On 13 June 2024, a nickel smelting furnace at the Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi caught fire and exploded, sending two workers to hospital. A year earlier, on 24 December 2023, a smelting furnace at the same facility also caught fire and exploded, killing 13 workers on the spot; several others late succumbed to their injuries later in hospital, resulting in the death of 21 workers. Another 39 workers suffered severe burns in the 2023 incident, with some becoming disabled and unable to work.

These tragic events expose a major flaw in the Indonesian government’s ambition to establish the country as the world’s nickel processing hub. Indeed, the Indonesian government’s policy of resource nationalism, particularly through nickel downstreaming, has successfully transformed Indonesia’s position in the global markets for this newly ‘critical’ mineral, with rising production figures, an increasing market share.

According to the International Nickel Study Group, Indonesia’s share of global nickel exports surged from 20% in 2015 to 80% in 2020. The export value of nickel-related commodities, particularly stainless steel, ferronickel, and battery materials, soared from US$6 billion in 2013 to US$30 billion in 2022. As of July 2023, Indonesia had 43 nickel smelters in operation, with an additional 28 under construction and 24 in the planning stages. The majority of investors are from China, with additional investment coming from the United States, Brazil and Australia.

The nickel downstreaming policy has been spruiked by the government as a boon for workers as well as the national balance sheet. As President Joko Widodo said during a visit to a Sulawesi smelter, downstreaming “…will create jobs, for instance, 27 thousand workers can be recruited in this company. Also, it will generate tax income for the country”.

In reality, downstreaming prioritises economic value and tax revenue over worker welfare. Officials have portrayed it as Indonesia’s  path to becoming a developed country, while turning a blind eye to pressing social and labour concerns arising from the policy.

An industry too important to regulate?

A focus on the business practices of two major nickel groups: Tsingshan Holding Group and Jiangsu Delong Nickel Industry reveal the contradictions in the downstreaming policy. The influence of these Chinese companies in Indonesia’s nickel industry is undeniable. They are the backbone of the downstreaming effort, controlling over half of the nation’s nickel production and operating vast smelters employing thousands of workers.

Tsingshan operates two smelter parks: IMIP in Central Sulawesi, and the Indonesia Weda Bay Industrial Park (IWIP) facility in North Maluku. Each park houses dozens of companies involved in the extraction and processing of minerals. Up until now, IMIP in general has employed approximately 120,000 workers, approximately 90% of whom are Indonesian; the rest are Chinese. Meanwhile, IWIP claims to have employed more than 24,000 local workers in 2021 with a goal of 36,000 in 2022.

Jiangsu Delong has three smelting companies: Obsidian Stainless Steel (OSS) and Virtue Dragon Nickel Industry (VDNI) in Southeast Sulawesi, and Gunbuster Nickel Indonesia (GNI) in Central Sulawesi. Since 2023, VDNI and OSS together have employed more than 10,000 workers, and GNI has also employed more than 10,000 workers.

Most of the nickel processing facilities, including those owned by these two groups, have been classified by the Jokowi administration as part of the National Strategic Projects (Proyek Strategis Nasional, or PSN). The majority of Chinese-funded energy and infrastructure projects are included in the PSN (e.g., Jakarta–Bandung high speed rail, industrial parks, toll roads) and receive policy and security prioritisation. In addition, the Widodo administration has strengthened the protection of investments in the nickel and smelting sector through the enactment of the Omnibus Law on Job Creation 2022 and its derivative regulations.

Often hailed as investments that can boost the economy and create jobs, these smelters pose significant problems. These problems include poverty, pollution, tax evasion, low wages, poor working conditions and poor occupational safety and health (OSH) standards. A recent report found that smelters benefit only a handful of people, while workers struggle to make ends meet and neighbouring communities remain impoverished. In 2017, IMIP was reported to be in tax arrears and faced a fine of IDR 60 billion (US$3.7 billion). Similarly, since 2021 VDNI has owed IDR 74.5 billion (US$4.6 billion) in tax arrears and has yet to pay the amount, despite repeated requests from the tax office.

Workplace fatalities and impunity

Another issue of great concern in the nickel smelting sector is the risk of occupational diseases and recurrent fatal accidents at work. According to some reports, since IMIP began its operations in 2015, there have been tens of thousands of cases of respiratory disease among workers. Similar conditions have been experienced by workers at IWIP and OSS. These illnesses are caused by coal pollution, ore dust, and sulphur odours caused by chemicals used in nickel processing.

Other reports also document the recurrence of fatal accidents at nickel processing facilities over the past decade. A database of workplace accidents I compiled from various sources, including company reports and local media outlets, shows that  between 2019 and 2024, 96 accidents occurred at nickel smelters in Indonesia, resulting in the deaths of 97 workers. Of these, 43 accidents occurred at Tsingshan smelters, resulting in the deaths of 56 workers, and 33 accidents occurred at Jiangsu Delong smelters, resulting in the deaths of 26 workers.

The number of work accidents in the nickel and smelting sector is indeed a relatively small percentage of the number of work accidents in Indonesia. In 2021 the number of work accidents was 234,370; in 2022, this figure rose to 265,334; and in 2023, it rose to 350,826.

However, in all cases of workplace accidents, the government often sees them as isolated events born of individual misconduct. In the case of occupational diseases in the nickel and smelting sector, for instance, workers can be blamed for not wearing personal protective equipment properly, whereas in terms of work accidents, workers can be blamed for not following work procedures.

But the issue of workplace accidents is in fact a structural problem. In the nickel and smelting sector, the data shows that workplace accidents have a similar pattern: explosions, fires, and heavy vehicle collisions. This is a systemic problem arising from weak regulations and lack of government supervision, which leads employers to apply poor OHS standards, seen in the form of long working hours, overtime, and the use of dangerous chemical substances and poorly maintained work equipment.

In this context, corporations conduct their business with impunity guaranteed by the government. Such impunity is usually reserved for politically and financially influential investors, especially those whose companies are included in the PSN. Following the fatal accident at IMIP on 24 December 2023, police named two Chinese workers as suspects for causing the explosion in the smelter furnace. One of these suspects was a financial supervisor. Many critics have condemned the police action as an attempt to scapegoat the foreign workers.

In fact, top management should be held accountable because there is a chain of responsibility in the workplace and in the organisation of production in general. Labour inspectors are also responsible for failing to conduct routine inspections in the workplaces where fatal accidents have occurred repeatedly. The legal case of this accident is still unclear. The police have submitted the IMIP case to the prosecutor’s office, but no further action has been taken.

Union demands

An alliance of trade unions at the local level in the nickel smelting area and their affiliates in the national level, along with NGOs, have repeatedly demanded improvements in working conditions in the workplace and the strengthening of OSH systems in the nickel smelters. Some of their more detailed demands include the need for a robust OSH regulation in the mineral processing sector, particularly nickel. Unlike related sectors such as mining, the smelting sector does not yet have such regulations. This type of regulation will ensure clear and systematic oversight from the national level to the workplace level.

In addition, this advocacy coalition is demanding an increase in the number of specialised inspectors in heavy sectors such as mining and smelting, and the assignment of these inspectors near accident-prone industrial areas where they can be easily reached by trade unions. So far, labour inspectors have only been stationed in provincial capitals with limited supervisory capabilities and tend to collude with company managements. The unions are also calling for the establishment of an independent national OSH commission with oversight and investigative powers to monitor business practices, including those in the mining and smelting sector. Indonesia already has a National OSH Council, but it only provides advice to the Ministry of Labour and has no oversight authority over employers.

Finally, unions advocate for the involvement of workers and themselves in the monitoring of OSH in the workplace. Although within-firm OSH committees are mandated by existing regulations and their members consist of both labour and management representatives, these committees often serve only as an advisory bodies to management and lack independent oversight. The involvement of unions makes OSH oversight more independent and there is no fear of retaliation from the workers to report companies’ misconduct.

So far, there has been no policy from the government and smelter companies in response to genuine demands from unions. On the one hand, the Jokowi administration has repeatedly warned smelters to improve working conditions and prioritise worker safety, yet has made no attempts to strengthen labour supervision and law enforcement. On the other hand, smelters have become more aggressive in spending on public relations campaigns: the GNI smelter paid Kompas, a major newspaper, to write a series of coverage on implementation of their corporate social responsibility (CSR) program.

International pressure

As the Widodo administration nears its end, it’s likely that president-elect Prabowo Subianto will maintain his predecessor’s nickel policy without making substantial changes. However, Indonesia’s significant role in the global nickel market has put the country in the international spotlight. International pressure is needed to add strength to the pressure already put forward by workers and trade unions in the country.

After the passage of the US Inflation Reduction Act (IRA) in 2022, some US senators have objected to opening their market to Indonesia, citing issues related to human rights, environmental protection, and labour rights. The IRA restricts access to the US market for essential mineral exports from countries that do not have specific free trade agreements with the United States. Of course, the IRA is inseparable from underlying geopolitical tensions with China, and the trade war and de-risking in response to them. However, Indonesia appears concerned about the Act’s implementation. Jokowi has lobbied Biden on this matter, but as of now, no resolution has been reached.

Australia also needs to put pressure on Indonesia. Australia already has a Modern Slavery Act in place, which requires that certain entities operating there report on the risks of modern slavery within their supply chains, regardless of whether those risks occur domestically or internationally. The Sydney-based company Nickel Industries Limited, is currently investing in IMIP and IWIP. The US State Department’s Trafficking in Persons Report has in 2022 and 2023 highlighted the risks of forced labour in one or more nickel mining companies it says are ‘affiliated with the PRC’s Belt and Road Initiative’, likely an allusion to Tsingshan and/or Jiangsu Delong. Unions and NGOs in Australia should stand in solidarity by putting pressure on the government and its corporations to warn Indonesia of the poor business practices in the nickel and smelting sector.

The growing demand for nickel, driven by the energy transition, will continue to seduce nickel-producing countries and corporations to force their workers to work overtime to increase productivity. Therefore, it’s crucial to continue mounting fierce international and domestic pressure to support unions and workers in fighting for their rights.

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When I walked my seven-year-old twins to their school in the East Java city of Malang, we sometimes made a game of counting the cigarette ads we passed during our ten-minute journey. The day in 2016 when we tallied fifty-eight one way, they would have passed over a hundred cigarette ads round trip.

We spotted four-metre banners adorning shops, signs erected on poles, and more modestly sized stickers that I also counted. If cigarette companies made these stickers, hired people to post them, and paid taxes on them, then they were surely effective in recruiting smokers. Sticker ads often appear at young children’s eye level, and tobacco control scholars have documented how tobacco companies work across the global south—including Indonesia—to ensure that cigarettes are widely sold near schools.

The dominant position cigarette ads command in Indonesian public space raise questions of tobacco justice and labour that were central to my research on Indonesia’s cigarette market. This market—the world’s second largest—is striking for its size, unique product composition, and gender disparities. Before the Covid-19 pandemic hit, Indonesians were smoking over 300 billion cigarettes a year. 95% of cigarettes sold in Indonesia are laced with cloves and called kretek, which onomatopoeically evokes the crackling sound they make when clove fragments ignite. So-called white cigarettes (rokok putih) without cloves make up only 5% of the market. In a country where about two out of three men smoke, boys and men experience social pressure to demonstrate adult masculinity by smoking. Girls and women are discouraged from smoking but exposed to environmental smoke in the majority of homes and workplaces.

My research focused on Sampoerna, Indonesia’s largest clove cigarette company, which was founded in 1913 by Liem Seeng Tee, a Chinese migrant. The company was primarily owned and operated by Liem’s descendants until Philip Morris International (PMI) acquired it in 2005. My recent book Kretek Capitalism shows that the cigarette industry in Indonesia is sustained through an extraordinary amount of paid and unpaid labour on the part of employees, contractors, retailers, community groups, artists, influencers, and consumers.

To understand the profoundly consequential relationship between Indonesians and these lethal commodities, I look beyond the “pull” of nicotine desire and addiction to examine the relentless “push” of predatory capitalism and the labour exploitation that undergirds it. I show that Sampoerna goes to great lengths to enlist and orchestrate this labour and to make it seem meaningful and fulfilling to those who perform it, even when its ultimate purpose is increasing company profits. Some of the jobs that kretek capitalism creates are stable, pay well, and offer opportunities for advancement and upward mobility in Indonesia’s difficult labour market. But a great deal of kretek capitalist labour is partial, seasonal, contract, low-paying, or unpaid.

Tobacco control versus commodity nationalism

From a public health perspective, the tobacco epidemic unleashes unnecessary and unjust suffering in Indonesia. Tobacco-related diseases claim an estimated 290,000 Indonesian lives each year, over 50,000 of which are attributable to second-hand smoke exposure. In Indonesian households where the father smokes, tobacco accounts for 22% of average weekly household expenditures, crowding out spending on food, education, and health care, contributing to high rates of child malnutrition and stunting, and diminishing health and economic life chances. People in Indonesia’s lowest income bracket smoke at twice the rate of Indonesians in the highest income bracket, implying that the poor bear the greatest burden of tobacco-related disease and risk of financial devastation due to chronic illness and the premature death of key household providers.

But Indonesia’s tobacco control advocates are resource-poor and politically weak compared to the wealthy, powerful, and entrenched industry, which insists that tobacco is a vital source of employment and tax revenue, overlooking government losses and expenditures as tobacco-related diseases diminish productivity and create high treatment costs in Indonesia’s single payer health system, BPJS Kesehatan.

Industry supporters often emphasise that kretek hold not only economic but also cultural significance. Because the commodity combines the New World crop of tobacco with cloves, indigenous to the “Spice Islands” of Maluku, and a brew of flavourants known as saus (sauce), proponents claim that it represents uniquely Indonesian cultural heritage. Commodity nationalists frame smoking kretek as a patriotic act that benefits the nation and links fellow citizen–consumers, creating national communion through consumption.

Coffee table books, industry- and government-sponsored kretek museums, and Netflix’s recent adaptation of Ratih Kumala’s novel Gadis Kretek, or Cigarette Girl, promote this perspective by romanticising and aestheticising the industry and soft-pedalling its harms. Kretek nationalist discourse and nostalgia focuses on the hand-rolled kretek and the women workers who make this charismatic commodity and figure as iconic and endangered by tobacco control. In the post-Suharto era of democratic transition and reformasi, it has become expedient for the industry to cultivate grassroots groups that purport to represent such workers alongside tobacco and clove farmers, vendors, and smokers who insist on the industry’s economic and cultural significance.

The organisation Komunitas Kretek (Kretek Community or Komtek) cultivates a more militant kretek nationalism. Its website, social media, and downloadable books serve as a clearing house for product reviews and brand endorsements for the beginning smoker, odes to smoking rituals and to the “little people” whose livelihoods depend on the industry, challenges to the scientific consensus that tobacco is addictive and harmful, and claims that the kretek is not a cigarette and may cure rather than cause diseases like cancer.

Komtek associates the commodity with positive sentiments like love, affection, pleasure, and pride, but also mobilises negative sentiments including suspicion and hatred towards those who criticise the kretek industry. Komtek portrays domestic tobacco control activists, who have faced death threats, as national traitors and colonial lackeys. Foreign tobacco control organisations figure as neocolonial agents aiming to usurp Indonesian sovereignty and suppress indigenous industry, with Michael Bloomberg singled out for antisemitic depictions and accusations that his ulterior motive is selling nicotine replacement products. Komtek enhances commodity nationalism’s potency by pitching it as not only pro-kretek but also anti-colonial.

Kretek nationalist depictions of the industry typically gloss over its dominance by a small number of companies that achieved staggering market success by adopting global Big Tobacco technologies. The Indonesian cigarette market was dominated by white cigarettes through the 1960s. Over the 1970s and 1980s, the four largest kretek manufacturers—Bentoel, Gudang Garam, Djarum, and Sampoerna—imported European machines and mechanised kretek production. They marketed the new machine-rolled kretek as combining Indonesian taste (cloves and saus) alongside white cigarette features associated with modernity, prestige, and quality control that made them appear less harmful than unfiltered hand-rolled kretek, which were stigmatised as low class, coarse, dirty, and cheap.

By the 1990s, the four large kretek manufacturers, all of which were owned by ethnic Chinese Indonesian families, controlled around 80% of the industry and produced the majority of their cigarettes in mechanised factories. A number of Indonesia’s wealthiest billionaires and oligarchs made their fortunes in tobacco, including Putera Sampoerna, Djarum’s Hartono brothers, and Gudang Garam’s Susilo Wonowidjojo (Bentoel was part of Peter Sondakh’s Rajawali Corpora from 1991 until British American Tobacco acquired the company in 2009).

The success of Indonesian firms in marginalising white cigarette producers eventually led the latter to acquire kretek companies and “indigenise.” Tobacco control activists claim that Indonesia’s refusal to sign and ratify the World Health Organization’s 2003 Framework Convention on Tobacco Control (FCTC) helped motivate PMI’s acquisition of Sampoerna. After British American Tobacco and Japan Tobacco International followed suit by acquiring kretek firms, foreign firms assumed control over 40% of the Indonesian cigarette market.

Kretek companies drew on Big Tobacco’s deceptive product engineering (e.g. synthetic filters that turn brown when smoked and cigarettes that yield low tar and nicotine readings when machine evaluated) and marketing strategies (e.g. “light” or “mild” brand descriptors and pastel and pale metallic palettes) to make kretek appear safer and thereby perpetuate uptake and continuity of lethal commodity consumption. While producers have applied cutting-edge global technologies to the kretek, they have also relied on cultural heritage to market the industry as artisanal, traditional, and employment generating, working to ensure that the hand-rolled kretek, which claims only 20% of the market, looms large in the public imagination.

Labouring for kretek capitalism

The urge to protect employment opportunities in a country that suffers from un(der)employment and surplus labour is understandable. The Indonesian cigarette industry generates thousands of jobs and economic opportunities, especially in the tobacco producing and manufacturing regions of Java.

The industry’s drive to constantly mechanise and increase efficiency across the commodity chain, however, has the effect of reducing wage labour opportunities even when production levels are maintained or increased. European rolling machines that churn out 10,000 to 20,000 cigarettes a minute trivialise the feats of human cigarette rollers who make 300 to 600 an hour. Tobacco is mechanised both in the fields where it is grown and in the factories where it is processed, with stems and dust that would formerly have been waste converted into reconstituted tobacco (“recon”). Whereas hand-rolled kretek weigh two grams, machine-rolled kretek contain one gram or less and often incorporate puffed tobacco (made from leaves saturated with freon and ammonia gases and then freeze-dried) that enables producers to make more cigarettes with less tobacco.

Beyond the industry’s drive to increase efficiency and reduce labour inputs, my research raised questions about the nature and conditions of kretek industry labour and how it reinforces gender and class inequalities. Both tobacco and clove labour tend to be part-time and seasonal and are often compensated below minimum wage. Women, who often make up the bulk of the tobacco workforce, are typically paid significantly lower wages than men. Tobacco labour exposes workers to toxic pesticides, the “suckercides” used to control tobacco plants’ growth, and nicotine (which can result in poisoning known as Green Tobacco Sickness). The masculine labour of clove picking is better compensated but seasonal and intermittent, and pickers who scale 25 to 40 feet trees on precarious ladders risk disabling or lethal falls.

I encountered widespread ambivalence among tobacco and clove farmers over whether their crops were sufficiently profitable to justify ongoing investment, and all were engaged in additional enterprises and crop production to make ends meet. World Bank studies have found high levels of poverty, poor housing, food insecurity, and reliance on government benefits among tobacco and clove farmers, and they attribute Indonesia’s import of 30–40% of the tobacco it consumes to the fact that farming is an insufficiently lucrative endeavour. In tobacco-growing regions cigarette companies primarily market budget brands—except during harvest when they briefly hawk expensive (“premium”) brands to rapidly relieve farmers of their newfound cash.

Sampoerna jobs in both hand-rolled and machine-rolled factories are coveted for their relatively high salaries and benefits, but the work itself is physically and mentally demanding and beset by tensions over contracting. Feminised hand-rolling factory workers are subject to punishing piecework quotas that produce stress and cumulative injuries. Workers with limited access to formal education and job opportunities appreciate high levels of take-home pay when factories require overtime but quickly find their household finances precarious in its absence.

Over the past three decades, Sampoerna has increasingly relied on contractors in lower minimum wage regions where workers must meet higher quotas for lower pay. Since 2014, Sampoerna has closed three of its own hand rolling factories, laid off thousands of workers, and reduced the contracts of its 38 “Third Party Operators.” Mechanised factories offer competitive salaries, benefits, and training opportunities but also subject their workers—who are hierarchised as contractors, daily workers, and monthly workers—to draining around-the-clock shift schedules, noise exposure and other factory hazards, and relentless pressure to “continuously improve” their quantity, quality, and safety performance.

Cigarette companies also recruit a considerable amount of labour—some of which is uncompensated—to promote their products and collect data on potential consumers. Sampoerna circumvents restrictions on directly promoting cigarettes through social media by hiring event organisers, influencers, and brand ambassadors to create hashtags, irresistible selfie walls, and competitions with prizes that require participants to register (yielding personal data including identity card, mobile phone number, social media accounts, and favourite cigarette brands) and post relevant content on platforms like Instagram. These efforts are particularly focused on youth and work through campus hobby groups, café and bar sponsorships, and amateur and professional music and art events.

Sampoerna’s marketing staff and contractors also extract shelf and advertising space and labour from the millions of independent retailers who reach into urban kampungs and remote highlands with commodities like instant noodles, soap, and cigarettes. Cigarette companies incentivise independent retailers to sell and advertise their products with “free” packs and competitions that prod them to create large pack displays or sell single sticks, all of which helps create the advertising-saturated and tobacco-friendly environment I described at the outset. Sampoerna has recruited over 243,000 independent retailers as “Sampoerna Retail Community” (SRC) partners that it encourages to modernise and promote its product. The company took advantage of the Covid-era demand for contactless shopping to expand the SRC “digital business ecosystem”, which is meant to generate more retail traffic and consumer data.

Conclusion

Sampoerna remains Indonesia’s largest cigarette producer, although the Covid-19 pandemic and subsequent government tax policies have weakened its market position. Indonesia’s cigarette market has rebounded considerably from its initial Covid decline (from almost 306 billion sticks in 2019 to 276 billion in 2020), but Sampoerna’s market share has fallen from 32.2% in 2019 to around 28% as smokers switched to lower-priced brands in the face of lower income and government excise tax hikes on the largest cigarette producers.

With Sampoerna, Philip Morris International has maintained its dominance over the white cigarette, “low-tar” machine-rolled kretek, and hand-rolled kretek market sectors, while also setting its sights on controlling the nascent “reduced-risk” nicotine product sector. In late 2022, the company began producing “smoke-free” HEETS tobacco products at its new $186 million plant in Karawang, and it has been marketing these heat-rather-than-combust products along with the IQOS device in Indonesia.

Public health researchers have expressed concern that new nicotine-containing products, like “light” cigarettes in the past, contain hidden health risks, are used to recruit youth consumers rather than facilitate smoking cessation, and perpetuate addiction among “dual users.” Juul, whose potent nicotine salt formula and aggressive youth marketing on social media led to a teen vaping epidemic in the United States and inspired Philip Morris’ parent company Altria to acquire a 35% stake in the company for US$12.8 billion, stands as a stark cautionary tale. But for now, the reduced-risk sector remains a thin slice of the industry, especially in low- and middle-income countries like Indonesia.

Indonesians live neither in the fictionalised and romanticised past depicted by kretek nationalists nor in the equally imaginative and deceptive smoke-free future that the tobacco industry itself promises to deliver. In contemporary, actually existing kretek capitalism, a significant share of the industry is controlled by foreign firms, kretek are mostly machine-rolled, the poorest smoke the most, and tobacco control activists struggle for influence in a context where policy decisions are shaped by patriarchal sympathy with male smokers and friendly relations between industry and government.

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