The Buhodopi district was home to a population of 7,517 with 1,738 households as of 2017, while this number has doubled or more due to the new immigrants that came to the area to work at the IMIP.[9], [10] The IMIP was initially built for the purpose of developing nickel pig iron and stainless-steel production, but expanded to become the largest nickel-based industrial area in Indonesia, taking advantage of the emergence of nickel as a critical mineral in the electric vehicle market as well as the renewable energy transition [11]. It was estimated in 2018 that the IMIP produced 50% of Indonesia’s processed nickel products and it is the largest nickel industrial site in Indonesia, overtaking PT Vale Indonesia Tbk (INCO) and Aneka Tambang Tbk (Antam), which used to control the processed nickel industry in Indonesia before IMIP’s presence [2]. As reported in 2021, the IMIP compound is home to at least 30 nickel processing lines [12]. More than 30 nickel mines could be seen in the area in the Energy and Mineral Map from the ESDM One Map platform [13].

The Indonesian government announced plans to develop a nickel-oriented industrial park in Morowali in August 2013, and an MoU between the Chinese and Indonesian companies was signed in October 2013, while the concept for the park allegedly dates back to 2009, before the official launch of the Belt and Road Initiative (BRI) in 2013 [11]. The operation of the IMIP began in April 2015, with President Joko Widodo inaugurating a smelter on 28 May 2015 [3]. As of January 2020, approximately 43,000 people worked at IMIP, with around 5,000 from China [14].

In September 2021, Tsingshan Group announced that it would not build any new CFPPs in Indonesia in response to Chinese President Xi Jinping’s announcement that China would no longer fund overseas coal projects [15]. There was also an announcement by Tsingshan Group in early 2021 that it would invest and build a 2,000MW clean energy base in Indonesia within the next 3-5 years, including a combination of solar and wind energy projects, as well as 5GW of hydropower capacity, to support the IMIP and the Indonesia Weda Bay Industrial Park (IWIP) located in Central Halhamera, North Maluku [16]. However, a series of coal-fired power plants (CFPPs) with over 2GW capacity (estimated annual CO2 emissions amounting to over 10 million tonnes) have already been planned and constructed to support the operations of SMI and the IMIP, and are located in the IMIP [17]. Tenant companies tend to be the major shareholder of these CFPPs [6]. It was estimated that the steam power plants of SMI, Guang Ching Nickel And Stainless Steel (GCNS) and Indonesia Tsingshan Stainless Steel (ITSS) and their smelters used up over four million tonnes and 920,000 tonnes of coal respectively in the year of 2017 [18].

The Bahodopi district is home to 12 villages, including 4 villages most directly affected by the IMIP, namely Bahodopi, Keurea, Fatufia and Bahomakmur [9]. Local NGOs such as AEER, JATAM and Yayasan Tanah Merdeka (YTM) have been raising the issues regarding the environmental and social impact of the IMIP, including the nickel mining activities and the CFPPs [20]. An academic article also documented different forms of conflicts involving various stakeholders in the nickel mining area in and around the IMIP based on interviews and questionnaires, especially the conflicts between migrant communities and local residents, and between local residents and companies [9]. The often mentioned impacts include the degradation of forests, rivers and coastal zones in the neighborhood, the impact on local farmers’ livelihood, and the health impact on the local residents [18]. It was reported that acute respiratory infection (ARI) is a common issue for local residents, including kids, in the Bahodopi district [18], [21]. While the companies claimed that they have used electrostatic precipitators at CFPPs and kilns to collect coal ash and some companies also used nets to filter coal ash, it appeared to be ineffective according to local residents’ complaints [18].

In addition to air pollution and carbon emissions from captive CFPPs, the waste management approach at the IMIP raised significant concerns [22]. The high-pressure acid leach (HPAL) plants that process laterite into chemicals used in batteries produce toxic waste that is difficult to manage [23], [24]. It was reported that PT Hua Pioneer Indonesia (HPI), presented its plan for deep-sea tailings disposal (DSTD) in January 2020. HPI is set to manage the waste for four factories under construction at IMIP, which are owned by Chinese-owned firms, Zhejiang Huayou Cobalt, GEM Group, PT Fajar Metal Industry and PT Teluk Metals Industry respectively [25]. While it was reported that Indonesia approved the environmental impact studies of the above-mentioned factories, it was unclear whether the companies were given the approval to dispose waste into the ocean [26]. According to the original plan, HPI would dump 25 million tons of tailings each year, making it one of the biggest DSTD projects in the world [25]. According to local NGO JATAM director Merah Johansyah, “these projects will adversely affect the lives of coastal communities, especially small-scale fishers or traditional fishers whose lives are highly dependent on marine and fisheries resources in the local waters [25].” In October 2020, it was reported that HPI canceled the permit request for disposal of tailings to the Morowali Sea in view of the complexity of tailings impacts at the sea [27].

However, the local communities still suffered from the impact of the submarine wastewater disposal from the IMIP (permitted by Decree 259/2018 of the Ministry of Environment and Forestry of Indonesia).[11] The villagers in Kurisa Village in Fatufia have reported degrading seawater quality in their neighborhood, with the fishermen forced to travel further out to sea to catch fish [11]. The alternative to DSTD for HPAL waste management would be on-land storage and treatment (e.g. dry-stacking or tailings dam). It is unclear what method the IMIP and HPAL plants have adopted. 

There were a number of protests and demonstrations held by local residents and student groups in response to the environmental and social concerns related to the IMIP and associated nickel mining activities. In 2019, there was a massive flood that hit the Bahodopi area. In September 2019, hundreds of residents took to the streets in Dampala Village in the Bahodopip district, about 7 kilometers away from the IMIP, as a result of the lack of satisfying response from mining companies after the flood that hit the three villages of Dampala, Le Le and Siumbatu on 8 June 2019 [28]. The flood disaster claimed the lives of two residents and hundreds of houses, as well as public facilities. Residents that are members of the Aliansi Rakyat Menggugat (Armet) claimed that the cause of the flood was related to the nickel mining activities upstream of the village, and demanded a review of the environmental impact assessment (Amdal) document of PT Bintang Delapan Mineral (BDM) and revoking the company of its mining business license (MBL) [21]. It was reported that the flood did not affect the operation of the IMIP, but cut off some workers from their workplace due to the collapse of bridges and road. The Morowali Police Chief ended up coordinating the negotiation between the protesters and the local government, who promised to compensate the local residents for their loss and evaluate the MBL holders such as BDM [18], [28]. In November and December 2021, demonstrations were held by student group Aliansi Mahasiswa dan Masyarakat Morowali (AMMM) and consumer group Aliansi Pelanggan Listrik Menggugat (Pelita) Morowali respectively to request for solving the local electricity crisis, as local residents suffered from frequent blackouts.[29] While the demonstration was more targeting the local government and electricity provider PLN, the electricity shortage at the local communities is in direct contrast with the scale of coal-fired power plants built by the IMIP that provides electricity supply to its industrial operations. In fact, the IMIP allocated most of its corporate social responsibility (CSR) budget to electricity subsidies to address the community electricity shortage in the Bahodopi district, including Fatufia, Keurea, Bahodopi and Bahomakmur villages [30]. It was reported that the construction of the CFPP at the IMIP helped with the electricity access in the area, especially with the subsidies from the company. However, PLN did not continue the collaboration with the IMIP and used diesel power instead [31].

Labor conditions is another major issue at the IMIP that has been voiced by multiple organizations. It is perceived by local workers that the Chinese peers tend to given higher wages and some of the Chinese workers were hired illegally, which led to anti-Chinese sentiments and even conflicts from time to time [32]. There were alleged labor malpractices such as termination of contracts, long working hours, unfair wages, and restrictions due to COVID-19, as well as high incident and fatality rate [7], [32], [33]. In a most recent case, “leading activists of the United Labour and People’s Alliance, which consists of three labor unions, the Morowali Industrial Workers Union (SPIM), the Morowali Indonesian Prosperous Labour Union (SBSI), and the Morowali Indonesian National Federation of Workers’ Unions (FSPNI), were dismissed unilaterally on 14 August 2020 by the management of the company due to their union activity in the pandemic time [34].” This incident started from a series of interactions between the Alliance and the company at the beginning of the Covid-19 pandemic, where 2,000 workers were sent home or told to quarantine. On 5 August 2020, the Alliance held a demonstration in front of the IMIP office, which led to a mediation meeting between the Alliance and the IMIP coordinated by the government through the Bahodopi sub-district secretary (Sekcam). On 14 August, three union leaders joined a meeting with the management of PT Indonesia Tsingshan Stainless Steel (ITSS) and PT Bukit Smelter Indonesia (BSI), which ended up with a unilateral dismissal of the three union leaders in the name of provoking colleagues to hold demonstrations and disrupting/hindering production. The layoff of union leaders later led to a strike of three days between 22 and 25 August 2020 [34].

In April 2021, AEER started a petition on Change.org to urge the nickel-battery industry for electric vehicles to follow best global standards, including stopping disposal of tailings into the ocean and replacing CFPPs with renewable energy [35]. In the petition, AEER also urged the Indonesian government and other stakeholders to no longer issue tailings disposal permits for DSTD and to require the companies to use renewable energy sources, as well as to improve the welfare of workers and working conditions at Morowali and Obi Island where nickel mining and processing is concentrated [35].

The IMIP is located in the Bahodopi district of Morowali Regency, Central Sulawesi, Indonesia. It has an area of 3,200 hectares and is served by coal-fired power plants of more than 2GW capacity.[3], [4] The IMIP was initially built for the purpose of developing nickel pig iron and stainless-steel production, but expanded to become the largest nickel-based industrial area in Indonesia.[11] The IMIP comprises of 3 clusters: stainless steel cluster (44 lines of nickel pig iron smelter furnaces with 3 million metric tons of stainless steel output per year), carbon steel cluster (with production capacity of 3.5 million tons per year), and EV battery cluster (under construction).[36]

The IMIP project received financial support from policy banks in China, including China Development Bank, the Export-Import Bank of China, and state-owned Chinese banks including Bank of China, as well as international bank such as HSBC.[5], [8] It was estimated in 2018 that the IMIP produced 50% of Indonesia’s processed nickel products and it is the largest nickel industrial site in Indonesia.[2]As reported in 2021, the IMIP compound is home to at least 30 nickel processing lines.[12] More than 30 nickel mines could be seen in the Energy and Mineral Map from the ESDM One Map platform.[13]

A series of coal-fired power plants (CFPPs) with over 2GW capacity have been planned and constructed to support the operations of SMI and the IMIP, and are located in the IMIP. According to the data from Global Energy Monitor (GEM), initially there were three phases involved in the Sulawesi Mining power station, including a first phase of 2x65MW, a second phase of 2x150MW, and the third phase of 2x150MW.[17] Phase 4 expansion project of 2x350MW was announced in 2019, and it was reported in June 2020 that China Power Construction Jiangxi Institute, a subsidiary of PowerChina, won the contract for the project.[17] The construction of Phase 5 started in March 2020, with a combination of 2x350MW and a unit of 380MW.[17] In total, these CFPPs (in operation and under construction) reached a scale of 2,530MW, or 2.53GW. In addition, it was reported that Energy China Zhejiang Thermal Power, a subsidiary of Energy China, signed a contract with Tsingshan Holding Group in August 2021 to construct the 3x380MW Lapota Power Plant in the IMIP.[19] According to Shanghai Decent Group’s own disclosure, the IMIP is home to around 2.91GW of CFPP capacity, with 700MW under construction as of 2021.[4]