Global Commitment to an International Agreement on Supply Chain Traceability: Lessons from the UN Minerals Panel

When UN Secretary-General António Guterres launched the Panel on Critical Energy Transition Minerals he said, “As we reshape how we power our societies and economies, we cannot replace one dirty, exploitative, extractive industry with another dirty, exploitative, extractive industry.”

This is a challenge well known to all of us here at COP16.

Demand for minerals critical for clean energy technologies is set to quadruple by 2040. Most of the known transition mineral reserves are in countries with high biodiversity: Indonesia, the Democratic Republic of the Congo and, closer to home here, Brazil and Colombia.

We need only look to the gold sector to see the detrimental impacts on biodiversity and local communities. Illegal extraction of gold in the Amazon rainforest has led to over 1.9 million hectares of mining deforestation – and about half of that has occurred in just the past five years, according to estimates from the MAAP initiative.

We are also already seeing worrying impacts on the environment and on biodiversity in transition minerals. In Indonesia, rapidly expanding nickel mining has already resulted in the deforestation of an area of tropical forest the size of New York City.

Add to this, that about 40 percent of the mineral production needed will occur in countries with “weak, poor and failing resource governance.” We know from past commodity booms that the boom in demand risks unleashing large waves of corruption. The promise of soaring profits and fast-paced dealmaking increases the risk appetite of private and public sector actors alike – all while regulators struggle to keep up. These corruption risks are exacerbated by the fact that the countries where these minerals are mined rank in the bottom half of Transparency International’s corruption perception index and in countries where civic space is hugely constrained and environmental defenders fear for their lives.

The intersection of biodiversity at risk, poor governance, and the race for transition minerals is a volatile and potentially toxic combination. NRGI’s analysis has shown that industry actors have used bribery and corruption in mining licensing processes to avoid environmental and social impact assessment requirements and get around community land rights. This has contributed to deforestation and destruction of ancestral community land.

So, the question that confronts us, and that animated the work of the UN panel is: What will be the cost not of climate inaction, but of climate action? Will the pursuit of precious minerals and a mining-intensive energy transition leave economic, social and environmental destruction in its wake? Or can we seize the urgent quest to secure a stable supply of minerals and advance clean energy to also usher in a new, more equitable, more just paradigm for mining?

The Secretary-General asked that we, the panel members,  design principles in response to the “urgent call from developing countries to ensure that they, and their communities, benefit from the production and trade of critical minerals; and that people and nature are protected.”

The heart of this call was a fundamental shift in the global discussion on critical minerals, which is privileging geopolitical tensions and consumer needs above considerations of environmental and economic equity, and risks replaying the same mistakes of the past.

Though we had only four short months to deliver, we drew strength from the tremendous diversity of the panel. My Colombian colleague Johana Rocha and colleagues from the OECD, expert representatives from the U.S., U.K., EU and China, as well as producing countries like Chile, Indonesia and the DRC. We benefitted from the voices of Indigenous Peoples, youth, trade unions, regional bodies, and multilateral institutions, industry and investors. And a brain trust of more than 300 civil society partners around the world. The multistakeholder nature of our work was a huge asset then – and it is essential to our success ahead.

Despite radically different agendas, the panel members quickly coalesced around seven principles for the governance of transition minerals: the centrality of human rights; the integrity of the planet, environment and biodiversity; the importance of justice and equity; development through value addition, benefit sharing and diversification; responsible fair trade and investment; transparency, accountability and anti-corruption; and international cooperation.

And while agreeing on principles was important progress, given the magnitude of the challenge before us, we knew we needed concrete actions. So our report culminates in five concerted actions reflecting the needs and ambitions of low- and middle-income resource-producing countries. What we heard very clearly from developing producer countries participating in the panel—and those we interact with every day—was a demand to be more in the driver’s seat and to create more spaces to bring forward their voices and leadership in shaping what truly equitable mining should look like. The recommended actions from the UN panel have tried to create that space and timeline for governments and civil society in key countries across Africa, Latin America and Asia to chart the course on how this mineral boom can be different from those of the past.

A critical action we specified in the report was the development of an expert-led, multistakeholder process to design a "global framework for traceability, transparency and accountability along the entire mineral value chain—from mining to recycling—to strengthen due diligence, facilitate corporate accountability and build a global market for critical energy transition minerals."

Traceability refers to tracking the origin and following the journey of a product through the various stages along its production and distribution chain. Traceability must be done holistically – not just about geographical information, but about the experience along the journey – the economic, social, governance, human rights dimensions. For that reason, in the discussion about the panel, we expressly called for traceability for accountability. But traceability is not a panacea, and it must be part of a broader swathe of actions that address economic and environmental equity at its root causes. Our vison as a panel was bolder than a framework, or working group, or report. It was about laying the groundwork for a new paradigm for mining.

But as American inventor Thomas Edison said: “Vision without execution is hallucination.” This is why today’s event is so important. The Colombian government has shown extraordinary leadership in seizing the Secretary-General’s call and executing the expert guidance of this diverse global panel.

NRGI is committed to bringing our experience and expertise to support this Colombia-led initiative. For nearly two decades, NRGI has accompanied reformers from government and civil society around the world to build a shared vision of good governance of the natural resource sector. To ensure that mining resources do not undermine, but rather enable more prosperous, sustainable societies and environments.

In Chile, NRGI is drawing on international research and peer learning, to help implement the country’s new lithium strategy. In the DRC, we are working with partners in government and civil society at the subnational level to ensure that mining translates into concrete benefits for the communities and to support value addition. Across Chile, Colombia, the DRC, Guinea, we are helping partners identify mining anti-corruption reforms in licensing and contracting, operations, revenue collection and management, and artisanal and small-scale mining. And we are working in close partnership with international institutions – whether the OECD, the International Energy Agency and the EITI, to bolster these country reform efforts. We have seen the power of such multistakeholder collaboration, across local, national, regional and international levels to center justice and equity in climate action.

Recommendations for the working group

While we’re here to support, we recognize it is producing countries like Colombia that have the deepest expertise and moral authority to change governance of mining for the benefit of humanity and nature alike. And we are eager for more producing countries to follow their lead. Together, we should all aim to set a high bar on 5 key issues to ensure that our ambitions translate into action. We must focus on comprehensiveness, credibility, consequences, coordination and community inclusion. Let me touch on each briefly.

1. Comprehensiveness

One of the defining elements of the UN Panel recommendation I mentioned earlier is that approaches on traceability for accountability must cover the entire mineral value chain—from mining to recycling. And they must encompass the interrelated issues that define responsible mining practices - ranging from human rights to environmental impacts to social practices and governance. This holistic approach is essential.

2. Credibility 

If the aim is to strengthen responsible mining, traceability is only part of the solution; traceability refers to the ability to track the origin and follow the journey of a mineral through the various stages along its extraction, processing and integration into a final product. But traceability and supply chain transparency alone will have no impact without credible, independent scrutiny of industry actions and impacts against high standards of best practice.

3. Consequences

Credibility is intimately linked to meaningful consequences for the company and government entities being scrutinized in due diligence processes. A comprehensive approach to strengthen regulations is required and, as called for by the UN Panel, “support regulators and market actors to incentivize good performance and penalize bad or illegal practices.” These consequences should include measures requiring industry and government actors to compensate impacted stakeholders for environmental harm and social costs caused by their sub-standard policies and actions.

4. Coordination

There is a large constellation of international entities working on issues related to mining and accountability, and there are a number of relevant global frameworks, and industry standards. The development of any new global framework must account for and ensure greater coordination between them.  Locating the framework squarely within existing debates and developments in the mining sector is essential. And any new initiative should support the goal of binding regulation and not create new voluntary or “best practice”-type initiatives.

5. Community inclusion

The development of any framework must ensure meaningful inclusion and participation of vulnerable groups in multistakeholder group discussions on the terms and scope, setting standards for industry and government, inputting into due diligence processes, and establishing adequate consequences in cases of poor performance. A truly multistakeholder effort requires equal participation, and meaningful representation from producer countries in the Global South. 

Implementing these five Cs—comprehensiveness, credibility, consequences, coordination and community inclusion—will help translate the vision and ambition of the UN panel into concrete change for people and the planet. Building on the launch today, we have an opportunity to build a critical mass of supporting governments and civil society between now and COP29, when the Secretary-General will officially launch the recommendations of the UN Panel on Critical Energy Transition Minerals and then onward to COP30 to consolidate the work of this initiative.

And so today, we are standing together at a crossroads. In one scenario, the planet continues to burn without the critical resources to embrace a low-carbon future. Mineral-producing countries become less stable politically, lose public funds, and suffer environmental and biodiversity losses.

But there is another scenario in which we take steps closer to the Paris goals with a stable supply of minerals. Countries and communities with transition minerals and precious metals harness this demand and use the proceeds to emerge from poverty. The environment is protected, biodiversity thrives, and the rights of all people are respected.

As we stated in the panel report: “Justice requires change.” Building on the leadership of the Colombian government, let us all move one step closer to the change we need.