Skip to content
GT
⚖️ Human Rights Due Diligence
Back to course
Just Transition & Emerging IssuesLesson 2 of 46 min readILO MNE Declaration (2022), OECD Due Diligence Guidance (2018)

Human Rights in the Green Economy

Human Rights in the Green Economy

The global pivot to clean energy and low-carbon technologies is one of the largest economic transformations in human history. It is also creating some of the most serious human rights risks of the twenty-first century. The minerals that power electric vehicles, solar panels, and wind turbines must come from somewhere - and in many cases that "somewhere" is a mine in the Democratic Republic of Congo, a lithium extraction facility in the Atacama Desert, or a processing plant in a country with weak labour protections. The inconvenient reality for sustainability professionals is that the green economy is not inherently a just economy: it requires deliberate effort to make it so.

Critical Minerals and Human Rights

The transition to clean energy is mineral-intensive in a way that fossil fuel energy is not. A wind turbine requires approximately nine times more mineral resources than a gas-fired power plant of equivalent capacity. An electric vehicle battery requires cobalt, lithium, nickel, manganese, and graphite - minerals whose primary sources are concentrated in a small number of countries with well-documented human rights and governance challenges.

Cobalt: The Democratic Republic of Congo (DRC) produces approximately 70% of the world's cobalt. A significant proportion of this comes from artisanal and small-scale mining (ASM) operations in Katanga and Lualaba provinces, where the ILO and UNICEF have documented child labour, inadequate safety equipment, mercury use, and debt bondage. The cobalt enters the battery supply chain through a complex network of traders and smelters in China, making traceability extremely difficult. Major EV manufacturers have faced civil litigation in US courts over child labour allegations in their cobalt supply chains.

Lithium: Chile, Argentina, and Bolivia hold more than 60% of global lithium reserves, concentrated in the Lithium Triangle of the Atacama, Atacamena, and Jujuy salt flats. Lithium extraction from brines uses vast quantities of water in one of the driest regions on earth, threatening the water sources and livelihoods of indigenous Atacameno and Colla communities. Several companies have faced legal challenges and protests from indigenous communities invoking their FPIC rights under UNDRIP and ILO Convention 169.

Rare earth elements: Approximately 60% of rare earth element processing occurs in China, concentrated in regions where environmental and labour regulations have historically been weakly enforced. Processing generates toxic and radioactive waste, creating risks to workers and surrounding communities.

The Mineral Security Partnership

In 2022, the United States launched the Minerals Security Partnership (MSP) with Australia, Canada, the EU, France, Germany, Japan, South Korea, Sweden, and the UK to accelerate responsible development of critical mineral supply chains. The MSP includes an explicit commitment to uphold environmental, social, and governance standards across mineral projects supported by member governments, representing a recognition at the inter-governmental level that critical mineral supply chains cannot be secured without addressing human rights risks.

Renewable Energy Siting Conflicts

The infrastructure of the green economy - wind farms, solar installations, transmission lines, hydropower projects - requires land. Large-scale land acquisition for renewable energy projects has generated significant human rights conflicts globally, particularly where project siting affects indigenous peoples' territories, smallholder farming communities, or ecologically sensitive areas.

Key issues include:

  • Land rights and displacement: Renewable energy projects on a commercial scale typically require thousands or tens of thousands of acres. In countries where land tenure documentation is weak or customary land rights are not legally recognised, communities can be displaced without adequate compensation or notice. The Okuafo project in Ghana and several large-scale solar projects in East Africa have faced community opposition on these grounds.
  • FPIC for indigenous peoples: Under UNDRIP and ILO Convention 169, indigenous peoples have the right to give or withhold their free, prior, and informed consent to projects affecting their territories. Wind energy expansion in southern Mexico's Isthmus of Tehuantepec encountered sustained indigenous Zapotec resistance precisely because consultations were conducted insufficiently, raising serious FPIC concerns.
  • Benefit sharing: Even where physical displacement is avoided, communities near large renewable installations often do not receive an equitable share of economic benefits. Land lease payments may be minimal, local employment may be limited to short-term construction work, and tax revenues may flow to central government rather than local authorities.

EV Supply Chains: A Case Study in Integrated Risk

The electric vehicle supply chain illustrates how multiple human rights risks can concentrate in a single product. A typical EV battery pack contains cobalt from the DRC (child labour and safety risks), lithium from Chile or Argentina (water rights and indigenous peoples' rights), nickel from Indonesia or the Philippines (environmental and community health risks), and graphite from China (labour conditions in processing). The cells are assembled in China, South Korea, or the US, the modules integrated in Europe or North America, and the final vehicle sold globally.

For an OEM (original equipment manufacturer), conducting adequate HRDD across this supply chain requires:

  • Mapping to the mine level, not just the cell or battery pack level.
  • Participating in or supporting multi-stakeholder initiatives such as the Responsible Minerals Initiative (RMI), which operates the Responsible Minerals Assurance Process (RMAP) for cobalt, tin, tungsten, tantalum, and gold.
  • Engaging with the Global Battery Alliance (GBA) Battery Passport initiative to track mineral provenance and due diligence data at the battery level.
  • Implementing supplier development programmes to build due diligence capacity among Tier 2 and 3 suppliers, rather than relying solely on contractual requirements that smaller suppliers may lack the capacity to fulfil.

Analogy: The Green Premium and the Social Deficit

Consumers often pay a "green premium" for sustainable products: the extra cost of an organic cotton t-shirt or a locally sourced meal. In the EV sector, a similar premium argument is being made: responsibly sourced batteries should cost more because they incorporate the true cost of decent working conditions and community benefit sharing. The challenge is that in competitive commodity markets, the "social deficit" - the cost savings from not addressing human rights risks - becomes a competitive advantage for those willing to accept it. Mandatory due diligence laws and import bans are partly designed to eliminate this competitive advantage by making social deficit a legal and reputational liability.

ILO MNE Declaration and the Green Economy

The ILO's Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration, 2022 revision) explicitly addresses the intersection of environmental transition and labour rights. The Declaration calls on enterprises to apply the same standards of social policy in new green economy investments as in their existing operations, and specifically urges governments and enterprises to ensure that environmental transitions do not compromise fundamental rights at work including freedom of association, collective bargaining, and the elimination of forced and child labour.

The OECD Due Diligence Guidance for Responsible Business Conduct (2018) similarly treats environmental and human rights due diligence as integrated rather than parallel processes, recognising that environmental harms often simultaneously create human rights violations - water contamination affecting community health, land degradation undermining livelihoods, and pollution threatening indigenous cultural sites.

Example: Battery Manufacturer's Cobalt Due Diligence

CATL, the world's largest battery manufacturer, publishes an annual responsible sourcing report covering its cobalt supply chain. It requires all cobalt suppliers to be certified through the Responsible Minerals Assurance Process, conducts in-person assessments of smelters and refiners, and participates in the OECD Forum on Responsible Mineral Supply Chains. It has also committed financial support to the Responsible Cobalt Initiative (RCI) in the DRC, which works to eliminate child labour from artisanal mining communities. Critics note that the artisanal mining sector remains structurally difficult to trace and that progress in eliminating child labour has been slower than targets suggest.

Key Takeaways

  • 1The green economy is mineral-intensive in ways that create severe human rights risks: cobalt mining in the DRC involves documented child labour, lithium extraction in the Atacama threatens indigenous water rights, and rare earth processing generates toxic environmental and occupational health hazards
  • 2Renewable energy siting - wind, solar, hydro, and transmission infrastructure - can involve land displacement, failure to obtain FPIC from indigenous communities, and inadequate benefit sharing with local populations
  • 3EV supply chain due diligence requires mapping to the mine level and engaging with multi-stakeholder initiatives such as the Responsible Minerals Initiative (RMAP) and the Global Battery Alliance Battery Passport
  • 4The ILO MNE Declaration (2022) and OECD Due Diligence Guidance (2018) treat environmental and human rights due diligence as integrated processes, recognising that environmental harms routinely constitute simultaneous human rights violations
  • 5Mandatory due diligence laws and import bans partly aim to eliminate the competitive advantage of ignoring social costs, making responsible sourcing a legal necessity rather than a voluntary market differentiator

Knowledge Check

1.Approximately what percentage of global cobalt production comes from the Democratic Republic of Congo, and what are the primary human rights concerns associated with its artisanal mining sector?

2.Why does lithium extraction in the Atacama Desert raise significant human rights concerns beyond standard environmental impacts?

3.What is the Responsible Minerals Assurance Process (RMAP) operated by the Responsible Minerals Initiative, and for which minerals does it provide certification?

2 of 4