February 9, 2024-Workers from the Indonesia Morowali Industrial Park (IMIP) gather for a declaration and discussion event to inaugurate the establishment of the Mining and Energy Industry Labor Union (Serikat Buruh Industri Pertambangan dan Energy, or SBIPE) in Morowali, Central Sulawesi, Thursday (8/9/2023). The union was established as a platform for nickel industry workers to fight for their rights for better lives in the face of poor working conditions, including low wages that force workers to work overtime, arbitrary transfers, environmental destruction, to weak work safety standards and continuous accidents – including the recent nickel smelter furnace explosion at PT Indonesia Tshinghan Stainless Steel (ITSS) that left 21 people dead and 38 injured on December 24 last year.

“The government is touting nickel downstreaming as a solution to the economy and all problems in Indonesia. However, few people see the situation on the ground. Workers are in a weak position. Small wages force us to continue doing overtime with minimal rest, which leads to fatigue and accidents. This includes the explosion at the PT ITSS furnace late last year, which also happened because workers had been doing repairs in the field for 24 hours,” said Hendrik Foord Jebbs, Chairman of SBIPE.

“We established this union to urge the industry to uphold workers’ rights. In addition to wages and working hours, workers are often left hanging. Meanwhile, companies arbitrarily carry out outsourcing practices and recruit workers from abroad with unequal wages. This haphazard downstream practice, which is carried out without humanizing workers, we will continue to fight until the end,” Hendrik concludes.

In Trend Asia’s research, during 2015-2022 work accidents claimed 53 lives and 76 injuries at 15 nickel smelter sites in Sulawesi and Maluku. In the same period, at IMIP alone there have been 18 incidents of accidents that have claimed 15 lives and 41 injuries. The high number of accidents is seen as a result of weak supervision and corruption at IMIP.

“The practice of downstreaming in Indonesia is a policy of massive exploitation of natural and human resources that can be seen from environmental damage around the nickel industry center, discriminatory labor practices between foreign workers and local workers, and massive labor market flexibility in a sector that relies entirely on foreign capital,” said Catur Widi from Rasamala Hijau.

In the discussion, the speakers touched on the many regulations that have been cut to facilitate investment in downstream industries. This has led to reckless industrial practices that damage the environment, oppress workers, and are riddled with corruption. The establishment of the union is expected to put pressure on bad industrial practices in IMIP, especially in protecting workers’ rights.

Laode M. Syarif, Executive Director of Kemitraan and former deputy chairman of the Corruption Eradication Commission (KPK), said that the government’s downstream appetite has bypassed various human, social, and environmental safety mechanisms. The KPK Bill was finalized in 2 weeks, the Revision of the Minerba Law in 4 weeks, and also the Ciptaker Law; all are regulations passed quickly by the government that are heavily influenced by business interests. 

“It is no wonder that environmental damage and accidents occur repeatedly. It is proof that supervision is also weak and highly likely to be corrupted. Nickel is being pushed for a clean energy transition with batteries, but it is useless if the practice is environmentally damaging and inhumane to workers,” Laode said. 

“There are many reasons that make the mining sector vulnerable to corruption and poor management: messy licensing management, regulations co-opted by elite interests, lack of transparency, and weak law enforcement,” said Gita Ayu Atikah from Transparency International.

“The 2020 Mining Law must be revised. In addition, grievance mechanisms and transparency towards the industry must be enforced so that they are not arbitrary. Hopefully, the establishment of this union can help workers to push for accountable governance of the industry,” he added.

“Downstream efforts have actually been running for 10 years, but what is the impact? In many cases, deindustrialization has occurred. Downstreaming in practice only benefits a handful of elites in Jakarta. To make a profit, entrepreneurs cut environmental, labor, and security costs. In the end, it is the workers and local communities around the industrial area who have to bear the burden in order for businessmen and politicians in Jakarta to become wealthier. We really have to evaluate this downstream promotion,” concluded Ahmad Ashov Birry from Trend Asia.

The replay can be accessed here

Resource materials can be accessed here