Indonesian National Critical Mineral Conference Produces Joint Communiqué: The Prabowo-Gibran Government Urged to Improve Governance and Mitigate Negative Impacts of the Nickel Downstream Industry in Indonesia

Palu/Jakarta, October 14, 2024 – The Indonesian National Critical Mineral Conference (KNMKI), held on October 9-10, has issued a joint communiqué urging all stakeholders in the critical minerals sector, particularly nickel, to prioritize human rights for marginalized social groups and to ensure sustainable environmental and social governance.

The communiqué emphasizes to the incoming Prabowo-Gibran administration, which will be inaugurated on October 20, that nickel downstream must not be used solely as a tool for economic growth. Field realities show many negative impacts that threaten the welfare of communities and the environment in areas surrounding nickel downstream operations.

Nickel downstream should be a strategic step to increase added value and create decent jobs. However, the government’s commitment to ensuring fair and sustainable growth remains in doubt. The joint communiqué, issued by more than 60 organizations/communities (civil society organizations, affected communities, and nickel processing industry workers’ unions), stresses that mineral resource management must consider the human rights of marginalized social groups and environmental impacts more seriously.

The conference chairperson and Executive Director of Transformasi untuk Keadilan (TuK) INDONESIA, Linda Rosalina, emphasized that this meeting is crucial with various organizations actively involved in advocacy, aiming to immediately reduce the destructive impacts of the mining and critical minerals sector. “This conference and workshop have revealed undeniable field facts, clarifying our commitment to synergizing and advocating for mining and nickel industry issues. We are determined to fight for more justice and sustainable nickel governance that respects local communities’ rights and protects the environment.”

“We urge the new Prabowo-Gibran government to listen directly to the voices of affected residents and take concrete steps in formulating inclusive and responsible policies. Nickel down streaming must not benefit only a few parties but also protect community rights and ensure environmental sustainability for the common good,” Linda added.

Projection of Nickel Demand and Environmental Impacts Remain Unclear in National Planning
The planning for nickel demand in Indonesia has not been adequately clarified in national strategic documents, including the National Long-Term Development Plan (RPJPN), the National Medium-Term Development Plan (RPJMN), and other derivative documents. Despite the rapid growth of the nickel industry, attention to environmental impacts, especially carbon emissions, remains minimal. This is evident in the weak environmental oversight of the industry, which is causing negative impacts on ecosystems.

The ResponsiBank Indonesia coalition highlights the worsening situation due to the massive financing of the nickel sector, supported by regulations that position nickel as a key component of the green energy transition. “Banks, as the lenders to companies, play a role as catalysts and accelerators of financing. However, reckless exploitation of nickel is causing environmental damage and social conflicts. Banks need to integrate responsible financing practices that support human rights and environmental preservation,” said Herni Ramdlaningrum of the ResponsiBank Indonesia coalition.

Monitoring nickel mining companies could be more optimal, especially at the regional level. Provincial governments’ limited authority and overlapping policies between central and regional governments exacerbate the situation. As a result, environmental law enforcement could be more effective.

Furthermore, the 2020 Coal and Mining Law (UU Minerba) and the 2022 Job Creation Law, which centralizes operational permit authority at the national level, have restricted civil society’s ability to conduct oversight. The mechanisms for restoring affected communities are often stalled, especially in areas where local governments have conflicts of interest due to their ownership stakes in nickel mining industries.

“The nickel industry does play an important role in supporting the energy transition, but the rapid development of this sector must be balanced with serious attention to environmental and social impacts. Weaknesses in national strategic planning, coupled with governance that is far from transparent and poor oversight of the nickel mining industry, are worsening the ongoing environmental crisis,” said Meliana Lumbantoruan, Deputy Director of Publish What You Pay (PWYP) Indonesia.

The government needs to strengthen the governance of the nickel sector by increasing transparency, accountability, and coordination between agencies at both the national and regional levels. In addition, the active involvement of civil society in oversight must be ensured so that industrial activities are carried out more responsibly and restoration for affected communities can be achieved more effectively,” Meliana added.

Olisias Gultom, Director of the Sahita Institute (HINTS), emphasized, “All stakeholders need to recognize that corrupt practices have contributed to environmental damage and marginalized local communities in this industry. Furthermore, the lack of commitment to providing decent livelihoods for workers is alarming. The development of downstream industries must align with the principles of humanity and social justice. Immediate action is needed before larger mistakes severely damage all aspects of life.”

Neglected Social, Economic, and Employment Impacts

The rapid development of the nickel industry is different from local government commitments to meet the energy and food needs of the communities in these areas. The purchasing power of the people continues to decline due to policies that do not favor the smallholder population. This situation is worsened by the need for more tangible efforts to rehabilitate the environment after ecological disasters. This leads to the loss of essential livelihoods, such as fishing, and limited alternative job opportunities for communities affected by nickel mining and downstream activities. Despite the presence of mining companies in their regions, the economic contribution to improving local welfare is barely felt. The enormous profits these companies earn are accompanied by the transfer of social and economic risks to residents.

Wasi Gede, Director of INKRISPENA, emphasized that a welfare approach cannot coexist with the militaristic and violent methods currently dominant in nickel industry areas. “It is impossible for farmers, workers, or residents in mining and critical mineral processing areas to thrive as long as the government and business world continue to prioritize militarism and violence in resolving the issues that arise.”

Strengthening Indigenous communities and local populations is crucial in facing critical mineral industries in Indonesia. This is particularly important in providing clear information about the presence of industries in their villages and regions. According to Rudiansyah from Yayasan Masyarakat Kehutanan Lestari (YMKL), one of the efforts needed is to enhance communities’ understanding of the concept of “Free, Prior, and Informed Consent” (FPIC).

“The issue of Indigenous and local communities’ rights is not limited to land compensation. It also includes a deep understanding of why, for what, and the consequences of critical mineral industry projects for their lives. Ultimately, they are the ones who are first and foremost exploited—whether they have already been, are currently, or will be part of this industry’s concessions,” explained Rudiansyah.

Thus, a joint effort between the government, communities, and all stakeholders is essential to ensure that communities’ rights are protected and that they receive comprehensive information about the impact of critical mineral industries on their environment and livelihoods.

In the employment sector, the weak enforcement of Health and Safety (K3) standards highlights the lack of corporate responsibility for workers’ safety. Many workers do not receive adequate protection, and existing legal regulations are outdated and irrelevant to the industry’s growth. Wage discrimination is also glaring, especially between male and female workers.

Richard, the leader of the Tanah Merdeka Foundation (YTM), stated, “The high work intensity with a three-shift system in the nickel industry not only worsens the social and economic conditions of local communities but also causes various Occupational Diseases (PAK). Workers often suffer from excessive fatigue, sleep disorders, and chronic health problems such as respiratory issues and musculoskeletal pain, exacerbated by the lack of enforcement of Health and Safety standards (K3).”

“In addition, unequal wages and the lack of healthcare protection for workers reflect the weakness of labor policies that should protect their well-being. While companies reap huge profits, communities are left to bear the increasing social and health burdens caused by industrial activities,” he continued.

Indonesia’s rapidly growing nickel industry attracts investors, making the business sector working in this field highly supported. “Investment flows should not only provide facilities for companies to run their businesses but also have a multiplier effect, such as providing fair economic benefits, access to decent work, and improving the welfare of local communities,” said Herni Ramdlaningrum from the ResponsiBank Indonesia Coalition.

Environmental Destruction, Biodiversity Loss, and Serious Health Threats

The “booming” of the critical minerals industry, promoted as a solution for energy transition, creates new crises. Instead of transitioning to clean energy, the government continues to approve the construction of captive (off-grid) coal-fired power plants in nickel industrial areas. As coal is one of the leading causes of climate change, this decision ignores the following environmental and social disasters. This demonstrates a total disregard for environmental sustainability.

In this context, Ahmad Ashov Birry, Program Director of Trend Asia, emphasized, “The practice of critical mineral exploitation in Indonesia, which seems to know no bounds, clearly overlooks the crises we are currently facing. Indonesia and the rest of the world face climate, biodiversity, and pollution crises. These are all interconnected and transboundary and have long-term consequences. The Indonesian government must rethink its critical mineral exploitation strategy to avoid worsening these crises.”

Nickel mining activities have caused massive deforestation, severe water and air pollution, and the extinction of biodiversity that supports ecosystems. This environmental destruction threatens flora and fauna and exacerbates the risk of inevitable ecological disasters—such as floods, landslides, and soil degradation—that make the environment uninhabitable.

However, the worst impacts are felt directly by the surrounding communities. Pollution has triggered a severe health crisis. Diseases like acute respiratory infections (ISPA), widespread skin diseases, eye irritation, and poor sanitation, which worsens childhood stunting, are clear evidence. Public health is being sacrificed for industrial profit, while both central and local governments and companies turn a blind eye to the growing suffering.

Richard, Yayasan Tanah Merdeka (YTM) Director, stated, “Dirty greenwashing practices are rampant in the nickel industry. Victims are falling every day. The environmentally friendly narrative pushed by the government for nickel investments contrasts starkly with the reality. In the field, we see no trace of good mining practices. The people are now facing a water crisis, respiratory diseases, floods, and landslides.”

Media Contact :
Annisa N. Fadhilah – Tuk Indonesia, 087884446640

Arie Utami – Indonesia Cerah, 08111770920

The Communiqué of Conference are here

Documentation of the Conference are here

Organizations and communities involved: