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Chinese companies are investing billions in Indonesia's nickel industry - but working conditions can be deadly

ABC News - November 5, 2023

Hellena Souisa, Kai Feng, and Sally Brooks – Chinese electrician Mr Ding says he saw co-workers die, a crane catch fire and worked for "175 days straight" during an 18-month stint at two nickel refining sites in Indonesia.

His experiences left him with a critical view of the Chinese companies he worked for.

"There's an old Chinese saying that money makes the devil work," Mr Ding said. "And that's just it, as long as you have money, you can just be lawless in Indonesia."

The 42-year-old, who requested to be identified only by his surname, worked as an electrician at two nickel refining hubs in Sulawesi between 2017 and 2020.

Despite now living in the United States, Mr Ding said he was still in contact with his former colleagues in the nickel industry. "[The workplaces are] still the same, exactly the same as before," he said.

Indonesia's Human Rights Commission is investigating working conditions in the nickel refining industry and plans to release those findings soon.

Commissioner Anis Hidayah said there is a "lack of labour protection" for both local and foreign workers who were mainly from China.

Indonesia is the largest miner and refiner of nickel in the world, thanks to billions of dollars' worth of Chinese investment that poured into refining operations after the government banned the export of unprocessed minerals in 2014.

Indonesia's nickel industry has been mainly processing the metal for stainless steel, but many companies are shifting to refine nickel ore for electric vehicle batteries.

Most of Indonesia's vast nickel reserves are located on the island of Sulawesi, which is also home to two of the country's established nickel refining industrial hubs.

The Indonesian Morowali Industrial Park (IMIP) in Central Sulawesi is owned by China's stainless steel giant Tsingshan Holding Group and Indonesia's Bintang Delapan Group.

In Morosi, in South-East Sulawesi, multiple nickel refining operators including Virtue Dragon Nickel Industry (VDNI) and Gunbuster Nickel Industry (GNI) are owned by Chinese company Jiangsu Delong Nickel Industry.

Unions, a mining watchdog and other non-government organisations in Indonesia have been sounding the alarm on worker rights and safety issues for several years.

Non-profit organisation Trend Asia recently counted the number of reported deaths at nickel refining sites over the past eight years and found the majority were Indonesian workers.

Research manager Zakki Amali said an analysis of news reports found 53 people died in workplace accidents between 2015 and 2022. Forty of those were local and 13 were Chinese.

Indonesian workers say nickel smelter is unsafe

As Indonesia pushes ahead with a plan to be the world's largest nickel producer for electric vehicle batteries, workers at smelter sites allege they face unsafe conditions, which sometimes can be fatal.

Mr Amali said the true number of fatalities could be much higher because government authorities had not provided official data on worker deaths.

"I think the data is just the tip of the iceberg," he said.

"I believe [the government] have the data but aren't willing to share with the public because they want to keep the nickel investment looking good to the world.

"For us, this is a lack of transparency."

The ABC contacted the Manpower Ministry for a response.

Recent fatalities include 20-year-old Nirwana Selle, who was "burned to death" after coal dust caught fire in a nickel smelter in December 2022.

In September this year, another worker employed by the same company, Gunbuster Nickel Industry, died after an "explosion in the nickel slag cooling process", according to a company statement.

The company said an investigation was underway.

"The company hopes that awareness of the importance of understanding work security and safety, especially in emergency conditions, will continue to be increased among each worker, so that things like this will not happen again," the statement said.

'Subjected to threats and intimidation'

A 2022 report by New York-based China Labor Watch titled Trapped: The Belt and Road Initiative's (BRI) Chinese Workers identified a range of issues faced by Chinese workers in the Indonesian nickel refining industry.

The report, based on a survey of 333 Chinese workers, including interviews conducted with 53, said the issues included deceptive recruitment, retention of identity documents, wages being withheld, and workers working for long stretches without days off.

The report said Chinese companies have invested more than US$30 billion ($47 billion) in the Indonesian nickel supply chain "making it one of the largest flagship projects of the BRI in South-East Asia".

A China Labor Watch researcher in Indonesia, who requested not to be named, said "a lot of the conditions have not changed" for Chinese workers employed in the nickel refining industry today.

Most Chinese workers' passports are "held" by their employer when they arrive in Indonesia, the researcher explained, and workers at larger industrial parks live within the confines of the site and cannot leave the park without permission.

"Company regulations of restricting workers movement, that's a very ... clear indicator of forced labour."

The researcher said Chinese workers were afraid to speak publicly about their working conditions due to fear of threats and punishment.

A group of five Chinese workers who were employed at two different nickel processing sites lodged a complaint with the Human Rights Commission in February.

Airlangga Julio, the lawyer representing the group, said the workers alleged their passports were withheld, they couldn't travel freely outside the region, and they had to work more than 12 hours almost every day.

"There are no holidays, no rest days, they still work on Saturdays and Sundays, and when it's a public holiday in Indonesia," he said.

"They were also subjected to threats and intimidation."

The workers provided videos they took inside two nickel refining sites to Mr Julio – one at the Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi and a second at the Virtue Dragon Nickel Industry (VDNI) smelter in South-East Sulawesi.

Mr Julio said both videos showed hazardous working conditions including people being exposed to dense smoke, and that workers had "inadequate [gear] for adverse work situations".

IMIP did not respond to those allegations, but said the industrial park "always maintain[ed] the stability, security and welfare of foreign workers and Indonesian workers".

"We make regular reports about the employment of [foreign workers] and [Indonesian workers] to the Morowali Manpower Office and the Ministry of Manpower."

Indonesia's Manpower Ministry did not respond to the ABC's questions about worker rights and safety issues in the nickel industry for this story.

VDNI did not respond to a request for comment.

In February, Indonesian workers spoke to the ABC about unsafe working conditions in the nickel industry.

Indonesian government occupational health and safety officer Adam Siola said at that time that health and safety systems in many nickel companies were not in "favour" of workers, and Indonesian authorities had trouble resolving the issues.

Mr Siola said decisions related to health and safety for Indonesian workers at nickel smelter sites were controlled by the Chinese companies that owned the sites, and the Indonesian government needed to reform the system to improve safety conditions for workers.

The global transition to electric vehicles is driving rapid expansion of Indonesia's nickel industry – but do the benefits outweigh the costs?

"When [government] safety teams analyse potential hazards on the ground and a job is considered high-risk, the job must be stopped temporarily while we manage the controlling aspects," Mr Siola said.

"But we can't do that because we are blocked by the Chinese [company's] safety team. They say we are disrupting production."

When the ABC visited a market in Kendari, near the operations of multiple nickel smelters in South-East Sulawesi in September, Indonesian workers also raised the issue of getting paid less for doing the same job as Chinese workers.

In February, the Morowali Regency's National Worker's Union (SPN) confirmed that locals and foreigners were paid different salaries for the same roles.

Sultan Sutrismat, who has worked for a nickel to stainless steel processing company in Morosi, said the difference in salary was significant and hoped the system would be changed to make it more equal.

VDNI and another subsidiary of Jiangsu Delong Nickel Industry employed nearly 20,000 local workers between 2018 and 2022, according to a local government authority.

Chinese workers are allowed to move in and out of those worksites, which are not as closed off as industrial parks like IMIP, according to the China Labor Watch researcher.

The ABC has approached Jiangsu Delong Nickel Industry and Tsingshan, owner of IMIP, for comment.

The presence of thousands of workers have created new business opportunities for local residents.

Eleven-year-old Hijratul Jannah works with her mother selling fruit to workers outside the PT Obsidian Stainless Steel (OSS) site in Morosi, and has learnt some Mandarin on the job.

"They [the Chinese workers] like durian the most, but if there isn't any ... [they choose] watermelon because it is hot during the day," Hijratul said.

"I like the fact that there is a company here, so it is lively."

Her mother Fatiamah said the fruit store provided the family with much-needed income.

"When I was still a farmer, sometimes we made profits but sometimes we did not. If it failed, we continued to have debts," she said. "Thank God there is this company now."

One of Fatiamah's fruit shop customers was Chinese worker Yubing Chen, who has worked at OSS for five years.

Like other workers from China crowding the market site, Mr Chen declined to be interviewed by the ABC.

For Mr Ding, who ended up leaving his job in Indonesia without his passport and got a new one at the embassy, the Chinese companies in Indonesia's nickel industry view workers as disposable resources.

"The workers are the same as the ore, they are digging for 'nickel' and we are their 'human ore', both of which have no value after being dug up and consumed," he said.

Source: https://www.abc.net.au/news/2023-11-05/chinese-companies-invest-billions-in-indonesias-nickel-industry/10301326