Human rights, artisanal mining, and our supplier audits.
Our Human Rights due diligence
At FREYR we take the protection of human rights seriously and have in place policies and internal processes to assess and monitor risks related to human rights. This includes due diligence of selected suppliers across our operations, and also entails a focus on our supply chain more broadly. Our human rights due diligence is an ongoing risk-based process including identifying, mitigating and accounting for adverse human rights impacts occurring when products or services are being produced, directly or indirectly, for FREYR.
The FREYR supply chain universe is currently limited to a small set of direct suppliers and their main sub-suppliers. We intend to establish a Chain of Custody from the mining companies of the minerals and through to our factories as is expected to be required by the new EU Battery Regulation. These companies will be delivering products and services towards an end-product ultimately delivered to FREYR, and the many workers involved may be considered as part of our human rights scope. FREYR has a Supplier Code of Conduct in place (here) which addresses our commitments and expectations to suppliers as they pertain to human rights. We also include specific human rights provisions in some of our contracts. We perform a basic desktop human rights risk assessment for our exposed procurements as part of our procurement process. Our supplier contract scope is screened for potential human rights risks, and if there are material concerns, the supplier’s approach towards their own workers and underlying supply chain may be assessed through a physical audit by a third party. We intend to do audits on our direct suppliers as we sign them on and start collaboration. Risks, impacts and weaknesses in the supplier’s system which are not improved before a contract is signed, will be further followed up after signing as per our Supplier Code of Conduct. Human rights risks will be documented, reported, and followed up in our risk management system in accordance with our corporate requirements. We will annually report on human rights due diligence as per applicable legal requirements.
The Norwegian Transparency Act establishes legal requirements for larger enterprises to account for the work they do to ensure respect for fundamental human rights and decent working conditions in their own operations and activities, and in their supply chains. The report for FREYR Battery Norway AS (“FREYR Battery Norway”) status on Human Rights Due Diligence per June 2023 is available here.
Artisanal and small-scale mining (“ASM”) is a largely informal economic sector that includes workers around the world who use basic tools to extract everything from gemstones to vital metals for various industries. For the battery industry, the use of cobalt in conventional lithium batteries has made ASM a material issue for its efforts toward sustainability. Most of the world’s supply of cobalt is produced in the Congolese province of Lualaba, and a significant proportion of that originates from artisanal mines. According to the Fair Cobalt Alliance, ASM provides a livelihood for thousands in some countries where work is scarce, yet it is associated with highly hazardous working conditions, systemic child labor, and unfair trade practices that take advantage of local workers. As it currently stands, most artisanal miners lack the means and expertise to adopt safer mining practices or to overcome their significant commercial disadvantages when selling their mine’s output.
While FREYR is currently not using cobalt in our batteries, we believe it is important to manage our natural resources supply chain with an eye toward mitigating the types of risks that we currently find in the supply of cobalt to our industry. As such, we joined the Fair Cobalt Alliance in 2021 and have followed its activities keenly through 2022, as we see the issue of ASM as an important area of focus for all battery manufacturers. As a multi-stakeholder action platform, the Fair Cobalt Alliance offers actors across the cobalt supply chain a pre-competitive environment for collaboration to help strengthen and professionalize the Congolese artisanal cobalt mining sector and contribute to local economic development at large. See more about Fair Cobalt Alliance here.
Our supplier audits
FREYR plan to conduct supplier audits together with third party ESG auditors, for all our raw material suppliers. These will focus on findings from our desk-top risk assessments in order to verify that the suppliers in our supply chain meet industry standards as well as our specific requirements across human rights, environment as well as health & safety, quality and other issues. Supplier audits provide FREYR with the insight needed to ensure compliance, mitigate risk and improve performance across our supplier networks.