A not-so ‘just transition’ - corruption and modern slavery in clean energy

Australia’s role in the global energy transition is critical. But as demand surges for minerals like lithium, cobalt and rare earths, so do the risks of corruption and modern slavery. What are the key risks facing the renewable energy sector – and what actions businesses do to manage them? Read on to find out.

Corruption and modern slavery risks are reportedly rife in global renewable energy supply chains, despite the fact that one of the core tenets of a just transition is to ensure ‘no one is left behind’.^[1] Renewable energy projects are particularly vulnerable to such risks due to their rapid growth, complex supply chains, and reliance on raw materials and activities in high-risk regions.

For Australia, businesses must be particularly aware of these risks given:

• significant clean energy investments by the Federal Government, including $9 billion in renewable energy projects– in 2024 (the largest figure since 2018)^[2] and a further $8 billion funding package committed in September 2025 under the 2050 Net Zero Plan with a significant portion dedicated to the energy and resources sectors
• Government contracts are increasingly mandating climate compliance and reporting, including via the Commonwealth Climate Disclosure Policy (legislated September 2024)
• a new anti-bribery corruption offence introduced in September 2024, which holds companies directly liable if an ‘associate’ bribes a foreign public official with the intention of improperly influencing them, and
• the government’s confirmation of key commitments to reform the Modern Slavery Act in December 2024, a priority being the introduction of civil penalties for non-compliance.

In this insight, we outline where and how corruption and modern slavery risks arise in the renewable energy supply chain, domestic and international developments including reporting obligations, and what your business can do to ensure greater compliance with Australia’s modern slavery and bribery and corruption laws.

Corruption risks, key drivers and trends

The renewable energy transition has driven an increase in demand for critical minerals and placed mounting pressure on governments and companies to prioritise renewable energy projects. This in turn has heightened corruption risks in global supply chains.^[4]

Modern slavery risks, key drivers and trends

Alongside corruption risks, the energy transition has also exacerbated modern slavery risks at multiple stages of the supply chain, particularly in the extraction of minerals and acquisition of land.^[5]

Developments domestically and abroad

Developments in Australia

Many businesses in the energy and resources sectors in Australia must comply with reporting obligations and publish modern slavery statements under the MSA and will be subject to Australia’s anti-bribery and corruption legislation.

More recently, regulatory and other responses to the renewable energy sector have begun to emerge. For example, the NSW Anti-Slavery Commissioner, in partnership with the Clean Energy Council, is currently developing a code of practice to manage modern slavery risks in renewable energy supply chains. A Discussion Paper on the code of practice was published in August 2023.^[6]

The increasing focus on supply chain due diligence is also being seen in the regulatory and litigation landscape:

• Regulatory: As noted in the NSW Anti-Slavery Commissioner’s Discussion Paper, in November 2022 the Planning Panel of NSW made approval of a development application conditional upon the applicant providing written evidence that manufacture of solar panels to be installed on the site complied with the MSA.^[7]
• Litigation: In August 2025, the Australian Uyghur Tangritagh Women’s Association commenced proceedings in the Federal Court of Australia, seeking documents to determine whether a misleading and deceptive conduct claim should be brought against Kmart. The documents sought relate to Kmart’s supply chains and potential links to Uyghur forced labour. These proceedings may be an early indication of a growing trend of litigation being used to increase supply chain due diligence and transparency.

Following its ratification of the International Labour Organization Forced Labour Protocol in 2022, Australia may in the future introduce laws prohibiting the import of goods manufactured using forced labour, similar to laws already in force in other jurisdictions which are discussed below.

Developments abroad

Globally, regulatory and legal responses targeted at responding to the high rate of modern slavery in the renewable energy sector are more advanced.

Energy-specific laws and initiatives

Some of these legal responses are directed towards particular risks in the clean energy transition.

• European Union - Batteries: the EU Battery Regulation imposes supply chain due diligence obligations on large companies placing batteries on the market or putting them into service, including obligations to develop a public battery due diligence policy, establish supply chain traceability systems and undertake supply chain risk assessments.^[8] Compliance with these obligations is subject to third-party audits (although commencement of the due diligence obligations has now been postponed to 18 August 2027).^[9]
• United Kingdom – Solar: in June 2025, the UK’s Solar Roadmap, which contains information on modern slavery in solar supply chains and was created by the government’s Solar Taskforce, was published.^[10] However, these initiatives were criticised as not doing enough by the Joint Committee on Human Rights in its ‘Forced Labour in UK Supply Chains’ report published in July 2025.^[11]
• United Kingdom – Clean energy: The Great British Energy Act 2025, which received Royal Assent in May 2025, establishes Great British Energy, an independent government-owned company to invest in clean energy. It names one of the objects of Great British Energy as facilitating, encouraging and participating in measures to prevent slavery and human trafficking in its business and supply chains.^[12]

Modern slavery laws and initiatives

Other more general modern slavery responses in Europe also apply to businesses operating in clean energy supply chains. For example:

• United States – Forced labor prevention: the US has taken specific action to address forced labour of Uyghurs and other minorities in the Xinjiang region of China by enacting the Uyghur Forced Labor Prevention Act (UFLPA).^[13] Entering into force in June 2022, the UFLPA creates a rebuttable presumption prohibiting the importation and entry into the USA of any products mined, produced or manufactured wholly or in part in the Xinjiang Uyghur region or produced by an entity on the UFLPA list. As at the date of this alert, approximately 10,500 shipments have been denied entry into the USA under the UFLPA.^[14]
• The Corporate Sustainability Due Diligence Directive (CSDDD) entered into force on 25 July 2024 and has been one of the most significant legal developments in the modern slavery space. It establishes minimum requirements to be included in the national laws of member states, and imposes wide-ranging obligations on companies to undertake human rights and environmental due diligence, with penalties for non-compliance.^[15]
  
  Timelines for member states to incorporate the CSDDD requirements into their national law and substantive obligations have been delayed, and the European Parliament is currently considering amendments which would mean the CSDDD obligations apply to fewer companies (with the proposed amendments limiting mandatory due diligence obligations to companies with a greater number of employees and a higher turnover than initially contemplated by the CSDDD).

• The EU Forced Labour Regulation (FLR) entered into force on 13 December 2024. This is similar to the UFPLA, but broader in its application. The FLR applies to products manufactured within and outside the EU, and prevents them from being sold in the EU if they are manufactured using forced labour. Authorities which investigate potential forced labour (whether the European Commission or national authorities) focus on products and locations with a high risk of forced labour, meaning the FLR will be highly relevant to the clean energy sector.^[16]

What can businesses do to ensure compliance with modern slavery and anti-corruption laws, and the notion of a just transition?

To mitigate corruption risks, companies should:

• implement anti-bribery compliance programs
• incorporate anti-bribery clauses in their contracts (including warranties and audit rights)
• conduct risk assessments and due diligence
• carry out communication and training with employees and associations
• report foreign bribery, and
• regularly monitor and review anti-bribery compliance programs.^[17]

To mitigate modern slavery risks, companies which fall within the definition of a ‘reporting entity’ should:

• improve reporting under the MSA
• improve supply chain transparency
• incorporate modern slavery clauses in their contracts (including clauses which best enable them to comply with their reporting requirements under the MSA)
• engage with industry and non-industry initiatives
• conduct due diligence beyond Tier 1 (assessing suppliers further down the supply chain)
• and work with suppliers to address modern slavery risks.^[18]