U.S. Solar Industry Working to Minimise Exposure to Forced Labour Allegations

The U.S. solar industry on 29 April unveiled a set of voluntary guidelines aimed at eradicating instances of forced labour in its global supply chain. The Solar Energy Industries Association is seeking to address concerns voiced by various U.S. lawmakers and other relevant actors that the U.S. solar industry is dependent on raw materials made with forced labour in mainland China’s Xinjiang Uyghur Autonomous Region, particularly polysilicon (a high-purity polycrystalline form of silicon used in photovoltaic and certain other applications).

On 4 February, SEIA announced that 175 solar companies – including some of the largest manufacturers in the world – had signed a pledge opposing forced labour, including a commitment to sever any links with forced labour production in the XUAR. The association indicated at the time that the pledge was part of an industry-wide effort “that supports the development of a supply chain traceability protocol and a comprehensive update to SEIA’s Solar Commitment”. SEIA also urged its members to immediately move their supply chains out of the XUAR and said that it expected most of the major suppliers to have moved elsewhere no later than June 2021. Moreover, the association announced that it would continue to work with the Biden administration, customs officials, lawmakers and international partners to ensure that solar products are free of forced labour.

In furtherance of these commitments, SEIA states that the guidelines announced on 29 April are designed to help the solar industry “meet compliance obligations and, importantly, provide customers with assurances that their solar products are free of unethical labor practices.” Concurrently, SEIA has finalised an update to its Solar Industry Commitment to Environmental & Social Responsibility, which was originally launched in 2013 to define common labour, health and safety, environmental and ethical standards, as well as expectations for solar companies. According to SEIA, the update modernises the standard and now covers an expansive list of topics, including guidance on workplace safety and ethical labour practices.

The Solar Supply Chain Traceability Protocol contains recommended guidelines and procedures designed to identify the source of a product’s material inputs and trace the movement of these inputs throughout the supply chain. It also incorporates an independent third-party audit mechanism to measure a company’s implementation of traceability policies and procedures. The protocol is also intended to help U.S. importers meet their reasonable care obligations under U.S. customs law and improve an importer’s ability to respond to U.S. Customs and Border Protection requests for information and audit inquiries. SEIA states that by following the protocol and producing the documentation recommended therein, “an importer should be well-positioned to demonstrate both provenance (where something comes from) and avoidance (locations that are not involved in the production of the product).”

Despite these efforts, it is still very possible that CBP could take action against mainland Chinese solar products and/or polysilicon (as well as any downstream products) that are made with forced labour, as it has done against various other products. Such action could potentially come in the form of a withhold release order against one or more specific companies, or as a broader action against all solar products/polysilicon made in the XUAR like the WRO in place against cotton and tomatoes and their downstream products produced in whole or in part in that region. At the same time, legislation could potentially advance in Congress adopting a blanket ban on imports from the XUAR and designating polysilicon as a high-priority sector for forced labour enforcement.