inside the world’s largest nickel plant

On the afternoon of Oct. 25, an explosion ripped through a factory at a massive steel complex in Morowal, a remote region in eastern Indonesia that has in recent years become a center for nickel, a metal critical to the production of steel and batteries for electric cars. .

The explosion — at a steel plant owned by a division of Chinese steel giant Tsingshan Holding Group — sparked a fire and trapped a crane operator named Gunawan. “There’s someone inside,” a colleague shouted, according to video of the incident seen by the Financial Times.

Some workers prayed and others sobbed as plumes of thick black smoke filled the plant and firefighters struggled to extinguish the blaze. Gunavan died later that day. Another worker was injured.

His death at Indonesia’s Morowali Industrial Park (IMIP), the world’s largest nickel processing plant controlled by China’s Tsingshan, is one of nine deaths reported at Indonesian nickel facilities this year.

Covers 4000 hectares and has more than 84,000 Indonesian and Chinese workers, the IMIP complex has about 50 tenants — many of them Qingshan subsidiaries — including nickel and stainless steel plants and coal-fired power plants.

IMIP, first established in 2015, has grown rapidly since Indonesia’s ban on nickel ore exports took effect in 2020, forcing companies to set up metal processing operations in the country. Indonesia’s extensive nickel industry has also grown rapidly to become the dominant producer of the metal thanks to the world’s largest nickel reserves and huge Chinese investment.

But workers say success comes at a price. In interviews with the FT, more than two dozen workers from nine companies in the IMIP complex claimed that unsafe safety practices, inadequate protective equipment and poor communication between Indonesian and Chinese workers were widespread, leading to unsafe working conditions and frequent accidents. Their reports have been confirmed by three unions representing 12,000 workers.

Between 2015 and the first half of 2024, there were 114 incidents at nickel plants in Indonesia, resulting in 101 deaths and 240 injuries, according to data compiled from media reports by the non-profit group Trend Asia. Almost half of these deaths occurred in IMIP. In the first half of 2024, Trend Asia recorded five accidents at IMIP and 12 at other nickel plants in Indonesia, with eight deaths and 63 injuries. Indonesia’s manpower ministry did not respond to FT requests for data on accidents at IMIP and other nickel facilities.

“Production first, then safety,” said an employee at Indonesia Tsingshan Stainless Steel, another Tsingshan unit working at IMIP. Last year, an explosion at ITSS killed 21 workers — it was the worst accident in the history of the industrial park.

Working conditions have drawn close attention from the US. In September, the U.S. Department of Labor added Indonesian nickel to its list of goods it believes are produced with forced labor, citing third-party reports of alleged mistreatment of Chinese migrant workers and multiple indicators of forced labor identified by the UN International Committee of the Red Cross. Labor organization is a globally recognized standard. Among other indicators, the agency cited deceptive hiring, arbitrary withholding of wages, intimidation and coercion of overtime. It did not identify any specific companies.

Non-commercial Chinese labor watch called on the US Customs and Border Protection Agency to investigate IMIP and ban US imports of cold-rolled steel made there. The American agency has asked the group to provide more detailed information, CLW reports. “A consistent pattern of labor control was found across the plants and across the complex,” the CLW petition, sent to the FT, said.

Following an investigation into the ITSS explosion that killed 21 workers, the Indonesian government said there were “strong indications” of violations of standard operating procedures and negligence in enforcing industrial safety standards.

The economy of Morawali Regency on the island of Sulawesi, where IMIP is located, has been transformed by nickel. Dozens of guesthouses have been set up for migrant workers, who typically earn 3.8 million rupiah a month ($240) as basic wages, which exceeds the region’s minimum wage of 3.4 million and the national average of 3.1 million . They also receive some other benefits and overtime pay.

But there are also risks. One former worker at Indonesia Ruipu Nickel & Chrome Alloy, Tsingshan’s IMIP subsidiary, said he quit after five years at the firm’s nickel furnace. “The pay I was getting was not commensurate with the risk I was taking,” he said, showing several burn scars on his forearm. According to him, he did not have adequate safety equipment.

A member of medical staff at the clinic, which is run by IMIP, told the FT that accidents ranging from minor to serious injuries “happen almost every day”. “The current labor protection standards are not enough,” he said.

An employee of Risun Group, a coal company located in IMIP, said some workers try to cover up accidents because they are punished with pay cuts or warning letters. “Focusing (on security) is not preemptive; they learn by accident.” Risun did not respond to a request for comment.

“Posting occupational accidents (online) is considered a disclosure of company secrets,” said one ITSS official. A second ITSS worker said that the target can only be achieved if they do not take breaks.

Another worker said he was not allowed to work overtime — considered necessary to cover living expenses — in retaliation for joining the union. Dangerous working conditions, as well as intimidation and threats are considered by the ILO as indicators of forced labor.

Poor communication with Chinese workers, who tend to hold management positions, contributes to accidents, more than a dozen workers say. According to them, employees communicate using gestures or applications. Some of them often move between companies and are not familiar with specific security procedures.

IMIP representative Dedi Kurniawan said the industrial park complies with all Indonesian laws and regulations. IMIP and its tenants have made “several efforts” to reduce accidents, he said.

Dedi said IMIP tenants have standard operating procedures, conduct regular assessments, provide their workers with protective equipment and inspect plant equipment. Employees are also regularly briefed and trained and asked to prioritize safety and health, he added.

Working conditions at IMIP are “very different” from those described by the US Department of Labor, Dadi said.

Tsingshan and Indonesia’s Ministry of Manpower and Ministry of Investment and Processing did not respond to requests for comment. Eternal Tsingshan, the Tsingshan unit that controls ITSS and Indonesia Ruipu Nickel & Chrome Alloy, also did not respond.

Indonesia has previously denied allegations of forced labor.

The US Department of Labor told the FT that it had asked the Indonesian government to investigate nickel projects in Sulawesi, where IMIP is based.

“Our recommendations included . . . investigating and prosecuting domestic and foreign companies that violate Indonesian labor laws and regulations in nickel production, and increasing the number of labor inspections at the Central and South Sulawesi Industrial Parks and surrounding nickel mining projects,” US Labor Council. the agency told the FT.

The US department also asked Indonesia to better protect migrant workers, who nonprofits say are at greater risk of abuse.

According to China Labor Watch and Indonesian workers, Chinese migrant workers, who reportedly make up about 13 percent of the total workforce, live in dormitories at the IMIP complex, have their passports confiscated and their movements restricted. No Chinese workers were seen outside the compound in Morowal while FT reporters were there. Passport retention and movement restrictions are also among the ILO indicators of forced labor.

IMIP did not respond to a request for comment on China Labor Watch’s call for an investigation into the US facility. US Customs said it does not comment on specific investigations and cannot release information about forced labor activities.

Meanwhile, at the Dexin Steel Indonesia plant where Gunawan was killed, unions say efforts to speed up production contributed to his death. Qingshan did not respond to an inquiry about Gunawan’s death. IMIP confirmed the DSI incident and Gunawan’s death, but did not comment on the union’s allegations. Failed to access DSI.

A few days after the DSI incident, there was another accident at IMIP, a series of explosions at a nickel plant operated by Zhongtsing New Energy after nickel slag came into contact with water.

Videos shared with the FT show panicked workers running out of the factory, engulfed in thick smoke. IMIP confirmed the incident but told the FT there were no casualties. China’s CNGR Advanced Material, ZNE’s parent company, did not respond to a request for comment.