The state should be present to mediate the workers and foreign investors in cases that could trigger violent acts such as the Morowali riot, which claimed two lives, and prevent the incident from recurring in the future. The root of the problems lies on inequality in working condition, job security, decent salary and social security between local and Chinese workers.
“What happened in Morowali reflects two sides of a coin: The state is racing to attract [foreign] investments by awarding various incentives and the ease of investment process but at the same time it lessens its role as a bridge of the interests of [local] workers and foreign investors,” Nikolaus Loy, a lecturer at the Department of International Relations, UPN Veteran in Yogyakarta, said on January 18, 2023.
Two workers – an Indonesian and a Chinese – died during a clash at PT Gunbuster Nickel Industry (GNI) smelter in Morowali, Central Sulawesi, on January 14, 2023. Around 500 local workers protested the working condition and their safety as well as demanding the termination of salary cut. The protest led to the destruction and burning of facilities, building and vehicles and started a clash between locals and Chinese workers.
Peculiar Chinese investment model
Loy explained that in the global economy, the state’s source of income was in the market and private companies economy activities. To secure revenue from foreign investors, the state has granted the ease of doing business and tax incentives but at the price of the environmental protection and the rights of the workers.
“We have to compete with Vietnam, Malaysia and other countries in order to attract investment and open jobs and secure income for government social spending,” he explained.
Loy also said that China as Indonesia’s biggest investor had a peculiar investment model called “follow the money”. Whenever Chinese investors – state-owned or private companies – put their money in a certain country, they will bring in experts and workers. They have applied this investment model in Africa, Latin America and Asia.
“Usually, this investment model takes place when Chinese companies have direct ownership of the business. This model has created debt burden and social political issues that are uncontrollable,” he added.
Chinese investment model has drawn criticism and triggered racial suspicion due to the presence of a significant number of their workers in countries with high unemployment rate.
Injustice and discrimination against local workers
The University of Indonesia (UI) lecturer Rocky Gerung highlighted the injustice issue in the Morowali riot. He said injustice and discrimination against local workers in the strategic nickel industry has provoked the tension.
“The problem in Morowali is due to the government policy that only benefits foreign workers, in this case Chinese nationals,” he said.
According to Gerung, President Joko “Jokowi” Widodo’s administration has a favoritism to Chinese capital. He revealed that Jokowi had once said that Indonesian workers were lazy and not smart enough to absorb technology and therefore companies need to bring in workers from China.
“It is a discrimination. If Jokowi said that Chinese workers have better qualification for technology intensive industry, we can accept that,” he said, adding that Jokowi’s policy has created income disparity and potential social conflicts.
Bhima Yudhistira, an economist at the Center of Economic and Law Studies (Celios), said the riot would have an impact on investments in Indonesia, mainly in nickel smelters or companies that recruit massive foreign workers. The unresolved workers issues will be a bigger risk for investment in Morowali.
Situation is under control
Spokesman of Central Sulawesi Police Sr. Comr. Didik Supranoto said the situation in Morowali has been under control and safe. He said the Indonesian Military (TNI) and the police have safeguarded GNI’s compound, including the smelter, hauling road and jetty. He also said that the police have named 17 local workers as suspects in the clash and attack against company’s facilities.
Chinese Foreign Ministry spokesperson Wang Wenbin said the Chinese Embassy in Indonesia had been in contact with Indonesian authorities on the incident. “China will continue to maintain close communication with the Indonesian side and promote a lawful and appropriate resolution to this incident,” he told Reuters on January 16, 2023.