When inaugurating the Sawerigading Wallacea Biodiversity Park located in the Vale Mine area at the end of March, President Joko Widodo encouraged mining companies in Indonesia to emulate Vale. The Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, also conveyed similar praise. During a visit to Vale’s nickel mine and smelter in Sorowako, South Sulawesi, last year at the end of November, Luhut said Vale was implementing good mining practices.

The National Coordinator of the civil society coalition institution Publish What You Pay (PWYP) Indonesia, Aryanto Nugroho, said that the application of Environmental, Social, and Governance (ESG) principles and standards in the operation of the extractive industry is an important thing that must be considered. So far, PT Vale Indonesia (PT VI) has affirmed its commitment to operationalizing nickel processing to apply international ESG standards. “The benefits of ESG are long-term, not short-term, meaning that it is not just about profits, but environmental standards, sustainability, and this is part of the equitable energy transition,” said Aryanto.

Therefore, Aryanto reminded the government to divest PT VI shares carefully. In this divestment process, the government, represented by Mining Industry Indonesia (Mind Id), is advised to pay attention to and implement ESG principles that support realizing a clean energy transition in Indonesia. “Do not want to provide benefits instead, the divestment (of PT Vale Indonesia) will cause harm to the community,” said an observer of extractive industry issues, Aryanto, in a written statement, Monday (24/7).

As one of Indonesia’s pioneers in the nickel industry, PT VI is a company committed to applying clean energy. Therefore, according to Aryanto, if the PT VI share divestment process is completed, the commitment to clean energy and the application of ESG principles carried out by PT VI must be prioritized and become the government’s agenda. “If you want an energy transition, there is no need to use coal energy anymore,” said Aryanto.

Aryanto assessed that Indonesia still needs a lot of catching up regarding the application of ESG in the extractive industry. He also said that Indonesia must still apply more ESG principles to grant licenses and investment requirements. “Support the implementation of ESG, then ESG standards are adopted by the government. That is an important thing in the divestment process,” he said.

This needs to be done so that everything runs smoothly in applying ESG in various lines of government, including the extractive industry. “Don’t build more smelters that use coal fuel when discussing industry. Because the (clean energy) transition becomes false because there is more coal,” said Aryanto. (Z-2)

Source: Media Indonesia