ENG - Policy Paper - Neo Extractivism in Indonesias Nickel Epicenter

SASA cover - section A
POLICY PAPER
Neo-extractivism in Indonesia’s Nickel Epicenter:
The Fragility of Mining Governance, Ecological Damage, and Human Rights Violations on
Celebes Earth
Authors:
Policy Paper
Civil Society Critical Notes on Nickel Mining Policy and Governance
October 2023
Drafting Team:
Satya Bumi
Walhi Sulawesi Selatan
Walhi Sulawesi Tengah
Walhi Sulawesi Tenggara
Translator:
Siti Rochmah Aga Desyana
Illustrations and cover art: Fitrah Yusri & Eghi Irfansyah
Design and Layout: Eghi Irfansyah & Amri Yusaq

FOREWORD
The Indonesian government is taking advantage of the momentum of the nickel boom
by creating a nickel policy ecosystem to speed up and accelerate the development of the
Indonesian electric vehicle market as well as offering partnerships and assurance to foreign
investors. A series of policies were presented by the government to facilitate investors
in carrying out nickel downstreaming as a state priority program. Various benefits and
incentives are promised to attract investors to invest in Indonesia. However, protection of
human rights and the environment has not been referred to as an investment corridor. The
right to regulate as an expression of state sovereignty does not stabilize environmental and
human rights protection yet, often causing civilians to experience negative impacts from
increasingly massive extractive activities.
The risk of environmental damage and human rights violations in the nickel value chain
is reflected in Sulawesi, one of the largest nickel reserve producing areas in Indonesia.
Deforestation cases and human rights violations in Sulawesi, due to nickel neo-extractivism,
revealed a gap between investment, human rights, and the environment that regulators
and investors must pay attention to.
It is important to note that, ambition that is not coincied by efforts to develop strong mining
governance will bear serious consequences, causing deforestation and ecological damage
as well as human rights violations. The government's capacity to balance the protection of
investors interest with respect for human rights and environmental protection is urgently
needed. Governance gaps will actually hinder the government's efforts to combat climate
change by strengthening Indonesia's role as the epicenter of the electric vehicle value chain.
Based on the statement above, Satya Bumi, Walhi Sulawesi Selatan, Sulawesi Tenggara,
and Sulawesi Tengah prepared a study on nickel mining governance, including a study
of regulations, truth discovered in nickel extractive locations, as well as the impact of
deforestation and ecological damage, and human rights violations resulting from nickel
mining.
We would like to thank the entire team who helped prepare this policy paper. We would
also like to express our thanks to Brown Brothers Energy and Environment, Mighty Earth,
and Limited Liability Company for their assistance in the form of data input, spatial analysis,
and maps of the nickel industry in Indonesia. We hope that this study will provide benefits
and provide input for the government in managing natural resources sustainably and from
a human rights perspective.
Writer Team
Neo-extractivism in Indonesia’s Nickel Epicenter iii

TABLE OF CONTENT
FOREWORD..................................................................................................................................... iii
Table of Content............................................................................................................................ iv
List of Figures and Tables.............................................................................................................. v
A. Introduction..............................................................................................................................1
B. Purpose and Methods in Preparing the Policy Paper.........................................................2
C. Regulatory Capture and the Corruption of Nickel Mining Governance............................3
a) Law Number 3 of 2020 concerning Minerals and Coal (UU Minerba) .........................3
b) Law Number 6 of 2023 concerning Job Creation (UUCK)...............................................4
D. Ecological Damage and Human Rights Violations Due to Nickel Extractive
Activities in Sulawesi ...............................................................................................................7
a) Deforestation and environmental damage.....................................................................7
1) .Deforestation in Sulawesi..............................................................................................7
2) .Risk of biodiversity loss and forests with high carbon stocks.................................16
I..PT Vale (Soroako Bloc) ................................................................................................17
II..Bintang Delapan Mineral ...........................................................................................17
III..Aneka Tambang..........................................................................................................18
3)Nickel Refining and Large Destructive Power and Marine Pollution Risk...............19
b) Human Rights Impact.......................................................................................................21
1) .South Sulawesi in the Grip of PT Vale........................................................................23
2) .PT. Gunbuster Nickel Industry impoverishes the people of Central Sulawesi......25
3) .Human Rights Impact of Nickel Mining in Southeast Sulawesi...............................25
E. Fragile Mining Governance Policies Leads to Nickel Neo-extractivism Practices in
Sulawesi..................................................................................................................................26
F. Stakeholders Identification...................................................................................................33
a) The government ...............................................................................................................33
b) The people’s parliament ..................................................................................................34
c) National independent agencies......................................................................................34
d) Business actors (investors and companies)...................................................................34
e) Global actors .....................................................................................................................35
G. Conclusions and Policy Recommendations........................................................................35
iv Neo-extractivism in Indonesia’s Nickel Epicenter

LIST OF FIGURES AND TABLES
Table 1: Nickel demand projections in 2030 based on three IEA scenarios (in thousands
of metric tons)................................................................................................................1
Table 2: Condition of legal regulations in Indonesia and legal politics that have been
captured by industrial interests...................................................................................6
Table 3: Shows mining expansion (brown) and slowly consumed forest (green)..............11
Table 4: The IUP concession area column is analyzed by the author of the 2021 Year-End
Notes of Walhi Sulawesi Region. The deforestation area column for Southeast
Sulawesi and Central Sulawesi is analyzed from Tempo's investigative report
"Tentacles of the Nickel Mines"..................................................................................13
Table 5: Three ways to measure total deforestation carried out by nickel mines in
Indonesia......................................................................................................................14
Table 6: Of the 10 nickel mines with the highest deforestation rates in Indonesia for
which data is available, half were established (and may have cleared forest land)
before the year indicated by MODI 2023 as the year of the most recent permit
grant or permit amendment......................................................................................15
Table 7: Illustrates the three nickel concessions with the highest deforestation rates in
Indonesia that overlap with forests with high carbon stocks, and Key Areas of
Biodiversity...................................................................................................................16
Table 8: HPAL waste disposal methods ..................................................................................20
Table 9: Map of Customary Territories and Forest Area Based on the Customary
Territory Registration System.....................................................................................22
Table 10: Identifying the Impact of Violations of Farmers' Rights in Loeha Raya, South
Sulawesi.23
Table 11: Identification of Human Rights Impacts Due to Extractive Activities in North
Morowali Regency.......................................................................................................25
Table 12: Identification of Other Impacts Due to Extractive Activities in the Pomalaa Block.
26
Table 13: Identification of impacts caused by extractive activities in the Pomalaa Block...26
Table 14: Nickel concessions that are given the privilege of not enforcing Law Number 41
of 1999 concerning Forestry are contained in the Attachment to Presidential
Decree No. 3 of 2023 concerning Amendments to Presidential Decree Number
41 of 2004 concerning Licensing or Agreements in the Mining Sectorin Forest
Areas. ......................................................................................................................28
Table 15: Regulation concerning the acceleration to electric vehicles. .................................29
Table 16: Risk of Fragile Mining Governance.............................................................................31
Neo-extractivism in Indonesia’s Nickel Epicenter v

Figure 1: Total nickel content in various parts of the world. Indonesia has 21 million
metric tons of nickel reserves in the world................................................................1
Figure 2: Purpose of Preparing Policy Paper..............................................................................2
Figure 3: Method & Flow in Preparing the Policy Paper...........................................................3
Figure 4 : Graphic showing IRMA critical requirements.............................................................6
Figure 5: Annual nickel deforestation 2000-2022 (Auriga Nusantara)....................................8
Figure 6: Number of IUPs issued by the Indonesian Government per year..........................8
Figure 7: Comparison of Landscape Changes Due to Deforestation......................................9
Figure 8 : Map of Pomalaa Area. Analysed by Walhi Southeast Sulawesi 2023....................12
Figure 9: Map of Southeast Sulawesi Provincial Spatial Plan 2023. ......................................12
Figure 10: Location of PT Vale (Soroako) minerals that overlap with key biodiversity areas
according to IUCN........................................................................................................17
Figure 11 : Location of PT Vale (Soroako) minerals that store carbon stocks. .....................17
Figure 12: Location of Bintang Delapan Mineral containing High Carbon Stock (HCS)
Forests in 2021.............................................................................................................18
Figure 13: Some of the Major Areas of Biodiversity cover most of the Bintang Delapan
nickel mineral concession area..................................................................................18
Figure 14: High Carbon Stock Forest inside Antam's nickel mining concession in 2021.....19
Figure 15: Antam's Logging of Protected Forest – as detected by satellite (GLAD)..............19
Figure 16: The impact of extractive activities that affect the human rights.........................22
Figure 17 and 18: Appearance of dust in the homes of PT Vale nickel mining victims........24
Figure 19: Violation of Six of the Nine Planetary Boundaries.................................................31
vi Neo-extractivism in Indonesia’s Nickel Epicenter

A. INTRODUCTION
Global demand for nickel as a transition mineral for electric vehicles is projected to be
continuously high in the next few decades. This surge was triggered by global demand and
the desire of the global community to prevent climate change through a low-carbon energy
transition. The International Energy Agency (IEA) estimates that demand for these transition
minerals will quadruple by 2040 to meet the targets of the Paris Climate Agreement. The
demands of the global market then encourages an increase in mining activities in nickel-
rich areas, including Indonesia. The IEA then issued a prediction for nickel demands in 2030,
consisting of electric vehicle batteries, stainless steel and other uses, would remain high.
Emission EV Battery on All Other Total

Reduction Passenger Truck 2 and 3 Other Total Stainless Uses
Scenario Vehicle and Wheels EV EV Steel
Bus
According to
Pledge 730 200 40 1.7 971.7 192 36 1,199.7
Established 530 160 30 1.2 721.2 176 36 933.2
Policies
Zero Emissions 1,330 450 80 9.4 1,869.4 192 40 2,101.4

2050
Table 1: Nickel demand projections in 2030 based on three IEA scenarios (in thousands of metric tons).1
Currently, Indonesia is the world's largest nickel producer. Standard & Poor's (S&P) projects
that Indonesia will be able to control 44 percent of the world nickel market by 2027.2 If you
look at the diagram below, the top five nickel producing countries consist of Indonesia, the
Philippines, New Caledonia, Russia and Australia.
Figure 1: Total nickel content in various parts of the world. Indonesia has 21 million metric tons of nickel
reserves in the world.
1 International Energy Administration (IEA), Sept 2021, “Global supply chains of EV batteries”, https://iea.blob.core.windows.net/
assets/4eb8c252-76b1-4710-8f5e-867e751c8dda/GlobalSupplyChainsofEVBatteries.pdf
2 https://www.kompas.id/baca/riset/2023/08/28/boom-nikel-indonesia-akankah-terus-berlanjut?open_from=Search_Result_Page,
accessed on 4 September 2023
Neo-extractivism in Indonesia’s Nickel Epicenter 1

Indonesia is a major contributor to global nickel supply in 2021, mainly due to the expansion
of the domestic nickel industry and the development of domestic High Pressure Acid
Leaching (HPAL) projects.3 This reflects the Indonesian government's ambition to become a
key player in the global electric vehicle value chain and offer partnerships and assurance to
foreign investors. Every work is done in the name of economic strength and development.
In the next section, these conditions will be strengthened by arguments that describe the
practice of regulatory capture. This practice is commonly used as an effort to support
industrialization practices and separate public interest.
B. PURPOSE AND METHODS IN PREPARING THE POLICY PAPER
This Policy Paper is intended to observe the relationship between the impact of the global
nickel supply chain on the increasingly massive expansion of nickel mines in Sulawesi. It
will specifically; 1) examine the socio-environmental and human rights impacts resulting
from the implementation of the neo-extractivist model of nickel mining in Indonesia,
especially Sulawesi as one of the largest nickel producing islands; 2) identify various mining
regulations and governance that supports the development of neo-extractivist politics in
Indonesia; 3) provide policy recommendations to minimize the impact of nickel mining
extractive activities.
Figure 2: Purpose of Preparing Policy Paper
This policy paper was based on research reports and field observations by Walhi Southeast
Sulawesi, Walhi South Sulawesi, and Walhi Central Sulawesi, all of which had identified
social and environmental impacts as well as human rights violations due to increasingly
expansive nickel mining activities in Sulawesi. The social and environmental impacts that
have been identified are then analyzed based on a human rights perspective, including
providing accentuation based on a business and human rights perspective. In addition, the
social and environmental impacts that become victims' epistemic experiences are analyzed
through the perspective of environmental (ecological) justice and climate justice with a
gender and multispecies perspective.
3 https://www.globaldata.com/data-insights/mining/the-top-five-nickel-producing-countries-thousand-tonnes-2021/, accessed on
4 September 2023
2 Neo-extractivism in Indonesia’s Nickel Epicenter

Figure 3: Method & Flow in Preparing the Policy Paper
C. REGULATORY CAPTURE AND THE CORRUPTION OF NICKEL MINING

GOVERNANCE
Simultaneously in several states, developments in a number of legal fields—particularly

those relating to international investment, trade, economics and finance, the environment
and human rights, as well as anti-corruption—have redefined the contours (patterns) of a
country's internal space. This definition relates to a state’s sovereign power in regulating
and allocating rights over minerals within their jurisdictions.4
These policies trigger the potential for corruption in the mining sector, which tends to take
the form of regulatory capture. Daniel Carpenter and David A. Moss define regulatory
capture as “the use of regulations that are consistently or repeatedly directed away from the
public interest towards the interests of the industry regulated in the regulation.”5 George J.
Stigler argued that naturally, industry would encourage the state to issue regulations that
made their economic activities easier.6 Thus, state rationality in mining governance is the
shield preventing the state from being held hostage by industry logic.
Simply put, it can be said that regulatory capture occurs when the regulations issued are
proven to benefit the industry.7 In general, the national trend actually shows this, where
regulations are formed in such a way as to encourage the interests of the mining industry,
for example:
a) Law Number 3 of 2020 concerning Minerals and Coal (UU Minerba)
The Mining and Coal Law was revised in 2020, and one of the problematic
provisions in it was that it removed the authority of regional governments in
mining governance. This cuts off regional community participation in submitting
objections and complaints to regional governments, because their authority has
been centralized back to the Central Government. Lack of accountability, severe
reduction of regional government’s role, and the absence of a public forum to
4 Ana Elizabeth Bastida, The Law and Governance of Mining and Minerals: A Global Perspective, (Oxford: Hart Publishing, 2020),
p. 3
5 Elizabeth Dávid-Barrett, State capture and development: a conceptual framework, Journal of International Relations and Devel-
opment, 2023, p. 4
6 George J. Stigler, “The Theory of Economic Regulation”, The Bell Journal of Economics and Management Science, Vol. 2, No. 1,
1971, p. 3
7 Elizabeth Dávid-Barrett, Op. cit. hlm. 228

complain often leads to escalation in existing disputes. In addition, regional civil
societies and communities are not given the freedom to refuse mining due to
Article 162, which criminalizes people who refuse mining operations.
This law also raised concerns for its provisions that loosens reclamation obligations.
Article 99 paragraph (3) of the New Mining and Coal Law provide relaxation of
reclamation obligations and post-mining activities for mining entrepreneurs
who have the potential to create more toxic and deadly mine holes. Article 99
paragraph (3) essentially determined that companies are only obliged to close
mining holes based on the percentage determined by statutory regulations—in
this case government regulations (PP)—not all mine holes resulting from mining
activities. Auriga Nusantara noted that with this policy, the area of ex-mining
holes that are at risk of not being reclaimed has reached 87,307 hectares (Auriga
Nusantara, 2020). Based on reports from the East Kalimantan Mining Advocacy
Network (Jatam), from 2011 to 2021, 40 people were victims of drowning in mine
shafts in East Kalimantan that were not reclaimed (Mongabay, 2021).8
b) Law Number 6 of 2023 concerning Job Creation (UUCK)
The Job Creation Law—hereinafter referred to as UUCK—presented several

problems within its protection; first, it cuts many environmental protections.
For example, with the implementation of UUCK, mining companies that were
previously fined IDR 10 billion and sentenced to 5 years in prison because they
did not have Forest and Land Use Permit (Izin Pinjam Pakai Kawasan Hutan untuk
Kegiatan Eksploitasi Tambang dan Non-Tambang, IPPKH), are now only subject
to administrative sanctions in the form of fines – even if their activities destroyed
forests (Articles 36 and 37 of UUCK). Furthermore, the Job Creation Law also
removes the provision of 30% forest area in each province which was previously
maintained through the Forestry Law.
UUCK also reduces the involvement of civil society in preparing the Environmental
Impact Analysis (AMDAL) or Environmental Impact Assessment (EIA). Apart from
not being involved in the process of preparing environmental impacts, the public
also no longer has room to raise objections. Civil society (apart from affected
communities) is positioned as a third party who is only given the opportunity
to submit objections when the AMDAL assessment has been completed and an
Environmental Feasibility Decision is issued.9 This condition is very unhealthy for
the policy-making climate, which puts the environment at risk amidst the onslaught
of the Joko Widodo Government's desire to "improve the country's economy".
UUCK also issued many problematic derivative regulations. In relation to mining,

Government Regulation Number 22 of 2021 allows miners to dispose of waste
into the deep sea using the Deep-Sea Tailing Placement (DSTP) method. This issue
will be discussed further in section 2.3.
8 Dea Tri Afrida, “Indonesia: Tanah Surga Bagi Oligarki” (Indonesia: Heaven for the Oligarchs), https://antikorupsi.org/id/indone-
sia-tanah-surga-bagi-oligarki, Accessed on 11 October 2023.
9 Changes to the editorial are made to Article 26(3) by deleting letters b and c. Article 26(2) now reads as “Preparation of Amdal
documents is carried out by involving communities directly affected by business plans and/or activities.”

With some of the legal conditions above, it becomes obvious that the pattern
of weakening generally occurs due to two things: 1) the continued issuance
of exception provisions from previously strong safeguards; 2) The excessive
broadening of government's authority without proper check-and-balance
mechanism from other chambers of power; and 3) minimal supervision. In the
table below, the author tries to contrast the three pillars of regulatory capture
formulated by Barret and the conditions of the legal and political framework in
Indonesia;10
Regulatory capture pillar Mechanisms conducted Reflection in Indonesian context
1) Through the establishment Create a control mechanism for the Regulations on military/police
military, police and state intelligence deployment on National Strategic
of laws or regulations Projects (PSN)
Ps 7 paragraph (2) number 5 Law No.
34 of 2004, “The main task of the TNI,
apart from defense in times of war,
is to secure vital national strategic
objects”
Nickel mining in Indonesia, especially
the Aneka Tambang concession, is a
vital national strategic object. National
vital objects are defined as major
sources of state income.
Create regulations authorizing State- In the Minerba Law (UU 3/2020) BUMN
owned Enterprises (Badan Usaha Milik is given priority to obtain Special
Negara, BUMN) to play a role in the Mining Business Permit (Izin Usaha
industrial sector (natural resources, Pertambangan Khusus, IUPK).
banking, etc.) The prioritization manifests into the
ability of BUMN to obtain more than
one Mining Business Permit (Izin Usaha
Pertambangan, IUP) and IUPK, and the
ability to transfer the permit to another
party as long as the majority share
(51%) is owned by the BUMN.11
Limiting parliamentary oversight of the The People’s Parliament (Dewan
law Perwakilan Rakyat, DPR) is no longer
involved in the process of changing the
designation of forest areas. Previously,
in the Forestry Law (Article 19) the DPR
had a role in researching and giving
approval to changes in forest areas.
After UUCK, DPR’s veto authority in
changes to the designation of forest
areas was removed (Article 36 of
UUCK).
This cuts off the DPR’s supervision of
the Government’s work in formulating
provisions for the use of forest areas.
Establish rules regarding the UUCK gives the President the authority
privatization and public procurement to form many technical regulations on
process, to ensure the Government the business agenda.
has a high degree of discretion at the As per 2021, the President has issued
implementation stage 45 Government Regulations, and 4
Presidential Regulations (a total of 49
regulations issued by the President)
some of which relate to construction,
taxes, forests and spatial planning.12
10 Elizabeth Dávid-Barrett, Op. cit, hlm. 230

11 Humas MK, “Irwandy Arif: UU Minerba Karpet Merah Bagi BUMN”, https://www.mkri.id/index.php?page=web.Beri-
ta&id=17452, diakses 10 Oktober 2023
12 RED, “Daftar 29 Peraturan UU Cipta Kerja”, https://www.hukumonline.com/berita/a/yuk-unduh-daftar-49-peraturan-pelaksa-
na-uu-cipta-kerja-di-sini-lt6036081634e54/

2) By giving large authority Appoint oligarchs to policy-making Joko Widodo’s government places
positions many business people in policy-making
to the government/civil positions.13
servants to form technical
regulations in implementing
the law
3) Weaken or disarm Design the judiciary to allow for At the end of 2022, the DPR fired
replacement independent judges with Constitutional Court Judge Aswanto
the independence of political allies because he was deemed to “often
institutions working for cancel laws issued by the DPR”. he was
replaced by Guntur Hamzah who was
accountability: Courts, considered not independent.14
Corruption Eradication Replace law enforcement and prosecu- In 2019 Firli Bahuri was appointed
Commission, CSOs, media, tors with allies chairman of the Corruption Eradication
Commission. Many people think that
etc. Firli is someone close to high-level
Indonesian politicians. This caused the
prosecution of corruption cases during
Firli’s leadership to be very low.15
Table 2: Condition of legal regulations in Indonesia and legal politics that have been captured by industrial
interests
With various forms of weakening through regulatory capture in Indonesia, looking

at global initiatives can be considered to fill inadequate mining governance in
Indonesia. One that is widely discussed when discussing responsible mining
initiatives in the world is the Initiative on Responsible Mining Assurance (IRMA).
IRMA was developed in 2006 and has 40 standards to ensure mining companies
work sustainably. In general, IRMA has four principles, each of which imposes
responsibility for environmental protection and human rights on the business
sector.16
Figure 4 : Graphic showing IRMA critical requirements
13 Ima Dini Shafira, “Pakar Sebut Pembentukan UU di Rezim Jokowi Didominasi Kepentingan Oligarki”, https://nasional.tempo.
co/read/1653023/pakar-sebu t-pembentukan-uu-di-rezim-jokowi-didominasi-kepentingan-oligarki
14 Marselinus Gual, “Lantik Guntur Hamzah, konflik kepentingan Jokowi dan MK kian terlihat”, https://www.alinea.id/nasional/
lantik-guntur-konflik-kepentingan-jokowi-mk-kian-terlihat-b2ftP9Ixv, diakses 10 Oktober 2023.
15 Avit Hidayat, “Firli Bahuri cs Dianggap Melemahkan KPK”, https://koran.tempo.co/read/nasional/451343/firli-bahuri-cs-diang-
gap-melemahkan-kpk
16 See; IRMA, https://responsiblemining.net/

Essentially, IRMA emphasizes several standards that are often skipped by
the Indonesian Government. IRMA requires all mining companies obtaining
IRMA certification to carry out meaningful dialogue between parties; respect
international human rights standards; provide provision of a grievance mechanism;
and minimize involvement of the Police and/or military. However unfortunately,
the Indonesian government has yet to view the usefulness of IRMA instrument in
improving mining governance in Indonesia.
Based on the illustration above, the legal conditions for protection in Indonesia
are currently very weak. Regulatory capture that uses business logic suppresses
environmental and human rights protection in mining governance. These changes
consequently limit public accountability mechanisms for activities that have an
environmental impact, while empowering the government to further exercise
control. These conditions furthers risks civil society and communities impacted
because it relies on the government to pay more attention to society's interests
and to have credible monitoring and information mechanisms in its policy making.
Whereas, the records have shown that public interest is often put aside, especially
if public accountability and the public's ability to supervise are also weakened by
the lack of available information.17
D. ECOLOGICAL DAMAGE AND HUMAN RIGHTS VIOLATIONS DUE TO NICKEL

EXTRACTIVE ACTIVITIES IN SULAWESI
a) Deforestation and environmental damage
1) Deforestation in Sulawesi
Increasing nickel production to respond to global demand and actualize

national strategic projects has the potential to cause increasingly massive
deforestation and environmental damage in Indonesia, especially in Sulawesi
as the main and largest producing area for nickel reserves. Meanwhile, the
deforestation rate in Sulawesi was already quite high previously. Using Google
Earth Engine (GEE) data and a combination of Landsat 4,5,7, 8, Sentinel 2 and
Global Forest Change data which are processed into NDVI, EVI, EVI2 and SRVI,
it can be estimated that from 2001 to 2019 deforestation in Sulawesi reached
an area of 2.049.586 hectares. The largest deforestation occurred in 2015
covering an area of 226.260 hectares, in 2016 covering an area of 190.667
hectares and in 2019 reaching an area of 159.891 hectares. The largest
deforestation occurred in Central Sulawesi Province with an area reaching
722.624.05 hectares, followed by Southeast Sulawesi Province in second
place, which reached an area of 512.465.40 hectares and in third place,
South Sulawesi Province which reached a deforestation area of 333.364.55
hectares. 18
17 Pandangan Kritis Terhadap UU No. 11 tahun 202 tentang Cipta Kerja: Masa Depan Ekonomi dan Lingkungan Hidup, Yayasan
Madani Berkelanjutan 2021
18 https://komiu.id/dalam-18-tahun-terakhir-sulawesi-tengah-kehilangan-hutan-seluas-559-96115-hektar/, accessed on 11
September 2023

Massive nickel mining activities will further increase the rate of deforestation.
The expansion of nickel mining threatens the condition of natural forests
within mining concessions. The bar chart processed by Auriga below shows
that 2012 was the year with the highest amount of deforestation. 19
Figure 5: Annual nickel deforestation 2000-2022 (Auriga Nusantara)
This drastic increase in deforestation is assumed due to that year the

Government granted permits and/or Contracts of Work for 69 nickel
concessions.
Figure 6: Number of IUPs issued by the Indonesian Government per year
(Source: Geoportal ESDM 2021)
19 https://www.kompas.id/baca/humaniora/2023/07/13/ekspansi-pertambangan-nikel-picu-deforestasi-seluas-25000-hektar,
accessed on September 11 2023

Henceforth it should be noted that in 2012 the Government first issued
derivative regulations regarding export bans in the Directorate General
of Mineral and Coal Law No. 4 of 2009 concerning Minerals and Coal (UU
Minerba). This provision is stated in the Ministry of Energy and Mineral
Resources Regulation No. 7 of 2012 concerning Increasing the Added Value
of Minerals Through Processing and Refining Activities, which was later
amended by Minister of Energy and Mineral Resources Regulation No. 20 of
2013 concerning the Second Amendment to Minister of Energy and Mineral
Resources Regulation No. 7 of 2012 concerning Increasing the Added Value
of Minerals Through Processing and Refining Activities.
The threads connecting these three events can be seen, which further
strengthen the initial thesis that the nickel industry in Indonesia is run with a
neo-extractivist approach.
In Central Sulawesi, there are approximately 196 mining companies that

have obtained mining exploration and production operation permits, with a
total area of 469.965.81 hectares.20 Changes in the landscape of the Central
Sulawesi region due to permits for the mining and plantation sectors over a
period of 18 years can be seen in the map below.21
Figure 7: Comparison of Landscape Changes Due to Deforestation
Description in Figure 5: The image above shows the results of remote

sensing using Landsat 7.8 satellite image data and Sentinel satellite imagery
monitored from 2000 to 2018. Deforestation activity in the Central Sulawesi
region occurred significantly.22
20 Op. Cit.
21 https://komiu.id/dalam-18-tahun-terakhir-sulawesi-tengah-kehilangan-hutan-seluas-559-96115-hektar/, accessed on 11
September 2023
22 https://komiu.id/dalam-18-tahun-terakhir-sulawesi-tengah-kehilangan-hutan-seluas-559-96115-hektar/, accessed on Septem-
ber 11 2023

One of the areas that has the potential to experience deforestation due
to extractive activities is in North Morowali Regency, Central Sulawesi– the
current smelter location of PT. Gunbuster Nickel Industry (PT. GNI), which
was inaugurated by President Joko Widodo in December 2021. PT. GNI is
amongst the largest smelters in North Morowali district, Central Sulawesi,
with a total investment value of around IDR 42.9 trillion. PT. GNI as a whole
will operate 24-line smelters with a production capacity of 1.800.000 tons of
ferronickel yearly. This production capacity requires a nickel ore supply of
21.600.00 WMT anually.23
In addition, in Tompira Village, North Morowali, there is a Nickel and Sand

Mining Business License (IUP), composed of those that have or have not been
operating in the village. On the border of the Laa River there are 4 Sand and
Gravel IUP with a total area of 131.74 hectares. These four permits are also
intended to meet the material needs of the ongoing construction of nickel
refining smelter infrastructure development. In addition to sand and gravel
IUP, the administrative area of Tompira Village is also controlled by 3 nickel
IUPs which currently continue to operate with a total area of 3 nickel IUPs
totalling at 7,931 hectares24. This project received support from the North
Morowali Government through the 2021-2026 RPJMD stating that North
Morowali Regency has the potential for various excavated resources and has
the potential to be developed. Petasia Timur District is the district that has
the highest area for nickel mining resources at 11,506.49 hectares.25
In Southeast Sulawesi, deforestation caused by extractive activities is seen

in Konawe Regency, Southeast Sulawesi Province through the satellite image
below.26
Spatial Dimentions Temporal Dimentions

November 2020
23 WALHI Sulawesi Tengah dan Komunitas Peduli Perempuan Dan Anak (KPPA), Pemanfaatan Kerang Sungai (Meti) Oleh Mas-
yarakat Desa Tompira Dalam Kepungan Industri Ekstraktif Di Morowali Utara, n.d, pg. 6
24 WALHI Sulawesi Tengah dan Komunitas Peduli Perempuan Dan Anak (KPPA), Pemanfaatan Kerang Sungai (Meti) Oleh Mas-
yarakat Desa Tompira Dalam Kepungan Industri Ekstraktif Di Morowali Utara , n.d, pg. 10
25 Ibid, pg. 2
26 https://majalah.tempo.co/read/investigasi/165153/deforestasi-nikel, accessed on September 10 2023

June 2021
November 2021
Table 3: Shows mining expansion (brown) and slowly consumed forest (green).
Kolaka Regency is also one of the regions in Southeast Sulawesi that has
very active mining activities – marked by the emergence of nickel mining
companies spread across various districts. One of the locations of nickel
extractive activities that have the potential to change the landscape of forest
areas can be found in the Pomalaa Block, in Kolaka Regency can be seen
through the map below.27
27 WALHI Sulawesi Tengah dan Komunitas Peduli Perempuan Dan Anak (KPPA), Op. Cit, pg.25

Figure 8 : Map of Pomalaa Area. Analysed by Walhi Southeast Sulawesi 2023.
Changes in Pomalaa's landscape have expanded over time until now,

especially with the current government policy that grants nickel mining
business licenses (IUP) to several nickel mining companies to operate. There
are at least 14 IUP nickel mining companies operating in Pomalaa Block,
Kolaka Regency.28
Most of the 14 companies operate in areas fed by rivers. The distribution of

fourteen IUPs in the Pomalaa Block can be seen on the map below.29
Figure 9: Map of Southeast Sulawesi Provincial Spatial Plan 2023.
In South Sulawesi, deforestation in this region began with the issuance of

a Contract of Work (CoW) for laterite nickel mining PT. International Nickel
Indonesia (INCO) in 1968. The contract work was renewed in 1996 and will
expire in 2025. P.T. INCO then transformed into PT. Vale Indonesia Tbk (PT.
Vale). In Sulawesi, PT. Vale has a concession area of 118,017 hectares and in
28 Minerba One Data Indonesia (MODI) Ministry of Energy and Mineral Resources, 2022.
29 WALHI Sulawesi Tengah dan Komunitas Peduli Perempuan Dan Anak (KPPA), Op. Cit, pg. 33

South Sulawesi an area of 70,566 hectares. One of the company's concessions
that potentially threaten the existence of the Nusantara pepper barn is in
the Tanamalia Block or Lumereo-Lengkona Mountains, specifically in Loeha
Village and Rante Angin Village with a total area of around 16,820.61 hectares.
In that area there are also pepper plantations owned by thousands of people
who have been operating for ages in Loeha Raya.30
Efforts to protect the landscape of rainforest ecosystems in Southeast

Sulawesi are now met with the existence of nickel mining extractive industries.
Extractive nickel mining activities in Southeast Sulawesi are substantially
expansive, threatening the rainforest area of Southeast Sulawesi. The total
area of Southeast Sulawesi Province is 15.3 million hectares with an area
coverage:31
1) Land area 3, 81 million hectares
2) Ocean area of 11, 49 million hectares,
3) Forest area approximately 2,32 million hectares or about 60% of
Southeast Sulawesi’s land area
Province Concession area (until 2021) Deforestation (hectares)

South Sulawesi 94.142,91 (6 IUP) 4.752,87 ha (2016 - 2021)
Southeast Sulawesi 510.282 (252 IUP) – during 143 120.000 hectares (2011 - 2020)32
IUP (2023) after demonstration
Central Sulawesi 92.604 (37 IUP) 240.000 hectares (2011 - 2020)33
Total 295 IUP: 690.442 hectares
Table 4: The IUP concession area column is analyzed by the author of the 2021 Year-End Notes of Walhi
Sulawesi Region. The deforestation area column for Southeast Sulawesi and Central Sulawesi is analyzed from
Tempo's investigative report "Tentacles of the Nickel Mines"
The amount of deforestation is wider than the concession area because in

some cases, companies clear forests without Forest Area Borrow to Use
Permits (IPPKH).
If photographed nationally, referring to information published by the Ministry

of Energy and Mineral Resources, Indonesia has 330 nickel mines (Minerba
One Data Indonesia–MODI 2023). The deforestation caused by these 330
mines has been measured in three different ways.
First, deforestation is measured by radar (RADD). This technology allows the

detection of forest area loss every two weeks, even in cloudy sky conditions.
Deforestation measured by radar has been published by Wageningen
University in the Netherlands since 2019. Depicting Indonesia's current
30 WALHI Sulawesi Selatan, Loeha Raya, Lumbung Merica Nusantara: Etnografi Perkebunan dan Studi Valuasi Ekonomi Kebun
Merica di Tanamalia Luwu Timur, 2023, pg. 33
31 WALHI Sulawesi Tenggara, Ancaman Espansi Pertambangan Nikel Terhadap Wilayah Kelola Rakyat Di Kecamatan Pomalaa,
Kabupaten Kolaka, Sulawesi Tenggara, 2023.
32 Tempo Data 2022
33 Tempo Data 2022

330 nickel concessions, on top of areas detected by radar that have been
deforested since 2019– it is discovered that nickel mines in Indonesia have
cleared 9.808 hectares of forest since 2019.
Second, looking further back in time, our measurement process is of all

deforestation that has occurred within the same 330 concessions since 2000.
The results of this measurement show a much higher number. The University
of Maryland in the United States has been using satellites to measure
deforestation in Indonesia since 2000 (GLAD) and releases this dataset every
year. By taking deforestation figures measured by satellite from 2000 to 2018
and adding them to deforestation figures measured by radar from 2019 to
the present, it is found that 156.281 hectares of deforestation has occurred
within the territories of 330 nickel concession in Indonesia since 2000 to date.
Third, since not all of these 330 mines have existed since 2000, our third
measurement only looks at how much deforestation has occurred in each
concession since the year, in which MODI 2023 stated as the most recent
year in granting concession permits (amendment year). The calculations
are limited to how much forest is logged by mining in Indonesia. Since the
most recent grant of permits or permit amendment alone, may result in an
underestimated amount of deforestation carried out by the mine.
This is because of the mines, many had been operating and clearing forest
for years before they received the latest permits or amendment. The area of
forest deforested since 2014 as an adjustment year was 78.948 hectares.
No. Measurement method Measurement period Total deforestation

(hectares)
1 Radar (RADD) 2019 to date 9,808 hectares
2 Radar dan satellite 2000 to date 156,281 hectares
(GLAD+RADD)
3 Radar and satellite From the latest permit 78,948 hectares
(GLAD+RADD) amendment to date
Table 5: Three ways to measure total deforestation carried out by nickel mines in Indonesia
The table below stated that in 10 of the 12 nickel mines with the highest
deforestation rates for which data are available, half were established before
the year, which, according to MODI 2023, is the year of their most recent
amendment or permit grant. (This corresponds to the starting date indicated
by MODI 2014.)
Nickel mining Deforestation rate since the Year amended/ Minimum

concession in Indonesia latest permit amendment/last latest permit number of
(and year of last permit grant - present grant according years each mine
permits adjustment, Ranking Deforestation to MODI 2014 operations
or latest permit grant, area started dwarfed
according to MODI by MODI 2023
2023)
Vale Indonesia – Soroako 1 14,837 2010 4

Bloc (2014)
Bintang Delapan Mineral 2 2,991 2010 0
(2010) – Morowali

Aneka Tambang – North 3 2,773 2010 0
Konawe (2010)
Vale Indonesia – Pomalaa 4 2,630 2010 4
Bloc (2014)
Vale Indonesia – 5 2,602 2010 4
Bahodopi (2014)
Bukit Makmur Istindo 6 1,912 2012 0
Nikeltama (2012) – Petasia
Multi Dinar Karya (2011) – 7 1,720 Not Specified Unknown
Tojo Una Una
Wana Kencana Mineral 8 1,441 2010 6
(2016) – Halmahera
Pertambangan Bumi 9 1,343 2009 0
(2009) – South Konawe
Weda Bay Nickel (2019) – 10 1,323 2010 9
Halmahera
Lawaki Tiar Raya (2013) – 11 1,299 2013 0
North Kolaka
Ceria Nugraha Indotama 12 1,214 Unavailable Unknown
(2012) – Lapao-Pao Bloc,
Kolaka
Table 6: Of the 10 nickel mines with the highest deforestation rates in Indonesia for which data is available,
half were established (and may have cleared forest land) before the year indicated by MODI 2023 as the year
of the most recent permit grant or permit amendment.
Source: MODI 2014 and MODI 2023
Note: “Not Specified” indicates that MODI 2014 does not states concession permit start dates. tanggal mulai izin konsesi.
“Not Available” indicates that the concession is not listed in MODI 2014.
The table above shows that of the ten nickel mines with the highest
deforestation rates in Indonesia for which data are available, half already
exist (and may have cleared forest land) before the years indicated by
MODI 2023 as the year of the most recent permit grant or amendment.
However, we have decided to limit deforestation measurements based on
each nickel concession in the year in which MODI 2023 has observed the
latest amendment or permit grant, because with a sufficiently high degree of
confidence, we know that from the most recently recorded amendment or
permit grant year to date, the legal boundaries of concessions will most likely
not change.
We also know that, within the same time frame, each concessionaire has
assumed legal control over his or her land area, and that any deforestation
that occurs within that land area is likely to be carried out by the concessionaire
himself for mining purposes. In other words, even though we know that about
half of these concessions have cleared forest land long before the last period
of amendment or permit grants, we still decided -- out of extreme caution -- to
measure deforestation that began only in the year in which each concession
underwent its most recent amendment or permit grant, even though this
method most likely results in underestimating the amount of deforestation
that has occurred.
Of the twelve mining concessions above, eight of them are known to be

concessions located in Central Sulawesi, Southeast Sulawesi, and South
Sulawesi. The total deforestation carried out by only 8 nickel concessions is
33,321 hectares–for the three provinces. For this reason, Sulawesi Island is of
main concern due to its very high deforestation rate caused by nickel mining.

2) Risk of biodiversity loss and forests with high carbon stocks
The author managed to collect satellite images of some of the highest-

ranking companies causing deforestation in the Sulawesi region, namely PT
Vale, Bintang Delapan Mineral, and Aneka Tambang. All three are listed as
concession holders who endanger the sustainability of natural forests and
do business on land with a high level of biodiversity (key biodiversity area
– KBA). All three companies operate in forest areas with high carbon stock
(HCS) – where HCS has the amount of carbon under the canopy and soil. HCS
plays a very important role in maintaining carbon which if disturbed then the
carbon that was previously stored can be released into the atmosphere and
increase greenhouse temperatures. HCS includes old forests (still intact) and
also young forests that are regenerating, which if allowed to regenerate then
the function of the forest can be restored.34 Therefore, business activities
above HCS are at great risk to climate change. The table below shows three
concessions that ranked in the top three for removing tree cover – including
high-carbon tree cover and high biodiversity land cover.
A B C D
Name of nickel Loss of tree cover from % High Hectares Productive forests
mining concession permit readjustment Carbon categorized
with the highest - now Forest35 as main
deforestation rate area of
Ranking Hectares Biodiversity Hectars %
in Indonesia remained remaining
Vale Indonesia – 1 14,837 51.0 34,124 14,859 87.1

Soroako Bloc
Bintang Delapan 2 2,991 85.1 17,105 18,635 87.9
Mineral
Aneka Tambang – 3 2,773 60.6 4,838 89.6
North Konawe
Table 7: illustrates the three nickel concessions with the highest deforestation rates in Indonesia that overlap
with forests with high carbon stocks, and Key Areas of Biodiversity.
34 For further information regarding HCS, you can visit the website: https://highcarbonstock.org/
35 This section is taken from an indicative map that still needs to integrate HCS assessment. However, it can still be seen
through imaging where there are young forests with medium to low density to high density forests.

I. PT Vale (Soroako Bloc)
Figure 10: Location of PT Vale (Soroako) minerals that overlap with key biodiversity areas according to IUCN.36
Figure 11 : Location of PT Vale (Soroako) minerals that store carbon stocks. 37
II. Bintang Delapan Mineral
The map interpreted below: is located on the eastern side of Central Sulawesi,
within the Indonesian Industrial Estate Morowali (which it partially owns). The
Bintang Delapan license was issued (or last amended) in 2010. Figure 12
shows that in 2021, 85 percent of the area can be said to be High Carbon
Stock forests. This, coupled with the fact that Bintang Delapan is the second
fastest deforesting nickel mine in Indonesia, suggests that the company will
continue to increase carbon emissions from deforestation along with clearing
natural or regenerating forests.
36 BirdLife International (2023) World Database of Key Biodiversity Areas. Developed by the KBA Partnership: BirdLife Interna-
tional, International Union for the Conservation of Nature, American Bird Conservancy,
37 Citation: Lang, N., Schindler, K., & Wegner, J. D. (2021). High carbon stock mapping at large scale with optical satellite imagery
and spaceborne LIDAR. arXiv preprint arXiv:2107.07431.

Figure 12: Location of Bintang Delapan Mineral containing High Carbon Stock (HCS) Forests in 2021
The Map interpreted below: The Bintang Delapan are almost entirely located
within an area classified by the International Union for Conservation of
Nature (IUCN) as a "Major Area of Biodiversity" with an overlapping area of
17,105 hectares (see Figure)
Figure 13: Some of the Major Areas of Biodiversity cover most of the Bintang Delapan nickel mineral
concession area
III. Aneka Tambang
The map interpreted below: the picture below is the largest nickel mining
block owned by the state-owned mining company, Aneka Tambang. The
block was granted in 2010 and is located on the west coast of Southeast
Sulawesi province. The figure below shows that in 2021, more than 60 percent
of concessions were classified as High Carbon Stock forests. This, coupled
with the fact that Aneka Tambang is the nickel mine with the third fastest
deforestation rate in Indonesia, shows the potential for Aneka Tambang to
continue to increase deforestation-related carbon emissions in the future.

Figure 14: High Carbon Stock Forest inside Antam's nickel mining concession in 2021
The map interpreted below: Satellite detection of Aneka Tambang clearing

of Protected Forest between 2001 and 2021 is shown in Figure 6 below. Until
2021, 962 hectares of protected forest in the Aneka Tambang block has been
opened. As discussed in Section 2 (above), two nickel blocks owned by Aneka
Tambang were authorized to cut down Protected Forest by the DPR at the
beginning of this century (Down to Earth 2004). Whether the concessions
mapped below constitute one of the two blocks remains undetermined.
Figure 15: Antam's Logging of Protected Forest – as detected by satellite (GLAD)
3) Nickel Refining and Large Destructive Power and Marine Pollution Risk
Nickel processing facilities are often located close to nickel extraction sites, so energy-
intensive that they require reliable power generation. Existing and planned nickel extraction
and smelting projects rely on burning large amounts of coal, diesel and fuel oil, resulting
in a significant emissions footprint. In Sulawesi, for example, a boom in nickel mining and
smelting has tripled electricity demand in the region. New coal-fired power plants are being
planned to meet that demand. Thus, some of the biggest socio-ecological impacts of nickel

mining and smelting arise from the energy equipment required to maintain nickel content
and most nickel mines and processing facilities are associated with significant air, water,
and soil pollution.38
In addition, something that requires serious concern is the matter of waste disposal. There
seems to be no safe way to dispose of the highly toxic tailings produced by HPAL smelters,
at least in Eastern Indonesia. Although there are four methods to remove toxic tailings,
there are drawbacks to these four methods
Method of Disposal The process of tailings Drawbacks of this tailing disposal method
disposal through this
method Long version Short version
Deep Sea Tailings Tailings are discharged The experience of China’s Ramu It can be done
Placement (DSTP) through a drain pipe nickel production in PNG shows albeit highly
located more than that despite its location close to risky. It is
100 meters below sea deep-sea trenches, DSTP does currently legal.
level. The waste is then not guarantee clean disposal.
supposed to flow into The main problem is the “sliding”
deeper waters because of or rising of highly polluted water
the density of the water from subsurface sewers that rise
back to sea level. Currently, it has
been legalized through PP 22/2021
Article 390. Despite Indonesia’s
international commitment to reject
DSTP.
Dry stacking Tailings are placed in Dry stacking can be done in the Cannot be done
large open spaces, in dry Australian desert, but it cannot be in Indonesia.
conditions. done in equatorial regions where
rainfall rates are high.
Tailing dam Natural valleys whose In wet climates, water accumulation Can be done but
expanses are filled puts pressure on tailings dams. very risky
with tailings, which are Sulawesi and Maluku are also areas
restrained from lateral with high tectonic activity, and
movement by the dams may not be fully earthquake-
construction of dams or resistant. The collapse of the
barriers. Vale tailings dam in Brazil in 2019
caused 270 fatalities. A dam holding
Indonesia’s Weda Bay Industrial
Estate waste collapsed and allegedly
spilled into the sea on January 30,
2022 (BHRRC 2023: 15).
Backfilling The tailings are backfilled Tailings from the HPAL process It can only be
into the emptied mine pit. exceeded mined material by a done if the
ratio of 1.4 to 1.0. Therefore, mines logistics can be
whose ore goes into the HPAL plant managed, and it
will not have space to accommodate is still quite risky.
tailings coming out of the factory.
Leaching into the surrounding water
surface is also a big risk.
Table 8: HPAL waste disposal methods
38 Daniel Macmillen Voskoboynik and JD Farrugia, The Nickel Nexus: Mapping the Frontiers of Carbon Neutrality, JHU-UPF Public
Policy Center, 2022, pg.3.

As mentioned in Part C above, after the Job Creation Law was promulgated by the Government
of Indonesia through PP 22/2021 it provides permission for additional entrepreneurs to
dispose of mining refining waste into the sea (DSTP). The problem arises because DSTP is
not environmentally friendly at all. Economically, DSTP is the waste disposal process that
reduces production costs the most. But environmentally, the costs that nature must incur
to improve itself due to DSTP cannot be calculated with nickel profit figures. HPAL smelters
that are waiting for the MoEF to issue DSTP permits (with a depth of 230 - 230 m)39. Two
other HPAL smelters are under construction. The Morowali Sea has 76% of the world's coral
reefs, 37% of coral reef fish, and the world's largest mangrove forest.40
After the promulgation of PP 22/2021, PT Amman Mineral Nusa Tenggara's gold mine was
granted a DSTP permit by KHLK as of March 2022. This permit was granted to dump 58.4
million tons of tailings per year into the sea of Sumbawa, West Nusa Tenggara, Indonesia.41
Even after only six months since the permit was granted it has already severely impacted
the fishermen. Fish swimming patterns change, causing fishermen to suffer losses.42
Ecological Action and People's Emancipation (AEER) together with the Rosa Luxemburg
Institute released a study that provides a picture of the environmental hazards that
lurk DSTP. No studies can guarantee the non-upwelling of nickel hazardous waste
into shallow seas. 15% of nickel waste pollutants will be released into shallow seas;
DTSP causes hyper sedimentation; causing it to be prone to plume sharing, where
small particles of waste carried by currents move for kilometers and enter the fish
food chain, because marine life has a vertical migration lifestyle, it is very likely to kill
marine life that migrates from shallow to deep sea.43 This condition further shows the
weakness of nickel mining governance due to the absence of a protection perspective
for Indonesian marine life. Even though the east sea is named the Coral Triangle.44
b) Human Rights Impact
Indigenous peoples/local communities in extractive sites are those most vulnerable

to nickel mining activities. Conflict is common in the border areas of nickel mines and
residential areas.45 Based on the Customary Territory Registration System, there are 158
maps of customary territories with a total area of 1.6 million hectares spread across 5 (five)
provinces and 27 regencies/cities in the Sulawesi region, as listed in the table below:46
39 n Morowali, Obi, and Weda Bay. see: AEER and Rosa Luxemburg, 2020, �HYPERLINK "https://www.aeer.or.id/2023/06/23/
rangkaian-pasok-nikel-baterai-di-indonesia-dan-persoalan-sosial-ekologi/"https://www.aeer.or.id/2023/06/23/rangkaian-pa-
sok-nikel-baterai-di-indonesia-dan-persoalan-sosial-ekologi/.
40 Dirhamsyah, et. al, State of the Coral Triangle: Indonesia, Mandaluyong: Asia Development Bank, 2014.
41 Muhamad Fajar Riyandanu, “Dituding Buang Limbah Ratusan Ribu Ton ke Laut, Ini Respons Amman This article is posted on
Katadata.co.id titled "Dituding Buang Limbah Ratusan Ribu Ton ke Laut, Ini Respons Amman" , https://katadata.co.id/am-
eidyonasution/berita/636d1d289d06f/dituding-buang-limbah-ratusan-ribu-ton-ke-laut-ini-respons-amman author: Muhamad
Fajar Riyandanu Editor: Ameidyo Daud Nasution”, https://katadata.co.id/ameidyonasution/berita/636d1d289d06f/dituding-
buang-limbah-ratusan-ribu-ton-ke-laut-ini-respons-amman.
42 Fachrur Rozie, “Pembuangan Limbah ke Laut Bikin Nelayan Sumbawa Barat Susah Cari Ikan”, https://www.liputan6.com/news/
read/5163095/pembuangan-limbah-ke-laut-bikin-nelayan-sumbawa-barat-susah-cari-ikan?page=2.
43 AEER dan Rosa Luxemburg, ibid, pg. 37 - 43.
44 ADB, Coral Triangle Initiative, dan gef, “State of The Coral Triangle: Indonesia”, 2014, https://www.adb.org/sites/default/files/
publication/42409/state-coral-triangle-indonesia.pdf
45 Walhi Region Sulawesi, “Catatan Akhir Tahun 2021: Red Alert Ekspansi Nikel di Indonesia”, https://www.walhi.or.id/uploads/
blogs/Foto%20Rilis/Catatan%20Akhir%20Tahun%20Region%20Sulawesi_%20Red%20Alert%20Espansi%20Tambang%20
Nikel%20di%20Sulawesi.pdf
46 https://www.celebesta.com/2021/08/20/update-pengakuan-wilayah-adat-region-sulawesi/, accessed on September 24 2023

Region Data related to indigenous peoples
Central Sulawesi There are 66 customary territories maps with an area of 632.377 hectares
spread across North Morowali, Sigi, and Tojo Una-Una regencies.
Of the total area of customary territories recorded in the Customary

Territory Registration System, 514.548 hectares have customary forest
potential. Meanwhile, 7.797 hectares of them have been determined
through district/city law products.
South Sulawesi There are 82 customary territories maps with an area of 820.493 hectares
spread across Bulukumba, Enrekang, Luwu, North Luwu, Sinjai, and North
Toraja regencies.
Of the total area of customary territory, 613,948 hectares of potential

customary forests and 4.637 hectares have been determined through
district law products.
West Sulawesi There are 5 customary territories maps with an area of 88,449 hectares,
and 60.940 hectares of which are potential customary forests in Mamasa
Regency.
Southeast Sulawesi There are 4 customary territories maps with an area of 67.469 hectares, and
29.355 hectares of them have customary forest potential
North Sulawesi There is 1 customary territories map with an area of 3.506 hectares and 634
hectares of which are potential customary forests
Table 9: Map of Customary Territories and Forest Area Based on the Customary Territory Registration System
There are at least seven human rights that are often violated by nickel mining companies,
including: rights to land and resources (including the right to property), the right to a clean
environment, the right to life, the right to culture, forced displacement, consultation and
participation in decision making, and discrimination against women.
The impact of extractive activities that will affect the human rights of indigenous peoples
and local communities can be seen in the figure below.47
Figure 16 : The impact of extractive activities that affect the human rights
47 WALHI Sulawesi Selatan, Loeha Raya, Lumbung Merica Nusantara: Etnografi Perkebunan dan Studi Valuasi Ekonomi Kebun
Merica di Tanamalia Luwu Timur, 2023, pg. 8-14

1) South Sulawesi in the Grip of PT Vale
In South Sulawesi, the existence of PT. Vale has affected the rights of communities
around concession areas. In addition to potentially threatening the existence of
rainforests, the company's operations also have the potential to threaten the
survival of thousands of farmers in Loeha Raya. Further implications, mining will
have a devastating impact on the economic, social, and cultural rights of pepper
farming communities. In every potential abuse of rights due to women's corporate
operations, both individuals and collectives, including women farmers will feel a
different and distinctive impact because of their womanhood.48
Walhi South Sulawesi identified the human rights violations of pepper farmers in
Loeha Raya as follows:49
Potentially-infringed rights Elaboration of the aforementioned rights
Right to Land The total area of land used as a pepper plantation

by the community is around 4,239.8 hectares with
the calculation that for each hectare of land, 1,850 to
2,000 pepper trees have been planted.
Right to work Farmers are people who have a special dependence

and attachment to land. Losing land means farmers
will lose their jobs and thus their ability to; achieve a
decent standard of living; have a safe, peaceful and
dignified place to live and; develop an agricultural-
based culture.
Right to Decent Living The 4,239.8 hectare pepper plantation area

owned by the Loeha Raya community can produce
approximately 24,544 tons of pepper each year.
Pepper yield is estimated at 1.4 trillion.
Based on the calculation results, the Total Economic

Value (TEV) of the Loeha Raya Pepper Plantation in
the Lumereo-Lengkona Mountains, Tanamalia Block,
reached IDR. 10,793,379,462,000 or 10.7 trillion
rupiah
Right of the farm workers Loss of employment and right to a decent income
Table 10: Identifying the Impact of Violations of Farmers' Rights in Loeha Raya, South Sulawesi.
Further impacts caused by PT. Vale's increasingly expansive operations are that
female farmers have the potential to lose their land, which will result in the
potential loss of a decent income, both as farmers and as farm workers. loss of
income will consequently affect the right to adequate education for children, the
right to children and families, and the right to food. This situation will also impact
the farmer family’s resilience to face natural disasters due to climate change.
Losing access to land will ultimately impact the enjoyment of other rights because
48 WALHI Sulawesi Selatan, op.cit., pg.36-38

49 This table was analysed from the Walhi South Sulawesi publication “Lumbung Merica Nusantara Di Tengah Perluasan Pertam-
bangan Nikel: Etnografi Perkebunan & Valuasi Ekonomi Kawasan Tanamalia, Luwu Timur, Sulawesi Selatan”, 2023, https://wal-
hisulsel.or.id/4133-laporan-hasil-riset-lumbung-merica-nusantara-di-tengah-perluasan-pertambangan-nikel-etnografi-perke-
bunan-valuasi-ekonomi-kawasan-tanamalia-luwu-timur-sulawesi-selatan/

women farmers end up trapped in debt thus reducing their income significantly.
This situation ultimately has the potential to lead to a trend in increasing rates of
domestic violence, including violence against children.50
Apart from that, women farmers are also significantly impacted by the lack of access
to water because they often must fetch water from water sources that are located
far away, thus adding to the double burden on women farmers. The presence of
officers on plantations also increases the risk of rights violation; officers’ presence
is more than likely to induce feelings of intimidation, fear, anxiety and worry
when they work on the plantations. female farmers are also at risk of being the
target of violence, especially those who champion land rights through protests
due to the repressive actions of the authorities.51 Thus, the expansion of PT Vale
will have the potential to perpetuate the feminization of poverty because female
farmers' access to land is affected by mining expansion. This situation will have
implications for the pepper supply chain which involves female farmer workers,
female collectors, female traders and women's groups who depend directly or
indirectly on the pepper supply chain.52
The burden of women is reflected on Hasniah's family; her house is directly across
the Nickel Ore stockpile, and there is only about 15 meters distance between her
door and the operation. The dense activity of trucks carrying nickel ore from the
jetty to the stockpile pollutes the air of the surrounding community. This, coupled
with factory activities that produce dust, smoke and pungent odors have become
Hasniah's daily diet.
Figure 17 and 18: Appearance of dust in the homes of PT Vale nickel mining victims
With dust filling her house, Hasniah now suffers from disease all over her body.
According to the results of the doctor's examination, Hasniah suffers from
cholesterol, gout, high blood pressure, a dry cough with phlegm and shortness
of breath. Apart from her, her siblings and grandchildren were also victims of air
pollution.
50 WALHI Sulawesi Selatan, op.cit, p. 6

51 Ibid, p. 6
52 Ibid, pp. 36-38

The mining exploration plan of PT. Vale also does not provide farmers who own
the land proper information, thus preventing them from fully and meaningfully
participating in the use of their plantation land.53 In fact, this situation shows that
protection of farmers' rights is inadequate in the management of agriculture and
natural resources in Indonesia.
2) PT. Gunbuster Nickel Industry impoverishes the people of Central Sulawesi
North Morowali Regency, Central Sulawesi, is the exploitation area of PT. Gunbuster
Nickel Industry (PT. GNI). It is not an exaggerated claim to say that the business
effectively impoverishes and starves the population by depriving the civilians of
their sources of livelihood. WALHI Central Sulawesi and the Women and Children
Care Community (KPPA) has identified potential rights that would be harmed due
to the impact of the company’s extractive operations, which can be seen at the
table below;54
Right to work Utilize the river to catch shellfish and shrimp

Right to food Obtaining Mussels and shrimp for family
consumption
Right to Decent Livelihood The catch is sold to collectors and processed into
various derivative products
On average, each fisherman has an monthly income

of 3 million which is used to meet their family’s
needs
Right to cultural identity River utilization has been carried out based
on traditions passed down from generation to
generation
Catching is done by netting using traditional tools

when the river water level is falling and diving to the
bottom of the river
Table 11: Identification of Human Rights Impacts Due to Extractive Activities in North Morowali Regency
3) Human Rights Impact of Nickel Mining in Southeast Sulawesi
Extractive activities in mining also impacted Southeast Sulawesi Province. Nickel

mining in the Pomalaa Block has a negative impact on farmers and Community
Management Areas (WKR) as their source of livelihood. Nickel mining activities are
only hundreds of meters away from settlements and rice fields, making people live
in anxiety. The rights affected by nickel extractive activities from the identification
results of WALHI Southeast Sulawesi can be seen in the following table;55
53 Ibid, p. 20
54 Ibid.
55 Ibid.

Right to work Rice fields were damaged due to mud floods and pollution
The coastal ecosystem for seaweed cultivation is contaminated with

nickel material
Right to clean water The river is polluted by waste
Right to decent livelihood Rice productivity has decreased, previously one harvest produced
7-10 tons of grain, due to nickel mining activities the community
could only harvest 5-6 tons
The productivity and quality of other grasses decreases
This decline will have an impact on farmers' income

Right to health The skin experiences irritants and other diseases
Contaminated agricultural products pose a risk to health
Table 12: Identification of Other Impacts Due to Extractive Activities in the Pomalaa Block
Furthermore, WALHI Southeast Sulawesi identification results show that there are
other impacts caused by extractive activities as shown in the table below.56
Consumer protection rights Consumers risk their health due to consumption of contaminated
agricultural products
Children’s rights to play The coastline, which is usually a place for children to play, is polluted
due to mud sedimentation
Right to mobility Mud floods enter the highway, causing traffic jams
Table 13: Identification of impacts caused by extractive activities in the Pomalaa Block
E. FRAGILE MINING GOVERNANCE POLICIES LEADS TO NICKEL NEO-

EXTRACTIVISM PRACTICES IN SULAWESI
Increasing demand for transition minerals poses risks for various stakeholders, which
actually hinders the sector's contribution to sustainable development and hinders efforts
to combat climate change. Weak governance and corruption present major challenges
for Indonesia, which is blessed with abundant natural resources. Indonesia faces a risk
of increasing contestation between human rights and environmental protection, and the
needs of the global community.57
Paul Collier, Development economist, developed a formula for the

relationship between poverty, resources and governance:58
nature + technology – regulation = looting
nature + technology + regulation = prosperity
56 Ibid.
57 Michelle Michot Foss and Jacob Koelsch, Need Nickel? How Electrifying Transport And Chinese Investment Are Playing Out In
The Indonesian Archipelago, Rice University’s Baker Institute for Public Policy, 2022.
58 Penelope Simons and Audrey Macklin, , The Governance Gap: Extractive Industries, Human Rights, and The Home State

As a follow-up to the revision of the Mining and Coal Law, President Joko Widodo issued
Presidential Decree Number 3 of 2023 concerning Licensing or Agreements in the Mining
Sector in Forest Areas, which amends Presidential Decree 4 of 2004 issued by Megawati
Soekarno Putri. This Presidential Decree essentially provides 16 mining companies—7 of
which are nickel mines with a concession area of 361,346 hectares—with Work Contract
Agreements, Mining Business Permits (IUP), and Mining Authorizations. This Beschikking
then provides many conveniences for nickel miners to: 1) not be subjected to the 10% quota
in production and protected forests; 2) be automatically granted 7 nickel mines Borrow-to-
Use Forest Area Permits and order the Ministry of the Environment to immediately issue
IPPKH; 3) obtain convenience as subsidiaries of PT Aneka Tambang to be given approval
and orders to release forest areas in East Halmahera; 4) expand the provision of special
forest areas from the previous 356,554 to 361,346 ha.
Advantage, (Abingdon: Routledge, 2014), p. 272

No. Government Permit Date of signing Type of permit Company name Minerals Activity Location Width of the
permitted Province city licensed area
(ha)
1. 82/EK/KEP/4/1967 7 April 1967 KK G-1 Freeport Copper, Gold, Production Papua Mimika 10.000
7 April 1967 Indonesia Comp. dmp
B-392/Pres/12/1991 30 December 1991 KK G-V Freeport Copper, Gold, Exploration Papua Mimika, Paniai, Jaya 202.950
26 December 1991 Indonesia Comp. dmp Wijaya, Puncak Jaya
2 B-121/Pres/9 /71 4 October 1971 KK G-II Karimun Granit Granite Production Riau islands Karimun 2.761
22 September 1971
3 B-745/Pres/12/1995 29 December 15 January 1996 KK G-II INCO Tbk. Nickel Production South Sulawesi, Luwu Utara, Kolaka, 218.528
1995 Central Sulawesi, Kendari, Morowali
Southeast
Sulawesi
4. 097B/Ji.292/U/199O 5 October 1990 5 October 1990 PKP2B Indominco Batubara Production East Kalimantan Kutai Timur, Kota 25.121
Neo-extractivism in Indonesia’s Nickel Epicenter

G-I Mandiri Bontang
5. No. 30 September 2022 IUP Aneka Tambang Nickel Production North Maluku Halmahera Timur 3.648
1103/1/IUP/PMDN/2022 Tbk
No. 30 Sep 2022 IUP Sumber Daya Nickel Production North Maluku Halmahera timur 14.421
1104/1/IUP/PMDN/ 2022 Arindo
No. 30 Sep 2022 IUP Nusa Karya Nickel Production North Maluku Halmahera timur 20.763
1103/1/IUP/PMDN/ 2022 Arindo
6. B-43/Pres/11/1986 2 Des 1986 KK G-IV Natarang Mining Gold dmp Construction Lampung Lampung Selatan, 12.790
6 November 1986 Tanggamus, Lampung
Barat
7. B.143/Pres/3/1997 17 Maret 1997 28 April 1997 KK G-VI Nusa Halmahera Gold dmp Production North Maluku Hal,ahera Utara, 29.622
Minerals Construction Halmahera Barat
Exploration
8. B-53/Pres/1/ 1988 19 January 1998 19 Februari 1998 KK G-VII Pelsart Tambang Gold dmp Exploration South Kalimantan Kotabaru, Banjar, 201.000
Kencana Tanah Laut
9. 850/A.I/1997 20 November 1997 PKP2B G-III Interex Sacra Batubara feasibility study East Kalimantan Pasir, Tabalong 15.650
20 November 1997 Raya and South
Kalimantan
10. B-53/Pres/1/1988 19 January 1998 KK G-VII Weda Bay Nickel Nickel Exploration North Maluku Halmahera Tengah 76.280
19 January 1998 (detail)
11 B-53/Pres/1/1988 19 January 1998 KK G-VII Gag Nickel Nickel Exploration Papua Sorong 13.136
12 B-53/Pres/1/1988 19 January 1998 KK G-VII Sorikmas Mining Gold dmp Exploration North Sumatra Mandailing Natal 66.200
13. 1170/20.01/UPG/1999 7 Sep 1999 KP Aneka Tambang Nickel Exploration Southeast Kendari 14.570
7 September 1999 Tbk (B) (detail) Sulawesi
Table 14: Nickel concessions that are given the privilege of not enforcing Law Number 41 of 1999 concerning Forestry are contained in the Attachment to Presidential Decree No. 3
28
of 2023 concerning Amendments to Presidential Decree Number 41 of 2004 concerning Licensing or Agreements in the Mining Sector in Forest Areas.
Indonesian mining law is then regulated in Law Number 4 of 2009 concerning Mineral
and Coal Mining. The rules marked the start of a new phase of state intervention. The law
introduced a new licensing system and instructed companies to use domestic mining services
rather than foreign mining services. In addition, the aim of this law is to shift Indonesian
mineral production away from mere extraction activities by attracting investment into the
metal manufacturing sector. This legislative product then provides more opportunities for
Indonesia's economic elite to own mining concessions.59
Furthermore, regulations were established through Government Regulation Number 23

of 2010, which requires mining companies to process and purify the minerals they mine
as added value to their products before exporting. This regulation requires companies
holding work contracts or mining permits to be given a five-year grace period to prepare
investments in processing facilities. This major shift in policy led to major changes in the
movement of foreign investors in the domestic market.60
The government have also drafted various regulations to accelerate the use of electric
vehicles:61
Regulation Title Substance
Presidential Decree Number 55 of 2019 concerning Regulates the requirement to use domestic
Acceleration of the Battery-Based Electric Motor component levels (TKDN).
Vehicle Program for Road Transportation
PP Number 73 of 2019, which was amended by PP One of the important points contained in the PP is
No. 74/2021 the 0 percent Luxury Goods Sales Tax (PPnBM) on
Battery-Based Electric Motorized Vehicles.
Presidential Instruction Number 7 of 2022 Use of battery-based electric motorized vehicles
as operational service vehicles and/or individual
service vehicles for central and regional government
agencies. It contains directions for accelerating
the development of electric vehicles, including for
ministers and regional heads.
Table 15: Regulation concerning the acceleration to electric vehicles.
The creation of a policy ecosystem to accelerate the electric motorized vehicle program
further strengthens foreign dominance, especially the Tsingshan Group from China which
currently operates the largest nickel syndicate in the world, including nickel ore mining,
nickel refining, refining, ferronickel production, raw steel production, logistics, port
management, trade, and transportation. This syndicate of nickel companies—which is the
most important element of the electric vehicle supply chain—is managed by Tsingshan.
Tsingshan's vertically integrated operations illustrate how a company's historical presence
in a country with high regulatory uncertainty can paradoxically provide a starting point
for relatively stable downstream expansion. A broadly integrated supply chain not only
equips Tsingshan with the flexibility necessary to manage uncertainty, but also gives them
significant leverage in dealing with governments looking to expand end-to-end development
in the same way.62
59 Angela Tritto, How Indonesia Used Chinese Industrial Investments to Turn Nickel into the New Gold, Carnegie Endowment for
International Peace, 2023, p. 5
60 Ibid, p. 6
61 https://www.kompas.id/baca/ekonomi/2022/10/15/regulasi-percepatan-penggunaan-kendaraan-listrik-sudahkah-efektif,
accessed on 24 September 2023
62 In 2017, the company acquired Wenzhou-based Ruipu Energy to handle production of advanced lithium-ion battery technol-
ogy. In September 2018, Tsingshan joined GEM, Brunp Recycling, and Hanwa in signing another joint venture agreement for
the company. construction of a factory to produce nickel sulfate crystals from nickel laterite in Indonesia. Later, the group

Efforts to encourage the downstream mining sector were then further strengthened
through Law Number 11 of 2020 concerning Job Creation. This law is assumed to be a
modality for restoring the economy, especially in the mining sector. However, it must be
acknowledged that the environmental implications of the law regarding the simplification of
business licensing and land acquisition have the potential to cause norm conflicts because
they intersect with forestry and environmental sector legislation. The fundamental changes
mandated by this law have undermined the standard environmental protection norms
contained in Law no. 41 of 1999 concerning Forestry and Law no. 32 of 2009 concerning
Environmental Protection and Management.63 One of the provisions in this legislative
product—Articles 110 A and 110 B—actually gives companies that have exploited these
natural resources time to complete their permits until November 2 2023.64
If you look at the existing policy ecosystem, there is the potential for policies that have been
set by the Indonesian Government to fail to manage governance risks, including mining
governance. The diversity of mineral governance risks at the national and local government
levels that need to be responded to through the creation of a strong policy ecosystem, can
be seen in the table below:65
Governance Risk at Levels Description
Local government More exploration and mining for transition minerals

could encroach on conservation areas and the
Governance risks for local stakeholders territories of indigenous peoples and land-connected
areas.
Pressure to approve mining projects can limit time
for community consultation and impact assessments
Mining methods that use a lot of water can cause
water scarcity and can have negative impacts on
communities, especially women and girls.
Rising commodity prices can trigger an increase
in unregulated or illegal artisanal and small-scale
mining.
Local government capacity constraints can hinder
effective planning for achieving sustainable
development
signed a joint venture with Guangzhou Automotive Corporation Group and Guangxin Holding Group to invest in a new ver-
tically integrated company for battery production. Even further downstream, Tsingshan signed a 5.5 billion yuan (US$850.73
million) deal with Xuzhou Construction Machinery Group Co. Ltd. in January 2021 to invest in new energy vehicle projects.
Overall, Tsingshan estimates nickel equivalent production of 600,000 tons in 2021, 850,000 tons in 2022, and 1.1 million tons
in 2023. See, Angela Tritto, loc.cit
63 The Constitutional Court decided that the Job Creation Law was conditionally unconstitutional, the government issued a
Government Regulation in Lieu of Law or Perppu Number 2 of 2022 concerning Job Creation which is substantially the same
as the Job Creation Law, the substance of the regulated norms still ignores environmental aspects.
64 https://www.kompas.id/baca/humaniora/2023/01/28/sisi-lingkungan-hidup-tetap-diabaikan-dalam-perppu-cipta-kerja, ac-
cessed on 18 September 2023
65 Kathryn Sturman, et,al., op.cit., p. 12

National Robust public geological data has not been
developed which could hinder competition in the
Governance risks for the country development of transition minerals.
Regulation may lag behind the development of
transition mineral markets, resulting in governance
gaps.
Accelerated contracts and permits can increase the
risk of corruption.
The substance of local policies and state participation
can trigger special treatment and corruption
Unclear tax arrangements throughout the mineral
value chain that are in transition can result in a loss
of government revenue.
Price volatility can result in unpredictable revenue
streams and macroeconomic planning challenges.
Export-oriented mining policies may fail to realize
the potential benefits and added value of minerals.
Rushed procurement of low-carbon energy and
transport infrastructure could open new channels
for corruption.
Table 16: Risk of Fragile Mining Governance
Constraints on climate change and land use have been pushed back for decades as extractive
industries have destroyed forests and fossil fuel emissions that cause global warming have
increased significantly since pre-industrial times. Biosphere integrity warns that the pillars
of the biosphere are being damaged by humans consuming too much biomass, destroying
too much habitat, and deforesting too much land.66 Six of the nine current planetary
boundaries that have been breached can be seen in the diagram below. The length of the
slice represents the current state.67
Figure 19: Violation of Six of the Nine Planetary Boundaries
66 Julia Conley, Six Out of Nine Planetary Boundaries Already Crossed, Study Warns, https://www.commondreams.org/news/
six-planetary-boundaries-crossed, accessed on 24 september 2024
67 Six of the nine limits have been breached. In addition, ocean acidification is approaching its planetary limits. The green zone
is the safe operating space (below the limit). Yellow to red represent increasing risk zones. Purple indicates high-risk zones
where interglacial earth system conditions are violated. See, Katherine Richardson, op.cit., p. 4

The planetary boundaries framework should inspire governance and policy strategies at
all levels68 to implement human rights due diligence and environmental due diligence for
all companies investing in Indonesia. The implementation of the obligation to carry out
human rights due diligence and environmental due diligence is an expression of the right to
regulate to protect human rights affected by corporate operations, products and services,
including extractive industries.
Companies must be required to carry out environmental due diligence to identify, prevent
and calculate how they deal with adverse impacts on the environment, including climate
change. This is in response to the fact that climate change and human rights are essentially
interrelated because climate change threatens the effective enjoyment of various
human rights including the rights to life, water and sanitation, food, health, housing, self-
determination, culture and development.
Reflecting on the various problems described above, it is also necessary to refer to how
states and businesses should act based on what are called the United Guiding Principles
on Business and Human Rights (UNGPs) issued by the UN Human Rights Council in 2011.69
This international instrument is a new breakthrough in placing corporations as actors who
bear responsibility for human rights. There are three main pillars regulated in the UNGPs,
namely:70
1. State obligations to protect human rights;

2. Corporate responsibility to respect human rights;
3. Expanding access to recovery for victims of human rights violations.
The first pillar, namely the state's obligation to protect human rights, emphasizes the
importance of steps that States must take in terms of effective policies, laws and regulations
to prevent, investigate, punish and redress human rights violations. Other important
operational indicators according to the UN Guiding Principles of States' duties to protect
human rights, include the need to build policy coherence, both horizontally and vertically.
The second pillar is the Company's responsibility to respect human rights. In carrying out
their responsibilities, companies must know and be able to demonstrate that they respect
human rights by, namely (1) making a policy commitment that supports the responsibility to
respect human rights; (2) carrying out human rights due diligence continuously to identify,
prevent, mitigate and quantify human rights impacts; (3) implementing processes that
enable remediation for impacts that reduce human rights for their business activities and
contributions. Furthermore, the third pillar of the UN Guiding Principles emphasizes the
need for victims to have greater access to effective remedies, both judicial and non-judicial,
including state-based and non-state mechanisms.71
68 Ibid
69 Indonesia supports UN Resolution No.17/4 in June 2011. There are 31 principles formulated by the UNGPs related to these
three pillars, consisting of 10 principles of obligations for the government, 1 for companies, and 7 for access to recovery.
70 The Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’
Framework, UN Doc. A/HRC/17/31, 21 March 2011.
71 Alex Newton, The Business of Human Rights: Best Practice and the UN Guiding Principles, (Oxon: Routledge, 2019), p. 7

Despite the many achievements and records regarding the use of the content of UNGPs
principles, its implementation in Indonesia is still weak. Even the regulations that have
emerged recently are contrary to the spirit of the UNGPs.72 One part that can be encouraged
is the implementation of the second pillar of the UNGPs, which calls for the obligation of
business groups to respect human rights. Business actors have a responsibility to respect
human rights and, as far as possible, prevent negative consequences from their business
activities on respect for human rights. In the mining context, there are several things that
must be done, for example business actors must open themselves up and consider human
rights in their business process policies; Business actors must also look at UNGPs beyond
obligations, this means that if the laws or regulations in the country where they operate
are lower than the regulations or standards that the company/business has had, then
the company needs to continue to implement the highest standards that it has. Finally,
as a business entity, in its business governance and its relationship with the supply chain,
companies operating in Indonesia need to consider the international commitments outlined
in IRMA, which has provided high standards regarding mining. This is important, because
if we refer to the Responsible Mining Foundation (RMI) data, most mining companies have
not been able to demonstrate their effectiveness in overcoming economic, environmental,
social and governance problems (RMI 2020).73
F. STAKEHOLDERS IDENTIFICATION
Based on the various facts and data presented above, we see that there are at least four key
actors who have shared responsibility for improving mining governance in Indonesia. They
are: the Indonesian government, the Indonesian House of Representatives, independent
state institutions, business actors and the international world.
a) The government
The government bears the great responsibility to change the extractivist mindset
in Indonesia. The government must stop aiming for economic improvement by
destroying the environment and threatening human rights. If the Indonesian
government truly feels it has an obligation to stop the rate of global warming as it
promised in the Paris Agreement, then stopping all activities with environmental
damage is the right way to go. This includes designing strong mining governance,
both at the national and regional levels by adopting an energy transition strategy
that is fair, sustainable and based on human rights.
72 On September 26 2023, Presidential Regulation of the Republic of Indonesia Number 60 of 2023 concerning Business Strat-
egy and Human Rights (Stranas B&HAM) was issued. Regarding Business and Human Rights policies in Indonesia. Previously,
Komnas HAM had established a National Action Plan for Business and Human Rights through Komnas HAM Regulation No.
1 of 2017. Then, several actions related to business and human rights were included in the 2015-2019 RANHAM through
Presidential Decree no. 33 of 2018.
73 The policies and practices of 38 large-scale mining companies in the world, including Indonesia, can be measured through
corporate responses to local workers, sustainability of community life, worker complaints, community complaints, air quality,
water quality, waste management and emergency preparedness. See, Responsible Mining Foundation, RMI Report 2020:
Summary, (Nyon: Responsible Mining Foundation,2020), p. 3

In developing mining governance, The government—together with the House
of Representatives (DPR RI)—must include plans to identify and mitigate human
rights risks, environmental risks and corruption at all stages of the global
nickel value chain, through instruments in the areas of licensing and contracts,
procurement, due diligence human and environmental rights, and other policies
needed to regulate investment in the nickel extractive sector in Sulawesi. In other
words, the government must exercise the authority to regulate investment while
still providing protection for investors' rights, but at the same time the need to
respect the rights of farmers, local communities and environmental protection
remains articulated in investment instruments.
b) The people’s parliament
The House of Representatives must again monitor all mining dynamics in

Indonesia. This includes preparing a nickel mining road map. The DPR must
play an active role in improving mining governance in Indonesia. One of them is
using the authority it has: making laws that reduce the pace of the climate crisis,
monitoring the government, stopping the use of the state budget to inject funds
– directly and indirectly – into nickel mining.
c) National independent agencies
The Independent bodies should be responsible in carrying out regular monitoring

of the nickel mining situation and issue recommendations that can restore
environmental damage and human rights violations that have occurred in nickel
industrial areas.
d) Business actors (investors and companies)
Investors are to involve affected communities, especially farmers, women, and

other vulnerable groups to build trust and social license for transitional mineral
projects. This involvement should start early and be carried out continuously
throughout the investment cycle by creating space, access, and mechanisms
for participation and consultation with the affected parties. Simultaneously,
due to the intersection between extractive activities in Sulawesi with indigenous
communities, the government must strengthen investors' commitment to
implementing Free Prior Informed Consent (FPIC) procedures.
Business actors—especially international ones—must understand that

manufacturing environmental protection in their country by destroying other
countries does not help improve the current climate crisis.

e) Global actors
Based on the Paris Agreement, global actors have a responsibility to

encourage southern countries to achieve development that does not damage
the environment.
G. CONCLUSIONS AND POLICY RECOMMENDATIONS
The new developmentalism paradigm adopted by President Joko Widodo's government

appears to be clearly articulated through a development strategy with a neo-extractivist
approach which leads to a lot of ecological damage and human rights violations. These
extractive activities continue to accelerate the rate of rainforest deforestation in Sulawesi
which threatens biodiversity. Deforestation that occurs in Sulawesi will have implications for
strengthening environmental polycrisis, which is characterized by climate change, increasing
pollution and air pollution and loss of biodiversity. Further implications of environmental
polycrisis are social crises which include increasing economic inequality, poverty and social
conflict due to loss of access to land, work and decent income. Increasingly expansive nickel
investment deepens risks and exacerbates the vulnerability of farmers and communities,
especially women living around locations affected by nickel extractive activities.
The impact on human rights and the environment continues to worsen due to fragile
mining governance. The fragility of mining governance can be seen from the dominance
of corporations that have taken over the mining governance space. This situation will have
implications for discrimination and systematic violations of farmers' rights which tend to
continue to increase along with the confiscation of resources, especially land rights. Often
the setting of development agendas in the energy and mineral resources sector, including
the use of nickel as an energy transition mineral, has had a negative impact on the rights
and environment of farmers.
Meanwhile, the economic benefits of this development are only enjoyed by other parties,
giving rise to environmental injustice and energy injustice. The government has an obligation
to protect the rights of farmers affected by corporate actions that have the potential to
harm farmers' rights, especially access to land affected by extractive activities. Extractive
companies are also responsible for increasing incidents of human rights violations and
environmental degradation. At this point, the government must provide space for the
reinterpretation of natural resource governance through an approach based on human
rights and environmental protection.

Based on the matters described above, the Indonesian Government and the DPR RI as
policy makers must:
1. Aligning the paradigm of "state control" with "as much as possible for the
prosperity of the people" as stated in Article 33 paragraph (3) of the 1945
Constitution of the Republic of Indonesia. So that the prosperity of the people
becomes a consideration for the state. This is useful for ensuring that no individual
is impoverished as a result of state control of Indonesia's natural resources.
2. Develop a blueprint for nickel mining governance that does not damage the
environment and threaten human life;
3. Issue a moratorium on nickel mining permits until a blueprint for responsible

nickel mining governance is issued;
4. Revise the Mining Law, Job Creation Law, and UUPA to restore provisions that
strengthen environmental protection and human rights in mining governance;
5. Revoke the exception provisions for forestry provisions as stated in Presidential

Decree No. 3 of 2023 concerning Amendments to Presidential Decree No. 41 of
2004 concerning Licensing or Agreements in the Mining Sector in Forest Areas.
6. Request the Government to revoke the DSTP provisions in PP 22 of 2021 solely

to protect Indonesia's underwater biodiversity;
7. Opens the latest list of all nickel mines that have received Borrow-Use Permits.
The Job Creation Law through the provisions of Articles 110A and 110B opens up
the possibility for miners working without permits in forest areas to settle fines
before November 2023. As a form of transparency both in the process and in
the interest of community participation, ideally the Ministry of Environment and
Forestry and ESDM will jointly disclose data on fines and payments. granting a
Borrow-to-Use Forest Area Permit (IPPKH) before November 2023.

Policy Paper
Civil Society Critical Notes on Nickel Mining Policy and Governance
October 2023
Drafting Team:
Satya Bumi
Walhi Sulawesi Selatan
Walhi Sulawesi Tengah
Walhi Sulawesi Tenggara

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SASA cover - section A

Neo-extractivism in Indonesia’s Nickel Epicenter:

Civil Society Critical Notes on Nickel Mining Policy and Governance

Walhi Sulawesi Selatan

Walhi Sulawesi Tengah

Walhi Sulawesi Tenggara

Siti Rochmah Aga Desyana

Illustrations and cover art: Fitrah Yusri & Eghi Irfansyah

Design and Layout: Eghi Irfansyah & Amri Yusaq

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Emission EV Battery on All Other Total

Zero Emissions 1,330 450 80 9.4 1,869.4 192 40 2,101.4

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B. PURPOSE AND METHODS IN PREPARING THE POLICY PAPER

Figure 2: Purpose of Preparing Policy Paper

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C. REGULATORY CAPTURE AND THE CORRUPTION OF NICKEL MINING

Simultaneously in several states, developments in a number of legal fields—particularly

a) Law Number 3 of 2020 concerning Minerals and Coal (UU Minerba)

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b) Law Number 6 of 2023 concerning Job Creation (UUCK)

The Job Creation Law—hereinafter referred to as UUCK—presented several

UUCK also issued many problematic derivative regulations. In relation to mining,

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Regulatory capture pillar Mechanisms conducted Reflection in Indonesian context

10 Elizabeth Dávid-Barrett, Op. cit, hlm. 230

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With various forms of weakening through regulatory capture in Indonesia, looking

Figure 4 : Graphic showing IRMA critical requirements

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D. ECOLOGICAL DAMAGE AND HUMAN RIGHTS VIOLATIONS DUE TO NICKEL

a) Deforestation and environmental damage

Increasing nickel production to respond to global demand and actualize

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Figure 5: Annual nickel deforestation 2000-2022 (Auriga Nusantara)

This drastic increase in deforestation is assumed due to that year the

Figure 6: Number of IUPs issued by the Indonesian Government per year

(Source: Geoportal ESDM 2021)

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In Central Sulawesi, there are approximately 196 mining companies that

Figure 7: Comparison of Landscape Changes Due to Deforestation

Description in Figure 5: The image above shows the results of remote

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In addition, in Tompira Village, North Morowali, there is a Nickel and Sand

In Southeast Sulawesi, deforestation caused by extractive activities is seen

Spatial Dimentions Temporal Dimentions

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Changes in Pomalaa's landscape have expanded over time until now,

Most of the 14 companies operate in areas fed by rivers. The distribution of

Figure 9: Map of Southeast Sulawesi Provincial Spatial Plan 2023.

In South Sulawesi, deforestation in this region began with the issuance of

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Efforts to protect the landscape of rainforest ecosystems in Southeast

Province Concession area (until 2021) Deforestation (hectares)

Central Sulawesi 92.604 (37 IUP) 240.000 hectares (2011 - 2020)33