UN Energy Transition Minerals panel: Development banks must now step up for a just transition

The ultimate test of the UN Secretary General’s panel on Critical Energy Transition Minerals will be the outcome for communities on the frontline of mineral extraction and processing. The Multilateral Development Banks (MDBs) should step up to ensure that the panel’s guidance becomes mandatory standard practice across the mineral sector, to build a transparent, fair and more just supply chain.??

• By Alison Doig , Clean Energy Campaign Manager at Recourse.

The UNSG panel on Critical Energy Transition Minerals has released a set of Guiding Principles to promote environmental and social safeguards across the transition minerals value chain and embed justice in the energy transition. The principles call for due care for human rights, biodiversity, equity and indigenous rights, and for value addition for mineral-rich countries. They include a set of recommendations for implementation, including a call to set up a fund to remedy harms caused by the mining sector.?

Why a Transition Minerals panel?

As the panel presents its recommendations, it is important to remember why it was set up in the first place. There is a very real tension to the energy transition that this panel sought to navigate.?

On the one hand there is the urgent need to transition to renewable energy, including the electrification of transport systems and heavy industries. This will see a huge increase in demand for a number of minerals such as aluminium, nickel and lithium, which are often found in low- and middle-income countries, potentially offering these countries new economic opportunities.

But on the other hand, the extraction, processing, use and ultimate recycling and disposal of these minerals has a legacy of devastating impacts on the natural environment and local communities, often in Indigenous Peoples’ territories. Economic benefits are predominantly gained by the mining companies and wealthy countries who demand the minerals, instead of the communities and countries from which they are extracted. The panel acknowledges this legacy and seeks to chart a new course to both benefit sharing and harm reduction.

The current impacts of transition minerals

In August 2024, Recourse and partners FARN , Inclusive Development International and Trend Asia sent messages from communities in Argentina, Guinea and Indonesia directly to the panel, to bring the hard-hitting reality from the frontlines of mineral mining and processing to its deliberations.?

“Lithium mining directly affects us native peoples,” explained a woman from the indigenous Kolla community in Jujuy province, Argentina, where lithium mines have wreaked havoc on wetland ecosystems. “It affects our water resources. It takes a lot of water, more than two million litres, to generate one ton of lithium. This is crazy for us, knowing that climate change is harming us a lot and we have little water left.”

A resident of Wawonii Island in Indonesia recounted how pollution from nickel smelting is ruining health and livelihoods for his community: “The water is no longer clear, from the pipes it is reddish-orange in colour and sometimes comes out mixed with mud. The river is murky and fish are hard to find. When we go to sea, fish and coral are also difficult to find because of the company's jetty. Then dust, a new problem from the company's hauling activities, produces thick dust that makes residents short of breath.”

A community member affected by bauxite mining in Guinea directly challenged the panel: “Our land is our life. Before the mine came, the land provided everything we needed: the water that we drank, the land to grow crops, to raise animals, to hunt. The mine destroyed that. I ask you: If someone came and destroyed your way of life, aren’t they responsible for helping you?”

These experiences testify to the real and urgent need for less damaging, more accountable mineral supply chain practices, that respect human and Indigenous rights, and uphold environmental integrity. The UN panel’s Guiding Principles form a starting point for future action. Now, the only way for them to have real impact is for stakeholders across the mining and mineral sector to take practical steps to turn these principles into mandatory standard practice.?

What role for MDBs in implementing the transition minerals principles??

To kick-start delivery, all public investments should be required to comply with these principles, and the MDBs can play a role in making sure this happens.

The World Bank had a seat on the UN panel: it should now respond by stating how these principles will be applied across its own investments, now and in the future. It can begin with reforms to its Accountability Mechanism, and a commitment from the bank's President Banga to uphold international human rights norms. To be effective, the World Bank must consult impacted communities and civil society who can help develop systems that are relevant and accountable.?

The Bank’s private sector arm, the IFC - International Finance Corporation , played a role in each of the damaging mining cases presented above. As the IFC reviews its environmental and social Performance Standards over the coming years, it must demonstrate that it has taken these principles fully on board, to protect climate and biodiversity, safeguard against pollution, and uphold Indigenous Peoples’ rights, such as adherence to Free, Prior and Informed Consent (FPIC). These standards have the potential to drive up standards across the sector, so they must be fully implemented and accountable across all investments, including those made via financial intermediaries, with robust and accessible routes to remedy for communities who are harmed.?

MDBs can support mineral-rich countries to build their capacity to regulate mining and uphold the Guiding Principles at a national level. The impacted communities themselves should be valued as key stakeholders and invited to participate in an accessible, safe and inclusive manner in decision-making on future transition mineral mining and processing projects.

Civil society groups around the world (including Recourse) will be monitoring what happens next with these principles. There are still unresolved issues to address - on trade rules, ‘no go’ zones and consumption levels, for example - and practical steps to be taken by MDBs, governments and companies.?

Overall, the panel has exposed an urgent agenda for clean energy transition that can no longer be swept under the carpet. Its principles form a starting point for improving outcomes for people on the frontlines of mineral extraction. Their future witness will be the judgement of its success.

• Hear from impacted communities in this briefing, sent to the panel in August 2024.?
• Find more information about the Panel here.
• Follow Recourse on Linkedin for more on the role of development banks in the just energy transition.?