Business on Nickel Downstreaming with China and European Union Lawsuits

Abstract

That the downstream nickel business between Indonesia and China aims to obtain maximum profits for the welfare of the Indonesian people, which is based on legal regulations issued by the Indonesian government. As Chinese companies are building purification and processing plants or nickel smelters in Indonesia with a large investment value, the Indonesian government obtains a substantial advantage from the export through the export of domestically processed nickel. Also, Indonesian and Chinese companies both benefit from having a nickel smelter or refining and processing factory in Indonesia. These advantages encompass Chinese investment in Indonesia, job creation in Indonesia, and increased export outcomes. However, this development has raised concerns in the European Union, primarily because Indonesia recently banned the export of nickel ore. Instead, Indonesia has encouraged the domestic processing of nickel ore to add value to nickel products. Indonesia as one of the world’s largest nickel producers has regulations in terms of nickel exports. This is stated in the Regulation of the Minister of Energy and Mineral Resources Number 11 of 2019 concerning the Second Amendment to the Regulation of the Minister of Energy and Mineral Resources Number 25 of 2018 concerning the Business of Mineral and Coal Mining. In this regulation, Indonesia imposes a ban on the export of nickel ore. Related to this ban, the European Union also reacted by filing a lawsuit filed at the World Trade Organization (WTO). Based on the Constitution, the welfare of the Indonesian people is the main goal through the management of natural resources, so outside parties or other countries cannot intervene.