Indonesian Chinese enterprises labor tide impacts the dream of a big nickel mining country-Zhejiang Benji Stainless Steel Co., Ltd

The Chairman of the Muslim Brotherhood of Workers, Dayin Washidin, said that Indonesian workers working in GNI have a low salary of only 5 million rupiah (about S $440) per month, while Chinese workers who do the same work receive three times higher salaries. He complained about the policy of Indonesian Minister of Ocean Affairs and Investment Co-ordination Ruhout, who allowed Chinese enterprises to "exploit Indonesian labor" and "sell Indonesia to China".

The conflict began when Indonesian workers from GNI Nickel Smelter proposed to improve workers safety, working environment and pay increase. The Indonesian Union of Trade Unions (SPN) negotiated with GNIs management on behalf of Indonesian workers. On January 13, the labour-management negotiation had made progress, but the factory refused to re-engage the workers whose employment had been terminated. The Indonesian Union of Trade Unions announced a strike on January 14. It is reported that the members of the trade union held a peaceful demonstration, which not only required the Indonesian workers to strike, but also the Chinese workers in the factory to strike together, but the Chinese workers were unwilling to join. In the evening of the same day, the Chinese workers who continued to work clashed with the Indonesian workers, resulting in two deaths, one Indonesian worker, the other Chinese worker, and many others injured.

Chinas development is in need of a large amount of nickel ore, so it will soon become the largest nickel investor in Indonesia. Most nickel smelters are concentrated in Sulawesi Province, and Morowali County is also the richest county in Indonesia due to its minerals. The mining of nickel mines employs many Indonesian workers, and also drives many local small enterprises, including food stores, homestays, grocery stores, etc.

The recent conflict between Chinese workers and Indonesian workers at Gunbuster Nickel Smelter (GNI), a Chinese-funded enterprise in North Morowali County, Central Sulawesi Province, Indonesia, reflects the problems of Chinese enterprises investment in Indonesia.

How this strike incident evolved into a conflict between Chinese and Indian workers and became a bloody incident out of control is still under investigation, but three issues are reflected behind the incident: first, ethnic and cultural differences; Second, the internal management of Chinese enterprises is improper; Third, there is a big gap in wages between Chinese and Indian workers. The incident also showed that someone deliberately undermined the nickel mining policy of Indonesian President Joko.

Adjunct professor of the Rajaranan Institute of International Studies, Nanyang University of Technology

On January 30 this year, a gathering of Indonesian entrepreneurs was held in Makassar. Yusuf Kara, originally from South Sulawesi, was invited to attend and deliver a speech. He said that the events in North Morowali could not be repeated, and pointed out that as long as the local government took over these foreign nickel smelting companies, such events would not occur. He said that there is nothing to be proud of when foreigners manage Indonesian nickel smelters. Kara believes that Indonesian local entrepreneurs have the ability to operate these companies, and supports the government and entrepreneurs of South Sulawesi Province to take over the nickel smelting plant of Fale Company in Luwu Timur. He also called for the takeover of other Chinese-funded nickel smelters. It is clear that Kara is stirring up Indonesian nationalism.

Some social media pointed out that in the conflict, it was the Chinese workers who started first, while the local police said that it was the Indonesian demonstrators who started first. The demonstrators burned heavy vehicles of GNI, damaged heavy machinery and burned part of the plant; The demonstrators also looted and burned the womens dormitory in the factory. The military and police jointly dispatched to maintain order and arrested 72 perpetrators. The scene was quickly controlled. The factory soon resumed production, but the situation was still quite tense.

Zoko believes that the policy of developing nickel mines not only increases Indonesias income, but also encourages developed countries to transfer technology to Indonesia. One day, Indonesia will become an industrial country of nickel mines. However, Indonesias nickel policy has aroused opposition from European countries, who complained to the World Trade Organization (WTO). The WTO also said that it is illegal for Indonesia to ban the export of unmelted nickel ores, and Indonesia should export unmelted (cheap) nickel seedlings. However, the Indonesian government believes that the policies of developed countries to exploit developing countries are unfair, so it appeals.

The police are still investigating the strike conflict. Indonesian elites have different views on Chinese capital and Chinese labor, and also have different attitudes towards Zocco nickel mine policy. However, at present, the most important thing is to solve labor disputes and improve the welfare of Indonesian workers, and find out the perpetrators, so as to remove obstacles for Zokos dream of a big nickel mining country.

The policy of the Zoko government to encourage nickel mines has increased Indonesias nickel mine income by many times. Previously, Indonesias income from exporting nickel ore was only US $1 billion (about S $1.4 billion), but the income from smelting nickel ore in 2021 was US $20.9 billion (about S $29.3 billion), which is estimated to increase to US $30 billion (about S $42 billion) in 2022.

The author is Yusuf Isa Institute of Southeast Asian Studies, Singapore

Sai Didu, who was once the secretary of the Ministry of State-owned Enterprises and is now the anti-Zoko, said that the governments excessive preferential treatment of Chinese investment is simply selling Indonesia to China. He claimed that the vast majority of nickel mine income flows into Chinas pockets, leaving very few in Indonesia. Another anti-Zoco trade union activist, Nayingolan, compared Chinese enterprises to the Dutch East India Company in the colonial era of the Netherlands, which exploited Indonesian labor and resources to a greater extent.

Senior visiting researcher

In order to industrialize Indonesian nickel mines, the Zoko government accepted the investment of Chinese enterprises in Indonesia. However, if the Morowali conflict is not well resolved, it may affect the investment of Chinese enterprises in Morowali, and also affect Zoccos dream of a big nickel mining country.

Indonesian elites have different views on Chinese workers and Chinese enterprises. The rich businessmen headed by former Vice President Yusuf Kara believed that there were Chinese workers everywhere in Morowali, and even the welding workers in the factory used Chinese workers. He pointed out that his Bukaka enterprise used all Indonesian workers and no foreign workers.

The security environment of GNI Smelter is bad, and it is already a public secret. On December 22, last year, two Indonesian workers were injured or killed in an accident while working. The accident triggered a struggle between labor and management, which also led to the conflict on January 14.

However, there are many Chinese enterprises in Sulawesi, and the large number of Chinese workers has caused dissatisfaction from anti-government and Indonesian workers.

Liao Jianyu

Indonesia is the largest producer of nickel ores. Nickel ore is the main raw material for manufacturing steel, batteries and electric vehicles. Before 2020, all nickel ores exported by Indonesia are unmelted nickel seedlings, and the price is very low. After becoming President, Zoko invited foreign enterprises to invest in nickel smelting plants. Those investors who have obtained licenses but have not built smelters will have their licenses cancelled.

Ruhout believed that the nickel smelting industry was just starting in Indonesia and lacked talents, so Chinese labor was temporarily employed. With the transfer of technology, the number of guest workers will naturally decrease. Taking PT Vale in South Sulawesi Province as an example, he pointed out that most of the people there are now Indonesian.

Maman pointed out that some nickel smelters of Chinese enterprises lack safety equipment and have a bad working environment, which must be corrected, and the government should take immediate action. At the same time, he was very concerned about the situation of anarchism and the resort of workers to violence. He said that the government could not tolerate burning other peoples property.

The fuse of the North Morowali conflict is the safety and welfare of workers. Carter Saiying, the leader of the Morowali trade union, said that GNI ignored the safety and welfare of Indonesian workers, for example, it did not provide enough equipment, and the working environment was poor and unsafe, resulting in casualties of Indonesian workers. The workers asked the management to improve the safety measures and working environment, but the factory turned a deaf ear, which finally led to the call of the labor union to strike.

However, Maman Aduraman, the vice chairman of the Seventh Committee of the Indonesian Congress, gave a more comprehensive evaluation. He said that Indonesia needs foreign capital. Not all Chinese enterprises, including Chinese ones, exploit workers as critics say. However, he admitted that there was indeed a problem between the management of GNI and Indonesian workers, which must be solved jointly by both labor and management. He pointed out that both labor and capital are two sides of the same coin. There is a relationship between lips and teeth. One side cannot be without the other. However, Maman also said that Chinese and Indian workers have cultural differences, different work attitudes and values. Chinese workers can accept the harsh working environment and long working hours, while Indonesian workers cannot. Therefore, Chinese workers should understand the culture of Indonesian workers and understand the Indonesian language when communicating with Indonesian workers.

However, Maman added that the situation of GNI does not represent the general phenomenon of Chinese nickel smelters. Many Chinese enterprises have good safety and working environment. Even so, the government should strengthen the supervision of foreign investment to meet the demands of Indonesian labor safety and welfare.

Zhejiang Benji Stainless Steel Co., Ltd.,