On August 20, 2026, the Alliance for Resource & Climate Justice Center (ARC Center) hosted a CSO workshop in Jakarta, Indonesia, titled “Strategic Dialogue: From Indonesia’s Forests to Asia’s Industries.” The workshop brought together six civil society organizations working to raise concerns about the social and environmental impacts of the nickel industry in Indonesia. Participants shared critical perspectives on Indonesia’s nickel-related policies and discussed ARC Center’s ongoing research on nickel supply chains and their connections to Korea. The workshop also explored ways to strengthen cooperation among stakeholders both within and beyond Indonesia, particularly in order to examine the responsibilities and roles of Korean companies in the nickel supply chain.
The Indonesian government’s policies on nickel “downstreaming” are closely linked to the country’s mineral policies during the Reformasi era that began following the end of the Suharto regime in 1998. Following decentralization in the 2000s, significant authority over mining permit was transferred to local governments, leading to a sharp increase in the number of KP (Kuasa Pertambangan, mining rights/mining permits) issued. However, with the enactment of the 2009 Minerba Law (Law No. 4/2009), the existing contract-and authorization-based system was replaced by a licensing system based on IUP (Izin Usaha Pertambangan, Mining Business Licenses).
The Minerba Law established the legal basis for requiring mining companies to process and refine minerals domestically and generate greater value from mineral resources within Indonesia. The government subsequently introduced regulations that gradually restricted and ultimately banned the export of unprocessed ore, while promoting the development of domestic downstream industries.
In 2019, the European Union requested consultations at the World Trade Organization (WTO), arguing that Indonesia’s measures violated WTO rules prohibiting export restrictions. In 2022, a WTO panel found that Indonesia’s measures were inconsistent with its WTO obligations, accepting the EU’s claims, although Indonesia subsequently appealed the ruling.
Meanwhile, Chinese investment has expanded rapidly into Indonesia’s nickel refining industry. As of 2024, Chinese stakeholders were estimated to control approximately 75% of Indonesia’s nickel refining capacity. At the same time, a significant share of Indonesia’s nickel products is exported to China, raising concerns about the Indonesian nickel industry’s high dependence on Chinese capital and markets. In 2023, 89% of nickel produced in Indonesia was exported to China, rising to 94% in 2025.
Meanwhile, as nickel prices declined amid a global oversupply beginning in late 2024, the Indonesian government began reducing and managing nickel production through the RKAB, the mining production planning system. In 2026, the government also announced a new export management policy to channel exports of certain key natural resources through state-designated state-owned enterprises. These measures represent a strengthening of state control over the production and export of natural resources. International observers have interpreted such policies in terms of resource nationalism or the strategic use—and, in some cases, weaponization—of natural resources.
Indonesian civil society organizations, however, have criticized these policies for failing to generate meaningful benefits for Indonesian people, particularly communities living in areas affected by nickel mining and processing.
Participants argued that if the government’s objective is to create greater value from mineral resources, it should promote demand-driven production and develop industries capable of generating genuine added value. Instead, downstream industries that can create such value have not developed sufficiently, while nickel supply has continued to expand without adequate consideration of sustainable production levels. Above all, participants emphasized the need to fundamentally reconsider who these policies are actually intended to benefit.
The discussion also questioned whether the framework of “resource nationalism” is sufficient to describe Indonesia’s current policies. While local communities bear the social and environmental costs of expanding nickel production, the economic benefits of industrialization remain concentrated among companies and other economic actors. This raises a fundamental question: can a policy truly be considered an exercise of resource sovereignty if the benefits of resource development do not reach the communities most affected by it?
In areas where nickel mines and smelters are located, communities are increasingly affected by the rapid expansion of nickel mining and processing. They face deforestation, air and marine pollution, land conflicts, and the loss of livelihoods, while receiving little or no tangible benefit from the industry. Participants therefore emphasized the urgent need for discussions on fair benefit sharing with affected communities.
The workshop also highlighted the particular situation of Indigenous Peoples in voluntary isolation who are affected by nickel development. For these communities, even the principle of Free, Prior and Informed Consent (FPIC) may not constitute an appropriate safeguard, as meaningful consultation may be impossible or incompatible with their right to remain isolated. Participants therefore proposed the establishment of no-go zones in the territories of Indigenous Peoples in voluntary isolation, where industrial activities would be prohibited altogether.
The workshop provided an opportunity for ARC and Indonesian civil society organizations to share concerns about nickel supply chains and to jointly ask a fundamental question: who benefits from, and who bears the costs of, the nickel industry?
As nickel supply chains extend beyond Indonesia and are connected to companies across Asia, including Korea, participants agreed that cross-border cooperation is essential to reducing the social and environmental impacts of resource development and protecting the rights of affected communities.
ARC will continue to work closely with Indonesian civil society organizations to address human rights and environmental issues arising from Korean companies’ nickel supply chains and to promote more just and responsible resource supply chains in which the rights and interests of local communities are respected and fairly represented.
