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What’s needed to make the Minerals Security Partnership work on the ground
Azure waters and exotic islands are not the only attractions of Cabo Delgado in Mozambique. The province is home to the largest graphite reserve globally, prompting Syrah Resources’ Twigg to open the Balama mine. This is one of the dozen projects across the world chosen by the Minerals Security Partnership to secure and diversify the supply of raw materials.
The energy transition is dependent on critical minerals such as lithium and copper as the world electrifies transport and shifts to renewables. With most minerals currently controlled by China, many western countries are playing catch up. The Minerals Security Partnership (MSP), whose members include Australia, Canada, India, the U.S. and many European countries, is central to this effort.
History is full of not-so-pretty attempts by western nations to capture minerals supply chains, as many living in the Global South know first hand. So how can this partnership offer a truly different value proposition centered on sustainability and deliver truly responsible projects?
Despite some effort, the current situation in the extractive industries is far from adequate. A recent report by the International Energy Agency notes that while governance in the minerals sector has somewhat improved, progress on water and greenhouse gas emissions is at best stagnating. (Add to this a deeply felt mistrust among communities and companies and you quickly realize how complicated the matters are.)
But it does not have to be this way. Most technologies for safer tailings management or better water treatment, rules for robust anti-corruption and human rights due diligence, and practices to engage communities and co-govern with Indigenous peoples all exist. They just need to be applied and upheld consistently. This is where the new minerals partnership can bring real value.
Yet right now the MSP principles lack any such concrete requirements. That’s a big omission. For example in the case of Cabo Delgado, concerns around involuntary resettlement of nearby communities and local value proposition abide. MSP-supported projects like this one will be judged as much by the volumes of critical minerals they supply as by their environmental and social stewardship.
The good news is that the MSP does not have to reinvent the wheel. The answer lies in applying the human right and environmental due diligence practices as stipulated in the Organization for Economic Co-operation and Development’s (OECD) guidelines. The EU has recently done exactly that in its new battery law. This will require tracing, addressing and mitigating all manner of social and environmental risks, alongside upholding global treaties such as on Free, Prior and Informed Consent.
Any global miner, refiner, or recycler whose cobalt, graphite, lithium, and nickel are found in batteries on the European market will already have to track and mitigate all manner of social and environmental risks from 2026, including forced labor, water pollution, and biodiversity. MSP member countries can simply uplift these provisions into the partnership projects.
Setting strong and transparent standards is the first step. These need to also be implemented so that they bring difference on the ground.
This means that the minerals partnership needs to quickly move from vision to a pipeline of responsible projects on the ground. So the focus should be on coordinating with local governments to bring local value and infrastructure, on engaging local communities to have a social license to operate and on bringing in finance instructions to make the projects happen.
Given how far ahead China is, there is no time to waste. A laser sharp focus to scale responsibly managed projects across the world is necessary to build a more diverse supply chain. But this should also come with better environmental stewardship and advancing the rights and livelihoods of those impacted, breaking from past behavior.
The Minerals Security Partnership shows global governments are waking up to the challenge of securing critical minerals responsibly. But whether projects like the Balama mine will become largest suppliers of quality graphite and raise the local community out of poverty will depend on how quickly responsible mining practices are scaled up on the ground.
"It's one thing for corporations to pass reasonable increased costs to consumers," said one analyst. "It's another for them to line their coffers by exploiting Americans who are just trying to get by."
Inflation has eased over the last two years, and with supply chains no longer struggling to keep up with demand and companies' business costs stabilizing, an analysis out Thursday asks: Why haven't American households seen the benefits of a more secure economy, with the prices of consumer goods and services falling?
The answer, said economic justice think tank Groundwork Collaborative, is that high prices linked to the coronavirus pandemic were never just the result of higher labor and production costs—but were partially caused by corporations' deliberate price gouging.
When the pandemic upended the U.S. economy, said the group, "businesses jumped on the opportunity to pass these costs on to consumers—and added a little extra to pad their profits."
"The worst part?" said the group. "They're still doing it."
Groundwork analyzed corporate earnings reports starting in 2021, focusing on numerous industries in which consumers were facing sky-high prices.
"This research revealed CEOs openly bragging to their shareholders about their ability to raise prices beyond their rising costs to increase profits," said Groundwork. "To justify these moves, CEOs hid behind the cover of supply chain issues and the economic turmoil caused by the pandemic."
"The fundamental question we need to ask ourselves is whether we want an economy where corporations can exploit pandemics, supply chain crises, and wars at the expense of American workers and families, or an economy where corporations are put in check, allowing everyone to thrive?"
More than two years later, executives from companies including Kimberly-Clark, General Mills, and PepsiCo have continued to "be explicit about how they have [raised prices] and will continue to do so even as inflation comes down and supply chains normalize," Groundwork warned, with the companies benefiting from rising profits as working families struggle to afford necessities.
Groundwork found that corporate profits—not labor and other business costs—drove 53% of price increases in the second and third quarters of 2023. In the four decades preceding the pandemic, profits drove just 11% of price growth.
Business costs have risen by about 1% since early 2023—and in some sectors, input costs have gone down due to drops in prices for transportation, warehousing, and fuel. Yet prices for consumers have gone up by 3.4% in the same time period.
Groundwork Collaborative used the example of the U.S. diaper industry, in which just two companies—Procter & Gamble (P&G) and Kimberly-Clark—control 70% of the domestic market.
Families are paying an average of 30% more for diapers than they were in 2019—and from 2021-23, high prices were partially linked to the soaring cost of wholesale wood pulp, a component of diapers.
Wood pulp prices went up by 87% over those two years, but over the past year, prices have dropped by 25%.
Still, reported Groundwork, "using their pricing power, P&G and Kimberly-Clark have kept diaper prices high for American families, allowing their profit margins to expand considerably."
In earnings calls with shareholders, executives at the two companies said their skyrocketing profits—an $800 million windfall in P&G's case—were attributed to declining input costs and high prices.
Mike Hsu, CEO of Kimberly-Clark, told investors the company has "a lot of opportunity to [expand margins over time] between what we're doing on the revenue side and also on the cost side."
Other companies have also been clear in recent months about their plans to keep prices high to pad their profits, with PepsiCo chief financial officer Hugh Johnson telling shareholders the company may "increase margins during the course of the year" as its costs decrease, after the company raised consumer prices by about 15%.
"It's one thing for corporations to pass reasonable increased costs to consumers. It's another for them to line their coffers by exploiting Americans who are just trying to get by," said Liz Pancotti, strategic adviser for Groundwork and a co-author of the report. "It's time to rein in corporate price gouging—or families will continue to pay the price."
The group noted that Congress will consider expiring provisions from the 2017 corporate tax cuts pushed by former President Donald Trump over the next year.
Congress "must take a hard look at the corporate tax," said Groundwork. "Our tax code should support a robust and equitable economy, not incentivize profiteering."
"The fundamental question we need to ask ourselves," reads the report, "is whether we want an economy where corporations can exploit pandemics, supply chain crises, and wars at the expense of American workers and families, or an economy where corporations are put in check, allowing everyone to thrive?"
An act awaiting Gov. Hochul’s signature would require any company that supplies state agencies with “forest-risk commodities” to know and show that its entire supply chain is not linked to tropical deforestation.
When confronting the climate emergency, rampant consumption of fossil fuels is top of mind—and rightly so—as tens of thousands of activists recently reminded us in the streets of New York City. But the second leading driver of the climate crisis is the rapid destruction of our planet’s forests. Global deforestation is also a major cause of the extinction crisis and is linked to a wave of violence against Indigenous and local land defenders across the tropics. That’s why a powerful group of Indigenous leaders and climate justice organizers recently used the stage of New York’s Climate Week to build momentum for the New York Tropical Deforestation-Free Procurement Act.
With this groundbreaking piece of legislation, New York Governor Kathy Hochul has the chance to lead the state, and the entire country, down a historic path towards climate justice. The bill already passed both houses in the state legislature and now simply awaits the governor’s signature. If signed into law, any company that supplies New York state agencies with products that contain “forest-risk commodities”—palm oil, soy, paper, beef, coffee, and others—will be required to know and show that its entire supply chain is not linked to tropical deforestation, forest degradation, or human rights abuses in the tropical countries where most of these commodities are produced.
The time we have left to mitigate that risk is running out; urgent action is needed at all levels.
The bill’s lead sponsor, State Senator Liz Krueger, recently co-authored an op-ed in the New York Daily News alongside Amazonian Indigenous leader Juan Carlos Jintiach, highlighting that deforestation has catastrophic impacts on frontline communities while also driving the climate emergency: Some 15% of greenhouse gas emissions are caused by converting natural forests to industrial farmland. Conversely, and not coincidentally, the regions with intact tropical forests are also home to the world’s greatest biocultural diversity. This means not only that demarcating Indigenous territories is critical to protecting forests, but that Indigenous peoples and local communities in the world’s forested regions are—still—under constant threat of violence for protecting the very lands and forests we all need to maintain climate stability. That’s why the Indigenous leaders in this video have expressly called for Gov. Hochul to sign the bill.
As part of our efforts during Climate Week, a group of climate activists from Borneo to Brazil to the Bronx hopped onto the Hoop Bus, a school bus decked out with a basketball hoop, murals, and colorful banners, for a tour around Manhattan—including a stop at Governor Hochul’s office. There, we delivered over 650,000 petition signatures urging her to sign the bill. After about an hour of waiting (and several calls to political insiders), the governor’s office sent down a representative to collect the signatures and meet with representatives of the Global Alliance of Territorial Communities, which brings together some of the world’s most powerful federations of Indigenous peoples.
Earlier in the week, I also participated in a press conference in front of the New York Stock Exchange to warn Wall Street to avoid buying stock in JBS, the world’s largest meat company, and a notorious perpetrator of both deforestation and massive methane emissions. To forge a food system that can move us away from climate emergency, it’s critical to understand the intersection of agriculture—especially monoculture plantations and industrial livestock—and deforestation. Land cleared for cattle grazing accounts for 40% of deforestation worldwide; as The New York Timesreported a few days ago, one study found that JBS alone produces more emissions each year than all of Italy. That’s why we hit the streets of New York to tell Wall Street to steer clear of JBS—and yet another reason this piece of legislation sitting on Governor Hochul’s desk is so important.
Protesters call on Wall Street to stop investing in JBS.(Photo: Friends of the Earth)
Legislation similar to the New York Tropical Deforestation-Free Procurement Act has already passed in the European Union, so multinational companies are already facing the need to shift their practices to meet new legal frameworks. In a sign of how serious E.U. lawmakers are about advancing this regulation, Manuel Carmona Yebra, counselor for Environment and Oceans for the Delegation of the E.U. to the U.S., published an op-ed in the Albany Times Union voicing strong support for the NY bill: “By aligning our approach to deforestation across the Atlantic and globally, we can become trailblazers of a healthier, innovative, and more competitive green economy,” the E.U. policymaker wrote.
With every new climate disaster that floods the subways of New York or incinerates the forests of Canada or California, its clear that the short and long-term costs of inaction are far greater than the cost of re-deploying state tax dollars to deal with the crisis at its roots. Even Wall Street—the engine of the New York economy—now understands that climate risk is economic risk. To drive that point home, earlier this year, 72 global investors representing $2.5 trillion in assets delivered a letter to the NY legislature and the governor supporting the bill.
The time we have left to mitigate that risk is running out; urgent action is needed at all levels. Governor Hochul herself recently signed legislation she called “a monumental step forward in our mission to protect New Yorkers from the impacts of climate change and extreme weather events.” But such legislation only mitigates the damage; Governor Hochul has yet to take any action to actually prevent the massive storms to come. The New York Tropical Deforestation-Free Procurement Act would do precisely that.
The legislation would hold businesses, big and small, accountable for their environmental practices, ensuring they do not contribute to tropical forest degradation, while also mobilizing resources to help smaller and women- and minority-owned companies make their supply chains greener and more resilient. The bill also closes a loophole in an existing state law that would ban state purchasing of precious tropical hardwood timber, which is still used in New York’s boardwalks, railroad ties, and marine pilings, despite the increased availability of more durable and cost-effective materials. As the world’s 10th largest economy, and a true microcosm of the world’s diversity, it’s past time for New York to step up to the challenge.
With this piece of legislation, Governor Hochul has the opportunity not only to forge a sensible climate action pathway for the rest of the country, but also to score a huge political win. After all, what’s more popular than saving the rainforest?