In June 2020,ACE launched a joint project with one of our corporate partners, leading renewable electricity provider Minna Denryoku (Minden), to work together to research the human rights and environmental issues in the battery supply chain.
Our FairCharge Project aims to deepen understanding of the many forms of exploitation found in the battery supply chain, including child labour, as well as its environmental impact. Together, we aim to develop and normalise an ethically sourced, child labour-free and sustainable battery market in Japan. Combining ACE's experience in resolving child labour issues in the supply chain with Minden's blockchain technology, cross-sector collaboration is a great way to leverage each others assets and accelerate progress. We aim to bring together battery manufacturers as well as other stakeholders and instigate industry-wide transformation.
The components that make up battery products - from big battery storage units down to smartphones - are procured, processed and assembled across the globe through some complex supply chains. This makes it hard to trace the materials from source to consumer. International human rights organizations have identified serious human rights violations including child labour and forced labour at cobalt mines, the main raw material that is used in lithium-ion batteries that power all sorts of daily electronics.
The Global Slavery Index 2018 declared electronic devices such as PCs and smartphones to pose the greatest modern slavery risk to G20 countries imports at US$200 billion. Then followed by US$127.7 billion in clothing, US$12.9 billion in fishery resources, US$3.6 billion in cocoa, and US$2.1 billion in sugarcane.
This means that there are significant human rights risks in one of Japan's major industries. With the advances of technology, we have the ability to address these risks and shift the industry toward a circular economy.
COBALT MINING IN THE DRC
AT THE SOURCE
The Democratic Republic of Congo consistently produces the vast majority of global cobalt output, accounting for more than 70% of global output in 2019 (USGS, 2020). Moreover, over 70% of global cobalt is mined as a by-product of copper of which the DRC is the 5th largest producer. Most production takes place in the “Copperbelt”, an area over 500 km long, both in southern DRC and northern Zambia. It is estimated that 20% of the ore from this region is mined by hand under poor conditions, a phenomenon known as Artisanal Small-scale Mining (ASM). At ASM sites, child labour is prevalent with about 40,000 children estimated to be engaged in such hazardous work, according to UNICEF (2014).
Despite their scarcity, rare metals are used in the electrical and electronic components of many technology-related products that have become norms of modern life. Among them, lithium-ion batteries are used in rechargeable batteries and storage batteries that power electric vehicles, PCs, smartphones, etc. The main raw material of lithium-ion is cobalt, a precious resource that is driving the sustainable energy transformation - and yet is being procured through unsustainable means.
DOWN THE SUPPLY CHAIN
ASM mixing with various supply chains
In 2011, the United Nations unanimously agreed to the framework of the Guiding Principles on Business and Human Rights, confirming that corporate responsibility extends to the production process of raw materials. While many companies claim not to source from ASMs, the likelihood that their products and the ones we use on a daily basis are linked to child labour is high.
In Amnesty International's 2016 report This is What We Die For, an investigation was conducted into the cobalt supply chain of Huayou Cobalt, one of the world’s largest cobalt processors and manufacturer of cobalt compounds used to make lithium-ion batteries. Amnesty International found that 20%–30% of Congo Dongfang International Mining's cobalt (Huayou Cobalt's subsidiary in the DRC) contained material from ASM sources. This cobalt trickles up the supply chain into numerous famous global electronics brands - including in Japan.
FOR MORE INFORMATION
Alice Harada, Social Business team