Jakarta, CNBC Indonesia – 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 imitate what Vale was doing. Similar praise was also conveyed by Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan. During a visit to Vale’s nickel mine and smelter in Sorowako, South Sulawesi, at the end of November last year, Luhut said Vale had implemented 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 emphasized 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 profit, but environmental standards, sustainability, and this is part of the equitable energy transition,” said Aryanto.

Therefore, Aryanto reminded the Government to be careful in the divestment process of PT VI shares. In the 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 extractive industry observer Aryanto in his conversation with the media in Jakarta Friday (07/21/2023).

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 that PT VI has carried out 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 so far, 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 in licensing 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.

Aryanto said there should be no more setbacks in applying ESG in various government lines, including the extractive industry. “Don’t build more smelters using coal fuel when discussing the industry. Because the (clean energy) transition becomes false because there is more coal,” said Aryanto.

Source: CNBC Indonesia