Toxic supply chain: EU companies profit from illegal mining in Indonesia

The intensive and often illegal exploitation of tin - a metal essential for the electronics industry, used in particular in solders, batteries and solar equipment - is causing major problems in Indonesia, where the state-owned company PT Timah collaborates with European companies Nokia, Volkswagen, Ericsson, Philips and Fairphone, according to an investigation published yesterday by the website Follow The Money.

The cited source shows that the investigation carried out by The Gecko Project reveals PT Timah's close links to illegal mining, high-level corruption practices and huge environmental damage. According to the investigation, between 2015 and 2022, almost half of the extractions from PT Timah's concessions were illegal, causing damage estimated at over 14 billion euros. In a corruption trial unprecedented in Indonesia's history, several of the company's executives, including its former CEO, were sentenced to prison for fraud, bribery and supply chain manipulation.

Despite these facts, the European companies mentioned above have continued to source from PT Timah. Indonesian tin accounted for around euro135 million of the European Union's gross imports in 2024, a significant share of a global market of almost euro800 million.

But the price of this trade is being paid by local communities and the environment, especially as, as onshore tin reserves have been depleted, mining has expanded offshore. Illegal miners, often working in dangerous conditions and without safety equipment, extract the ore with powerful pumps from the seabed, destroying fragile ecosystems. The cited source states that 38 people died in such exploitations between 2021 and 2024, under conditions where wages are minimal: 6.50 euros for a kilogram of tin, given that the international price exceeds 28 euros.

Follow The Money also claims that the corrupt supply chain is maintained through a complex system of shell companies, false contracts and hidden agreements between PT Timah and private smelters. Although the company officially claims to comply with international standards, the journalistic investigation shows that a large part of the tin comes from illegal sources. International audits carried out by the Responsible Minerals Initiative (RMI) are extremely limited in Indonesia, because the region is not considered a "conflict zone", and the checks are limited to evaluating the smelters' control systems, not the actual provenance of the ore.

Representatives of Nokia, Ericsson, Merck claimed to the cited source that they have no direct relations with PT Timah, but they acknowledge that the Indonesian company may appear in their supply chain. Although they are committed to complying with regulations and taking action in case of problems, indirect involvement remains an issue of ethical responsibility. The company Fairphone has acknowledged that some of the tin it purchases could come from PT Timah and is looking for solutions to support more sustainable mining practices.

The situation is aggravated by the fact that current European legislation does not require companies to identify or compensate for environmental damage, but only to avoid fueling armed conflicts. In the absence of strict regulations, companies will continue to put profits before environmental protection, warn specialists such as Johanna Sydow from the Heinrich Boll Foundation.

With new European legislation due to come into force by 2028 and requiring companies to also remedy environmental damage in the supply chain, the pressure on the industry is increasing. But until then, millions of euros continue to flow through a dirty chain, sustained by the exploitation of nature and the planet's most vulnerable workers.