Indonesia plans to appeal against the World Trade Organization’s EU-leaning ruling on its nickel ore export ban, in what analysts say is an unwinnable case that will create an uncertain investment climate in Southeast Asia’s biggest economy.
The WTO’s ruling supporting the European Union’s complaint against Jakarta, and the government’s decision to appeal, were revealed by Arifin Tasrif, energy and mineral resources minister, ahead of the organisation’s formal announcement.
In January 2020 Indonesia implemented its ban, ahead of schedule, to generate higher-value nickel products and help Jakarta become part of the electric vehicles (EVs) global supply chain; the nation has the world’s largest reserve of nickel ore.
However, Brussels viewed the move as a violation of Article XI of the 1994 General Agreement on Tariffs and Trade (GATT), which says all WTO members must not prohibit or restrict imports or exports, other than duties, taxes, and other such charges. The European bloc said Jakarta’s restrictions unfairly limited access to nickel ore and other raw materials.
The export ban, which has created an artificial nickel shortage, has disrupted Europe’s stainless-steel industry employing around 230,000 workers. Nickel is the main component of stainless steel.
Appealing would also give the impression that Indonesia, which this month hosted the G20 annual summit, would only follow international law when it benefited from it. Refusing to comply or delaying “could be seen as Indonesia ‘thumbing its nose’ at the WTO and GATT 1994” which would be “a big problem”.