Retirement of Indonesia's first coal plant stirs worries about worker rights protections and liability for environmental devastation remediation
The early retirement of the 660 MW Cirebon-1 coal power plant in Indonesia, under the Just Energy Transition Partnership (JETP), has raised significant labor rights and compensation concerns, particularly for workers and local communities affected by the plant’s closure.
### Labor Rights Concerns
The Indonesian regulation (Regulation 10/2025) that sets the roadmap for coal retirement and energy transition focuses primarily on reducing coal dependency and emissions. However, it lacks sufficient provisions to address justice for fossil fuel workers who will lose their jobs due to the plant’s early shutdown. Workers' retraining, social protections, or alternative employment opportunities are not adequately covered in the current framework.
Moreover, the regulation fails to ensure inclusive public participation, particularly by workers and nearby communities, in decision-making processes related to the retirement and transition. Without proper safeguards, the burdens of the transition—such as job losses—may fall disproportionately on vulnerable groups, including coal plant workers, without fair compensation or support systems.
### Compensation and Just Transition Financing
The early retirement of Cirebon-1 is financially supported by the Asian Development Bank (ADB) through preferential loans and mechanisms to pay off the plant’s outstanding debt, enabling the shortening of its power-purchase agreement. However, compensation specifically for workers and environmental damage remediation remains unclear or inadequate. Public reporting highlights a gap in mechanisms to ensure that affected laborers receive fair compensation or that environmental harms from the plant’s operation and closure are addressed.
Lessons learned from the Cirebon early retirement pilot are being studied to improve future coal retirement mechanisms, aiming to place “just transition” at the core—meaning transitions that protect workers’ rights and livelihoods as coal power is phased out.
### Broader Context
Indonesia's grid infrastructure challenges complicate the pace of coal retirement, as power supply must remain stable and renewable energy capacity scaled up before coal generation is removed. The Cirebon plant is one of the first cases under Indonesia's JETP, setting a precedent. The outcomes here are likely to influence policies ensuring labor rights and compensation in other planned coal plant retirements.
### Impacts on Local Communities and Environment
The Cirebon-1 coal power plant has negatively impacted local fishermen’s livelihoods for over 13 years. Before the power plant was built, local fishermen could earn IDR400,000 to IDR600,000 a day without needing diesel or boats. However, many fishing grounds near the power plant have disappeared, and marine pollution from the power plant has expanded to other areas, causing severe damage to the marine ecosystem. Salt farmers have been impacted as well, with the pollution worsening the quality of the salts as it gets mixed with the dust produced by the coal chimney.
Coal spills and coal barges have devastated coral reefs and destroyed fishing nets near the power plant. Employees at Cirebon-1 were required to pay illegal fees ranging from IDR1m-3m (US$60-180) to be hired. Rakyat Penyelamat Lingkungan (RAPEL), a local environmental organization, reported that only 50 out of 300 employees at Cirebon-1 are from the local village surrounding the facility.
The early retirement plan for Cirebon-1 has stalled, with delays in finalising the roadmap process. The closure of the coal power plant is expected to generate 639,000 new jobs in the renewable energy sector. The damage to the marine ecosystem may not be fully reversible, but efforts to restore it are recommended, such as planting mangroves.
In summary, while Indonesia’s JETP and related regulations represent progress toward decarbonization and early coal plant retirement, they currently fall short of fully addressing labor rights and compensation for workers affected by Cirebon-1’s early closure. There is an acknowledged need for stronger justice-centered policies and inclusive participation to ensure a fair transition that safeguards worker livelihoods and community well-being.
- The early retirement of the Cirebon-1 coal power plant, under the Just Energy Transition Partnership (JETP), raises concerns about labor rights and compensation, particularly for affected workers and local communities.
- Regulation 10/2025, which outlines Indonesia's energy transition roadmap, focuses on reducing coal dependency and emissions, but lacks provisions for justice for fossil fuel workers losing their jobs.
- The regulation also fails to ensure inclusive public participation, particularly by workers and nearby communities, in decision-making processes related to the retirement and transition.
- Compensation for workers and environmental damage remediation remains unclear or inadequate in the current framework, despite the Cirebon-1's early retirement being financially supported by institutions like the Asian Development Bank.
- As Indonesia moves towards renewable energy, the early retirement of the Cirebon-1 plant serves as a precedent, with its outcomes likely influencing policies and practices concerning labor rights and compensation in other planned coal plant retirements.
- The Cirebon-1 coal power plant has negatively impacted local fishermen's livelihoods and marine ecosystems for over 13 years, causing marine pollution, destruction of fishing grounds, and coral reef damage.
- The transition to renewable energy presents an opportunity for job creation, with the closure of the Cirebon-1 coal power plant expected to generate 639,000 new jobs in the renewable energy sector.
- To ensure a fair transition, it's crucial to prioritize justice-centered policies, strengthen labor rights, and promote inclusive participation, safeguarding worker livelihoods and community well-being in the context of Indonesia’s energy transition and the broader shift towards clean energy and a low-carbon economy.
