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Workers keep dying at this Chinese nickel mining company in Indonesia

Vice - February 7, 2023

Rachel Cheung – When 20-year-old Nirwana Selle got a phone call to work as a crane operator in 2021, the Indonesian vocational school graduate was elated. She had waited months for a job after graduation and was excited to finally start her career. But she didn't know the job would lead her to TikTok stardom – and then her tragic death.

Nirwana was among some 11,000 locals who worked for Gunbuster Nickel Industry, a Chinese-owned nickel smelting company on the Indonesian island of Sulawesi, churning out a critical metal for batteries that power the world's growing fleet of electric vehicles.

Inside the overhead operating compartment of her crane at the metal processing plant, Nirwana filmed herself controlling a set of joysticks to lift and move ladles of molten metal. Her videos gave outsiders a glimpse of life in the country's increasingly important mining and metals industry. Many were watched millions of times, earning her more than 137,000 TikTok followers. In mid-December, she posted footage of her riding a motorcycle across the nickel smelter's vast industrial site.

That would be the last video she made.

Nirwana's life was tragically cut short three days before Christmas, when leaked coal dust caught fire at the plant in the middle of the night, when she was working the late shift. Minutes later, it led to an explosion. "Look, there's someone inside," a worker said as he filmed the blaze from afar. Nirwana's control room was on fire; sounds of screaming could be heard in the background of the clip.

Nirwana and her assistant, Made Detri Hari Jonathan, were both trapped and burned to death, according to a company report seen by VICE World News. The report attributed the cause of the accident to an unsealed valve and faulted workers for it.

Spurred by the tragedy, hundreds of Indonesian workers and the union at the factory organized a strike last month to demand justice for the two workers and better labor protections. But negotiations with the company fell apart. From there, an already tense atmosphere at the facility descended into chaos. On the evening of Jan. 14, after four days of peaceful rallies, the strike turned violent as local workers set fire to dormitories and clashed with Chinese workers tasked with guarding the company's properties.

Indonesian authorities deployed more than 500 security personnel, including police and soldiers, to quell the unrest. By the next morning, 71 people had been arrested and at least two workers – one Indonesian and one Chinese – were dead.

The violent clashes followed a series of fatalities, including deaths from labor accidents and suicides, that have plagued the nickel smelter since it began operating in December 2021 with an inauguration by Indonesian President Joko "Jokowi" Widodo.

While top Indonesian officials have blamed the latest unrest on "provocateurs" and are eager to turn the page, workers, advocacy groups, and a local official told VICE World News the company has long neglected labor rights and safety. They also expressed frustration with their failed efforts to hold Gunbuster and its powerful Chinese parent company accountable.

Analysts say this is emblematic of a larger issue – that in its eagerness to leverage the country's natural resources and court Chinese capital, the Jokowi administration has allowed Chinese companies like Gunbuster to circumvent institutional checks.

"Jokowi only cares about economic development and is sidelining everything, including environment, human rights, and working conditions," said Muhamad Ikhsan, a senior researcher at the Paramadina Public Policy Institute in Jakarta who has studied the outcomes of Chinese investment on the local nickel industry.

"The sector is evolving so fast that the state and society have not caught up with this industry," Ikhsan said. "The company is evolving too fast. They don't bother about working conditions and only care about money."

Indonesia is home to the world's largest reserves of nickel, a metal so crucial to the production of batteries for electric vehicles and so tight in global supply that Tesla CEO Elon Musk famously begged firms to "please mine more nickel" on a post-earnings call in 2020.

Since as early as 2009, a succession of Indonesian leaders have sought to limit and ultimately ban the export of nickel ore to keep nickel processing onshore, attract foreign investment, and create local jobs. Jokowi's grand vision is to leverage Indonesia's natural assets and turn the archipelago into a global electric vehicle hub.

"We don't just want to build batteries. This is just half of it. We want to build electric cars in Indonesia," he said in 2021.

Jiangsu Delong Nickel Industry, the Chinese parent company of Gunbuster, is among those that have answered the call. While other foreign investors, wary of Indonesia's environmental record, have been more cautious about entering the country, Chinese mining companies have flocked in. In 2022 alone, they poured $3.2 billion into the islands of Sulawesi and Halmahera, Indonesia's nickel mining hubs, making China the biggest source of foreign investment in Indonesia's nickel industry.

Angela Tritto, a postdoctoral fellow with the Hong Kong UST Institute for Emerging Market Studies, said the Chinese companies are also drawn by cheap labor and a lack of regulatory oversight as China's own regulations have toughened.

"They flow into countries that are rich in mineral resources, and have more lax environmental policies," Tritto said. "Indonesia fits the profile."

With investment from two Chinese state-owned firms, China First Heavy Industries Group and Xiamen Xiangyu Group, Jiangsu Delong in 2015 developed an industrial park spanning 2,200 hectares – the size of more than six Central Parks – in Sulawesi.

In addition to the Gunbuster nickel plant, it runs two other ferronickel and stainless steel plants, projects that have been officially endorsed in China as part of Chinese President Xi Jinping's signature Belt and Road initiative, a scheme to expand infrastructure – and Beijing's influence – across continents.

They were hailed by Chinese state media as examples of bilateral cooperation that benefit both countries. China strengthens its access to the critical mineral and feeds its booming electric car market, while Indonesia moves one step closer toward building its own EV ecosystem.

"[Chinese companies] seem to have cracked the ability to build these nickel processing facilities at a lower cost than any Western company can manage and much quicker than anyone else has been able to do," said Henry Sanderson, executive editor at Benchmark Mineral Intelligence, a specialist information provider. "No one really knows what the secret is."

But according to advocacy groups, there is a dark side to this burgeoning partnership.

A 2020 report by the Paramadina Public Policy Institute said China could build plants at an unmatched speed because it ignored local laws on labor and environmental protection. Last year, China Labor Watch, a New York-based advocacy group, interviewed 124 Chinese migrant workers at smelters run by Jiangsu Delong and found that more than half did not have valid work visas and a third did not sign a labor contract. Some workers had their passports confiscated and their wages withheld for up to four months, the group said.

Labor disputes at sites operated by Jiangsu Delong have made news headlines. In 2021, a Chinese worker told The Washington Post he was beaten by local security guards and handcuffed after arguing with a manager to be allowed to return to China. Another Chinese worker recalled being physically assaulted by his managers and ending up in the hospital. To escape what they said were exploitative conditions at another metal smelter under the company, five Chinese workers even hired a smuggler to take them by boat to Malaysia, where they were eventually caught offshore.

But JATAM – a mining advocacy network in Indonesia that has documented the pollution caused by Gunbuster and its coal-fired power plant – said these issues are being swept under the rug in the name of economic growth.

"The authorities are turning a blind eye to these violations to realize President Joko Widodo's plan in making Indonesia one of the key players in the global nickel industry," said April Perlindungan, JATAM's head of campaigns.

The president's office and the national police did not respond to requests for comments.

It was at the Gunbuster factory in North Morowali, in Central Sulawesi, where these growing industry tensions came to a head in mid-January. In the aftermath of the deadly clashes, Jokowi instructed the national police chief to ensure the smelter would be up and running again soon. The regent of North Morowali, Delis Julkarson Hehi, blamed the chaos on "provocateurs from outside with other agendas."

In a statement days after the unrest, Gunbuster expressed its condolences and said it was conducting an investigation with law enforcement. It urged all parties to keep a "clear and conscious mind" during the probe, as "ambiguous news" could potentially "cause a wrong perception of the events." Gunbuster and Jiangsu Delong did not respond to VICE World News' repeated requests for comment.

The circumstances of the two workers' deaths during the protest remain unclear. But according to Didik Supranoto, a spokesperson for Central Sulawesi police, Indonesian and Chinese workers attacked each other. According to local police, security forces were outnumbered by workers who stormed the plant that evening. Among the 71 employees detained, 17 are suspected of vandalism and arson.

A Chinese worker present that night told VICE World News he and other workers were asked to stand guard and set up blockades to prevent workers on strike from entering the factories. He said Chinese and Indonesian workers pelted stones at one another in the dark, leaving some injured.

Li Qiang, director of China Labor Watch, which has spoken to more than 10 Chinese workers since the protest, accused the company of using Chinese workers to break the strike. He said the company pitted Chinese workers against Indonesian workers by arming the former with weapons and asking them to protect the company's property.

Social media footage filmed on the night of the conflict and the day after showed dozens of Chinese workers at the industrial park holding metal pipes, some affixed with sharp ends. Another video circulating among workers and obtained by VICE World News allegedly showed the body of the Chinese victim, whose face was bruised and bloodied. One worker, who said he knew the Chinese victim, told Li he was run over by a loader.

One worker who was at the protest when it turned violent said he did not know what triggered the clash. Workers were trading barbs before it turned into a brawl with stones being thrown, he said. He said he recorded Indonesian workers setting fire to a car but immediately deleted the video, fearing management would check his phone and accuse him of inciting the riot.

But regardless of how that night unfolded, labor groups argue the company should also take responsibility for the fatalities.

Chinese workers, who make up a small minority of the workforce at Gunbuster, are also better paid than their Indonesian counterparts, Li said. Researchers, including Ikhsan and Tritto, said this discrepancy bred resentment between the groups. During a visit to the nickel smelter in the aftermath of the protest, Deputy Minister of Manpower Afriansyah Noor said the pay gap was among a few long-standing issues that caused the violence and needed to be addressed.

"Most of us came all the way just to make money. None of us wanted to get involved," the Chinese worker told VICE World News, speaking on condition of anonymity to avoid reprisals from the company. He said managers had warned workers not to speak to the media or post online.

According to Li, the company has begun checking workers' phones to prevent them from speaking out, a measure it has adopted in the past to keep a lid on negative news. In May, Gunbuster fined a contracting company 100,000 yuan ($14,742) after one of its workers shared a photo of a colleague who killed himself in a group chat with other employees, according to a company report seen by VICE World News.

But while the night of Jan. 14 spilled over into violence, deaths at the facility are not a new occurrence, and have in fact happened at an alarming rate.

Dedi Askary, the chairman of the National Human Rights Commission's Central Sulawesi office, said his team has recorded the deaths of seven Gunbuster workers, including two suicides, in 2022 alone. The repeated work accidents, the official added, indicate the management are failing to uphold safety standards at the facility.

In June, a 41-year-old Indonesian worker operating a bulldozer without lights during a night shift was swept by an avalanche into the sea. The next month, a 21-year-old worker, who had joined the company only two weeks earlier, died after falling into hot slag. The same summer, two Chinese workers died by suicide at the industrial site.

"The management was also extremely secretive. There's no way to make sure the company did not violate our labor law," Dedi said.

The Chinese firm's alarming record stood in stark contrast with that of another nickel smelter. Vale Indonesia, a subsidiary of the publicly-listed Brazilian mining giant Vale, recorded no fatalities or disabling injuries for six consecutive years, according to its annual report in 2021.A risk management unit at Vale's plant makes periodic assessments that are reviewed by the board of directors and an audit committee. In comparison, Gunbuster did not disclose any concrete steps it took to ensure the wellbeing of its workers. Hardly any information about the company's operations, structure, and policies, including the names of its directors, is listed on its website.

International mining companies, especially ones that are public, are subject to market and political scrutiny, and therefore under pressure to adhere to global standards and ensure their supply chains are clean. But Chinese companies, many of which are state-backed, are not susceptible to the same pressure, said Alvin Camba, an assistant professor at the Josef Korbel School of International Studies at the University of Denver, who has studied Chinese investment in Indonesia.

"The logic for Chinese firms to invest depends much more on their political relationship with a host country," Camba said. "Therefore, host countries like Indonesia have a bigger incentive to protect them."

The effects of this top-level political protection are felt acutely on the ground. Amirullah, an Indonesian worker and the chief of the Morowali Utara Workers' Union, spent 13 months at Gunbuster. His job was to keep track of ore and coal that was transported to the warehouse. But in July, a month after the company found out about his involvement with a labor union, he was fired without being given a reason.

"We unionized because the company does not prioritize its workers' safety," Amirullah told VICE World News. "I've only worn a helmet to protect my head while working in the field. There was no other protection. Sometimes I had to buy personal protective equipment with my own money."

Some accidents went unreported, with the 28-year-old recalling seeing two workers run over by a 12-wheeler truck near a factory in September. These incidents did not come as a surprise to Ode, who drives a large truck across steep and potholed roads every day, shuffling coal and ore between warehouses and the smelter.

"The boss says we don't need to rush, but we will be reprimanded if we fall behind our daily target. We'll receive a bad assessment," Ode said, speaking under a pseudonym to avoid reprisals. "So what else can we do but to speed up the truck? We no longer care about safety. All we think about is achieving our target."

His complaint was echoed by another truck driver at the factory, who said the company prioritized efficiency above all else. "No one cares about safety or protecting the environment. What if the coal spilled into the sea? So be it," he said. "That's why the beach is so dirty. We can't even fish here."

Local government officials appear to be at least partially aware of the labor violations, but their power is limited. Arnold Firdaus Bandu, head of the provincial office of the Ministry of Manpower, said officials were sent to investigate the nickel processing plant after the fire in December, but Gunbuster did not give them access. "PT GNI was too strict and uncooperative. If they had been transparent, we could have given the workers understandings," he told BenarNews, an affiliate of Radio Free Asia.

National officials, however, have made clear what the government's priority is. Visiting the site days after operations resumed, Noor, the Deputy Minister of Manpower, said the ministry has provided guidance to the company on how to improve workplace safety and the atmosphere was back to "normal." And the Minister of Investment, Bahlil Lahadalia, lamented that the clash was bad for business and urged the media to play it down. "We don't hype this up as a big problem," he said.

But there is a problem on the ground, and it will not go away by itself, said Ikhsan of the Paramadina Public Policy Institute.

"If the government is not seriously tackling the problem with society and investors, situations like [clashes at] Gunbuster Nickel Industry will happen again and again," he said.

[Additional reporting by Eko Rusdianto and translation by Annisa Nurul Aziza.]

Source: https://www.vice.com/en/article/3ad3n8/china-nickel-smelting-factory-indonesia-gunbuster-belt-and-roa