Joint Submission to the UK Parliament Call for Evidence on Critical Minerals (MIN0044)

Never Again The UK’s Responsibility to Act on Atrocities in Xinjiang and Beyond

February 28, 2023

Written evidence submitted on behalf of Anti-Slavery International, Campaign for Uyghurs, Global Legal Action Network, Stop Uyghur Genocide, Unseen, Uyghur Human Rights Project, World Uyghur Congress

The above named organisations welcome the Foreign Affairs Committee’s enquiry on how the UK can engage with global partners to diversify supply chains and access critical minerals in a way that respects human rights. The enquiry offers an important opportunity to consider the pervasive, state-imposed forced labour in the Xinjiang Uyghur Autonomous Region of China (Uyghur Region) linked to the mining, production, and processing of a number of critical minerals across industries, many of which are key to a just transition to renewable energy. We support the UK Government’s commitment to diversifying its critical raw minerals supply chains and call for investment into strengthening innovation and production of green technologies.

This submission will focus on the need to eliminate the reliance of global supply chains on the Uyghur Region for critical minerals and dismantle the financial support that continued sourcing provides the Chinese Government’s state-imposed forced labour apparatus and persecution of Uyghur and other Turkic and Muslim-majority people. The minerals highlighted in this submission are those where extensive research has been undertaken, and does not reflect an exhaustive list of critical minerals that are exposed to Uyghur forced labour.

The urgent need for a just transition that prioritises human rights and climate goals

1.1 The transition to clean energy is imperative, however, a just transition must be fair and respect everyone’s fundamental rights. Governmental action to diversify UK critical mineral supply chains must aim to reduce reliance on sourcing from the Uyghur Region, which is the location of large-scale systemic state-imposed forced labour (see section 2).

1.2 Critical minerals processing undertaken in the Uyghur Region for key renewable energy products, such as production of polysilicon for solar panels, is heavily reliant on coal for energy. Preference should be given to sourcing countries or regions with stringent environmental standards that use, where possible, less carbon-intensive energy in production processes.

2. Context: State-Imposed Forced labour in the Uyghur Region

2.1 The Government of China is perpetrating human rights abuses on a massive scale in the Uyghur Region targeting the Uyghur population and other Turkic and Muslim-majority peoples on the basis of their religion and ethnicity. These abuses include arbitrary mass detention of an estimated range of 1 million to 1.8 million people and a program to “cleanse” ethnic groups of their “extremist” thoughts through re-education and forced labour. This involves both detainee labour inside internment camps and multiple forms of involuntary labour at workplaces across the region and even in other parts of China. This system is maintained through an extensive digital and personal surveillance system.¹

2.2 The extreme levels of repression and surveillance in the Uyghur Region make human rights due diligence a practical impossibility and companies must operate on the assumption that all products produced in part or in whole in the Uyghur Region are at high risk of being tainted by forced labour.

2.3 The Chinese government is also transporting Uyghurs and other Turkic and Muslim-majority peoples to other parts of China, where they are working in factories under conditions that strongly indicate forced labour. A 2020 report revealed that at least 80,000 people were transferred to factories across China where they cannot leave and are under constant surveillance.² A more recent report estimates up to 1.6 million transferred labourers are at risk of being subjected to forced labour.³

2.4 UN human rights experts have determined the forced labour abuses against the Uyghur people may constitute crimes against humanity. The U.S. government and legal and human rights experts have declared, that the abuses amount to genocide. Many other governments have passed parliamentary resolutions on same.⁴

2.5 Given the widespread and systemic use of Uyghur forced labour and the breadth of raw materials sourcing and manufacturing in the Uyghur Region and throughout China, there are significant risks of Uyghur forced labour in numerous global supply chains.

3 Exposure of critical mineral supply chains to Uyghur forced labour

3.1 In the last ten years, the PRC government has deliberately encouraged the expansion of mining, farming, processing, and manufacturing to the Uyghur Region. In an effort to capitalise on the region’s resources and dominate the international market in the renewable energy sector, the Chinese government has placed an explicit emphasis on the development of critical minerals in the Uyghur Region.

3.2 The 13th and 14th Five-year Plans on National Economic and Social Development of the Xinjiang Uyghur Autonomous Region have encouraged rapid raw materials mining and processing and industrial growth in the Uyghur Region.⁵

3.3 Solar industry – Quartz, metallurgical grade silicon and polysilicon

3.3.1 Quartz is the primary raw material used to produce photovoltaic cells for solar panels, which is mined, crushed, and then heated to produce metallurgical-grade silicon. It is estimated that the Uyghur Region holds 10% of China’s reserves of vein quartz used in the manufacture of metallurgical-grade silicon.⁶

3.3.2 Metallurgical-grade silicon is then processed further and made into polysilicon. 95% of solar modules rely on solar-grade polysilicon.⁷

3.3.3 Xinjiang Hoshine Silicon Industry Co., Ltd. is the world’s largest metallurgical-grade silicon producer. According to research by Sheffield Hallam University, Hoshine has participated in labour transfer programmes and also has significant exposure to forced labour through its quartz supplier.⁸

3.3.4 In 2021, the U.S. issued a Withhold Release Order on Hoshine Silicon Industry Co., Ltd and banned the importation of silica-based products made in-whole or in-part by the company.⁹

3.3.5 The Sheffield Hallam research also notes that polysilicon manufacturers in the Uyghur Region account for approximately 45% of the world’s solar-grade polysilicon supply. All four of these manufacturers have reported their participation in labour transfer or labour placement programmes and/or are supplied by raw materials companies that have.¹⁰

3.3.6 One of these polysilicon manufacturers is a supplier to the world’s four largest solar module manufacturers.¹¹

3.4 Electric vehicles and batteries – Lithium, manganese and graphene

3.4.1 Academic research details the exposure of the auto industry to Uyghur forced labour and reports the Government of China is now estimated to process 44% of the world’s chemical lithium, and produces 78% of cathodes, 91% of anodes, and 70% of lithium-ion battery cells, which is increasingly shifting to the Uyghur Region (see 3.1 and 3.2).¹²

3.4.2 Key actors are deeply implicated in the Region’s state-sponsored labour transfer programs including those in lithium processing and distribution, mining and processing of manganese (necessary for the manufacture of EV batteries and other alloyed metal car parts), the manufacture of lithium battery anodes, and the sale of battery-grade lithium materials.¹³

3.4.3 The market dominance of just two companies in the Uyghur Region, including a manufacturer and supplier of lithium products and materials, means that practically all EV battery manufacturers are exposed to Uyghur forced labour.¹⁴

3.4.4 Research also notes that graphene – a potential alternative to lithium-ion batteries for EV batteries – is produced in the Uyghur Region and that significant research on graphene development and uses is being undertaken.¹⁵

3.5 Steel, aluminium, copper

3.5.1 The Government of China leads global steel production, accounting for more than half of all the world’s steel. Research By Sheffield Hallam and NomoGaia reports that the world’s largest steel producer and at least seven other major steel producers, operating in or investing in the Uyghur Region, have publicly advertised their participation in state-sponsored labour transfers and other oppressive state-run programs in the region.¹⁶

3.5.2 Aluminium production capacity in the Uyghur Region accounts for almost 12% of the world’s capacity. The Uyghur Region produced more aluminium than India, Russia, Canada or any other major aluminium producer outside of China in 2021.¹⁷

3.5.3 Aluminium is not a directly mined material; the raw material bauxite goes through a smelting process to produce aluminium. While European bauxite is sourced primarily from Guinea (64%) to produce aluminium, two thirds of global aluminium is smelted in China.¹⁸

3.5.4 Research firm Horizon Advisory carried out analysis of forced labour risks at eight dominant aluminium producers operating in the Uygur Region and found that all eight were involved in labour transfers, either as direct recipients of transferred labour or as coordinators of training and transfer programs. Two of these companies are among the largest aluminium producers in the world.¹⁹

3.5.5 Two of the eight producers are Xinjiang Production and Construction Corps (XPCC), the Chinese government’s state-run paramilitary corporate conglomerate, companies; individuals and entities related to the XPCC have been sanctioned by the UK, EU, U.S., and Canada for human rights abuses in the Uyghur Region.²⁰

4 Impact on global trade, supply chains, the environment, and climate goals

4.1 The Chinese government’s concerted efforts to move critical minerals production and processing into the Uyghur Region has relied on Uyghur forced labour, and an array incentives and benefits schemes, including annual monetary rewards, has distorted the global market.

4.1.1 Such efforts have artificially kept costs low thereby increasing sourcing and reliance on the region for critical minerals.

4.1.2 This has resulted in an unfair competitive advantage for complicit companies and negatively impacted companies with more ethical sourcing practices that respect human rights and recognise environmental standards in line with net zero goals.

4.2 Complicit companies are operating across supply chains and are exposing many industries that are vital to the green transition to Uyghur forced labour. According to research by Sheffield Hallam and NomoGaia, most of the major polysilicon manufacturers in the Uyghur Region also own aluminium smelters and coal processing and energy plants, capitalizing on the low-cost coal energy used in the production of both materials, which are used in the auto, solar and electronics sectors.²¹

4.3 Trading of commodities that occurs on international exchanges, such as aluminium, further increases the risk of – inadvertently – blending product from the Uyghur Region with product from elsewhere for the production of various inputs, meaning that the entire supply chain of some finished products, such as cars, are potentially at high risk of exposure to Uyghur forced labour.

4.4 The concentration of production and processing of minerals in the Uyghur Region leaves global supply chains highly exposed and vulnerable to geopolitical tensions and retaliatory measures. In 2021, in response to increasingly targeted sanctions against Chinese entities or individuals by foreign countries, including for Uyghur forced labour, the Chinese government adopted countermeasures in the form of the Anti-Foreign Sanctions Law.

4.5 Materials such as aluminium and lithium are used in a number of renewable energy products. Aluminium is one of the most widely used material in solar panels and is also used to manufacture wind turbines. Lithium is used for EV batteries as well as solar energy storage.

4.6 The U.S. has taken legislative steps to address such reliance of key raw materials that are produced, farmed, or manufactured with Uyghur forced labour.

4.6.1 Following on from a number of Withhold Release Orders banning the importation of certain goods made with Uyghur forced labour, the U.S. has enacted the Uyghur Forced Labor Prevention Act (UFLPA) which establishes a rebuttable presumption that goods mined, produced, or manufactured wholly or in part, in the Uyghur Region or by certain entities, are prohibited from entering the U.S. due to the high likelihood of being tainted by forced labour, unless the importer is able to provide “clear and convincing evidence” to provide otherwise.²²

4.6.2 The UFLPA currently targets for enforcement, among other products, silica-based products, including the raw materials used to make aluminium alloys, silicones, and polysilicon.

4.6.3 Media has report ed the U.S. Customs and Border Protection has issued detention orders tarting aluminium products under the UFLPA.²³

4.7 The environmental implications are severe. The Uyghur Region’s use of extremely low-cost coal energy, and relaxed environmental regulations, have made it a prime location for smelting. In the case of smelting aluminium, the carbon footprint is massive, emitting over 16 tonnes of carbon per ton of aluminium as compared to 4 tonnes in Europe where aluminium smelting is more green and energy efficient.²⁴

5 Recommendations to the UK Government and FCDO

5.1 The UK government must act urgently with the FCDO to establish the UK as a leader in the just transition to renewable energy that prioritises human rights in the sourcing, production and processing of critical minerals.

5.2 To achieve this, the UK government should work with the FCDO to establish an agenda including legislative, financial and collaborative engagement efforts, that will support investment and innovation to identify and establish alternative sources of critical minerals outside the Uyghur Region and that end reliance on forced labour.

5.2.1 The UK government should work with the FCDO collaborate with likeminded governments to create a cohesive strategy to onshore and friend-shore critical minerals and create incentives for the innovation and creation of new sourcing locations that respect human rights and environmental standards. Alliance building will mitigate risk of alienating partners and help to maximise supply chain resiliency.

5.2.2 We recommend the introduction of new primary legislation with a corporate duty to prevent adverse human rights and environmental impacts, as proposed in the Business, Human Rights and Environment Act, which would align the UK with legislation in Norway, Germany, France and the European Union.²⁵

5.2.3 We recommend the introduction of an import ban mechanism to complement a Business, Human Rights and Environment Act that would provide for a ban of products made in whole or in part with forced labour to that includes a clear and published process for the imposition of an import ban on specific goods, entities (e.g. importers, manufacturers) or industries from specific geographical regions to specifically address state-imposed forced labour such as in the Uyghur Region. Forced labour import ban mechanisms have been enacted in the U.S. and Canada and are in development in the EU and Mexico. Since the UFLPA went into force in the U.S., there are indications that sourcing of targeted goods such as cotton and polysilicon, have shifted out of the Uyghur Region demonstrating that this type of legislative tool can help to advance alternative sourcing solutions and diversify supply chains.²⁶

5.2.4 By harmonising legislation with that enacted in the jurisdictions of close allies, the UK Government will help to provide a level playing field for UK-based companies with global markets and legal certainty, which is diluted when global companies must comply with varying legal obligations in each of the markets it operates.

5.2.5 A strategy on diversifying sourcing and ensuring more resilient supply chains must consider the entire supply chain, including all key materials that are required from extraction to end product manufacturing. For example, rare earth magnets cannot be converted into renewable energy infrastructure without steel, plastic, copper, aluminium, polysilicon, nickel lithium, and cobalt for processing into turbines, solar panels or batteries. In short, it is not enough to achieve a single ethically sourced component while other components are still sourced from the Uyghur Region which is using forced labour and coal in production of the materials.

5.2.6 The FCDO should engage with counterparts in the G7 and G20, alongside other governments, to develop global approaches to this issue. Uyghur forced labour must therefore feature high on the agenda in key policy discussions and negotiations, including the forthcoming G7 and G20, as well as COP28, in 2023.