Forced Labor: The Dark Side of Feel-Good Electric Vehicles

The far left's push for green energy regardless of the financial or humanitarian cost has long been a topic deemed unworthy of mention to those with "higher goals" to be achieved. A sustainable planet that delivers climate solutions and environmental justice is at the world's fingertips, and all you need to do to fight $5-a-gallon gasoline is to buy a $50,000 electric vehicle (EV). Unfortunately, it turns out the typical electric car is not great for the environment – or humanity.

Blood Batteries

The New York Times recently published a bombshell report that found Chinese producers of raw materials for EV batteries are using forced labor. In one instance, mining juggernaut Xinjiang Nonferrous Metal Industry employs hundreds of Uyghurs as part of a work transfer initiative. The company manufactures metals and minerals, including copper, lithium, and nickel, that have been exported to the US, UK, Germany, Japan, and India. These are crucial components for EV batteries that have exploded in value over the last couple of years.

Prior to starting employment, internment camp detainees were forced to listen to lectures on "eradicating religious extremism" and turn into obedient workers who "embraced their Chinese nationhood." The newspaper reported:

"Inductees for one company unit underwent six months of training, including military-style drills and ideological training. They were encouraged to speak out against religious extremism, oppose 'two-faced individuals' — a term for those who privately oppose Chinese government policies — and write a letter to their hometown elders expressing gratitude to the Communist Party and the company, according to the company’s social media account. Trainees faced strict assessments, with ‘morality’ and rule compliance accounting for half of their score. Those who scored well earned better pay, while students and teachers who violated rules were punished or fined."

China currently creates three-quarters of the planet's lithium-ion batteries, and nearly all the metals required to produce them are processed in the world's second-largest economy. Because a considerable amount of the material is mined in the Democratic Republic of Congo and Argentina, the central government has relied on its own western province's mineral inventories to boost domestic stocks.

Multiple industries, including apparel, food, and renewable energy, have supply chain links to Xinjiang. The newspaper noted that thousands of companies worldwide might have some type of connection to Xinjiang in their supply chains. This could prove to be challenging as the US government is set to implement the Uyghur Forced Labor Prevention Act, a piece of legislation that prohibits goods produced with forced labor in the Chinese province from entering the country unless businesses can prove their products were not created in this manner.

Beijing has reportedly confirmed that the government is maintaining a program that transfers Uyghurs and other ethnic minorities from the southern region of the province to the north to work in industrial positions. Millions of the Muslim minority residing in the Xinjiang province are presently confined to mass re-education camps, where there have been reports of sexual abuse and torture. However, the Chinese Communist Party (CCP) insists that it doesn’t enslave or imprison Uyghurs, calling it “the lie of the century” and a "huge lie made up by anti-China forces to denigrate China."

This is not the first time the EV sector has had tragic connections to nations with human rights abuses. The Democratic Republic of Congo maintains the world's largest cobalt deposit that is mined through industrial and artisanal practices. The latter does not include any safety protocols or labor laws for the roughly 200,000 miners, including 40,000 children. The workers often dig with their hands and are not provided masks or gloves. Beijing imports tons of cobalt from the Congo in exchange for billions of dollars in investment in local infrastructure and schools, although corrupt government officials make it unclear if the funds achieve the desired result.

US officials have expressed concern over these reports in recent years. "People are being enslaved in part of the world in order to get the resources that we seem to want to be out of sight, out of mind, and we just say, ‘Well, we have an electric vehicle,'" Sen. Joe Manchin (D-WV) told the National Press Club last year.

Rep. Thomas Suozzi (D-NY) was more forthright in an interview with The Times, sending the message that "it's too damn bad" if prices go up by banning products from Xinjiang. “We can’t continue to do business with people that are violating basic human rights,” he said.

In April, Sen. Marco Rubio (R-FL) urged automaker Volkswagen to provide more information on its decision to seek partnerships with two Chinese companies that have records of environmental destruction and alleged human rights violations, including human trafficking and forced labor. “As you may know, Huayou has been credibly implicated in the forced labor and human trafficking of child laborers in its cobalt mines in Democratic Republic of Congo," Rubio wrote in his letter to the European company. “Meanwhile, Tsingshan operates lithium and nickel mines in Indonesia, which require the destruction of the rainforest ecosystem, and is considered a major risk to biodiversity.”

Considering the increased number of entrants in the EV realm and raw material costs for electric vehicles doubling since the start of the coronavirus pandemic, experts doubt anything will change.

The Economics of Forced Labor

The White House is stuck between a rock and a hard place. On the one hand, it wishes to accelerate green energy production and adoption. On the other, the swelling costs of the domestic output and non-Chinese imports can make solar panels and electric cars more expensive and, therefore, less prevalent. It has become a trade-off between China's low-cost parts and blatant humanitarian violations. For now, it is a juggling act between Democrats who want to expand renewable energy prevalence and Republicans who advocate for the free market.

With the growing number of transgressions and challenges in China, multi-national corporations might continue to reconsider their presence in the country. Over the last few years, Beijing has erected multiple hurdles for foreign companies, aside from market liberalization: COVID Zero, human rights abuses, trade strife, the possibility of invading Taiwan, and intensifying state power. Where is the incentive to do business in China, especially with the yuan appreciating in value and rising wage rates? Plus, Corporate America was quick to abandon Russia over its invasion of Ukraine, so it seems inevitable that companies will need to choose to emulate this strategy with China in the future.

In the end, US corporations, from apparel to solar, will need to make one of three decisions: repatriate capital and investment, shift supply chains to other Asian markets (Vietnam, the Philippines, and Thailand), or maintain the status quo in China and turn a blind eye to the degradation of mankind.