Jakarta, February 12, 2025 – The International Institute for Sustainable Development (IISD), in collaboration with Publish What You Pay (PWYP) Indonesia, hosted a Focus Group Discussion (FGD) titled “Towards a More Responsible Nickel Supply Chain to Support Indonesia’s Energy Transition” in South Jakarta on Wednesday, February 12, 2025. Supported by Viriya ENB, the event aimed to strengthen nickel governance as a critical mineral for sustainable development and the global energy transition, while addressing sustainability challenges in its extraction and management.
Indonesia, holding 42% of the world’s nickel reserves—approximately 5.03 billion tons according to the U.S. Geological Survey (USGS) 2023—plays a strategic role in the global supply chain for clean energy technologies, such as electric vehicle (EV) batteries and energy storage systems. In 2023, Indonesia accounted for 51% of global nickel production. However, with reserves estimated to last only 10 years at current extraction rates, the forum underscored the urgent need for responsible resource management.
The FGD brought together over 20 organizations, including representatives from government bodies such as the Ministry of Energy and Mineral Resources (ESDM), the Ministry of Industry, the Ministry of Environment and Forestry, and the Ministry of Investment/Indonesia Investment Coordinating Board (BKPM), as well as industry associations, civil society organizations, and international entities like the Initiative for Responsible Mining Assurance (IRMA) and the International Energy Agency (IEA).
The discussion centered on the policy and regulatory framework for ESG (Environmental, Social, and Governance), the environmental impact of nickel mining, supply chain transparency, and the rights of affected communities.
Challenges in ESG Implementation
Significant challenges remain in implementing ESG standards. Meidy Katrin from the Indonesian Nickel Miners Association (APNI) highlighted the high costs of adopting ESG principles, noting that the market does not differentiate between ESG-compliant nickel and non-compliant nickel. “Nickel prices are declining, while ESG adds operational costs. There’s no firm regulation yet to enforce compliance,” she stated. Fauzan Arif from the Ministry of Industry added that, despite a Green Industry Policy aligned with six Sustainable Development Goals (SDGs), no specific green standards exist for nickel, despite its significant emissions.
Conversely, Grita Anindarini from the Indonesian Center for Environmental Law (ICEL) pointed out the industry’s low compliance with environmental standards, including issues like waste dumping and inadequate community compensation. “Mining contributes to the highest number of violations. The responsibility of companies toward local communities—whether it’s just knowledge transfer or local workforce inclusion—remains unclear,” she emphasized, recommending stricter and more transparent regulations.
In response, Dr. Lyta Permatasari from the Ministry of Environment and Forestry stated that her ministry is strengthening environmental impact assessment (AMDAL) oversight, streamlining permitting processes, and designing new regulations and incentives for sustainability. “We’re focused on resource mobilization and clear regulations to support stakeholders,” she said optimistically.
The event concluded with several recommendations to enhance coordination among fragmented ESG regulations, establish robust enforcement mechanisms, and continue facilitating multi-stakeholder dialogue. Through this synergy, Indonesia aims to lead in building a responsible nickel supply chain, supporting the global energy transition while delivering social and environmental benefits to local communities.