Uyghur Forced Labour Linked to Global Supply of Critical Minerals

A fresh report cautions that government-enforced forced labour in China's Xinjiang Uyghur Autonomous Region (XUAR) is deeply integrated into international supply chains of strategic minerals that go into everything from defence to car, renewable energy, and electronics. Global Rights Compliance's (GRC) "Risk at the Source" report indicates coercive labour practices pervade production of strategic materials such as titanium, lithium, beryllium and magnesium.

The People's Republic of China has one or more supply chain stages for 30 of the 44 United States listed critical minerals. The majority of these activities are found in the XUAR, which contains 103 confirmed mineral deposits and 77 of them are among China's top 10 in terms of production capacity. The area positively contributes to world mineral output: 11.6% of world titanium sponge, 1.5% of lithium carbonate equivalent, 11% of beryllium, and 5.3% of smelted magnesium.

The area is made possible for mining and refining by inexpensive labour schemes utilising allegedly forced labour of Uyghur and other Turkic ethnic minority people. These schemes have created extreme concerns around the world on the ethics of procuring material from the area.

The GRC report found 77 companies that were active in the four major mineral sectors of XUAR. 15 of these companies have themselves sourced from the region during the last two years, and there were an additional 68 downstream buyers who were indirectly connected. Additionally, there were 18 parent companies who would be potentially utilizing inputs provided by their own region-based subsidiaries. These linkages are of extremely high ethical, legal, and reputational risk to international companies.

These minerals are at the heart of the production of electric vehicle batteries, aluminium alloys, aerospace components, and consumer electronics. The report details sector-specific exposure hazards. Titanium production in the region is 17% of China's share and is linked to both aerospace components and standard paint products. Lithium, on which clean energy storage and electric mobility rely, is increasingly processed in Xinjiang as well. Beryllium, an important raw material for defence and communications technology, is primarily produced in the region by state-owned operators. Magnesium, utilized in light alloys, will double production by 2025 from XUAR plants.

Because of these issues, the report points to rising legal risk for companies under international law like the U.S. Uyghur Forced Labor Prevention Act (UFLPA), which presumes that products from the territory include forced labor unless conclusively demonstrated otherwise. Current auditing and due diligence procedures are deemed inadequate by virtue of restricted access and state interference in the region.

The report calls on governments to impose tighter import controls, designate higher-risk minerals as priority sectors, and demand transparency of supplier origin. It also advises companies to leave supply chains connected to the Uyghur Region and full mapping of suppliers without the assistance of local audits for credibility concerns.

The increasing clean energy transition globally fueled by strategic minerals has put more pressure on discovering and covering up ethical fault lines in the supply chain. Consumers and companies threaten to entrench systematic abuse of human rights in products consumed daily if there is no heightened monitoring.

Source & Credit:
Global Rights Compliance (GRC) Report