The UK’s underwhelming response to solar supply chain fears

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Tensions between environmental and social concerns are nowhere starker than around the booming Chinese solar sector, with its alleged links to human rights violations in the Xinjiang region.

This is a particularly delicate problem for Keir Starmer’s UK administration, as it pursues ambitious clean energy goals and a diplomatic push to build bridges with Beijing. And while the government has sought to calm concerns with a move in parliament this week, it’s unlikely to have put the matter to rest, as I explain below.

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Ethical supply chains

UK moves nervously on Xinjiang supply chain concerns

On Wednesday, the UK government issued a rather triumphal statement asserting that its new green investment vehicle will “lead the field in ethical supply chains”.

A new amendment to the law creating Great British Energy will require the state-owned company to guard against forced labour in its supply chains, amid concerns about human rights violations in China’s Xinjiang.

Yet this intervention — and the parliamentary tussle preceding it — has served to underscore the difficulty of building a solar supply chain untainted by the abuses against Xinjiang’s indigenous Uyghur population, and the UK government’s nervousness about trying to do so.

Xinjiang, a north-western Chinese region half the size of India, has played a key role in China’s rise to dominance in the global solar sector. It has long produced the lion’s share of the country’s polysilicon, the key ingredient in photovoltaic solar cells.

But Xinjiang has also been the theatre for a brutal campaign of oppression, according to the UN Office of the High Commissioner for Human Rights, which has described extensive detention and coercive labour practices imposed on the Muslim Uyghur population and other minority groups. The Chinese government has strongly denied allegations of human rights violations, saying its policies in Xinjiang are aimed at tackling poverty and unemployment.

Research by academics — notably at the UK’s Sheffield Hallam University — has alleged forced labour across much of the region’s polysilicon industry, and warned that the majority of global solar module production has exposure to that industry in its supply chain.

Concerns about the alleged abuses came to a head in Westminster when the government sought to pass a law creating GB Energy. The company, with a mandate to invest in clean technologies and individual projects, is a high-profile element in Starmer’s plan to make the country’s electricity system 95 per cent carbon-free by 2030.

In February, the House of Lords approved an amendment to the law that would deny funding to GB Energy if there was “credible evidence” of modern slavery in its supply chain. The government pushed against the amendment when it came up for a vote in the House of Commons — only to be faced with an embarrassing rebellion, as 92 ruling Labour party lawmakers abstained.

The government then responded with Wednesday’s more softly worded amendment, which says that GB Energy is authorised to pursue “measures for ensuring that slavery and human trafficking is not taking place in its business or supply chains”.

This reluctant and limited move — which applies only to a single public entity that’s set to invest just £100mn in its first two years — strikes quite a contrast with steps taken in Washington and Brussels. Last year, the EU passed a new law banning products made with forced labour from its market, which will come into force from the end of 2027.

The US has banned imported goods made with forced labour since 1930. In 2021, it further cracked down on China with the Uyghur Forced Labor Prevention Act, which established a “rebuttable presumption” that any products made even partly in Xinjiang were produced using forced labour and therefore banned.

The international pressure on China seems to be having some effect. Many “re-education” camps appear to have been closed, though experts warn of expanded prisons and the continued coercion of huge numbers of people through “labour-transfer” schemes. Xinjiang’s share in global polysilicon production has been slipping — from 45 per cent in 2020 to 35 per cent in 2022, according to estimates by prominent industry analyst Johannes Bernreuter — as Chinese companies shift production elsewhere in the country.

Yet relatively little of that foreign pressure has been coming from Britain. While the UK’s Modern Slavery Act of 2015 requires larger companies to report on steps they take to avoid forced labour, the country has no law against the import of goods made using it, and the government has no plan to introduce one.

One factor here may be the sheer ambition of the government’s 2030 clean energy goal, which will be difficult to achieve even without new supply chain constraints. Another is likely a fear of antagonising Beijing at a time when the UK administration is keen to strengthen relations (both chancellor Rachel Reeves and energy minister Ed Miliband visited in the first quarter of this year).

Laura Murphy, a senior associate at the Center for Strategic and International Studies who is among the most widely cited researchers on forced labour in Xinjiang, told me that this week’s move by the UK government was a welcome but insufficient step.

“The UK is lagging on addressing forced labour-linked imports writ large,” said Murphy, who advised US president Joe Biden’s administration on this issue. As other nations impose legal barriers against such imports, she added, countries such as the UK risked becoming “a dumping ground for goods that can’t be sold in other places”.

Murphy added that tough action on this front need not slow down the UK’s energy transition, given the large and growing supply of solar panels with Xinjiang-free supply chains. “We need to recognise that addressing human rights abuses and doing right by the climate can go hand in hand,” she said.

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