Coal Retirement in Indonesia Sparks Debate on Workers' Rights and Compensation for Environmental Damage
**Indonesia's Coal Plant Retirement Plan Faces Challenges in Labour Rights and Environmental Compensation**
Indonesia's initiative to retire coal power plants under the Just Energy Transition Partnership (JETP) is underway, with the early retirement of Cirebon-1, a 660-megawatt coal power plant in West Java, announced for 2035. However, the process is facing significant challenges, particularly in addressing labour rights and environmental damage compensation.
**Labour Rights**
The impending closure of Cirebon-1 raises concerns about the protection of workers who will lose their jobs. Regulation 10/2025, issued in April 2025 and supported by the Asian Development Bank (ADB), does not provide concrete measures to ensure retraining, alternative employment, or financial support for affected laborers. The lack of such provisions is a critical oversight, as the burden of the transition should not disproportionately fall on workers and local communities.
Similar concerns have been raised about the Pelabuhan Ratu power station, where there is limited public information regarding labour rights or worker transition plans. The national transition framework does not yet include robust labour protection measures.
**Environmental Damage Compensation**
Neither the JETP nor the Indonesian government’s new regulations for early coal plant retirement provide explicit provisions for compensation for environmental damage caused by coal power stations. The focus is on reducing emissions and increasing renewable energy, but there is no consideration for remediation of past environmental harm or compensation for affected communities.
This lack of provisions is particularly concerning for facilities like Cirebon-1, where marine pollution has expanded to coastal towns and neighbouring city borders, causing severe damage to the marine ecosystem. There has been no further information from ADB and the power plant regarding environmental damage compensation or rehabilitation efforts to restore the ecology.
**Looking Ahead**
The regional government should take action to diversify the local economy and provide upskilling and reskilling programmes for power plant employees. The ADB and PT Cirebon Electric Power should also provide adequate public consultation on the plant's early retirement, ensuring that employees are informed about their future job prospects.
Transiting to renewable energy could attract more investors, as many companies have started relocating to countries like Vietnam, which has a power wheeling system that allows businesses to use government-owned transmission networks for renewable energy. However, activists emphasise the need to safeguard livelihoods and protect the environment during the transition to renewable energy, and to conduct a thorough assessment of potential impacts on ecosystems.
The second JETP pilot project involves the early retirement of the 1,050-MW Pelabuhan Ratu coal power station in 2037, which will prevent 5,409 deaths and US$3.7 billion in economic losses. However, the challenges faced at Cirebon-1 suggest that similar issues may arise at Pelabuhan Ratu, underscoring the need for comprehensive plans to address labour rights and environmental damage compensation.
[1] Source: Greenpeace Indonesia [2] Source: Rakyat Penyelamat Lingkungan (RAPEL) [3] Source: The Jakarta Post
- Corporate responsibility requires that the Asian Development Bank (ADB) and PT Cirebon Electric Power prioritize concrete measures for retraining, alternative employment, and financial support for affected workers during the energy transition.
- The energy transition towards renewable energy in Indonesia necessitates a comprehensive and inclusive approach, considering the need for environmental science, technological advancements, and education-and-self-development to ensure a smooth transition for all industries.
- Regulation 10/2025 fails to address personal-finance and business concerns of workers losing their jobs in the coal industry, highlighting the importance of climate finance in supporting a just transition to clean energy.
- The lack of provisions for environmental damage compensation raises questions about the industry's commitment to sustainable practices and adherence to the Sustainable Development Goals (SDG).
- Sports events can serve as powerful platforms to raise awareness about climate-change and the urgent need for energy transition within general-news outlets, fostering a culture of environmental responsibility within lifestyles.
- Without comprehensive plans to address labour rights and environmental damage compensation, the energy transition could lead to increased industry opposition, jeopardizing the success of initiatives like the Just Energy Transition Partnership (JETP).
- Science remains critical in providing evidence-based solutions for energy transition, climate-change mitigation, and clean energy development, ensuring a sustainable future for all impacted communities.
- The focus on reducing emissions and increasing renewable energy must be balanced with a commitment to remediate past environmental harm and provide compensation for affected communities, fostering trust and cooperation during the energy transition process.
- The success of the energy transition in Indonesia will depend on the collaboration between governments, businesses, and civil societies, as well as international organizations like the Asian Development Bank (ADB), in addressing various challenges arising from labour rights, environmental damage, and the overall transition process.
- The challenges faced by Indonesia's coal plant retirement plan serve as an example for other countries embarking on their energy transition journey, emphasizing the importance of addressing labour rights, environmental concerns, and comprehensive planning in ensuring a just and sustainable transition to renewable energy.
