As the energy transition gathers pace around the world, China is emerging as a significant player due to its dominance over the processing and refining of key “transition minerals” necessary for the shift to renewable energy. However, a new report published today (6 July 2023) has revealed significant human rights concerns associated with this overseas Chinese investment.

Published by the Business & Human Rights Resource Centre, the report identified 102 allegations of human rights and environmental abuses linked to Chinese overseas investment in transition mineral projects between 2021 and 2022. This included direct investment in the exploration, licensing, mining and processing of nine major minerals: cobalt, copper, lithium, manganese, nickel, zinc, chromium, aluminum and rare earth elements (REEs).

Many projects invested in by Chinese companies are located in resource-rich host countries, which often have weak governance and limited options for victims of abuse to seek remedy. This is accompanied by an absence of legislation in China mandating extra-territorial human rights and environmental due diligence, leaving workers and communities vulnerable to harms.

Key findings from the research included:

• The recorded allegations of abuse spanned 18 countries, with the highest number of abuses taking place in Asia (42%). A significant number also occurred in Latin America (27%) and Africa (24%).
• The country with the highest number of abuses was Indonesia (27), followed by Peru (16), DR Congo (12), Myanmar (11) and Zimbabwe (7). These five countries accounted for over 70% of all reported allegations and China is a major economic partner for them all.
• Copper is the mineral most frequently associated with allegations of abuse (33), followed by nickel (24).
• Human rights abuses against local communities and civil society organisations were rampant, making up 68% of all allegations. Workers’ rights were affected in 35% of allegations.
• Environmental harms featured in 53% of allegations of abuse.
• Only eight companies were linked to more than half (57%) of the total number of allegations of abuse. Only half of them have published human rights policies.
• Despite commitments to openness and transparency, the response rate among companies approached about human rights concerns linked to their operations was only 18%.

A spokesperson for the Business & Human Rights Resource Centre said: “China has shown commitment to the green energy transition by pledging to stop building coal power plants overseas and through Chinese companies’ significant investment in transition minerals necessary for the globe’s net-zero ambitions. However, this is overshadowed by the serious human rights risks associated with their overseas business operations.

“Our data shows human rights and environmental abuse is prevalent in the exploration, extraction and processing of transition minerals. Local communities are bearing the brunt of these abuses, with their livelihoods being affected, land rights being ignored and the erosion of Indigenous rights. Most companies don’t even have human rights policies in place, and those that do were linked to the highest number of allegations, indicating significant need for improvement when it comes to both policy and practice. Given their vital role in energy sectors globally, Chinese actors are well placed to lead a responsible energy transition. However, this can only be achieved if Chinese businesses and regulators take proactive measures to address endemic human rights and environmental abuses linked to transition minerals.

“Lack of company action risks leading to conflict, suspensions, delays and rising costs. There is an urgent need for existing business models to be transformed, enabling the delivery of a just transition which is to the benefit of companies, investors and local communities. Three core Just Energy Transition Principles – shared prosperity, respect for human rights and social protection, and fair negotiation – are essential to generate public support and deliver benefit to communities, workers and companies. As Chinese companies invest in transition mineral mining overseas, they take on a crucial responsibility of ensuring the transition to clean energy is not only fast, but also fair.”

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Notes to editors:

• The Business & Human Rights Resource Centre is an international NGO that tracks the human rights impacts (positive and negative) of more than 10,000 companies across nearly 200 countries. We seek responses from companies when concerns are raised by civil society.