Indonesia Loses Nickel Lawsuit at WTO

nickel production

Indonesia finally lost a lawsuit regarding its nickel ore export ban policy in early 2020. This lawsuit came from the European Union, through the Dispute Settlement Body (DSB) of the World Trade Organization (WTO).

The results of the defeat were stated in the results of the DS 592 dispute decision regarding the final panel report which came out on October 17, 2022.

In the minutes presented by the Minister of Energy and Mineral Resources, Arifin Tasrif at the Working Meeting (Raker) with Commission VII DPR, it was stated: Decided that the export policy and the obligation to process and refine nickel minerals in Indonesia are proven to violate WTO provisions Article XI.1 GATT 1994 and cannot be justified by Article XI.2(a) and XX(d) GATT 1994.

Then, if Indonesia loses in this lawsuit, will Indonesia be exposed to costs or fines incurred?

The Director General of International Trade Negotiations at the Indonesian Ministry of Trade (Kemendag), Djatmiko Bris Witjaksono said that Indonesia was not subject to payments or fines.

“There is no (payment obligation),” explained Djatmiko quoted on Wednesday (23/11/2022).

Previously, ESDM Minister Arifin Tasrif said the final panel report also contained a panel rejecting the defense submitted by the Government of Indonesia regarding the limited number of National Nickel Reserves and implementing Good Mining Practices (Environmental Aspects) as the basis for the defense.

Responding to the panel’s results, Arifin revealed that the Government of Indonesia would submit an appeal. The reason is that the government is of the view that the panel’s decision does not yet have permanent legal force.

Thus, Indonesia does not need to change regulations or even revoke policies deemed inappropriate before the dispute decision is adopted by the Dispute Settlement Body (DSB).

“The panel’s decision does not yet have permanent legal force, so the government will appeal it,” said Arifin.

He said the final report would be distributed to other WTO members on November 30, 2022, and would be included in the DSB agenda on December 20, 2022.