Corporate Accountability in the Green Transition: Human Rights Risks in Clean Energy Supply Chains

Author: Megan Scopp, LLM

May 28, 2025

(Photo by iStock/Tomwang112)

Introduction

As the global push toward decarbonization accelerates, the demand for renewable energy technologies is reshaping the world economy. Solar panels, electric vehicles (EVs), and battery storage systems are central to this transformation, all of which rely heavily on critical minerals such as cobalt, lithium, nickel, and rare earth elements. These raw materials are extracted from a relatively small number of high-risk regions, particularly in the Global South, where mining activities often intersect with weak regulatory frameworks and systemic human rights violations.

While renewable energy technologies promise climate mitigation and sustainability, they also present a paradox. The so-called "clean" energy revolution is deeply entangled with exploitative practices, environmental degradation, and social displacement. Reports have consistently highlighted how the mining of essential transition minerals contributes to forced labor, child labor, Indigenous land seizures, and irreversible environmental harm. Despite public-facing commitments to ethical sourcing, many corporations operate with limited supply chain transparency, relying on voluntary reporting mechanisms that fail to ensure compliance. This has given rise to accusations of greenwashing and corporate impunity.

This discussion focuses on the complex relationship between climate goals and human rights, with particular attention to supply chain risks in cobalt, lithium, and nickel production. By centering voices from affected communities and surveying legal responses across jurisdictions, it becomes clear how inconsistently corporations and states have responded to these harms. A critical examination of international frameworks, national legislation, and corporate policies reveals structural weaknesses in current accountability mechanisms. The aim is to identify and advocate for multi-layered legal and ethical reforms that ensure the global energy transition is not only environmentally sustainable but also just, inclusive, and grounded in human dignity.

Mapping the Supply Chain

The clean energy economy depends on a small group of critical minerals that serve as building blocks for low-carbon technologies. Cobalt is essential for stabilizing battery chemistry, lithium for battery energy density and rechargeability, nickel for enhancing storage capacity in solar applications, and polysilicon for the production of solar panels. These materials are indispensable to electrification, but their sourcing is fraught with geopolitical and ethical challenges.

Production of these minerals is highly concentrated in a few countries. The Democratic Republic of the Congo (DRC) dominates global cobalt supply, while Chile and Argentina are central to lithium extraction. Indonesia and the Philippines are major nickel producers, and China has become the world’s leading processor and refiner—not just of nickel, but also of polysilicon, a critical input for solar panel manufacturing. Much of this refining occurs in regions such as Xinjiang, where forced labor among Uyghur populations has been widely documented, raising profound human rights concerns about global solar supply chains.

Adding to the complexity, clean energy supply chains are notoriously opaque. Upstream suppliers—including artisanal and small-scale miners—are difficult to monitor, and downstream actors often have little visibility beyond their immediate Tier 1 suppliers.[1] Refining and processing bottlenecks further obscure accountability, as minerals may change hands multiple times before reaching final assembly. This fragmented structure makes tracing responsibility difficult and enables systemic abuse to persist unchecked.

Understanding where and how these materials move through the global supply web is crucial for building effective oversight mechanisms. Without traceability, there can be no accountability—and without accountability, clean energy risks perpetuating the very harms it seeks to solve.

Human Rights Risks and Affected Communities

The extraction and processing of critical minerals carry serious implications for labor rights, Indigenous sovereignty, and environmental health. These impacts are often borne by marginalized communities in the Global South, where regulatory enforcement is weak and avenues for legal redress are limited.

Labor Rights Violations

In the Democratic Republic of the Congo (DRC), child labor is widespread in artisanal cobalt mining, with children working long hours in dangerous, unregulated conditions. These mines supply major tech and electric vehicle companies, many of which lack visibility beyond their Tier 1 suppliers. In Indonesia, nickel mining has been linked to hazardous working environments, limited protective equipment, and suppression of labor organizing. In China, forced labor—particularly among Uyghur populations in Xinjiang—has been tied to the production of solar-grade polysilicon, underscoring the risks of sourcing from regions where state repression intersects with global supply chains. Across these contexts, the absence of robust labor protections allows for systemic exploitation and wage theft.

Indigenous Displacement & Land Rights

Lithium extraction in South America’s “Lithium Triangle” has disproportionately affected Indigenous communities, particularly in the Atacama Desert. Projects have moved forward without meaningful consultation, violating the principle of Free, Prior, and Informed Consent (FPIC).[2] In Chile and Argentina, community-led resistance movements have emerged to contest land dispossession, water depletion, and lack of transparency in permitting processes. Similar violations have occurred in the Philippines, where Indigenous communities face militarization and displacement linked to nickel mining projects. These conflicts illustrate how the energy transition, when imposed without Indigenous participation, can reproduce colonial patterns of resource exploitation.

Environmental & Health Harms

The environmental toll of mining is extensive and frequently under-regulated. In lithium-rich regions like northern Chile and Argentina, extraction has led to the depletion of freshwater resources critical to Indigenous and farming communities. Nickel mining in Indonesia and the Philippines has caused deforestation, soil erosion, and the release of airborne toxins. These environmental harms are often accompanied by chronic health issues for nearby residents, who face respiratory problems, contaminated drinking water, and inadequate access to healthcare or remediation. In most cases, companies are not held accountable for the long-term ecological and human health consequences of their operations.

Corporate and Legal Accountability Mechanisms

Efforts to address the human rights risks embedded in clean energy supply chains rely on a patchwork of international frameworks, national laws, and voluntary corporate initiatives—each with varying degrees of enforceability and effectiveness.

International Frameworks

The UN Guiding Principles on Business and Human Rights (UNGPs) establish a foundational framework, affirming that states have a duty to protect human rights, businesses have a responsibility to respect them, and victims must have access to remedy. While widely endorsed, the UNGPs are non-binding and lack enforcement mechanisms. Complementing this, the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas outlines a five-step model for responsible sourcing, emphasizing risk identification, mitigation, and transparent reporting. Some complaints under this framework have led to mediation via National Contact Points (NCPs), such as the case against Rio Tinto over environmental harm in Bougainville, and the Cerrejón coal mine case involving Glencore, BHP, and Anglo American. However, outcomes of NCP processes vary significantly and are often non-binding.

National and Regional Laws

At the national level, legislation such as the California Transparency in Supply Chains Act (CTSCA) and the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD) aim to compel companies to disclose or conduct human rights due diligence. The CTSCA is limited to disclosure requirements and lacks penalties for inaction, while the CSDDD mandates actual due diligence and introduces civil liability for companies that fail to prevent human rights and environmental harm. Despite these developments, enforcement remains uneven, especially in producer countries. In the DRC and Indonesia, weak regulatory frameworks and inconsistent enforcement allow abuses to persist unchecked. Chile’s evolving approach to lithium governance—particularly its recent nationalization strategy—has generated debate about Indigenous consultation and the implementation of Free, Prior, and Informed Consent (FPIC), with many communities voicing concerns over exclusion from decision-making.

Corporate Self-Regulation and ESG

Many companies rely on voluntary Environmental, Social, and Governance (ESG) initiatives to demonstrate their commitment to responsible sourcing. However, ESG disclosures often lack depth, consistency, and verification, and are susceptible to accusations of "techwashing"—the superficial use of technology like blockchain to signal transparency without real accountability. Rankings published by Amnesty International show a stark contrast between companies like BYD, which scored only 11 out of 90 on human rights due diligence metrics, and Mercedes-Benz, which ranked highest but still fell short of full compliance. This underscores the need for binding standards and robust external oversight mechanisms to prevent harm and ensure justice.

Case Studies

Cobalt Mining in the DRC

The Democratic Republic of Congo, which supplies more than 70% of the world’s cobalt, has become a focal point for labor rights abuses in the clean energy transition. Investigations by Amnesty International and other watchdog groups have documented widespread child labor and unsafe working environments in artisanal mines supplying cobalt to global tech and electric vehicle companies. Corporations like Apple and Tesla, while pledging ethical sourcing policies, have been linked to suppliers such as Huayou Cobalt, which sources cobalt from artisanal mines in the DRC. Despite public commitments to human rights, efforts to trace and remediate labor abuses have often been limited to upstream transparency pledges, with minimal accountability mechanisms beyond Tier 1 suppliers.

Lithium Extraction in the Lithium Triangle

The Lithium Triangle—spanning Chile, Argentina, and Bolivia—contains over half of the world’s lithium reserves. Indigenous communities have engaged in legal and grassroots efforts to challenge lithium mining operations that threaten land, water, and cultural heritage. In Argentina’s Catamarca province, courts have temporarily halted new mining permits due to environmental concerns raised by Indigenous communities. In Chile, protests have erupted in the Atacama Desert over exclusion from state-led lithium agreements involving companies like SQM. The nationalization strategy has further intensified concerns among Indigenous communities, many of whom report exclusion from formal lithium negotiations and decision-making processes.

Nickel Mining in Indonesia and the Philippines

Indonesia and the Philippines are among the world’s top nickel producers, but both face mounting scrutiny over the environmental and human rights costs of mining. In Indonesia’s Morowali Industrial Park, workers have reported unsafe conditions, long hours, and labor suppression. Nickel processing has also been linked to environmental degradation, including deforestation and air pollution. In the Philippines, Indigenous communities have been displaced by nickel mining operations that proceed without proper consultation, often under militarized conditions. Despite growing investor concern about ESG risks in these regions, local enforcement remains weak and community grievances are frequently ignored.

Polysilicon and Refining in China

China dominates the global solar supply chain, producing over 80% of the world’s polysilicon.  A significant portion of this supply comes from Xinjiang, raising renewed concerns about forced labor and traceability in solar supply chains. Investigations have linked solar-grade polysilicon from Xinjiang to major global solar brands. However, supply chain opacity and the layering of intermediaries make it difficult to verify sourcing and hold corporations accountable. As countries increase their reliance on solar energy, the industry's dependence on Xinjiang polysilicon underscores a profound ethical dilemma: the push for climate action must not come at the expense of fundamental human rights.

Legal and Policy Gaps

Despite the emergence of global frameworks and regional legislation, key legal and policy gaps continue to undermine accountability in clean energy supply chains.

First, the enforcement of voluntary frameworks such as the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Due Diligence Guidance remains weak. These instruments rely heavily on non-binding norms and the goodwill of corporations. National Contact Points (NCPs), which facilitate grievance processes under the OECD framework, have produced inconsistent outcomes and lack the authority to compel remedies.

Second, traceability mechanisms remain inadequate, particularly in the refining and midstream stages. While some downstream actors have visibility over Tier 1 suppliers, complex layering and opaque intermediaries make it nearly impossible to track minerals from mine to market. This lack of transparency prevents effective risk identification and obscures accountability.

Third, affected communities face significant obstacles in seeking remedies. Cross-border legal hurdles, the absence of binding international accountability mechanisms, and the limited jurisdiction of national courts often leave victims without redress. Even when cases are brought under voluntary grievance frameworks like NCPs, the outcomes are often delayed, non-binding, or result in superficial commitments. UN treaty body complaint mechanisms, while theoretically available, remain severely underutilized and difficult to access.

Finally, most mandatory due diligence laws apply only to large corporations, excluding a wide range of small- to mid-size firms that play a significant role in sourcing and processing minerals. This regulatory gap enables systemic harm to persist throughout lower tiers of the supply chain, where oversight is weakest and abuses are most prevalent.

Addressing these deficiencies requires coordinated legal reform, improved traceability infrastructure, and greater access to justice for affected communities.

Potential Reforms and Recommendations

Closing the accountability gap in clean energy supply chains requires coordinated reforms across legal, corporate, and institutional spheres. The following recommendations aim to build a rights-based foundation for a sustainable transition.

Mandatory Human Rights Due Diligence (mHRDD)

The scope of mandatory due diligence laws must expand beyond large multinationals to include mid-size and high-risk firms across the supply chain. The European Union’s CSDDD offers a promising foundation but requires refinement. Strengthening enforcement, lowering company size thresholds, and integrating clear remediation obligations are essential. Additionally, global harmonization of mHRDD standards through multilateral forums can create baseline expectations and reduce fragmentation.

Improved Traceability and Transparency

Supply chain transparency must extend beyond Tier 1 suppliers to cover refining and midstream processing stages. Governments and industry groups should invest in technologies like blockchain and digital tracing tools. However, these tools are only as reliable as the data entered, and they risk becoming performative if not paired with rigorous oversight. The growing critique of "techwashing" highlights the need for transparency tools to be meaningful, verifiable, and inclusive of all supply chain actors.

Support for Impacted Communities

Legal reform should prioritize access to remedies for affected communities. Models such as EarthRights International’s transnational litigation and OECD grievance mechanisms should be strengthened and scaled. Additionally, the creation of public and private funding pools—targeted at environmental remediation, community health initiatives, and legal empowerment—can help redress historic harms. These funds must be administered transparently and in partnership with local organizations.

Centering Climate Justice

A just energy transition must be grounded in equity. Policymakers should embed human rights into climate adaptation and mitigation strategies using frameworks developed by UNDP, UNFCCC, and the Heinrich Böll Foundation. Energy equity must prioritize Indigenous sovereignty, community participation, and land rights. Multilateral institutions such as the World Bank and regional development banks must ensure that climate financing mechanisms do not reproduce the extractive dynamics they are meant to alleviate.

Collectively, these reforms offer a path forward to ensure that clean energy does not come at the expense of human rights, but rather becomes a vehicle for equity, sustainability, and justice.

Conclusion

The global shift toward decarbonization represents both a profound opportunity and a critical challenge. While the clean energy transition is essential to combat climate change, it must not come at the cost of human dignity, environmental justice, and community well-being. The very minerals fueling renewable technologies are often extracted through systems that entrench labor exploitation, Indigenous displacement, and environmental degradation.

This paradox underscores the urgent need for both legal and moral reform. Voluntary frameworks, corporate pledges, and incomplete legislation are insufficient in the face of systemic harm. Corporations must be held accountable through robust human rights due diligence requirements, supply chain transparency obligations, and enforceable remediation mechanisms. Equally, governments and multilateral institutions must align climate financing with social equity, ensuring that frontline communities are not left behind.

Yet there is reason for hope. With coordinated action, it is possible to build a clean energy economy that upholds, not undermines, human rights. By embedding justice, inclusivity, and accountability at the heart of climate policy, we can realize a truly just green transition: one that is not only environmentally sustainable but also grounded in fairness, dignity, and shared responsibility.

[1] See p. 14

[2] See Article 32(2)

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Glossary of Terms

International Frameworks and Standards

• California Transparency in Supply Chains Act (CTSCA): A U.S. state law requiring certain businesses to disclose efforts to eradicate slavery and human trafficking from their supply chains.

• CSDDD (Corporate Sustainability Due Diligence Directive): A European Union directive requiring large companies to carry out human rights and environmental due diligence across their supply chains.

• OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: A five-step framework encouraging responsible mineral sourcing and transparency.

• UN Guiding Principles on Business and Human Rights (UNGPs): A global standard for preventing and addressing human rights abuses linked to business activity.

Minerals and Critical Materials

• Cobalt: A key mineral used in rechargeable batteries, particularly in electric vehicles (EVs).

• Essential Transition Minerals: Critical minerals such as lithium, cobalt, and nickel that are essential to low-carbon technologies.

• Lithium: A lightweight metal essential for battery storage in EVs and renewable energy systems.

• Nickel: A mineral used to improve energy density in batteries and increase storage capacity.

• Polysilicon: A purified form of silicon used in the manufacture of solar photovoltaic (PV) cells.

  
  

Geographic Regions

• Atacama Desert: A high-altitude desert in Chile impacted by lithium extraction and water depletion.

• Bougainville: A region in Papua New Guinea known for historical mining-related human rights disputes.

• Catamarca: An Argentine province central to legal resistance and lithium mining conflicts.

• DRC (Democratic Republic of the Congo): The leading global source of cobalt, with significant artisanal mining.

• Lithium Triangle: A region spanning Chile, Argentina, and Bolivia, home to over half the world’s lithium reserves.

• Morowali Industrial Park (Indonesia): A major nickel production hub associated with hazardous labor conditions.

• Xinjiang: A region in China where forced labor among Uyghur populations has been reported in solar-grade polysilicon production.

  
  

Corporate and Legal Terms

• Civil Liability: Legal responsibility of a company for harm caused by its activities.

• Compliance: Adherence to laws, regulations, or ethical standards.

• Disclosure: The act of making information about corporate practices publicly available.

• ESG (Environmental, Social, and Governance): A set of voluntary corporate standards related to sustainability and ethical impacts.

• Grievance: A formal complaint raised about harmful practices or violations.

• Mediation: A form of dispute resolution where parties work with a neutral third party to resolve conflicts.

• mHRDD (Mandatory Human Rights Due Diligence): Binding laws requiring companies to identify, prevent, and mitigate human rights abuses in their supply chains.

• NCP (National Contact Point): A non-judicial grievance mechanism established under the OECD to resolve complaints related to multinational enterprises.

• Techwashing: A critique referring to the use of technology (e.g., blockchain) to create an illusion of transparency without substantive accountability.

• Tier 1 Supplier: A direct supplier to a company, typically more visible than upstream actors in a supply chain.

  
  

Human Rights and Climate Justice

• Displacement: The forced movement of people due to development, extraction, or conflict.

• Energy Equity: Ensuring that all communities, particularly marginalized ones, have access to affordable, clean, and sustainable energy.

• Environmental Remediation: The process of cleaning up and restoring land, water, and ecosystems damaged by industrial activity.

• FPIC (Free, Prior and Informed Consent): A principle requiring Indigenous peoples' consent before projects affect their lands or resources.

• Indigenous Participation: The inclusion of Indigenous voices and decision-making in projects and policy design.

• Indigenous Sovereignty: The right of Indigenous peoples to self-governance and control over their lands and resources.

• Just Transition: A framework promoting equitable climate action that protects workers’ and communities’ rights.

• Legal Empowerment: Enabling communities to know, use, and shape the law to defend their rights and achieve justice.

• Militarization: The presence or involvement of armed forces or security in civilian or contested areas, often linked to repression.

  
  

Additional Advanced Vocabulary

• Airborne Toxins: Harmful pollutants released into the air, often from industrial or mining activities.

• Alleviate: To reduce or ease burdens, suffering, or negative impacts.

• Bottlenecks: Points of congestion or delay within a system, especially in supply chains.

• Climate Financing: Financial flows intended to support mitigation and adaptation strategies in response to climate change, often with an equity or justice component.

• Corporate Impunity: The lack of accountability for corporations responsible for human rights or environmental harm.

• Deforestation: The large-scale clearing of forests, often to make way for mining or agricultural development.

• Downstream Actors: Entities involved in later stages of production, like refinement or retail.

• Fragmentation: The disjointed and inconsistent application of laws or standards across jurisdictions.

• Fraught: Characterized by tension, conflict, or risk.

• Geopolitical: Relating to the influence of geography and politics on international relations.

• Greenwashing: Marketing that misleadingly presents a company or product as environmentally responsible.

• Grievance Mechanism: A formal process through which stakeholders can raise concerns about adverse human rights or environmental impacts.

• Indispensable: Absolutely essential or necessary.

• Notoriously Opaque: Widely recognized as lacking transparency.

• Obscure: To conceal or make less visible or understandable.

• Opacity: Lack of transparency in corporate or institutional practices.

• Paradox: A situation with seemingly contradictory elements.

• Perpetuating: Contributing to the continuation of a harmful condition or practice.

• Persist: To continue despite challenges or opposition.

• Profound: Deeply significant or intense.

• Regulatory Capture: A form of corruption where regulatory agencies are dominated by the industries they are charged with overseeing.

• Remediate: To take action to correct or reverse environmental or social harm.

• Remediation: The act of correcting or compensating for harm caused by business operations, especially concerning human rights or environmental damage.

• Robust: Strong and well-implemented (often used to describe laws or frameworks).

• Soil Erosion: The degradation of soil health and structure, commonly caused by mining and deforestation.

• Traceability: The ability to track the history, application, or location of materials and products throughout the supply chain.

• Under-regulated: Not subject to sufficient oversight or control.

• Undermine: To weaken or sabotage a system or objective.

• Underutilized: Not used to its full potential or frequency.

• Upstream Suppliers: Suppliers involved in early stages of production, such as raw material extraction.

• Voluntary Reporting Mechanisms: Non-mandatory frameworks through which companies disclose ESG performance.