Indonesian VP hopeful slams Jokowi’s nickel investment policy

One of three front-runners to become Indonesia’s vice president attacked Joko Widodo’s policy of forcing foreign companies to invest in mineral processing through export bans, stepping up criticism of the outgoing head of state’s economic record.

Muhaimin Iskandar, the running mate of presidential candidate Anies Baswedan, said the goverment’s so called “downstreaming” policy had caused major environmental damage without significantly benefiting local people. While the measures helped create much needed jobs in outlying islands, in particular on Sulawesi, foreign workers have dominated the new roles, Iskandar said.

“We saw in our mining business downstreaming is done recklessly,” Mr Iskandar said at a debate with other vice presidential candidates on Sunday, ahead of the country’s election next month. “Downstreaming development is not significantly affecting people’s welfare.”

The comments are the fiercest criticism yet of the flagship industrial policy of Mr Widodo - better known as Jokowi - which all three leading presidential candidates had until recently said they would uphold.

The outgoing head of state banned the export of raw nickel ore in 2020, drawing in billions of dollars worth of investment in plants to process it into more valuable products, spearheaded by Chinese firms including Tsingshan Holding Group.

The move fueled a nickel mining and processing boom which upended the global market, causing the metal’s price to plunge and forcing miners in other countries to cut their output. The sector’s explosive growth has also driven large-scale deforestation, while predominantly coal-fueled smelters have led to massive carbon emissions. Nickel is needed to create high-performing batteries for electric vehicles.

Iskandar also criticized the deadly accidents that have occurred at industrial facilities run by foreign firms, the most recent of which claimed 21 lives. He also attacked the proliferation of illegal nickel mining, which is particularly environmentally destructive.

“What kind of downstreaming do we want to continue while illegal mining is still widespread,” he said.

Meanwhile, Mohammad Mahfud Mahmodin, running mate of presidential hopeful Ganjar Pranowo, pointed to the slow pace with which regulators had cracked down on illegal mining. Gibran Rakabuming Raka, the vice presidential pick of poll-leader Prabowo Subianto and Widowo’s son, said those breaching the rules should have their mining permits revoked.

Indonesia’s heads to the polls next month. The next leader will take over from Jokowi after nearly a decade in power. Though the President has not officially endorsed a candidate, Subianto is widely seen as his favoured pick after the former-general picked his son as running mate.