Behind the Indonesian EV Boom: Ecocide and Cronyism

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Tesla Model Y, Peugeot 208, Renault Megane. If you own one of these electric car models, which are among the best-selling in France, they are all likely to contain “dirty nickel” from Indonesia.

Nickel is one of the key components of the so-called NCM batteries – nickel, cobalt and manganese – used in most western EV models as of today. These materials have been identified as “critical minerals” – indispensable to the green transition – but the explosion in global demand for them is paradoxically leading Indonesia to a veritable environmental catastrophe.

Currently on a visit to Jakarta, Emmanuel Macron is hoping to forge strategic partnerships around these minerals, a week after he spoke out in favor of abolishing the European directive on corporate duty of care. This directive is designed to prevent multinationals from violating human rights, health and the environment.

Several major Indonesian political figures and their relatives, including current ministers and those close to former president Joko Widodo, are profiting directly from the ecocide already underway in the country, as revealed by EIF and its partners Narasi, Der Freitag and Mediapart, as part of our #DirtyNickel investigative series.

“A major ecocide is underway in Indonesia, certainly one of the most serious in the world. Forest and marine ecosystems of international importance are being destroyed, and there will be no turning back,” warns Vincent Romera, ecologist and project manager for the Humy association.

For the latter, our revelations about environmental fraud at the world’s largest nickel mine, co-owned by French giant Eramet, on the island of Halmahera, have sent shockwaves throughout Indonesia, the world’s leading nickel producer.

The Indonesian Ministry of Energy and Mineral Resources counts over one million hectares allocated for nickel and iron mining, spread across the islands of Halmahera, Sulawesi and the Obi archipelago. An area larger than Corsica.

“The majority of mines proliferate on the island of Sulawesi. There are almost 5,900 km² of surface allocated to mining, which is more than 55 times the size of Paris intra-muros”, he explains.

“These areas are mainly composed of primary tropical forests. They are true carbon sinks, playing an essential role in absorbing CO2 and combating climate change”.

Last year, the ecologist already denounced the deforestation linked to the mining industry in Reporterre, as well as the use of coal to refine the ores extracted across Indonesia. This resource is “particularly polluting, and its combustion is responsible for emissions of sulfur dioxide”, a gas that is particularly dangerous for the health of exposed populations.

Travelling through south-east Sulawesi, Vincent Romera saw numerous illegal mines and almost as many illegal dumps of mining waste, contaminating local water resources with heavy metals and seriously endangering both local populations and aquatic life.

“In Indonesia, mining operations are prohibited on islands smaller than 2000km2. This does not prevent nickel mining on Kabaena, for example. Nearly 900km2 of which 73% is covered by mining concessions. 165 hectares of protected forest have already been destroyed”, he points out.

This damage also extends to the Coral Triangle, also known as the “Amazon of the seas”, and home to the world’s greatest marine biodiversity. 120 million people depend on it as a source of food and direct income, including over 2 million fishermen.

“Tens of kilometers of reef have been totally destroyed by mining waste. The continuous transport of minerals by water causes discharges that contaminate the waters of the Coral Triangle with heavy metals, and contribute to the bleaching of the reefs”, said the ecologist on site.

Many Indonesian researchers, including Professor Ode Aslan (Halu Oleo University) and Mario Yosryandi Sara (Tikar Institute), agree with international NGOs such as Humy, Naturevolution and Mighty Earth in describing the situation in Indonesia as ecocide.

While NGO reports and international press investigations continue to denounce the abuses of local mining operators, Indonesian politicians are toasting the health of their share of the nickel market.

Conflicts of interest within the Indonesian government

The ongoing ecocide is the result of an extractive economic model controlled by Indonesia’s political and economic elites, some of whose members pay little heed to issues of conflict of interest.

Such is the case of Indonesian MP Shanty Nathalia of the Indonesian Democratic Party of Struggle (PDI-P, former presidential party). Known for her entrepreneurial past in the nickel sector, she has since resigned from several mining concessions on the island of Gebe, in the Moluccan archipelago.

However, to this day, she remains a 30% co-shareholder in the PT Smart Marsindo mine, from which she had resigned as manager, as evidenced by documents obtained by our partner Narasi. She does this through two other companies discreetly placed under her control.

A clear conflict of interest for the MP, who is a member of the parliamentary commission for environmental regulation of mining, and who refused to answer Narasi’s questions on the subject. PT Smart Marsindo had already been accused by the Indonesian press of operating illegally and without permits issued by the authorities.

Financial documents consulted by Narasi and Mediapart yet unfolds the presence of yet another high-level Indonesian political figure in the company’s shareholder base: Bobby Nasution, son-in-law of the former Indonesian president.

The former president’s son-in-law’s right-hand man, lawyer and childhood friend are all shareholders in a tangle of companies making up almost 30% of PT Smart Marsindo’s shares.

In the wake of a scandal surrounding 13 fraudulent mining licenses in 2022, MP Shanty Natalia had already sold shares in another mining company to other senior political figures, via her company PT Aneaka Niaga Prima.

At the height of the affair, she decided to transfer all these shares to three companies owned by two nephews and a cousin of Budo Gunawan. The man, who is none other than the former Director of Indonesian Intelligence and current Minister of Political and Security Affairs, is also close to the former president.

The Minister’s family still holds shares in the mine, which is illegal because it operates on the 900-hectare island of Fau – where all mining should be prohibited.

Another Indonesian minister, Luhut Binsar Pandjaitan, Delegate for Maritime Affairs, has a direct shareholding in PT Toba Bara, which receives part of the astronomical quantity of coal needed for nickel processing throughout the country.

“He has no involvement in coal. The accusations of conflict of interest are false. His shareholding is below 9% and he holds no position in the company,” said the Minister’s spokesman in response to Narasi’s questions.

The father of the Indonesian Minister for the Environment and Forestry holds a 40% stake in a company that owns a major supplier of Indonesian coal.

According to Narasi’s calculations, the Indonesian coal market alone is worth almost 4 billion euros for 40 million tonnes transported each year in the Weda Bay region alone, which leaves one wondering about the potential profits of those involved.

Continue reading the news on the web site of the y the Environmental Investigative Forum.

What is EIF ?

The Environmental Investigative Forum (EIF) was established in 2020 as global non-profit specialized in environmental investigative journalism, registered in France. Our organization works on a cross-regional scale to develop environmental investigative projects, tools and capacity building initiatives.