Jakarta – As Indonesia seeks to maintain its position as the world’s leading nickel supplier, accounting for around 65% of global market demand, the extractive industry is facing increasingly stringent human rights (HR) compliance requirements. In response to this challenge, the Indonesian Nickel Miners Association (APNI) held The 2nd APNI ESG Forum on Tuesday (2 June 2026) in Jakarta under the theme, “Shaping Indonesia ESG Standard: From Compliance to Global Market Recognition.”
Speaking as one of the panelists in the discussion session “Integrating Human Rights into Business Practices of Critical Minerals Industry,” Aryanto Nugroho, National Coordinator of Publish What You Pay (PWYP) Indonesia, presented a critical perspective challenging the Environmental, Social, and Governance (ESG) implementation model that has long been adopted by the majority of nickel mining and smelting companies in Indonesia.
Challenging Grievance Mechanisms That Serve Merely as Corporate Cosmetics
In his presentation titled “Beyond ESG Compliance: Rights-Based Governance for Indonesia’s Critical Mineral Sector,” Aryanto examined the reality behind the public disclosures of one of Indonesia’s major mining permit (IUP) holders. Based on data confirmed through public records, he identified a major paradox in the company’s corporate grievance mechanism.
“The data shows that of all complaints submitted regarding operational impacts, zero percent (0%) were filed directly by affected communities on the ground. Instead, every complaint had to be mobilized or amplified by third parties such as the media and civil society organizations,” Aryanto explained.
Furthermore, PWYP Indonesia criticized the practice of companies immediately labeling complaints as “Closed.” Based on its findings, this status often merely indicates that the company has submitted a response letter or exercised its right of reply to the media, rather than providing documented remediation that is directly experienced by affected communities. This occurs because environmental and human rights issues within many corporations continue to be managed under external relations or corporate communications departments, rather than through an independent legal and human rights compliance system.
A Paradigm Shift Toward Right-Holders
PWYP Indonesia emphasized that genuine recognition from global markets will never be achieved as long as industry actors continue to view local communities and workers merely as stakeholders whose interests are accommodated on a voluntary basis.
“There is an urgent need to shift the paradigm from stakeholders to right-holders. Communities living around mining operations, Indigenous Peoples, and workers possess sovereign rights to information, land, a healthy environment, and meaningful participation,” Aryanto stressed.
According to PWYP Indonesia, this shift is not merely rhetorical but a fundamental prerequisite for meeting the increasingly rigorous credibility standards of global markets. Aryanto noted that international regulations such as the European Union Corporate Sustainability Due Diligence Directive (EU CSDDD), which is expected to be fully implemented, along with strict oversight by international institutions such as the U.S. Department of Labor’s Bureau of International Labor Affairs (ILAB), require independently verifiable Human Rights and Environmental Due Diligence (HREDD) throughout the nickel supply chain—from upstream extraction to end buyers in Europe and the United States.
Four Strategic Steps Forward
As a way forward, PWYP Indonesia proposed four elements of a shared framework to reform critical mineral governance in Indonesia:
Mandatory Regulatory Integration. Integrating mandatory Human Rights Due Diligence (HRDD) into industry operational standards, in line with national policy directions.
Beneficial Ownership Transparency. Strengthening the disclosure of ultimate beneficial owners throughout the nickel value chain to prevent corruption and tax avoidance.
Independent Verification. Creating space for independent verification beyond one-sided corporate communication reports to assess actual impacts on communities.
Explicit Recognition of Right-Holders. Formally incorporating the category of right-holders into the architecture of industry ESG standards, rather than subsuming them under generic public consultation processes.
“Who designs the standard determines what the standard is able to see. Global standards are not built through unilateral declarations on paper; they are tested directly through the lived experiences of right-holders at extraction sites,” Aryanto concluded as he closed his session before representatives of Indonesia’s nickel industry. (AN)