JAKARTA, Sept 27 (Askume) – Indonesia will tighten regulations on its commodity industry after the U.S. Labor Department said the country’s nickel industry involves forced labour, a senior Manpower Ministry official said on Friday.
Indonesia is the world’s largest producer of nickel, a vital product in electric vehicle (EV) production, and has increased domestic metal processing.
Earlier this month, the US Department of Labor cited reports from non-governmental organisations.added nickel imports from Indonesia to its annual ” List of Goods Produced with Child Labor or Forced Labor”.
The ministry’s labour inspection director Yuli Adiratna told Askume the U.S. report would form the basis for the ministry to improve “regulation and supervision by international standards” in the commodities sector, without elaborating.
Yuli said the ministry had not confirmed the U.S. report’s claims, which include deceptive recruitment of workers in China, low pay, corporal punishment and confiscation of passports.
The Indonesian nickel industry is centred on Sulawesi and dominated by Chinese companies.
“There are numerous reports of Indonesian adults being forced to work in nickel production,” the US report says.
Reports say Sulawesi has built large industrial parks to process nickel ore, most of which are owned by Chinese companies and employ about 6,000 Chinese migrant workers.
The Chinese Embassy in Jakarta did not immediately respond to a request for comment on the contents of the US report.
Indonesia aims to become a major player in the manufacture of electric vehicles and their batteries. Jakarta is negotiating a major mining deal with Washington to include its nickel in supply chains recognized under President Joe Biden’s Inflation Reduction Act (IRA).
To qualify for a tax deduction under the IRA, materials for electric vehicles or batteries must be supplied by companies in which no more than 25% stake is held by “foreign entities,” including Chinese, Russian, North Korean, and Iranian companies.
