Indonesia’s ‘bloody nickel’ under fire as US flags forced labour concerns, 22 Sep 2024

Indonesia’s nickel industry faces mounting scrutiny after being flagged by US authorities for forced labour, a designation analysts say should serve as a “wake-up call” to Jakarta as it attempts to secure a critical mineral deal with Washington.

The US Department of Labour’s latest report on the “Global State of Child and Forced Labour” classified Indonesian nickel as a product of exploitative practices, citing various news reports and research from non-governmental organisations.

“Forced labour taints the supply chain of … crucial minerals, including aluminium and polysilicon from China, nickel from Indonesia, and cobalt, tantalum, and tin from the DRC [Democratic Republic of Congo],” Thea Lee, deputy undersecretary for international labour affairs at the agency, said during a September 5 press briefing.

[...]

Labour and environmental activists have criticised Chinese-owned nickel smelters in Indonesia for poor health and safety standards, [...]workers had filed numerous complaints but received few responses.

Zakki Amali, research manager at Trend Asia [...] said the Labour Department report would “make nickel buyers in the US more aware about bloody nickel from Indonesia”.

From 2015 to 2023, Trend Asia recorded 93 incidents at Indonesia nickel complexes, resulting in 91 deaths and 158 injuries. This year alone, there were 17 incidents between January and June, leading to eight deaths and 63 injuries in nickel hubs like Morowali and Weda Bay.

[...]

A culture exists at Indonesia’s smelters of blaming workers for accidents, said labour rights activist Alfian Al Ayyubi Pelu from [...] a workers advocacy group. But he argues that the real issue lies in “systemic” failures related to occupational safety and inadequate government oversight.

Indonesian workers, like their Chinese counterparts, typically endure long hours to earn around 5 million rupiah (US$325) per month. Although their base salaries are comparable to Jakarta’s minimum wage, the higher cost of living in regions like Morowali and Halmahera makes overtime essential for financial stability, he said.

Alfian also pointed out that Indonesian workers enjoy more legal protections than their Chinese counterparts.

“The listing of Indonesian nickel as a product derived from forced labour … provides hope for improved conditions for well over 200,000 workers in the sector,” wrote Kevin O’Rourke, author of the Indonesia-focused newsletter Reformasi Weekly, in his September 13 edition. “An end to the sector’s long history of inexplicably lax regulation is, in fact, beneficial for all involved.”