Jayanty Nada Shofa, Jakarta – The longstanding problem of corruption can take a toll on the domestic tin supply chain, and if neglected, Indonesia will struggle to maintain its competitiveness in the global market, according to a think-tank's report.
Research institute CSIS Indonesia recently launched a sustainable investment report, which detailed the state of the Indonesian critical minerals industry. Indonesia produces tin – a key ingredient in lithium battery and solar panel production. Tin is also among the sought-after minerals for smartphone production.
The report revealed that Indonesian tin was now connected to the global supply chain. Indonesia is a tin supplier for the American tech giant Apple and Chinese telecommunications firm China Mobile Limited. However, the CSIS report warned that corruption could make Indonesia's tin less competitive despite the growing global demand for the metal.
Earlier this year, state tin miner Timah made headlines following an alleged corruption case that could lead to a state loss of up to a whopping Rp 300 trillion ($18.3 billion). Businessman Harvey Moeis – who is also the husband to actress Sandra Dewi– is among the suspects. This scandal has painted a grim picture on the Indonesian tin industry.
"Tin is a key component in smartphones. Indonesian tin has penetrated into the global supply chain. But because of many issues, particularly corruption or poor governance, the Indonesian tin production is on a decline," CSIS Indonesia researcher M Habib Abiyan Dzakwan said on Monday.
The 2024 US Geological Survey shows that Indonesia produced 52,000 metric tons of tin in 2023, down from 70,000 metric tons the previous year. Indonesian tin production ranked third globally last year – just behind China (68,000 metric tons) and Myanmar (54,000 metric tons).
Timah's corruption case has worried government officials. Not long after the Harvey Moeis scandal was exposed, Chief Investment Minister Luhut Binsar Pandjaitan revealed the government's plan to prevent history from repeating itself. And that is to integrate the tin industry into the Simbara app, which lets the government keep an eye on the entire mineral management processes, including tax payments and mining permits, among others.
"This [tin] graft case should be a lesson for us. I have to admit we are quite late in integrating everything into Simbara," Luhut said at the time.
Corruption has become commonplace in Indonesia, regardless of the sector. Almost every month, we see high-ranking government officials getting arrested by the anti-graft commission KPK. Indonesia even ranked 115 out of 180 countries in the 2023 Corruption Perceptions Index (CPI). This index measures the perceived levels of public sector corruption on a 0-100 scale with 0 being "highly corrupt" and 100 means "very clean". Indonesia only scored 34 out of 100.
Source: https://jakartaglobe.id/business/corruption-can-make-indonesian-tin-lose-its-charm-in-global-marke