REPUBLIKA.CO.ID, JAKARTA -- The Indonesian Chamber of Commerce and Industry (Kadin) UK and Ireland Bilateral Committee assesses that the success of Indonesia's nickel downstreaming in the future can no longer be measured solely by the amount of investment and production capacity. The national nickel industry is also required to meet environmental, social, and governance (ESG) standards, which are increasingly becoming a key requirement for accessing global markets.
This issue became the focus of the discussion "Responsible Downstreaming at Scale: North Maluku Sustainable Experience" held as part of the Indonesia Critical Minerals Conference 2026. The forum brought together regional governments, industry players, international organizations, and various stakeholders in the critical minerals sector to discuss responsible downstreaming practices amid the increasing demand for minerals for the global energy transition.
"Many participants came with various perspectives and expectations regarding Indonesia's nickel industry. However, after seeing the operations on the ground, the environmental investments made, and the openness of various parties in dialogue, we see an industrial ecosystem operating on a world-class scale that continues to strive to improve its sustainability standards," said Ovan Tito, Head of ESDM at Kadin UK and Ireland Bilateral Committee, in Jakarta, as quoted on Thursday (4/6/2024).
The discussion was part of the North Maluku Sustainability Trip held at the Indonesia Weda Bay Industrial Park (IWIP), North Maluku, on June 1-2, 2026. Field visits were conducted to observe the development of the nickel downstreaming ecosystem and various efforts to strengthen responsible downstreaming practices.
Amid the rapid industrial expansion, the contribution of downstreaming to the national economy continues to increase. Realized downstreaming investment in the first quarter of 2026 reached approximately IDR 147.5 trillion, with the nickel sector contributing around IDR 41.5 trillion.
The export value of nickel derivative products has also surged nearly tenfold, from US$3.3 billion in 2018 to around US$34 billion in 2024. This increase reflects the growing value added domestically.
"Going forward, global market access will increasingly be determined by the ability of producers to demonstrate verifiable environmental, social, and governance practices. Therefore, it is important for the industry to refer to credible, relevant, and science-based standards so that claims regarding these practices can be objectively measured," said Chris Schlekat, Executive Director of NiPERA.
North Maluku is one of the regions most affected by nickel downstreaming. With a contribution of around 13 to 15 percent of the world's nickel supply, the province has become a key node in the global critical mineral supply chain.
In the first quarter of 2026, North Maluku's economy grew by 19.64 percent, the highest in Indonesia. Processing and mining activities are the main drivers of this growth. Commodities based on iron and steel, nickel, and inorganic chemicals contributed 96.65 percent of the region's total exports.
Governor of North Maluku, Sherly Tjoanda, said the success of downstreaming cannot be seen only from economic growth or incoming investment. According to her, the benefits of the industry must also be felt by the community through improved human resource quality and expanded economic opportunities.
"Therefore, we are strengthening education and skills training so that more North Maluku residents can take on greater roles in the industry. We are also promoting the development of vocational education and polytechnics relevant to the needs of the industrial sector, so that in the future more local people can fill strategic positions," said Sherly.
Sherly targets that by 2030, North Maluku will not only have a larger industrial area but also a community with better access to education, healthcare, infrastructure, and economic opportunities. Scrutiny of Indonesia's ESG practices also comes from global industry players. Ilse Schoeters, Co-Head of Responsible Sourcing at Glencore, said Indonesia's nickel industry is developing very rapidly compared to many other producing countries.
"Indonesia's nickel industry is developing at an extraordinary pace. In less than a decade, industrial zones and complex value chains have grown very quickly. We see some companies have made progress in integrating ESG into their operations, while others are still in the process of building the necessary systems," she said.
According to Andre Barahamin, Community Outreach Coordinator at IRMA, transparency and independent audits will be key factors in building market trust for Indonesia's nickel industry. He said global recognition of responsible mining practices heavily depends on companies' willingness to undergo open and independent evaluation processes.
Such audits can help companies identify areas for improvement while strengthening the trust of communities, investors, and global markets. With evolving market demands, the success of Indonesia's nickel downstreaming is now determined not only by the amount of investment coming in. The industry's ability to demonstrate measurable and verifiable sustainability performance is becoming an increasingly decisive factor in global competitiveness.
