On September 21, 2022, smoke billowed from a nickel smelting plant operated by Virtue Dragon Nickel Industry in Konawe, Southeast Sulawesi, a reminder of Indonesia's significant role as the leading producer of nickel globally. This metal is critical for electric vehicle (EV) production, and Indonesia has been focusing on increasing its domestic processing capabilities to meet rising demand.

Recently, the US Department of Labor released findings, based on reports from non-governmental organizations, that included Indonesian nickel on its annual list of goods associated with child labor or forced labor. In response, Yuli Adiratna, the director of labor inspection at Indonesia's Ministry of Manpower, indicated that this report would inform efforts to strengthen the monitoring of regulations and adherence to international standards within the commodities sector, although specifics were scarce.

Yuli Adiratna acknowledged that the ministry has not yet confirmed the allegations cited in the US report. These claims detail serious issues like deceptive recruitment practices from China, inadequate wages, instances of physical abuse, and confiscation of workers' passports, pointing to dire conditions faced by Nickel producers. Dominated by Chinese firms, the nickel industry in Sulawesi has around 6,000 Chinese migrant workers employed in large industrial parks processing nickel ore.

Moreover, the report suggests widespread forced labor among adult workers in Indonesia's nickel production. In light of these concerns, the Chinese embassy in Jakarta did not provide immediate comments on the allegations outlined in the US report. Meanwhile, Indonesia aspires to enhance its role in the electric vehicle and battery manufacturing sectors and engage in strategic dealings with the United States regarding critical minerals, seeking to align with President Biden's Inflation Reduction Act concerning material supply chains. For tax incentives under this act, companies providing materials for EVs or batteries must have limited foreign ownership, which could complicate relations with major Chinese interests.