Energy transition brings risk of slavery
Australian energy and mining companies are at risk of feeding off modern slavery in their global operations but new tools will help map and manage risks.
An Australian Human Rights Commission guide released on Tuesday identifies alleged use of forced labour as a particular supply chain risk for renewable energy technologies, including solar panels and wind power.
“Companies must challenge their thinking on where they’ll find risk to people,” KPMG Australia partner Richard Boele said.
Modern slavery can occur at any point in the supply chain, from feeding crews to sourcing and trucking critical minerals.
Australian companies are at high risk because of their complex operations and global reach.
Mr Boele, the global leader of KPMG’s international business and human rights network helped the commission develop the new guide to identify risks and fend off harm.
Goods considered high-risk also include personal protective equipment and uniforms, explosives, construction materials, and tyres and wheels.
Electrical parts and electronic equipment including metering equipment, mechanical parts, processed metals, imported feedstock and food are also problematic.
“The need to decarbonise means that the global energy mix is rapidly shifting,” Mr Boele said.
This means a crossover in international operations and supply chains is happening between the traditionally distinct sectors of mining, oil and gas, and power generators and retailers.
Many of the minerals needed for the global energy transition are extracted in countries with few labour rights and common use of child labour.
Commitments to reduce emissions mean resource companies are increasingly installing renewable generation at operational sites and signing power purchase agreements (PPAs), which exposes them to more local risks.
An increasing range of metals and minerals are finding their way into the supply chain.
Demand for workers in construction of infrastructure and the frequent outsourcing of labour to third-party contractors is also potentially risky.
Mining heavyweight Andrew Forrest investigated his corporate supply chains and found workers who were being subjected to forced labour by way of passport confiscation.
“Hiding our head in the sand, are no longer options,” he said.
According to the Global Slavery Index, more than 40 million people are living in modern slavery conditions and up to 15,000 victims are living in Australia.
“In Australia, the poor working conditions and intersecting risks for cleaners are now well documented,” the guide said.
“Similarly, hospitality and catering have higher risks of association with forced labour and trafficking practices.”
Chartering and contracting sea transport is also a known high-risk.
Commission president Rosalind Croucher said taking a rights-based approach would help energy and resources companies to meet the increasing expectations of investors, governments, clients, consumers and business peers.
Indigenous rights are also of concern for the whole resources and energy sectors because they often operate in contested, sensitive and remote locations.
Under Australian laws passed three years ago, large companies are required to report annually on measures taken to avoid slavery.
Modern slavery practices include people trafficking, forced labour, child labour, debt bondage and deceptive recruitment.
There have also been calls for stronger laws, with penalties for companies failing to report on actions to stamp out forced labour.
Centre Alliance MP Rebekha Sharkie last month introduced a Banning Goods Produced by Forced Labour Bill that could strengthen existing laws.
Independent Rex Patrick wants to ban imports of goods produced by using Uighur forced labour, including cheap solar panels imported from China.
The Modern Slavery Act is due for a three-year review on December 10.
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