The Price of Scale: Environmental, Social, and Governance Challenges in Indonesia's Mining Sector
Sagarika Bopanna, Alvin Karl Bürck, Ashi Parelkar
Andalus Committee Indo-Pacific Center
This policy report from the Andalus Committee's Indo-Pacific Center examines the environmental, social, and governance challenges shaping Indonesia’s rapidly expanding nickel and tin sectors. While downstreaming policies have made Indonesia the world’s largest nickel producer and attracted tens of billions in investment, weak environmental enforcement, high-carbon production, unsafe working conditions, and governance fragmentation threaten long-term sustainability and market access, especially as markets increasingly price carbon intensity, tailings risk, and labor conditions into procurement decisions. The report identifies key risk areas—including ecological degradation, worker and community vulnerabilities, and informality in artisanal tin mining—while outlining practical cooperation pathways between government, industry, civil society, and international partners. It proposes targeted reforms through which Indoensia can position its mining sector as a global supplier of certified low-carbon and socially responsible minerals. By maturing its downstreaming strategy in such a manner, Indonesia has the critical opportunity to shift from high-risk producer to preferred supplier in EV and electronics value chains.
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