Research identifies human rights abuses in battery supply chain

Research from Infyos has identified that companies accounting for 75 per cent of the global battery market have connections to one or more companies in the supply chain facing allegations of severe human rights abuses.

This new industry data is compiled from evidence on Infyos’ AI supply chain risk platform using thousands of government datasets, NGO reports, news articles and social media sources.

The AI-driven platform is said to be working with some of the world’s largest renewable energy and automotive companies to combine open-source data with additional proprietary data sources to identify which companies a customer may be connected to across the supply chain and where there is exposure to, or allegations of, human rights abuses.

In a statement, Tony To, Infyos co-founder & CTO, said: “We’ve created a system that delivers accurate data despite the complexity of the battery industry and most importantly provides users with simple actionable mitigations to collaborate with their suppliers to address risks and improve the sustainability of the industry.”

Human rights abuses identified range from people being forced to work in lithium refining facilities with no or minimal pay to five-year-old children mining cobalt materials. According to Infyos, severe human rights incidents are occurring globally, especially in resource-rich countries with fragile and corrupt governments.

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Despite this, most of the allegations of severe human rights abuses involve companies mining and refining raw materials in China that end up in batteries globally, particularly in Xinjiang Uyghur Autonomous Region (XUAR) in northwest China.

Electric vehicle and battery manufacturers have a complex supply chain, sometimes with over 10,000 suppliers across their network, from mines to chemical refineries and automotive manufacturers. Human rights abuses frequently occur upstream in the supply chain, notably at the raw material mining and refining stages, making it difficult for companies purchasing batteries to identify their supply chain risks.

Sarah Montgomery, CEO & co-founder, Infyos, said: “The relative opaqueness of battery supply chains and the complexity of supply chain legal requirements means current approaches like ESG audits are out of date and don’t comply with new regulations. Most battery manufacturers and their customers, including automotive companies and grid-scale battery energy storage developers, still don’t have complete supply chain oversight.”

In Europe and the US, failure to address the issues means companies could be in breach of current and future regulations, which is hampering investment into the global battery market forecast to be worth nearly $500bn in 2030.

Legislation including the EU Battery Regulation and the US’s Uyghur Forced Labour Prevention Act (UFLPA) is being phased in to address human rights and environmental impacts in the battery supply chain.

The UFLPA prohibits the import of goods made with forced labour in the Xinjiang region of China. Europe is following suit with its forced labour ban while a proposal has been submitted to increase the fines for non-compliance with the UK’s Modern Slavery Act to four per cent of global annual turnover.