Sued to the WTO, Jokowi Still Stops Raw Nickel Exports

President Joko Widodo emphasized that Indonesia would no longer export nickel in raw material, even though the policy led to a lawsuit by the European Union (EU) against Indonesia to the World Trade Organization (WTO).

“Even though we were sued at the WTO, it’s okay, nickel, nickel. Our stuff. We want to make a factory here, we want to make goods here, it’s our right. Yes, we face it, if someone sues, don’t sue, we will withdraw again, there will be no opportunity and the opportunity will come again,” said Jokowi while giving a briefing to the participants of the XXIII 2021 Lemhanas Short Education Program (PPSA) at the State Palace, Jakarta, Wednesday. (13/10).

In facing the lawsuit, Jokowi admitted that he was not afraid. He said downstreaming must be carried out in the country in order to create derivative products with high added value which he believes can be of broad benefit to the community.

“And once again, we must have courage, we must not be nervous because we are being sued at the WTO. We have prepared international class lawyers so we don’t lose, this is what we are preparing in the process to integrate what we aspire to,” he said.

Jokowi: Indonesia can’t lose any more momentum

According to him, Indonesia has long lost its momentum to carry out downstreaming and industrialization in its own country so that many other countries actually feel the benefits. With abundant natural resources, Indonesia, said Jokowi, should be able to use them for the national economy but still be able to preserve these natural resources.

“What does it mean? If it’s a mine, we shouldn’t just be diggers. The gift that God has given us is truly extraordinary, but if we are just diggers and then we send them outside, they build a smelter there, then turn it into semi-finished goods, or finished goods and then come back here we buy. This is what little by little, we must begin to eliminate step by step,” he explained.

Trucks pass at the Grasberg copper and gold mine managed by PT Freeport Indonesia, in Papua, September 19, 2015. (Photo: Antara via Reuters)

Trucks pass at the Grasberg copper and gold mine managed by PT Freeport Indonesia, in Papua, September 19, 2015. (Photo: Antara via Reuters)

In order to achieve the downstream target, Indonesia is said to have taken over the majority of the shares of foreign mining companies such as PT Freeport Indonesia, which previously had been managed by Freeport Mcmoran for 54 years. The government has also taken over 100 percent of the Mahakam Block to be managed by Pertamina, after being previously managed by Total from France. Jokowi also hopes that in addition to nickel, other commodities available in the country must be produced domestically.

“This mineral and coal must be our foundation in order to advance our country, Indonesia. After nickel what? Yes, next time bauxite, stop can no longer export raw materials, must be made of aluminum. Palm oil is the same, at some point in the future we will stop exporting CPO, it has to be cosmetic, it has to be butter, it has to be bio-diesel, and other derivatives,” he said.

Observer of the Value of Incomprehensive Government Policy, Full of Discrimination

Economic Observer Salamun Daeng said that Jokowi’s step by intensifying the downstreaming and industrialization of mineral and coal commodities in the country is a good step. However, unfortunately he is not sure whether the downstream target can be achieved. This is because the policies made by the government are not comprehensive, inconsistent and full of discrimination.

He gave an example, a policy that is not comprehensive can be seen from the number of permits for exporting raw materials for mineral and coal compared to mineral and coal processed domestically, so that it becomes counter-productive which in the end does not create room for downstreaming. In addition, the government’s policy for downstreaming is inconsistent. This can be seen from the many relaxations given to giant mining companies to delay the construction of smelters in the country and continue to export raw materials.

“For example, in the case of Newmont, Freeport, or other large mining companies which generally get relaxation again, the export permits that I see tend to violate the rules and principles that have been regulated and I see there is an abuse of power. Looking for a legal space to be able to do that with the main mode of export relaxation,” he said FLY.

He also sees that there is still discrimination among business actors, so that only small and medium-scale mining companies are forced to do downstreaming in the country. Meanwhile, large or foreign companies are always given relaxation by the government.

“There are discriminatory practices, and it takes place in the field in various scales, for example small ones must, large ones also have to, but big companies don’t have to. Like Freeport, Newmont and others, they violated it, none of them met the target even though the regulations were in place and the time limit given to them had expired.

Therefore, he suggested to the government if you really want to realize a downstream in the country, the existing regulations must be properly enforced.

“If this rule is implemented, then downstreaming will definitely add value to exports, and it can also protect and help us limit the exploitation of natural resources, which will be in accordance with national needs so the rate of damage can automatically be restrained. Thus, if the rate of damage can be controlled in this way, the government can actually fulfill a lot, including emission reduction targets and others, which can help. But if it’s not serious, it’s not obeyed, so the implications are everywhere,” he concluded. (what)

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