"Sufferings of Residents and Environment behind the Business Transactions of Tesla and Chinese Companies in Indonesia" 10 August 2022

The move by an electric car manufacturer from the United States (US), Tesla Inc, to sign a nickel purchase contract worth around US$ 5 billion from two Chinese companies in Indonesia, is against the rules and/or the agreement it made itself, which is to strictly implement Environment, Social and Governance (ESG) aspect in investing.

Tesla’s claim at the annual shareholders’ meeting in September 2020 that it will implement business practices that do not pollute the environment while keep paying attention to social aspects, is just an empty message.

As claimed by the Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, that the electric vehicle company from the United States, Tesla, has signed nickel purchase contracts from two Chinese companies in Indonesia, namely Zhejiang Huayou and CNGR Advanced Materials. [...] CNGR Advanced Materials has also signed an agreement with Singapore-based Riqueza International Pte Ltd  jointly invest in three projects in the Weda Bay industrial area to produce nickel matte in North Maluku. [...]

Residents’ Suffering and the Environment

Behind the business transaction between Tesla and Zhejiang Huayou and CNGR Advanced Materials, there is a prolonged suffering of the people and environmental damages. CNGR Advanced Materials, which join a business agreement with nickel giant Tsingshan Holding Group, indirectly contributed to the destruction of the living spaces of residents in Morowali, Central Sulawesi and Weda, Central Halmahera, North Maluku. [...]

PT IMIP’s activities also triggered sea water pollution in the Kurisa Village area, Bahodopi. The sea water suddenly turned black in June 2021. Residents suspected that the massive coal pile was dragged into the hot water disposal of PT IMIP’s 65×2 megawatt steam power plant (PLTU) when it rained heavily and flowed directly into the sea. [...] Another threat is related to the government’s plan to allow the disposal of tailings waste into the Morowali deep sea through the Deep Sea Tailings Placement project, adversely affecting more than 7,000 fishing families.

Meanwhile, business transactions between Zhejiang Huayou and Vale Indonesia also put the safety of residents in East Luwu, South Sulawesi and Pomalaa, South-East Sulawesi at risk. The existence of PT Vale Indonesia has caused losses to the community in Malili, East Luwu.

In 2014, an oil spill from PT Vale Indonesia polluted the Lampia Sea. Then, in 2018, Lake Mahalona was also heavily polluted due to sedimentation of ex-mining soil. In August 2021, PT Vale’s operations also polluted the waters of Mori Island, resulting in disruption of aquatic biota, health and livelihoods of residents.

In 2016, PT Vale was suspected of taking agricultural land and the land of the indigenous people of Sorowako, Nuha District, East Luwu. In addition, PT Vale criminalized seven activists and indigenous people around the mine in March 2022. The criminalization of these residents began when the indigenous people around the mine held a demonstration demanding PT Vale’s accountability for the company’s mining on indigenous peoples’ land.

Meanwhile in Weda, the investment of Tsingshan Holding Group and Huayou in PT Indonesia Weda Bay Industrial Park (IWIP), has triggered massive land grabbing and environmental destruction. [...]

It did not stop there, two nickel mining companies suspected of being affiliated with PT IWIP, namely PT Zhong Hai Rare Metal Mining and PT First Pacific Mining Indonesia, which operate in Sagea Village, North Weda, threaten the existence of the karst landscape in the Weda area, including the Bokimaruru Karst Cave site. [...]

The practice of nickel extraction in Indonesia has triggered the loss of access for most people to food and water, as well as the escalation of conflict which is getting higher and wider due to land grabbing and repressive security approaches to people who defend their living space.