New research about Indonesia’s Sulawesi region provides a distressing illustration of the impact of the global scramble to secure raw materials. The EU’s strategy to secure supply from third countries – through Free Trade Agreement negotiations and the upcoming Critical Raw Materials Act – must insist on measures that reduce the devastation of targeted populations and their natural heritage.
Indonesia, the world’s largest nickel producer, is a target of mining efforts to feed the surging demand for electric vehicles slated to increase through 2040; according to S&P Global Ratings, Indonesia will represent 44 per cent of the global market by 2027.
Indonesian NGOs Satya Bumi and Walhí Sulawesi (representing South, Southeast, and Central Sulawesi) show that, in a domestic context where no guard rails exist, mining brings ruin to local people and their forests.
Indonesian President Joko Widodo has framed Indonesia’s nickel policy to facilitate foreign investment and develop the Indonesian electric vehicle market, bulldozing anything in the way. The legislative deck has been stacked to draw investment and sweep aside human and environmental considerations: the 2020 Mining and 2023 Job Creation laws have been revised to streamline the process to obtain permits, to remove environmental and social protections such as Free, Prior and Informed Consent (FPIC), to criminalise protests, and to relax company obligations to clean up toxic mining tailings (left-over materials from the processing of mined ore) – or even fill in all the open mine holes (reclamation) in which people drown each year.
Designating nickel mining as a National Vital Object, entails further dangers for local people, such as deployment of the military or the police.
Judicial checks have also been dismantled, making it extremely difficult for civil society or the public to turn to the courts for help: the Job Creation Law erased the authority for the Administration Court to annul environmental permits. Moreover, at least one Constitutional Court Judge, Judge Aswanto, was removed from his post in 2022, because he was found too often to cancel laws issued by the People’s Parliament. The Corruption Eradication Commission has been rendered toothless.
In Sulawesi, home to Indonesia’s largest nickel deposit, the devastation comes as no surprise.
- The mining sector’s human cost is catastrophic:
Conflict is everywhere in Sulawesi, where the Customary Territory Registration System counts 158 customary territories, totalling 1.6 million hectares.
“In South Sulawesi, white pepper farmers once had the highest incomes. After the mining and job creation laws passed, Vale, a giant Brazilian mining enterprise, was given access to agricultural areas,” says Satya Bumi’s Sayyidatihayaya Afra. “Thousands of people who farmed pepper for generations in Loeha Raya were removed because of nickel mining. Vale came to plantations and houses and evicted them. No plan of where to send them, no compensation, no third-party rights, no land swap – just out.” The matter is the subject of a human rights case before the National Commission on Human Rights.
- The mining sector’s environmental and climate impact is equally alarming:
Satellite data shows that between 2001 and 2019, 2,049,586 hectares in Sulawesi were deforested. A telling spike in 2021 coincides with the year that 69 nickel concessions were authorised. Worse, the three largest concession holders (PT Vale, Bintang Delapan and Aneka Tambang) operate in key biodiversity areas (7,000 hectares have been destroyed since 2000, including in high carbon stock forests (where 85 per cent of Bintang Delapan’s concession sits). In Southeast Sulawesi 80 concessions were recently revoked: a hard-won victory that can be reversed, if the mining operation reapplies.
As for mining waste, it can now be dumped into one of the world’s richest seas. Permits are pending for the three biggest companies, but already one gold mining operation in early 2022 was permitted to dump 43.8 million tons of tailings, each year (120,000 tons each day), into the sea of Sumbawa.
Afra says, “It was the world’s largest marine laboratory, with very high biodiversity. Today, the sea has changed colour, and no fish are found. When the Ministry of Environment grants the other permits, it will be like – snap! – everything will be destroyed within one year.”
Walhí’s Muhammad Al Amin adds, “Nickel mining has put a target on Sulawesi. Essential ecosystems have been broken, and the land is no longer suitable for our livelihoods, our forests are destroyed. They broke even the ocean. Many smelters built by China do not respect human rights, environmental impact, or community. Unfortunately, China doesn’t care. We have asked the Government to review forest permits, to make no-go areas where permits cannot be given.”
The EU cannot be a willing party to such human and environmental destruction, setting up supply-side measures without strong human rights and environmental safeguards, thereby allowing the domestic context to do the dirty work.
Negotiations for the Critical Raw Materials Act and the EU-Indonesia Free Trade Agreement must advance in a context of corporate responsibility and sufficiency; this includes implementing demand-side solutions to decrease critical raw materials consumption, aligning Free Trade Agreements and Strategic Partnerships on Raw Materials with key international human rights, labour rights and environmental instrument; enforceable measures concerning participation of local populations, FPIC, and functional grievance mechanisms; and mandatory due diligence regarding environmental, social and human rights impacts.