Jakarta, June 27, 2024 – German chemical company Badische Anilin Soda Fabrik (BASF) and French mining company Eramet have withdrawn from their investment in the Sonic Bay project due to changes in the nickel market conditions. Although the companies cited changes in the global nickel market as the reason, Aksi Ekologi dan Emansipasi Rakyat (AEER) believes that environmental and social issues also played a role in the decision of foreign investors. This is particularly relevant with the enforcement of various international regulations, including the Corporate Sustainability Due Diligence Directive (CSDDD), which strictly ensures that companies’ operations respect human rights (HR) and the environment.

Pius Ginting stated that BASF and Eramet certainly did not want their substantial investment of IDR 42.64 trillion in the Sonic Bay project to result in a poor reputation regarding environmental and social issues. In April 2024, the European Union approved the CSDDD, a regulation that requires European companies to respect human rights and environmental protection throughout their supply chains (Article 5). The CSDDD includes several important aspects related to social and environmental issues, such as: respect for workers’ fundamental rights, as stipulated in the core labor standards of the International Labour Organization (ILO); respect for human rights, such as freedom and personal security, equality before the law, privacy, basic services, and leisure and recreation; protection of biodiversity and ecosystems; protection of water and air quality; and efforts to combat climate change, such as greenhouse gas emissions, pollution, or degradation of biodiversity and ecosystems.

According to Annex I, Section 1, Paragraph 15 of the CSDDD, companies are prohibited from causing measurable environmental degradation, such as harmful soil changes, water or air pollution, harmful emissions, excessive water consumption, land degradation, or other impacts on natural resources, such as deforestation. Regarding climate change, Article 22 of the CSDDD requires companies to adopt and make their best efforts to combat climate change. According to data from the Global Energy Monitor (GEM), energy sources in the IWIP area are supplied by coal-fired power plants, with an operational capacity of at least 3,150 MW.

In its development, PT Weda Bay Nickel’s mining activities have encroached on the living space of the O’Hongana Manyawa tribe in Halmahera, North Maluku. Additionally, local residents have lost access to clean water as natural rivers have been polluted.

AEER urges the Eramet Group and Tsingshan Holding Group to improve nickel industry practices in Central Halmahera. These two companies control 90% of Weda Bay Nickel (WBN) shares, located in the Weda Bay Industrial Area (IWIP). Unlike Germany, which has ratified ILO Convention 169, France, China, and Indonesia have not. As the home country of BASF, Germany’s efforts in mining should include community rights protection, including the protection of forests as living spaces for the O’Hongana Manyawa community.