Summary

[...] nickel plays a key role in electric vehicle (EV) batteries and renewable energy technologies. However, its extraction and processing raise serious human rights and environmental concerns, particularly in Indonesia [...]. This research aims to map Indonesia’s nickel supply chain, enhancing transparency and offering strategic recommendations to help companies address social and environmental risks while ensuring ethical and sustainable sourcing. The supply chain mapping focuses on links between nickel industries in Morowali, Central Sulawesi, and downstream uses in EV manufacturing, wind and solar power.

Supply chain links with the renewable energy and automotive sectors

[...] While many of these links do not definitely confirm that nickel from IMIP and PTVI ends up in EV cars, they suggest a high likelihood of connections between the Morowali nickel industry and EV battery and car manufacturers [...]. Car manufacturers include Tesla, Volkswagen, BMW, Hyundai, Stellantis and Volvo, while battery makers with likely links are CATL, LG Energy Solutions, CNGR, SK On, Samsung SDI, and Ningbo Shanshan, among others. For renewable energy technologies [...] This sector appears to be more opaque [...].

Social risk assessment

[...] These conditions pertain to Occupational Safety and Health (OSH), wages and income inequality, working hours, job insecurity, gender-based violence and discrimination, and the undermining of trade unions. [...] polluted water from runoff sediment, deforestation, air pollution, and forced evictions caused by nickel mining and production activities harm the surrounding communities. [...].

Strategic recommendations

[...] companies are recommended to:

• Implement human rights due diligence processes throughout the organisation
• Conduct regular, independent audits of mining, smelting and refining operations
• Enhance transparency in their mineral supply chain [...]
• [...] overall impact on workers, local communities, and the environment in Indonesia is significant and should be traced and addressed.
• Assign clear Board responsibility for and oversight of respect for social and environmental rights.

Measures that can be taken to prevent and mitigate adverse impacts related to a supplier relationship include:

• Work with suppliers on corrective action plans with clear goals.
• Provide training and support to improve practices.
• Encourage sector-wide collaboration on impact prevention.
• Help suppliers access financing for improvements.
• Use purchasing power to demand ethical practices or disengage if violations persist.
• Push for renewable energy and stop new coal plant projects.
• Support remediation efforts and responsibly disengage if necessary.
• Follow OECD guidelines to enhance leverage through industry collaboration.

[...]

All these companies were contacted and offered to participate in the research by providing feedback on several questions related to their nickel supply chains. [...] However, none of the companies shared details on its supply chain beyond generic information.

In addition, the member companies of the Dutch Renewable Energy Agreement (REA) have been contacted for this research. Out of the two replies, one company provided names of some of their main suppliers of wind towers, wind foundations, (gas) turbines and heat pumps.