See also the broader UNEP FI Environmental and Social Risk Briefing as well as these resources.
Power Generation includes the following:
- Power stations and the use of fossil fuels
- Nuclear power
- Renewable energy sources, such as hydroelectric power, wind farms, geothermal energy, photovoltaics
- Energy generation from biomass and waste
This briefing covers project feasibility, construction, operations and decommissioning of facilities. The Utilities and Waste Management section of this tool covers electricity transmission and distribution. The construction of facilities for this industry mirrors issues covered in the Infrastructure briefing. The Agriculture section covers issues relating to biomass. Therefore, you may need to review each of these briefings to get a full risk profile for one particular company.
Key human rights related risks include:
- The impact on the workforce, particularly health and safety issues
- Fuel sourcing, particularly coal (the sector is the largest purchaser of coal worldwide) and increasingly bio-fuels (both their production and disposal)
- Community impact, including the health and safety of communities and the environmental impact on them
- Use of security contractors
- The threat of terrorism and sabotage, which has implications for security and also a potentially significant impact on workforces and local communities
Relevant voluntary and trade initiatives include:
- The Voluntary Principles on Security and Human Rights: signatories include a number of power generating companies; the Principles guide companies in maintaining safe and secure operations within a framework that respects human rights.
- Forest Peoples Programme: An NGO that exists to protect ways of life and traditional knowledge from developments (including dams, mines, oil wells and gas pipelines) that often force forest peoples out of their homes.
There are links to these initiatives in the resources section.
WORKPLACE CONDITIONS
What does this cover?
Workplace conditions include factors such as working hours, wages, health and safety and disciplinary practices.
What are the main issues for the power generation sector?
Health and Safety
- Fatal and non-fatal incidents occurring due to faulty equipment/machinery within power stations
- Fatal and non-fatal incidents which may have been caused by lack of proper risk-management procedures or adherence to procedures
- Fatal and non-fatal incidents which may have been prevented with proper training and/or PPE (personal protective equipment)
- Contraction of illness and disease among workers due to inadequate procedures, training or PPE (eg respiratory disease)
Migrant workers
Migrant workers are often a large component of the workforce due to a lack of local skills.
- Migrant workers may be subject to degrading or life-threatening treatment and/or lack of equal opportunity for promotion, due to discrimination against workers from other cultures/races
- This can also include discrimination with regard to working hours, proper training, housing conditions, access to health care or access to education
- Migrant and immigrant workers can have their travel documents held by the employer as a condition of work. This takes away their freedom of movement and is a version of bonded labour
SECURITY OF OPERATIONS
What does this cover?
Security of operations covers the activities undertaken by a company and/or their contractors to protect their assets and uphold the safety of their employees. Power stations may be the focus of protests by environmental and community groups.
What are the main issues for the power generation sector?
- In conflict zones, security contractors can be complicit in fuelling conflict by aiding paramilitaries including payment of protection monies to paramilitary groups
- Security forces can over-react to protests against the power generation companies. This can result in escalation of violence, injury and death of civilians or union members exercising their right to protest
- Security operations should extend to employees’ safety beyond the workplace, to ensure that workers are not exposed when travelling to and from work, and in housing facilities
- Lack of effective security can lead to attacks, theft of dangerous equipment and an unsafe/insecure environment for workers
- Lack of effective security creates health and safety risks for the general public (especially children/young people unaware of the dangers of power generation and machinery)
CONTROLS AND MITIGANTS
- Regular maintenance of power station components (piping, containers, meters, electronics etc.) and on-site equipment
- Health and safety plan communicated to all workers in their own language (includes on site signage, policy communication and training)
- Risk-management training for all line-managers
- Provision of high quality PPE and strict code of conduct for usage
- Emergency preparedness/accident response plan to ensure safety of workers in the event of a serious incident
- Robust governance and disciplinary procedure in place to cover all health and safety incidents
- Ongoing review of health and safety performance including clear recording of incidents and after-incident review
- Written policies and procedures around anti-discrimination and equal opportunities, including the protection and welfare of migrant workers
- Written policies and procedures around security, covering: the employment and training of security workers; dealing with violent and non-violent protests; and use of local police force if arrests or detention are necessary
- The type and number of security forces deployed should be competent, appropriate and proportional to the need.
- In cases where physical force is used by security, such incidents should be reported to the appropriate authorities and to the company. Where force is used, medical aid should be provided to all injured persons
LABOUR RIGHTS AND COMMUNITY IMPACT
What does this cover?
This covers workers rights in the supply chain and the impact of key supplier facilities on local communities. It also covers the use of contracted and agency labour.
What are the main issues for the power generation sector?
Fuel Sourcing
- The sector is the main purchaser of coal world-wide. Coal mining brings with it a range of human rights issues including labour standards (HSE, right to join a trade union), transportation to site, land acquisition and resettlement, security of operations, community impacts and bribery/corruption. Please refer to the Mining and Metals section of this tool for more detailed information
- The sector purchases and burns increasing amounts of biomass and waste as a fuel source. The human rights issues involved in bio-fuel growth include labour standards (HSE, right to join a trade union), land use and usage of a food source often scarce in the country of origin. Waste must be transported safety to avoid public HSE incidents. Please refer to the Agriculture and Fisheries section of this tool for more detailed information
- The purchase of components, chemicals and equipment for nuclear power stations includes risks such as supplier participation in black-market/illegal trading and insecure transportation
Other Key Products and services
- The sector is a key customer for suppliers of cabling, piping and meters. Meters in particular can contain components or be compiled in factories where working conditions are harmful, or that employ child labour
- The sector is a large purchaser of PPE (personal protective equipment) and orders PPE, uniforms, and other products with company logos marked clearly on it. These items may be produced in factories which can have a number of issues such as child labour, unfair pay, health and safety, migrant workers and forced over-time
- Risk of illegal migrant workforce recruited by the sub-contractor especially during construction of facilities (this also has implications for health and safety risks)
CONTROLS AND MITIGANTS
- Social and environmental supplier screening policy covering labour relations issues and sustainable/ethical sourcing of materials. Suppliers should be aware of potential issues and have systems in place to protect workers and communities
- Policies and procedures in place to minimise risks to workers, alongside training programmes to ensure that workers are aware of potential risks to their personal safety
- Proper checking procedures in place to ensure that workers are employed legally by sub-contractors and agencies (including supplier engagement focused on raising standards – ideally through industry-wide collaboration)
PUBLIC/COMMUNITY HEALTH AND SAFETY
What does this cover?
Power stations, whether coal-fired, nuclear, biomass, or renewable energy plants can be a source of potential environmental and health and safety risk which may affect workers and local communities.
What are the main issues for the power generation sector?
- Risk (especially for children) of accident and death when insufficient security arrangements and warnings are provided around facilities and assets
- Decommissioning of nuclear power stations presents (though currently not fully understood) environmental and human rights risks particularly in terms of storage of waste
- Emissions can adversely affect the local air quality. This can lead to asthma and other respiratory diseases
- Contamination of local water supply can lead to disease and illness
- Electro-magnetic and electric radiation may be a risk to communities living under or close to power lines connected to power stations (medical opinion on this risk is divided)
- During construction, a further risk is the presence of heavy machinery and transportation
- The impact of natural disasters and severe weather events on facilities (especially nuclear power stations) can put the health and safety of local communities at risk
PROPERTY RIGHTS and LAND ACQUISITION
What does this cover?
The sector acquires land for power stations and facilities. Communities may need to be relocated as part of the infrastructure project. This may include residential land, land used for agriculture and fisheries and land used for community activities. Communities may also be split or separated from neighbouring communities by the development. Also, as power stations often create employment (directly and indirectly) the economic wellbeing of communities after closure must be considered.
It is the responsibility of governments to carry out consultation on relocation and to ensure that compensation is paid. However, the company will be very closely associated with the development, and this is therefore a significant risk area.
What are the main issues for the power generation sector?
- Lack of free, prior and informed consultation with local and indigenous populations and/or lack of process to explore this can lead to arbitrary destruction of identity and livelihood
- Forced removal of indigenous groups from lands. This may be carried out by host governments which do not recognise indigenous groups or their rights
- Lack of, or unfair, compensation, or lack of adequate and appropriate alternative provision
- Damage to or loss of cultural/historical sites which form the basis of indigenous groups and/or national identity
- Economic depression after facility closure, particularly in remote areas, due to lack of alternative sources of employment
CONTROLS AND MITIGANTS
- Community awareness and education plan as part of health and safety measures
- Policies and procedures around conservation and sustainable use of finite resources eg: water, energy, land, which take account of local community need for these resources now and in the future
- Social assessment to evaluate a project's positive and adverse effects on indigenous peoples and examine alternatives where adverse impacts may be significant
- Policies and procedures to ensure the free, prior and informed consultation of local and indigenous communities; ensuring that vulnerable groups are part of the consultation process. There should be a complaints mechanism available to local communities
- Policy and procedures around the relocation of communities to allow company development, including measures around consultation, compensation and continuation of livelihoods
- Economic development plan for full-life cycle of facility including after closure
VANDALISM, TERRORISM AND SABOTAGE
What does this cover?
Power stations may be targets for vandalism, terrorism or sabotage during either their construction or operational phases.
What are the main issues for the power generation sector?
- Restrictions on local populations’ movement or access to facilities, as part of overall security for site
- Discrimination against some sectors of society due to government views on their likelihood of engaging in terrorism or sabotage
- Catastrophic damage to the local community, including large scale injury, deaths and damage to community infrastructure and livelihoods in the event of an attack
- Regional or national loss of life and livelihood due to pause in supply of energy. Examples include loss of income due to business closure and shut-down of basic services such as hospitals and schools.
CORRUPTION/BRIBERY
What does this cover?
The sector is often highly regulated or part-owned or fully-owned by the state. This close relationship with states can provide opportunities for bribery and corruption. In such cases, taxes and revenues are being diverted away from the realisation of fundamental rights such as education and health.
What are the main issues for the power generation sector?
- Price are often set and controlled by a regulator, and this may limit price sensitivity to the market and transparency about charges. There is potential for over-charging in what may be a monopoly market
- Major developments of the infrastructure for projects is potentially subject to corruption and bribery during the planning process
- Regulation may mean that generators are very close to government officials, which may lead to potential concerns about transparency of taxation, licensing and other payments
CONTROLS AND MITIGANTS
- Compliance with local/national law is a minimum benchmark
- Application of consistent and effective management practices in relation to site security, and consultation with local communities
- Written emergency plans in place to deal with the company’s role in large scale incidents
- Transparency about payments to governments, including licence payments, taxation and other payments
- Written anti-corruption policies which are communicated to all employees, agents and intermediaries
