Chinese nickel company promises to hire 5,000 locals amid backlash in Indonesia

Activities at a nickel mining site. (Kontan/Cheppy A. Muchlis). Sketched by the Pan Pacific Agency.

JAKARTA, Jul 10, 2020, The Jakarta Post. Chinese-backed mining company PT Virtue Dragon Nickel Industry (VDNI) has promised to hire 5,000 locals amid protests over the employment of 500 Chinese workers for nickel smelter projects in Konawe regency, Southeast Sulawesi, The Jakarta Post reported.

VDNI signed a memorandum of understanding (MoU) on the matter with the Konawe administration on Wednesday. The company agreed to absorb the workforce while the administration agreed to headhunt workers, who will start working once the smelter installation was finished.

“We are committed to employing local workers. But recruitment will be done in stages, as needed,” VDNI spokesman Indrayanto told The Jakarta Post from nickel-rich Southeast Sulawesi on Thursday.

He said the company would hire 2,500 local workers in the first phase. These workers would become smelter operators, which were priority positions that VDNI needed filled. Indrayanto did not detail the successive phases.

Indrayanto also said the company had brought in 261 out of the 500 Chinese workers as of Thursday. The remaining third batch was supposed to arrive last week but the arrival was delayed due to local protests.

Virtue Dragon, which is developing Indonesia’s largest nickel smelter, plays a key role in realizing the central government’s ambition of transforming mineral-rich Indonesia from a commodity-driven economy to an industrial economy.

The smelter, last valued at US$1.4 billion, is slated to produce 600,000 tons of nickel pig iron (NPI) each year once fully completed in 2021.

Indrayanto argued that the employment of Chinese workers was essential to install the smelter. While there had been a delay in the arrival of foreign workers, he was optimistic the project would still run on time, at the end of the year.

“The development of the [smelter] is still ongoing but it will just be slower,” he said.

In April, Southeast Sulawesi Governor Ali Mazi and the Southeast Sulawesi Legislative Council had refused entry to the foreign workers, supposedly due to concerns over COVID-19 transmission. Ali then turned around and green lighted the arrival amid the backlash.

Manpower Minister Ida Fauziah previously stated in June that allowing foreign employment would eventually result in more jobs for local workers after they learned to use the technology used in the projects.

With the sizeable investment for the project, the Office of the Coordinating Maritime Affairs and Investment Minister has also stated that it would oversee the local worker recruitment process, says a spokesman.

“With this deal, we hope all employment-related policy making and problem solving in the area can be handled faster and better,” Office of the Coordinating Maritime Affairs and Investment Minister spokesman Jodi Mahardi said in a statement on Wednesday.

Locals were seen up in arms near Haluoleo Kendari Airport in South Konawe on June 23 as the first batch of 152 Chinese workers landed.

Protesters raised concerns over local unemployment rates, COVID-19 infections and the workers’ visa statuses, while also blaring religious and racially-charged statements.

As of May 27, more than 1.79 million people have lost their jobs as many nonessential businesses shut down to comply with government restrictions, according to data from the Manpower Ministry. The government predicts up to 5.5 million workers could lose their jobs, while 4 million could fall below the poverty line.

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