Report finds abuses linked to Chinese investment in overseas mining projects


China must ensure the renewable energy transition is ‘fair,’ authors say

Report finds abuses linked to Chinese investment in overseas mining projects

This aerial picture taken on Feb. 11, 2023 shows a mangrove area amid contaminated seawater in Pomalaa in southeast Sulawesi, Indonesia.

Chinese investment in overseas mining projects in Asia, Latin America and Africa has resulted in serious human rights abuses and environmental harm, especially in the booming sector necessary for the renewable energy transition, a report released on Thursday by a rights research group said. 

There are “significant” human rights and environmental concerns in Chinese companies-invested mining-related projects located in resource-rich host countries that often have weak governance and limited options for victims to seek remedy, the London-based Business & Human Rights Resource Centre (BHRRC) said in its report.

“This is accompanied by an absence of legislation in China mandating extraterritorial human rights and environmental due diligence, leaving workers and communities vulnerable to harm,” the group said in a statement accompanying the report.

The report identified 102 allegations of human rights and environmental abuses linked to Chinese overseas investment in transition mineral projects between 2021 and 2022, including those in Indonesia and Myanmar.

Such projects included direct investment in the exploration, licensing, mining and processing of nine major “transition” minerals: cobalt, copper, lithium, manganese, nickel, zinc, chromium, aluminum and rare earth elements. 

These allegations of abuse sit alongside similar ones by North American and European companies recorded by the group.

The global shift towards clean energy technologies is driving a rapid increase in demand for such minerals, with global consumption of these transition minerals projected to grow six-fold by 2040.

China has emerged as a significant player in recent years due to its dominance over the processing and refining of such key minerals necessary for renewable energy. 

It is also ahead in manufacturing clean energy technologies, such as solar panels, wind turbines and electric vehicle (EV) batteries, due to a blend of incentives and regulatory policies. It hosts approximately 50% of the world’s operational wind and solar capacity.

Another report last week said China is on track to double its solar and wind power capacity and shatter Beijing’s ambitious 2030 target of 1,200 gigawatts (GW) five years ahead of schedule if all prospective projects are successfully built or commissioned.

Solar panel installations are growing at a pace that would increase global capacity by 85% and wind power by nearly 50% by 2025, San Francisco-based Global Energy Monitor said. 

Chinese companies have been acquiring overseas mines and investing in mineral-rich countries to secure the sourcing of transition minerals to meet their rising demand. 

This includes efforts in Indonesia, the world’s biggest nickel producer, a key component for lithium-ion batteries, with 21 million metric tons (4.6 billion pounds) in proven reserves, according to the U.S. Geological Survey. 

Indonesia and Myanmar dominate the abuse list

According to the BHRRC report, the country with the highest number of abuses was Indonesia (27), followed by Peru (16), DR Congo (12), Myanmar (11) and Zimbabwe (7). 

The report alleged that these five countries accounted for over 70% of all reported allegations, and China is a major economic partner for them all. There were also four allegations against projects in Papua New Guinea and one in Solomon Islands projects.

In Indonesia, BHRRC recorded 20 allegations related to Chinese investor-dominated nickel smelter industrial parks and facilities in two years. 

Some of these projects caused air pollution, water pollution, soil contamination, flood, deforestation and biodiversity loss, as well as loss of livelihood and access to food and water for local communities, the report alleged.

In Myanmar, illicit and unregulated rare earth element extraction surged in the conflict-affected northern Kachin State, bordering China, following the military coup in early 2021, BHRRC said.

The harms include “dreadful pollution and ecological devastation, impacts on endangered species and local livelihood, lack of workplace protection, widespread use of child labor, intimidation and harassment of residents opposing mining and rampant corruption,” the report alleged.

Rare earth elements are critical for many high-tech devices. Chinese companies account for 85% of its global processing capacity.

BHRRC said over two-thirds of the allegations involve human rights abuses against local communities and attacks against civil society organizations, while 53% involved environmental harms, where water pollution, effects on wildlife and species habitat, and issues with access to water were frequently recorded.

The group also said it received only four responses from the 22 Chinese companies that were approached regarding the human rights allegations.

“The low response rate among Chinese companies shows a lack of willingness to engage with civil society actors,” BHRRC said in its report.

Radio Free Asia tried to contact five of the top eight Chinese companies linked to the most allegations in Indonesia and Myanmar. None of them answered. 

The China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC), responsible for monitoring overseas corporate responsibility, also did not respond to RFA queries.

A BHRRC spokesperson said that as Chinese companies invest in mining projects overseas, they must ensure “the transition to clean energy is not only fast, but also fair.” 

“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,” the BHRRC spokesperson said. 

“However, this is overshadowed by the serious human rights risks associated with their overseas business operations … Given their vital role in energy sectors globally, Chinese actors are well placed to lead a responsible energy transition.”

Edited by Mike Firn.

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