A one-day journey with the Sustainability Head of Nickel Industries, Mr. Muchtazar
In Indonesia, the nickel mining sector has come under scrutiny for its significant environmental and social impact. The activities, including those linked to the Morowali Industrial Park on Sulawesi and other regions such as Raja Ampat and Kabaena Island, have been causing severe environmental degradation and social harm.
Environmental Impact
Nickel mining in the Morowali Industrial Park overlaps with globally important biodiversity areas (Key Biodiversity Areas), leading to large-scale damage to nature. This includes deforestation, pollution, and habitat loss for endangered species [1]. In Raja Ampat, nickel mining threatens one of the world's most important marine biodiversity hotspots, risking irreversible damage to coral reefs and terrestrial habitats through deforestation, sedimentation, and pollution. This region includes UNESCO Global Geopark areas [2][3]. On Kabaena Island, nickel mining has caused marine pollution, forest degradation, and disrupted Indigenous communities’ livelihoods, threatening unique biodiversity and posing health risks for locals [4].
Social Impact
Indigenous and local communities have suffered loss of income, reduced fishing and farming yields, land seizures without adequate consultation or compensation, and criminalization of protests against mining operations. These impacts violate Indigenous rights and national laws, as reported by NGOs and communities affected by mining [4].
Nickel Industries Limited
Nickel Industries Limited, an entity that holds an 80% stake in the Hengjaya nickel mine in Central Sulawesi, operates in Indonesia and has a portfolio of mining and low-cost downstream nickel processing assets. The company has committed to reducing their carbon intensity by half by 2035 and achieving net zero by 2050 [5]. However, specific information on the practices or impacts directly attributable to Nickel Industries Limited in Indonesia is not readily available. Given the broad environmental harm and social conflicts associated with nickel mining in Indonesia, it is reasonable that companies active in the sector face similar scrutiny regarding sustainability and community impact.
The Head of Sustainability: Muchtazar
Muchtazar, the head of sustainability for Nickel Industries Limited, joined the company because he wanted to work for a company with a positive environmental and social impact. His typical working day involves staying up-to-date with global ESG stories, leading coordination meetings with his sustainability team, addressing pending issues to ensure their sustainability commitments are on track, and engaging with external stakeholders such as business partners, consultants, and the media to build partnerships and align expectations [6].
Muchtazar believes a partnership with industry associations is essential to develop ESG standards relevant to the Indonesian context. He also acknowledges that adopting global ESG frameworks requires significant costs [7]. Muchtazar hopes more companies in Indonesia prioritize sustainability and assign sustainability professionals with enough clout to make decisions at a senior level [8].
Transparency and Regulation
There is a need for Indonesia's nickel sector to be more transparent to avoid the possibility of nickel being mined from protected areas, as a recent case emerged in Raja Ampat [9]. The curtailment of the Inflation Reduction Act in the US by President Trump reduces the incentives for producing nickel to high ESG standards [10]. However, the absence of a "green premium" or incentive for adopting more stringent environmental standards does not deter Muchtazar in his mission for sustainability [11].
Muchtazar's key allies include governments, industry associations, and suppliers committed to responsible mining practices. He remains optimistic about the future of sustainable nickel mining in Indonesia, driven by his personal commitment and the support of his team and allies [12]. Muchtazar has been working at Nickel Industries for almost four years and leads a team of three in the sustainability department [13]. He also reads or watches videos on sustainability reporting, as his company is preparing for mandatory climate-related disclosure for Australian companies [14].
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- The energy transition towards renewable and clean energy sources is crucial to mitigate the impacts of climate-change on biodiversity and social systems, as demonstrated in Indonesia where nickel mining has caused severe environmental degradation and social harm.
- Corporate responsibility plays a significant role in addressing the environmental and social impacts linked to the nickel industry, with companies like Nickel Industries Limited committing to reducing carbon emissions and achieving net zero by 2050.
- The sustainable development goals (SDG) serve as a blueprint for achieving a better and more sustainable future for all, including the protection of the environment and promoting social equity.
- In the context of the Indonesian nickel industry, the focus should be on adopting best practices and ESG standards that prioritize the preservation of biodiversity, the reduction of carbon emissions, and the promotion of social justice.
- The head of sustainability for Nickel Industries Limited, Muchtazar, is dedicated to ensuring his company's practices are aligned with scientific knowledge on climate-change and the importance of sustainability for the industry, environment, and society.
- Transparency and regulation are essential to protect sensitive areas such as Key Biodiversity Areas (KBA) and UNESCO Global Geoparks from environmental degradation caused by the mining sector, as well as to ensure compliance with national laws and Indigenous rights.
- Finance plays a crucial role in determining the practices and impact of companies in the nickel industry, with investors and other stakeholders increasingly focusing on ESG factors when making investment decisions.
- Biodiversity conservation is not just an environmental issue but also a social issue, as the degradation of ecosystems can have a negative impact on local communities and their livelihoods.
- The nickel industry, like any other business, must consider its social and environmental impact and adopt a sustainable approach that aligns with science, promotes sustainability, and contributes to the achievement of the SDGs.
