The UN is promoting mineral wealth as a source of domestic jobs and prosperity, while PWYP stresses that justice on the ground must be assessed against the realities experienced by regions producing and processing critical minerals, including nickel.
United Nations (UN) Secretary-General António Guterres launched the Country Support Mechanism on Critical Energy Transition Minerals in New York, United States, on Wednesday, 23 September 2026. The mechanism aims to help developing countries rich in critical minerals build sustainable, responsible, and resilient value chains. Six countries have been included in its first phase: Guinea, Indonesia, Madagascar, Nigeria, Zambia, and Zimbabwe.
“The Country Support Mechanism puts equity and justice into practice, to turn mineral wealth into jobs and prosperity at home,” Guterres said in a statement published on the UN website on Wednesday, 23 September 2026.
Civil society groups have raised concerns about the mechanism. Aryanto Nugroho, National Coordinator of Publish What You Pay (PWYP) Indonesia, noted that the UN support mechanism is led by the United Nations Development Programme (UNDP) and the UN Development Coordination Office, and implemented through UN Resident Coordinator Offices in each country. Its focus includes governance, value addition, industrial development, and environmental and human protection, guided by the principles of the UN Secretary-General’s Panel on Critical Energy Transition Minerals.
Ary, as he is commonly known, stressed that Guterres’s principle that mineral-producing countries should be the first to benefit from their resources must be tested through its implementation. The UN has promised benefits that reach “the people and countries at the source of the transition.” However, its official announcement has yet to specify the role of civil society and Indigenous Peoples, including the proposed funding arrangements and implementation timeline.
Ary recalled that on 14 July 2026, PWYP Indonesia, together with more than 100 civil society organisations worldwide, called on the UN to launch country support platforms. These platforms should bring together stakeholders, rights-holders, and development partners, rather than involving only government institutions and the UN.
“Before country-level work plans are finalised, it must be clear who has a seat at the table from the outset. Communities in mining areas and around smelter facilities bear the greatest social and ecological costs. They must not be consulted only after the framework has already been set,” Ary said in an interview on Saturday, 26 September 2026.
According to Ary, justice on the ground must be assessed against the actual conditions experienced by regions producing and processing critical minerals, including nickel. He identified at least three key burdens that deserve scrutiny.
1. Fiscal Burdens
The first is the fiscal burden. The Central Sulawesi Provincial Government and its Regional House of Representatives (DPRD), for example, have protested against Minister of Energy and Mineral Resources Decree No. 157 of 2026 , which does not recognise Morowali and North Morowali as processing regions under the revenue-sharing fund (Dana Bagi Hasil or DBH) scheme.
Ary stressed that the DBH scheme does not yet account for the environmental damage and social costs borne by regions producing and processing minerals. Citing a study by CELIOS, he noted that fiscal incentives for smelters, including tax holidays and export duty exemptions for semi-finished products, are estimated to have reduced potential state revenue by approximately IDR 32 trillion since 2020. This estimate predates the discontinuation, in 2024, of tax holidays for low-grade nickel pig iron (NPI) smelters.
2. Labour Burdens
The second is the burden on workers. Ary highlighted the phased layoffs of 1,900 workers at PT Gunbuster Nickel Industry (GNI) in North Morowali, which the company has described as temporary amid its ongoing debt payment suspension proceedings (Penundaan Kewajiban Pembayaran Utang or PKPU).
Previously, an explosion involving a smelting furnace at PT Indonesia Tsingshan Stainless Steel (ITSS), within the Indonesia Morowali Industrial Park (IMIP), in December 2023 killed 21 workers. Workplace accidents in the industrial complex have continued to recur.
Value added built on a fragile industrial foundation can disappear within weeks, with workers among the first to bear the consequences.
3. Ecological Burdens
The third is the ecological burden. Ary noted that the expansion of downstream mineral processing has intensified local environmental damage and emissions. Indonesia currently has 19.3 gigawatts (GW) of operating captive coal-fired power plant capacity, rising to more than 31 GW when projects under construction and in the planning pipeline are included.
In nickel industrial hubs such as Central Sulawesi and North Maluku, captive coal-fired power capacity operating outside the state electricity utility PLN’s grid has increased 2.25-fold since 2023. The expansion of mines and smelters continues to drive the loss of natural forests to meet production targets. These problems are compounded by low levels of mining company compliance with reclamation and post-mining obligations.
Ary argued that Indonesia’s national transparency instruments are not yet equipped to support the promise of justice on the ground. In the Extractive Industries Transparency Initiative (EITI) 2024 Validation, Indonesia scored 67 out of 100, placing it in the fairly low category.
The institutional framework for implementing EITI in Indonesia has also weakened considerably. Initially supported by a Presidential Regulation (Peraturan Presiden or Perpres), it now rests only on a ministerial decree that is not binding across ministries. This comes as the EITI Reports for Fiscal Years 2024 and 2025 are targeted for publication before the end of 2026.
In addition, Constitutional Court Decision No. 202/PUU-XXIII/2025 affirms that priority permits for downstream processing must prioritise domestic value addition and supply chains. Constitutional Court Decision No. 160/PUU-XXIII/2025 requires clear and transparent parameters for the allocation of mining areas.
“The same standards of transparency must apply to this UN mechanism,” Ary proposed.
PWYP Calls for Six Measures to Ensure Accountability
PWYP has put forward at least six demands to the Indonesian government and the UN Resident Coordinator.
First, publish the draft country work plan, designated focal points, participating UN agencies, indicators, timeline, and funding arrangements before implementation begins, with adequate time for public consultation.
Second, ensure that the draft work plan includes concrete mechanisms and a roadmap for implementing the UN Secretary-General’s Panel Principles. Human rights must be at the centre, while justice and equity must be guaranteed throughout the mineral value chain, including through human rights and environmental due diligence in accordance with international standards.
The work plan must establish measurable performance targets, publicly accessible progress reports, and legal compliance benchmarks. It must also ensure enforcement of prohibitions on mining on small islands and in coastal areas, as well as requirements for reclamation and post-mining financial guarantees.
“UN support for value addition must not flow into supply chains sourced from mines that violate the law,” Ary emphasised.
Third, provide meaningful participation, alongside capacity-building support and funding, so that civil society organisations, trade unions, local governments, affected communities, and Indigenous Peoples can participate on an equal footing throughout the design and monitoring processes. This must also include guaranteeing Indigenous Peoples’ right to Free, Prior and Informed Consent (FPIC).
Fourth, measure value addition based on fiscal recognition for producing and processing regions, worker protection, and environmental restoration costs, rather than simply on smelter capacity or export volumes. Industrialisation dependent on captive coal-fired power plants must not be presented as a successful energy transition.
Fifth, make strengthening EITI an initial milestone of the mechanism. This should include establishing a legal framework at the Presidential Regulation level, completing the EITI Reports for Fiscal Years 2024–2025, and developing a roadmap to improve Indonesia’s validation score.
Sixth, disclose mining contracts, company beneficial ownership information, and project-level state revenue details, including those related to smelters and captive coal-fired power plants. Human rights and environmental protection standards must also be implemented in ways that allow for public scrutiny.
According to Ary, the success of the UN mechanism should not be measured by the number of smelters built. Instead, it must demonstrate whether producing and processing regions receive their fair share, workers are protected, and environmental damage is remedied.
“If success is measured only by industrial capacity, this mechanism will become nothing more than a new stamp of legitimacy for the old pattern of extraction,” Ary concluded.
Source: Hukum Online