The UN has launched the Country Support Mechanism on Critical Energy Transition Minerals. The mechanism is designed to help mineral-rich developing countries build sustainable, responsible, and resilient value chains.
THE PRINCIPLE that mineral-owning countries should be the first to benefit from their resources under the Country Support Mechanism on Critical Energy Transition Minerals must be tested at the implementation level. The UN’s official press release announcing the mechanism on 23 September 2026 did not mention the role of civil society and Indigenous Peoples , nor did it outline a funding scheme or implementation timeline.
Aryanto Nugroho, National Coordinator of Publish What You Pay (PWYP) Indonesia, stressed that it must first be clear who will have a seat at the table before the country-level work plan for the mechanism is established. “Communities living in mining areas and around smelter facilities bear the greatest social and ecological costs. They must not be consulted only after the framework has been locked in,” Aryanto said in a PWYP Indonesia press release on 25 September 2026.
UN Secretary-General António Guterres previously launched the Country Support Mechanism on Critical Energy Transition Minerals at UN Headquarters in New York, United States. The mechanism is designed to help mineral-rich developing countries build sustainable, responsible, and resilient value chains.
Indonesia is among the first six participating countries, alongside Guyana, Madagascar, Nigeria, Zambia, and Zimbabwe. In 2025, Indonesia produced 2.6 million tonnes of nickel out of a global total of 3.9 million tonnes.
Through the mechanism, the UN has pledged to ensure that its benefits reach “the people and countries at the source of the energy transition .” However, Aryanto stressed that justice at the local level must be assessed against the actual conditions experienced by mineral-producing and processing regions, including nickel-producing areas, today.
He pointed to the fiscal burden facing Indonesia. The Central Sulawesi Provincial Government and Regional House of Representatives (DPRD), for example, are protesting Minister of Energy and Mineral Resources Decree No. 157 of 2026 because Morowali and North Morowali are not recognized as processing regions under the revenue-sharing fund (DBH) scheme.
According to PWYP Indonesia, the current DBH scheme also fails to account for the environmental damage and social costs borne by mineral-producing and processing regions. Meanwhile, the Center of Economic and Law Studies (CELIOS) estimates that fiscal incentives for smelters, including tax holidays and export duty exemptions for semi-finished products, have eroded the country’s potential state revenue by approximately IDR 32 trillion since 2020.
The second burden falls on workers. Aryanto highlighted the gradual layoffs of 1,900 workers at PT Gunbuster Nickel Industry (GNI) in North Morowali. The company described the layoffs as temporary amid its ongoing suspension of debt payment obligations (PKPU) proceedings.
Previously, an explosion at a smelting furnace operated by PT Indonesia Tsingshan Stainless Steel (ITSS) at 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 industry can disappear within weeks, with workers being the first to bear the consequences,” Aryanto said.
The third burden is ecological. He argued that the expansion of downstream mineral processing continues to exacerbate local environmental damage and carbon emissions. Indonesia’s captive coal-fired power plant capacity has also continued to grow, reaching 19.3 GW and exceeding 31 GW when projects under construction and in the planning pipeline are included.
“At the nickel industrial hubs of Central Sulawesi and North Maluku, captive coal-fired power plant capacity has surged 2.25-fold since 2023, outside the PLN grid,” Aryanto said. He added that “the expansion of mines and smelters continues to erode natural forests in the pursuit of greater production capacity.”
Compounding these problems is the low level of corporate compliance with mine reclamation and post-mining obligations. In October 2025, Aryanto noted, the Ministry of Energy and Mineral Resources temporarily suspended 190 mining business permits because the companies had failed to provide reclamation guarantees.
“Given that these three burdens are already being felt today, the UN programme must not be designed without the involvement of local governments and communities, workers, and reliable data on actual impacts,” Aryanto said.
Aryanto also highlighted another problem: Indonesia’s national transparency instruments are not yet equipped to support the promise of justice at the local level. In the 2024 Extractive Industries Transparency Initiative (EITI) Validation, Indonesia scored 67 out of 100, a result considered relatively low.
The institutional framework for implementing EITI in Indonesia is also at its weakest point. Previously established under a Presidential Regulation (Perpres), it now rests only on a ministerial decree that does not bind ministries across the government. Yet, the EITI Reports for fiscal years 2024 and 2025 are targeted for publication before the end of 2026.
Meanwhile, two Constitutional Court (MK) rulings issued in July 2026 provide important legal grounds for advancing accountability. Constitutional Court Decision No. 202/PUU-XXIII/2025 affirmed that priority permits for downstream processing must prioritize domestic value addition and supply chains.
Earlier, Constitutional Court Decision No. 160/PUU-XXIII/2025 required clear and transparent criteria for the allocation of mining areas. “The same standards of transparency must apply to this UN programme.”
Source: Tempo