Indonesia Enhances Oversight in Nickel Industry Amid Forced Labor Concerns

Indonesia aims to bolster supervision in its commodities sector following the U.S. Department of Labor's claim of forced labor in its nickel industry. This action comes as Indonesia pushes to become a key player in electric vehicle production and seeks compliance with international labor standards.

Indonesia plans to strengthen oversight of its commodities sector after the U.S. Department of Labor reported instances of forced labor in the country's nickel industry, a senior official from the manpower ministry disclosed on Friday.

As the world's leading nickel producer—an essential component for electric vehicles (EVs)—Indonesia has ramped up domestic processing of the metal. The U.S. Department of Labor recently listed Indonesian nickel as a product of forced labor, based on reports from non-governmental organizations.

Yuli Adiratna, the ministry's director of labor inspection, revealed to Reuters that the U.S. report would guide enhanced supervision of regulatory and international standards in the sector, though details were not provided. The ministry has not yet verified the claims, which include deceptive recruitment practices, inadequate payment, physical punishments, and passport confiscation involving Chinese migrant workers.

The U.S. report noted that major Chinese-owned industrial parks on Sulawesi island employ around 6,000 Chinese migrant workers under exploitative conditions. Jakarta is also in talks with Washington to integrate its nickel into EV supply chains compliant with President Joe Biden's Inflation Reduction Act, which imposes tax-cut eligibility criteria on materials sourced from countries of concern like China, Russia, North Korea, and Iran.

(With inputs from agencies.)