Indonesia
Nickel — a transition mineral and core input for electric vehicles — is one of Indonesia’ key exports. As of 2022, it accounted for half of nickel production worldwide. To extract the mineral, entire forests are often destroyed to access what lies below. Some of the world’s largest companies have invested in its production, most notably the Brazilian giant Vale, which “operates three of the top five projects with the highest level of deforestation.”
According to the Financial Times, “[D]eforestation, coupled with waste, pollution, high carbon emissions and displacement of villages, has put pressure on the government and miners to clean up their act and on carmakers to search for alternative sources of nickel, such as Australia. President Joko Widodo said in March Indonesia would step up scrutiny of the sector and tell companies to reforest depleted mining regions. (…) Environmental groups and analysts have warned Indonesia could repeat mistakes made in the palm oil industry, associated with rampant deforestation, unless more steps are taken to protect forests from nickel mining.”
In August 2023,the former director general of Minerals and Coal of the Ministry of Energy and Mineral Resources,along with several other officials, was arrested for alleged corruption of nickel ore mining inSoutheast Sulawesi,accused of facilitating unlawful mining. According to Publish What You Pay (Indonesia), “This case confirms that corruption in the mineral and coal mining sector is categorized as ‘state capture,’ where corruption is not merely administrative involving bribes or facilitation payments, but corruption through its roots, namely corruption through regulations.”
In addition to the pay-to-play accusations involving State capture, nickel mining in Indonesia is unfortunately a classic case that pits community members against the State’s and companies’ development interests.
In July 2023, BBC New Indonesia documented nickel’s mining effects on the environment, farmers, and fisherpeople. “In order to mine nickel, large areas of trees are cut down and the land is excavated to create open pits. With the roots of the trees no longer present to stabilise the ground, when it rains earth is more easily swept away. Government data shows that in 2022 there were at least 21 floods and mudslides in Southeast Sulawesi. Between 2005 and 2008, before the proliferation of mines, there were two to three per year, according to the National Agency for Disaster Countermeasure. Local conservationist Habib Nadjar Buduha says that when waste material and water are not properly managed, sediment ends up in the sea. (…) ‘We don’t have a track record of sustainable mining yet,’ [Novita Indri, a campaigner for Trend Asia, an NGO that promotes sustainable development] says. ‘Indonesia has a lot of homework to do, strengthening law enforcement, increasing emission standards, and implementing environmental regulations.’”