Water monitoring gap puts Indonesian nickel under scrutiny

What Benchmark's numbers actually show

Indonesia is on track to supply roughly 60 percent of the world's nickel by 2030, according to Benchmark Minerals, making it the single most important country for the metal that goes into most electric vehicle batteries. Against that scale, a finding from Benchmark's Nickel ESG research stands out: only about 25 percent of nickel refiners operating in Indonesia have water pollution monitoring systems in place, compared with a global average of 48 percent among operating nickel refiners. That is roughly half the global rate, in the one country that will soon supply well over half the world's supply. The gap matters because nickel processing, particularly the high-pressure acid leaching (HPAL) route used for battery-grade material, sits near rivers and coastlines that communities depend on for fishing, farming, and drinking water, and what is not measured cannot be managed, defended to a buyer, or, when something does go wrong, caught early.

What a monitoring gap looks like on the ground

A 2024 investigation by the Organized Crime and Corruption Reporting Project (OCCRP), built on internal documents, offers a concrete illustration of what that gap can mean in practice. At PT Trimegah Bangun Persada's nickel operation on Obi Island, part of the Harita Nickel group, internal testing recorded chromium-6, a known carcinogen, at 350 parts per billion (ppb) in 2012, seven times Indonesia's legal limit of 50 ppb. The company began installing sediment ponds the following year, and its own Health, Safety and Environment director wrote internally in 2014 that he still saw "too many non-compliant values" for chromium-6. An HPAL refinery, built with Chinese partner Lygend Resources in a $1 billion joint venture, came online in 2021 roughly 200 meters from a spring used by the nearby Kawasi community. Testing after a February 2022 Guardian investigation into the site found chromium-6 at 128 ppb, and independent consultancy SRK Consulting recorded 173 ppb in February 2023, both well above the legal threshold, with an internal August 2022 review finding every one of 30 tested days in breach of the limit.

Laode M. Syarif, a Supreme Court environmental law trainer and former commissioner of Indonesia's Corruption Eradication Commission, reviewed the internal documents and said they "prove violations of Indonesian environmental law."

Harita disputed the Guardian's characterization, telling reporters its own testing between 2013 and 2021 showed chromium-6 readings between 5 and 40 ppb, within legal limits and, in the company's words, "suitable for consumption." The refinery has gone on to supply nickel used, directly or indirectly, by automakers including Tesla, BMW, Ford, Volkswagen, Mercedes-Benz, and Toyota, several of which have since confirmed conducting their own supplier audits at the site. That gap, between a company's internal figures and an outside investigation's testing, is itself the argument for the kind of independent, continuously verified monitoring that leaves less room for competing accounts of the same water.

Community accounts from the coastline

The pattern is not confined to one island or one company. In Central Halmahera, near the Weda Bay Industrial Park, residents and researchers with the environmental group AEER have documented diminished water quality and piling waste linked to nickel operations, alongside displacement pressure on nearby communities. Fishermen quoted by Dialogue Earth in coastal villages near Indonesia's nickel hubs describe smaller catches and murkier water they attribute to sedimentation and processing discharge, with limited access to the kind of official water quality data that would let them confirm or rule out a specific cause. In Sulawesi's Morowali area, residents near the Kobe River have reported similar difficulty finding fish amid turbid water blamed on sedimentation from nearby industrial activity. None of these accounts substitute for instrumented water testing, and that is precisely the point: without consistent, published monitoring data, communities, companies, and regulators are often arguing from anecdote rather than from a shared set of numbers.

Government is tightening the requirement

Indonesian regulators are not standing still on this. On May 30, 2025, Environment Minister Hanif Faisol Nurofiq personally inspected the Morowali nickel industrial area and, according to his ministry's own account, found open dumping at a landfill risking soil and water contamination, inadequate wastewater treatment at PT Obsidian Stainless Steel with floodwater discharged directly to sea, unmonitored nickel slag and tailings disposal at several sites, and a major stainless steel producer operating 26 emission sources with only partial continuous monitoring. "This is not merely an administrative violation," the minister said following the inspection. "This concerns lives, environmental futures, and responsibility. The state will not tolerate continued environmental regulation neglect." He added a direct warning to operators in the area: "We will not hesitate to impose sanctions."

That inspection sits alongside a broader regulatory tightening. In 2025, the Ministry of Environment and Forestry (KLHK) revised the implementing rules under Government Regulation No. 22 of 2021 to require large and medium-sized industrial polluters, nickel processing included, to install automated, real-time wastewater quality monitoring connected directly to KLHK's own SPARING online system, replacing periodic self-reported testing with continuous data the ministry can see as it is generated. Companies not yet meeting the new technical standard have a maximum one-year adaptation window, during which they must file a Corrective Action Plan, before facing administrative sanctions that range from fines to suspension or revocation of operating permits.

Closing the gap

The technical fix here is not exotic, and Indonesia's own regulators have just written much of it into law. Define discharge points, monitor continuously rather than periodically, connect that data to a system regulators and, ideally, communities can actually see, and act when the numbers move rather than after an outside investigation forces the question. Producers that build this out ahead of the one-year SPARING compliance deadline, rather than at the deadline, will enter the next few years of intensifying automaker and EU due diligence scrutiny with a real-time compliance record instead of a promise. Those that wait are choosing to let the next Guardian investigation, OCCRP-style document trove, or ministry inspection write their water quality record for them.

Sirkularium's view

Indonesia's own numbers make the case better than any outside critic could: a quarter of refiners monitoring water pollution against a global average of nearly half, in a country about to supply 60 percent of the world's nickel, is a gap that automakers, financiers, and Indonesia's own environment ministry have all independently identified as a priority. The ministry's Morowali inspection and the new SPARING monitoring mandate show the regulatory direction is already set. What closes the remaining gap fastest is operators treating independently verified, continuous water monitoring as a baseline cost of doing business rather than a compliance deadline to meet at the last possible month. Sirkularium views that kind of proactive, standardized water and ecosystem monitoring, commissioned before a regulator or an investigative reporter asks for it, as the clearest way for Indonesia's nickel sector to convert its current scrutiny into the kind of documented, defensible environmental record its scale now demands.