Governing the Security-Energy Nexus in the Semi-Conductor Supply Chain: Emerging Human Rights and Environmental Due Diligence Legalization for Resilience and Sustainability in the Sourcing of Critical Raw Materials

The digital and energy transition has increased the dependencies on semi-conductors. Semi-conductors are foundational to new and emerging technologies that enable these transitions, for instance solar arrays and wind turbines. As became apparent during the Covid-pandemic, dependencies on semi-conductors in the EU and the US have raised geopolitical issues and trade and investment related concerns. There has been less attention for how the accelerating demand for semi-conductors also drives up the demand for critical raw materials (CRMs) that are needed for semi-conductor fabrication, with potential adverse impacts on human rights and the environment, especially in the global South where these CRMs are sourced. This article examines how tensions and tradeoffs between ensuring the security of supply, the increasing extraction of CRMs and sustainability are navigated in the semi-conductor supply chain. New laws have been adopted at national and EU level that are oriented towards ensuring security of supply and resilient semi-conductor supply chains. This article will examine the EU Chip Act, which was adopted in July 2023, and how it governs the trade-offs related to the semi-conductor supply chain. This EU law will be compared to other EU supply chain regulations that emerged recently, most notably the CRM and the CSDDD, in terms of their integration and prioritization of sustainability. Moreover, this article will discuss how the Dutch government has navigated tensions and trade-offs related to semi-conductor industry specifically, the political contestations around goal conflicts, how HREDD manifests in recent developments, and the implications for Dutch semi-conductor companies. HREDD serves as a conceptual anchor or reference that can help identify and analyze tensions within and between the EU laws that govern the semi-conductor supply chain, and their embedding of sustainability. This concept can also be of use to the Netherlands and other EU countries in their navigation of these tensions, in setting expectations and compliance structures, to ensure that the semi-conductor value chain is both ‘resilient’ and ‘sustainable’. This article will re-iterate that it is essential that the Netherlands, being home to semi-conductor companies, adopts a strong HREDD law. Some recommendations for the design of a Dutch HREDD law are provided that can potentially empower right-holders in the semi-conductor supply chain and contribute to the realization of a just energy transition.