A recent report from the United Nations Office on Drugs and Crime (UNODC) reveals that the global supply chains for critical energy transition minerals (CETMs) – including copper, lithium, nickel, cobalt, graphite, and rare earth elements – are characterized by a lack of transparency that allows for widespread criminal activity.  The report identifies corruption as a primary enabler, facilitating illegal acts such as smuggling, trafficking, and money laundering.  Notably, the report finds that the trafficking of bulk CETMs often relies not on concealment, but rather the exploitation of systemic weaknesses, including bribery and the use of false documentation to misdeclare a shipment’s origin or content.  The UNODC also notes that corporations are key actors whose appearance of legitimacy can hinder the detection of illegal activities, highlighting how both criminal groups and otherwise legitimate companies can exploit opaque supply chains for financial gain. 

This environment of poor governance and lack of traceability creates significant operational and ethical risks, particularly for the renewable energy sector.  The pressure on these supply chains is immense, as the technologies powering the green transition are far more mineral-intensive than their fossil-fuel counterparts; a single electric vehicle, for example, requires six times the mineral inputs of a conventional car.

And these inherent dangers are not just theoretical, as the U.S. government is taking firm action to address these risks.  Framing its enforcement as both a human rights and an economic imperative, an August report by the Department of Homeland Security (DHS) details how the U.S. is leveraging the Uyghur Forced Labor Prevention Act (UFLPA) to bolster its long-standing prohibition against forced labor imports under Section 307 of the Tariff Act of 1930.  The UFLPA’s enforcement at U.S. ports has become increasingly active and expansive, with consequences already being felt across billions of dollars in trade.  This law strengthens the original statute by creating a “rebuttable presumption” that goods with links to China’s Xinjiang region are made with forced labor and thus banned from entry.  Since its implementation, U.S. Customs and Border Protection (CBP) has stopped and reviewed more than 16,000 shipments of goods valued at almost $3.7 billion to check for links to forced labor. 

Most noteworthy for renewable energy companies, the 2025 update designates lithium and copper as new “high-priority sectors for enforcement,” joining aluminum and polysilicon.  This action signals that these specific mineral supply chains will now face the highest level of scrutiny, directly targeting the types of state-sponsored labor schemes and opaque supply chains identified as key risks in the UNODC’s global report.

In light of these findings, renewable energy companies should consider a proactive approach on supply chain management to safeguard their operations and reputations, for a passive stance may result in severe risks to both financial stability and brand integrity.  To navigate this evolving enforcement landscape, companies would benefit from prioritizing the following actions: 

• Enhancing Due Diligence and Screening Processes: Companies should move beyond static, one-time supplier checks by continuously screening all tiers of the supply chain against the UFLPA Entity List and other U.S. restricted party lists.  A robust due diligence program can help identify “red flags” mentioned in both reports, such as a supplier’s participation in state-sponsored “poverty alleviation” or “labor transfer” programs.
• Strengthening Supply Chain Mapping and Verification: Encouraging suppliers to provide complete traceability documentation from the raw material extraction site to the final product can also be a valuable step.  Given the UNODC’s finding that criminals exploit systemic weaknesses like false documentation, companies would benefit from establishing a process for verifying the authenticity of these records.
• Adopting a Forensic Approach to Supplier Audits: Supplier audits should be expanded to not only confirm quality, but also to look for indicators of corruption and forced labor. This could include verifying wage payments, ensuring freedom of movement for workers, and reviewing corporate structures that might obscure ownership or affiliations with entities on the UFLPA Entity List.
• Developing a Proactive UFLPA Compliance Strategy: Rather than waiting for a shipment to be detained, companies should prepare in advance a “clear and convincing evidence” documentation package for high-risk supply chains, which may help expedite the review process if goods are ultimately stopped at entry by CBP.
• Considering Strategic Sourcing Diversification: The geographic concentration of mining and processing, a key risk highlighted by UNODC, presents a significant vulnerability.  Where feasible, companies should explore diversifying sourcing for CETMs, which could help mitigate geopolitical risks and reduce reliance on regions with a high prevalence of forced labor and criminal activity.
• Engaging in Public-Private Dialogue: DHS and other agencies regularly offer webinars and roundtables for high-priority sectors.  Participation in these events provides valuable, up-to-date guidance on enforcement trends and compliance expectations, offering a direct channel to understand what regulators are looking for.

Ultimately, meeting these challenges requires recognizing that robust supply chain diligence is not simply a matter of ethical sourcing, but a core component of operational resilience and economic security.