies, civil society organisations, companies and public institutions is working together to integrate artisanal and small-scale copper mining into formal, globally responsible supply chains.
Germany has established a similar initiative. The German CSR (corporate social responsibility) sector dialogue supports implementation of its national action plan on business and human rights, including a dedicated energy sector dialogue that brings together business, government and civil society. Activities include sector specific risk mapping and the development of guidance to help companies meet their modern slavery obligations.
How is the federal government enabling a stronger focus on human rights and renewables?
Given the known human rights risk in renewable energy value chains, the Australian government cannot continue to focus only on megawatts in the race to decarbonisation. As Australia heads towards taking a leading role in COP31, there is much more the federal government can and should be doing to enable coordinated efforts on a fast but also fair transition. Responsible sourcing needs to be part of the mix.
In NSW, Australia’s largest state economy, the Anti-Slavery Commissioner has commenced development of a code of practice on managing modern slavery risk in renewable energy value chains. This will provide guidance to the over 400 public buyers who have had legal obligations since 1 July 2022 to take reasonable steps to ensure they are not buying goods and services made by modern slavery.
To date, there is no equivalent initiative being undertaken federally. While large businesses in Australia already have certain obligations under the Modern Slavery Act, the limits of the existing framework are well known, with the Federal Anti-Slavery Commissioner recently describing the framework as “voluntary”.
Just as climate change is a global challenge, human rights in the energy transition are also a global challenge that all countries are facing. Given the absence of national human rights legislation in Australia, we are already behind other OECD countries in this regard. However, even without human rights legislation, there are practical steps that the federal government could take to better support industries to power up the energy transition in more responsible ways. Government-sponsored multi-stakeholder initiatives, such as those in place in the Netherlands and Germany, are two examples directly relevant to the Australian context.
As we head towards playing a leading role at COP31, if Australia wants to be taken seriously on the world stage as a climate leader, our national efforts will need to look beyond simply moving fast, towards moving in ways that are fast but also fair.