JAKARTA, 25 September 2026 — United Nations Secretary-General António Guterres launched the Country Support Mechanism on Critical Energy Transition Minerals on 23 September 2026 in New York. The Mechanism is designed to help resource-rich developing countries build sustainable, responsible, and resilient value chains. Indonesia has been selected as one of the first six pilot countries, alongside Guinea, Madagascar, Nigeria, Zambia, and Zimbabwe. In 2025 alone, Indonesia produced 2.6 million of the world’s 3.9 million metric tons of nickel.
This UN support mechanism is co-led by the United Nations Development Programme (UNDP) and the UN Development Coordination Office, and will be operationalized through the UN Resident Coordinator offices in each country. It focuses on four primary areas: governance, value addition, industrial development, and environmental and human safeguards, guided by the principles of the UN Secretary-General’s Panel on Critical Energy Transition Minerals.
Publish What You Pay (PWYP) Indonesia stresses that Guterres’ core principle—that the countries holding critical minerals must be the first to benefit from them—must be tested directly at the implementation level. While the UN promises benefits that reach “the people and nations at the source of the transition,” the official UN press release omits any mention of the role of civil society and Indigenous Peoples, nor does it outline funding frameworks or concrete timelines.
On 14 July 2026, PWYP Indonesia, alongside over 100 global civil society organizations, urged UN member states to launch country support platforms that convene stakeholders, rights-holders, and development partners, rather than relying solely on closed-door interactions between government bodies and UN agencies. Today, the fundamental question is no longer about the mechanism’s design, but who gets to sit at the table to shape it in Indonesia.
“Before national work plans are locked in, it must be clear who sits at the table from day one. Communities in mining regions and smelter zones bear the heaviest socio-ecological burden. They must not be brought in merely as an afterthought once the framework is finalized,” stated Aryanto Nugroho, National Coordinator of PWYP Indonesia.
Three Burdens at the Source
Justice at the source must be evaluated against the realities on the ground in critical mineral producing and processing regions, particularly nickel:
First, the fiscal burden. The Provincial Government and Regional Parliament (DPRD) of Central Sulawesi have protested Ministerial Decree No. 157/2026 issued by the Ministry of Energy and Mineral Resources (ESDM), as Morowali and North Morowali are not recognized as processing regions under the revenue-sharing scheme (DBH). According to PWYP Indonesia, current revenue-sharing formulas (DBH) also fail to account for the environmental damage and social costs borne by producing and processing regions. On the other hand, CELIOS estimates that fiscal incentives for smelters, including tax holidays and export duty exemptions on semi-finished products, have eroded state revenue potential by approximately IDR 32 trillion since 2020. This estimate was made before tax holidays for low-grade NPI smelters were phased out in 2024.
Second, the worker burden. The gradual layoff of 1,900 workers at PT Gunbuster Nickel Industry (GNI) in North Morowali, which the company claims is temporary amid ongoing Debt Payment Obligation Suspension (PKPU) proceedings, demonstrates workplace insecurity. Previously, a furnace explosion at PT ITSS in the IMIP area, Morowali, in December 2023 killed 21 workers, and workplace accidents in the region continue to recur. Value addition built upon fragile industrial foundations can vanish in weeks, with workers bearing the initial impact.
Third, the ecological burden. The expansion of downstream processing continues to escalate local environmental damage and carbon emissions. Operating captive coal-fired power plants (PLTU) in Indonesia have reached a capacity of 19.3 GW, exceeding 31 GW when accounting for projects under construction and planned. In the nickel industrial hubs of Central Sulawesi and North Maluku, off-grid captive coal capacity has surged 2.25 times since 2023, while mine and smelter expansion continues to clear natural forests in the name of value addition. This is further compounded by low corporate compliance in post-mining land reclamation. In October 2025, for instance, the Ministry of ESDM temporarily suspended 190 Mining Business Licenses (IUP) for failing to deposit post-mining reclamation guarantees.
Because these three burdens are unfolding today, the UN program cannot be designed in a vacuum without local regions, workers, and real impact data.
Fragile Transparency and Accountability Frameworks
National transparency mechanisms remain unprepared to support promises of justice at the source. In Indonesia’s 2024 Extractive Industries Transparency Initiative (EITI) Validation, the country achieved a score of only 67 out of 100, categorized as “fairly low.” Institutional oversight for EITI in Indonesia has reached a low point, shifting from a Presidential Regulation (Perpres) to an unbinding Ministerial Decree that lacks cross-ministry authority, even as EITI Reports for Fiscal Years 2024 and 2025 are targeted for publication before the end of 2026.
Conversely, two Constitutional Court (MK) rulings from July 2026 provide crucial legal anchors. Ruling No. 202/PUU-XXIII/2025 affirms that priority permits for downstream development must prioritize domestic value addition and domestic supply chains. Ruling No. 160/PUU-XXIII/2025 mandates clear and transparent parameters in the allocation of mining areas. The same standards of transparency must apply to this UN program.
PWYP Indonesia’s Demands
To the Government of Indonesia and the UN Resident Coordinator:
- Publicly disclose draft national work plans, focal points, participating UN agencies, key performance indicators, timelines, and funding frameworks prior to implementation, allowing adequate time for public consultation.
- Ensure draft work plans set out concrete mechanisms and a roadmap for operationalising the Secretary-General’s Panel Guiding Principles, notably placing human rights at the core and ensuring justice and equity across mineral value chains, including mandatory human rights and environmental due diligence in line with international standards. The work plan must also incorporate measurable performance targets, public progress reports, and legal compliance benchmarks, including enforcing prohibition of mining on small islands and coastal areas, as well as mandatory post-mining reclamation guarantees. UN support for value addition must not flow into supply chains sourced from illegal or non-compliant mining operations.
- Provide meaningful and institutionalized participation channels, supported by capacity building and funding, to ensure civil society organizations, trade unions, local governments, impacted communities, and Indigenous Peoples can participate equitably from design through monitoring, including guaranteeing the right of Indigenous Peoples to Free, Prior, and Informed Consent (FPIC).
To the Government of Indonesia:
- Measure value addition through the lens of fiscal recognition for producing and processing regions, worker protection, and environmental restoration costs, not merely through smelter capacity or export volumes. Industrial development reliant on captive coal plants must not be touted as a successful transition.
- Lock in EITI reinforcement as an early-stage milestone for this mechanism: re-establishing a legal framework at the Presidential Regulation (Perpres) level, completing the Fiscal Year 2024–2025 EITI Reports, and defining a clear roadmap to improve validation scores.
- Disclose mining contracts, Beneficial Ownership data, and project-level revenue payments, including for smelters and captive power plants, while enforcing publicly verifiable human rights and environmental safeguards.
“Success cannot be measured by how many smelters are built, but by whether producing and processing regions receive their fair share, workers are protected, and environmental damage is restored. If success is judged solely by industrial capacity, this mechanism risks becoming nothing more than a new stamp of legitimacy for old extractive models,” concluded Aryanto.
Media Contact:
Aryanto Nugroho – National Coordinator, PWYP Indonesia
Email: aryanto@pwypindonesia.org