To Comply or To Not Comply: The Case of Indonesia's Nickel Downstreaming at the WTO

The world’s biggest nickel producer and owner of the largest nickel reserve, Indonesia, has banned the export of its nickel ore two years ahead of schedule in 2020. This action prompted the European Union to file a complaint at the World Trade Organization in November 2019. Two years later, the Panel has ruled in favor of the European Union. Specifically, Indonesia’s export prohibition and domestic processing requirement on nickel ore were deemed inconsistent with the prohibition of export prohibitions and restrictions under the purview of Article XI:1 of the General Agreement on Tariffs and Trade. Instead of backing down, Indonesia has now appealed the Panel Report to the Appellate Body. This thesis draws from International Compliance Theory and combines the management approach and enforcement approach. Through descriptive qualitative analysis utilizing primary and secondary resources, it aims to investigate the reasons behind Indonesia's non-compliance. Indonesia’s appeal and...Show moreThe world’s biggest nickel producer and owner of the largest nickel reserve, Indonesia, has banned the export of its nickel ore two years ahead of schedule in 2020. This action prompted the European Union to file a complaint at the World Trade Organization in November 2019. Two years later, the Panel has ruled in favor of the European Union. Specifically, Indonesia’s export prohibition and domestic processing requirement on nickel ore were deemed inconsistent with the prohibition of export prohibitions and restrictions under the purview of Article XI:1 of the General Agreement on Tariffs and Trade. Instead of backing down, Indonesia has now appealed the Panel Report to the Appellate Body. This thesis draws from International Compliance Theory and combines the management approach and enforcement approach. Through descriptive qualitative analysis utilizing primary and secondary resources, it aims to investigate the reasons behind Indonesia's non-compliance. Indonesia’s appeal and persistent downstreaming efforts are deeply rooted in its ambition to reach high-income status by 2045, thus shedding light on the political-economic significance of the nickel sector. Lack of clarity on exemptions regarding export restrictions and inactive Appellate Body further provides an opportunity to prolong non-compliance with WTO Ruling.Show less

Leiden University Student Repository

Documents

In Collections

To Comply or To Not Comply: The Case of Indonesia's Nickel Downstreaming at the WTO