INDONESIA – MEASURES RELATING TO RAW MATERIALS REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 30 November 2022
Document codes: WT/DS592/R
Complainant: EU
Respondent: Indonesia
Third parties: Brazil, Canada, China, Japan, South Korea, India, Russia, Saudi Arabia, Singapore, Taiwan, Turkey, Ukraine, UAE, United Kingdom, U.S.
Dispute stage: Panel
Agreements cited: GATT 1994  GATT 1994

INDONESIA – MEASURES RELATING TO RAW MATERIALS
REPORT OF THE PANEL
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LIST OF ANNEXES
ANNEX A
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex A-1 Working Procedures of the Panel 4
Annex A-2 Additional Working Procedures Concerning Business Confidential
Information 12
Annex A-3 Additional Working Procedures Concerning Substantive Meetings with
Remote Participation 15
Annex A-4 Additional Working Procedures Concerning Substantive Meetings with
Remote Participation 19
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 Integrated executive summary of the arguments of the European Union 24
Annex B-2 Integrated executive summary of the arguments of Indonesia 34
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Integrated executive summary of the arguments of Brazil 49
Annex C-2 Integrated executive summary of the arguments of Canada 52
Annex C-3 Integrated executive summary of the arguments of India 56
Annex C-4 Integrated executive summary of the arguments of Japan 59
Annex C-5 Integrated executive summary of the arguments of the Republic of Korea 66
Annex C-6 Integrated executive summary of the arguments of Ukraine 69
Annex C-7 Integrated executive summary of the arguments of the United Kingdom 71
Annex C-8 Integrated executive summary of the arguments of the United States 73

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CASES CITED IN THIS REPORT
Short Title Full Case Title and Citation
Argentina – Financial
Services
Appellate Body Report, Argentina – Measures Relating to Trade in Goods and
Services, and Add.1, adopted 9 May 2016, DSR 2016:II,
p. 431
Argentina – Hides and
Leather
Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and
the Import of Finished Leather, and Corr.1, adopted
16 February 2001, DSR 2001:V, p. 1779
Argentina – Import
Measures
Appellate Body Reports, Argentina – Measures Affecting the Importation of
Goods, WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R, adopted
26 January 2015, DSR 2015:II, p. 579
Argentina – Textiles and
Apparel
Appellate Body Report, Argentina – Measures Affecting Imports of Footwear,
Textiles, Apparel and Other Items, WT/DS56/AB/R and Corr.1, adopted
22 April 1998, DSR 1998:III, p. 1003
Brazil – Desiccated Coconut Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut,
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, p. 167
Brazil – Retreaded Tyres Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres,
WT/DS332/AB/R, adopted 17 December 2007, DSR 2007:IV, p. 1527
Brazil – Retreaded Tyres Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres,
WT/DS332/R, adopted 17 December 2007, as modified by Appellate Body
Report WT/DS332/AB/R, DSR 2007:V, p. 1649
Canada – Periodicals Appellate Body Report, Canada – Certain Measures Concerning Periodicals,
WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, p. 449
Canada – Wheat Exports
and Grain Imports
Panel Report, Canada – Measures Relating to Exports of Wheat and Treatment
of Imported Grain, WT/DS276/R, adopted 27 September 2004, upheld by
Appellate Body Report WT/DS276/AB/R, DSR 2004:VI, p. 2817
Chile – Price Band System Panel Report, Chile – Price Band System and Safeguard Measures Relating to
Certain Agricultural Products, WT/DS207/R, adopted 23 October 2002, as
modified by Appellate Body Report WT/DS207AB/R, DSR 2002:VIII, p. 3127
China – Auto Parts Appellate Body Reports, China – Measures Affecting Imports of Automobile
Parts, WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, adopted
12 January 2009, DSR 2009:I, p. 3
Canada – FIRA GATT Panel Report, Canada – Administration of the Foreign Investment Review
Act, L/5504, adopted 7 February 1984, BISD 30S/140
China – Publications and
Audiovisual Products
Appellate Body Report, China – Measures Affecting Trading Rights and
Distribution Services for Certain Publications and Audiovisual Entertainment
Products, WT/DS363/AB/R, adopted 19 January 2010, DSR 2010:I, p. 3
China – Publications and
Audiovisual Products
Panel Report, China – Measures Affecting Trading Rights and Distribution
Services for Certain Publications and Audiovisual Entertainment Products,
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by
Appellate Body Report WT/DS363/AB/R, DSR 2010:II, p. 261
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of Various
Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted
22 February 2012, DSR 2012:VII, p. 3295
China – Raw Materials Panel Reports, China – Measures Related to the Exportation of Various Raw
Materials, WT/DS394/R, Add.1 and Corr.1 / WT/DS395/R, Add.1 and Corr.1 /
WT/DS398/R, Add.1 and Corr.1, adopted 22 February 2012, as modified by
Appellate Body Reports WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R,
DSR 2012:VII, p. 3501
Colombia – Ports of Entry Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry,
WT/DS366/R and Corr.1, adopted 20 May 2009, DSR 2009:VI, p. 2535
Colombia – Textiles Panel Report, Colombia – Measures Relating to the Importation of Textiles,
Apparel and Footwear, WT/DS461/R and Add.1, adopted 22 June 2016, as
modified by Appellate Body Report WT/DS461/AB/R, DSR 2016:III, p. 1227
Colombia – Textiles Appellate Body Report, Colombia – Measures Relating to the Importation of
Textiles, Apparel and Footwear, WT/DS461/AB/R and Add.1, adopted
22 June 2016, DSR 2016:III, p. 1131
Dominican Republic –
Import and Sale of
Cigarettes
Appellate Body Report, Dominican Republic – Measures Affecting the
Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted
19 May 2005, DSR 2005:XV, p. 7367
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation,
Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997,
DSR 1997:II, p. 591

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Short Title Full Case Title and Citation
EC – Bananas III
(Article 21.5 – Ecuador II) /
EC – Bananas III
(Article 21.5 – US)
Appellate Body Reports, European Communities – Regime for the Importation,
Sale and Distribution of Bananas – Second Recourse to Article 21.5 of the DSU
by Ecuador, WT/DS27/AB/RW2/ECU, adopted 11 December 2008, and Corr.1 /
European Communities – Regime for the Importation, Sale and Distribution of
Bananas – Recourse to Article 21.5 of the DSU by the United States,
WT/DS27/AB/RW/USA and Corr.1, adopted 22 December 2008, DSR
2008:XVIII, p. 7165
EC – Hormones Appellate Body Report, European Communities – Measures Concerning Meat
and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted
13 February 1998, DSR 1998:I, p. 135
EC – IT Products Panel Reports, European Communities and its member States – Tariff
Treatment of Certain Information Technology Products, WT/DS375/R /
WT/DS376/R / WT/DS377/R, adopted 21 September 2010, DSR 2010:III, p.
933
EC – Seal Products Appellate Body Reports, European Communities – Measures Prohibiting the
Importation and Marketing of Seal Products, WT/DS400/AB/R /
WT/DS401/AB/R, adopted 18 June 2014, DSR 2014:I, p. 7
EC – Seal Products Panel Reports, European Communities – Measures Prohibiting the Importation
and Marketing of Seal Products, WT/DS400/R and Add.1 / WT/DS401/R and
Add.1, adopted 18 June 2014, as modified by Appellate Body Reports
WT/DS400/AB/R / WT/DS401/AB/R, DSR 2014:II, p. 365
EC and certain member
States – Large Civil Aircraft
Appellate Body Report, European Communities and Certain Member States –
Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted
1 June 2011, DSR 2011:I, p. 7
EU – Energy Package Panel Report, European Union and its member States – Certain Measures
Relating to the Energy Sector, WT/DS476/R and Add.1, circulated to WTO
Members 10 August 2018, appealed on 21 September 2018
India – Autos Panel Report, India – Measures Affecting the Automotive Sector, WT/DS146/R,
WT/DS175/R, and Corr.1, adopted 5 April 2002, DSR 2002:V, p. 1827
India – Quantitative
Restrictions
Panel Report, India – Quantitative Restrictions on Imports of Agricultural,
Textile and Industrial Products, WT/DS90/R, adopted 22 September 1999,
upheld by Appellate Body Report WT/DS90/AB/R, DSR 1999:V, p. 1799
India – Solar Cells Appellate Body Report, India – Certain Measures Relating to Solar Cells and
Solar Modules, WT/DS456/AB/R and Add.1, adopted 14 October 2016, DSR
2016:IV, p. 1827
Indonesia – Chicken Panel Report, Indonesia – Measures Concerning the Importation of Chicken
Meat and Chicken Products, WT/DS484/R and Add.1, adopted
22 November 2017, DSR 2017:VIII, p. 3769
Indonesia – Import
Licensing Regimes
Appellate Body Report, Indonesia – Importation of Horticultural Products,
Animals and Animal Products, WT/DS477/AB/R, WT/DS478/AB/R, and Add.1,
adopted 22 November 2017, DSR 2017:VII, p. 3037
Indonesia – Import
Licensing Regimes
Panel Report, Indonesia – Importation of Horticultural Products, Animals and
Animal Products, WT/DS477/R, WT/DS478/R, Add.1 and Corr.1, adopted
22 November 2017, as modified by Appellate Body Report WT/DS477/AB/R,
WT/DS478/AB/R, DSR 2017:VII, p. 3131
Japan – Agricultural
Products II
Appellate Body Report, Japan – Measures Affecting Agricultural Products,
WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, p. 277
Japan – Alcoholic Beverages
II
Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, p. 97
Japan – Apples Appellate Body Report, Japan – Measures Affecting the Importation of Apples,
WT/DS245/AB/R, adopted 10 December 2003, DSR 2003:IX, p. 4391
Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and
Paper, WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, p. 1179
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of
Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I,
p. 3
Korea – Various Measures
on Beef
Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled
and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001,
DSR 2001:I, p. 5
Mexico – Corn Syrup
(Article 21.5 – US)
Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose
Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the
DSU by the United States, WT/DS132/AB/RW, adopted 21 November 2001,
DSR 2001:XIII, p. 6675
Mexico – Taxes on Soft
Drinks
Appellate Body Report, Mexico – Tax Measures on Soft Drinks and Other
Beverages, WT/DS308/AB/R, adopted 24 March 2006, DSR 2006:I, p. 3
Mexico – Taxes on Soft
Drinks
Panel Report, Mexico – Tax Measures on Soft Drinks and Other Beverages,
WT/DS308/R, adopted 24 March 2006, as modified by Appellate Body Report
WT/DS308/AB/R, DSR 2006:I, p. 43

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Short Title Full Case Title and Citation
US – 1916 Act (EC) Panel Report, United States – Anti-Dumping Act of 1916, Complaint by the
European Communities, WT/DS136/R and Corr.1, adopted 26 September 2000,
upheld by Appellate Body Report WT/DS136/AB/R, WT/DS162/AB/R, DSR
2000:X, p. 4593
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain
Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R
and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779
US – Carbon Steel Panel Report, United States – Countervailing Duties on Certain Corrosion-
Resistant Carbon Steel Flat Products from Germany, WT/DS213/R and Corr.1,
adopted 19 December 2002, as modified by Appellate Body Report
WT/DS213/AB/R, DSR 2002:IX, p. 3833
US – Certain EC Products Appellate Body Report, United States – Import Measures on Certain Products
from the European Communities, WT/DS165/AB/R, adopted 10 January 2001,
DSR 2001:I, p. 373
US – Clove Cigarettes Appellate Body Report, United States – Measures Affecting the Production and
Sale of Clove Cigarettes, WT/DS406/AB/R, adopted 24 April 2012, DSR
2012:XI, p. 5751
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application of
Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009, DSR
2009:III, p. 1291
US – Corrosion-Resistant
Steel Sunset Review
Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties
on Corrosion-Resistant Carbon Steel Flat Products from Japan,
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, p. 3
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border
Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted
20 April 2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475)
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and
Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, p. 3
US – Large Civil Aircraft (2nd
complaint)
Appellate Body Report, United States – Measures Affecting Trade in Large Civil
Aircraft (Second Complaint), WT/DS353/AB/R, adopted 23 March 2012, DSR
2012:I, p. 7
US – Poultry (China) Panel Report, United States – Certain Measures Affecting Imports of Poultry
from China, WT/DS392/R, adopted 25 October 2010, DSR 2010:V, p. 1909
US – Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp
and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR
1998:VII, p. 2755
US – Shrimp Panel Report, United States – Import Prohibition of Certain Shrimp and Shrimp
Products, WT/DS58/R and Corr.1, adopted 6 November 1998, as modified by
Appellate Body Report WT/DS58/AB/R, DSR 1998:VII, p. 2821
US – Shrimp (Ecuador) Panel Report, United States – Anti-Dumping Measure on Shrimp from Ecuador,
WT/DS335/R, adopted on 20 February 2007, DSR 2007:II, p. 425
US – Softwood Lumber IV
(Article 21.5 – Canada)
Appellate Body Report, United States – Final Countervailing Duty Determination
with Respect to Certain Softwood Lumber from Canada – Recourse by Canada
to Article 21.5 of the DSU, WT/DS257/AB/RW, adopted 20 December 2005,
DSR 2005:XXIII, p. 11357
US – Superfund GATT Panel Report, United States – Taxes on Petroleum and Certain Imported
Substances, L/6175, adopted 17 June 1987, BISD 34S/136
US – Wool Shirts and
Blouses
Appellate Body Report, United States – Measure Affecting Imports of Woven
Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, and
Corr.1, DSR 1997:I, p. 323

BCI deleted, as indicated [[***]]

EXHIBITS REFERRED TO IN THIS REPORT
Exhibit Short title
(if applicable)
 Description/Long title
EU-1(b)1 Law No. 4/2009 Republic of Indonesia Law on Mineral and Coal Mining, Law No. 4 of
12 January 2009
EU-2(b) Law No. 3/2020 Law of the Republic of Indonesia Number 3 of 2020 on Amendment
of Law Number 4 of 2009 on Mineral and Coal Mining
EU-3(b) Government Regulation
No. 23/2010
Regulation of the Government No. 23/2010 of 1 February 2010
EU-4(b) MEMR Regulation
No. 7/2012
Minister of Energy and Mineral Resources of the Republic of
Indonesia Number 7 Year 2012 concerning increasing added value
of minerals through processing and refining of minerals activities
EU-5(b) MEMR Regulation
No. 11/2012
Minister of Energy and Mineral Resources of the Republic of
Indonesia Number 11 Year 2012 concerning amendment to Minister
of Energy and Mineral Resources Regulation Number 07 Year 2012
concerning increasing added value of minerals through processing
and refining of minerals activities
EU-6(b) MEMR Regulation
No. 20/2013
Minister of Energy and Mineral Resources of the Republic of
Indonesia Number 20 Year 2013 concerning second amendment to
Minister of Energy and Mineral Resources Regulation Number 07
Year 2012 concerning increasing added value of minerals through
processing and refining of minerals activities
EU-7(b) MEMR Regulation
No. 1/2014
Minister of Energy and Mineral Resources of the Republic of
Indonesia Regulation Number 1 Year 2014 concerning increasing
added value of minerals through domestic processing and refining
of mineral activities
EU-8(b) MOT Regulation
No. 1/2017
Regulation of the Minister of Trade of the Republic of Indonesia
Number: 01/M-DAG/PER/1/2017 concerning export provisions for
processed and purified mining products
EU-9(b) MEMR Regulation
No. 25/2018
Regulation of Minister of Energy and Mineral Resources of the
Republic of Indonesia Number 25 Year 2018 regarding minerals and
coal mining business
EU-10(b) MEMR Regulation
No. 11/2019
Regulation of the Minister for Energy and Mineral Resources of the
Republic of Indonesia Number 11 Year 2019 regarding second
amendment of the Regulation of the Minister of Energy and Mineral
Resources Number 25 Year 2018 on mineral and coal mining
businesses
EU-11(b) MOT Regulation
No. 96/2019
Regulation of the Minister of Trade of the Republic of Indonesia
Number 96 of 2019 on export provisions for processed and purified
mining products
EU-12(b) MEMR Regulation
No. 7/2020
Regulation of the Minister of Energy and Mineral Resources of the
Republic of Indonesia Number 7 of 2020 on procedures for the
granting of areas, licensing, and reporting in relation to mineral and
coal-mining business activities
EU-16
(rev)
Medium-Term National
Development Plan
(RPJMN) 2020–2024
Presidential Regulation No 18 of 2020 on Medium-Term National
Development Plan (RPJMN) 2020–2024, signed by President Joko
Widodo on 17 January 2020 and entered into force on
20 January 2020
EU-17
(rev)
Government Regulation
No. 14 of 2015, Master
Plan of National Industry
Development 2015-2035
Government Regulation No 14 of 2015 on Master Plan of National
Industry Development 2015 – 2035, signed by President Joko
Widodo and entered into force on 6 March 2015
EU-18
(rev)
Presidential Regulation
No. 2 of 2018, National
Industrial Policy (2015-
2019)
Presidential Regulation No 2 of 2018 on National Industrial Policy
2015-2019, signed by President Joko Widodo on 2 February 2018
and entered into force on 6 February 2018
EU-20 The Indonesian
Government's Arguments
to WTO Regarding the
Ban on Nickel Exports,
5 December 2019
Larissa Huda, "The Indonesian Government's Arguments to WTO
Regarding the Ban on Nickel Exports", 5 December 2019, available
at https://bisnis.tempo.co/read/1280152/ini-argumentasi-
pemerintah-unt

1 The European Union provided two versions of exhibits that were originally published in Bahasaa
Indonesian: version (a) in the original language and version (b) in English. English is an official language of the
WTO and the working language of the Panel. The Panel, therefore, has systematically referred to version (b) of
the EU exhibits in the Report.

BCI deleted, as indicated [[***]]

Exhibit Short title
(if applicable)
 Description/Long title
EU-21 Transcript of President Joko Widodoi's Speech (translated) at the
groundbreaking ceremony of PT Freeport Indonesia's (PTFI) new
copper smelter, at the Gresik Special Economic Zone, East Java,
12 October 2021
EU-22 "Remarks of President of the Republic of Indonesia at the Opening
Inauguration of the 2021 National Coordination Meeting and
Investment Service Award, at Ballroom of the Ritz-Carlton Hotel at
Pacific Place, SCBD, 24 November 2021, Special Capital Region of
Jakarta"
EU-23 President Joko Widodo
Inaugurates Nickel
Smelter in SE Sulawesi,
27 December 2021
President Jokowi Inaugurates Nickel Smelter in SE Sulawesi, Office
of Assistant to Deputy Cabinet Secretary for State Documents &
Translation, 27 December 2021
EU-24 Bisnis Indonesia
Interview with President
Joko Widodo,
10 January 2022
"SPECIAL INTERVIEW: President Joko Widodo openly talks about
coal exports and the next targets", Bisnis Indonesia Team –
Bisnis.com 10 January 2022
EU-27 Macquarie, Commodities
Outlook, M. Garvey and J.
Lennon, March 2021
Macquarie, Commodities Outlook, Marcus Garvey & Jim Lennon,
March 2021
EU-28 Ministry of Energy and Mineral resources, Government of Indonesia,
Press Release Number: 253.Pers./04/SJI/2020 "Pushing Domestic
Nickel Market Growth, Government Sets Reference Prices of
Minerals (RPM) Regulations"
IDN-1 MEMR, Indonesian Mining
Guidance (2020)
Directorate General of Mineral and Coal MEMR, Indonesian Mining
Guidance (2020)
IDN-4 A. van der Ent, A.J.M. Baker, M.M.J. van Balgooy, A. Tjoa,
"Ultramafic nickel laterites in Indonesia (Sulawesi, Halmahera):
Mining, nickel hyperaccumulators and opportunities for
phytomining", Journal of Geochemical Exploration, Vol. 128 (2013)
72-79
IDN-5 B. Devi, D. Prayogo, "Mining and Development in Indonesia: An
Overview of the Regulatory Framework and Policies", International
Mining for Development Centre: Action Research Report, (March
2013)
IDN-7 PWC, "Mining in Indonesia", Investment and Taxation Guide, 11th
ed., (June 2019)
IDN-11 Nickel Institute, "About
nickel", (last accessed
20 August 2021)
Nickel Institute, "About nickel", available at:
https://nickelinstitute.org/about-nickel/ (last accessed 20 August
2021)
IDN-12 Minerals UK, "Nickel", British Geological Survey, Natural
Environment Research Council, (September 2008)
IDN-13 INSG, Report on Nickel Production and Usage in Indonesia,
(February 2020)
IDN-15 Sayoga Gautama Report Expert Report of R. Sayoga Gautama (3 September 2021)
IDN-16 IEA, Special Report on
the Role of Critical
Minerals in Clean Energy
Transition (2021)
IEA, "The Role of Critical Minerals in Clean Energy Transition",
World Energy Outlook Special Report (2021)
IDN-18
(BCI)
Maryono Report Expert Report of A. Maryono (4 September 2021)
IDN-19 A. Dalvi, W. Bacon, R. Osborne, "The Past and the Future of Nickel
Laterites", PDAC 2004 International Convention, Trade Show &
Investor Exchange, 7-10 March 2004
IDN-20 USGS, Excel of "Nickel Reserves"
IDN-21 INSG, "Production, Usage and Price", available at
https://insg.org/index.php/about-nickel/production-usage/ (last
accessed 20 August 2021)
IDN-22 Fraser, Jake; Anderson, Jack; Lazuen, Jose; Lu, Ying; Heathman,
Oliver; Brewster, Neal; Bedder, Jack; Masson, Oliver, Study on
future demand and supply security of nickel for electric vehicle
batteries, Publications Office of the European Union, Luxembourg,
2021
IDN-23 UNCTAD, Lessons from
Indonesia's ban on nickel
exports, Background
document
K. Terauds, Using trade policy to drive value addition: Lessons from
Indonesia's ban on nickel exports. Background document to the
Commodities and Development Report, Special Unit on
Commodities UNCTAD, 2017

BCI deleted, as indicated [[***]]

Exhibit Short title
(if applicable)
 Description/Long title
IDN-24 MEMR, Excel of "Production and Sales of Nickel Ore from 2010-
2020"
IDN-25
(BCI)
 Sample of Nickel Ore Sales Contract 1
IDN-26 The White House, Building Resilient Supply Chains, Revitalizing
American Manufacturing, and Fostering Broad-Based Growth – 100-
day Reviews under Executive Order 14017 (June 2021),
Washington
IDN-30 MOT Regulation
No. 96/2019
MOT Regulation 96/2019
IDN-33 MEMR Regulation
No. 5/2017
MEMR Regulation 5/2017
IDN-37 National Standardization Agency, Indonesian National Standard
(SNI), 2019 Ed.
IDN-38 Kode KCMI IAGI-PERHAPI, Indonesian Joint Committee for Mineral
Reserves KCMI- Code, 2017 Ed.
IDN-42 CRIRSCO, Standard Definitions and International Report Template,
October 2012
IDN-45 JORC Code Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (The JORC Code), 2012 Ed.
IDN-48 MEMR, Excel of "Nickel Data 2012 – 2020"
IDN-50 Bank Indonesia, "Gross Domestic Product by Industrial Origin at
Current Prices", Indonesian Economic and Financial Statistics
(2021), 226-227
IDN-51 NIKKEI Asia, "Indonesia teams with LG to build $1.2bn battery
plant" (25 May 2021), available at:
https://asia.nikkei.com/Business/Automobiles/Indonesia-teams –
with-LG-to-build-1.2bn-battery-plant(last accessed
30 August 2021)
IDN-53 Law No. 32/2009
IDN-56 MEMR Regulation
No. 26/2018
MEMR Regulation 26/2018
IDN-58
(BCI)
 Sample of Nickel Ore Sales Contract 2
IDN-62 UNESCAP, 1992
Environmental Impact
Assessment, Guidelines
for Mining Development
UNESCAP 1992. Environmental Impact Assessment, Guidelines for
Mining Development, p. 6. New York/Bangkok: UN Econ. Soc.
Comm. Asia Pacific
IDN-63 G. Bridge, "Contested Terrain: Mining and the Environment",
Annual Review of Environment and Resource (2004), Vol. 29, 205-
259
IDN-64 AEER, Supply of Nickel Battery Industry from Indonesia and
Ecological Social Issues, Action for Ecology and Emancipation of
People (December 2020)
IDN-65 NIWA, "Sediment and
Mining" (9 March 2021)
NIWA, "Sediment and Mining" (9 March 2021), available at
https://niwa.co.nz/our-science/freshwater/tools/kaitiaki_
tools/land-use/mining/impacts/sedimentation-and-mining (last
accessed 20 August 2021)
IDN-66 Clean Technica, Image of
Indonesia at "Electric
Vehicles:
The Dirty Nickel
Problem", (Exhibit IDN-
66), available at:
https://cleantechnica.com

2020/09/27/electric-
vehicles-the-dirty-nickel-
problem/ (last accessed
30 August 2021)
DigitalGlobe Earthstar Geographics, Image of Indonesia, available
at: Clean Technica, "Electric Vehicles: The Dirty Nickel Problem"
(27 September 2020), available at:
https://cleantechnica.com/2020/09/27/electric-vehicles-the-dirty-
nickel-problem/ (last accessed 30 August 2021)
IDN-67 Agricultural and Environmental Policy Minutes, Formulating Policies
in Addressing the Environmental Damage Due to Nickel Mine
Activities in Tinanggea Sub-District, South Konawe Regency, Vol. 4
No. 2, August 2017: 125-142
IDN-68 WALHI, Study Report on Environmental Conditions around Coastal
Sea near the Mining Area due to the Nickel Industry in Morowali
regency. Central Sulawesi, Kolaka and North Konawe Regencies,
Southeast Sulawesi (2021)

BCI deleted, as indicated [[***]]

Exhibit Short title
(if applicable)
 Description/Long title
IDN-69 Images of Environmental Destruction in Indonesia
IDN-70 World Bank, "The impact of a nickel mine in Tanjung Buli,
Indonesia" (27 March, 2009), available at:
https://www.youtube.com/watch?v=ToiPA7RThSQ (last accessed
30 August 2021)
IDN-71
(BCI)
 Sample of Nickel Ore Sales Contract 3
IDN-78 Financial Times, "Indonesia and Foxconn in talks over electric
vehicle investment" (01 November 2021), available at:
https://www.ft.com/content/f1a805aa-82ac-4f24-ad22-
58e43712091e (last accessed 11 November 2021)
IDN-91 BPS Export Data
Indonesia
Excel of "BPS Export Data Indonesia"
IDN-92 Press Release from the MEMR, 2 September 2019
IDN-97 MEMR Director General
Circular No. 741/2021
MEMR Director General Circular 741/2021 Regarding
Implementation of the Use of Competent Person in the Estimation
of Mineral and Coal Resources and Reserves
IDN-99 Nikkei Asia, Automobiles "Indonesia's electric car dreams at odds
with deforestation pledge", available at:
https://asia.nikkei.com/Business/Automobiles/Indonesia-s-electric-
car-dreams-at-odds-with-deforestation-pledge (last accessed
21 January 2022)
IDN-100 BPS, Excel of "GRDP of South Sulawesi, Central Sulawesi and North
Maluku"
IDN-106 Reuters, "Update 1 – Indonesia Stays China's Second-Biggest
Nickel Ore Supplier Despite Export Ban (January 2021)", available
at https://www.reuters.com/article/china-economy-trade-nickel-
idUSL1N2JV0FP (last accessed 20 January 2022)
IDN-108 The Pan-European Reserves and Resources Reporting Committee
(PERC asbl), Pan-European Standard for the Public Reporting of
Exploration Results, Mineral Resources and Mineral Reserves
(1 October 2021)
IDN-109 Sayoga Gautama
Supplemental Expert
Report, 17 March 2022
Supplemental Expert Report of R. Sayoga Gautama
(17 March 2022)
IDN-110
(BCI)
 Criminal Investigation Agency, Excel of "Recap of Nickel Criminal
Case handled by the Police"
IDN-111
(BCI)
 Expert Affidavit of [[***]] (15 March 2022)
IDN-113
(BCI)
 Expert Affidavit of [[***]] (17 March 2022)
IDN-114
(BCI)
 Sample of Nickel Ore Sales Contract 4
IDN-115
(BCI)
 Sample of Nickel Ore Sales Contract 5
IDN-116
(BCI)
 Sample of Nickel Ore Sales Contract 6
IDN-123
(BCI)
 MOT, Excel of "Approved Export Applications"
IDN-127
(BCI)
 MEMR, Presentation on "The Role of Minerals in the Development of
Indonesia's Battery Industry" (10 September 2021)

BCI deleted, as indicated [[***]]

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
AMDAL Environmental impact analysis
BCI Business Confidential Information
CRIRSCO Committee for Mineral Reserves International Reporting Standards
dmt Dry metric tonne
DPR Domestic Processing Requirement
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
GATT 1994 General Agreement on Tariffs and Trade 1994
GDP Gross domestic product
GRDP Gross regional domestic product
HGSO High-grade saprolite ore
HPAL High Pressure Acid Leach
HS Harmonized system
IEA International Energy Agency
IPR Community Mining Licences
IUP Mining Licences
IUPK Special Mining Licences
KK Contract of Work
LGSO Low-grade saprolite ore
MEMR Ministry of Energy and Mineral Resources of the Republic of Indonesia
MOT Minister of Trade of the Republic of Indonesia
RIPIN National Industry Development Master Plan 2015-2035
RKAB Work Plan and Budget
RKEF Rotary Kiln Electric Furnace
SCM Agreement Agreement on Subsidies and Countervailing Measures
USGS United States Geological Survey
WTO World Trade Organization

BCI deleted, as indicated [[***]]

1 INTRODUCTION
1.1. This dispute concerns Indonesia's imposition of two measures that the European Union alleges
prevent the export of nickel ore from Indonesia. The European Union challenges a prohibition on the
exportation of nickel ore as well as another measure that requires that all nickel ore be processed
domestically.
1.1 Complaint by the European Union
1.2. On 22 November 2019, the European Union requested consultations with Indonesia pursuant
to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes (DSU) and Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994)
and Article 4.1 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) with
respect to the measures and claims set forth below.2
1.3. Consultations were held on 30 January 2020, but they were unsuccessful.
1.2 Panel establishment and composition
1.4. On 14 January 2021, the European Union requested the establishment of a panel pursuant to
Article 6 of the DSU with standard terms of reference. 3 At its meeting on 22 February 2021, the
Dispute Settlement Body (DSB) established a panel pursuant to the request of the European Union
in document WT/DS592/3, in accordance with Article 6 of the DSU.4
1.5. The Panel's terms of reference are the following:
To examine, in the light of the r elevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by the European Union in
document WT/DS592/3 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.5
1.6. On 19 April 2021, the European Union requested the Director -General to determine the
composition of the panel, pursuant to Article 8.7 of the DSU. On 29 April 2021, the Director-General
accordingly composed the Panel as follows:
Chairperson: Ms Leora BLUMBERG

Members: Mr Gonzalo DE LAS CASAS SALINAS
Ms Sanji M. MONAGENG

1.7. Brazil, Canada, China, India, Japan, Korea, the Russian Federation, the Kingdom of Saudi
Arabia, Singapore, Chinese Taipei, Türkiye6, Ukraine, the United Arab Emirates, the United Kingdom,
and the United States reserved their rights to participate in the Panel proceedings as third parties.7
1.3 Panel proceedings
1.8. After consultation with the parties, the Panel adopted its Working Procedures8, timetable, and
Additional Working Procedures Concerning Business Confidential Information (BCI) 9 on
28 May 2021. The Panel amended its timetable on 29 June and 5 October 2021, and
17 August 2022.

2 See WT/DS592/1. The Panel notes that the European Union did not advance claims under the
SCM Agreement in the panel request or in its submissions before the Panel.
3 Request for the establishment of a panel by the European Union, WT/DS592/3 (European Union's
panel request).
4 See WT/DSB/M/449.
5 WT/DS592/4.
6 Formerly "Turkey" (see WT/INF/43/Rev.23).
7 WT/DS592/4.
8 Working Procedures of the Panel (Annex A-1).
9 Additional Working Procedures Concerning Business Confidential Information (Annex A-2).

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1.9. In light of the rapidly changing sanitary situation with respect to the COVID-19 pandemic, the
Panel committed in its communication of 28 May 2021 transmitting the Working Procedures,
timetable, and BCI Procedures to inform the parties by 30 September 2021 as to whether the Panel
would hold the first substantive meeting in-person or remotely.
1.10. On 23 September 2021, the Panel informed the parties that due to sanitary requirements for
both outbound and inbound travellers in the places of residence of the panelists, the Panel would be
unable to attend the first substantive meeting in Geneva during the week of 15 November 2021.
That same day, the Panel sent to the parties draft Additional Working Procedures Concerning
Substantive Meetings with Remote Participation10 to complement the Working Procedures with
respect to the conduct of the substantive meeting, and a proposed amended timetable reflecting the
need to spread the meeting over more days due to the time differences between the various
participants.
1.11. The European Union informed the Panel that it had no comments on the Panel's draft
Additional Working Procedures Concerning Substantive Meetings with Remote Participation or the
proposed amended timetable. Indonesia objected to the Panel's proposal to conduct the first
substantive meeting with the parties and third parties remotely and requested that the Panel hold
in-person hearings. Indonesia suggested that the Panel either consider postponing the first
substantive meeting or holding it in hybrid format if applicable quarantine requirements rendered it
more difficult for individual panelists to attend the substantive meeting in -person. On
5 October 2021 the Panel informed the parties that it was not in a position to hold an in-person first
substantive meeting inter alia due to restrictions on travel and meeting room capacity at the WTO.
The Panel further noted that it had based its decision on preserving the due process rights of all
parties and that delaying the meeting until an uncertain future date could prevent the Panel from
ensuring the prompt settlement of the dispute in accordance with Article 3.3 of the DSU. The Panel
therefore confirmed its intention to hold the first substantive meeting remotely.11
1.12. The Panel held a first substantive meeting with the parties on 15 and 17-19 November 2021.
A session with the third parties took place on 18 November 2021. The Panel conducted the first
substantive meeting and third-party session via secure videoconference.
1.13. The Panel held an in -person second substantive meeting with the parties on
22-23 March 2022.
1.14. On 7 June 2022, the Panel issued the descriptive part of its Report to the parties. The Panel
issued its Interim Report to the parties on 29 August 2022. The Panel issued its Final Report to the
parties on 17 October 2022.
2 FACTUAL ASPECTS
2.1 The measures at issue
2.1. The European Union's claims concern two measures, namely a prohibition on the exportation
of nickel ore and a requirement that all nickel ore be processed (purified or refined) domestically.
The European Union refers to the latter measure as the Domestic Processing Requirement (DPR).
2.1.1 Export prohibition of nickel ore
2.2. The European Union describes the export prohibition of nickel ore in its consultations request
as follows:
As part of the implementation of a national plan to develop certain downstream industry
sectors including that of stainless steel production, Indonesia introduced a number of
limitations on exports of raw materials. In particular, exports of nickel ore were
prohibited in Indonesia in 2014. In 2017, Indonesia partially relaxed the export ban by
temporarily allowing exports of certain minerals, including nickel ore with a

10 Additional Working Procedures Concerning Substantive Meetings with Remote Participation
(Annex A-3).
11 Panel's communication to the parties, 5 October 2021.

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concentration below 1.7%, subject to certain additional requirements (see below). It
was foreseen that these requirements be temporary and that the full export prohibition
be reinstated on 11 January 2022. However, in August 2019 Indonesia's Ministry of
Energy and Mineral Resources (MEMR) established that the validity of certain documents
necessary to export low-concentration nickel ore expire on 31 December 2019, thereby
effectively reinstating the total export prohibition of nickel ore as of 1 January 2020.
The temporary permission to export low -concentration nickel ore has been without
prejudice to the continued prohibition to export nic kel ore with a concentration above
1.7%, which may not be exported even during the temporary relaxation of the export
ban. Exports of nickel ore is also subject to the additional export requirements as
described below.12
2.3. In its request for establishment of a panel the European Union describes the measure at issue
thusly:
Indonesia has restricted exports of nickel ore to different extents and under different
rules since at least 2014. In January 2014 nickel was excluded from the regime on the
necessary processing and purification of mining commodities for export, which
effectively outlawed exports of nickel ore. From January 2017 to December 2019
exports of nickel ore with a concentration below 1.7% were permitted subject to certain
conditions, while those of nickel ore with a higher concentration remained prohibited.
Since January 2020 all exports of nickel ore, regardless of its concentration, are
banned.13
2.4. In its request for establishment of a panel, the European Union also provides the follo wing
illustrative list of legal instruments through which this prohibition has been implemented over time14:
i. Law No. 4/2009 on Coal and Mining;
ii. Regulation of the Minister of Energy and Mineral Resources of the Republic of Indonesia
(MEMR Regulation) No. 7/2012 concerning increasing added value of minerals through
processing and refining of minerals activities of 6 February 2012;
iii. MEMR Regulation No. 11/2012 amending MEMR Regulation No. 7/2012 of
16 May 2012;
iv. MEMR Regulation No. 20/2013 amending MEMR Regulat ion No. 7/2012 of
1 August 2013;
v. MEMR Regulation No. 1/2014 concerning increasing added value of minerals through
domestic processing and refining of minerals activities of 11 January 2014;
vi. Regulation of the Minister of Trade of the Republic of Indonesia ( MOT Regulation)
No. 1/2017 concerning export provisions for processed and purified mining products
of 9 January 2017;
vii. MEMR Regulation No. 25/2018 concerning mineral and coal mining business of
3 May 2018;
viii. MEMR Regulation No. 11/2019 amending MEMR Regulatio n No. 25/2018 of
28 August 2019;

12 WT/DS592/1.
13 WT/DS592/3.
14 It should be noted that four of the legal instruments listed in the European Union's request for
establishment of a panel (namely MEMR Regulation Nos. 7/2012, 11/2012, 20/2013, and 1/2014) were not
expressly listed in the European Union's consultations request even though they pre-date that request).

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ix. MOT Regulation No. 96/2019 on export provisions for processed and purified mining
products of 30 December 2019; and
x. any annexes thereto, notices, preliminary findings, reviews, amendments,
supplements, replacements, renewa ls, extensions, implementing measures or any
other related measures.
2.5. In its first written submission, the European Union notes that since 1 January 2020 the export
prohibition has, in particular, been implemented through Article 3 and Appendix IV of the MOT
Regulation No. 96/2019 and Article 1 paragraph 2 of the MEMR Regulation No. 11/2019.15
2.6. Article 3 of MOT Regulation No. 96/2019 states that "[p] rocessed and/or Purified Mining
Products and Mining Products in the form of raw material or ore with certain criteria which export is
restricted are as contained in Appendix IV, which constitutes an integral part of this Regulation of
the Minister."16 Appendix IV is set out below in relevant part:
Appendix IV of MOT Regulation No. 96/201917

MINING PRODUCTS WHOSE EXPORTS ARE PROHIBITED

A. ORE/ RAW MATERIAL
No. Goods Description Tariff Head/HS
… … …
8. Nickel ore and its concentrate 2604.00.00
… … …

2.7. Article 1 paragraph 2 of MEMR Regulation No. 11/2019 provides for the insertion of Article 62A
into MEMR Regulation No. 25/2018. Pursuant to Article 62A, exports of nickel ore with a nickel
content of <1.7% were allowed until 31 December 2019. Previously, Article 46 of MEMR Regulation
No. 25/2018 (as amended by MEMR Regulation No. 50/2018) permitted the export of nickel ore with
a nickel content of <1.7% (less than one point seven percent) until 11 January 2022.18
2.8. In its first written submission, the European Union reiterated that Indonesia had imposed an
export prohibition since Janu ary 2014 and made specific reference to

15 European Union's first written submission, paras. 24-26 (referring to MOT Regulation No. 96/2019,
(Exhibit EU-11(b)) and MEMR Regulation No. 11/2019, (Exhibit EU-10(b))). The European Union, as the
complainant, placed English versions of the relevant Indonesian legal instruments on the record. Indonesia
placed its own versions of some of the same documents on the record with its own submissions. The Panel
raised the issue with the parties, and Indonesia has confirmed that it has no objection to the Panel relying
upon the European Union's versions of the following legal instruments: Law No. 4/2009 (Exhibit EU-1(b)); Law
No. 3/2020 (Exhibit EU-2(b)); Government Regulation No. 23/2010 (Exhibit EU-3(b)); MEMR Regulation
Nos. 7/2012 (Exhibit EU-4(b)), 11/2012 (Exhibit EU-5(b)), 20/2013 (Exhibit EU-6(b)), 1/2014 (Exhibit EU-
7(b)), 25/2018 (Exhibit EU-9(b)), 11/2019 (Exhibit EU-10(b)) and 7/2020 (Exhibit EU-12(b)); and MOT
Regulation Nos. 1/2017 (Exhibit EU-8(b)) and 96/2019 (Exhibit EU-11(b)). Indonesia did note that Exhibit EU-
11(b) did not include Appendix IV of that regulation. See Indonesia's response to Panel question No. 15. The
Panel, therefore, will use the Indonesian version of MOT Regulation No. 96/2019 (Exhibit IDN-30) when it
refers to Appendix.
16 MOT Regulation No. 96/2019, (Exhibit EU-11(b)).
17 MOT Regulation No. 96/2019, (Exhibit IDN-30).
18 MEMR Regulation No. 11/2019, (Exhibit EU-10(b)):
1. Provisions in Article 46 are revised to be written as follow:
Article 46
(1) The holders of Mining Business License (IUP) for Production Operation or Special Mining
Business License (IUPK) for Production Operation can conduct the sales of nickel with a level of
<1,7% (less than one point seven percent) or washed bauxite with a level of A12O3 >42%
(more than or equal to forty two percent) abroad in the specific quantities by using the Tariff
Post/ HS (Harmonized System) in accordance with the provisions of the laws and regulations at
the latest of the date of January 11, 2022.
(2) The sales of nickel with a level of <1,7% (less than one point seven percent) or washed
bauxite with a level of A12O3 >42% (more than or equal to forty two percent) as referred to in
Paragraph (1) is conducted with the conditions…

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MEMR Regulation No. 1/2014.19 The European Union requested the Panel to make findings on the
legal instruments that implemented the export prohibition that were currently in force20, which, in
its view , included MEMR Regulation No. 1/2014.21 In that regulation, Indonesia prohibited the
exportation of all types of nickel ore from 12 January 2014 until 11 January 2017.22
2.9. For its part, Indonesia noted that MEMR Regulation No. 1/2014 was revoked by MEMR
Regulation No. 5/2017 which, along with MOT Regulation No. 1/2017, continued the prohibition on
the exportation of nickel ore but only with respect to nickel content over 1.7% from 12 January 2017
until 11 January 2022.23 Both MEMR Regulation No. 5/2017 and MOT Regulation No. 1/2017 allowed
for the export of nickel ore with a nickel content below 1.7%.24 These regulations were subsequently
revoked by MEMR Regulation No. 25/2018 and MOT Regulation No. 96/2019, respectively. MEMR
Regulation No. 25/2018, as amended by MEMR Regulation No. 11/2019, prohibits exportation of all
types of nickel ore since 1 January 2020.25 MOT Regulation No. 96/2019 prohibits exportation of all
types of nickel ore since 2 January 2020. Based on these regulations , as of 1 January 2020 the
exportation of all nickel ore, regardless of nickel content, was prohibited.
2.10. In its first written submission, Indonesia noted that the European Union had included in its
panel request several legal instruments that had not been subject of consultat ions and that
purportedly implemented the export prohibition on nickel ore , namely MEMR Regulation
Nos. 7/2012, 11/2012, 20/2013, and 1/2014, and MOT Regulation No. 96/2019.26 Indonesia
considered that the inclusion of MEMR Regulation Nos. 7/2012, 11/2012, 20/2013 and 1/2014 in
the European Union's panel request "expanded the scope and changed the essence of the dispute".27
Indonesia argued that the Panel should find that MEMR Regulation Nos. 7/2012, 11/2012, 20/2013
and 1/2014 fall outside its terms of reference. Indonesia clarified that if the European Union did not
request the Panel to make findings on the above -mentioned legal instruments, Indonesia's "due
process rights [would] not … be prejudiced if the Panel were to address its jurisdictional challenge
together with the issuance of its report".28
2.11. The European Union maintains that MEMR Regulation No. 1/2014 is within the Panel's terms
of reference as it was described, although not explicitly named, in both the consultations request
and the request for establishment of a panel.29 At the same time, the European Union clarified that
it requests that the Panel make findings on the export prohibition that began with MEMR Regulation
No. 1/2014 but also acknowledges that any findings or recommendation s should be addressed
towards the legal instruments implementing the export prohibition that are legally in force. 30 The
European Union also acknowledges and accepts Indonesia's explanation that MEMR Regulation
No. 1/2014 was repealed and replaced by MEMR Regulation No. 5/2017, which was itself
subsequently revoked and replaced.31
2.12. The Panel understands that the measure at issue is an exp ort prohibition that has been in
place since January 2014 and is currently implemented through MEMR Regulation No. 11/2019 and
MOT Regulation No. 96/2019.32 The Panel, therefore, will make its findings on this basis and sees

19 European Union's first written submission, para. 19, referring to MEMR Regulation No. 1/2014
(Exhibit EU-7(b)).
20 European Union's opening statement at the first meeting of the Panel, para. 6.
21 European Union's response to Panel question No. 20(b).
22 MEMR Regulation No. 1/2014, (Exhibit EU-7(b)), Article 12(4).
23 Indonesia's second written submission, para. 22, referring to Article 22 of MEMR Regulation
No. 5/2017 (Exhibit IDN-33).
24 MEMR Regulation No. 5/2017 (Exhibit IDN-33) and MOT Regulation No. 1/2017 (Exhibit EU-8(b)).
25 Before this amendment, MEMR Regulation No. 25/2018 prohibited exports of nickel ore with a nickel
content over 1.7% while permitting exports of nickel ore with a nickel content below 1.7% provided that
holders of IUP for Production Operation or IUPK for Production Operation had, inter alia, a purification facility or
were in the process of building one. See MEMR Regulation No. 25/2018, (Exhibit EU-9(b)), Arts. 17, 44, 46.
26 Indonesia's first written submission, para. 71.
27 Indonesia's first written submission, para. 72, referring to Appellate Body Report, Argentina – Import
Measures, para. 5.3.
28 Indonesia's first written submission, para. 76.
29 European Union's response to Panel question Nos. 20 and 72.
30 European Union's response to Panel question No. 20(b).
31 European Union's response to Panel question No. 72.
32 The Panel notes that the export ban was originally imposed in January 2014 through MEMR
Regulation No. 1/2014. This MEMR Regulation was revoked by MEMR Regulation No. 5/2017, which partially

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no need for a preliminary ruling on its terms of reference with regard to the prohibition on the export
of nickel ore.
2.1.2 Domestic processing requirement on nickel ore
2.13. The European Union challenges the requirement whereby holders of mining business licen ce
(IUP) for Production Operation, S pecial Mining Business Licen ce (IUPK) for Production Operation,
and Mining Business Licen ce (IUP) for Production Operation specifically for the processing and/or
purification of metallic mineral, non-metallic mineral, or rocks33 are required to process (pu rify or
refine) nickel ore in Indonesia.
2.14. In its consultations request the European Union provides a narrative description of the
measure as:
Exports of certain mining products are subject to them undergoing an added value
enhancement through certain proce ssing and/or purification activities in Indonesia as
determined by the MEMR. This obligation is directed to holders of production permits
and applies, among others, to nickel ore, iron ore and chromium, as well as to coal and
coal products. As a result, mi nerals that have not undergone such processing and/or
purification operations, as required by law, may not be exported. This obligation does
not apply in cases of domestic interest or research and development.34
2.15. In its request for establishment of a panel, the European Union describes the DPR as:
Indonesia applies domestic processing requirements with regard to certain raw
materials, notably nickel ore and iron ore, prior to them being exported. Domestic
processing requirements oblige mining companies to enhance the value of the relevant
raw materials through the conduct of certain processing and/or purification operations
in Indonesia before exporting them.35
2.16. According to the European Union, the DPR has "the consequence of preventing exports of the
raw mate rials concerned unless they have been duly processed and/or purified" .36 The
European Union also provides in its request for establishment of a panel an illustrative list of the
legal instruments through which the DPR is implemented. These instruments are:
i. Law Number No. 4/2009 on Coal and Mining.
ii. Regulation of the Minister of Energy and Mineral Resources of the Republic of Indonesia
(MEMR Regulation) No. 25/2018 concerning mineral and coal mining
commercialisation of 3 May 2018.
iii. MEMR Regulation No. 50/2018 amending MEMR Regulation No. 25/2018 of
5 December 2018.

lifted the export ban on nickel ore as from 12 January 2017 by allowing for the exportation of nickel ore with a
nickel content less than 1.7%. The prohibition of nickel ore with a nickel content over 1.7% remained in place.
MOT Regulation No. 1/2017, which entered into force on 1 February 2017, also provided for an export ban on
nickel ore with a nickel content less than 1.7%. MEMR Regulation No. 5/2017 and MOT Regulation No. 1/2017
were revoked by MEMR Regulation No. 25/2018 and MOT Regulation No. 96/2019, respectively. MEMR
Regulation No. 25/2018 set a deadline for the exportation of nickel ore with a nickel content less than 1.7%,
i.e. 11 January 2022. MEMR Regulation No. 11/2019 amended MEMR Regulation No. 25/2018 and established a
prohibition on the exportation of all types of nickel ore as from 1 January 2020. MOT Regulation No. 96/2019
confirmed that prohibition as from 2 January 2020 and revoked the approvals to export nickel ore.
33 The names of the types of mining licences available were established in 2009 in the Law on Mineral
and Coal Mining (Law No. 4/2009). Law No. 4/2009 was amended in 2020 by Law No. 3/2020. The
amendments replaced this categorization. The text of the relevant regulations that the parties provided the
Panel does not reflect the 2020 amendments and throughout their argumentation the parties have utilized the
pre-2020 nomenclature. The Panel, therefore, will continue to refer to the relevant licences using the
nomenclature that was in force prior to 2020.
34 WT/DS592/1.
35 WT/DS592/3.
36 WT/DS592/3.

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iv. MEMR Regulation No. 11/2019 amending MEMR Regulation No. 25/2018 of
28 August 2019.
v. This request also covers any annexes thereto, notices, preliminary findings, reviews,
amendments, supplements , replacements, renewals, extensions, implementing
measures or any other related measures.37
2.17. The requirement to process or refine mining products domestically is imposed in
Article 103(1) of Law No. 4/2009, which states that "[t]he holders of IUP and IUPK […] must conduct
mineral processing and/or refinery of mining products domestically."38
2.18. MEMR Regulation No. 25/2018 contains relevant articles that the European Union challenges
with respect to a requirement to process or purify nickel ore domestically. 39 First, Article 17, which
is entitled "Mineral Sales of the results of Processing and/or Purification Abroad" , states in relevant
part:
(1) The holders of Mining Business License (IUP) for Production Operation, Special
Mining Business License (IUPK) for Pro duction Operation, and Mining Business License
(IUP) for Production Operation specifically for the processing and/or purification of
metallic Mineral, nonmetallic Mineral, or rocks before conducting the sales activity
abroad shall at first conducting the Enhancement of Added Values through the activities
of Processing and/or Purification in accordance with the minimum limits of Processing
and/or Purification as included in Appendix I, Appendix II, and Appendix III which are
the integral part of this Ministerial Regulation.

(2) Type of mining commodities of metallic Mineral, nonmetallic Mineral, or rocks that
have not been included in the Appendix I, Appendix II, and Appendix III may only be
sale abroad after the minimum limits of the Processing and/or Purification is stipulated
by the Minister.40
2.19. Secondly, Article 19(1) states that IUP and IUPK holders may conduct sales abroad of the
specified metallic minerals that have met the minimum limits of purification and/o r non-metallic
minerals that have met the minimum limits of processing. Article 19(2) permits other parties who
process and/or purify minerals to conduct sales abroad if they have met the requisite minimum limits
for purification (in the case of metallic minerals) or processing (in the case of non-metallic minerals).
Article 19(3) exempts minerals used for domestic interest and research and development through
the delivery of mineral samples abroad from the processing and purification limits.41
2.20. Finally, in Chapter XV of MEMR Regulation No. 25/2018 in a section entitled "Transitional
Provisions", Article 46 allowed IUP and IUPK holders to conduct sales abroad of nickel with a level
of <1 .7% (less than one point seven percent) in accordance with the provision s of laws and
regulations, up until 11 January 2022 if such sales are conducted by a licence holder who has or is
building a facility for purification and pays the relevant export duty. 42 As noted in paragraph 2.7
above, Article 1 paragraph 2 of MEMR Regulation No. 11/2019 added Article 62A of MEMR Regulation
No. 25/2018, which removed the permission to conduct sales abroad of nickel with a level of <1.7%
(less than one point seven percent) as of 1 January 2020.43

37 WT/DS592/3.
38 Law No. 4/2009, (Exhibit EU-1(b)), Article 103(1).
39 Article 16 of MEMR Regulation No. 25/2018 also sets out a requirement that IUP and IUPK holders
enhance added value of mineral and coal mining including through the activities of processing and/or purifying
metallic minerals. The European Union, however, does not specifically challenge Article 16.
40 MEMR Regulation No. 25/2018, (Exhibit EU-9(b)).
41 MEMR Regulation No. 25/2018, (Exhibit EU-9(b)).
42 MEMR Regulation No. 25/2018, (Exhibit EU-9(b)), Article 46. According to Article 46, "[h]as or is
building the facility of Purification" can take the form of (a) building one's own purification facility or (b)
cooperating to build a purification facility through share ownership directly to the Business Entity of the holders
of Mining Business Licence (IUP) for Production Operation specifically for the processing and/or purification; or
share ownership directly to the holders of Mining Business Licence (IUP) for Production Operation specifically
for the processing and/or purification at the Business Entity of the holders of Mining Business Licence (IUP) for
Production Operation or Special Mining Business Licence (IUPK) for Production Operation.
43 MEMR Regulation No. 11/2019, (Exhibit EU-10(b)).

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2.21. Indonesia's laws and regulations make a distinction between "processing" and "purification"
or "refining".44 Indonesia has also explained that the term "processing" has two meanings. It can
refer to "all activity conducted to treat ore" or it can be understood as "an effort to improve the
quality of Minerals that produce products with the same physical and chemical properties as the
origin Minerals".45 This latter definition is what is used in MEMR Regulation No. 25/2018. Indonesia
confirmed that while some minerals can be both processed and purified (such as iron, manganese,
or chromium) others (such as nickel or bauxite) can only be purified.46 This is because any treatment
to nickel will result in a change in its physical or chemical property. The Panel notes that while MEMR
Regulation No. 25/2018 uses the term "purification", Law No. 4/2009, as amended by Law
No. 3/2020, refers to "refining". Indonesia has clarified that the distinction is merely an issue of
translation and that the same Bahasa term 'pemurnian' is used in both legal instruments. The Panel,
thus, understands that the terms refining and purification can be used interchangeably . When
referencing exhibits or the arguments of the parties, the Panel will, therefore, use the term that
appears in the exhibit or arguments.
2.22. Appendix I of MEMR Regulation No. 25/2018 (reproduced below) sets forth the minimum
limits of processing and purification referred to in Article 19 for each relevant ore or mineral. It
contains a column for processing and a separate one for purification, recognizing that these are two
separate and distinct phases in production.
Appendix I of MEMR Regulation No. 25/2018
LIMITATION OF MINIMUM PROCESSING AND PURIFICATION MINING MINERAL METAL
COMMODITIES IN THE STATE
Ore or
Mineral
Processing Purification
Product Quality Product Quality
Nickel and /
or cobalt
(process
smelting)
a. Saprolite;
b. Limonite

Nickel mate,
metal alloy,
metal nickel
and metal
oxide
a. Ni Mate, Ni ≥ 70%;
b. Metal FeNi, Ni ≥ 8 %;
c. Nickel Pig Iron (NPI), 2% ≤ Ni <4% , and Fe ≥
75% ;
d. Nickel Pig Iron (NPI), Ni ≥ 4%;
e. Nickel Metal, Ni ≥ 93%; and / or
f. Nickel Oksida (NiO), Ni ≥ 65 %.
Nickel and /
or cobalt
(process
[l]eaching)
Limonite

Metal, metal
oxide, metal
sulfide, mix
it up
hydroxide/
sulfide
precipitate,
and
hydroxide
nickel
carbonate
a. Nickel Metal, Ni ≥ 93%;
b. Mix Hydroxide Precipitate (MHP), Ni ≥ 25%;
c. Mix Sulfide Precipitate (MSP), Ni ≥ 45%;
d. Hydroxide Nickel Carbonate (HNC), Ni ≥ 40%;
e. Nickel Sulphate and Nickel Sulfate Hydrate
(NiSO4 and NiSO4xH2O), Ni ≥ 20%;
f. Cobalt sulfate and Cobalt Sulfate Hydrate
(CoSO4 and CoSO4.xH2O), Co ≥ 19 %;
g. Nickel Chloride and Nickel Hydrate Chloride
(NiCl2 and NiCl2.xH2O), Ni ≥ 20%;
h. Cobalt Chloride and Cobalt Klorida Hydrate
(CoCl2 and CoCl2.xH2O), Co ≥19%;
i. Nickel Carbonate (NiCO3), Ni≥40%;
j. Cobalt Carbonate (CoCO3 ), Co ≥ 40% Co;
k. Nickel Oxide (NiO), Ni ≥ 65%;
l. Cobalt Oxide (CoO), Co ≥ 65%;
m. Hydroxide Nickel (Ni(OH)2), Ni ≥ 50%;
n. Cobalt Hydroxide (Co(OH)2), Co ≥ 50%;
o. Sulfide Nickel (NiS), Ni ≥ 40%;
p. Metal Cobalt, Co ≥ 93% ;
q. Cobalt Sulfide (CoS), Co ≥ 40%; and / or
r. Metal Chromium, Cr ≥ 99%.

44 Indonesia's response to Panel question No. 66(a).
45 Indonesia's response to Panel question No. 66(a) (referring to Article 1(20) of MEMR Regulation
No. 25/2018).
46 Indonesia's response to Panel question No. 66(a).

BCI deleted, as indicated [[***]]

Ore or
Mineral
Processing Purification
Product Quality Product Quality
Nickel and /
or cobalt
(process
reduction)
a. Saprolite;
b. Limonite

Metal alloy
a. FeNi sponge (Sponge FeNi), 2% ≤ Ni <4%, and
Fe ≥ 75%;
b. FeNi sponge (Sponge FeNi), Ni ≥ 4%;
c. Luppen FeNi, 2% ≤ Ni <4% and Fe ≥ 75%; and /
or
d. Luppen FeNi, Ni ≥ 4%;
e. Nugget FeNi, 2% ≤ Ni <4%, and Fe ≥ 75%; and
/ or
f. Nugget FeNi , Ni ≥ 4%.

2.23. Indonesia has confirmed that the column for "processing" is blank because nickel is a mineral
that can only be purified or refined. 47 Indonesia has further confirmed that the product resulting
from the purification or refining of nickel ore ceases to be nickel ore and becomes a different product,
such as nickel pig iron, fe rro nickel and nickel matte, which are classified under different codes in
the Harmonized System. 48 Thus, any products exported after compliance with MEMR Regulation
No. 25/2018 would not be nickel ore, but another product.
2.24. In its first written submission, the European Union also identifies and requests findings on
Article 66 of MEMR Regulation No. 7/2020 as one of the legal instruments through which the DPR is
implemented.49 Article 66 of MEMR Regulation No. 7/2020 which is in a subdivision enti tled
"Prohibitions" notes that holders of IUP and IUPK are prohibited from " sell[ing] products resulting
from Mining abroad before carrying out processing and/or refineries domestically in accordance with
provisions of laws and regulations…".50
2.25. This regulation was not explicitly mentioned in either the European Union's consultations
request or its request for establishment of a panel. Indonesia considers that "the inclusion of MEMR
Regulation 7/2020 [in] these proceedings would impermissibly expand the scop e and change the
essence of this dispute".51 The Panel will deal with this issue in section 7.1 below.
2.2 Other factual aspects
2.2.1 Nickel
2.26. Nickel is a naturally occurring metallic element. It is the fifth most common element on earth
and occurs extensively in the earth's crust and core. 52 Economic concentrations of nickel occur in
sulfide and laterite-type ore deposits.53 Nickel occurs naturally, principally as ox ides, sulfides, and
silicates. There are many different nickel ores requiring a variety of techniques to extract the nickel.
Improved technologies in mining, smelting, and refining, as well as increased capacities allow lower-
grade nickel ore to be utilized. Decreasing ore grade is, therefore, not necessarily a sign of
diminishing resources, but a reflection of innovation and improvements made in mining and process

47 Indonesia confirms that the relevant term in Bahasa Indonesian ("pemurnian") is translated as both
"refining" and "purifying". See Indonesia's response to Panel question No. 66(a).
48 Nickel pig iron is produced from low-grade laterite ores, it can be used to produce the low-nickel 200-
series stainless steels and contains only 3-5% of nickel and higher concentrations of sulfur and phosphorus
than ferronickel. Ferronickel is an alloy normally produced by direct smelting of lateritic ore that contains 20-
38% of nickel. Nickel matte is an intermediate product of nickel metallurgy that contains approximately 70% of
nickel and is used in the preparation of refined metal. It is produced in smelters and comprises a mixture of
nickel and iron sulfides. The HS codes for nickel ore, nickel pig iron, ferronickel and nickel matte are 260400,
720150, 720260, and 750110, respectively. See Minerals UK, "Nickel", British Geological Survey, Natural
Environment Research Council, (September 2008), (Exhibit IDN-12), p. 10; and Indonesia's response to Panel
question No. 66(c).
49 European Union's first written submission, para. 36. See also, European Union's response to Panel
question No. 22.
50 MEMR Regulation No. 7/2020 (Exhibit EU-12(b)).
51 Indonesia's comments on the European Union's response to Panel question No. 72.
52 Nickel Institute, "About nickel", (last accessed 20 August 2021), (Exhibit IDN-11).
53 Nickel Institute, "About nickel", (last accessed 20 August 2021), (Exhibit IDN-11) noting that the
Committee for Mineral Reserves International Reporting Standards defines a mineral resource as "a
concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade
or quality that there are reasonable prospects for eventual economic extraction".

BCI deleted, as indicated [[***]]

technology.54 Essentially, the development of technology may render it economic to process lo wer
grades of nickel, which could, therefore, expand economically viable nickel reserves. A change in
the type of processing technology operating in a country, therefore, could result in a change in the
volume of its mineral reserves.55
2.27. Australia, Indonesia, South Africa, the Russian Federation, and Canada account for more than
50% of the global nickel resources.56 Indonesia accounts for one quarter of overall global reserves57
and is the world's biggest nickel producer, with a production contribution to t he world of 800,000
tonnes, i.e. 29.6% of the world production, in 2019. 58 The Philippines and the Russian Federation
join Indonesia in the top three nickel -producing countries that provide around half of the global
supply of nickel.59 Indonesia is expected to dominate nickel ore production through 2040. Multiple
nickel-refining projects with a combined capacity of 0.42 Mt per year as of 2020 are under
construction in Indonesia.60
2.28. Nickel ore production and export in Indonesia in the per iod 2010-2020 is shown in Figure 1
below.
Figure 1: Indonesian nickel ore production and export (2010-2020)

Source: MEMR 2021 Sayoga Gautama Report, (Exhibit IDN-15, Figure 5, p. 5; and Exhibit IDN-24)

2.29. Over the past two decades, the nickel market has increased in total production from
1.1 million tonnes in 2000 to 2.4 million tonnes in 2019. 61 This growth was largely d ue to rapid
expansion in demand for stainless steel. From 2010 -2021 nickel demand for the production of
stainless steel has more than doubled.62 In 2020, 73% of the global nickel consumption by first use
was for production of stainless steel, while 8% was assigned to producing batteries.63

54 Nickel Institute, "About nickel", (last accessed 20 August 2021), (Exhibit IDN-11).
55 Indonesia's response to Panel question No. 9(b).
56 Nickel Institute, "About nickel", (last accessed 20 August 2021), (Exhibit IDN-11).
57 The White House, Building Resilient Supply Chains, Revitalizing American Manufacturing, and
Fostering Broad-Based Growth – 100-day Reviews under Executive Order 14017 (June 2021), Washington,
(Exhibit IDN-26), p. 99.
58 MEMR, Indonesian Mining Guidance (2020), (Exhibit IDN-1), p. 52.
59 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021), (Exhibit
IDN-16), p. 30.
60 The White House, Building Resilient Supply Chains, Revitalizing American Manufacturing, and
Fostering Broad-Based Growth – 100-day Reviews under Executive Order 14017 (June 2021), Washington,
(Exhibit IDN-26), p.100.
61 INSG, "Production, Usage and Price", available at https://insg.org/index.php/aboutnickel/production-
usage/ (last accessed 20 August 2021), (Exhibit IDN-21). See also, The White House, Building Resilient Supply
Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth – 100-day Reviews under
Executive Order 14017 (June 2021), Washington, (Exhibit IDN-26), p. 99.
62 J. Fraser, J. Anderson, J. Lazuen, et al., Study on future demand and supply security of nickel for
electric vehicle batteries, Publications Office of the European Union, Luxembourg, 2021, (Exhibit IDN-22), p.1.
63 Macquarie, Commodities Outlook, M. Garvey and J. Lennon, March 2021, (Exhibit EU-27), p. 3. See
also IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021), (Exhibit IDN-16),

BCI deleted, as indicated [[***]]

2.30. It is expected that world nickel demand will increase due to the use of nickel in the production
of lithium -ion batteries, which are an important component in electric vehicles and stationary
storage.64 In this respect, some reports estimate that the global nickel consumption by first use will
considerably increase in the coming years, as a result of growing demand from stainless steel and
EV battery production.65 The combination of demand from stainless steel production and in electric
vehicles and battery storage could see demand for nickel increase between 20-25 times by 2040.66
2.31. The increasing demand for nickel in recent years finds reflection in the nickel pric e, which
increased from 11,526 USD per dry metric tonne (dmt) in 2017 to 13,558 USD/dmt in 2019. 67 The
drop in 2020 is probably due to the impact of the COVID-19 pandemic on nickel demand (e.g. less
need for stainless steel because of construction projects in standby).68 Figure 2 below summarizes
nickel price trends from 1991 to 2021:
Figure 2: Nickel price trends (1991-2021)

Source: London Metal Exchange and Shanghai Futures Exchange (Exhibit IDN-21)

2.32. Globally, the nickel value chain supports large numbers of jobs, from mining through to end
use and recycling.69

p. 144; and J. Fraser, J. Anderson, J. Lazuen, Y. Lu, O. Heathman, N. Brewster, J. Bedder, M. Oliver, Study on
future demand and supply security of nickel for electric vehicle batteries, Publications Office of the
European Union, Luxembourg, 2021, (Exhibit IDN-22), pp. 11 and 56.
64 MEMR, Indonesian Mining Guidance (2020), (Exhibit IDN-1), p. 33. See also IEA, Special Report on
the Role of Critical Minerals in Clean Energy Transition (2021), (Exhibit IDN-16), pp. 26 and 28; and The White
House, Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based
Growth – 100-day Reviews under Executive Order 14017 (June 2021), Washington, (Exhibit IDN-26),
pp. 99-100.
65 According to Macquarie, global nickel consumption by first use will have increased around 80%
(4.3 mt by 2030 versus 2.4 mt in 2020), and 57% will go to stainless steel production and the 30% to battery
production. For its part, the IEA estimates that "EVs and battery storage … are set to take over from stainless
steel as the largest end user of nickel by 2040". See Macquarie, Commodities Outlook, M. Garvey and J.
Lennon, March 2021, (Exhibit EU-27), p. 3, and IEA, Special Report on the Role of Critical Minerals in Clean
Energy Transition (2021), (Exhibit IDN-16), p. 5. The Panel notes that some exhibits refer to metric tonnes
while others refer to imperial tons. This is not a matter of a mere spelling difference. A metric tonne is
1,000 kilograms while an imperial ton is 2,240 pounds (about 1,016 kilograms). For this reason, the Panel will
continue to use the terminology as presented in the exhibits or submissions and not attempt to harmonize the
terminology.
66 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 8.
67 MEMR, Indonesian Mining Guidance (2020), (Exhibit IDN-1), p. 55.
68 INSG, "Production, Usage and Price", available at https://insg.org/index.php/aboutnickel/production-
usage/ (last accessed 20 August 2021), (Exhibit IDN-21).
69 Nickel Institute, "About nickel", (last accessed 20 August 2021), (Exhibit IDN-11).

BCI deleted, as indicated [[***]]

2.2.2 Nickel mining in Indonesia
2.2.2.1 Legal and policy framework of mining activities
2.33. Mining in Indonesia is regulated by several legal instruments on a variety of issues ranging
from environmental protection, water and forestry, resource conservation policy, resource and
reserves reporting mechanisms to raw material certificati on, land reclamation and post -mining
activities.70
2.34. Law No. 4/2009 establishes the fundamental regulatory framework for coal and mineral
mining in Indonesia. This law establishes the regime for granting licenses and permits for mining
activities.71 In 2014, pursuant to Local Government Law No. 23/2014, authority for issuing mining
permits was transferred from the central government to regional governors. In 2020, following the
adoption of Law No. 3/2020, which amended Law No . 4/2009, the authority for mining permits
returned again to the central government.72
2.35. In its preamble, Law No. 4/2009 emphasizes the important role of the mining industry in
giving real added value to the national economy. It also establishes that managem ent of mineral
mining will be conducted "siding with national interests" and from a "sustainable and environment-
oriented" approach.73 In line with these principles, Law No. 4/2009 sets out objectives to provide for
sustainable management of mineral resour ces such as "ensuring the benefit of mineral and coal
mining in a sustainable and environment-oriented way", "ensuring the availability of mineral[s] …
as raw materials and/or energy sources to meet the domestic needs" , and "supporting and
developing national capacity to enable the nation to compete with other countries…".74
2.36. Indonesia also regulates mining activities in relation to their impact on the environment
through Law No. 32/2009 on the Protection and Management of the Environment, which entered
into force on 3 October 2009.75 This law requires that businesses that may have a significant
environmental impact, such as mining companies, prepare an environmental impact analysis
(AMDAL).76 Some of the objectives of Law No. 32/2009 concern "the control [over] the use of natural
resources on a wise basis"; the "realiz[ation of] … sustainable development"; and "anticipat[ing] any
of global issues on environment".77
2.37. Finally, in addition to the legal instruments that regulate the industry, mining activity in
general and nickel mining, in particular, are an important focus of the industrial policy of Indonesia.
The National Industry Development Master Plan 2015-2035 (RIPIN) sets 10 priority industries for
the 2015-2035 period. One of these priority industries is the basic metal and non -metal mineral
industry. The RIPIN outlines 11 strategies to achieve the vision and mission of national industry
development. Two of the 11 strategies concern the development of the upstre am and intermediate
industry based on natural resources; and the control on the exportation of raw materials and energy
resources.78 The RIPIN establishes a first phase covering the 2015 -2019 period. In this first phase

70 Indonesia's first written submission, para. 7 and Figure 10.
71 Indonesia's first written submission, para. 154.
72 Sayoga Gautama Supplemental Expert Report, 17 March 2022, (Exhibit IDN-109), pp. 1-2.
73 Law No. 4/2009, (Exhibit EU-1(b)), Article 2(b) and (d).
74 Law No. 4/2009, (Exhibit EU-1(b)), Article 3(b), (c), and (d). The preference accorded to domestic
needs is also reflected in one of the first implementing measures of Law No. 4/2009. See Government
Regulation No. 23/2010 as amended by Government Regulation No. 24/2012, (Exhibit EU-3(b)), Article 84. In
its defence under Article XX(d) of the GATT 1994, Indonesia specifically refers to Articles 96(c) and (d) of Law
No. 4/2009.
75 Indonesia's first written submission, para. 161.
76 The AMDAL consists of an environmental impact assessment, an environmental management plan,
and an environmental monitoring plan. In cases where an AMDAL is not required, other documents such as
environmental management effort documents and environment monitoring effort documents are generally
required. See INSG, Report on Nickel Production and Usage in Indonesia, February 2020, (Exhibit IDN-13
(revised)), p. 57; and PWC, "Mining in Indonesia", Investment and Taxation Guide, 11th edn., June 2019,
(Exhibit IDN-7), p. 143.
77 Law No. 32/2009, (Exhibit IDN-53), Article 3. In its defence under Article XX(d) of the GATT 1994,
Indonesia specifically refers to Article 57 of Law No. 32/2009.
78 Government Regulation No. 14 of 2015, Master Plan of National Industry Development 2015-2035,
(Exhibit EU-17 (rev)), Chapter I, p. 18. The Panel notes that the European Union initially submitted this exhibit
in a non-official WTO language and provided a summary in English of the main relevant provisions in

BCI deleted, as indicated [[***]]

the increase of the added value of the natural resources in agricultural, mineral, and oil-processing-
based upstream industry took a prominent role.79 Although not legally binding, the RIPIN describes
the overall industrialization goals of the Indonesian government for the relevant period. Presidential
Regulation No. 2 of 2018 on the National Industrial Policy (2015-2019) outlines the target to secure
the supply and distribution of natural resources to meet the demand for raw materials, intermediate
goods, energy and water resources for Indonesia's national industry.80
2.38. The RIPIN further outlines programmes that the Indonesian government will implement to
guarantee the availability of natural resources for industrial development, in particular those that
are based on mining mineral, coal, oil a nd gas, and agriculture. One of the programmes relates to
the prohibition or restriction of exports of natural resources required for the utilization plan and the
needs of industrial companies and industrial areas companies.81
2.2.2.2 Types of nickel ore and reserves
2.39. The two measures at issue, namely the export ban and the DPR, concern the same product:
nickel ore. Ore is defined as "[a] naturally occurring solid material containing a precious or useful
metal in such quantity and in such chemical combination as to make its extraction profitable"82 or
"rock or soil from which metal can be obtained".83 In 2021 nickel mining (including smelter activity)
in Indonesia represented [[***]] of its gross domestic product ( GDP) and [[***]] of its total
employment.84 In certain regions of Indonesia where nickel mining predominantly takes place it
makes a significant contribution to the gross regional domestic product (GRDP). In 2020, nickel
mining (including purification and refining) accounted for 27% of the GRDP in Southeast Sulawesi,
41% of the GRDP in Central Sulawesi, and 23% of the GRDP in North Maluku.85
2.40. Nickel ore originates from two types of deposits: sul fide deposits and laterite deposits.
Indonesia's nickel resources are mainly of the laterite type since they "are formed by weathering in
a high-temperature and humid climate". 86 Lateritic ore is divided into limonite (more weathered
upper soil) and saprolite (less weathered lower soil) ore. Saprolite ore has a higher grade of nickel
than limonite.87

Exhibit EU-19. The European Union filed a revised version of Exhibit EU-17 with its responses to the Panel
questions following the second meeting. This revised version includes translations into English of the relevant
excerpts of the original document.
79 Government Regulation No. 14 of 2015, Master Plan of National Industry Development 2015-2035,
(Exhibit EU-17 (rev)), Chapter II, part B, p. 20. See above explanation on the filing of a revised version of
Exhibit EU-17 by the European Union.
80 Presidential Regulation No. 2 of 2018, National Industrial Policy (2015-2019), (Exhibit EU-18 (rev)),
p. 21. The Panel notes that the European Union initially submitted this exhibit in a non-official WTO language
and provided a summary in English of the main relevant provisions in Exhibit EU-19. The European Union filed
a revised version of Exhibit EU-18 with its responses to the Panel questions following the second meeting. This
revised version includes translations into English of the relevant excerpts of the original document.
81 Government Regulation No. 14 of 2015, Master Plan of National Industry Development 2015-2035,
(Exhibit EU-17 (rev)), pp. 53-54. See above explanation on the filing of a revised version of Exhibit EU-17 by
the European Union.
82 Oxford English Dictionary Online, at
https://www.oed.com/search?searchType=dictionary&q=ore&_searchBtn=Search
83 Cambridge Dictionary Online, at https://dictionary.cambridge.org/dictionary/english/ore
84 Indonesia's response to Panel question No. 101.
85 See Indonesia's second written submission, para. 109, referring to BPS, Excel of "GRDP of South
Sulawesi, Central Sulawesi and North Maluku", (Exhibit IDN-100).
86 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), pp. 144 and 146; J. Fraser, J. Anderson, J. Lazuen, Y. Lu, O. Heathman, N. Brewster, J.
Bedder, M. Oliver, Study on future demand and supply security of nickel for electric vehicle batteries,
Publications Office of the European Union, Luxembourg, 2021, (Exhibit IDN-22), p. 23; and WALHI, Study
report on Environmental Conditions around Coastal Sea near the Mining Area due to the Nickel Industry in
Morowali regency. Central Sulawesi, Kolaka and North Konawe Regencies, Southeast Sulawesi (2021),
(Exhibit IDN-68), p. 15.
87 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 144.

BCI deleted, as indicated [[***]]

2.41. As regards Indonesia's nickel reserves, the term "mineral reserve" refers to the "economically
mineable part of a measured and/or indicated mineral resource".88 Mineral reserves are divided into
probable or proved reserves depending on the lower or higher level of confidence in the modifying
factors.89 Probable reserves are "the economically mineable part of an Indicated, and in some
circumstances, a Measured Mineral Resource.90 The confidence in the Modifying Factors applying to
a Probable Mineral Reserve is lower than that applying to a Proved Mineral Reserve." Proved reserves
are "the economically mineable part of a Measured Mineral Resource. A Proved Mineral Reserve
implies a high degree of confidence in the Modifying Factors".91
2.42. The Panel notes that evidence on the record provides different estimates on the level of nickel
reserves in Indonesia. The divergences may be due, inter alia, to the economic value attributed to
limonite and low -grade saprolite nickel ore (LGSO). 92 In its argumentation Indonesia asserts that
only reserves of high -grade saprolite ore (HGSO) are economically mineable and, therefore, it is
only that ore that is relevant for the reserve calculations. 93 Additionally, in accordance with the
Indonesia National Standard (SNI) 2019 Editi on and the Indonesian KCMI Code 2017 Edition by
Kombers KCMI IAGI-PERHAPI94 and CRIRSCO, Indonesia only includes in its reserves those reported
by IUP and IUPK holders , as part of the application for a mining permit, which were verified by a
Competent Person.95 A "Competent Person" is defined as a minerals industry professional with at
least five years of relevant experience in the style of mineralization or type of deposit under
consideration and in the activity that the person is undertaking.96
2.43. The following table summarizes the reserve estimates (in million tonnes) provided to the
Panel:

88 CRIRSCO, Standard Definitions and International Report Template, October 2012, (Exhibit IDN-42),
pp. 3-5. "Mineral resource" is in turn defined as "a concentration or occurrence of solid material of economic
interest in or on the Earth's crust in such form, grade or quality and quantity that there are reasonable
prospects for eventual economic extraction". An "Indicated Mineral Resource" is "that part of a Mineral
Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with
sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning
and evaluation of the economic viability of the deposit". This type of mineral resource "has a lower level of
confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable
Mineral Reserve". Measured Mineral Resource is "that part of a Mineral Resource for which quantity, grade or
quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the
application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability
of the deposit". This type of mineral resource "has a higher level of confidence than that applying to either an
Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proved Mineral Reserve
or to a Probable Mineral Reserve". Similar definitions of "mineral reserve" and "mineral resource" can be found
in Exhibits IDN-37, p. 7; IDN-5, and IDN-108.
89 The modifying factors are "considerations used to convert Mineral Resources to Mineral Reserves.
These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing,
legal, environmental, social and governmental factors". See CRIRSCO, Standard Definitions and International
Report Template, October 2012, (Exhibit IDN-42), p. 3.
90 CRIRSCO, Standard Definitions and International Report Template, October 2012, (Exhibit IDN-42),
p. 5.
91 CRIRSCO, Standard Definitions and International Report Template, October 2012, (Exhibit IDN-42),
p. 5.
92 The Panel notes that the parties dispute the economic value of low-grade saprolite nickel ore and
limonite nickel ore. Indonesia does not include low-grade saprolite ore and limonite nickel ore in its reserve
estimate because it considers that only high-grade saprolite ore has economic value whereas the
European Union notes that low-grade saprolite ore and limonite nickel ore can be processed using
hydrometallurgical processes. See Indonesia's first written submission, para. 118; and European Union's
second written submission, para. 98.
93 Indonesia's first written submission, para. 118; Indonesia's responses to Panel question Nos. 16 and
38. See also the Maryono Report, (Exhibit IDN-18 (BCI)), pp. 18-19.
94 National Standardization Agency, Indonesian National Standard (SNI), 2019 edn. (Exhibit IDN-37)
and Kode KCMI IAGI-PERHAPI, Indonesian Joint Committee for Mineral Reserves KCMI – Code, 2017 edn.
(Exhibit IDN-38).
95 MEMR Director General Circular No. 741/2021 Regarding Implementation of the Use of Competent
Person in the Estimation of Mineral and Coal Resources and Reserves, (Exhibit IDN-97), p. 3. Failure to use a
Competent Person results in a sanction and the non-approval of the Annual Work Plan and Budget.
96 CRIRSCO, Standard Definitions and International Report Template, October 2012, (Exhibit IDN-42),
pp. 2-3.

BCI deleted, as indicated [[***]]

Table 1: Estimates of Indonesian nickel ore reserves (in million tonnes) (2012-2020)
 Year →
Source ↓ 2012 2013 2014 2015 2016 2017 2018 2019 2020
Mining
Guidance
of 2020
IDN-1
 3.19 3.15 3.16 3.57 4.59
Maryono
Report
IDN-
18(BCI)97
(only HGSO
reserves)

USGS
IDN-2098 3.9 3.9 4.5 4.5 4.5 4.5 21 21 21
MEMR /
Indonesia's
Geological
Agency
IDN-4899
2.5–
prov.- /
19.1–
prob.-
2.6
prov./
18.9
prob.
2.4
prov./
18.9
prob.
3.9
prov./
46.9
prob.
4.2
prov./
44.2
prob.
22.5
prov./
39.7
prob.
37
prov./
39.7
prob
17
prov./
54.2
prob
20.9
prov./
48.4
prob
Prov.= proven reserves; Prob. = probable reserves

2.2.2.3 Extraction and refining of nickel ore
2.44. Nickel ore extraction from lateritic deposits is normally accomplished through strip or open-
cast mining techniques. 100 It is essentially an earth -moving exercise requiring more land clearing
than vertical digging. This makes nickel mining land intensive and facilitates the development of
small nickel mines in which strip -mining operations using "relatively crude" techniques are
conducted, with the subsequent higher impact on the environment, mainly in terms of deforestation
and water pollution.101
2.45. The nickel mining activity basically consists of the following steps: (i) Land clearing; (ii) Top
soil (red limonite) stripping and stockpiling for later use for reclamation of mined -out area,
(iii) Stripping of overburden (yellow limonite) and dumped in overburden stockpile area;
(iv) Stripping of saprolite ore, the main target of nickel mine, as run -of-mine product; and
(v) Reclamation of mined-out area.102

97 This reserve estimate only includes high-grade saprolite ore (HGSO). See the Maryono Report,
(Exhibit IDN-18 (BCI)), p. 21.
98This exhibit was the only source that contained estimates for 2010 and 2011. That estimate –
3.9 million tonnes – was the same as the estimate for 2012. See USGS, Excel of "Nickel Reserves",
(Exhibit IDN-20), p.1.
99 This reserve estimate encompasses limonite ore, low-grade saprolite ore (LGSO), and high-grade
saprolite ore (HGSO) based on the reports by holders of mining permits. See Indonesia's first written
submission, para. 117.
100 Clean Technica, Image of Indonesia at "Electric Vehicles: The Dirty Nickel Problem",
(Exhibit IDN-66), available at: https://cleantechnica.com/2020/09/27/electric-vehicles-the-dirty-nickel-
problem/ (last accessed 30 August 2021); Sayoga Gautama Report, (Exhibit IDN-15), pp. 1-2; and NIWA,
"Sediment and Mining" (9 March 2021), available at https://niwa.co.nz/our-
science/freshwater/tools/kaitiaki_tools/land-use/mining/impacts/sedimentation-and-mining (last accessed
20 August 2021), (Exhibit IDN-65).
101 UNCTAD, Lessons from Indonesia's ban on nickel exports, Background document, (Exhibit IDN-23),
p. 12.
102 Sayoga Gautama Report, (Exhibit IDN-15), pp. 2-3.

BCI deleted, as indicated [[***]]

Figure 3: Complete profile of nickel laterite

Source: Maryono Report, (Exhibit IDN-18(BCI)), p. 13.

2.46. Because lateritic nickel ore deposits do not produce the same reaction heats as sulfide nickel
deposits, pyrometallurgical processing techniques such as rotary kiln electric furnace (RKEF), which
are energy intensive, are commonly used, particularly as regards HGSO. In these pyrometallurgical
processes, "the dried ore is smelted in an electric furnace with carbon as a reducing agent" and heat
is required "to remove free moisture and combined water in addition to calcining and smelting" .103
As regards the processing of LGSO and limonite ore, hydrometallurgical methods such as the Caron
process104 and High Pressure Acid Leaching (HPAL) are normally used. The figure summarizes these
two processing techniques.

103 Minerals UK, "Nickel", British Geological Survey, Natural Environment Research Council, (September
2008), (Exhibit IDN-12), p. 8. Pyrometallurgical processes may also involve the use of sulfur, if matte is
required. These processes are completed by further refining to produce ferronickel or matte.
104 The Caron process involves "selective reduction of the ore and ammonia leaching". It is more energy
intensive than HPAL "as it includes drying, calcining and reduction stages". HPAL involves "preheating the
slurried ore and leaching with concentrated sulfuric acid at high temperature and pressure". The nickel is
converted to "soluble sulphate salts which are recovered from the slurry in a counter-current decantation
circuit (CCD). CCD involves several stages of washing the residue and recovering soluble nickel … in the liquid.
The remaining acid in this liquid is neutralized using a limestone slurry, producing a gypsum precipitate. Nickel
and other sulfides are precipitated in the next stage, through a reaction with injected hydrogen sulfide. This
mixed metal sulfide is refined through re-leaching with oxygen at high pressure, then removing iron and
copper using chemical reactions with ammonia and air, and sulfide, respectively. Anhydrious ammonia and
ammonium sulphate are added to the preheated nickel solution, hydrogen is introduced under high pressure
and nickel is precipitated. See Minerals UK, "Nickel", British Geological Survey, Natural Environment Research
Council, (September 2008), (Exhibit IDN-12), pp. 8-9.

BCI deleted, as indicated [[***]]

Figure 4: Caron and HPAL smelter processes

Source: Minerals UK, "Nickel", British Geological Survey, Natural Environment Research Council, (September
2008), (Exhibit IDN-12, p. 9)

2.47. At the time of the Panel's establishment, all smelter facilities in Indonesia used
pyrometallurgical processes, namely RKEF . Indonesia has confirmed that the first HPAL plants in
Indonesia were not yet operational at the time of this Panel's analysis. Although different sources
provide different estimates on when HPAL plants would become operational, Indonesia tells the Panel
that [[***]] plants will be operational starting in [[***]].105 Indonesia expects a significant increase
in the number of operational RKEF facilities in the coming years .106 This will result in a significant
increase in the number of refining facilities in the next few years.107
2.2.2.4 Environmental impact of nickel mining
2.48. Mining activities, in general, and nickel mining, more particularly, have an impact on the
environment. As mentioned above, nickel deposits in Indonesia are mostly lateritic in nature, which
requires open-cast or strip mining to extract the nickel ore.108 This type of mining entails extensive
land clearing, stripping of topsoil and overburden (rock or soil layer covering the mineral resources,
which must be stockpiled) and stripping of saprolite ore, the main object of nickel mining. This
results in a negative environmental impact on landscape, water resources, air quality, and emissions.
Waste management is also a challenge for all the players involved in the mining business, including
governments.
2.49. The main environmental impact of laterite nickel mining is land disturbance because
extraction of this type of nickel requires clearing trees, plants and topsoil from the mining area. This

105 Indonesia's response to Panel question No. 100.
106 Indonesia's response to Panel question No. 100 (an increase of [[***]] by [[***]]).
107 Indonesia's first written submission, para. 42. The Panel notes, nonetheless, that some exhibits on
the record indicate that there may be 30 smelters in 2024 or [[***]] smelters by 2023. See MEMR, Indonesian
Mining Guidance (2020), (Exhibit IDN-1), p. 143; and the Maryono Report, (Exhibit IDN-18(BCI)), p. 30,
respectively.
108 See para. 2.40 above. See also A. van der Ent, A.J.M. Baker, M.M.J. van Balgooy, A. Tjoa,
"Ultramafic nickel laterites in Indonesia (Sulawesi, Halmahera): Mining, nickel hyperaccumulators and
opportunities for phytomining", Journal of Geochemical Exploration, Vol. 128 (2013), (Exhibit IDN-4); and
Clean Technica, Image of Indonesia at "Electric Vehicles: The Dirty Nickel Problem", (Exhibit IDN-66), available
at: https://cleantechnica.com/2020/09/27/electric-vehicles-the-dirty-nickel-problem/ (last accessed
30 August 2021).

BCI deleted, as indicated [[***]]

results in deforestation, loss of biodiversity, soil erosion and contamination, destruction of
agricultural land and water pollution through sediments that are washed from the loosened topsoil
when it rains.109
2.50. Water resources are also severely affected by nickel mining activities, both as regards its
intensive use and the risk of pollution. Mineral processing requires large volumes of water from
exploration to processing, which reduces water availability for other purposes. 110 Further, nickel
mining can also be a source of water contamination, e.g. through acid mine drainage 111 or
wastewater discharge. 112 Water pollution is particularly relevant at the processing stage, where
grinding, milling and concentration methods generate toxic effluents rich in heavy metals and
chemicals.113 The marine environment is also negatively affected by mining activities because of
sedimentation, wastewater discharge, and deep-sea facilities to store tailings.114
2.51. Waste management remains a challenge in the field of mining. Wast e includes overburden,
waste rock (uneconomic materials removed in ore extraction) and tailings (fine -grained materials
left after separating the valuable fraction of the ore). 115 The declining quality of ore causes a
considerable increase in mining waste. 116 Due to the low -nickel ore grade, almost 700 tonnes of
waste rock and tailings were generated to produce one tonne of nickel in 2017, which is 30% more
than in 2010.117 Tailings storage facilities may pollute soil and waterbodies due e.g. to the leaching
of waste piles.118

109 Clean Technica, Image of Indonesia at "Electric Vehicles: The Dirty Nickel Problem", (Exhibit IDN-
66); available at: https://cleantechnica.com/2020/09/27/electric-vehicles-the-dirty-nickel-problem/ (last
accessed 30 August 2021); Sayoga Gautama Report, (Exhibit IDN-15), p. 3; IEA, Special Report on the Role of
Critical Minerals in Clean Energy Transition (2021), (Exhibit IDN-16), pp. 209 and 211; UNESCAP, 1992
Environmental Impact Assessment, Guidelines for Mining Development, (Exhibit IDN-62); G. Bridge,
"Contested Terrain: Mining and the Environment", Annual Review of Environment and Resource (2004),
Vol. 29, (Exhibit IDN-63), p. 5; NIWA, "Sediment and Mining" (9 March 2021), (Exhibit IDN-65); Agricultural
and Environmental Policy Minutes, Formulating Policies in Addressing the Environmental Damage Due to Nickel
Mine Activities in Tinanggea Sub-District, South Konawe Regency, Vol. 4 No. 2, August 2017, (Exhibit IDN-67),
pp. 6-7 and 21; and Sayoga Gautama Supplemental Expert Report (17 March 2022), (Exhibit IDN-109), p. 4.
110 Water consumption levels for nickel production are more than double in hydrometallurgy than using
the pyrometallurgical method. See IEA, Special Report on the Role of Critical Minerals in Clean Energy
Transition (2021), (Exhibit IDN-16), p. 215.
111 Acid mine drainage results from oxygen and water coming into contact with sulfide-rich materials.
These materials undergo a chemical reaction called "oxidation" that can inhibit plant growth at the surface of a
waste pile. If water infiltrates into waste rock containing sulfide, water become acidified and it is a source of
contamination of streams. It remains long time after the mine is closed. See IEA, Special Report on the Role of
Critical Minerals in Clean Energy Transition (2021), (Exhibit IDN-16), p. 215; UNESCAP, 1992 Environmental
Impact Assessment, Guidelines for Mining Development, (Exhibit IDN-62); and G. Bridge, "Contested Terrain:
Mining and the Environment", Annual Review of Environment and Resource (2004), Vol. 29, (Exhibit IDN-63),
p. 213.
112 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 209.
113 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 215.
114 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), pp. 40, 146, 215-216. Deep-sea tailings placement has been considered an option for
Indonesia due to its high precipitation and seismic activity.; and Clean Technica, Image of Indonesia at
"Electric Vehicles: The Dirty Nickel Problem", (Exhibit IDN-66), available at:
https://cleantechnica.com/2020/09/27/electric-vehicles-the-dirty-nickel-problem/ (last accessed
30 August 2021). See also AEER, Supply of Nickel Battery Industry from Indonesia and Ecological Social
Issues, Action for Ecology and Emancipation of People (December 2020), (Exhibit IDN-64) for further
information on the potential environmental impact of tailings disposal into the deep sea.
115 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 220.
116 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 40. See also A. Dalvi, W. Bacon, R. Osborne, "The Past and the Future of Nickel Laterites",
PDAC 2004 International Convention, Trade Show & Investor Exchange, 7-10 March 2004, (Exhibit IDN-19),
p. 17; and UNCTAD, Lessons from Indonesia's ban on nickel exports, Background document, (Exhibit IDN-23),
pp. 28-29.
117 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 220.
118 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), pp. 215 and 220.

BCI deleted, as indicated [[***]]

2.52. Air quality is also negatively affected by particles mobilized during excavations, blasting, and
ore crushing and by gaseous emissions from fuel combustion in e.g. drying and smelting
operations.119 Sulfur dioxide emissions resulting from s melting operations react with atmospheric
water vapour to form sulfuric acid or "acid rain", which could harm vegetation.120
2.53. Another growing environmental concern related to nickel mining is the increase in carbon
dioxide (CO2) emissions.121 Laterite nickel ore has lower concentrations of nickel than sulfide ore.
Lower-grade ores require more energy to extract the valuable fraction, and to move and treat the
waste fraction.122 This energy mainly comes from burning coal. Smelting and refining laterite nickel
ore releases nearly 90 tons of CO2 for every tonne of nickel produced.123
3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1. The European Union requests the Panel to find that the export prohibition of nickel ore and
the DPR are inconsistent with Indonesia's obligations under Article XI:1 of the GATT 1994. The
European Union further requests, pursuant to Article 19.1 of the DSU, that the Panel recommend
that Indonesia bring its measures into conformity with the GATT 1994.124
3.2. Indonesia requests the Panel to find that (i) the European Union has failed to establish a prima
facie case that the DPR is inconsistent with Article XI:1 of the GATT 1994, (ii) the measures at issue
constitute export prohibitions or restrictions temporarily applied to prevent or relieve critical
shortages of a product essential to Indonesia, within the meaning of Article XI:2(a) of the
GATT 1994, and (iii) alternatively, should the Panel find that the measures at issue do not fall within
the scope of Article XI:2(a) and are inconsistent with Article XI:1 of the GATT 1994, these measures
are justified under Article XX(d) of the GATT 1994.125
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflected in their executive summaries, provided to the Panel
in accordance with paragraph 25 of the Working Procedures of the Panel (see Annexes B-1 and B-2).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Brazil, Canada, India, Japan, Korea, Ukraine, the United Kingdom, and the
United States are reflected in their executive summaries, provided in accordance with paragraph 27
of the Working Procedures of the Panel (see Annexes C-1, C-2, C-3, C-4, C-5, C-6, C-7, and C-8).
China, the Russian Federation, the Kingdom of Saudi Arabia, Singapore, Chinese Taipei, Türkiye,
and the United Arab Emirates did not submit written or oral arguments to the Panel.
6 INTERIM REVIEW
6.1 Introduction
6.1. The Panel issued its Interim Report to the parties on 29 August 2022. Indonesia submitted its
written request to review precise aspects of the Interim Report o n 12 September 2022 . The

119 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 224. See also UNCTAD, Lessons from Indonesia's ban on nickel exports, Background
document, (Exhibit IDN-23), pp. 28-29.
120 UNESCAP, 1992 Environmental Impact Assessment, Guidelines for Mining Development,
(Exhibit-IDN-62). It should be noted that modern smelters have drastically reduced particulate and sulfur
dioxide emissions.
121 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 133.
122 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 197.
123 Clean Technica, Image of Indonesia at "Electric Vehicles: The Dirty Nickel Problem", (Exhibit IDN-
66), available at: https://cleantechnica.com/2020/09/27/electric-vehicles-the-dirty-nickel-problem/ (last
accessed 30 August 2021).
124 European Union's first written submission, para. 53.
125 Indonesia's first written submission, paras. 230-232; second written submission, paras. 202-204.

BCI deleted, as indicated [[***]]

European Union informed the Panel that it had no comments on the Interim Report. On
26 September 2022, the European Union submitted comments on Indonesia's request for review.
6.2. In addition to its written request to review precise aspects of the Interim Report, Indonesia
made general comments expressing disappointment with the panel's analysis and approach to the
evidence in its cover letter addressed to the Panel. The Panel declines to address these comments
in the interim review as they do not pertain to precise aspect s of the Interim Report as required
under Article 15.2 of the DSU, but rather to Indonesia's view of the broader geopolitical context in
which the dispute sits. The Panel recalls that its duty under Article 11 of the DSU is to make an
objective assessment of the matter before it, and assist the DSB in making recommendations and
rulings provided for in the covered agreements.126 The Panel's assessment was based on the facts
and legal argument presented to the Panel as well as an interpretation of the covered agreements
consistent with customary rules of interpretation of public international law, also in light of the role
of WTO dispute settlement as a central element in "providing security and predictability to the
multilateral trading system".127 The Panel is also mindful that any of the Panel's recommendations
that the DSB may adopt "cannot add to or diminish the rights and obligations provided in the covered
agreements".128 To the ext ent that the Panel's understanding of the relevant WTO rules, reached
pursuant to its obligations under the DSU, needs to be revised to take into account the concerns
Indonesia has raised, the appropriate vehicle for pursuing that is negotiations. Revising the Interim
Report in response to Indonesia's general comments would therefore not accord with the Panel's
duties under the DSU.129
6.3. In accordance with Article 15.3 of the DSU, this section of the Report sets out the Panel's
response to the parties' requests made at the interim review stage. In addition to the parties'
requests for substantive modifications, the Panel also made minor editorial changes in the following
paragraphs: 7.6, 7.10, 7.11, 7.12, 7.14, 7.22, 7.28, 7.31, 7.52, 7.54, 7.58, 7.59, 7.60, 7.62, 7.63,
7.65, 7.67, 7.74, 7.81, 7.85, 7.88, 7.89, 7.90, 7.97, 7.99, 7.101, 7.106, 7.108, 7.109, 7.118, 7.124,
7.125, 7.137, 7.138, 7.153, 7.158, 7.166, 7.168, 7.186, 7.231, 7.262 and Figures 5 and 6. The
numbering of some of the paragraphs and footnotes in the Final Report has changed from the
numbering in the Interim Report. If one of the paragraphs or footnotes refe rred to in
section 6.2 below has changed, the Panel indicates the paragraph or footnote number in the Final
Report as well as the original numbering in the Interim Report.
6.2 Indonesia's specific requests for review
6.2.1 Paragraph 7.17
6.4. Indonesia requests that the Panel revise paragraph 7.17 to reflect its position as summarized
in paragraph 3.2 of the Panel Report , which it considers to be a more accurate and complete
representation of its position.130
6.5. The Panel notes that paragraph 7.17 is intended to provide a brief broad summary of the
parties' positions in relation to Article XI of the GATT . Nevertheless, the Panel accepts Indonesia's
request and has reformulated the paragraph accordingly.
6.2.2 Paragraph 7.48
6.6. Indonesia argues that the use of the term "therefore" in the third sentence of paragraph 7.48
could lead to a misapprehension that its two separate arguments on the internal nature of the DPR
and whether it has a limiting effect on exports are dependent on each other. Indonesia requests the
Panel to revise paragraph 7.48 to reflect the separate nature of the two arguments.

126 Specifically, Article 11 of the DSU provides that a panel should "make an objective assessment of the
matter before it, including an objective assessment of the facts of the case and the applicability of and
conformity with the relevant covered agreements, and make such other findings as will assist the DSB in
making the recommendations or in giving the rulings provided for in the covered agreements".
127 Article 3.2 of the DSU.
128 Article 3.2 of the DSU.
129 See Panel Report, Korea – Stainless Steel Bars, Annex A-3, para. 1.3.
130 Indonesia's comments on the Interim Report, paras. 3-5.

BCI deleted, as indicated [[***]]

6.7. In response to Indonesia's request the Panel has re-ordered the sentences in paragraph 7.48
to start with Indonesia's argument that the DPR is an internal measure and then to note Indonesia's
argument that the DPR was rendered inoperative with respect to exports by the export ban.
6.2.3 Paragraph 7.70
6.8. Indonesia requests the Panel to revise paragraph 7.70 to note that the export data referred to
in paragraph 7.69 confirm its arguments that the DPR does not govern whether nickel ore can be
exported rather than to be considered a separate argument.131
6.9. The Panel notes that Indonesia referred to the export data in response to Panel question No. 13,
which asked Indonesia what would happen if the export ban were lifted and the DPR remained in
force. The Panel, for this reason treated the export data as separate from Indonesia's main argument
on the DPR's status in Indonesia's legal system. Indonesia called to the Panel's attention its
comments on the European Union's response to Panel question No. 77 where it argues that the
exports occurred because spe cific legal instruments, which are lex specialis, allowed the exports
despite the DPR. In light of this, the Panel has removed the phrase "separate from the export data"
from the first sentence of paragraph 7.70 and added a reference to Indonesia's comment s to the
European Union's response to Panel question No. 77.
6.2.4 Paragraph 7.87
6.10. Indonesia requests the Panel to better reflect its arguments on why nickel is essential to
Indonesia in paragraph 7.87 while acknowledging that the paragraph is meant to provide a brief
summary of its arguments.132 In this regard, Indonesia refers to paragraphs 109 -115 of its second
written submission where it presented its data and arguments on why nickel was "essential" to
Indonesia within the meaning of Article XI:2(a) of the GATT.133
6.11. The Panel accepts Indonesia's request and has modified paragraph 7.87 to elaborate
Indonesia's arguments and include a reference to paragraphs 109 -115 of its second written
submission, in addition to paragraph 136 of its first written submis sion. Because these arguments
were repetitive of those summarized in paragraph 7.89, the Panel has removed the references from
that paragraph.
6.2.5 Paragraph 7.111
6.12. In paragraph 7.111 the Panel concludes that Indonesia does not cite any text in the current
regulations that demonstrates the temporary nature or a specific timeframe of application of the
measures. Indonesia argues that this is an inaccurate description of Indonesia's arguments and
requests the Panel to modify the paragraph . Indonesia maintains that it has argued that it was
facially evident from its regulations that Indonesia only applies export prohibitions on nickel ore for
limited time periods. With respect to the DPR, Indonesia comments that it had pointed to specific
provisions demonstrating tha t the DPR has been applied to restrict exports of nickel ore for only
limited time-periods.134
6.13. The Panel notes that the paragraph Indonesia requests be modified occurs in the section for
the analysis of the Panel and not the summary of Indonesia's argument s. In this paragraph, t he
Panel is not describing Indonesia's arguments but reaching a conclusion. The Panel has reviewed
paragraphs 100 and 102 of Indonesia's first written submission, which Indonesia refers to in its
request. The Panel does not find in these paragraphs a referral to a specific textual basis in current
regulations that explicitly states that they are meant to be temporary , or sets out a specific
timeframe in which they will be lifted , or triggering criteria for lifting them. The Panel, the refore,
sees no reason to make the changes requested by Indonesia.

131 Indonesia's comments on the Interim Report, para. 10.
132 Indonesia's comments on the Interim Report, para. 15.
133 Indonesia's comments on the Interim Report, para. 14.
134 Indonesia's comments on the Interim Report, paras. 16-17.

BCI deleted, as indicated [[***]]

6.2.6 Paragraphs 7.228, 7.243, 7.277 and 7.278
6.14. With respect to the reference to the National Industry Development Master Plan 2015 -2035
(RIPIN), Indonesia requests the Panel not to base its finding on the RIPIN as it is not properly before
the Panel. Indonesia argues that European Union's submission of the exhibit does not comport with
the Panel's Working Procedures and reflects extensive paraphrasing of the original text .
Alternatively, Indonesia requests that the Panel clarify the status of the RIPIN as not forming a part
of the legal and policy framework of mining activities in Indonesia, but merely acting as a guideline
for long-term economic development.135
6.15. In the European Union's view, Indonesia's argument that there were no ground s to contest
the accuracy of the translation on the basis that the European Union had not submitted a complete
translation is "entirely circular". The European Union requests the Panel to reject Indonesia's
arguments as neither the factual accuracy of the statement in paragraph 7.228 nor the accuracy of
the translation has been challenged.136
6.16. As noted in footnote 78, the European Union initially submitted this exhibit
(Exhibit EU-17(rev)) as well as exhibits EU -16 and EU -18 in a non -official WTO language
accompanied by a separate exhibit, EU-19, which contained a summary in English of the relevant
provisions of all three documents. In response to the Panel's questions following the second meeting,
the European Union filed a revised version of the exhibit highlighting the relevant portions of the
text and including the corres ponding English translations. 137 Paragraph 6(1) of the Working
Procedures, contemplates the submission of translation of only relevant portions of an exhibit, rather
than the entire document, into a WTO official working language if the original language of the exhibit
is not a WTO official working language. The Panel, therefore, considered the issue it raised with the
European Union on this exhibit resolved with the submission of the revised exhibit. Moreover,
Indonesia has acces s to and the ability to read the full Indonesian original of the documents and
decide whether the translated portions are, in its view, inaccurate or incomplete (in that other
portions should have been translated as wel l). Per the Working Procedures, Indonesia was ,
therefore, required to raise its objection along with the submission of an alternative translation. 138
It did not do so. The Panel, therefore, maintains that the RIPIN contained in Exhibit EU -17(rev) is
properly before it.
6.17. On the status of the RIPIN, the Panel accepts Indonesia's request to clarify that the RIPIN
acts as a statement of overall goals of the Indonesian government and is not a legally binding
instrument. The Panel has modified the description of the RIPIN in paragraph 2.37 to reflect this.
6.18. The Panel notes that it does not rely on the RIPIN for its findings on any issue. In
paragraph 7.228 the Panel refers to the RIPIN's prediction that increasing domestic demand will
require an expansion in nickel ore extraction as part of its overall analysis of whether the export ban
and DPR secure compliance with Article 96(c). In paragraph 7.243, the Panel refers to the RIPIN to
find additional support for its observation that the legal instruments implementing the DPR prioritize
the development of industries based on natural resources and generating added value in Indonesia
rather than on the objectives of Article 96(c).
6.19. In paragraphs 7.277 and 7.278, in the context of analyzing the contribution of the measures
at issue towards achieving the objective within the meaning of Article XX(d), the Panel refers to the
RIPIN to highlight the projection of natural resources need ed for the Indonesian industry an d the
expected increase in demand for nickel every five years from 2015 to 2035. In this regard, the Panel
notes it has not referred to the RIPIN as the sole basis for supporting its analysis but only to provide
additional context. The Panel therefore declines Indonesia's request in this respect.
6.2.7 Footnote 466 (previously 448) to paragraph 7.228
6.20. Indonesia requests the Panel to delete footnote 466 (previously 448) to paragraph 7.228
where the Panel refers to Indonesia's response to the Panel's questions during the second meeting.
Indonesia submits that its argument was in response to the European Union's argument that demand

135 Indonesia's comments on the Interim Report, paras. 20-21.
136 European Union's comments on Indonesia's comments on the Interim Report, paras. 4-7.
137 European Union's response to Panel Question No. 125; Exhibit EU-17(rev).
138 Working Procedures of the Panel, para. 6(2).

BCI deleted, as indicated [[***]]

for stainless steel and EV batteries could be met through imports. Further, Indonesia argues that its
comments were made in response to questions by the Panel on Indonesia's affirmative defence
under Article XX(d) of the GATT 1994. Indonesia notes that its defence under Article XX(d) of the
GATT 1994 was put forward in the alternative to its justification under Article XI:2(a) and, therefore,
is premised on the assumption that the Panel had rejected its argument that there is an imminent
critical shortage of nickel in Indonesia.139 Relying on the panel report in Dominican Republic – Import
and Sale of Cigarettes, Indonesia argues that the legal arguments presented by a party in support
of a particular claim or defence should not be invoked against it in the assessment of an alternative
claim or defence.
6.21. In response, the European Union observes that the Panel's citation to Indonesia's response in
footnote 466 forms a part of the analysis under Article XX(d) of the GATT 1994 and that Indonesia
itself acknowledges that its response was in the context of the same provision. The European Union
therefore requests the Panel to reject Indonesia's request to delete the footnote.140
6.22. The Panel has reviewed the statements made at the second meeting. The response by
Indonesia was made in the context of question s regarding Article XI:2(a) and not Article XX(d) of
the GATT 1994. Moreover, the statement relates to a factual matter not one of legal argumentation.
The Panel is, therefore, of the view that the reasoning of the panel in Dominican Republic – Import
and Sale of Cigarettes is inapposite. The factual matter at issue was whether Indonesia imported
nickel ore or sought to satisfy increasing demand through expansion of domestic nickel extraction.
In the interest of avoiding confusion, the Panel has modified the footnote to refer to INSG, Report
on Nickel Production and Usage in Indonesia , February 2020 (E xhibit IDN-13) with respect to the
factual matter of Indonesia's imports of nickel products. The Panel has removed the quotation but
maintains that Indonesia confirmed the lack of imports at the second meeting.
6.2.8 BCI issues raised by the Panel
6.23. At the same time it issued the Interim Report, the Panel noted that the parties' executive
summaries of their submissions contained BCI and requested the parties to submit non-confidential
versions of the same. Both parties submitted the requested non -confidential versions of their
executive summaries (see Annexes B-1 and B-2).
6.24. With respect to titles of exhibits, the Panel noted that Indonesia had not specifically indicated
that the titles of exhibits contained BCI and, therefore, the Panel did not intend to redact any of the
exhibit titles even if the content of an exhibit might be redacted. Indonesia responded by requesting
the Panel to treat the titles of two exhibits as BCI: Exhibits IDN-111 and IDN-113. Both of these
exhibits contain affidavits from individua ls with direct knowledge of mining activities in Indonesia.
Indonesia has asked the Panel to protect the names of those individuals and maintains that the titles
fulfil the definition of BCI as provided under the Additional Working Procedures concerning BC I.141
The Panel will treat as BCI the names of the affiants in the titles of Exhibits IDN -111 and IDN-113
in the list of exhibits. The Panel will also redact the names and identifying characteristics of the
affiants wherever referenced in the Panel Report (see paragraphs 7.246, 7.282, 7.284).
6.25. Indonesia agreed with the Panel that although Figure 3 of the Interim Report was taken from
the Maryono Report (Exhibit IDN-18 (BCI)), it did not contain BCI and could be included in the Final
Report without redaction. 142 The Panel , therefore, makes no change to the Interim Report with
respect to Figure 3.
7 FINDINGS
7.1 Preliminary issue
7.1. In its first written submission, Indonesia raises a preliminary objection to the inclusion in the
European Union's request for establishment of a panel the following regulations: MEMR Regulation

139 Indonesia's comments on the Interim Report, paras. 23-26 (referring to Panel Report, Dominican
Republic – Import and Sale of Cigarettes, paras. 7.275 and 7.277).
140 European Union's comments on Indonesia's comments on the Interim Report, para. 9.
141 Indonesia's comments on the Interim Report, para. 29.
142 Indonesia's comments on the Interim Report, para. 30.

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Nos. 7/2012, 11/2012, 20/2013, and 1/2014, and MOT Regulation No. 96/2019.143 Indonesia
argued that the Panel should find that MEMR Regulation Nos. 7/2012, 11/2012, 20/2013 and 1/2014
are outside its terms of reference because they were not the subject of consultations and expanded
the scope and changed the essence of the dispute.144 Indonesia requests that the Panel address its
jurisdictional challenge, either as a preliminary ruling or in its report. 145 Additionally, as noted in
paragraph 2.24 above, the Panel observed that the European Union mentions in its first written
submission two measures adopted in 2020 – Law No. 3/2020 amending Law No. 4/2009 and MEMR
Regulation No. 7/2020. Neither of these measures appears in the consultations request, which dates
from 2019146 nor in the request for establishment of a panel, which dates from early 2021.147
7.2. Article 7.1 of the DSU sets the parameters of the Panel's terms of reference (or jurisdiction) as
being limited to the matter referred to in the request for establishment of a panel.148 The terms of
reference have two essential purposes: first, to give the parties and third parties sufficient
information concerning the claims at issue in the dispute to allow them an opportunity to respond
to the complainant's case; and second, to establi sh the jurisdiction of the panel by defining the
precise claims at issue in the dispute.149
7.3. The requirements for the request for establishment of a panel are set out in Article 6.2 of the
DSU, which requires that complaining Members note whether consultatio ns were held and, in
relevant part, identify the specific measures at issue. Article 4.4 of the DSU sets out the provisions
relating to requests for consultations, and it also requires that complaining Members identify the
measures at issue. A panel analys es a request for establishment of a panel for consistency with
Article 6 of the DSU on a case -by-case basis looking at the request on its face and in light of the
attendant circumstances. 150 Although subsequent events in panel proceedings, including
submissions by a party, may assist a panel in confirming the meaning of the wording in a panel
request, those events do not have the effect of curing a deficient panel request.151
7.4. The Appellate Body has clarified, and this Panel agrees, "that the vesting of jurisd iction in a
panel is a fundamental prerequisite for a lawful panel proceeding ".152 A panel must therefore
scrutinize the parties' requests for findings in their submissions and the request for establishment
of a panel to ensure compliance with both the lett er and spirit of the DSU. 153 In light of the
fundamental requirement that a panel not exceed its mandate, the Appellate Body has confirmed
that:
[P]anels cannot simply ignore issues which go to the root of their jurisdiction – that is,
to their authority t o deal with and dispose of matters. Rather, panels must deal with
such issues – if necessary, on their own motion – in order to satisfy themselves that
they have authority to proceed.154
7.5. The Panel, therefore, in addition to querying the European Union about the regulations
Indonesia raised in its preliminary objection, brought to the parties' attention that the

143 Indonesia's first written submission, para. 71.
144 Indonesia's first written submission, para. 72.
 Indonesia's response to Panel question No. 21. With respect to MOT Regulation No. 96/2019 Indonesia
acknowledged that it fell within the Panel's terms of reference under Articles 6.2 and 7.1 of the DSU.
145 Indonesia's first written submission, para. 76.
146 WT/DS592/1.
147 WT/DS592/3.
148 Specifically, Article 7.1 of the DSU provides that a panel's standard terms of reference shall be:
To examine, in the light of the relevant provisions in (name of the covered agreement(s) cited by
the parties to the dispute), the matter referred to the DSB by (name of party) in document …
and to make such findings as will assist the DSB in making the recommendations or in giving the
rulings provided for in that/those agreement(s).
149 Panel Report, China – Publications and Audiovisual Products, para. 7.27 (referring to Appellate Body
Report, Brazil – Desiccated Coconut, p. 22, DSR 1997:I, 167 at 186).
150 Appellate Body Report, US – Carbon Steel, para. 127. See also Appellate Body Report, Korea – Dairy,
paras. 124-127.
151 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 642 (referring to
Appellate Body Reports, EC – Bananas III, para. 143; and US – Carbon Steel, para. 127).
152 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US), para. 36 (quoting Appellate Body
Report, United States – 1916 Act, fn 32, para. 54).
153 Appellate Body Report, EC – Bananas III, para. 142.
154 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US), para. 36. See also para. 53.

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European Union had referred to MEMR Regulation No. 7/2020 as a measure that implemented the
DPR155 and asked the European Union to clarify whether it sought findings with respect to this
regulation in its claim against the DPR. 156 The regulation post -dates the consultations request
(2019), but not the request for establishment of a panel (2021).
7.1.1 Main arguments of the parties
7.6. The European Union clarifies that its request for findings on the export prohibition is limited to
the legal instruments that currently implement the measure. 157 The European Union states that it
only mentioned any previously applicable instruments of Indonesia through which the expo rt
prohibition was implemented "to give the proper framework of the instruments currently in force".158
The European Union referred to Article 66 of MEMR Regulation No. 7/2020 in its first written
submission as one of the legal instruments by which the DPR is implemented.159 In response to a
request for clarification from the Panel, the European Union explained that it requests the Panel to
make findings on this regulation.160
7.7. The Panel subsequently asked the European Union to specifically address the issue of whether
MEMR Regulation No. 7/2020 was within the Panel's terms of reference even though it was not listed
in either the consultations or panel request. 161 In response, the European Union noted that the
regulation was not in force at the time of the consultations request.162 The European Union contends
that the DPR is described clearly in both the consultations request and the request for establishment
of a panel and that the list of legal instruments implementing the DPR contained in those requests
makes clear that it is not exhaustive.163
7.8. The European Union notes that the recitals in MEMR Regulation No. 7/2020 indicate that it is
meant to adjust MEMR Regulation No. 11/2018 and serves to implement Law No. 4/2009. MEMR
Regulation No. 11/2018 and Law No. 4/2009 were both listed in the consultations request while
Law No. 4/2009 was listed in the request for establishment of a panel. The European Union explains,
in this respect, that its request for establishment of a panel covers amendments and implementing
measures or any other related measures to those contained in the request. The European Union also
notes that the express language of Article 66 of MEMR Regulation No. 7/2020 is directly linked to
and reinforces the DPR.164
7.9. Indonesia maintains that MEMR Regulations 7/2012, 11/2012, and 20/2013 clearly do not fall
within the Panel's terms of reference because they expanded the temporal scope of the dispute to
include measures that pre-date those that were referred to in the consultations request and changed
the essence of the dispute to include measures that permitted the export of nickel ore.165 Indonesia
argues that the purpose of MEMR Regulation No. 7/2020 is not to implement any of the legal
instruments the European Union identified as a specific measure at issue in its request for
establishment of a panel. According to Indonesia , MEMR Regulation No. 7/2020 is not aimed at
adjusting the DPR, but rather at regulating the provisions on the procedures for the granting of
areas, licensing, and reporting for mineral and coal-mining business activities and is expressly linked

155 With respect to Law No. 3/2020, the Panel notes that the law expressly amends Law No. 4/2009.
Both the European Union's requests for consultations and establishment of a panel state that the requests
cover the listed legal instruments as well as "any annexes thereto, notices, preliminary findings, reviews,
amendments, supplements, replacements, renewals, extensions, implementing measures or any other related
measures". The Appellate Body and prior panels have accepted the use of such language as an appropriate
mechanism for including legal instruments that are not expressly listed within a panel's terms of reference. See
Appellate Body Report, European Communities – Bananas III, para. 140. See also, Panel Reports, EC – IT
Products, para. 7.140; Japan – Film, para. 10.8; and China – Publications and Audiovisual Products,
para. 7.20. The Panel, therefore, saw no reason to doubt that Law No. 3/2020 is included within the Panel's
terms of reference.
156 Panel question Nos. 20 and 22.
157 European Union's opening statement at the first meeting of the Panel, para. 6.
158 European Union's opening statement at the first meeting of the Panel, para. 8.
159 European Union's first written submission, para. 36.
160 European Union's response to Panel question No. 22.
161 Panel question No. 72.
162 European Union's response to Panel question No. 72.
163 European Union's response to Panel question No. 72.
164 European Union's response to Panel question No. 72.
165 Indonesia's response to Panel question No. 21 (referring to Appellate Body Report,
Argentina – Import Measures, para. 5.3).

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to Articles 124-126 of Law No. 4/2009, which relate to mining services efforts. Indonesia also notes
that MEMR Regulation No. 11/2018, which MEMR Regulation No. 7/2020 amends, was not identified
by the European Union in its request for establishment of a panel as one of the specific measures at
issue that purportedly implement the DPR.166 In Indonesia's view, the inclusion of MEMR Regulation
No. 7/2020 in these proceedings would impermissibly expand the scope and change the essence of
this dispute.167
7.1.2 Analysis by the Panel
7.10. Articles 4 and 6 of the DSU require that complaining Members identify the measures at issue
in both the consultations request and request for establishment of a panel and that such measures
be the subject of consultations before they can be included in a panel's terms of reference. If the
European Union requests findings on a measure that was neither consulted upon nor mentioned in
its request for establishment of a panel , that measure could be outside the Panel's terms of
reference. At the same time panels and the Appellate Body have recognized that the situation of a
dispute may change over time as a complaining Member learns more through the course of
consultations or as a responding Member updates or changes its measures. Complainants are,
therefore, given some flexibility with respect to their manner of compliance with the obligations in
Articles 4 and 6 of the DSU so long as the respondent's due process rights are not prejudiced. Panels
and the Appellate Body have recognized that respondents must receive adequate notice of the case
before them and that additions to the legal instruments considered under a panel's jurisdiction
should not change the essence of the nature of a dispute or expand its scope.168
7.11. Although identification of a measure by reference to the name and number of a particular
legal instrument is the easiest way for a Member to comply with Articles 4 and 6 of the DSU, it is
not required. A complainant may substantively identify a measure, e.g. by providing a narrative
description of the nature of the measure so that a panel and the responding party may discern the
measure from the consultations or panel request.169 This is especially important as the concept of a
measure as contained in Article 3.3 of the DSU is not to be equated with the concept of a particular
legal instrument (e.g. laws or regulations). A measure for the purposes of WTO dispute settlement
encompasses any act or omission attributable to a Member and may, therefore, be inclusive not only
of individual legal instruments but also of actions, unwritten practices, or several instruments or
actions operating together.170
7.12. With respect to the additional regulations Indonesia refers to, the Panel notes the
European Union's clarification that it is only seeking findings and recommendations with respect to
the export prohibition that was imposed in January 2014 as it is currently legally enforced – i.e. via
MOT Regulation No. 96/2019 and MEMR Regulation No. 11/2019. There is no debate that these
instruments are within the Panel's terms of reference. The Panel takes note of the European Union's
clarification that any reference to prior instruments, including those that pre -date 2014, was to
provide context for understanding the current situation and that it did not seek findings or
recommendations on those legal instruments. This clarification is sufficient to ensure that the
European Union's claims have not prejudiced Indonesia's due process rights, nor have they exceeded
the Panel's terms of reference. The inclusion of legal instruments in the request for establishment of
a panel or in written submissions that did not appear in the consultations request is not ideal. The
European Union, however, is not seeking finding s on these regulations. The Panel, therefore , sees
no need to make a specific ruling with respect to whether they might be included in its terms of
reference under the standard discussed above.
7.13. Turning to MEMR Regulation No. 7/2020, in light of the guidance from the Appellate Body and
of previous panels, the Panel is of the view that it would be within the Panel's terms of reference if
its content is covered by the narrative description of the DPR in the requests for cons ultations and
establishment of a panel.

166 Indonesia's comments on the European Union's response to Panel question No. 72.
167 Indonesia's comments on the European Union's response to Panel question No. 72.
168 Panel Report, China – Publications and Audiovisual Products, para. 7.20 (referring to Panel Report,
EC – Bananas III, para. 7.27; also Panel Report, US – Carbon Steel, para. 8.41).
169 Appellate Body Report, US – Continued Zeroing, para. 168.
170 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 81. See also
Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 67.

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7.14. In this case, the European Union identified the specific measure at issue as the DPR and
provided a narrative description of the DPR in both its requests for consultations and establishment
of a panel. In its consul tations request, the European Union noted that exports of certain mining
products, including nickel had to undergo processing and/or purification activities in Indonesia as
determined by the MEMR and that minerals that have not undergone such processing an d/or
purification operations may not be exported. 171 In its request for establishment of a panel, the
European Union noted that the DPR obliges mining companies to enhance the value of the relevant
raw materials through the conduct of certain processing and/or purification operations in Indonesia
before exporting them , which has "the consequence of preventing exports of the raw materials
concerned unless they have been duly processed and/or purified" .172 Although the European Union
provided an illustrative list of legal instruments that implement the challenged measures in both its
requests for consultations and establishment of a panel, the narrative description of the measure
serves to notify Indonesia of the essence and scope of the dispute irrespective of what legal
instruments within Indonesia's system create the situation identified. Indonesia was adequately
notified that the European Union was concerned with the Indonesian government's efforts to prohibit
the exportation of nickel ore and require, instea d, that it be processed or refined domestically with
only the subsequent downstream products permitted to be exported.
7.15. The Panel compares the European Union's description of the DPR to the wording in Article 66
of MEMR Regulation No. 7/2020. Article 66 prohibits holders of IUP and IUPK from "sell[ing] products
resulting from Mining abroad before carrying out processing and/or refineries domestically in
accordance with provisions of laws and regulation s…".173 The Panel finds striking identity between
the w ording of Article 66 and the European Union's description of the DPR. Article 66 operates
precisely as the European Union alleges the measure it refers to as the DPR operates. In the Panel's
view, the European Union's requests for consultations and establi shment of a panel adequately
described the substantive nature of Article 66 of MEMR Regulation No. 7/2020 such that the
European Union has complied with both Articles 4 and 6 of the DSU.
7.16. In light of the above, the Panel finds that Article 66 of MEMR Regul ation No. 7/2020 is,
therefore, within its terms of reference.
7.2 Article XI of the GATT 1994
7.17. The European Union challenges both the export ban and the DPR as being inconsistent with
Article XI:1 of the GATT 1994. Indonesia, for its part, requests the Panel to find that (i) the European
Union has failed to establish a prima facie case that the DPR is inconsistent with Article XI:1 of the
GATT 1994, (ii) the measures at issue constitute export prohibitions or restrictions temporarily
applied to prevent or relieve critical shortages of a product essential to Indonesia, within the meaning
of Article XI:2(a) of the GATT 1994, and (iii) alternatively, should the Panel find that the measures
at issue do not fall within the scope of Article XI:2(a) and are inconsiste nt with Article XI:1 of the
GATT 1994, these measures are justified under Article XX(d) of the GATT 1994.
7.18. Article XI:1 of the GATT 1994 states:
No prohibitions or restrictions other than duties, taxes or other charges, whether made
effective through quotas, import or export licences or other measures, shall be instituted
or maintained by any contracting party on the importation of any product of the territory
of any other contracting party or on the exportation or sale for export of any product
destined for the territory of any other contracting party.
7.19. Article XI:1 does not permit the maintenance or imposition of prohibitions or restrictions other
than duties, taxes or other charges, whether made effective through quotas, export licences or other
measures, on the exportation or sale for export of any product destined for the territory of any other
Member. Thus, to prove an inconsistency with Article XI:1, the European Union must demonstrate
two elements: (i) that Indonesia's measures are a prohibition or restriction on the exportation or

171 WT/DS592/1.
172 WT/DS592/3.
173 MEMR Regulation No. 7/2020 (Exhibit EU-12(b)).

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sale for export of products from Indonesia, and (ii) that the prohibition is made effective through
"quotas, import or export licences or other measures".174
7.20. Article XI:2 of t he GATT 1994 excludes certain types of restrictions or prohibitions on
importation and exportation from the general obligation to eliminate quantitative restrictions under
Article XI:1. In particular, subparagraph (a) of Article XI:2 provides that the provisions of paragraph
1 shall not extend to:
Export prohibitions or restrictions temporarily applied to prevent or relieve critical
shortages of foodstuffs or other products essential to the exporting contracting party;
…
7.21. Unlike with an affirmative defence, a respondent invoking Article XI:2(a) is not admitting to
an inconsistency with Article XI:1 that is nevertheless justified, but rather maintaining that there is
no obligation under Article XI:1 of the GATT 1994.175 Although Article XI:2(a) is not an affirmative
defence, prior panels have found that the burden of proof still rests on the respondent to
demonstrate that the conditions of Article XI:2(a) are satisfied.176
7.22. To demonstrate that a measure satisfies the conditions of Article XI:2(a), Indonesia must
show that its measures are export prohibitions or restrictions on foodstuffs or products that are
essential to it and that are temporarily applied to prevent or relieve critical shortages. These
requirements are cumulative. If a respondent fails to demonstrate one of them then exclusion from
the obligations in Article XI:1 of the GATT 1994 would not apply.177
7.23. The Appellate Body has explained that Article XI:2(a) of the GATT 1994 "must be interpreted
so as to give meaning to each of the c oncepts contained in that provision. At the same time, the
Panel must take into account that these different concepts impart meaning to each other". 178 "For
example, whether a shortage is 'critical' may be informed by how 'essential' a particular product is.
In addition, the characteristics of the product as well as factors pertaining to a critical situation, may
inform the duration that a measure can be maintained."179
7.24. The Panel notes that Indonesia formulates its arguments in a manne r that treats
Article XI:2(a) of the GATT 1994 more as an affirmative defence rather than an exclusion from
application of Article XI:1 of the GATT 1994. Specifically, Indonesia only argues that the measures
are within the scope of Article XI:2(a) of the GATT 1994 in the event that the Panel finds that the
measures at issue are inconsistent with Article XI:1 of the GATT 1994.180
7.25. Article 12.7 of the DSU requires that the report of a panel "set out the findings of fact, the
applicability of relevant provisions and the basic rationale behind any findings and recommendations
that it makes" .181 Given the nature of Article XI:2(a) of the GATT 1994 as an exclusion from
applicability of the obligations in Article XI:1 of the GATT 1994, the Panel will first determine whether
Indonesia's measures satisfy all the elements of Article XI:2(a) of the GATT 1994. If the Panel finds
that Article XI:1 is applicable to the measures at issue, the Panel will move on to an analysis of the
European Union's claims under Article XI:1 of the GATT 1994.
7.2.1 Whether Indonesia's measures constitute prohibitions or restrictions on the export
or sale for export of nickel ore
7.26. The Appellate Body explained in China – Raw Materials that the exemption from application
of Article XI:1 of the GATT 1994 contained in Article XI:2(a) of the GATT 1994 necessarily applies

174 Panel Report, EU – Energy Package, para. 7.243; and India – Quantitative Restrictions, para. 5.129.
175 Appellate Body Reports, China – Raw Materials, para. 334.
176 Panel Reports, China – Raw Materials, para. 7.213.
177 Appellate Body Report, Japan – Apples, para. 176, referring to Appellate Body Report,
Japan – Agricultural Products II, para. 89 (explaining that when requirements are clearly cumulative in nature
whenever one of them is not met the measure at issue does not satisfy that provision).
178 Appellate Body Reports, China – Raw Materials, para. 328.
179 Appellate Body Reports, China – Raw Materials, para. 328.
180 Indonesia's first written submission, para. 231.
181 Article 12.7 of the DSU (emphasis added).

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to the same types of measures as Article XI:1 of the GATT 1994 namely any measure prohibiting or
restricting the exportation of certain goods.182
7.27. The term "prohibition" within the meaning of Article XI of the GATT 1994 is a "legal ban on
the trade or importation of a specified commodity", whereas the term "restriction", which is broader
than prohibition183, is defined as a "t hing which restricts someone or something, a limitation on
action, a limiting condition or regulation". 184 The Appellate Body has considered that these terms
are informed by the notion of "quantitative" in the title of Article XI:1 of the GATT 1994.185
Accordingly, this provision "covers those prohibitions and restrictions that have a limiting effect on
the quantity or amount of a product being imported or exported". 186 Thus, only those prohibitions
or restrictions limiting importation or exportation fall with in the scope of Article XI:1 of the
GATT 1994. The complaining Member must specify how it believes a challenged measure is
inconsistent with Article XI:1 of the GATT 1994 and thus must explain whether it believes the
measure restricts or prohibits exportation and how it does so.
7.28. A party demonstrates whether a restriction or prohibition exists through the design,
architecture and revealing structure of the measure considered in its relevant context, and not by
quantifying its effects through examining trade flows.187 While numerical or statistical data on the
actual effects of a measure on trade flows is not essential to establishing an inconsistency, it may
be used as evidence to inform the overall examination of whether a measure has a limiting effect
within the meaning of Article XI:1 of the GATT 1994.188 Although intent is not an element specifically
referred to or required in WTO dispute settlement, evidence of an intended outcome of a policy may,
similarly, be part of the relevant context a panel examines when evaluating a measure.189
7.29. The phrase "made effective through", which precedes the terms "quotas, import or export
licences or other measures" in the provision is understood to mean that "the scope of Article XI:1
covers measures through which a prohibit ion or restriction is produced or becomes operative". 190
The Appellate Body has also referred to the concept of effectiveness when relating to a legal
instrument or governmental measure, as "in operation at a given time" or "being 'operative', 'in
force', or as having 'come into effect'".191
7.30. With respect to the type of measure the prohibition or restriction must be made effective
through, in this dispute the European Union has referenced an export prohibition and a requirement
to process or purify ore before the resulting product can be exported. Both of these measures fall
within the broad category of "other measures".192 Although the concept of "other measures" is broad,
the scope of Article XI:1 is not unfettered. Article XI:2 restricts the scope of application of
Article XI:1 by providing that the provisions of Article XI:1 shall not extend to the areas listed
therein.193 Similarly, certain provisions of the GATT 1994, such as Articles XII, XIV, XV, XVIII, XX,

182 See Appellate Body Reports, China – Raw Materials, paras. 319-321.
184 Appellate Body Reports, Argentina – Import Measures, para. 5.217 (quoting Appellate Body Reports,
China – Raw Materials, para. 319).
185 Appellate Body Reports, China – Raw Materials, para. 320.
186 Appellate Body Reports, China – Raw Materials, para. 320.
187 Appellate Body Reports, Argentina – Import Measures, para. 5.217.
188 Panel Report, Indonesia – Import Licensing Regimes, para. 7.50.
189 Panel Report, Mexico – Taxes on Soft Drinks, para. 8.91. See also Appellate Body Report,
Japan – Alcoholic Beverages II, pp. 27-28, DSR 1996:I, p. 97, at pp. 119 and Appellate Body Report,
Canada – Periodicals, pp. 30-32, DSR 1997:1, p. 449, at pp. 475-476.
190 Appellate Body Reports, Argentina – Import Measures, para. 5.218.
191 Appellate Body Report, US – Gasoline, p. 20, DSR 1996:I, p. 19 (quoting The New Shorter Oxford
English Dictionary on Historical Principles, L. Brown (ed.) (Clarendon Press, 1993), Vol. I, p. 786). See also
Appellate Body Reports, Argentina – Import Measures, para. 5.218.
192 Panel Report, Argentina – Hides and Leather, para. 11.17 (noting that this category includes de facto
measures); and Panel Report, Japan – Film, para. 10.56; and China – Raw Materials, paras. 7.1005, 7.1026,
and 7.1036. (other measures include those implemented or enforced by non-government actors if there is
sufficient governmental involvement).
193 Appellate Body Reports, Argentina – Import Measures, para. 5.219.

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and XXI, permit a Member, to justify an inconsistency with the obligations under Article XI:1 if all of
the conditions for that justification are satisfied.194
7.31. Indonesia argues that both the export prohibition and the DPR fall within the scope of
Article XI:2(a) of the GATT 1994 because "[b]y its express terms, Article XI:2(a) applies in respect
of 'export prohibitions or restrictions'" 195, that is, it applies to "measures which either 'legally ban'
or have a 'limiting effect' on exports".196 Indonesia submits that because both sides agree that the
measures at issue restrict or limit exports that it is undisputed that they fall within the purview of
Article XI:2(a).197 At the same time, Indonesia also argues that to the ex tent the DPR remained in
place while exports were entirely prohibited, it would be a measure affecting internal sale of nickel
to be assessed under Article III:4 rather than Article XI:1.198 Indonesia explains that its invocation
of Article XI:2(a) of the GATT 1994 with respect to the DPR is contingent upon this Panel concluding
that the DPR entails an export restriction under Article XI:1 of the GATT 1994. Should the Panel
agree with the European Union that the DPR entails a "restriction" on the exportation of nickel ore,
then Indonesia posits that this measure falls within the scope and meets the requirements of
Article XI:2(a) of the GATT 1994.199
7.32. The Panel will, therefore, begin its analysis under Article XI of the GATT 1994 with the element
in common between both Article XI:1 and Article XI:2(a) – whether the measures at issue are
prohibitions or restrictions. The Panel will address each measure in turn.
7.2.1.1 The export ban
7.2.1.1.1 Main arguments of the parties and third parties
7.33. The European Union argues that Indonesia has prohibited or restricted the export of nickel
ore intermittently since January 2014 and presents a selection of Indonesia's various regulations in
a chronological progression since 2014 ending with MEMR Regulation No. 11/2019 and MOT
Regulation No. 96/2019 that were promulgated in 2019 and entered into force on 1 January 2020.
As noted in section 2.1.1 above, the European Union has clarified that its references to the various
regulations prior to 2019 provide context on the export prohibition currently implemented through
MEMR Regulation No. 11/2019 and MOT Regulation No. 96/2019, but it does not seek specific
findings or recommendations on those legal instruments that did implement the export ban, but are
no longer in force.
7.34. The European Union explains the timeline and scope of the various restrictions and
prohibitions thus200:

194 Appellate Body Reports, Argentina – Import Measures, paras. 5.220-5.221 (referring to
Appellate Body Report, Argentina – Textiles and Apparel, para. 73). The Panel notes Indonesia has raised a
defence under Article XX(d) of the GATT 1994 if the Panel were to find Indonesia's measures not within the
scope of Article XI:2(a) and inconsistent with Article XI:1. The Panel will discuss this in section 7.3 below.
195 Indonesia's first written submission, para. 89.
196 Indonesia's first written submission, para. 90.
197 Indonesia's first written submission, para. 91.
198 Indonesia's first written submission, paras. 102-103.
199 Indonesia's response to Panel question No. 14.
200 European Union's first written submission, paras. 23-26.

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Table 2: European Union's timeline of Indonesia's restrictions and prohibitions
Regulation Provision Scope of the restriction
MEMR Regulation
No. 7/2012
Article 1 No. 6, and
Article 21
Prohibition on the export of unprocessed and
unrefined minerals.
MEMR Regulation
No. 11/2012
Article 1 No. 1, amending
MEMR Regulation
No. 7/2012 by inserting a
new Article 21A into MEMR
Regulation No. 7/2012
Allows for the export of mineral ore subject to a
"recommendation" by the minister.
MEMR Regulation
No. 20/2013
Article I, amending
Article 21A of MEMR
Regulation No. 7/2012
Allows for the export of mineral ore until
12 January 2014, subject to obtaining an approval
by the minister of trade. Approval granted if the
mining permit holders submitted a plan concerning
the domestic processing and/or refining of minerals.

Complete prohibition on export of mineral ore as of
13 January 2014.
MEMR Regulation
No. 1/2014
Article 12(1), (3) and (4)201

Allows for the export of certain minerals subject to
compliance with DPR and approval by the minister.

Any export of nickel was however specifically
excluded from this possibility.
MOT Regulation
No. 1/2017
Article 3, 4(a)(2), and
Appendices III and IV
Unprocessed and unrefined mining products were
subject to an export prohibition, unless they were
mentioned in Appendix III to the Regulation.
Appendix III mentions ore with a concentration of
less than 1.7 % Nickel. Such ore could therefore be
exported, subject to several strict conditions and
notably to the condition that the exporter had built
(or was building) a purifying facility.

Ore with a nickel content above 1.7 % (high-value
ore) however could not be exported.
MEMR Regulation
No. 25/2018
Article 46(1), (2) and 50(1) Export of ore with a nickel content of less than 1.7
% could only occur until 11 January 2022. Such
exports were furthermore subject to the condition
that the exporters had built (or was building) a
purification facility and to approval by the minister.
MEMR Regulation
No. 11/2019
Article I(1), amending MEMR
Regulation No. 25/2018 by
deleting the relevant
reference in Article 46(1) of
MEMR Regulation
No. 25/2018, and Articles
I(2) and II
Revokes the possibility to export low-quality ore
(with a nickel content of less than 1.7%)
As from the entry into force of this regulation, prior
ministerial approvals for export of ore with nickel
content of less than 1.7 % became invalid.

It results in a total prohibition of exports of nickel
ore as of 1 January 2020.
MOT Regulation
No. 96/2019
Articles 3 and 27(1) Exports of raw material or ore mentioned in
Appendix IV to the Regulation is prohibited. Nickel
ore is specifically mentioned in this appendix.

Export approvals issued on the basis of Regulation
1/2017 become invalid.
7.35. In its substantive arguments, the European Union focuses on the plain meaning of MEMR
Regulation No. 11/2019 and MOT Regulation No. 96/2019 and argues that the two measures
expressly prohibit the export of nickel ore.
7.36. MEMR Regulation No. 11/2019 does not itself expressly prohibit all nickel exports, but rather
amends an earlier regulation to remove an exemption from previous prohibitions that allowed for a
limited possibility to export low -quality nickel ore (with content of less than 1.7%) and invalidated
any pre-existing export approvals as of 1 January 2020. The European Union argues that this was

201 Article 13 revokes MEMR Regulation No. 7/2012 as amended by MEMR Regulation No. 20/2013.

BCI deleted, as indicated [[***]]

accomplished by Article 1 of MEMR Regulation No. 11/2019 deleting the relevant reference in
Article 46(1) of MEMR Regulation No . 25/2018. The European Union argues, therefore, that MEMR
Regulation No. 11/2019 resulted in a total prohibition on exports of nickel ore starting from
1 January 2020.202
7.37. The earlier-in-time regulations the European Union describes as implementing the export ban
in the past are not, therefore, completely irrelevant to an understanding of the current situation.
The 2019 regulations cannot be read in isolation from the 2017 and 2018 regulations as the 2019
regulations simply remove exemptions that had been granted and thus return to the status quo ante
of a complete prohibition. Those regulations also relate back to the initial ban in January 2014. As
noted in paragraph 2.12, the Panel is therefore of the view that the measure before it is the export
ban. That ban is currently being implemented via MOT Regulation No. 96/2019 and MEMR Regulation
No. 11/2019.203 The Panel will, therefore, consider in its analysis of the export ban the prior legal
instruments that implemented it 204, but will limit any recommendations the Panel makes to those
legal instruments currently in force.205
7.38. Indonesia does not dispute that it currently prohibits the export of nickel ore206 or that it has
done so in some form or another since January 2014. 207 Indeed, Indonesia acknowledges that
demonstrating that the measure is a prohibition or restriction within the meaning of Article XI of the
GATT 1994 is a necessary element of its case that the measure is excluded from the application of
Article XI:1 by virtue of its falling within the scope of Article XI:2(a).208
7.2.1.1.2 Analysis by the Panel
7.39. The European Union argues that the specific wording of the relevant regulations clearly and
unequivocally spells out an export prohibition on nickel ore. The two regulations, MEMR Regulation
No. 11/2019 and MOT Regulation No. 96/2019 contain, according to the European Union, by their
very terms, a prohibition of exports. The European Union contends that by making exports illegal,
the two regulations have the inherent effect of limiting exports and therefore constitute an export
prohibition within the meaning of Article XI:1 of the GATT 1994.209 As noted above, Indonesia does
not dispute this.
7.40. The explicit language of the two regulations shows their design, architecture and revealing
structure to be that of a prohibition on exports of nickel ore. The Panel finds relevant context in Law
No. 4/2009 that created the framework for the MEMR and MOT to regulate mining in Indonesia,
including nickel ore. The Panel also considers the succession of regulations limiting or prohibiting
the export of nickel ore, all adopted pursuant to Law No. 4/2009, dating back to at least
January 2014 as relevant context for understanding the impact of the two regulations (MEMR
Regulation No. 11/2019 and MOT Regulation No. 96/2019) that are currently in force.
7.41. Considering all these elements, the Panel fi nds that the European Union has demonstrated,
and Indonesia has admitted, that Indonesia imposes a prohibition on exports of nickel ore that is
currently implemented through the operation of MEMR Regulation No. 11/2019 and MOT Regulation
No. 96/2019.

202 European Union's first written submission, para. 24 referring to MEMR Regulation No. 11/2019
(Exhibit EU-10(b)).
203 As noted above, if those measures were to be amended or superseded by new ones, they may well
fall within the Panel's terms of reference without expanding the essence or scope of the dispute in light of how
the European Union has identified the challenged measure and formulated its claim.
204 The Panel notes, in this respect, that Indonesia itself argues that the prior instances of the imposition
of the export ban are relevant to evaluating the present situation in its defence under Article XI:2(a) with
respect to the temporary nature of the ban. See Indonesia's first written submission, paras. 58-59.
205 Panel Report, Chile – Price Band System, para. 7.112. See also Appellate Body Report, US – Certain
EC Products, para. 81 ("the panel erred in recommending that the DSB request the US to bring into conformity
… a measure which the panel has found no longer exists").
206 Indonesia's first written submission, paras. 56-57.
207 See e.g. Indonesia's response to Panel question No. 13 ("This corroborates Indonesia's position that
export prohibitions introduced by MEMR Regulation 1/2014 had a limiting effect on international trade in nickel
ore.").
208 Indonesia's first written submission, para. 91.
209 European Union's first written submission, para. 47.

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7.2.1.2 Domestic processing requirement
7.42. Unlike with the export ban, Indonesia disputes the European Union's assertion that the DPR
is a restriction within the meaning of Article XI of the GATT 1994. Indonesia maintains that the DPR
does not fall within the scope of Article XI of the GATT 1994.210 Indonesia first argues that the scope
of Article XI only extends to border measures and that the DPR is an internal measure. Indonesia
next argues that the DPR does not have a limiting effect and thus cannot be a restriction within the
meaning of Article XI of the GATT 1994.
7.2.1.2.1 Whether Article XI of the GATT 1994 applies to a measure such as the DPR
7.2.1.2.2 Main arguments of the parties and third parties
7.43. The European Union argues that the DPR, made effective via Law No. 4/2009 together with
the implementing regulations, i.e. MEMR Regulation No. 25/2018 (and its amendments in MEMR
Regulation Nos. 50/2018 and 11/2019) as well as MEMR Regulation No. 7/2020, is a restriction on
the export of nickel ore from Indonesia within the meaning of Article XI:1 of the GATT 1994.211
7.44. The European Union identifies, in particular, Articles 102 and 103 that require holders of IUP
and IUPK permits to increase the added value of mineral in mining business activities through
processing and refinery for metal mineral mining commodity (Article 102)212 and to conduct mineral
processing and/or refinery of mining products domestically (Article 103).213
7.45. With respect to MEMR Regulation No. 25/2018, the Eur opean Union points to the following
provisions as creating a restriction on the export of nickel ore from Indonesia.214
Table 3: Provisions of MEMR Regulation No. 25/2018 identified by the European Union
Provision Substance
Article 1
(paras. 19-
21)
19. Processing and/or refining shall mean mining business activities to improve the quality
of mineral and/or coal, utilize and obtain its derived minerals.
20. Mineral processing shall mean an effort to improve the quality of mineral that produces
products with the same physical and chemical characteristics as the origin mineral
21. Mineral refining shall mean an effort to improve the quality of metal minerals through an
extraction process and an additional purity enhancement process resulting in products with
different physical and chemical properties from the origin minerals.
Article 16 Obligation for the holders of a mining business licen ce to engage in processing and
purification of coal and of minerals which they mine.
Article 17 Requires IUP and IUPK for operation holders and IUP for processing holders to first carry out
the value added enhancement through processing and/or refining activities in accordance
with the minimum thresholds of processing and/or refining as listed in Appendix I,
Appendix II, and Appendix III before conducting export activities. Those minerals not listed
in the Appendices may only be sold to overseas after the Minister stipulates the minimum
thresholds for processing and/or refining.
Appendices
I, II, III
Contain detailed descriptions for the kind of processing or purification required for different
types of minerals.
Article 19 Confirms that minerals can only be sold abroad once they have been subject to the "minimum
limits of processing/purification" fixed by the Regulation. These obligations exist for holders
of mining business permits (Article 19(1)) as well as for "other parties" (Article 19(3)).
Chapter XV Contains more obligations concerning purification and/or processing before minerals or coal
can be exported.
Source: MEMR Regulation No. 25/2018 (Exhibit EU-9(b)).

210 Indonesia's first written submission, para. 12. See also Indonesia's first written submission,
paras. 80 and 84.
211 European Union's first written submission, paras. 50-51.
212 European Union's first written submission, para. 28, quoting Law No. 4/2009, as amended by Law
No. 3/2020 (Exhibit EU-2(b)).
213 European Union's first written submission, para. 29, quoting Law No. 4/2009 (Exhibit EU-1(b)).
214 European Union's first written submission, paras. 30-35, referring to MEMR Regulation No. 25/2018
(Exhibit EU-9(b)).

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7.46. With respect to MEMR Regulation No. 7/2020 the European Union argues that Article 66 of
that Regulation prohibits IUP and IUPK holders from "selling products resulting from Mining abroad
before carrying out processing and/or refineries domestically in accordance with provisions of laws
and regulations".215
7.47. The European Union notes that it is only the permit holders subject to the processing
obligations that can conduct mining business activities in Indonesia. Insofar as these companies are
under a legal obligation to purify or process raw mining products in Indonesia prior to exporting the
relevant goods, these legal obligations are, according to the European Union, designed and operate
to restrict the possibility to export the unpurified and unprocessed raw mineral products and,
therefore, have an inherent direct limiting effect on exports.216
7.48. Indonesia argues that the DPR is an internal requirement regulating the sale and processing
of nickel ore, rather than a border measure regulating the "exportation …of [a] product", within the
meaning of Article XI:1. Indonesia submits that, properly interpreted, Article XI:1 applies strictly to
border measures that have a direct limiting effect on importation or exportation, and does not apply
to internal measures.217 Moreover, Indonesia argues that since the adoption of the export ban on 1
January 2020, the DPR re quirement in MEMR Regulation No. 25/2018 neither operates as a pre -
condition for the exportation of nickel ore nor restricts these exports because the exportation of
nickel ore, regardless of concentration, is legally prohibited in the first place. 218 According to
Indonesia, the export ban renders the DPR entirely inoperative with respect to exports.219
7.49. Indonesia notes that the measures in the illustrative list in Article XI:1 of the GATT 1994 –
quotas, import or export licences – are all border measures in that they are triggered by, or apply
by virtue of, importation or exportation rather than an internal factor behind the border – such as
mining, processing, sale, or distribution. 220 Indonesia argues that this delineation is not unfamiliar
and has bee n endorsed by the Appellate Body when seeking to define the scope of application of
legal disciplines under the GATT 1994.221 In Indonesia's view, border measures apply by virtue of
the event of importation (or exportation), while internal measures apply be cause of an internal
factor. Indonesia's position is that as Article XI:1 of the GATT 1994 only applies to border measures,
the DPR, as an internal measure, is not subject to the obligations in Article XI:1 of the GATT 1994.222
7.50. Indonesia argues that the DPR imposes processing obligations on all mining companies
regardless of whether sales are being conducted in the domestic or foreign market. 223 Indonesia
acknowledges that Article 17 of MEMR Regulation No. 25/2018 proscribes the exportation of nickel
ore that has not undergone processing in accordance with the DPR. Indonesia, however, takes the
position that this merely enforces the DPR in respect of exports and does not transform the DPR –
an internal measure regulating the sale and processing of nickel ore – into a border measure.224
7.51. Indonesia relies on the Appellate Body's reasoning in China – Auto Parts to argue that the
Panel must scrutinize the design , architecture, and revealing structure of the measure as a whole
to determine whether it applies by virtue of exportation or, instead, by virtue of an internal factor.225
Indonesia argues that a proper analysis of the DPR will show that its centre of gravity is not

215 European Union's first written submission, para. 36, quoting MEMR Regulation No. 7/2020
(Exhibit EU-12(b)).
216 European Union's first written submission, para. 50.
217 Indonesia's second written submission, paras. 26 and 35.
218 Indonesia's first written submission, para. 83.
219 Indonesia's second written submission, para. 51.
220 Indonesia's second written submission, para. 34.
221 Indonesia's second written submission, para. 37 (referring to Appellate Body Reports, China – Auto
Parts, paras. 158 and 167.
222 Indonesia's second written submission, paras. 38-39.
223 Indonesia's second written submission, paras. 41-42 (referring to Article 102 of Law No. 4/2009 and
Article 16 of MEMR Regulation No. 25/2018). See also Indonesia's opening statement at the second meeting of
the panel, para. 17.
224 Indonesia's second written submission, para. 43.
225 Indonesia's second written submission, paras. 43 and 44 (quoting Appellate Body Reports, China –
Auto Parts, para. 171 – where the Appellate Body stated that:
[A] panel must identify all relevant characteristics of the measure, and recognize which features
are the most central to that measure itself, and which are to be accorded the most significance,
for purposes of …determining the discipline(s) to which it is subject under the covered
agreements. (emphasis original))

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exportation, but that it is an internal measure triggered by an internal factor, namely the production,
sale and use of nickel ore.226 In Indonesia's view the European Union is seeking to radically expand
Article XI:1 of the GATT 1994 to prohibit non -discriminatory internal measures that are fully
consistent with Article III:4 of the GATT 1994, wh ich would be manifestly absurd and
unreasonable.227
7.52. The European Union responds to Indonesia's arguments on the scope of Article XI:1 of the
GATT 1994 by noting three relevant aspects of Article XI:1 of the GATT 1994. First, that the
provision's wording is broad with no express limitation to border measures. The European Union
contrasts this with other provisions of the GATT 1994 that make specific reference to where they
apply – noting for example, that Article III:2 refers to internal taxes or internal cha rges. Second,
that the provision refers to "sale for export", which in the European Union's view is by its very
definition a business activity that will regularly occur not on the occasion of a border crossing, but
before such a border crossing, i.e. internally. Third, that Article XI:1 of the GATT 1994 would not
specifically exclude taxes or other charges (which can be applied internally) from its scope if it were
exclusively addressing border measures.228
7.53. Japan disagrees with Indonesia that the DPR is subject to Article III:4 of the GATT 1994 noting
that the European Union does not allege differential treatment between products imported into
Indonesia and those of national origin. Furthermore, the text of the underlying measure makes clear
that the DPR applies on the exportation of unprocessed nickel ore rather than on the internal sale of
the product.229
7.54. Canada comments that the Panel should focus on the "nature of the measure" rather than on
whether the measure is an internal one or one that is applied at the border. In Canada's view t he
DPR operates to limit the quantity or amount of product that may be exported and therefore properly
falls under Article XI:1 of the GATT 1994 rather than a case covered by Article III:4 of the
GATT 1994.230 Similarly, the United Kingdom states that the analysis should focus on whether there
is sufficient nexus between the relevant measures and the act of importing and exporting the
relevant product and that this requirement does not mean that a measure has to be applied a t the
time of import (or export). 231
7.2.1.2.3 Analysis by the Panel
7.55. Indonesia's arguments in this respect raise an interpretative question about the scope of
Article XI:1 of the GATT 1994 and then a factual contention with respect to the operation of the DPR
itself. Indonesia's factual contention is only relevant if the Panel accepts Indonesia's interpretation
that there are strict delineations in the GATT 1994 with respect to the scope of obligations whereby
some apply to internal measures and others to border measures.
7.56. In Indonesia's view, Article XI:1 of the GATT 1994 only applies to so-called border measures
and the DPR is not a border measure. In Indonesia's view this means that the D PR is outside the
scope of Article XI:1 of the GATT 1994.
7.57. The Panel notes that the term "border measure" appears nowhere in the GATT 1994.
Members, panels, and the Appellate Body have used the parlance of internal and border measures
as a technique to distinguish between the types of measures that are covered by the basic obligations
in the GATT 1994 – most-favoured nation (MFN), tariff bindings, quantitative restrictions, and
national treatment. In the past, a delineation between what a border measure is and what an internal
measure is has been used to determine which of the obligations in the GATT 1994 would be
applicable to particular measures.232

226 Indonesia's opening statement at the second meeting of the panel, para. 19.
227 Indonesia's opening statement at the second meeting of the panel, para. 3.
228 European Union's response to Panel question No. 78.
229 Japan's third-party submission, paras. 13-14.
230 Canada's third-party response to Panel question No. 1 (referring to Panel Report, Brazil – Retreaded
Tyres, para. 7.372).
231 United Kingdom's third-party response to Panel question No. 1.
232 See Panel Report, India – Autos, paras. 7.217-7.224 (quoting GATT Panel Report, Canada – FIRA,
para. 5.14).

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7.58. Although such a technique is useful when there is potential for more than one obligation to
be applicable to a particular measure, this is more likely to be the situation for measures that affect
imports as Articles I, II, III, and XI of the GATT 1994 all regulate the treatment of imports from
different perspectives. The GATT 1994 does not, however, require a strict separation of the concepts
permitting no overlap. Article I states that the MFN obligation applies not only at the border, but
also to measures covered under Article III of the GATT 1994. Moreover, the Ad Note to Article III of
the GATT 1994 clarifies that measures may fall within the ambit of Article III, which is typically seen
as being triggered by an internal event, even if they are applied at the border.
7.59. With respect to Article XI itself, there are several important elements to consider. First,
Article XI:1 is an obligation to refrain from imposing quantitative restrictions, it is not a non -
discrimination provision, such as Article III:4. Its coverage is not limited to imports, but also applies
to measures on exportation or sale for export. The Panel also notes that the provision distinguishes
between the way it refers to the obligation with respect to imports and exports. Article XI:1 of the
GATT 1994 refers to measures on the importation of any product when referring to imports. When
referring to exports the provision uses a similar phrase: "on the exportation" but it also adds the
additional clause "or sale for export". This must be given meaning. The use of the disjunctive "or"
indicates that the two concepts exportation and sale for export are not to be conflated with each
other. The similarity in the term "on the exportation" with "on the importation" indicates that it is
this phrase that refers to border measures while sale for export refers to something else. As the
European Union notes, sales for export will often take place entirely within the territory of the
exporting Member. Accepting Indonesia's reading that Article XI:1 of the GATT 1994 only applies to
measures that regulate action at the border would, therefore, render the term "or sale for export"
inutile.233
7.60. The Panel agrees with Indonesia that the panel and Appellate Body reports in China – Auto
Parts provide useful guidance in this respect. That panel examined the underlying purpose and centre
of gravity of the measures rather than how the respondent classified or fashioned the challenged
measure. In that case, the panel and Appellate Body found that a measure that purported to be a
customs duty was really an i nternal measure subject to Article III:4 of the GATT 1994 (and not
Article II:1) because the additional duties charged were triggered by the internal use of the imported
auto parts. In the instant case the Panel has the converse situation – the measure app lies to
domestic actors but operates to prevent the sale of nickel ore for export.
7.61. By their very nature measures governing exports will be addressed to domestic actors and
not to foreign actors or products. Indeed, Indonesia has cited its inability to exe rcise jurisdiction
over foreign purchasers as one of the reasons why the export prohibition is necessary to secure
compliance with Indonesia's sustainable mining and mineral resource management requirements.234
Measures on exportation or the sale for export may be addressed to the producers of a product that
only that Member produces or that faces no import competition. 235 Indonesia's argument that the
measure applies to all domestic producers regardless of whether they intend to sell on the domestic
or foreign market is, however, tautological as what the measure does is require sales in the domestic
market. The fact, therefore, that the measure addresses domestic actors does not remove it from
the scope of Article XI:1 of the GATT 1994. If this alone were suf ficient to make a measure fall
outside the scope of Article XI:1 of the GATT 1994 the entire obligation to avoid export restraints
could be rendered inutile. This is so, particularly in the case of products where a country exports but
does not import, which could often be the case with natural resources.
7.62. Indonesia acknowledges that the DPR is "triggered" by the production and sale of nickel ore.236
Indonesia also acknowledges that miners of raw unprocessed nickel ore are not permitted to sell

233 Panel Report, India – Autos, para. 7.222 (noting that the principle of effective treaty interpretation
applies to prevent reducing any provision to inutility).
234 Indonesia's second written submission, paras. 174-175.
235 The Panel recalls that Indonesia initially argued that the DPR would fall to be assessed under
Article III:4 of the GATT 1994. This, however, would be impossible as Article III:4 applies to situations of
competition between imports and a domestic like product. As Indonesia itself noted during the second meeting
of the Panel it would be absurd to expect that Indonesia would be importing nickel ore. In essence, therefore,
the present case is not like the ones in India – Autos or China – Auto Parts where a panel is faced with the
question of whether one or the other provision of the GATT 1994 regulates a measure. The question is whether
the measure is covered by Article XI:1 of the GATT 1994 or not at all.
236 Indonesia's response to Panel question No. 78.

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their ore for e xport, turning domestic refineries into the only potential buyers. 237 Indonesia also
acknowledges that the refining process , which must take place domestically , transforms the nickel
ore into another product and it is only these products that can be exported. 238 This means that, if
miners and producers fully adhere to the DPR, no nickel ore exists in Indonesia to be exported. The
DPR thus prevents sale for export of raw unrefined nickel ore. The centre of gravity of the measure
is precisely who the ore can be sold to. This is confirmed by Indonesia's response to the Panel's
question as to how the DPR contributes to preventing the depletion of nickel ore reserves. Indonesia
explains that one way the DPR prevents depletion of nickel ore reserves is by limiting extraction to
the installed capacity of domestic smelters and "entirely eliminat[ing] from the market extraction
that is not in conformity with Indonesia's sust ainable mining and mineral resource management
requirements".239 Indonesia goes on to explain that mines that cannot comply with the requirements
to sell to domestic smelters and were previously export-oriented are giving up their licences.240
7.63. Indonesia urges the Panel to find that the export ban renders the DPR irrelevant with respect
to exports. If the Panel agreed with Indonesia in this regard and, at the same time, also found that
the export ban is (a) not covered by Article XI:2(a) of the GATT 1994, (b) inconsistent with
Article XI:1 of the GATT 1994, and (c) not justified under Article XX(d) of the GATT 1994, the Panel
would recommend that Indonesia remove the export ban. Indonesia could comply. In such a scenario
the DPR would then spring back into effe ct. The European Union would have undertaken lengthy
dispute settlement proceedings yet still be left with the DPR in place and needing to once again
pursue dispute settlement to obtain findings with respect to the consistency of a measure it had
sought consultations on in 2019. The Panel does not believe such a situation would constitute prompt
settlement of the dispute. The Panel agrees, therefore, with the United States and the United
Kingdom that for the European Union to seek a ruling on the DPR, the DPR does not have to currently
be creating a limiting effect.
7.64. The Panel notes that the DPR was first referred to in Law No. 4/2009 and the European Union
requested consultations on this measure in 2019 before the new export bans took effect on
1 January 2020. Nevertheless, with respect to Indonesia's arguments it is important to recall that
Members may bring to WTO dispute settlement measures that have not yet been implemented as
well as those that have expired or are no longer in force. 241 Indonesia's argument that the DPR
neither operates as a pre -condition for the exportation of nickel ore nor restricts exports because
the exportation of nickel ore is prohibited contradicts these well-understood principles of WTO law.
Accepting Indonesia's argument would mean that a Member could avoid a finding of non-compliance
with respect to one measure by adopting another measure that it freely admits is inconsistent with
Article XI:1, to pre-empt the effects of the first measure. Such an approach could thwart the principle
of prompt settlement of disputes between Members set out in Article 3.3 of the DSU.

237 Indonesia's second written submission, paras, 174-175 and Indonesia's response to Panel question
No. 45(c). See also Indonesia's response to Panel question No. 79 ("The domestic processing requirement
simply imposes processing obligations on all mining companies in Indonesia, regardless of whether sales are
being conducted in the domestic or foreign market.").
238 Indonesia's response to Panel question No. 66(c).
239 Indonesia's response to Panel question No. 75(b).
240 Indonesia's response to Panel question No. 75(b).
241 If the Panel were to find that the DPR is no longer in force it might be limited in the recommendation
it could make pursuant to Article 19 of the DSU with respect to compliance, but it would not be precluded from
making findings as to the consistency of the DPR with Indonesia's WTO obligations. See e.g. Panel Report,
Chile – Price Band System, paras. 7.112 and 7.124 where the panel refrained from making a recommendation
to the respondent under Article 19 of the DSU to bring into conformity a measure that was no longer in
existence but concluded that nothing precluded it from making findings on such a measure. See also GATT
Panel Report, US — Superfund, para. 5.2.2; Panel Report, US — Poultry (China), para. 7.56; and
Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US),
para. 270. In US — Superfund, the GATT panel found that Articles III and XI of the GATT 1947 also purport to
create the predictability needed to plan future trade. The panel noted that the coming into force of the tax at
issue at the beginning of the second year following that of the dispute was a timeframe within which the trade
and investment decisions that could be influenced by the tax would be taken. The panel in US — Poultry
(China) proceeded to make findings on the WTO consistency of an expired measure while also recognizing that
it would not be appropriate to make recommendations with respect such measures. In EC – Bananas III
(Article 21.5 – Ecuador II)) / EC – Bananas III (Article 21.5 – US), the Appellate Body considered that it is
"within the discretion of the panel to decide how it takes into account subsequent modifications or a repeal of
the measure at issue… depending on the particularities of the disputes before them".

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7.65. As noted in section 2.1.2 above, the DPR requires the IUP and IUPK permit holders to purify
(i.e. refine) nickel ore domestically. Indonesia has explained that the Appendix I to MEMR Regulation
No. 25/2018 only contains information with respect to purification of nickel ore, rathe r than
processing, because nickel ore cannot undergo minimal processing and must be purified or
refined.242 Indonesia also clarified that the products that result after the required purification or
refining are no longer nickel ore, but would be such products as nickel mate, ferro nickel, nickel pig
iron, or mix hydroxide precipitate, or mix sulfide precipitate, which fall under different HS codes than
nickel ore.243 Although the DPR does not explicitly prohibit export of nickel ore in the same manner
as the regulations that implement the export ban, it creates a situation whereby only refined nickel
products will be available for export. By its very nature, such a measure limits exports on nickel ore.
7.66. The DPR regulates the sale of nickel ore and operates to create a situation where there is no
nickel ore available for exporters to sell abroad. The only products available for export are
downstream ones such as ferro nickel, nickel pig iron and nickel matte. 244 The Panel concludes,
therefore, that the DPR is a measure on the sale for export within the meaning of Article XI:1 of the
GATT 1994 and is subject to the obligations therein.
7.2.1.3 Whether the DPR has a limiting effect on exports
7.2.1.3.1 Main arguments of the parties and third parties
7.67. As noted above, the European Union argues that the DPR is designed and operates so as to
restrict the possibility to export the unpurified and unprocessed raw mineral products and, therefore,
has an inherent direct limiting effect on exports.245
7.68. Indonesia argues that even if the Panel were to consider that the DPR falls within the scope
of Article XI:1 of the GATT 1994, the European Union failed to make a prima facie case of
inconsistency with Article XI:1 of the GATT 1994 because it did not demonstrate that the DPR has a
limiting effect on nickel ore trade that is fully attributable to that measure separate and apart from
the limiting effect of the export ban. 246 Indonesia contends that because the export prohibition in
MEMR Regulation No. 11/2019 totally prohibits exports of nickel ore as of 1 January 2020, there is
simply no circumstance in which the DPR can currently have any limiting effect on nickel ore
exports.247
7.69. Indonesia argues that the facts demonstrate that even without the export ban, the DPR would
have no limiting effect on exports of nickel ore. 248 Indonesia supports its argument by pointing to
evidence from when the export ban was not in place (first from 12 January 2009 to 12 January 2014
and second from 11 January 2017 to 31 December 2019).249 According to Indonesia, in the first
period of suspension of the export ban exports of unprocessed nickel ore increased five -fold from
10 million wet metric tonnes in 2009 to 52 million tonnes in 2013, and in the second period more
than six times from 4.9 million wet metric tonnes in 2017 to 30.2 million wet metric tonnes in
2019.250 In Indonesia's view, while trade effects are not required to demonstrate a limiting effect
they cannot be ignored when they disprove one. According to Indonesia, t he European Union is
effectively asking the Panel "to set aside empirical export data in favour of conjecture to conclude
that a non -discriminatory internal regulation is a prohibited quant itative restriction under
Article XI:1".251
7.70. Indonesia argues that the DPR cannot directly restrict exports, because it does not govern
whether nickel ore can be exported. Under Indonesian law, the authorization or prohibition to export
nickel ore or any other raw minerals is implemented through specific legal provisions that are distinct

242 Indonesia's response to Panel question No. 66(a).
243 Indonesia's response to Panel question Nos. 12 and 66.
244 Indonesia's response to Panel question No. 66.
245 European Union's first written submission, para. 50. (fns omitted)
246 Indonesia's first written submission, para. 12. See also Indonesia's first written submission,
paras. 80 and 84 and Indonesia's second written submission, para. 27.
247 Indonesia's second written submission, para. 52.
248 Indonesia's response to Panel question No. 13.
249 Indonesia's second written submission, paras. 52-54; and response to Panel question No. 13.
250 Indonesia's response to Panel question No. 13 referring to MEMR, Excel of "Production and Sales of
Nickel Ore from 2010-2020", (Exhibit IDN-24).
251 Indonesia's opening statement at the second meeting of the Panel, para. 4.

BCI deleted, as indicated [[***]]

from, and apply regardless of, any DPR. Indonesia argues that the legal provisions specifically
governing the exportation of nickel ore are lex specialis to the general requ irement to conduct
minimum processing activities in Indonesia. 252 Indonesia points to the export data as confirming
that Indonesia's legal regime permits exports separately from the DPR. 253 The European Union, for
its part, argues that "[i] t is immaterial fo r the application of Art. XI:1 of the GATT 1994 how the
national law in question calls and categorizes the national measure in question " what matters is
whether an objective assessment of the matter revealed that the measure prohibited or restricted
exports.254 The European Union compares the relevant provisions in MEMR Regulation No. 25/2018
(Articles 16, 17, and 46) and concludes that Indonesia's argument that the DPR does not regulate
exports at all cannot be sustained.255
7.71. Japan, Korea, the United Kingdom, and the United States contend that it is not necessary for
a complainant to demonstrate that an export restriction or prohibition has actual trade effects. The
Panel could find a violation of Article XI:1 if the DPR were to constitute a limitation on action or
exports without the need to show that it has caused an actual decrease in exports. 256 Ukraine, for
its part, argues that a complainant cannot simply state its claims; it should demonstrate what the
measures do in terms of their effect on trade.257
7.72. The United States notes that the Panel is not prevented from finding that a measure breaches
Article XI:1 simply because there exists another measure that may also prohibit or restrict
exportation and submits that Indonesia's export ban does not prevent the Panel from evaluating the
domestic processing requirement under Article XI:1.258 The United Kingdom notes that, although the
export ban deprived the DPR of practical effect, it does not appear to have changed the nature of
the DPR or its nexus with the exportation of the product at issue.259
7.73. Canada and the United Kingdom contend that the issue is the nexus between the relevant
measure and its effect on the quantity of exports of a particular product. In times when exports are
permitted, they nevertheless cannot take place unless the DPR has been satisfied. This means that
the act of exportation is dependent on compliance with the DPR.
7.2.1.3.2 Analysis by the Panel
7.74. As noted above260, not all restrictions on exportation or sale for export would be inconsistent
with Article XI:1 of the GATT 1994. Rather, it would only be those that have a limiting effect on the
quantity of exports. Panels determine consistency with Article XI:1 based on the design, architecture
and revealing structure of the measure considered in its relevant context. 261 Data on trade flows
may serve to illustrate or confirm a conclusion on the limiting effect or lack thereof of a particular
measure262 but is not dispositive of whether a measure is a restriction on export or sale for export
within the meaning of Article XI:1 of the GATT 1994. In this context, it is important to recall that a
measure may be challenged based on its de jure nature and its past or potential limiting effect, even
if it is not currently having an effect.
7.75. The DPR by its very nature requires nickel ore to be sold to domestic processors who then
transform it into something other than nickel ore. This necessarily means that if mines and refineries
comply with the DPR there will be no nickel ore available to be sold for export. The European Union
has presented a prima facie case that the DPR creates a de jure restriction on the export of nickel
ore even in times when there is no export ban in effect.

252 Indonesia's opening statement at the second meeting of the Panel, para. 29; and response to Panel
questions No. 73; No. 74(c).
253 Indonesia's comments on European Union's reply to Panel question No. 77.
254 European Union's comments on Indonesia's reply to Panel question No. 74.
255 European Union's comments on Indonesia's reply to Panel question No. 74.
256 Japan's third-party submission, para. 10; Korea's third-party submission, para. 12; United Kingdom's
third-party submission, paras. 4-6; United States' third-party submission, paras. 12-13.
257 Ukraine's third-party submission, para. 9.
258 United States' third-party response to Panel question No. 1.
259 United Kingdom's third-party response to Panel question No. 1.
260 See para. 7.27 above.
261 Appellate Body Reports, Argentina – Import Measures, para. 5.217.
262 Panel Report, Indonesia – Import Licensing Regimes, para. 7.132.

BCI deleted, as indicated [[***]]

7.76. In seeking to rebut the European Union's prima facie case, Indonesia argues that the entirety
of the limiting effect is attributable to the export ban and not the DPR. In support of its argument
Indonesia points to export data for periods when Indonesia claims export was permitted, but the
DPR was nevertheless in effect. Indonesia also argues that the DPR cannot have a limiting effect on
exports because in Indonesia's legal system it is the MOT, not the MEMR, that can authorize or
prohibit exportation.
7.77. Indonesia provides data that shows increasing exports of nickel ore in the periods when it
claims the export ban was "lifted" and the DPR remained in force to argue that the DPR has no
limiting effect on exports separate and apart from the export ban itself. The Panel notes, however,
that the relaxation of the ban in the relevant periods only related to low-grade ore.263 The prohibition
on export of high-grade ore remained throughout. The data, therefore, does not demonstrate what
would happen if the two measures – the export ban and the DPR – were not in place simultaneously.
7.78. With respect to the data itself, the Panel notes that it is presented as absolute volumes of
export data. Limiting effects can be demonstrated not only by a reduction in absolute numbers, but
also through suppression of increases or reduction in market share. 264 The Panel also notes that
Indonesia itself reports a current imbalance between supply and demand as well as predicting an
exploding demand for nickel ore.265
7.79. The Panel notes that these exports would have been taking place pursuant to separate
regulatory provisions (MEMR Regulation Nos. 20/2013, then 1/2014, then 25/2018 and MOT
Regulation No. 1/2017), which allowed exportation of low-grade ore upon approval by the Minister
of Trade if certain conditions were met – most notably the building of refining facilities. 266 The
creation of limited opportunities to export through special application to the Minister of Trade does
not cancel out the overall design, architecture, revealing structure, and effect of the DPR.
7.80. In light of the above, the Panel concludes that Indonesia's export data has not rebutted the
prima facie case that the DPR has a limiting effect by its very nature.
7.81. Indonesia also argues that the DPR cannot have a limiting effect on exports because of where
it is situated within the domestic legal regime of Indonesia. Indonesia expla ins that the DPR was
issued by the MEMR and only the MOT has the authority to permit or prohibit exports. The Panel
notes that how a measure is characterized by the respondent within its own legal regime is not
dispositive on how that measure will be consi dered by a panel or the Appellate Body.267 The Panel
also notes that measures can have the effect of restricting exports without taking the form of an
express export prohibition. Nothing in the WTO agreements states that government measures that
restrict ex portation are limited to only those that do so explicitly and pursuant to a specific
governmental authority.
7.82. The DPR is set out in Article 103 of Law No. 4/2009 and has been implemented over time
through a variety of regulations , most recently MEMR Regula tion No. 25/2018, which explicitly
restricts the ability of holders of IUP/IUPK for Production Operation and IUP for Production Operation
specifically for the processing and/or purification of metallic Mineral, nonmetallic Mineral, or rocks
to sell nickel ore abroad.268 Other MEMR regulations state that they permit or prohibit exports or
provide an exception to an existing prohibition if the exporter gets permission from the minister of

263 The Panel asked Indonesia to provide export data for both low-grade and high-grade ore (see Panel
question No. 17(a)). Indonesia's reply did not make such a distinction. When asked whether the data
represented only low-grade ore, Indonesia indicated that not all of the exports were of low-grade ore, but also
noted that "[u]pon the relaxation of the export prohibition, a large amount of low-grade ore was exported."
See Indonesia's response to Panel question No. 76. Indonesia also noted in its first written submission that the
purity of the nickel exported by one major Indonesian concern to China in 2019 averaged [[***]]. See
Indonesia's first written submission, para. 48.
264 Appellate Body Report, US – Large Civil Aircraft (2nd complaint) para. 1006.
265 Indonesia's second written submission, para. 88.
266 Indonesia's response to Panel question No. 74(c), referring to MOT, Excel of "Approved Export
Applications", Exhibit IDN-123 (BCI). [[***]] "Between 2017-2019, MOT did not reject any export approval
application, which fulfilled all statutory requirements".
267 Appellate Body Report, US – Large Civil Aircraft (2nd complaint), para. 593.
268 Article 19 of MEMR Regulation No. 25/2018 also refers to holders of IUP for Production Operation
specifically for transportation and sales.

BCI deleted, as indicated [[***]]

trade and demonstrates that they are building refining facilities. 269 The MEMR has issued multiple
regulations referring to and regulating the sales abroad of nickel ore, the Panel therefore must
presume it has the competence to do so. The Panel also notes that, in the context of the export ban,
Indonesia has not argued that ME MR Regulation No. 11/2019 cannot serve as the basis of a claim
for violation of Article XI:1 because it was issued by the MEMR and not the MOT.
7.83. The Panel finds, therefore, that the fact that DPR is administered by the MEMR and not the
MOT and is addressed to mining companies and refineries and not to exporters is not enough to
conclude that it does not have a limiting effect on exports.
7.84. In sum, the European Union has demonstrated that the design, architecture, and revealing
structure of the DPR establish that by its very nature it has a limiting effect on exports. As such, the
European Union has established a prima facie case that the DPR is inconsistent with Article XI:1 of
the GATT 1994, which Indonesia has not rebutted.
7.2.1.4 Conclusion on whether the DPR is a restriction within the meaning of Article XI:1
of the GATT 1994
7.85. The Panel finds that the text of Article XI:1 of the GATT 1994 plainly includes measures
relating to the "sale for export". The Panel finds that the DPR falls within the scope of Article XI:1 of
the GATT 1994 because it is a restriction on the sale for export of nickel ore , which has a limiting
effect on exports by its very nature. The Panel, therefore, finds that the DPR is subject to the
obligation in Article XI:1 of the GATT 1994 and eligible for the exclusion from that obligation
contained in Article XI:2(a) of the GATT 1994 if the other elements of that provision are satisfied.
7.2.2 Whether nickel ore is essential to Indonesia within the meaning of Article XI:2(a)
of the GATT 1994
7.86. As noted above, to fall within the scope of Article XI:2(a) and thus not fall within the obligation
in Article XI:1 the prohibitions or restrictions must be on foodstuffs or other essential products to
the responding Member. The Panel w ill, therefore, now move to a determination of whether nickel
ore is essential to Indonesia.270
7.2.2.1 Main arguments of the parties and third parties
7.87. Indonesia identifies three main reasons why nickel is essential to it. First, the importance of
mining for the Indonesian economy, accounting for a substantial portion of its GDP. In this regard,
Indonesia notes that Indonesia is a top nickel producer in the world accounting for 7% of global
output, and nickel mining contributes significantly to government revenue an d to employment 271
while being of particular economic and strategic significance in the impoverished regions where it is
produced, such as Sulawesi and Maluku.272 Second, Indonesia argues that nickel is an indispensable
input for the steel industry which accounts for 3.94% of total industrial GDP . Indonesia notes that
the domestic steel industry is not able to meet demand and that nearly half of Indonesia's demand
for steel is supplied from abroad.273 Third, Indonesia points to the implementation of a strategic plan

269 MEMR Regulation Nos. 20/2013, 1/2014, and 11/2019. The Panel is not finding that these
regulations are part of the current iteration of the DPR nor is the Panel making findings on their consistency
with Indonesia's obligations under the GATT 1994, the Panel is simply noting a factual pattern in Indonesian
regulations issued by the MEMR and governing nickel ore (among other minerals).
270 The Panel notes that the panel in China – Raw Materials, followed a similar order of analysis first
determining whether the measures were prohibitions or restrictions, then whether they related to an essential
product, and then moving on to the other elements of Article XI:2(a). See Panel Reports, China – Raw
Materials, section D.1.b.
271 Indonesia's first written submission, para. 136; Indonesia's second written submission, paras. 109-
115.
272 Indonesia's second written submission, para. 100.
273 Indonesia's first written submission, para. 137 referring to (Bank Indonesia, "Gross Domestic Product
by Industrial Origin at Current Prices", Indonesian Economic and Financial Statistics (2021), 226-227, Exhibit
IDN-50.) The Panel notes that Indonesia refers here to the share of industrial GDP and not total GDP
represented by the steel industry.

BCI deleted, as indicated [[***]]

to expand EV battery production in Indonesia in the short term, which results in a need to secure a
critical input for such production, i.e. nickel.274
7.88. In support of its argument, Indonesia notes that the panel in China – Raw Materials recognized
refractory-grade bauxite as "essential" to China because it was an input into steel making and the
relevant importance of that sector to China's economy.275
7.89. Indonesia argues that its case t hat nickel is "essential" to Indonesia within the meaning of
Article XI:2(a) of the GATT 1994 has not been successfully rebutted by the European Union.
7.90. The European Union argues that merely being the source of primary economic activity in a
region or a Me mber is not enough to qualify a product as essential within the meaning of
Article XI:2(a) of the GATT 1994. The European Union contends that one must interpret the types
of products covered by the provision b y reference to the express inclusion of "foodst uffs" in
Article XI:2(a). In the European Union's view, which it argues the Appellate Body agrees with, "other
products essential to the contracting party" must be similar in kind to foodstuffs and thus must
address the essential needs of the population. 276 According to the European Union, a product that
has great economic importance in terms of providing employment or government revenue may not
be "essential" if it does not address a particular vital need of the population. 277 In the
European Union's view these types of products would be more or less the same across all Members,
with some differentiation for local dietary customs or climate differences. 278 The European Union
argues that accepting Indonesia's interpretation would lead to an overly broad interpretation of
Article XI:2(a) of the GATT 1994, which would have the consequence of eviscerating the obligation
in Article XI:1 of the GATT 1994.
7.91. Canada suggests that the Panel's consideration of whether nickel production is essential
requires it to examine data regarding nickel production capacity in recent years and compare that
data with data regarding domestic demand over the same period, as well as assessing the
contribution of nickel ore as a sector of production to the Indonesian economy.279
7.92. With respect to whether Article XI:2(a) of the GATT 1994 is available for the imposition of
measures to ensure supply for a domestic industry, Korea, refers to a GATT Working Party report in
which the Working Party confirmed that the GATT 1994 "does not permit the imposition of restriction
upon the export of a raw material in order to protect or promote a domestic industry".280 The United
Kingdom comments that "access to domestic supplies of input products is not, in and of itself,
'essential' to the development of a domestic industry" 281 and that one should look at whether
imported inputs could satisfy the need of the domestic industry without requiring an export restraint.
Japan and the United States accept the possibility that securing inputs for a domestic industry could
be allowed under Article XI:2(a). Japan, argues that a Member using this line of argument would be
required to explain why the development of that particular industry is absolutely necessary or
indispensable to meet the basic needs of the popul ation of that Member, and thus why an input
product in that particular industry is "essential" to the Member .282 For its part, the United States
argues that a product that is an input product for an industry that a Member wishes to develop "can
be a supporting factor for the product's 'essentialness' to the Member".283
7.2.2.2 Analysis by the Panel
7.93. The term "essential" is defined as "[a]bsolutely indispensable or necessary". 284 Accordingly,
Article XI:2(a) refers to critical shortages of foodstuffs or otherwise absolutely indispensable or
necessary products. By including, in particular, the word "foodstuffs", Article XI:2(a) provides a

274 Indonesia's first written submission, para. 138; Indonesia's second written submission, para. 100.
275 Indonesia's first written submission, para. 135.
276 European Union's second written submission, paras. 129-131; European Union's response to Panel
question No. 29.
277 European Union's second written submission, para. 132.
278 European Union's response to Panel question Nos. 29 and 31.
279 Canada's third-party response to Panel question No. 4.
280 Korea's third-party response to Panel question, No. 4.
281 United Kingdom's third-party response to Panel question No. 4.
282 Japan's third-party response to Panel question No. 4.
283 United States' third-party response to Panel question No. 4.
284 Appellate Body Reports, China – Raw Materials, para. 326.

BCI deleted, as indicated [[***]]

measure of what might be considered a product essential to the contracting party, but it does not
limit the scope of other essential products to only foodstuffs.
7.94. This Panel agrees with the panel in China – Raw Materials that "[t]he phrase 'to the exporting'
Member appears to have been added to the initial draft of Article XI:2(a) to clarify that 'the
importance of any product should be judged in relation to the particular country concerned'".285 This
does not mean that a Member may simply assert that a product is essential to it. 286 It does mean,
however, that the types of products that are essential may vary from Member to Member. A
determination whether a product is essential should thus be focused on the particular circumstances
faced by the responding Member at a time when that Member applies a restriction or prohibition
under Article XI:2(a) of the GATT 1994.287
7.95. The Panel also agrees with the panel in China – Raw Materials that the definition of essential
product within the meaning of Article XI:2(a) of the GATT 1994 "may include a product that is an
'input' to an important product or industry".288 Like the Appellate Body, the Panel does not exclude
that a measure falling within the ambit of Article XI:2(a) could relate to an exhaustible natural
resource.289
7.96. Applying this understanding to the facts of this case, the Panel recalls that Indonesia has
described low-grade nickel ore as wa ste and over burden and not economically viable. The Panel,
therefore, concludes that Indonesia has not demonstrated that low -grade nickel ore is currently an
essential product to Indonesia.
7.97. With respect to high -grade ore, Indonesia has based its argument ation on the fact that the
product is essential to the economies of two regions – Maluku and Sulawesi – and in three industries:
nickel mining, stainless steel, and EV batteries. 290 Indonesia indicates that i n 2020, nickel mining
accounted for 27% of the Gross Regional Domestic Product (GRDP) in Southeast Sulawesi, 41% of
the GRDP in Central Sulawesi, and 23% of the GRDP in North Maluku.291
7.98. The Panel asked Indonesia to provide information on employment and revenue in the three
areas Indonesia identified that nickel ore was essential to: nickel mining, stainless steel, and EV
batteries. Indonesia submitted the following data with respect to the nickel mining and stainless
steel industries292:

285 Panel Reports, China – Raw Materials, para. 7.275 (quoting UN Economic and Social Council, Second
Session of the Preparatory Committee of the United Nations Conference on Trade and Employment.
Commission A: Report of Sub-Committee on Articles 25 and 27 E/PC/T/141 (1 August 1947)).
286 Panel Reports, China – Raw Materials, para. 7.345.
287 Panel Reports, China – Raw Materials, para. 7.276.
288 Panel Reports, China – Raw Materials, para. 7.282.
289 Appellate Body Reports, China – Raw Materials, para. 337.
290 Indonesia's second written submission, para. 100, referring to Indonesia's response to Panel
question No. 39(a); B. Devi, D. Prayogo, "Mining and Development in Indonesia: An Overview of the
Regulatory Framework and Policies", International Mining for Development Centre: Action Research Report,
(March 2013), (Exhibit IDN-5), p. 11; and Nikkei Asia, Automobiles "Indonesia's electric car dreams at odds
with deforestation pledge", available at: https://asia.nikkei.com/Business/Automobiles/Indonesia-s-electric-
car-dreams-at-odds-with-deforestation-pledge (last accessed 21 January 2022), (Exhibit IDN-99).
291 BPS, Excel of "GRDP of South Sulawesi, Central Sulawesi and North Maluku" (Exhibit IDN-100).
292 Indonesia's response to Panel question No. 101 (contains BCI). The Panel notes that Indonesia
provided the data with respect to nickel mining in percentages whereas it presented the data on the stainless
steel industry in decimals. The Panel has adjusted the data on the stainless steel industry so that they are
comparable with that for nickel mining.

BCI deleted, as indicated [[***]]

NICKEL MINING INDUSTRY (NICKEL MINING + SMELTER)
Year % of
Indonesia's
GDP
Total # of
employees
% of total
employment
% of
government
revenue
2012 [[*** *** *** ***
2013 *** *** *** ***
2014 *** *** *** ***
2015 *** *** *** ***
2016 *** *** *** ***
2017 *** *** *** ***
2018 *** *** *** ***
2019 *** *** *** ***
2020 *** *** *** ***
2021 *** *** *** ***]]

STAINLESS STEEL INDUSTRY
Year
% of
Indonesia's
GDP
Total # of
employees
% of total
employment
% of
government
revenue
2012 [[*** *** *** ***
2013 *** *** *** ***
2014 *** *** *** ***
2015 *** *** *** ***
2016 *** *** *** ***
2017 *** *** *** ***
2018 *** *** *** ***
2019 *** *** *** ***
2020 *** *** *** ***
2021 *** *** *** ***]]

7.99. The data shows that nickel mining has represented a significant share of Indonesia's GDP
(above 10%) at a steady level from 2012 -2021. Likewise nickel mining was an important share of
government revenue in 2012/2013 and declined thereafter although still remaining significant. The
number of employees in nickel mining was small in the years 2012-2105 and increased significantly
from 2016 to 2017 and continued to grow thereafter until beginning to decline in 2021. As a share
of total employment, nickel mining has represented a substantial share of total employment since
2017. By contrast, stainless steel represents a minor percentage of Indonesia's GDP and represents
a very small percentage of total employment and government revenue. As regards the EV battery
industry, Indonesia acknowledges that when the measures were adopted, there was no employment
in the EV battery industry, but there were estimates that building an EV ecosystem would contribute
significantly to GDP and result in the creation of thousands of di rect jobs, generate state revenue,
as well as create thousands of additional downstream jobs, and increase Indonesia's trade
balance.293
7.100. The Panel recalls the guidance from the Appellate Body that the various elements of
Article XI:2(a) inform one another, and one element can impart meaning to the other. The Panel will
discuss further in section 7.2.3 below the element of the temporary application of measures under
Article XI:2(a) that they must be to bridge a passing need and not to be permanent or maintained
until a natural resource is completely depleted. As will be discussed further in section 7.2.4 below
with respect to critical shortage, th e Panel also understand th at the flexibility in Article XI:2(a) is
not meant to enable Members to impose restrictions upon the export of a raw material in order to
protect or promote a d omestic industry .294 Bearing that in mind, it is the Panel's view that an
industrial input product can be essential and within the category of "absolutely indispensable or
necessary" if it is needed to maintain an industry through a passing need, but not to protect it from
the vagaries of competition or ordinary market condi tions with respect to access to inputs, or to
create an industry that did not yet exist. In that sense, the Panel is of the view that it may be difficult
to prove that an input product is essential within the meaning of Article XI:2(a) of the GATT 1994 if
it is not yet actually being used by a domestic industry in the responding Member. The implication
of Indonesia's arguments is that if the panel in China – Raw Materials was correct that bauxite was

293 Indonesia's response to Panel question No. 101, referring to MEMR, Presentation on "The Role of
Minerals in the Development of Indonesia's Battery Industry" (10 September 2021), (Exhibit IDN-127 (BCI)).
294 GATT/CP.4/33, Report of the Working Party "D" on Quantitative Restrictions of 28 March 1950
republished as "The Use of Quantitative Restrictions for Protective and Commercial Purposes," Sales No.
GATT/1950-3, para. 12.

BCI deleted, as indicated [[***]]

"essential" to an economy as diverse as China's then this Panel must necessarily conclude that nickel
ore is essential to Indonesia. The Panel , however, does not see a n exact parallel between the
situation of bauxite in China and nickel in Indonesia. In this respect, the Panel recalls the factors
that the panel in China – Raw Materials found relevant when determining that bauxite was an
essential product to China. That panel noted that refractory-grade bauxite was used in the production
of iron, steel, and other important products to China's domestic and export markets. That China was
the leading producer of steel – the downstream product – in the world and that its steel industry
was a primary consumer of the input product (refractory -grade bauxite) and represented a
significant source of employment. It was also the case that the downstream products were
themselves important products in the manufacturing and construction industries, two fundamental
sectors that drive China's industry and development.295
7.101. Nickel mining is an important source of employment and government revenue for Indonesia,
particularly if one looks at the regions of Maluku and Sulawesi. The measures, however, are not
designed to address a critical shortage of nickel ore to the mining industry. Rather, as Indonesia
explains, the measures address the availability of nickel ore as an input product to downstream
industries.296 Unlike the situation of bauxite in China, however, nickel ore is not already an input to
important downstream industries in Indonesia. Indonesia acknowledges that as at the time of
establishment of the Panel, EV battery production ha d not yet started in Indonesia and was only
projected to become a source of employment and government revenue in the future .297 Likewise,
stainless steel production is currently a minor part of Indonesia's economy, representing a low share
of employment and government revenue over the period 2012 -2020. Moreover, Indonesia has not
presented evidence on how stainless steel and EV batteries are important products to other
manufacturing industries in Indonesia.
7.102. The Panel finds, therefore, that based on the argumentation and evidence Indonesia
provided, Indonesia has not satisfied its burden to demonstrate that nickel ore is essential to
Indonesia within the meaning of Article XI:2(a).
7.103. As the Panel will discuss further in paragraph 7.137 below, the principle of permanent
sovereignty over natural resources is relevant to an interpretation of GATT obligations. The Panel's
finding here does not contradict that understanding.
7.2.3 Whether the export ban and the DPR are temporarily applied
7.2.3.1 Main arguments of the parties and third parties
7.104. Indonesia relies on its application of export prohibitions and restrictions on nickel ore in the
past for what it calls "only for limited time -periods"298 as proof that the current implementing
regulations are also only temporarily applied. Specifically, Indonesia refers to two export prohibitions
that were implemented through MEMR Regulations No. 7/2012 (which was in force for 15 days) 299
and No. 1/2014 (which Indonesia submits was in force from 11 January 2014 until it was revoked in
January 2017).300
7.105. Similarly, in relation to the DPR, Indonesia argues that these requirements " only operated
to restrict exports of unprocessed or unrefined nickel for limited time-periods".301 Further, Indonesia
submits that to the extent domestic producers were subject to these requirements, they affected
the internal sale of nickel and, therefore, fell under Article III:4 of the GATT 1994.302
7.106. Indonesia asserts that it has a consistent practice of applying export prohibitions and
restrictions on nickel ore exclusively on a temporary basis.303 Indonesia also argues that it has

295 Panel Reports, China – Raw Materials, para. 7.340.
296 Indonesia's first written submission, paras. 137-138; and second written submission, para. 116.
297 Indonesia's response to Panel question Nos. 39(c) and 101.
298 Indonesia's first written submission, para. 94.
299 Indonesia's first written submission, paras. 95-96.
300 Indonesia's first written submission, para. 99.
301 Indonesia's first written submission, para. 103.
302 Indonesia's first written submission, para. 103.
303 Indonesia's second written submission, para. 78 referring to Indonesia's first written submission,
paras. 94-103.

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produced contemporaneous evidence that the rationale for the adoption of the export prohibition on
nickel ore was to secure the immediate supply needs of the domestic processing industry and that
its app lication is, therefore, to bridge a passing need. 304 Finally, Indonesia argues that the
European Union appears to agree that, in the past, export prohibitions on low-grade nickel ore have
been in place only for a limited time, such that the only remaining disagreement between the parties
appears to relate exclusively to grades of nickel ore above 1.7%.305 Indonesia notes that at the time
the European Union requested consultations in 2019, MEMR Regulation 25/2018 had been in place
for less than 1 year and 7 mo nths, while the export prohibitions in MEMR Regulation 11/2019 and
MOT Regulation 96/2019 were not in effect at all. Indonesia notes that while the Panel proceedings
were ongoing, MEMR Regulation 25/2018 had been in effect for 3 years and 8 months, while MEMR
Regulation 11/2019 and MOT Regulation 96/2019 ha d been in effect for 2 years .306 In Indonesia's
view, in light of exploration to production timetables for nickel ore, less than four years of application
is a very short period of time in the mining industry.307
7.107. The European Union submits that it is unpersuasive to refer to the way in whi ch export
prohibitions were applied in the past to argue that a current export prohibition is also only applied
temporarily.308 The European Union also notes that the arguments of historical temporary application
can only be said to be valid for low -grade o re because the export of high -grade ore has been
continuously prohibited since January 2014. 309 The European Union argues that the length of time
the 2019 regulations were in force before consultations were requested cannot be dispositive
because it implies that a Member must wait for a prolonged period of time before bringing a claim
and therefore accept the nullification or impairment of its benefits under the WTO agreements.310
7.108. Brazil and Japan query whether the motivation behind the adoption of the measure – which
seems to be, in their view, the depletion of nickel ore reserves – can be considered a passing need.311
The United States comments that as Indonesia considers its processing capacity will continue to
expand, which will result in increased demand, it is unclear and unlikely that the export restriction
would be applied for a limited time.312 The United Kingdom references the Appellate Body finding in
China – Raw Materials that an export restriction applied to an exhaustible resource that is intended
to be maintained until the remaining reserves have been depleted, or until new technology or
conditions lessen the demand for that product, cannot be said to be "temporarily applied".313
7.109. Canada is of the view that even though Indonesia's export prohibition has not been
consistently applied, the Panel should consider whether the ban is more in the nature of a long-term
conservation measure that is applied to an exhaustible mineral resource and whether it is possible
that the expected shortage would ever cease to exist. Canada submits that "a restriction that is
imposed almost all the time until reserves are depleted would not meet the 'temporarily applied'
requirement".314 Further, Canada submits that the Panel should also consider whether there are
indications that the ban would be effectively applied permanently, or whether it will be lifted, at a
time when the critical shortage has been resolved.315 Korea considers that a measure may fall short
of being temporary if one cannot reasonably anticipate that the measure would be lifted in due time
or under certain non-temporary conditions.316
7.110. Japan, Korea, the United States, and the United Kingdom all express concern that a series
of measures with some breaks in application or a single measure that is frequently paused and
reinitiated, may indicate that the measure is in fact intended to be permanent, subject to periodic

304 Indonesia's second written submission, paras. 75-76 referring to Press Release from the MEMR,
2 September 2019 (Exhibit IDN-92), p.2.
305 Indonesia's second written submission, para. 79.
306 Indonesia's second written submission, para. 81.
307 Indonesia's second written submission, para. 82.
308 European Union's second written submission, para. 149.
309 European Union's second written submission, para. 151.
310 European Union's second written submission, para. 156.
311 Brazil's third-party submission, para. 16; and Japan's third-party submission, paras. 25-26.
312 United States' third-party submission, para. 22 and United States' third-party response to Panel
question No. 2.
313 United Kingdom's third-party submission, para. 12 (referring to Appellate Body Reports, China – Raw
Materials, para. 340).
314 Canada's third-party statement, para.11, and third-party response to Panel question No. 2.
315 Canada's third-party response to Panel question No. 5.
316 Korea's third-party response to Panel question No. 2; United States' third-party response to Panel
question No. 5.

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exceptions. Considering such a measure(s) to be temporarily applied within the meaning of
Article XI:2(a) could create the possibility for Members to circumvent that narrow exception thereby
rendering the substantive obligation meaningless.317
7.2.3.2 Analysis by the Panel
7.111. Indonesia does not cite any text in the current regulations that indicates explicitly that they
are meant to be temporary or if there is a specific timeframe in which it is envisaged that they will
be lifted or triggering criteria for lifting them.
7.112. The Appellate Body has noted that the setting forth of a specific timeframe in advance is not
required for a measure to be considered "temporarily applied" within the meaning of Article XI:2(a).
At the same time, the Appellate Body agreed with the panel in China – Raw Materials that a measure
"applied 'temporarily' in the sense of Article XI:2(a) is a measure applied in the interim, to provide
relief in extraordinary conditions to bridge a passing need. It must be finite, that is, applied for a
limited time" and not indefinitely.318
7.113. With respect to Indonesia's arguments about the limited time periods in which the measures
were in force, the Panel presents the table below to reflect its understanding of the application of
the two measures – export ban and DPR – over time.
Figure 5: Timeline of application of the export ban

317 Japan's third-party response to Panel question No. 2; Korea's third-party response to Panel question
No. 5; United States' third-party response to Panel question No. 5, and United Kingdom's third-party response
to Panel question No. 2.
318 Appellate Body Reports, China – Raw Materials, para. 330.

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Figure 6: Timeline of application of the DPR

7.114. Although the length of time a series of similar measures has been imposed could indicate a
pattern of short -term measures it could also indicate a long -term measure that was sim ply being
updated by different legal instruments. The Panel notes in this regard that there were no breaks in
the application of the DPR and any breaks in the application of the export ban were limited to low -
grade ore.
7.115. Indonesia argues that because an in itial ban in 2012 only lasted 15 days and the 2019
regulations had only been in place for two weeks when the European Union requested consultations
that the ban on high -grade ore also has a history of only being applied temporarily. 319 Indonesia
overlooks t he fact that export of high -grade ore has remained prohibited continuously since
1 January 2014 and that Indonesia itself has averred to this when asserting that the export ban has
a limiting effect. 320 The Panel notes that at the time of panel establishment export of high -grade
nickel ore had been continuously prohibited for seven years and the DPR had been in place for nine
years.321
7.116. The Panel, therefore, does not find the history of various sequential measures governing
nickel ore to support Indonesia's argument that the export ban and DPR are temporarily applied.
7.117. The Panel next looks to whether there is any indication when Indonesia might lift the
measures, such as criteria for lifting the measures eit her in the regulations themselves or in
contemporaneous government documents.
7.118. Indonesia cites a press release announcing the 2019 regulations that removed the
permission to export low-grade nickel ore and returned Indonesia to a state of a total export ba n.
In that press release while there are indications of the length of proven reserves (7.3 years) and the
hope that reserves could fulfil demand for 42.67 years there is no indication that the measure is
meant to be lifted before the depletion of reserves. 322 There is a reference in the press release to
the technology development of low -grade nickel ore so that existing reserves can be processed

319 Indonesia's response to Panel question No. 25(b).
320 See Indonesia's response to Panel question No. 13.
321 The Panel notes in this regard that Indonesia repeatedly compared its situation to that of China in
China – Raw Materials where China's export ban on bauxite, which the panel found was inconsistent with
Article XI:1 of the GATT 1994, had been in place uninterrupted for nearly 11 years. The Panel does not believe
that the panel in China – Raw Materials made any type of declaration that such a length of time of continued
application was necessary for a measure not to be considered temporarily applied within the meaning of
Article XI:2(a) of the GATT 1994. That simply happened to be the factual situation that panel was presented
with.
322 Press Release from the MEMR, 2 September 2019 (Exhibit IDN-92).

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domestically with no need to export. But there is no indication of when that technology will be
available.323
7.119. Indonesia has told the Panel that it cannot currently process low-grade ore. It has also told
the Panel that Indonesia expects to nearly double its refining capacity in the next five years. It
intends, however, to mostly rely on the existing predominant method of refining – pyrometallurgical
– with less than 20% of smelters expected to use HPAL technology. 324 It is not evident, therefore,
that these technological developments are expected to be available sufficiently soon to consider that
the measures bridge a passing need.
7.120. Indonesia argues that it does not intend to maintain the measures until the reserves of nickel
ore are depleted, but rather constantly reassesses the measures as well as the level of reserves.325
Indonesia is in the process of increasing domes tic refining capacity as well as the downstream
industries that would use nickel products. Indonesia tells the Panel that increasing domestic
processing capacity is not equivalent to a perennial state of critical shortage that would require the
permanent imposition of the measures.326 At the same time Indonesia states that the measures will
remain in place until "economically useful nickel reserves are sufficient to meet demand of the
domestic processing industry, estimated at 292.4 million wmt by 2026".327
7.121. The Panel finds that the measures had been in place, albeit with short breaks that allowed
the exportation of low -grade ore328, for seven (export ban) and nine (DPR) years when the Panel
was established and remain in place to date. Indonesia has presented n o direct, contemporaneous
evidence in the measures themselves or the circumstances around their adoption to indicate a
timeframe or even specific achievable criteria for when the measures would be lifted.
7.122. The Panel does not find that Indonesia intends to keep the measures in place until all
reserves are depleted. Indonesia itself informed the Panel that it intends to keep the measures in
place until supply meets demand or new technology allows.329 Given the projected rates of increasing
demand Indonesia has placed on the record as well the limited potential HPAL capacity in the near
future, the Panel finds that the measures would be expected to last an indefinite period.330 The Panel
notes that the panel in China – Raw Materials reached a similar conclusion when it found that China's
export restraints on bauxite were not temporarily applied despite China's argument that they would
be maintained "until new technology or conditions lessen demand".331
7.123. In light of the above, the Panel finds that neither the export ban nor the DPR are temporarily
applied within the meaning of Article XI:2(a) of the GATT 1994.
7.2.4 Whether the export ban and the DPR applied to prevent a critical shortage of nickel
ore in Indonesia
7.124. Article XI:2(a) allows Members to apply prohibitions or restrictions temporarily to either
prevent or relieve critical shortages. The Appellate Body has concluded that Article XI:2(a) provides
a basis for measures "adopted to alleviate or reduce an existing critic al shortage, as well as for
preventive or anticipatory measures adopted to pre -empt an imminent critical shortage".332 As the

323 Press Release from the MEMR, 2 September 2019 (Exhibit IDN-92). The press release also states
that the policy is "merely to increase value added for nickel to process minerals all over Indonesia".
324 Indonesia's response to Panel question No. 9(c). See also, Maryono Report (Exhibit IDN-18 (BCI)),
p. 30.
325 Indonesia's response to Panel question No. 26.
326 Indonesia's opening statement at the first meeting of the Panel, para. 53.
327 Indonesia's response to Panel question No. 26.
328 As will be discussed further below in section 7.2.4.2.2, Indonesia has not provided any evidence on
the reserve levels of low-grade ore.
329 Indonesia's second written submission, para. 77 ("… The MEMR press release also buttresses the
temporary nature of such measures by evidencing MEMR's intent to remove the measures once technological
developments enable the expansion of proven reserves and the processing of lower grades of nickel, thus
alleviating the supply deficiency that justifies the measures."). See also Indonesia's response to Panel question
No. 25(a).
330 Indonesia argues that demand for nickel is expected to grow 20-25 times by 2040. See IEA, Special
Report on the Role of Critical Minerals in Clean Energy Transition (2021), (Exhibit IDN-16), p. 8.
331 See e.g. Panel Reports, China – Raw Materials, paras. 7.348 and 7.350.
332 Appellate Body Reports, China – Raw Materials, para. 326.

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Appellate Body stated, "inherent in the notion of criticality is the expectation of reaching a point in
time at which conditions ar e no longer 'critical', such that measures will no longer fulfil the
requirement of addressing a critical shortage".333
7.2.4.1 Main arguments of the parties and third parties
7.125. Indonesia explains that the increase in demand for nickel ore has resulted in higher (and
unsustainable) levels of extraction and production in Indonesia. It is Indonesia's view that failure to
act preventively would have resulted in an imminent crucial deficiency of nickel ore. Indonesia argues
that the temporary restrictions it imposed betwe en 2014 and 2017 were successful because
production diminished to sustainable levels. It further states that the current demand for nickel ore
in Indonesia and the corresponding extraction and production levels may indicate that " a crucial
deficiency in quantities of HGSO is likely to ensue if export restrictions on nickel ore were no longer
in place".334
7.126. Indonesia argues that the measures are applied to prevent critical shortages of nickel ore in
its territory. Indonesia submits that "[f]aced with a surge in nickel ore production and consumption
and anticipating even greater demand for its nickel in the short term as a critical input into EV
batteries, Indonesia acted preventively to mitigate the risk that its nickel reserves would be depleted
at unsustainable rates"335 by adopting temporary export restrictions.
7.127. Indonesia presents three main types of evidence in support of its argument that there is a
risk of a critical shortage of nickel ore that it needs to prevent. Indonesia focuses on estimates of its
nickel reserves, ore production, and projections for consumption that it argues demonstrate the risk
of crucial deficiencies.
7.128. Based on a variety of methodologies, including reporting from mining permit holders,
Indonesia provided the following estimate of the evolution of its reserves from 2012-2020:
Table 4: Evolution of Indonesia's nickel ore reserves
 2012 2013 2014 2015 2016 2017 2018 2019 2020
Probable
Reserves
of
Nickel
metal
(tons)
19,154,662 18,916,367 18,915,262 46,931,459 44,287,596 39,786,145 39,700,090 54,273,601 48,444,790
Proved
Reserves
of
Nickel
metal
(tons)
2,548,956 2,631,146 2,463,051 3,940,845 4,277,095 22,563,738 37,021,667 17,716,023 20,949,290
Source: MEMR, Excel of "Nickel Data 2012-2020", (Exhibit IDN-48).

7.129. As discussed in paragraph 2.41 above, Indonesia argues that only "proved", rather than
"probable" reserves can be considered when estimating Indonesia's nickel ore reserves for the
purpose of determining whether there is an imminent critical shortage. Moreover, Indonesia argues
that only the proportion of its "proved" reserves that can be mined economically can be considered
"reserves".336 Relying on this definition Indonesia posits that its actual reserves are lower than
estimates from various sources such as the USGS and the MEMR, because only HGSO is economically
viable given the methodology used in Indonesian smelters. Indonesia notes that "[a]verage costs of
production for Indonesian smelters render it uneconomic to process nickel ores at lower grades,
including low-grade saprolite ores and all types of limonite ores. For this reason, while HGSO is used
as an input for further processin g downstream, low-grade nickel ore stockpiles below 1.7% purity
are considered waste and over burden, or inventory that might have economic value in the future.337

333 Appellate Body Reports, China – Raw Materials, para. 328.
334 Indonesia's first written submission, paras. 130-131.
335 Indonesia's first written submission, para. 107. (emphasis added)
336 Indonesia's first written submission, para. 118 (referring to CRIRSCO, Standard Definitions,
October 2012, (Exhibit IDN-42)).
337 Indonesia's first written submission, para. 118.

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7.130. According to Indonesia, evidence on the record shows that the current level of reserves of
HGSO have "a total lifespan of merely 6 years at current production and consumption levels" 338,
even without considering the future surge in demand resulting from EV battery production. Indonesia
considers that "[t]he potential removal of the measures at iss ue would exacerbate the critical
shortage of Indonesia's nickel ore even further by adding foreign demand for HGSO, particularly
from China, to current domestic demand for HGSO in Indonesia."339
7.131. With respect to nickel production, Indonesia provides several data points referring to
production, number of processing facilities, domestic consumption, and domestic processing
capacity. Again, Indonesia's argument focuses primarily on nickel ore being consumed domestically
for stainless steel production.340 Indeed, its forecasts for nickel ore consumption based on historical
data are "according to nickel input processing capacity".341
7.132. The European Union seeks to rebut Indonesia's contention that the measures are designed
to prevent a critical shortage by arguing that they are designed to promote Indonesia's domestic
downstream processing industries. 342 The European Union also provides a detailed challenge to
Indonesia's data used to support its argument that a critical shortage is imminent. 343 In particular,
the European Union maintains that the alleged risk of shortage is too remote 344, not temporary345,
self-created by Indonesia through the application of the measures346, and that the alleged deficiency
in quantity is neither likely nor serious.347
7.133. Canada submits that if Indonesia's measures were designed to prevent long-term depletion
of nickel reserves, and therefore was not responding to a "critical shortage" then the Article XI:2(a)
requirement would likely not be met.348 Korea, likewise argues that as nickel ore is not a regenerating
resource that can recover over time it would seem that only "a measure with perpetual effect, instead
of a 'temporary measure', would be apt to relieve the ongoing shortage". 349 Japan and the United
Kingdom consider that where the depletion of ore reserves is caused or exacerbated by continued
mining it will be difficult to demonstrate that this is a critical shortage within the meaning of the
provision.350 Japan also notes that if a shortage is permanent, then a measure could not be applied
to prevent a critical shortage.351
7.2.4.2 Analysis by the Panel
7.134. The Panel is presented with several questions in determining whether Indonesia's measures
satisfy this element of Article XI:2(a) of the GATT 1994. The first is an interpretative question with
respect to what types of situations may be considered a critical shortage within the meaning of
Article XI:2(a) that is eligible to be prevented or relieved. In particular, the parties differ on whether
such measures can be taken to address the normal depletion of natural resources and also whether
they can be used to satisfy expanding domestic demand related to the development of downstream
processing industries for the input product. The second question relates to a factual determi nation
on the level of reserves of nickel ore in Indonesia. The Panel must then apply the law to the facts
and determine whether there is an imminent critical shortage in nickel ore in Indonesia that could
be prevented.

338 Indonesia's first written submission, para. 131.
339 Indonesia's first written submission, para. 131.
340 Indonesia's first written submission, paras. 124-127.
341 Indonesia's first written submission, para. 126, Table 3 (referring to the Maryono Report,
(Exhibit IDN-18 (BCI)), p. 19).
342 European Union's second written submission, paras. 26-62.
343 European Union's second written submission, paras. 73-127.
344 European Union's second written submission, paras. 73-80.
345 European Union's second written submission, paras. 81-87.
346 European Union's second written submission, paras. 88-90.
347 European Union's second written submission, paras. 91-127.
348 Canada's third-party response to Panel question No. 3.
349 Korea's third-party statement, para. 7.
350 Japan's third-party response to Panel question No. 3; and United Kingdom's third-party response to
Panel question No. 3.
351 Japan's third-party submission, para. 29.

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7.2.4.2.1 Critical shortage within the meaning of Article XI:2(a) of the GATT 1994
7.135. The term "critical shortage" was first interpreted by the Appellate Body in the China – Raw
Materials dispute. In that case, the Appellate Body looked to the dictionary definitions of shortage
and critical as well as t he context supplied by other provisions of the GATT 1994 that refer to
shortages – notably the reference to "short supply" in Article XX(j) – to determine that a "critical
shortage" within the meaning of Article XI:2(a) refers to "those deficiencies in qua ntity that are
crucial, that amount to a situation of decisive importance, or that reach a vitally important or decisive
stage, or a turning point" , which is more narrowly circumscribed than the type of shortage that
would fall within the scope of Article XX(j).352 Addressing a mere shortage or a situation of short
supply will not be enough to bring a measure within the scope of Article XI:2(a), the shortage must
be critical.
7.136. Similarly, Article XI:2(a) and Article XX(i) must address separate circumstances. Essential
quantities of materials necessary to a domestic industry must mean something different than a
critical shortage of an essential product. 353 A need to secure essential quantities for the domestic
industry cannot be considered equivalent to a critical shortage. As noted above, a critical shortage
has to be of decisive importance and capable of reaching a turning point. The Panel is of the view,
therefore, that securing enough of a particular input to meet potential increases in demand brought
about by normal market forces that are expected to continue for some time is not responding to a
critical shortage.
7.137. The Panel understands that the GATT 1994 must be interpreted in a manner consistent with
general principles of customary internati onal law, including the principle of permanent sovereignty
over natural resources.354 The Panel agrees with the panel in China – Raw Materials that the ability
to enter into international agreements such as the WTO Agreement is a quintessential example of
the exercise of sovereignty. The Panel also notes that the principle of harmonious interpretation
requires that Members must exercise their sovereignty over natural resources consistently with their
WTO obligations.355 At the same time, the flexibilities built in the GATT 1994 and the other covered
agreements must be interpreted in a way that respects this principle as well as the goals of the
Preamble of the WTO Agreement with respect to sustainable development. For this reason, like the
Appellate Body, the Panel does not exclude the possibility that a measure falling within the ambit of
Article XI:2(a) of the GATT 1994 could relate to an exhaustible natural resource. Nevertheless ,
Indonesia would still have to demonstrate that all of the component elements of Article XI:2(a) are
satisfied.
7.138. With respect to the availability of Article XI:2(a) measures to address critical shortages of
exhaustible natural resources, the Appellate Body has explained that they could be imposed, "for
example, if a natural disaster caused a 'critical shortage' of an exhaustible natural resource, which,
at the same time, constituted a foodstuff or other essential product".356 The Panel does not read the
Appellate Body's statement as limiting the types of critical shortages of exhaustible natural resources
to natural disasters. The Panel does not find support in the Appellate Body's statement, however,
for the notion that the concept of a critical shortage of an exhaustible natural resource can simply
be that under ordinary market conditions supply cannot currently meet demand or that it is projected
to be unable to meet demand in the future.

352 Appellate Body Reports, China – Raw Materials, paras. 324-325.
353 That difference is reflected in the criteria for the application of Article XX(i), which require Members
to hold the domestic price of such materials below the world price as part of a governmental stabilization plan
and that any restrictions applied shall not operate to increase the exports of or the protection afforded to such
domestic industry and shall not depart from the provisions of this agreement relating to non-discrimination.
The Panel notes that there is evidence on the record that in conjunction with the export ban and DPR,
Indonesia applies a reference price to nickel ore, which is held below the world market price to "create a
balance or fair pricing between profits for the smelters while at the same time ensuring the nickel mining
activities can provide sufficient margin for the miners". See Ministry of Energy and Mineral resources,
Government of Indonesia, Press Release No 253.Pers./04/SJI/2020 "Pushing Domestic Nickel Market Growth,
Government Sets Reference Prices of Minerals (RPM) Regulations", (Exhibit EU–28).
354 Article 3.2 of the DSU. See also Panel Reports, China – Raw Materials, paras. 7.377–7.383.
355 Panel Reports, China – Raw Materials, paras. 7.381-7.382.
356 Appellate Body Reports, China – Raw Materials, para. 337.

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7.139. In sum, the Panel is of the view that, Article XI:2(a) can be utilized by Members to address
a critical shortage of industrial inputs, including exhaustible natural resources, but the shortage has
to be critical and capable of being resolved.357
7.2.4.2.2 The level of nickel ore reserves in Indonesia
7.140. To demonstrate that there is an imminent critical shortage of nickel ore, Indonesia must
provide evidence to the Panel on the level of reserves. In that respect, Indonesia provides an expert
report – the Maryono Report – as well as other relevant data on the level of Indonesia's nickel
reserves. The European Union raises two major issues with respect to the reserve calculations put
forward by Indonesia. Specifically, the European Union takes issue with the fact that Indonesia
excludes low-grade ore from the calculation of reserves and th at Indonesia also excluded any data
on nickel reserves not verified by a "competent person".358
7.141. With respect to the low -grade ore, Indonesia acknowledges that it has excluded low-grade
ore from its calculations. Indonesia relies on an industry standard definition of reserves to include
only economical ly viable product. In Indonesia's view low -grade ore is properly excluded from
reserve calculations because its smelters cannot currently process it and, therefore, this ore is not
economically viable.359
7.142. Indonesia's regulations (particularly the two from 2017) specifically require the use of low-
grade ore in domestic facilities (and the construction of such facilities) before the product can be
exported.360 Indonesia has acknowledged to the Panel that some of its facilities use low -grade ore
for "blending".361 Moreover, Indonesia does not take into account that the miners may economically
exploit this low -grade ore by selling it to foreign purchasers. 362 This appears inconsistent with
Indonesia's arguments on why nickel ore is essential to Indonesia, which high light the importance
of the nickel ore industry in certain Indonesian regions such as Sulawesi and Maluku.363
7.143. With respect to high -grade ore there are several estimates on the record. The estimates
from the Maryono Report, dated September 2021, indicate between [[***-***]] years of remaining
reserves.364 This calculation is based on the proven reserves calculated with respect to high -grade
ore reported by competent persons 365 as well as recent production data and capacity of existing
smelters. At the same time, Indonesia's Mining Guidance which is provided to potential investors to
encourage them to build refining facilities and downstream manufacturing facilities (stainless steel
and EV battery) in Indonesia indicates that "the mineral mining production is ver y high and the
reserves availability is still abundant for a long term".366
7.144. Indonesia also notes that reserves may be calculated upwards if new HPAL refineries that
can refine low -grade nickel ore come online.367 Indonesia notes that the first of these plants is
intended to start production in 2026 with more soon to follow.368 This potential upward trend is also
addressed in Indonesia's Mining Guidance which indicates that the proven reserves security of
nickel – hydrometallurgy from 2020 should last until 2030, or 2029 in case of nickel – pyrometallurgy

357 Hence the requirement that measures under Article XI:2(a) of the GATT 1994 be temporarily applied.
358 European Union's second written submission, paras. 95 – 104.
359 Indonesia's response to Panel question No. 27(b).
360 See e.g. MOT Regulation No. 1/2017, (Exhibit EU-8(b)), Article 4.
361 Indonesia's response to Panel question No. 76(b).
362 Indonesia's response to Panel question No. 9(a).
363 Indonesia's second written submission, paras. 100, 109, and 112. See also, Indonesia's response to
Panel question No. 97 ("Between 2017 and 2019, Indonesia has decided to permit the exportation of lower
grades of nickel ore. At the time, Indonesia attempted to respond to pleas by mining companies that they
would not remain economically viable if deprived of the opportunity to export nickel ore, while at the same
time ensuring the continuity of supply of higher grades of nickel ore for Indonesia's expanding processing
capacity.")
364 The Maryono Report, (Exhibit IDN-18 (BCI)), p. 31.
365 The European Union objects to the exclusion of potential reserve data that were not reported by a
competent person – indicating that leaving out this information depresses the overall calculation of reserves.
The Panel notes that reliance on competent persons is industry standard (See Exhibits IDN-37, IDN-42, and
IDN-45) and that the total volume of remaining nickel ore estimated in the Maryono Report is larger than those
estimated generated using alternate methodologies that did not require a competent person.
366 MEMR, Indonesian Mining Guidance (2020), (Exhibit IDN-1), p. 142.
367 Indonesia's response to Panel question No. 9(b).
368 Indonesia's response to Panel question No. 100(a).

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commodity. According to the Mining Guidance, these time periods are significantly longer when the
reference is to total reserves instead of proven reserves: the tot al nickel reserves security would
cover until 2052 for nickel – pyrometallurgy and 2091 for nickel – hydrometallurgy.369 It should be
recalled that Indonesia currently only has smelters that refine through pyrometallurgical processes
but expects to bring hydrometallurgical (HPAL) smelters on-line in the coming years. The Mining
Guidance recognizes that adding the use of HPAL facilities would extend the life of reserves as would
including probable rather than proven reserves in the estimates.
7.2.4.2.3 Whether there is an imminent critical shortage of nickel ore in Indonesia
7.145. In analysing this question, the Panel will apply its understanding of the type of situation that
qualifies as a critical shortage for the purposes of Article XI:2(a) of the GATT 1994 to the factual
situation in Indonesia. In this respect, the Panel recalls that Indonesia has made a distinction in its
calculation of reserves between low-grade ore (with a nickel content of <1.7%) and high-grade ore
(with a nickel content of >1.7%).
7.146. The Panel notes that, despite Indonesia's position regarding the value of low-grade ore, the
measures also apply to low-grade ore. Indonesia has periodically lifted the export ban on low-grade
ore. With respect to the DPR the Panel notes that it applies to both low -grade and high-grade ore.
Permission to export unrefined ore only applies to low-grade ore and is specifically conditioned upon
a commitment to domestic refining.370
7.147. Without any data on the level of reserves of low-grade ore in Indonesia, the Panel does not
see how Indonesia can demonstrate that its measures are temporarily applied to prevent a critical
shortage of that very product. Indonesia itself acknowledges that the export ban on low-grade nickel
ore is not related to preventing a critical shortage of that product, but rather to prevent
environmental degradation such as deforestation, land disturbance, and water contamination
typically associated with export-oriented shallow strip mines.371 Indonesia also argues that the ban
on low-grade ore is necessary to prevent exporters from using the ability to export low-grade ore to
present fraudulent customs declarations and actually export high-grade ore and that the surge in
exports of nickel ore between 2017 and 2019 had the effect of reducing Indonesia's economic
reserves of higher grades of nickel ore, even though exports of high -grade ore were not legally
permitted.372 Yet at the same time Indonesia has repeatedly noted that in 2018 the amount of
reserves was revised upward significantly. 373 In any event , this does not demonstrate that the
measure was applied to prevent a critical shortage of low-grade nickel ore.
7.148. Indonesia also refers to the potential uses of low -grade ore once HPAL capacity becomes
operational but cannot point to any imminent shortage of low -grade ore at the time the measures
were adopted.
7.149. With respect to high -grade ore, the Panel first notes that , as discussed above, a critical
shortage within the meaning of Article XI:2(a) cannot simply be a situation of short supply. It cannot
also merely be a situation of needing to secure essential quantities for a domestic industry to meet
demand. A critical shortage must be of decisive importance or at a turning point and capable of
being resolved.
7.150. The data provided by Indonesia refer to projections for demand in areas of production that
are currently not yet fully developed in Indonesia. 374 Indonesia's estimates on the ability of HPAL
technology to enable broader use of low-grade ore and thus obviate the need for an export restraint

369 MEMR, Indonesian Mining Guidance (2020), (Exhibit IDN-1), p. 142, Table 9.3.
370 MEMR Regulation No. 25/2018, Article 46 (Exhibit EU-9(b)). See MEMR Regulation No. 5/2017,
Article 10 (Exhibit IDN-33), MOT Regulation No. 1/2017, Article 4 (Exhibit EU-8(b)) and MEMR Regulation
No. 11/2012, Article 21A (Exhibit EU-5(b)) for prior formulations of this requirement.
371 Indonesia's response to Panel question No. 27(c).
372 Indonesia's response to Panel question No. 97. This reasoning sounds closer to that Indonesia used
under Article XX(d) of the GATT 1994 than demonstrating that there is a critical shortage of low-grade nickel
ore within the meaning of Article XI:2(a) of the GATT 1994.
373 See e.g., Indonesia's response to Panel question No. 33 ("Indonesia's nickel reserves have been
revised more than five-fold in 2018 as a result of improvements in reporting compliance by nickel permit
holders.")
374 Indonesia's response to Panel question No. 101.

BCI deleted, as indicated [[***]]

have also been continuously revised to be further in the future (from [[ ***]] to now [[ ***]]).375
With respect to EV battery production, Indonesia has acknowledged that there are currently no EV
battery production plants in operation in Indonesia and that the first plants would not be expected
to be operational until 2024. 376 This would be five years after the adoption of the most recent
regulation implementing the export ban in 2019, 10 years from the imposition of the export ban on
high-grade nickel ore in 2014, and 12 years from the imposition of the DPR in 2012. 377 Indonesia
has also indicated that employment in the stainless steel industry currently only accounts for a small
percentage [[***]] of its total workforce.378
7.151. The Panel finds that this prospective future demand is too attenuated to be reasonably relied
upon as evidence of an imminent critical shortage that can be prevented through the measures at
issue.
7.152. In light of the above, the Panel finds that Indonesia has not demonstrated the existence of
an imminent critical shortage of nickel ore, either low -grade or high-grade, within the meaning of
Article XI:2(a) of the GATT 1994.
7.2.5 Overall conclusion on Article XI:2(a) of the GATT 1994
7.153. It should be recalled that the analysis under Article XI:2(a) of the GATT 1994 is cumulative.
All the elements must be demonstrated for a respondent to be able to avail itself of the exemption
from the obligation in Article XI:1 of the GATT 1994. In this case the Panel has found that:
a. The export ban is a prohibition and the DPR is a restriction within the meaning of
Article XI:1 of the GATT 1994. Both measures, therefore, are eligible for exemption from
the application of Article XI:1 contained in Article XI:2(a) of the GATT 1994;
b. Indonesia has not demonstrated that nickel ore is an essential product within the meaning
of Article XI:2(a) of the GATT 1994;
c. Neither the export ban nor the DPR are temporarily applied within the meaning of
Article XI:2(a) of the GATT 1994; and
d. Indonesia has not satisfied the burden of proof to demonstrate that there is an imminent
critical shortage of nickel ore (either low -grade or high -grade) that the measures can
prevent.
7.154. Having found that Indonesia has not demonstrated that all of the component elements of
Article XI:2(a) of the GATT 1994 are present, the Panel finds that neither the export ban nor the
DPR are exempt from the obligations in Article XI:1 of the GATT 1994.
7.155. The Panel, therefore, moves on to address the European Union's claims that the export ban
and the DPR are inconsistent with Article XI:1 of the GATT 1994.

375 Indonesia's response to Panel question No. 100 (noting that HPAL technology is still experimental in
Indonesia and different. sources had different estimates in respect of when HPAL plants would become
operational. Indonesia is now in a position to confirm that the first HPAL plants in Indonesia are becoming
operational, with eight plants starting until 2026.).
376 See MEMR, Presentation on "The Role of Minerals in the Development of Indonesia's Battery
Industry" (10 September 2021), (Exhibit IDN-127 (BCI)) providing estimates on projected impact of GDP from
EV battery production by [[***]]. See also, Media report that in September 2021 Hyundai Motor Group and LG
Energy Solution started construction of a 1.1 billion US dollar battery plant near Jakarta, which is scheduled to
start production in 2024. See Indonesia's opening statement at the first meeting with the Panel, referring to
Financial Times, "Indonesia and Foxconn in talks over electric vehicle investment" (1 November 2021),
available at: https://www.ft.com/content/f1a805aa-82ac-4f24-ad22-58e43712091e, (Exhibit IDN-78). See
also NIKKEI Asia, "Indonesia teams with LG to build $1.2bn battery plant" (25 May 2021), available at:
https://asia.nikkei.com/Business/Automobiles/Indonesia-teams-with-LG-to-build-1.2bn-battery-plant, (Exhibit
IDN-51).
377 Although the content of the DPR is contained in Article 103 of Law No. 4/2009 it was first
implemented via regulation in 2012 (see MEMR Regulation No. 7/2012).
378 Indonesia's response to Panel question No. 101.

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7.2.6 Whether Indonesia's measures are inconsistent with Article XI:1 of the GATT 1994
7.2.6.1 The export ban
7.156. As noted above, Indonesia does not dispute that the export ban is a prohibition on
exportation within the meaning of Article XI:1 of the GATT 1994. Nor does it dispute that it has a
limiting effect.
7.157. Despite Indonesia's admission, the burden remains on the European Union to make a prima
facie case379 that the challenged measure – in this case, the alleged export ban on nic kel ore as
currently implemented via MEMR Regulation No. 11/2019 and MOT Regulation No. 96/2019 – is a
prohibition within the meaning of Article XI of the GATT 1994.380
7.158. The Panel has found in paragraph 7.84 above that the design, architecture, and revealing
structure of the export ban, as explained by the European Union and confirmed by Indonesia,
demonstrate that the export ban is a prohibition on exportation. The Panel finds, therefore, that the
export ban is inconsistent with the obligation in Article XI:1 of the GATT 1994.
7.2.6.2 The DPR
7.159. The Panel has found that the DPR falls within the scope of Article XI:1 of the GATT 1994
because it is a restriction on the sale for export of nickel ore.
7.160. The Panel has also found that the DPR has a limiting effect on exports by its very nature.
7.161. The Panel finds, therefore, that the DPR as set out in Law No. 4/2009 and implemented via
MEMR Regulation Nos. 25/2018 and 7/2020, is inconsistent with Article XI:1 of the GATT 1994.
7.162. Indonesia has also raised an affirmative defence that its measures are justified under
Article XX(d) of the GATT 1994. The Panel now analyses this defence.
7.3 Whether Indonesia's measures are justified under Article XX(d) of the GATT 1994
7.163. Indonesia submits an alternative affirmative defence under Article XX(d) of the GATT 1994
if the Panel concludes that the measures at issue do not fall within the scope of Article XI:2(a) of
the GATT 1994 and are inconsistent with Article XI:1 of the GATT 1994.381
7.164. The Panel has found in section 7.2 above that the measures at issue are inconsistent with
Article XI:1 of the GATT 1994 and do not fall within the scope Article XI:2(a) of the GATT 1994. The
Panel will therefore address Indonesia's alternative affirmative defence under subparagraph (d) of
Article XX of the GATT 1994.

379 A prima facie case is generally understood in WTO law to be one which, in the absence of effective
refutation by the defending party, requires a panel, as a matter of law, to rule in favour of the complaining
party. See e.g. Appellate Body Report, EC – Hormones, para. 104, and US – Wool Shirts and Blouses, p. 14,
DSR 1997:I, p. 335. The Appellate Body explained in US – Gambling that such a prima facie case must include
evidence and legal argument that "must be sufficient to identify the challenged measure and its basic import,
identify the relevant WTO provision and obligation contained therein, and explain the basis for the claimed
inconsistency of the measure with that provision" (Appellate Body Report, US – Gambling, para. 141).
380 See Panel Report, US – Shrimp (Ecuador), para. 7.9 finding that even though the United States did
not contest Ecuador's claims the Panel was obligated under Article 11 of the DSU to determine whether
Ecuador had made a prima facie case in order to find for Ecuador. See also Appellate Body Report,
US – Gambling, para. 139 ("[a] panel errs when it rules on a claim for which the complaining party has failed
to make a prima facie case").
381 Indonesia's first written submission, para. 14. See also Indonesia's first written submission,
para. 232.

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7.165. Article XX(d) of the GATT 1994 provides as follows:
Subject to the requirement that such measures are not applied in a manner which would
constitute a means of arbitrary or unjustifiable discrimination between countries where
the same conditions prevail, or a disguised restriction on international trade, nothing in
this Agreement shall be construed to prevent the adoption or enforcement by any
contracting party of measures:
…
(d) necessary to secure compliance with laws or regulations which are not inconsistent
with the provisions of this Agreement, including those relating to customs enforcement,
the enforcement of monopolies operated under paragraph 4 of Article II and
Article XVII, the protection of patents, trade marks and copyrights, and the prevention
of deceptive practices; …
7.166. The Appellate Body explained in US – Gasoline that a two -tiered analysis is the proper
manner to consider a defence under Article XX of the GATT 1994: a panel is to first determine
whether the measure satisfies the conditions set out in the subparagraph being invoked, and second
to determine whether the measure complies with the chapeau of Article XX.382 Subsequent panels
dealing with defences under Article XX of the GATT 1994 have consistently followed this approach.383
In Indonesia – Import Licensing Regimes, the Appellate Body stated that in particular circumstances
a panel may decide to proceed with the analysis under the chapeau without committing a reversible
error.384 In its third-party submission, the United States submitted that this might be such a case.385
The European Union, for its part, did not specifically ask the Panel to begin its analysis with the
chapeau, but noted that this might be a case where it is appropriate to begin the analysis with the
chapeau.386
7.167. The Panel notes that Indonesia – Import Licensing Regimes involved the invocation of
multiple subparagraphs of Article XX. The Panel in that case, therefore, had a specific reason for
beginning its analysis with the chapeau.387 There are no similar compelling circumstance s in this
case and the Panel, therefore, sees no reason to depart from the well -established practice of
conducting the two -tiered analysis beginning with whether Indonesia's measures satisfy the
subparagraph invoked, in this case subparagraph (d) of Article XX of the GATT 1994.
7.168. Indonesia, as the party invoking this defence, bears the burden of proof in this respect. The
Panel will therefore determine whether Indonesia has demonstrated that (i) its measures fall under
subparagraph (d) of Article XX; and if they do, (ii) whether they are consistent with the chapeau of
Article XX.
7.3.1 Whether the measures at issue are necessary to secure compliance with laws or
regulations which are not inconsistent with the provisions of the GATT 1994
7.169. For the challenged measures – i.e. the export ban and the DPR – to be provisionally justified
under subparagraph (d) of Article XX Indonesia must demonstrate that (i) the export ban and the

382 Appellate Body Report, US – Gasoline, p. 22, DSR 1996:I, p. 20.
383 Appellate Body Reports, US – Shrimp, para. 118; Dominican Republic – Import and Sale of
Cigarettes, para. 64 (both quoting Appellate Body Report, US – Gasoline, p. 22, DSR 1996:I, p. 20);
Brazil – Retreated Tyres, para. 139 (referring to Appellate Body Reports, US – Gasoline, p. 22, DSR 1996:I,
p. 20; Dominican Republic – Import and Sales of Cigarettes, para. 64; US – Shrimp, para. 149); EC – Seal
Products, para. 5.169 (referring to Appellate Body Reports, US – Gasoline, p. 22; US – Shrimp, paras. 119 and
120; US – Gambling, para. 292); Colombia – Textiles, para. 5.67 (referring to Appellate Body Reports,
US – Gasoline, p. 22; Dominican Republic – Import and Sale of Cigarettes, para. 64; US – Shrimp,
384 Appellate Body Report, Indonesia – Import Licensing Regimes, para. 5.100.
385 United States' third-party submission, para. 27 where the United States stated that "[n]othing in the
text of Article XX suggests that it is not possible to conduct an appropriate legal analysis beginning with the
chapeau" because the chapeau and the subparagraphs are independent requirements.
386 European Union's second written submission, para. 291; and response to Panel question No. 120.
387 The Appellate Body stated that "depending on the particular circumstances of the case at hand,
including the way in which the defence is presented", a deviation from the sequence of analysis under
Article XX may be justified. See Appellate Body Report, Indonesia – Import Licensing Regimes, para. 5.100.

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DPR are designed to secure compliance with laws or regulations that are themselves not inconsistent
with the GATT 1994; and (ii) the export ban and the DPR are necessary to secure such
compliance.388
7.3.1.1 Whether the measures at issue secure compliance with laws or regulations that
are themselves not inconsistent with the GATT 1994
7.170. The Appellate Body explained in India – Solar Cells that to demonstrate that a measure falls
within the scope of subparagraph (d) of Article XX of the GATT 1994 a responding Member must
make three showings that apply cumulatively: (i) that there are laws or regulations for w hich it
seeks to secure compliance; (ii) that such laws and regulations are not themselves inconsistent with
the GATT 1994; and (iii) that the challenged measures are designed to secure compliance with those
laws and regulations.389
7.3.1.1.1 Laws and regulations
7.171. The term "laws and regulations" is broad and can refer to a wide variety of government
measures. The term, however, must be read in the context of subparagraph (d) of Article XX. For
this reason, panels and the Appellate Body have reasoned that not all laws and regulations fall within
the scope of subparagraph (d). In light of the obligation that the measures a respondent seeks to
justify must be to secure compliance with those laws and regulations, prior panels and the
Appellate Body have, in the Panel's view, correctly reasoned that the types of laws and regulations
that can be justified under subparagraph (d) must be those "in respect of which conduct would, or
would not, be in 'compliance'".390
7.172. The Appellate Body has identified a number of factors for panels to consider when evaluating
whether a legal instrument raised by a respondent falls within the scope of laws and regulations
within the meaning of Article XX(d). These factors include " (i) the degree of normat ivity of the
instrument and the extent to which the instrument operates to set out a rule of conduct or course
of action that is to be observed within the domestic legal system of a Member; (ii) the degree of
specificity of the relevant rule; (iii) whether the rule is legally enforceable, including, e.g. before a
court of law; (iv) whether the rule has been adopted or recognized by a competent authority
possessing the necessary powers under the domestic legal system of a Member; (v) the form and
title given to any instrument or instruments containing the rule under the domestic legal system of
a Member; and (vi) the penalties or sanctions that may accompany the relevant rule ".391 Further,
the assessment of the legal instruments or provisions identified by the respondent must be carried
out "in light of the specific characteristics and features of the instruments at issue, the rule alleged
to exist, as well as the domestic legal system of the Member concerned".392 The Panel finds valuable
guidance in this approach.
7.3.1.1.1.1 Main arguments of the parties and third parties
7.173. Indonesia's position on what the relevant laws and regulations are for the purposes of
Article XX(d) of the GATT 1994 has evolved throughout the proceedings. 393 Ultimately, Indonesia

388 Appellate Body Report, Korea – Various Measures on Beef, para. 157.
389 Appellate Body Report, India – Solar Cells, para. 5.58.
390 Appellate Body Report, India – Solar Cells, para. 5.108.
391 Appellate Body Report, India – Solar Cells, paras. 5.150 and 6.6.
392 Appellate Body Report, India – Solar Cells, paras. 5.114 and 6.6.
393 Indonesia initially identified in its first written submission Articles 2, 3, 96-98 of Law No. 4/2009,
Articles 3, 10, 23(1)(b) and 57 of Law No. 32/2009 and other implementing regulations as the "laws and
regulations" within the meaning of Article XX(d) of the GATT 1994. Indonesia subsequently argued in its
opening statement at the first meeting with the Panel that the relevant provisions were Articles 2(d), 3(b), and
96 of Law No. 4/2009, Articles 3 and 57 of Law No. 32/2009 and their respective implementing regulations.
Then Indonesia further narrowed the scope of its relevant "laws and regulations" in its responses to the Panel's
questions following the first meeting with the Panel by deleting the reference to the implementing regulations.
In its second written submission, Indonesia first identified Articles 2 and 96 of Law No. 4/2009 and Articles 3
and 57 of Law No. 32/2009 and three paragraphs later it referred to Articles 2(d), 3(b) and 96 of Law
No. 4/2009, Articles 3 and 57 of Law No. 32/2009 and the respective implementing regulations. See
Indonesia's first written submission, paras. 153-169; opening statement at the first meeting with the Panel,
para. 63; response to Panel question No. 10(c); and second written submission, paras. 121 and 124. See also
European Union's second written submission, paras. 174, 189-192, and 217.

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submits that the export ban and the DPR secure compliance with Articles 96(c) and (d) of Law
No. 4/2009 and Article 57 of Law No. 32/2009.394 Indonesia further submits that these provisions
are part of two of the main pillars of its comprehensive policy framework to regulate mining activities,
namely the protection of Indonesia's environment through the imposition of sustainable mining
requirements, and the conservation of natural resources through the imposition of mineral resource
management requirements.395
7.174. The European Union argues that the provisions identified by Indonesia do not constitute laws
or regulations for the purposes of Article XX(d) because they have an aspirational nature and provide
for general objectives.396
7.175. The third parties tend to support the European Union's view with Canada, Korea, the United
Kingdom, and the United States all arguing that broad policy objectives cannot serve as the laws
and regulations referred to under Article XX(d).397 Japan, for its part, submits that "a law or
regulation that lays out broad policy goals without requiring specific actions is not necessarily
excluded from the coverage of Article XX(d)".398 It further clarifies though that although laws and
regulations "with a general objective and normative content are not excluded from the coverage of
Article XX(d), the assessment of contribution of a measure at issue needs to have a minimum degree
of specificity".399
7.3.1.1.1.2 Analysis by the Panel
Article 96(c) of Law No. 4/2009
7.176. Article 96(c) of Law No. 4/2009 (Article 96(c)) is one o f the 18 provisions included in Part
Two (Obligations) of Chapter XIII (Rights and obligations), and reads as follows:
In applying the principles of good mining technique, the holders of IUP and IUPK shall:
(c) manage and monitor the mining environment, including reclamation and post -
mining; …400
7.177. Indonesia explains that this provision, which is part of Indonesia's comprehensive framework
on sustainable mining and mineral resource management, sets out a sustainable mining binding
requirement401 that imposes specific legally pr escribed rules of conduct on Indonesian market
operators.402
7.178. The European Union argues that Article 96 identifies general categories of rules that mining
business licence holders are required to implement.403 In the European Union's view, this provision

394 Indonesia's response to Panel question No. 105.
395 Indonesia's first written submission, paras. 142-143.
396 European Union's second written submission, paras. 200-201 and 210-211; and opening statement
at the first meeting of the Panel, para. 68.
397 Canada's third-party response to Panel question Nos. 7 and 9; Korea's response to Panel question
No. 7 (noting that while broad policy objectives can be used as an interpretative tool to clarify the meaning of
other provisions the actual laws and regulations must give rise to specific rules or norms); United Kingdom's
response to Panel question Nos. 7 and 9 (arguing that an overly expansive interpretation of laws and
regulations would allow GATT-inconsistent measures to be justified by referring to "aspirational objectives or
broad policy goals, which would disturb the balance between trade liberalisation and the right to regulate
enshrined in Article XX"); and United States' response to Panel question No. 7.
398 Japan's third-party response to Panel question No. 7.
399 Japan's third-party response to Panel question No. 7.
400 Law No. 4/2009, (Exhibit EU-1(b)), Article 96(c). The Panel notes that Law No. 3/2020 amended
Law 4/2009 so that what had been Article 96(c) is now Article 96(b); moreover the text was slightly modified
in the following manner: "In the application of good mining technique principles, the holder of IUP or IUPK
must implement…". The Panel does not find these changes material to the analysis and will continue to refer to
Article 96(c) of Law No. 4/2009 as the parties do so throughout their argumentation.
401 Indonesia's response to Panel question No. 105.
402 Indonesia's second written submission, para. 146.
403 European Union's second written submission, para. 205.

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is insufficiently specific for the purposes of Article XX(d) because it is "framed in general terms and
defines a broad task as opposed to specific rules or a course of conduct".404
7.179. The obligation imposed on IUP and IUPK holders in Article 96(c) to manage and monitor the
mining environment, including reclamation and post -mining, takes places in the context of the
application of the principles of good mining techniques. MEMR Regulation No. 26/2018 on the
implementation of good mining principles and mineral and coal mining supervision 405 provides
guidance for the implementation of g ood mining technical practices. Good mining principles are
divided into those dealing with technical issues and those concerning enterprise management, as
shown below:
Table 5: Good mining principles in MEMR Regulation No. 26/2018
Good mining principles
Good mining technical principles
(implementation of the following aspects)406 ↓
Mining enterprise management
(implementation of the following aspects)407 ↓
(a) mining technical matters; (a) marketing;
(b) mineral and coal conservation; (b) finance;
(c) mining occupational health and safety; (c) data management;
(d) mining operation safety; (d) use of goods, services, and technology;
(e) management of the mining environment,
reclamation, post-mining, and post-operation; and
(e) development of mining technical manpower;
(f) use of technology, engineering capability, design,
development, and application of the mining
technology.
(f) local community development and
empowerment;
 (g) other activities in the field of mining business
related to public interests;
 (h) implementation of activities pursuant to IUP or
IUPK; and
 (i) amount/number, type, and quality of mining
business products.

7.180. Both Article 96(c) of Law No. 4/2009 and the good mining technical principle set out in
Article 3(3)(e) of MEMR Regulation No. 26/2018 deal with management of the mining environment,
including reclamation and post-mining.
7.181. The first relevant factor is the degree of normativity of the relevant provision and the extent
to which it sets out a rule of action to be observed within the domestic legal system. As noted above,
this has been interpreted as "[t]he 'laws or regulations' … in respect of which conduct would, or
would not, be in 'compliance'."408 The Appellate Body drew a distinction between a legal instrument
that "lays down a particular rule of conduct or course of action within the domestic legal system of
a Member" and a legal instru ment that "simply provid[es] a legal basis for action that may be
consistent with certain objectives".409 The use of coercion or an absolute certainty in the achievement
of the stated goal of a measure is not required to find that a provision or a legal ins trument
constitutes a "law or regulation".410 Article 96(c) establishes an obligation for IUP and IUPK holders,
as denoted by the use of the term "shall" followed by the verbs "manage and monitor". The obligation
to manage and monitor the mining environment established in subparagraph (c) entails certain acts
or omissions for the IUP and IUPK holders, which may consist, for example, in conducting certain
monitoring activities or refraining from remaining passive in certain situations such as environmental
degradation beyond what is acceptable according to Indonesia's environmental laws and regulations.
For this reason, the Panel considers that it may be possible to determine whether the conduct of an
IUP and IUPK holder would be in compliance with the obligat ion provided in Article 96(c) of Law
No. 4/2009.
7.182. The second relevant factor is the degree of specificity of Article 96(c). The Appellate Body
considered that "[t]he "'more precisely' a respondent is able to identify specific rules, obligations, or

404 European Union's second written submission, para. 208.
405 MEMR Regulation No. 26/2018, (Exhibit IDN-56).
406 MEMR Regulation No. 26/2018, (Exhibit IDN-56), Article 3(3).
407 MEMR Regulation No. 26/2018, (Exhibit IDN-56), Article 3(4).
408 See para. 7.171 above referring to Appellate Body Report, India – Solar Cells, para. 5.108.
409 Appellate Body Report, India – Solar Cells, para. 5.110.
410 Appellate Body Report, Mexico – Taxes on Soft Drinks, para. 74. See also Appellate Body Report,
India – Solar Cells, para. 5.108.

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requirements contained in the relevant 'laws or regulations ', the 'more likely ' it will be able to
elucidate how and why the inconsistent measure secures compliance with such 'laws or
regulations'".411 The Panel notes that Article 96(c) touches upon broad areas of mining activities
such as the management and monitoring of the mining environment.
7.183. The third relevant factor concerns the enforceability of Article 96(c). Although there is no
need for a law or regulation within th e meaning of Article XX(d) to be legally enforceable, the
Appellate Body has considered that legal enforceability "may demonstrate the extent to which [a
law or regulation] sets out a rule of conduct or course of action that is to be observed within the
domestic legal system of a Member". 412 The Panel considers Article 96(c) to be an enforceable
provision because of the binding nature of the obligation it contains, i.e. "shall manage and monitor
the mining environment". Further, the Panel notes that Article 151 of Law No. 4/2009 provides for
administrative sanctions for non -compliance with Article 96 that can take the form of a written
warning, the suspension of part or all of the exploration or operational production, or the revocation
of an IUP/IPR/IUPK. The Panel recalls that the imposition of penalties and sanctions is not required
for a provision or legal instrument to qualify as a law or regulation but it is nonetheless relevant to
the Panel's analysis.413
7.184. The last two relevant factors relat e to the authority that has adopted or recognized
Article 96(c) and the form and title of the instrument containing Article 96(c), which "may shed light
on its legal status a nd content " but are not determinative of whether it qualifies as a "law or
regulation".414 Article 96(c) is one of the 18 provisions included in Part Two of the Law on Mineral
and Coal Mining of Indonesia, i.e. Law No. 4/2009, entitled "Obligations" . Th e Government of
Indonesia enacted this Law.415
7.185. A careful analysis of the above -mentioned factors leads us to conclude that Article 96(c) is
a law or regulation within the meaning of Article XX(d) of the GATT 1994 because it sets out an
obligation to be observed by IUP and IUPK holders within the Indonesian legal system that can be
enforced, and its degree of normativity is sufficient for the purposes of Article XX(d) of the
GATT 1994.
Article 96(d) of Law No. 4/2009
7.186. Article 96(d) of Law No. 4/2009 (Article 96(d)) is one of the 18 provisions included in Part
Two (Obligations) of Chapter XIII (Rights and obligations) . The Government of Indonesia enacted
this Law.416 The provision reads as follows:
In applying the principles of good mining technique, the holders of IUP and IUPK shall:
… (d) make mineral and coal resources conservation efforts; …
7.187. Indonesia explains that this provision, which is part of Indonesia's comprehensive framework
on sustainab le mining and mineral resource management, sets out a resource management
requirement417 that imposes on Indonesian market operators "specific, legally prescribed rules of
conduct".418
7.188. The European Union argues that Article 96(d) is framed in general terms and is insufficiently
specific since it establishes a broad task, and not specific rules or course of conduct as required by
Article XX of the GATT 1994.419

411 Appellate Body Report, Argentina – Financial Services, para. 6.203. See also Appellate Body Report,
India – Solar Cells, para. 5.110.
412 Appellate Body Report, India – Solar Cells, para. 5.109.
413 Appellate Body Report, India – Solar Cells, para. 5.109.
414 Appellate Body Report, India – Solar Cells, para. 5.112.
415 Indonesia's first written submission, para. 154.
416 Indonesia's first written submission, para. 154.
417 Indonesia's response to Panel question No. 105.
418 Indonesia's response to Panel question No. 105. See more generally Indonesia's second written
submission, para. 146.
419 European Union's second written submission, para. 208.

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7.189. Article 96(d) refers to the obligation of IUP and IUPK holders to " make mineral and coal
resources conservation efforts". (emphasis added) Such vague language about the content of the
obligation makes this provision closer to a legal basis for action consistent with good mining
principles than to an established rule of conduct or course of action. Even more so as the efforts
referred to in Article 96(d) concern a very broad area of mining activities, namely mineral and coal
resources conservation. The Panel refers to its analysis above concerning the authority that adopted
Article 96(d) and the form and title of the legal instrument in which it is found since both provisions
form part of the same legal instrument, i.e. Law No. 4/2009.
7.190. Similar to subparagraph (c) , subparagraph (d) also closely resembles the good mining
technical principle set out in Article 3(3)(b) of MEMR Regulation No. 26/2018, which concerns
mineral and coal conservation.
7.191. The Panel acknowledges that Article 151 of Law No. 4/2009 establishes the ability to impose
sanctions for non-compliance with Article 96. The Panel is not convinced, however, that this would
disturb its understanding of Article 96(d). Because of the "best efforts" character of the provision it
is hard to see how the sanctions under Article 151 could be enforced.
7.192. In light of the above, the Panel considers that Article 96(d) of Law No. 4/2009 does not
qualify as a law or regulation for the purposes of Article XX(d) of the GATT 1994 because it is not
an enforceable obligation whose compliance can be secured.
Article 57 of Law No. 32/2009
7.193. Finally, the Panel turns to the third provision identified by Indonesia, namely Article 57 of
Law No. 32/2009 concerning the protection and management of environment (Article 57). This
provision, which is the only provision in Chapter VI of Law No. 32/2009, entitled "Maintenance ",
reads as follows:
(1) Maintenance of environment shall be conducted by ways of: a. conservation of
natural resources; b. reserves of natural resources; and/or c. preservation of the
function of atmosphere.
(2) Conservation of natural resources as cited in paragraph (1) letter a shall cover the
activities of: a. protecting the natural resources; b. preserving the natural resources;
and c. sustaining the natural resources.
(3) Preserving the natural resources as cited in paragraph (1) letter b shall be of the
natural resource that cannot be managed in a certain period of time.
(4) Sustaining the function of atmosphere as cited in paragraph (1) letter c shall include:
a. the mitigation and adaptation to climate change; b. the protection of ozone layer;
and c. the safeguard against acid rain.
(5) Further provisions on the conservation and reserves of natural resources and the
preservation of the function of atmosphere as cited in paragraph (1) shall be regulated
under a Government Regulation.420
7.194. Indonesia explains that this provision is part of Indonesia's comprehensive framework on
sustainable mining and mineral resource management and sets out both sustainable mining and
resource management requirements. Indonesia argues that Article 57 imposes "specific legally
prescribed rules of conduct" that are not hortatory or vague 421, as can be seen from its language
("shall be conducted").422
7.195. The European Union submits that Article 57 is formulated in general terms and, therefore,
lacks the requi red degree of normative content or specificity. In particular, the European Union

420 Law No. 32/2009, (Exhibit IDN-53).
421 Indonesia's response to Panel question No. 105.
422 Indonesia's second written submission, para. 146.

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argues that it is unclear how the obligation to ensure the preservation of the function of the
atmosphere can constitute a sustainable mining requirement.423
7.196. Indonesia refers to the entirety of Article 57 and not to any one particular subparagraph.
Paragraph (1) of this provision contains the only obligation, namely that IUP and IUPK holders
preserve the environment by three means, i.e. (i) conservation of natural resources; (ii) reserves of
natural resources; and/or (iii) preservation of the function of atmosphere . Paragraphs (2) to (4)
define the scope of each of the se means, and paragraph (5) provides for further regulatory
development of this provision through a government regulation.
7.197. The scope of application of this provision is broad, playing an umbrella role on several issues
related to the preservation of the environment. Paragraph (5) indicates that Article 57 does not itself
set out the specific manner in which IUP and IUPK holders can comply with the obligation in
paragraph (1), but rather that the specific provisions are meant to be set down in an implementing
regulation. Such implementing regulations should have been enacted or issued within a period of no
longer than one year after the enactment of Law No. 32/2009.424 Indonesia did not argue that
Article 57 needed to be read together with a particular implementing regulation in terms of its
affirmative defence under Article XX(d) of the GATT 1994. Moreover, nothing in Law No. 32/2009
provides for penalties or sanctions in case of non -compliance. The Panel concludes, therefore, that
Article 57 on its own does not contain a legally enforceable obligation.
7.198. Article 57 is the only provision in Chapte r VI of Law No. 32/2009 on "Maintenance". Th e
Government of Indonesia enacted this Law.425
7.199. The Panel considers that the distinction drawn by the Appellate Body between a legal
instrument that "lays down a particular rule of conduct or course of action within the domestic legal
system of a Member" and a legal instrument that "simply provid[es] a legal basis for action that may
be consistent with certain objectives" 426 is particularly relevant when assessing this provision. The
Panel considers that Article 57 falls into the category of provisions that provide a legal basis for
action; it does not lay down a sufficiently specific rule of conduct or course of action that can be
enforced but rather some broad guidelines that should be translated into specific acti ons aiming at
preserving the environment in the fields of conservation and reserves of natural resources and
preservation of the function of atmosphere.
7.200. Based on the above considerations, the Panel concludes that Article 57 of Law No. 32/2009
does not qualify as a law or regulation for the purposes of Article XX(d) of the GATT 1994 because
its normative content and specificity are not sufficient to consider that it is an enforceable obligation
whose compliance can be secured.
Conclusion
7.201. In sum , the Panel finds that Indonesia has demonstrated that Article 96(c) of Law
No. 4/2009 is a law or regulation within the meaning of Article XX(d) of the GATT 1994, but
Indonesia has failed to demonstrate that Article 96(d) of Law No. 4/2009 and Article 57 of Law
No. 32/2009 fall within the scope of the subparagraph.
7.202. Consequently, the Panel will continue its analysis with respect to Article 96(c) of Law
No. 4/2009 only. The Panel now examines whether this provision is "not inconsistent " with the
provisions of the GATT 1994.
7.3.1.1.2 Consistency of the laws and regulations with the GATT 1994
7.203. Past panels dealing with defences under Article XX(d) such as Colombia – Ports of Entry and
Colombia – Textiles found that a responding Member's law should be treated as WTO consistent until
proven otherwise on the basis of an Appellate Body statement in US – Carbon Steel.427 Even if this

423 European Union's comments on Indonesia's response to Panel question No. 106.
424 Law No. 32/2009, (Exhibit IDN-53), Article 126.
425 Indonesia's first written submission, paras. 154 and 161.
426 Appellate Body Report, India – Solar Cells, para. 5.110.
427 Panel Reports, Colombia – Ports of Entry, para. 7.531; and Colombia – Textiles, para. 7.511
(referring to Appellate Body Report, US – Carbon Steel, para. 157).

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Appellate Body statement concerned the consistency of the challenged measures, and not the
consistency of the legal instruments the measures at issue seek to secure compliance with, the Panel
considers it also relevant for this element of the legal standard because it r eflects the general
principle that the party arguing that a measure is WTO inconsistent must prove it.
7.3.1.1.2.1 Main arguments of the parties
7.204. Indonesia argues that the sustainable mining and mineral resource management
requirements of Indonesia's comprehensive policy framework on mining activities are consistent with
its WTO obligations as well as with other international commitments. 428 In particular, Indonesia
submits that "its sustainable mining and mineral resource management requirements pursue, and
are fully in line with, a core objective of the WTO covered agreements, namely, the sustainable use
of natural resources and the preservation of the environment, which finds explicit expression in the
Preamble to the WTO Agreement".429 Further, Indonesia contends that its "sustainable mining and
mineral resource management laws … are non-discriminatory, do not entail quantitative restrictions,
are fully transparent and administered in a uniform, reasonable and impartial manner".430
7.205. Indonesia further submits that " generally, and in the absence of any indication to the
contrary, laws and regulations consistent with the sustainable use of natural resources and the
preservation of the environment can properly be characterized as GATT -consistent 'laws or
regulations' for the purposes of Article XX(d)".431
7.206. The European Union initially did not express its views on the consistency of Indonesia's laws
and regulations with the GATT 1994 because it considered Indonesia had not particularized its case.
Nonetheless, the European Union states that, in general terms, it is not suggesting that laws or
regulations that are designed to ensure environmental protection or sustainable mining are WTO
inconsistent.432 After clarifications by Indonesia at the second substantive meeting regarding t he
provisions on which it relies for the purpose of its defence under Article XX, the European Union
indicates that it does not contest that those specific provisions are WTO consistent.433
7.3.1.1.2.2 Analysis by the Panel
7.207. Past panels have presumed the consistency of the relevant laws and regulations under
Article XX(d) of the GATT 1994 when the complainant did not contest it.434
7.208. Article 96(c) of Law No. 4/2009 reads as follows:
In applying the principles of good mining technique, the holders of IUP and IUPK shall:
(c) manage and monitor the mining environment, including reclamation and post -
mining; …435
7.209. The Panel finds nothing in the text of Article 96(c) of Law No 4/2009 that indicates that this
provision is inconsistent with the GATT 1994.
7.210. As the Europe an Union does not dispute the GATT -consistency of Article 96(c) and in the
absence of any evidence to the contrary, the Panel sees no basis to find that Article 96(c) of Law

428 Indonesia's first written submission, para. 143. See also Indonesia's first written submission,
para. 152; and second written submission, para. 125. For example, Indonesia claims that its "laws and
regulations directly conform with paragraph 46 of the Annex to the Johannesburg Declaration on Sustainable
Development, Plan of Implementation of the World Summit on Sustainable Development". See Indonesia's first
written submission, para. 173.
429 Indonesia's second written submission, para. 125.
430 Indonesia's first written submission, para. 172.
431 Indonesia's second written submission, para. 125.
432 European Union's response to Panel question No. 40.
433 European Union's response to Panel question No. 104.
434 See e.g. Panel Report, Indonesia – Chicken, para. 7.124 (referring to Appellate Body Report,
US – Carbon Steel, para. 157).
435 Law No. 4/2009, (Exhibit EU-1(b)), Article 96(c).

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No. 4/2009 is inconsistent with the GATT 1994. The Panel will therefore proceed with its analysis on
the basis that Article 96(c) of Law 4/2009 is not inconsistent with the GATT 1994.
7.3.1.1.3 Secure compliance with the relevant laws and regulations
7.211. The next element of analysis under Article XX(d) is whether the challenged measures –
export ban and the DPR – secure compliance with Article 96(c). The Panel will examine each measure
separately.
7.212. To determine whether a measure at issue secures compliance with the relevant laws or
regulations a panel must assess whether those measures are designed to secure compliance with
them436, that is, whether there is a relationship between the measure at issue and ensuring
compliance with those laws or regulations. This initial assessment has been traditionally considered
to be "not… particularly demanding" 437 since it requires that an examination of the design of the
measure at issue, including its content, structure, and expected operation, reveals that the measure
is not incapable of ensuring compliance with the relevant law or regulation.438
7.213. Thus, if the Panel were to find that either the export ban or the DPR is capable, even remotely
or hypothetically, of securing compliance with Article 96(c), that would be enough to conclude that
the measure(s) at issue secure compliance with this provision within the meaning of Article XX(d) of
the GATT 1994.
7.3.1.1.3.1 Export ban
Main arguments of the parties
7.214. Indonesia submits that the export ban is "manifestly not 'incapable' of securing compliance
with Indonesia's sustainable mining and mineral resource management requirements".439 Indonesia
argues that the export prohibition is a " preventive measure[] to secure compliance with its
comprehensive policy framework for mining activities, in particular sustainable mining and mineral
resource management requirements" .440 In th is regard, Indonesia notes that foreign demand
presents a greater risk of non-compliance because foreign purchasers of nickel ore do not fall within
Indonesia's jurisdiction.441 Indonesia further argues that remedial measures to address these risks
have not worked in the past.442
7.215. Indonesia argues that the export prohibition "reduces total Indonesian production and
extraction of nickel ore". 443 In this respect Indonesia notes that " export demand was met almost
exclusively by illegal or poorly regulated mining activities"444 and, therefore, an export ban would
reduce such mining practices and the adverse environmental and resource conservation effects
closely associated with them.445

436 Appellate Body Report, Korea – Various Measures on Beef, para. 157.
437 Appellate Body Report, Colombia – Textiles, para. 5.70.
438 Appellate Body Report, Argentina – Financial Services, para. 6.203. The Appellate Body has warned
about an "analysis of the ["design" step] in such a way as to lead [the Panel] to truncate its analysis
prematurely and thereby foreclose consideration of crucial aspects of the respondent's defence relating to the
'necessity' analysis". See Appellate Body Report, Argentina – Financial Services, para. 6.203.
439 Indonesia's first written submission, para. 176.
440 Indonesia's first written submission, para. 145. See also Indonesia's first written submission,
para. 144.
441 Indonesia's second written submission, para. 173.
442 Indonesia's second written submission, paras. 171-172; and opening statement at the second
443 Indonesia's first written submission, para. 177.
444 Indonesia's response to Panel question No. 64.
445 Indonesia's first written submission, para. 177. See also Indonesia's second written submission,
para. 128.

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7.216. Indonesia contends that the fact that the export ban has an eco nomic objective related to
the increase of added value in Indonesia does not detract from the fact that it also has a resource
conservation objective, namely, to decrease the extraction rate.446
7.217. Indonesia further emphasizes the close relationship between the export ban and Indonesia's
sustainable mining and mineral resource management requirements in light of the explicit references
to Law Nos. 4/2009 and 32/2009 in MEMR Regulation No. 11/2019 and MOT Regulation
No. 96/2019.447
7.218. The European Union contends that the export ban is not designed to secure compliance with
the relevant laws and regulations identified by Indonesia but instead to increase the added value of
Indonesia's exports. 448 The European Union argues that Indonesia has not demonstrate d a
relationship between the export ban and the objective of securing the enforcement of rules requiring
permit holders in general terms to adhere to environmental standards for the following reasons.
7.219. First, the European Union contends that the export ban does not prevent or limit ore
extraction and that Indonesia has not identified any limitation on domestic consumption or
extraction. The European Union explains that, on the contrary, evidence on the record shows that
overall domestic extraction and consu mption will increase in the coming years. In the
European Union's view, this means that the export ban "is plainly not designed to reduce nickel ore
production and extraction but solely to modify the destination of the ore once extracted" .449 In this
regard, the European Union considers that its approach finds support in the same UNCTAD Report
Indonesia relies upon, which "suggests that the primary objective was in fact that of value
addition"450 and not ensuring adherence to environmental standards.
7.220. Second, the European Union is of the view that Indonesia has not demonstrated how the
ban on exports of nickel ore incentivizes domestic producers to comply with the relevant domestic
regulatory requirements or improves the enforcement issues Indonesia is facing.451
7.221. In response to Indonesia's argument that there is a relationship between the export ban and
Law No. 4/2009 because the legal instruments that implement the export ban refer to Law
No. 4/2009, the European Union notes that the references made in MEMR Reg ulation No. 11/2019
and MOT Regulation No. 96/2019 to Law No. 4/2009 do not indicate that the export ban seeks to
secure compliance with Article 96(c). In this respect, the European Union notes that MEMR
Regulation No. 11/2019 refers to 11 different legal instruments and does not elaborate on the link
between this Regulation and Law No. 4/2009.452 The European Union notes that MEMR Regulation
No. 11/2019 explains in its preamble that the changes it introduces aim at "ensur[ing] the continuity
of supply of ni ckel processing and refining facilities as directed by the President of the Republic of
Indonesia on 24 July 2019 and 26 August 2019" in light of the domestic nickel processing and
refining facilities that have been built.453
7.222. As regards MOT Regulation No. 96/2019, the European Union notes that it was enacted to
"provide business certainty, increase the added value of the Export of Mining commodities, and
support the effectiveness of the implementation of the Export of Mining commodities as th e
Processing and refining products through online single licensing service system ".454 The
European Union emphasizes that MOT Regulation No. 96/2019 only refers to Article 102 of Law
No. 4/2009 in the context of the need for IUP and IUPK holders to increase the added value of the
mineral resources. For the European Union, this indicates that the objective of MOT Regulation

446 Indonesia's second written submission, para. 143 (referring to UNCTAD, Lessons from Indonesia's
ban on nickel exports, Background document, (Exhibit IDN-23), p. 3).
447 Indonesia's first written submission, para. 179.
448 European Union's second written submission, para. 175. See also European Union's second written
submission, para. 219.
449 European Union's second written submission, paras. 225-226.
450 European Union's second written submission, para. 230.
451 European Union's second written submission, paras. 233-234.
452 European Union's second written submission, para. 245.
453 European Union's second written submission, para. 245.
454 European Union's second written submission, para. 245.

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No. 96/2019 "is about securing added value and not ensuring that there are high standards of
environmental protection or the conservation of natural resources".455
Analysis by the Panel
7.223. The question before the Panel is whether the export ban is not incapable of securing
compliance with Article 96(c) of the Law No. 4/2009. The Panel agrees with past panels and the
Appellate Body that an examination of the design of the export ban, including its content, structure,
and expected operation may reveal whether that is indeed the case.
7.224. The export ban is implemented through Article 3 and Appendix IV of MOT Regulation
No. 96/2019 and Article 1 paragraph 2 of MEMR Regulation No. 11/2019.456 The exportation of nickel
ore was prohibited as from 1 January 2020, without any indication of a date when the prohibition
would end.
7.225. MEMR Regulation No. 11/2019 is the second amendment to MEMR Regulation No. 25/2018,
which concerns mineral and coal businesses. The preamble of MEMR Regulation No. 11/2019 refers
to the need to amend MEMR Regulation No. 25/2018 to "ensure sustainability of supply for purifying
and processing facilities of nickel " and mentions the establishment of several nickel and purifying
and processing facilities in Indonesia. 457 MOT Regulation No. 96/2019 deals with exports of
processed and purified mining products. The preamble of MOT Regulation No. 96/2019 refers to the
need to improve export regulations for processed and purified mining products to "provide business
certainty" and "increase the added value of Mining Products". 458 It also refers to the obligation of
IUP and IUPK holders to "increase the added value of mineral resources in mining, processing and
refining, as well as mineral utilization".459
7.226. The legal instruments that implement the export ban do not explicitly pursue an
environmental objective, which is, according to Indonesia, the objective of Article 96(c), but rather
an economic objective. Yet, the Panel cannot rule out that the export ban may have a positive impact
on the environment, as alleged by Indonesia, which considers that the export ban fulfils a resource
conservation objective by decreasing the extraction rate.
7.227. In this respect, the Panel observes that there has been a reduction in the total production
of nickel ore since the entry into force of the export ban, i.e. 61 million tonnes in 2019 vs 52.7 million
tonnes in 2020. 460 The reduction in production (8.3 million tonnes) is lower than the reduction in
exports (from 30.2 million tonnes in 2019 to zero in 2020) . The Panel further notes that domestic
consumption of nickel ore doubled from 2019 (21.6 million tonnes) to 2020 (43.5 million tonnes461).
Domestic consumption is expected to increase even more significantly with the introduction of a
large number of new sm elters expected to be operational by 2026 462, which would enable th e
development in Indonesia of an EV battery industry in the future.463 This shift aligns with the purpose
expressed in the preamble of MEMR Regulation No. 11/2019 of "ensur[ing] sustainability of supply
for purifying and processing facilities of nickel … established domestically".464
7.228. In light of this evidence, the Panel cannot exclude the possibility that the export ban has
had some downward pressure on extraction rates. The Panel notes, howev er, that Indonesia itself

455 European Union's second written submission, para. 245.
456 See section 2.1.1 above and European Union's first written submission, paras. 24-26.
457 MEMR Regulation No. 11/2019, (Exhibit EU-10(b)), preamble, para. (a).
458 MOT Regulation No. 96/2019, (Exhibit EU-11(b)), preamble, para. (a).
459 MOT Regulation No. 96/2019, (Exhibit EU-11(b)), preamble, para. (b).
460 MEMR, Excel of "Production and Sales of Nickel Ore from 2010-2020", (Exhibit IDN-24).
461 The Maryono Report indicates that [[***]] (Exhibit IDN-18(BCI)), p. 24.
462 Maryono Report, (Exhibit IDN-18(BCI)), p. 24 [[***]].
463 Indonesia's response to Panel question No. 100; MEMR, Presentation on "The Role of Minerals in the
Development of Indonesia's Battery Industry", 10 September 2021, (Exhibit IDN-127 (BCI)); NIKKEI Asia,
"Indonesia teams with LG to build $1.2bn battery plant", 25 May 2021, (Exhibit IDN-51); Financial Times,
"Indonesia and Foxconn in talks over electric vehicle investment", 1 November 2021, (Exhibit IDN-78); The
Indonesian Government's Arguments to WTO Regarding the Ban on Nickel Exports, 5 December 2019, (Exhibit
EU-20), p. 1; and Remarks of President of the Republic of Indonesia at the Opening Inauguration of the 2021
National Coordination Meeting and Investment Service Award, 24 November 2021, (Exhibit EU-22), p. 5.
464 MEMR Regulation No. 11/ 2019, (Exhibit 10(b)), preamble, para. (a).

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predicts that increased domestic demand will require expansion in nickel ore extraction 465 as
Indonesia does not satisfy the domestic demand for nickel ore through imports.466
7.229. Indonesia argues that the rate of extraction is not the only relevant factor to consider when
looking at the effect of the export ban because the export-oriented mines were operating illegally or
under poor regulation and caused more environmental degradation than mines selling to domestic
smelters.467 The Pane l does not find evidence on the record that establishes such a causal
relationship between the export ban and an improvement in the sustainability of mining practices in
Indonesia.468 The Panel cannot, however, completely dismiss the possibility that the export ban, by
removing foreign purchasers from the market , also reduces illegal and poorly regulated mining
activity and, consequently, contributes to the sustainability of nickel mining in Indonesia.
7.230. The Panel is of the view that m easures can have multiple objectives and effects.469 Even
though the stated objective of the export ban relates to ensuring supply for the domestic industry
this does not preclude that it was also intended to address problems related to the sustainability of
export-oriented nickel mines. The Panel also cannot exclude that the resulting reduction in exports
could have had a positive impact on the sustainability of nickel mining in Indonesia.
7.231. The European Union is correct that the prohibition on nickel ore exports was not done in
conjunction with a limitation on domestic consumption of nickel ore. The Panel agrees with
Indonesia, however, that such restrictions on domestic consumption do not constitute an integral
part of the legal standard under Article XX(d) of the GATT 1994 as they would if Indonesia had
invoked Article XX(g). The presence or lack of such restrictions, nonetheless, constitutes a relevant
factor in assessing Indonesia's argument that the export ban pursues the conservation objective of
decreasing the extraction rate of nickel ore.470
7.232. As regards the relationship between the export ban and Article 96(c) of Law No. 4/2009, the
Panel does not find anything in the legal instruments that implement the export ban that explicitly
refers to Article 96(c). Article 3 and A ppendix IV of MOT Regulation No. 96/2019 and Article 1
paragraph 2 of MEMR Regulation No. 11/2019 whereby the export ban is implemented, make no
reference to Article 96(c) or any issue related to sustainable mining and resource conservation. The
Panel finds, however, a certain degree of connection in the sense that the export ban and
Article 96(c) do in fact concern the management of mining activity in Indonesia. In this respect, the
Panel notes that MEMR Regulation No. 11/2019 and MOT Regulation No. 96/2019 refer to
Law No. 4/2009, which is the cornerstone of Indonesia's legal framework governing mining.
7.233. The foregoing does not detract from the fact that an export ban may, to a certain extent,
have the effect of securing compliance with Article 96(c) by reducing the total production and
extraction of nickel ore. The fact that there is not absolute certainty on what the effects of the export
ban currently are or will be does not prevent the Panel from concluding that the export ban is not
incapable of securing compliance with Article 96(c). The fact that there is a possibility, even remote,
for the export ban to secure compliance with Article 96(c), therefore, leads the Panel to conclude

465 Government Regulation No. 14 of 2015 on the RIPIN, (Exhibit EU-17(rev)), Table 4.1.
466 INSG, Report on Nickel Production and Usage in Indonesia, February 2020 (Exhibit IDN-13) shows
that for the period 2015-2018 Indonesia did not import significant quantities of nickel ores, nickel
concentrates, ferro nickel, or nickel mattes. Indonesia does import nickel hydroxide, nickel sulfate, nickel
chloride, and nickel cathode. Indonesia confirmed the Panel's understanding that it does not satisfy demand
with imports, at the second meeting with the Panel.
467 UNCTAD, Lessons from Indonesia's ban on nickel exports, Background document, (Exhibit IDN-23),
p. 12. The Panel notes that Exhibits IDN-68, IDN-69, and IDN-70 also report illegal or poorly regulated mining
practices, but do not specify whether the nickel ore from those mines is exported.
468 It could be argued as well that an export ban would have no effect on illegal mining as those willing
to operate outside the domestic legal framework would be willing to continue to do so. The Panel notes, in this
respect, that despite the export ban, Indonesia remained China's second-biggest nickel ore supplier in 2020
according to Chinese customs data, when the export ban was already in place. See Reuters, "Update 1 –
Indonesia Stays China's Second-Biggest Nickel Ore Supplier Despite Export Ban (January 2021)", available at
https://www.reuters.com/article/china-economy-trade-nickel-idUSL1N2JV0FP, (Exhibit IDN-106). The Panel
further notes, however, that Indonesia's export data shows no exports of nickel ore to China in 2020 and close
to zero in 2021. See BPS Export Data Indonesia, (Exhibit IDN-91), p. 1.
469 See e.g. Appellate Body Report, US – Clove Cigarettes, paras. 113 and 115.
470 Indonesia's first written submission, para. 177; second written submission, para. 128. See also
UNCTAD, Lessons from Indonesia's ban on nickel exports, Background document, (Exhibit IDN-23), p. 10.

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that Indonesia has demonstrated that the export ban is a measure to se cure compliance with
Article 96(c) within the meaning of Article XX(d) of the GATT 1994.
7.3.1.1.3.2 DPR
Main arguments of the parties
7.234. Indonesia contends that the DPR is " capable of contributing to securing compliance with
Indonesia's sustainable mining and mineral r esource management requirements by promoting
vertical integration in the supply chain ", which in turn " is critical to promoting sustainable mining
practices".471 According to Indonesia, "[t]he domestic processing requirement seeks to induce long-
term changes in the behaviour of market operators by fostering long -term supply arrangements
between mining companies and smelters". 472 Indonesia explains that "the domestic processing
requirement curbs predatory mining practices and ensure[s] that all mining activities are properly
regulated both on the supply and on the demand side" because "domestic smelters require that the
nickel ore that they purchased be mined in conformity with Indonesia's sustainable mining and
mineral resource management requirements".473
7.235. Indonesia further argues that the DPR is a preventive measure that was adopted after other
past remedial measures, e.g. licensing requirements, environmental management and monitoring
measures, increased enforcement through fines and sanctions, and clear and clean (CnC)
certification, were unsuccessful at achieving their objective of securing compliance with Indonesia's
comprehensive policy framework for mining activities.474
7.236. Indonesia points to the explicit references to Law Nos. 4/2009 and 32/2009 in MEMR
Regulation No. 25/2018 and MEMR Regulation No. 50/2018 to demonstrate a close relationship
between the DPR and sustainable mining and mineral resource management requirements.475
7.237. The European Union argues that Indonesia has failed to demonstrate a link between the
design of the DPR and securing compliance with Article 96(c).476 In the European Union's view, the
DPR is designed to increase the added value of Indonesia's exports. 477 The European Union further
argues that the references made in MEMR Regulation No. 25/2018 to Law Nos. 4/2009 and 32/2009
do not indicate that the measures at issue seek to secure compliance with the environmental
provisions in such laws and regulations. In this respect, the European Union notes that the preamble
of MEMR Regulation No. 25/2018 states that it is enacted "in order to ensure the legal certainty and
business certainty and to increase the effectiveness, efficiency and accountability in the
implementation of the mining business activity and to encourage the development of minerals and
coal businesses". The European Union further notes that subparagraph (b) of the preamble refers to
Article 127 of Law No. 4/2009, which is not one of the provisions relied upon by Indonesia in the
context of its defence under Article XX(d).478
Analysis by the Panel
7.238. The Panel now examines the design of the DPR, including its content, structure, and expected
operation to determine whether the DPR is not incapable of securing compliance with Article 96(c).
7.239. The DPR is set out in Article 103(1) of Law No. 4/2009, and implemented through Article 17
of MEMR Regulation No. 25/2018, and Article 66 of MEMR Regulation No. 7/2020. Article 103(1) of
Law No. 4/2009 sets out the general principle that IUP and IUPK holders must conduct mineral
processing and refining in Indonesia. This s ame principle is contained in Article 17 of MEMR
Regulation No. 25/2018 and Article 66 of MEMR Regulation No. 7/2020 in the context of sales

471 Indonesia's first written submission, para. 178.
472 Indonesia's first written submission, para. 178.
473 Indonesia's first written submission, para. 178.
474 Indonesia's first written submission, para. 145. See also Indonesia's first written submission,
para. 144; and second written submission, paras. 171-172.
475 Indonesia's first written submission, para. 179.
476 European Union's second written submission, para. 243.
477 European Union's second written submission, para. 175. See also European Union's second written
submission, para. 219.
478 European Union's second written submission, para. 245.

BCI deleted, as indicated [[***]]

abroad. Article 17 establishes that holders of IUP for Production Operation, IUPK for Production
Operation, and IUP for Production Operation specifically for the processing and/or purification of
metallic Mineral, nonmetallic Mineral, or rocks must "conduct[] the Enhancement of Added Values
through the activities of Processing and/or Purification in accordance with the minimum limits of
Processing and/or Purification as included in Appendix I, Appendix II, and Appendix III " before
exportation. Similarly, Article 66 of MEMR Regulation No. 7/2020 prohibits IUP and IUPK holders
from selling abroad products resulting from m ining without having carried out processing and
refining in Indonesia first.
7.240. MEMR Regulation No. 25/2018 establishes a two-fold objective in its preamble: (i) "ensure
the legal certainty and business certainty and to increase effectiveness, efficiency and accountability
in the implementation of the mining business activity and to encourage the development of mineral
and coal businesses" 479, and (ii) implement several listed provisions, none of which is
Article 96(c).480 Neither the preamble nor the text of Ar ticle 17 nor Appendix I of MEMR Regulation
No. 25/2018 establish a connection with sustainable mining or resource conservation principles.
7.241. The preamble of Law No. 4/2009 does refer to the environmental sustainability of mining by
stating that creation of businesses to manage and exploit mineral and coal potential must be done
in a "self-reliant, reliable, transparent, effective, efficient and environment-oriented way" to "ensure
sustainable national development". It also refers to the objective of managing mineral resources to
give "real added value" to the national economy.481
7.242. As regards MEMR Regulation No. 7/2020 on procedures for the granting of areas, licensing,
and reporting in relation to mineral and coal -mining business activities, it shares with MEMR
Regulation No. 25/2018 the objective of ensuring legal and business certainty and to increase
effectiveness, efficiency and accountability in the implementation of the mining business activity and
to encourage the development of mineral and coal businesses. This Regulation amends MEMR
Regulation No. 11/2018 and implements several provisions in Law No. 4/2009, Government
Regulation No. 22/2010, and Government Regulation No. 23/2010.482
7.243. Neither Article 103 of Law No. 4/2009 nor the relevant provisions in MEMR Regulation
No. 25/2018 and MEMR Regulation No. 7/2020 show any relevant relationship with Article 96(c) or,
more generally, with the sustainability of mining activi ties. Rather, these legal instruments pursue
economic objectives, as mentioned in their respective preambles, such as developing mineral
businesses and generating added value in Indonesia. This finds support in public statements by the
President of Indonesia and high-level government officials483, and in national industrial plans such
as the Medium -Term National Development Plan (RPJMN) 2020 –2024, the National Industry
Development Master Plan 2015 -2035 (RIPIN), and National Industrial Policy 2015 -2019, which
prioritize the development of upstream and intermediate industry based on natural resources and
the increase of added value of the natural resources in mineral processing based upstream
industry.484
7.244. This economic dimension can also be deduced from the text of the provisions through which
the DPR is developed, more specifically Articles 16(4) and (5) of MEMR Regulation No. 25/2018.

479 MEMR Regulation No. 25/2018, (Exhibit EU-9(b)), preamble, para. a).
480 These provisions are Article 127 of Law No. 4/2009, Articles 43, 84(4), 85(4), 88, 91, 92(3), 96, 99,
109, 112C point 5, and 112 of Government Regulation No. 23/2010, and Article 15 of Government Regulation
No. 9/2012. See MEMR Regulation No. 25/2018, (Exhibit EU-9(b)), preamble, para. b).
481 Law No. 4/2009, (Exhibit EU-1(b)), preamble, paras. b) and c).
482 These provisions are Article 127 of Law No. 4/2009, Articles 21(4) and 38(4) of Government
Regulation No. 22/2010, and Articles 19, 27(2), 41, 44(5), 61, 68, 83, and 105 of Government Regulation
No. 23/2010.
483 See e.g. The Indonesian Government's Arguments to WTO Regarding the Ban on Nickel Exports,
5 December 2019, (Exhibit EU-20); Transcript of President Joko Widodoi's Speech (translated) at the
groundbreaking ceremony of PT Freeport Indonesia's (PTFI) new copper smelter, at the Gresik Special
Economic Zone, East Java, 12 October 2021 (Exhibit EU-21); Remarks of President of the Republic of Indonesia
at the Opening Inauguration of the 2021 National Coordination Meeting and Investment Service Award,
24 November 2021, (Exhibit EU-22); President Joko Widodo Inaugurates Nickel Smelter in SE Sulawesi,
27 December 2021, (Exhibit EU-23); and President Joko Widodo openly talks about coal exports and the next
targets, 10 January 2022, (Exhibit EU-24).
484 Medium-Term National Development Plan (RPJMN) 2020–2024, (Exhibit EU-16(rev)); Master Plan of
National Industry Development 2015-2035, (Exhibit EU-17(rev)); and Presidential Regulation No. 2/2018 on
the National Industry Policy 2015-2019, (Exhibit EU-18(rev)).

BCI deleted, as indicated [[***]]

These provisions establish that IUP and IUPK holders for Production Operation can comply with the
requirement to process and purify nickel and other minerals domestically by cooperating with other
mining licence holders. In this respect, the Panel agrees with Indonesia that the DPR may promote
vertical integration in the supply chain , as demonstrated by the fact that, as of September 2021,
"integrated smelters with the nickel ore mines have developed in [[***]] IUP-KK licenses".485 The
issue is whether such integration between mining companies and smelters "promotes sustainable
mining practices", as Indonesia alleges486 and, more particularly, whether this results in the DPR not
being incapable of securing compliance with Article 96(c).
7.245. The Panel noted above that measures can have multiple objectives and effects. The fact that
the legal instruments that implement the DPR do not explicitly refer to an environmental element is
not a reason to dismiss the possibility that the DPR may have a positive impact on the sustainability
of mining activities in Indonesi a. In this regard, the Panel refers to Indonesia's argument that the
DPR, by generating partnerships between the different actors of the mining supply chain, namely
mining businesses and smelters, thereby creating vertical integration, improves mining practices
and facilitates enforcemen t of environmental regulations. 487 The Panel is of the view that vertical
integration may indeed facilitate verification and enforcement of mining regulations, including those
dealing with sustainability and the environment, because the Indonesian authorities may more easily
keep track of the conduct of the operators involved in the supply chain.
7.246. Evidence on the record such as statistics by the Criminal Investigation Agency (Exhibit IDN-
110(BCI)), and the s worn expert testimonies of [[***]] (Exhibit IDN-111(BCI)) and of a mining
officer at a ma jor Indonesian mining concern (Exhibit IDN -113(BCI)) indicate that r egulatory
enforcement by Indonesian authorities has improved since the entry into force of the DPR. It is not
clear, however, whether such improvement can be attributed to the DPR or to ot her factors taking
place simultaneously, such as the transfer from the regional and provincial governments to the
central government of the responsibility for mineral reporting mechanisms pursuant to Law
No. 3/2020.488 The fact that it could be attributed t o various factors, including the DPR, leads the
Panel to conclude that it cannot be ruled out that the DPR, because of the vertical integration it
encourages, facilitates enforcement of environmental regulations and, consequently, promotes
sustainable mining practices in line with the principles of good mining techniques.
7.247. In light of the above, the Panel finds that the DPR is not incapable of fostering integration
between mining companies and smelters that can improve the ability to enforce environmental
mining regulations. Indonesia, therefore, has demonstrated that the DPR is a measure designed to
secure compliance with Article 96(c) within the meaning of Article XX(d) of the GATT 1994.
7.3.1.2 Whether the measures at issue are necessary to secure such compliance
7.248. The Panel has found that the export ban and the DPR are measures designed to secure
compliance with Article 96(c) of Law No. 4/2009. The Panel will now continue with the analysis under
Article XX(d) by assessing whether the measures at issue are necessary to secure such compliance.
7.249. An assessment of necessity under Article XX of the GATT 1994 "involves 'weighing and
balancing' a number of distinc t factors relating both to the measure sought to be justified as
'necessary' and to possible alternative measures that may be reasonably available to the responding
Member to achieve its desired objective" .489 The Panel shall start by assessing the relative
importance of the interests or values furthered by the challenged measure. Then the Panel will
examine other relevant factors, which will usually include the trade restrictiveness of the challenged
measure and the contribution made by the challenged measure to the realization of the end pursued
(i.e. securing compliance with specific rules, obligations, or requirements under the relevant

485 Indonesia's first written submission, para. 178, and the Maryono Report, (Exhibit IDN-18 (BCI)),
p. 26.
486 Indonesia's first written submission, para. 178.
487 See para. 7.234. above.
488 Indonesia's first written submission, para. 109. The Panel notes that Indonesia states that
"purchasing nickel ore mined in conformity with Indonesia's sustainable mining and mineral resource
management requirements is not something that domestic smelters do out of goodwill. Compliance is not
optional. It is required under penalty of law". See Indonesia's response to Panel question No. 70(a).
489 Appellate Body Report, China – Publications and Audiovisual Products, para. 239.

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provisions of the relevant laws or regulations that are not GATT inconsistent).490 Once the Panel has
identified the factors to be weighed and balanced, the Panel will compare the challenged measures
with proposed possible alternatives.491
7.3.1.2.1 Relative importance of the common interests or values
7.250. The Panel will start by looking at the values that Article 96(c) is intended to protect. The
Panel recalls that panels and the Appellate Body have found in several disputes that the more vital
or important those values are, the easier it will be to accept as necessary a measure designed to
secure compliance with the laws and regulations intended to protect those values.492
7.3.1.2.1.1 Main arguments of the parties
7.251. Indonesia states that "the protection of the environment and the conservation of Indonesia's
mineral resources are interests or values of the highest importance". 493 Indonesia submits that
sustainable mining requirements such as Article 96(c) ensure that "mining activities in Indonesia are
conducted in a manner that preserves and protects the environment because they are designed to
mitigate environmental impacts inherent in mi ning activities, such as deforestation, land
disturbance, water pollution and waste management". 494 Indonesia states that these requirements
"protect not only native forests and the environment, but also the livelihoods of indigenous people
that reside in mining areas".495
7.252. The European Union does not address the relative importance of these values; it questions
instead whether the challenged measures pursue the objective of securing compliance with rules on
environmental protection and the conservation of natural resources. The European Union considers
that Indonesia has failed to show that the export ban and the DPR pursue the objective of securing
compliance with rules on environmental protection and the conservation of natural resources.496
7.3.1.2.1.2 Analysis by the Panel
7.253. Indonesia has addressed in detail in its submissions the environmental impact of mining
activities in general as well as in Indonesia in light of its specificities, namely its earthquake-prone
territory and high rainfall. 497 As referred to in the descriptive part of this report, the Panel finds
evidence on the record reporting, inter alia, the loss of forest and biodiversity as a result of strip
mining498; land disturbance499; impact on air quality, vibration and noise500; sea shore pollution501;
and challenges relating to waste management.502

490 Appellate Body Report, China – Publications and Audiovisual Products, para. 240 (referring to
Appellate Body Report, US – Gambling, paras. 306-308).
491 Appellate Body Report, China – Publications and Audiovisual Products, para. 240.
492 Appellate Body Report, Korea – Various Measures on Beef, para. 162. See Panel Reports, EC – Seal
493 Indonesia's first written submission, para. 187.
494 Indonesia's first written submission, para. 185.
495 Indonesia's first written submission, para. 185.
496 European Union's second written submission, para. 248.
497 AEER, Supply of Nickel Battery Industry from Indonesia and Ecological Social Issues, Action for
Ecology and Emancipation of People, December 2020, (Exhibit IDN-64), p. 54; and Clean Technica, Image of
Indonesia at "Electric Vehicles: The Dirty Nickel Problem", (Exhibit IDN-66), available at:
https://cleantechnica.com/2020/09/27/electric-vehicles-the-dirty-nickel-problem/ (last accessed
30 August 2021). See also the following exhibits Indonesia submitted on the environmental impact of mining:
IDN-19, IDN-23, IDN-62, IDN-63, IDN-65, IDN-67, IDN-69, and IDN-70.
498 A. van der Ent, A.J.M. Baker, M.M.J. van Balgooy, A. Tjoa, "Ultramafic nickel laterites in Indonesia
(Sulawesi, Halmahera): Mining, nickel hyperaccumulators and opportunities for phytomining", Journal of
Geochemical Exploration, Vol. 128 (2013), pp. 72-79, (Exhibit IDN-4), p. 6.
499 Sayoga Gautama Supplemental Expert Report, 17 March 2022, (Exhibit IDN-109).
500 Sayoga Gautama Report, (Exhibit IDN-15), p. 3.
501 WALHI, Study report on Environmental Conditions around Coastal Sea near the Mining Area due to
the Nickel Industry in Morowali regency. Central Sulawesi, Kolaka and North Konawe Regencies, Southeast
Sulawesi (2021), (Exhibit IDN-68).
502 IEA, Special Report on the Role of Critical Minerals in Clean Energy Transition (2021),
(Exhibit IDN-16), p. 40.

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7.254. Given the overall understanding among WTO Members of the importance of the protection
of the environment 503 and, more specifically, the environmental impact of mining activities in
Indonesia, the Panel concludes that the protection of the environment is a value of high importance
for Indonesia.
7.3.1.2.2 Trade restrictiveness of the measures at issue
7.255. Before the Panel turns to the parties' arguments on the trade restrictiveness of the measures
at issue, the Panel recalls that "[a] measure with a relatively slight impact upon imported products
might more easily be considered as 'necessary' than a measure with intense or broader restrictive
effects".504
7.3.1.2.2.1 Main arguments of the parties
7.256. Indonesia acknowledges that the export prohibition is highly trade restrictive insofar as it
prohibits the exportation of nickel ore.505 It notes, however, that past panels and the Appellate Body
have deemed necessary highly trade -restrictive measures "where they [were] 'apt to make a
material contribution' to the achievement of their objective".506 With respect to the DPR, Indonesia
states that "questions still remain as to whether the domestic processing requirement entails limiting
effects on trade that are separate and distinct from the export prohibition itself".507
7.257. The European Union submits that the export ban reflects the greatest degree of trade
restrictiveness, which results in a greater burden on Indonesia to demonstrate that the measure
contributes to securing compliance with the relevant laws and regulations. 508 It further states that
the DPR "has inherent limiting effects" on nickel ore exports.509
7.3.1.2.2.2 Analysis by the Panel
7.258. The Panel has found above that the European Union has demonstrated, and Indonesia has
admitted, that Indonesia imposes a prohibition on exports of nickel ore inconsistent with Article XI:1
of the GATT 1994 that is currently implemented through the operation of MEMR Regulation
No. 11/2019 and MOT Regulation No. 96/2019. The Panel notes that a total prohibition on trade
(whether exports or imports) is the most trade-restrictive measure that could be applied.510
7.259. The Panel has also found that the European Union has demonstrated, and Indonesia has not
successfully rebutted, that the DPR is a restriction on the sale for export of nickel ore whose design,
architecture, and revealing structure establish that by its very nature it has a limiting effect on
exports inconsistent with Article XI:1 of the GATT 1994. If the DPR is complied with there will be no
nickel ore to export. The Panel, however, does not find that the DPR is as restrictive as a total
prohibition on exports because , there were certain periods of time where mines could export low -

503 This value has been explicitly accepted by WTO Members in the very text of the WTO Agreements.
The Preamble of the WTO Agreement notes the goal of protection and preservation of the environment and
sustainable development. Article XX(g) of the GATT 1994 provides a justification for GATT-inconsistent
measures relating to the conservation of exhaustible natural resources. Article 8.2(c) of the SCM Agreement
provides an exception for environmental subsidies. Moreover, in one of its first disputes the Appellate Body
stated as follows: "We have not decided [in this appeal] that the protection and preservation of the
environment is of no significance to the Members of the WTO. Clearly, it is. … And we have not decided [in this
appeal] that sovereign states should not act together bilaterally, plurilaterally or multilaterally, either within
the WTO or in other international fora, to protect endangered species or to otherwise protect the environment.
Clearly, they should and do." Appellate Body Report, US – Shrimp, para. 185.
504 Appellate Body Report, Korea – Various Measures on Beef, para. 163.
505 Indonesia's first written submission, para. 188.
506 Indonesia's first written submission, para. 188.
507 Indonesia's first written submission, para. 222.
508 European Union's second written submission, para. 253.
509 European Union's second written submission, para. 254.
510 See e.g. Appellate Body Report, US – Shrimp, para. 171 ("an import prohibition is, ordinarily, the
heaviest 'weapon' in a Member's armoury of trade measures".). See also Panel Report, Brazil – Retreaded
Tyres, para. 7.114 (finding that "Brazil's measure is as trade-restrictive as can be, as far as retreaded tyres
from non-MERCOSUR countries are concerned, since it aims to halt completely their entry into Brazil".)

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grade ore upon approval of the Minister of Trade if certain conditions were met. The Panel finds,
therefore, that the DPR is highly trade restrictive.
7.3.1.2.3 The contribution of the measures at issue
7.260. The concept of necessity under Article XX of the GATT 1994 has evolved over time. In the
first Article XX disputes the concept of necessity was "located significantly closer to … 'indispensable'
than to … simply 'making a contribution to' ".511 However, the standard applied in more recent
disputes has evolved to consider that a measure can be found to be necessary if it is "apt to produce
a material contribution to the a chievement of its objective".512 The Appellate Body has also stated
that, "[t]he greater the contribution, the more easily a measure might be considered to be
'necessary'".513
7.261. A measure contributes to achieving the objective of the Member "when there is a genuine
relationship of ends and means between the objective pursued and the measure at issue ".514 The
Appellate Body, has explained that the contribution of the measure at issue towards securing
compliance with the relevant law or regulation must be "mater ial". The definition of "material" is
"[h]aving significance or relevance" 515, "important or having an important effect "516.517 Thus, it is
not any contribution minimally or marginally relevant that qualifies so as to make the measure at
issue necessary withi n the meaning of Article XX(d). Whether the contribution is sufficient to be
considered material within the meaning of Article XX can only be determined on a case -by-case
basis, in light of the specific circumstances of each dispute . The methodology used to assess a
measure's contribution can be of a quantitative or qualitative nature, depending on " the nature,
quantity, and quality of evidence existing at the time the analysis is made".518
7.262. A party may make the required demonstration by resorting to evidenc e pertaining to the
past or the present, that establishes that the measure at issue makes a material contribution to the
objectives pursued.519 The Appellate Body clarified, however, that a panel is not bound to find that
a measure does not make a contribution to the objective pursued merely because such contribution
is not "immediately observable" or because, "[i]n the short-term, it may prove difficult to isolate the
contribution [made by] one specific measure from those attributable to the other measures that are
part of the same comprehensive policy".520 The Appellate Body, therefore, noted that a panel may
conclude that a measure is necessary if the responding Member demonstrates that it "is apt to
produce a material contribution to the achievem ent of its objective".521 Although this may seem to
be a more relaxed standard than what had been applied in the past, it is not without rigour and a
demonstration cannot be made by simple assertions. The Appellate Body clarified that a
demonstration that a measure is apt to make a material contribution "could consist of quantitative
projections in the future, or qualitative reasoning based on a set of hypotheses that are tested and
supported by sufficient evidence ".522 This requires that a respondent provide s sufficient evidence
that proves the contribution that the measure makes or may be able to make. Mere speculation or
logical presumptions would not suffice.
7.263. The Panel's understanding of a measure's ability to make a material contribution implies that
the measure at issue must be in a position to contribute to the realization of the objective ; the

511 Appellate Body Report, Korea – Various Measures on Beef, para. 161.
512 Appellate Body Report, Brazil – Retreaded Tyres, para. 151.
513 Appellate Body Report, Korea – Various Measures on Beef, para. 163.
514 Appellate Body Report, Brazil – Retreaded Tyres, para. 145.
515 Online Oxford English Dictionary, Material available at
https://www.oed.com/view/Entry/114923?rskey=NmRYAB&result=1#eid (last accessed 26 August 2022).
516 Online Cambridge English Dictionary, Material available at
https://dictionary.cambridge.org/dictionary/english/material (last accessed 26 August 2022).
517 As noted by the panel in Colombia – Textiles, "[t]he expression 'apt to produce a material
contribution' in the original English language text of the Appellate Body report was translated into Spanish as
'adecuada para hacer una contribución importante'", Colombia – Textiles, fn 485. The translation into French
also refers to "à même d'apporter une contribution importante". See Panel Report.
518 Appellate Body Report, Brazil – Retreaded Tyres, para. 145.
519 Appellate Body Report, Brazil – Retreaded Tyres, para. 151. See also, Appellate Body Report,
China – Publications and Audiovisual Products, para. 252.
520 Appellate Body Report, China – Publications and Audiovisual Products, paras. 252-253 (referring to
Appellate Body Report, Brazil – Retreaded Tyres, para. 151).
521 Appellate Body Report, Brazil – Retreaded Tyres, para. 151.
522 Appellate Body Report, Brazil – Retreaded Tyres, para. 151.

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contribution of the measure should not be reduced to a hypothetical contribution in implausible or
improbable factual scenarios . There should be some certainty in the ability of the measure to
contribute towards securing compliance with the relevant law or regulation.
7.264. The Panel further recalls that a measure contributes to the achievement of the objective
when there is a genuine relationship of ends and means betwe en the objective pursued and the
measure at issue. Past panels and the Appellate Body have emphasized the "latitude" enjoyed by
panels "in designing the appropriate methodology to use and deciding how to structure or organize
the analysis of the contributi on of the measure at issue to the realization of the ends pursued by
it".523
7.265. The Panel is of the view that an analysis of the design of the measures at issue, including its
structure and operation, can shed light on the existence or not of a genuine relationship of ends and
means. For that purpose, the Panel will refer to its analysis above on whether the measures at issue
are designed to secure compliance with the relevant provisions Indonesia has identified. The Panel
notes nonetheless that even if that p art of the analysis may prove useful when assessing the
contribution of the measures at issue under the necessity test, the "designed to secure compliance"
element and the contribution element are conceptually distinct; otherwise, there would not be two
separate steps to the analysis. The former element involves an assessment of whether the measure
is not incapable of ensuring compliance with the relevant law or regulation whereas the latter
element requires that a panel determine whether the measure at issue is "apt to produce a material
contribution to the achievement of its objective", i.e. securing compliance with the relevant law or
regulation.524 As noted by the Appellate Body, the element of the test focusing on whether the
measures are designed to secure compliance is less demanding than the contribution element. This
is so because in the Appellate Body's view "[a] panel must not … structure its analysis of the ['design'
step] in such a way as to lead it to truncate its analysis prematurely and thereby foreclose
consideration of crucial aspects of the respondent's defence relating to the 'necessity' analysis."525
7.266. After having made these clarifications on its understanding of contribution under the
necessity test, the Panel now assesses the contribution of each of the measures at issue towards
securing compliance with Article 96(c) of Law No. 4/2009.
7.3.1.2.3.1 Export ban
Main arguments of the parties and third parties
7.267. Indonesia argues that the export prohibition is "a pt to make a material contribu tion to
securing compliance with " the sustainable mining and mineral resource management
requirements526 because it reduces the amount of nickel extracted. More specifically, it eliminates
export-driven nickel extraction and, as a result, it mitigates the negative environmental impact and
the risk of nickel resource depletion.527
7.268. Indonesia contends that there is no requirement under Article XX(d) to demonstrate that
the challenged measures are "the 'sole' or 'most substantial' cause of any observed positive e ffect
in relation to the objective of the challenged measures" . This is all the more so in the present case
given that the challenged measures form part of a comprehensive policy framework "with multiple
elements interacting synergistically to achieve a policy objective".528
7.269. The European Union submits that Indonesia has failed to demonstrate that a prohibition on
the exportation of nickel ore contributes to securing the enforcement of environmental standards
and the rules on conservation of natural resources.529
7.270. The European Union argues that Indonesia has not demonstrated that adverse
environmental effects result exclusively from nickel mining. Therefore, these adverse effects on

523 Appellate Body Report, Brazil – Retreaded Tyres, para. 145.
524 Appellate Body Report, Brazil – Retreaded Tyres, para. 151.
525 Appellate Body Report, Argentina – Financial Services, para. 6.203.
526 Indonesia's first written submission, para. 194.
527 Indonesia's first written submission, paras. 212-213.
528 Indonesia's response to Panel question No. 122.
529 European Union's second written submission, paras. 256-257.

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Indonesia's environment are not "relevant to determining the potential contribution of the measures
at issue" given that Indonesia has submitted an al ternative defence under subparagraph (d), and
not under subparagraphs (b) or (g), of Article XX.530
7.271. The European Union further argues that Indonesia has not substantiated its claim that the
extraction of nickel ore for exports, and not the extraction of nic kel ore per se, results in adverse
environmental effects in Indonesia. According to the European Union, Indonesia has not
demonstrated that a shift from exports of both nickel ore and processed nickel to just exports of
processed nickel has "lead to a rise in environmental standards".531
7.272. In the European Union's view, the evidence Indonesia submits makes it clear that the
measures at issue are not apt to make a material contribution to "securing the implementation of
higher environmental standards or the cons ervation of nickel reserves ".532 In particular, the
European Union notes that Indonesia submits evidence on adverse marine environmental effects
that post-dates the adoption of the measures at issue and suggests that environmental problems
continue to exist after the adoption of the measures. 533 The European Union also notes that
Indonesia does not submit evidence on the number of enforcement proceedings initiated before and
after the adoption of the measures at issue to support its argument that the measures contribute to
securing compliance because the ultimate purchasers of the ore are necessarily within Indonesia 's
jurisdiction.534
7.273. Canada and Japan note that the empirical demonstration of an actual cont ribution is not
always required to establish justification under Article XX(d) of the GATT 1994. Both note, however,
that if such evidence exists this makes it more likely that the measure will satisfy the contribution
factor of the necessity analysis. Japan comments that requiring a certain minimum level of specificity
in describing the contribution is necessary to avoid circumvention. Both Japan and Canada refer to
looking at the design, structure, and operation of the measure and whether the measure is capable
of securing compliance. 535 For its part, t he United States submits that the Panel should examine
whether Indonesia has shown that the challenged measures are indispensable, vital, essential, and
requisite for the objective of securing compliance with the underlying laws or regulations.536
Analysis by the Panel
7.274. The Panel will conduct its assessment of the contribution of the export ban to securing
compliance with Article 96(c) of Law No. 4/2009 by looking at the design of the export ban, including
its structure and expected operation. The Panel conducted a similar assessment under the "designed
to secure compliance" element to which the Panel will refer in this section. As mentioned above,
these two parts of the analysis are distinct and m ust therefore be conducted in a related but
independent manner.
7.275. The Panel found above that the legal instruments that implement the export ban, i.e.
Article 3 and Appendix IV of MEMR Regulation No. 96/2019 and Article 1(2) of MEMR Regulation
No. 11/2019, do not contain any explicit mention of Article 96(c) or to the accomplishment of
sustainable mining objectives. The Panel further acknowledged that measures can have a multiplicity
of objectives and that there was a certain degree of connection between the export ban and
Article 96(c). The Panel, therefore, found that it could not be ruled out that the export ban had a
positive impact on the sustainability of mining activities in Indonesia in that it may result in a
decrease in the extraction of nickel ore, including ore from illegal and poorly regulated sources. The
Panel noted, however, that evidence on the record showed that the decrease in the extraction rate
did not correspond with the level of exports prior to the ban , and that domestic demand for nickel
ore was expected to expand as a result of the development of the smelter industry in Indonesia. In
this regard the Panel observed that the resource conservation concern expressed by Indonesia did

530 European Union's second written submission, paras. 262-263.
531 European Union's second written submission, para. 269.
532 European Union's second written submission, para. 270.
533 European Union's second written submission, para. 271 (referring to Exhibit IDN-68).
534 European Union's second written submission, para. 272.
535 Canada and Japan's third-party responses to Panel question No. 8.
536 United States' third-party response to Panel question No. 8.

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not seem to be aligned with its plans to expand the smelt er industry and develop an EV battery
industry in the near future.537
7.276. The Panel sees no reason to disagree with Indonesia that Article 96(c) sets out a sustainable
mining requirement. This does not mean, however, that the Panel will examine the contribution of
the export ban to improving any environmental objective set out in Law No. 4/2009. As the Panel is
examining an alternative defence under subparagraph (d) of Article XX and not another of the
subparagraphs, what the Panel must determine is whether the export ban is apt to produce a
material contribution towards securing compliance with Article 96(c), and not whether it is apt to
produce a material contribution towards achieving the objectives pursued by Article 96(c).
7.277. Indonesia argues that the export b an contributes to securing compliance with Article 96(c)
by reducing nickel extraction, particularly export -driven extraction from illegal or poorly regulated
sources, which results in turn in less damage to the environment and a slower pace of resource
depletion. As explained above, the Panel finds data on the record that show that the total nickel
production in 2020 decreased by 13.6% whereas exports of nickel ore represented almost 50% of
Indonesia's total production.538 Thus, the Panel observes that nickel resources that in the past would
have been exported are being redirected towards domestic consumption, which is in need of more
nickel resources due to the increase in the number of nickel smelters in operation. 539 Table 4.1 of
Government Regulation No. 14 of 2015 on the RIPIN contains a projection of the natural resources
needs for the Indonesian industry. The demand for nickel is expected to increase by over 20% every
five years from 2015 to 2035 (11 million tons/year in the 2015-2019 period, 14 million tons/year in
the 2020-2024 period; and 17 million tons/year in the 2025-2035 period).540
7.278. The RIPIN sets out a clear strategy to develop Indonesia's smelter industry as a first step
towards establishing an EV battery industry in the country. Indonesia' s strategy is based on an
increase in nickel production to feed domestic smelters, which are expected to exponentially increase
in the near future. Table 4.1 of Government Regulation No. 14 of 2015 on the RIPIN contains the
projection of the needs of natural resources for the Indonesian industry. The raw material needs of
nickel are expected to increase by over 20% every five years from 2015 to 2035 (11 million
tons/year in the 2015 -2019 period, 14 million tons/year in the 2020 -2024 period, and 17 million
tons/year in the 2025-2035 period).541
7.279. This context of an increase in the use of nickel resources domestically to satisfy the
increasing needs of Indonesian smelters does not support Indonesia's argument that the export ban
will contribute to securing compl iance with Article 96(c) by reducing nickel extraction. This is so
because, based on the evidence before us, such a reduction will not take place in the near future if
the Indonesian authorities' plan to expand the smelter industry develops as expected. Furthermore,
the Panel notes that Indonesia relies on the introduction of HPAL processing technology to increase
its nickel reserves by taking into account low -grade nickel ore in its reserve estimates. Low -grade
nickel ore is currently considered waste or o verburden given the lack of adequate processing
technology.542
7.280. Additionally, Indonesia argues that there has been a reduction in land disturbance in
Sulawesi as a result of the export ban, which has improved the environmental situation there.
Indonesia provides to the Panel the Gautama Supplemental Expert Report (Exhibit IDN -109).
According to the expert Mr Gautama land disturbance decreased between 2017 and 2 018 even
though nickel production increased during that period. The report concludes that the export ban
between 2014 and 2017 "significantly contributed to reducing the non -compliant miners and
promoted more sustainable mining practice ".543 The Panel acknowledges that the report indicates
there was a decrease in land disturbance in Sulawesi after the imposition of the export ban in 2014.

537 See paras. 7.223-7.233 above.
538 See para. 7.227 above.
539 MEMR, Indonesian Mining Guidance (2020), (Exhibit IDN-1), Picture 9.6: Smelter Growth and
Projection in Indonesia.
540 Government Regulation No. 14 of 2015, Master Plan of National Industry Development 2015-2035,
(Exhibit EU-17 (rev)), pp. 52-53.
541 Government Regulation No. 14 of 2015 on the RIPIN, (Exhibit EU-17(rev)).
542 Indonesia's first written submission, para. 118 referring to Maryono Report, (Exhibit IDN-18(BCI)),
p. 25. See also Indonesia's first written submission, para. 129, Indonesia's second written submission,
para. 97, and Indonesia's response to Panel question No. 38.
543 Sayoga Gautama Supplemental Expert Report, 17 March 2022, (Exhibit IDN-109), p. 3.

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This does not necessarily translate into a causal relationship between the former and the latter.
Indeed, the report concludes that the data suggests that the export ban resulted in predatory mining
practices being replaced by sustainable ones but does not provide analysis of the root causes of the
shift in behaviour. For instance, the report does not provide analysis of the years between 2014 and
2017. Nor does the report include data for 2019 and 2020, which would show the potential effects
of the re-imposition of a total export ban via the 2019 regulations or projections of what is expected
to happen if the export ban remains in place. The Panel acknowledges that causal relationships may
not always be easy to prove, especially as regards effects that take time to materialize. While this
type of information may be a useful indicator, the Panel considers that a mere correlati on without
further analysis of the root causes is not sufficient for Indonesia to satisfy its burden.
7.281. Indonesia's arguments revolve around the link between exports of nickel and predatory
mining practices. Indonesia argues that poorly regulated and illega l mining is export -oriented
because domestic smelters only buy nickel ore that has been extracted in accordance with the
relevant laws and regulations.544 Indonesia states that "the entirety of nickel ore exports between
2006 and 2013 was sourced from minin g companies which were either subject to limited or no
oversight in respect of regulatory compliance ( … 'poorly regulated ' mining companies), or were
exporting nickel ore that was not in conformity with the relevant regulatory requirements (i.e. 'illegal'
mining)".545 When examining whether the export ban was designed to secure compliance with
Article 96(c), the Panel did not rule out that an export ban could lead to a reduction of nickel
production that may, in turn, result in a reduction in the mining acti vity, including poorly regulated
and illegal activities. However, Indonesia fails to provide the Panel with evidence relating to the
magnitude of such predatory mining practices and their share of total exports before and after the
entry into force of the export ban.546 Therefore, the Panel is not in a position to conclude, considered
along with additional evidence and arguments, that the export ban is apt to produce a material
contribution to securing compliance with Article 96(c) by diminishing predatory mining practices.
7.282. As regards the improvement of regulatory enforcement, Indonesia argues that
Exhibits IDN-110(BCI), IDN -111(BCI), and IDN -113(BCI) demonstrate that the export ban
contributes to the improvement of regulatory enforcement. These three exhibits each present
information on criminal enforcement matters related to nickel mining in recent years. Indonesia
asserts that Exhibit IDN-110(BCI) is a summary of nickel criminal cases handled by the regional
police in Sulawesi and Maluku between 2017 and 2022. This summary shows a significant increase
in criminal cases brought by the government after the introduction of the export prohibition. 547
Indonesia also provides an expert affidavit from [[***]] dated 15 March 2022 that it argues
corroborates the data from Sulawesi and Maluku. In this affidavit [[***]], a law enforcement official
in the field of natural resources, attests to an increase in criminal enforcement against illegal nickel
mining.548 [[***]] also testifies that in his personal opinion the export prohibition on nickel ore has
positively impacted law enforcement efforts insofar as mining is regulated both upstream and
downstream.549 Exhibit IDN -113(BCI) is an affidavit by [[***]], a mining officer at a major
Indonesian mining concern between 2011 and 2015. In this affidavit, [[***]] reports on the efforts
his and other mining companies undertake to curb export-oriented illegal mining activities in [[***]]
concession areas. In particular, he testifies on one internal field investigation in which his company
uncovered illegal mining activities in one of its permit areas.550
7.283. The exhibits do show an increase in the cases police initiated and the cooperation bet ween
a mining company and the Indonesian authorities to address illegal mining practices. Although this

544 Indonesia's response to Panel question No. 64.
545 Indonesia's response to Panel question No. 64. (emphasis original)
546 Indonesia submitted images of environmental damage in Indonesia resulting from mining activities.
See e.g. WALHI, Study report on Environmental Conditions around Coastal Sea near the Mining Area due to the
Nickel Industry in Morowali regency. Central Sulawesi, Kolaka and North Konawe Regencies, Southeast
Sulawesi (2021), (Exhibit IDN-68); Images of Environmental Destruction in Indonesia, (Exhibit IDN-69); and
World Bank, "The impact of a nickel mine in Tanjung Buli, Indonesia" (27 March 2009), (Exhibit IDN-70). It is
not always clear, though, whether they concern export-oriented mines.
547 Indonesia's opening statement at the second meeting of the Panel, para. 79 (referring to Exhibit
IDN-110 (BCI), which shows an increase from [[***]]).
548 [[***]] Expert Affidavit of [[***]] (15 March 2022), (Exhibit IDN-111(BCI)), p. 3.
549 Indonesia's opening statement at the second meeting of the Panel, para. 82 (referring to Exhibit
IDN-111(BCI)), p. 3.
550 Indonesia's opening statement at the second meeting of the Panel, para. 83 (referring to Expert
Affidavit of [[***]] (17 March 2022), Exhibit IDN-113 (BCI)).

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suggests an improvement in terms of regulatory vigour, there is nothing in the exhibits to
demonstrate that the ability to take the enforcement actions or the rigorous adherence to law and
regulation by mining companies was a result of the export ban – even partially. The Panel observes
that the increase in nickel mining criminal cases coincides in time with the transfer from the regional
and provincial g overnments to the central government of the responsibility for mineral reporting
mechanisms pursuant to Law No. 3/2020.551 Indonesia does not address the relevance of this
regulatory change, of notable importance, when explaining the increase in the criminal proceedings.
7.284. Exhibit IDN-111(BCI), for its part, reflects the personal views of a law enforcement officer
in the area of natural resources who assumed his position after the measures were imposed. It also
contains Attachment B, which lists recent enforcement cases regarding the breach of laws governing
the environment and mining. 552 Even accepting [[***]] personal opinion that the regulation of
mining both upstream and downstream positively impacted law enforcement efforts, he presents no
direct evidence that the export ban contributed to the bringing of the enforcement actions referred
to in Exhibit IDN-111 (BCI) or in his own affidavit. More importantly, the Panel does not find in this
exhibit anything that demonstrates that the export ban contributes in a material way to securing
compliance with Article 96(c).553 Finally, as regards Exhibit IDN-113(BCI), the Panel notes that the
situation described dates back to 2012 and 2013, prior to the entry into force of the export ban. In
the Panel's view, therefore, the exhibits do not demonstrate a causal relationship – even partially –
between the increased criminal enforcement and the export ban challenged by the European Union.
7.285. Indonesia requests the Panel to take account of Indonesia's comprehensive policy framework
on sustainable mining and mineral resource management when assessing the contribution of the
measures at issue. 554 The Panel agrees with Indonesia that, as stated by the Appellate Body, in
certain circumstances555 "a panel may be required to examine together the different elements of
one or more instruments identified by a respondent" to "understand properly the content, substance,
and normativity of a given rule". 556 Indonesia submits that Article 96(c) is part of one of the main
pillars of its comprehensive policy framework to regulate mining activities, namely the protection of
Indonesia's environment through the imposition of sustainable mining requirements. 557 However,
Indonesia has failed to explain how the legal instruments that are pa rt of such a policy framework
operate together and, in particular, how they operate vis-à-vis Article 96(c) of Law No. 4/2009.
Furthermore, Indonesia has not provided the Panel with most of the legal instruments that comprise
the policy framework. The Panel does not find on the record anything that explains, nor even refers
to, this comprehensive policy framework, other than a figure included in Indonesia's first written
submission.558 Therefore, the Panel is not in a position to assess the contribution of t he export ban
to securing compliance with Article 96(c) in light of Indonesia's comprehensive policy framework.
7.286. Based on the above, the Panel does not consider that Indonesia has demonstrated that there
is a genuine relationship of ends and means between t he objective pursued, namely securing
compliance with Article 96(c), and the export ban. Although the Panel has found that the export ban
is not incapable of resulting in a decrease in the nickel ore extraction rate, Indonesia has not provided
sufficient evidence to demonstrate that any change in the behaviour of the mines (i.e., less predatory
and more sustainable) would be attributable to the export ban. As such, the Panel find s that
Indonesia has failed to demonstrate that the export ban would be apt to make a material contribution
to securing compliance with Article 96(c).

551 Indonesia's first written submission, para. 109.
552 Exhibit IDN-111 (BCI) [[***]]
553 The Panel notes that the criminal actions referred to in Exhibit IDN-111 (BCI) were taken with
respect to [[***]] and not to enforce Article 96(c).
554 Indonesia's response to Panel question No. 122 and comment on the European Union's response to
Panel question No. 115.
555 The Appellate Body found that such circumstances concern the respondent's choice "to demonstrate
that the measure is designed and necessary to secure compliance with an obligation or obligations arising from
several laws or regulations operating together as part of a comprehensive framework". See Appellate Body
Report, Argentina – Financial Services, fn 505 to para. 6.208. See also Appellate Body Report, India – Solar
Cells, para. 5.111.
556 Appellate Body Report, India – Solar Cells, para. 5.111.
557 Indonesia's first written submission, paras. 142-143; and response to Panel question No. 105.
558 Indonesia's first written submission, Figure 10.

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7.3.1.2.3.2 DPR
Main arguments of the parties and third parties
7.287. Indonesia argues that the DPR is "apt to make a material contribution to securing compliance
with" the sustainable mining and mineral resource management requirements559 because it "fosters
vertical integration and long-term supply arrangement[s] in the nickel supply chain ".560 Indonesia
contends that these requirements lead to long -term supply agreements, joint-ventures, and other
forms of association with domestic smelters that "ensure[] that nickel-refining activities are properly
regulated within Indonesia" and "force[] changes in the behaviour of market actors".561
7.288. Indonesia argues that "the burden of verifying conformity …becomes much easier once all
market operators are brought within the enforcement jurisdiction of Indonesia" .562 In this respect,
Indonesia contends that Article XX(d) does not require that the changes in enforcement are
attributable ex clusively to the measure at issue, particularly in cases like this one where the
challenged measures form part of "a comprehensive policy framework with multiple elements
interacting synergistically to achieve a policy objective".563
7.289. The European Union submits that Indonesia has failed to demonstrate that the DPR
contributes to securing the enforcement of environmental standards and the rules on conservation
of natural resources 564 because Indonesia has not demonstrated that nickel mining is solely
responsible for the adverse environmental effects described by Indonesia. The European Union
contends that these adverse effects on Indonesia's environment are not " relevant to determinin g
the potential contribution of the measures at issue " given that Indonesia has submitted an
alternative defence under subparagraph(d), and not under subparagraphs (b) or (g), of Article XX.565
7.290. The European Union further argues that the evidence Indonesia submitted demonstrates
that the DPR is not apt to make a material contribution to "securing the implementation of higher
environmental standards or the conservation of nickel reserves ".566 In particular, the
European Union notes that Indonesia submits evide nce on adverse marine environmental effects
that post-dates the adoption of the measures at issue and suggests that environmental problems
continue to exist after the adoption of the measures. 567 The European Union further notes that
Indonesia has not demonstrated that the measures contribute to securing compliance because the
ultimate purchasers of the ore are necessarily within Indonesia 's jurisdiction .568 Finally, the
European Union submits that Indonesia has also failed to demonstrate that the processing of nickel
ore domestically " ensures that illegal strip mines convert to sustainable mines regulated under
Indonesian law".569
7.291. For the third parties' main arguments, the Panel refers to paragraph 7.273 above.
Analysis by the Panel
7.292. As explained above with regard to the export ban, the Panel will conduct its assessment of
the contribution of the DPR to securing compliance with Article 96(c) of Law No. 4/2009 by looking
at its design, including its structure and expected operation. The Panel will partially rely on the
findings under the "designed to secure com pliance" element because Indonesia's arguments are
substantially the same and these two parts of the Panel's analysis are related, although distinct.
7.293. The Panel found above that the legal instruments that implement the DPR, i.e. Article 103(1)
of Law No. 4/2009, Article 17 of MEMR Regulation No. 25/2018, and Article 66 of MEMR Regulation

559 Indonesia's first written submission, para. 194.
560 Indonesia's first written submission, paras. 215-216.
561 Indonesia's first written submission, paras. 215-216.
562 Indonesia's comment on the European Union's response to Panel question No. 111.
563 Indonesia's comment on the European Union's response to Panel question No. 115.
564 European Union's second written submission, paras. 256-257.
565 European Union's second written submission, paras. 262-263.
566 European Union's second written submission, para. 270.
567 European Union's second written submission, para. 271 (referring to Exhibit IDN-68).
568 European Union's second written submission, para. 272.
569 European Union's second written submission, para. 273.

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No. 7/2020, do not contain any explicit mention of Article 96(c) or to the accomplishment of
sustainable mining objectives. The Panel further acknowledged that although the DPR has a
predominantly economic objective, it could not be ruled out that the DPR has a positive impact on
the sustainability of mining activities in Indonesia in the sense that the vertical integration resulting
from the application of the DPR may be co nsidered to facilitate regulatory enforcement. The Panel
noted, however, that Indonesia had not demonstrated that such improvement in regulatory
enforcement could be attributed to the DPR.570
7.294. Indonesia's main argument as regards the contribution of the DPR to securing compliance
with Article 96(c) is the same as under the "designed to secure compliance" analysis, i.e. the DPR
leads to long-term supply agreements, joint-ventures, and other forms of association with domestic
smelters that "ensure[] that nicke l-refining activities are properly regulated within Indonesia" .571
The Panel agrees with Indonesia that the DPR can foster vertical integration between miners and
smelters because, as explained above, Articles 16(4) and (5) of MEMR Regulation No. 25/2018
establish that IUP and IUPK holders for Production Operation can comply with their obligation to
process and purify nickel and other minerals domestically by cooperating with other mining licence
holders.572
7.295. Indonesia provides several samples of nickel ore sales contracts to support its contention.573
The Panel has carefully reviewed these sales contracts and observed that they deal with usual
matters covered in this type of contract such as the type of commodity, its price and quality,
sampling, force majeure or termination. Indonesia has not explained the link between these
contracts and the ability of th e DPR to make a material contribution to securing compliance with
Article 96(c). Nor has the Panel been able to discern that link from the text of t he sales contracts.
Thus, the Panel does not consider that these sales contracts illustrate how the DPR is apt to make a
material contribution to securing compliance with Article 96(c) by fostering vertical integration.
7.296. Indonesia does not distinguish its argumentation between the material contribution made
by the export ban from that made by the DPR. It, therefore, relies upon the same increase in
enforcement actions in recent years (Exhibits IDN-110, 111, and 113) that it says demonstrates the
export ban is apt to make a material contribution to securing compliance with Article 96(c), as
evidence that the DPR is apt to make a material contribution to the same objective .574 The Panel
observes that the largest increase in enforcement actions, in 2020, also co incides with the transfer
of regulatory authority from the regional and provincial governments to the central government. The
Panel has earlier acknowledged that increased vertical integration could facilitate government
exercise of regulatory authority. A lthough the evidence presented by Indonesia does not
demonstrate that the increase in the number of investigations is definitely attributable to the
implementation of the DPR, it may be.575 The Panel finds, therefore, that the DPR might make some
contribution to increased regulatory enforcement. The Panel, however, does not see evidence of a
material contribution.
7.297. The Panel further refer s to its findings above on public statements by the President of
Indonesia and high -level government officials, and in national industrial plans where the
development of [down]stream and intermediate industry based on natural resources and the
increase of added value of the natural resources appear as the priority. The Panel finds no mention
in these statements about the role of the DPR in improving regulatory compliance.576

570 See paras. 7.238-7.247 above.
571 Indonesia's first written submission, paras. 215-216.
572 As of September 2021, "integrated smelters with the nickel ore mines have developed in [[***]]
IUP-KK licenses". See Indonesia's first written submission, para. 178, and the Maryono Report, (Exhibit IDN-18
(BCI)), p. 26.
573 See Exhibits IDN-25(BCI), IDN-58(BCI), IDN-71(BCI), IDN-114(BCI), IDN-115(BCI), and
IDN-116(BCI).
574 Indonesia's response to Panel question No. 123 ("Exhibits IDN-110, IDN-111 and IDN-113 constitute
evidence on the panel record that the challenged measures make a contribution to their enforcement
objective").
575 Sayoga Gautama Supplemental Expert Report, 17 March 2022, (Exhibit IDN-109), p.5.
576 See para. 7.243 above.

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7.298. As regards Indonesia's request that the Panel assesses the contribution of the DPR in light
of Indonesia's comprehensive policy framework on sustainable mining and mineral resource
management, the Panel refers to its views expressed in paragraph 7.285 above.
7.299. Based on the above considerations, the Panel does not rule out the possibility that the DPR
may improve regulatory enforcement by fostering vertical integration. Whatever the precise level of
contribution the DPR makes, Indonesia has not demonstrated t hat it would be of sufficient
importance to be considered a "material contribution", that is, an important or relevant contribution
towards securing compliance with Article 96(c).577
7.300. The Panel finds, therefore, that Indonesia has failed to demonstrate that the DPR is apt to
produce a material contribution to securing compliance with Article 96(c).
7.3.1.2.4 Weighing and balancing
7.301. As noted above 578, the weighing and balancing process concerns several distinct factors
relating both to the measure s sought to be justified as necessary and to possible alternative
measures that may be reasonably available to the responding Member to achieve its desired
objective. These factors include the relative importan ce of the interests or values furthered by the
challenged measures as well as the trade restrictiveness and the level of contribution achieved by
both the challenged measures and the proposed alternative.
7.302. As noted in para graph 7.249 above, after having identified the factors to be weighed and
balanced, the Panel will now analyse them with respect to the challenged measures and the proposed
alternative measure. The Panel will examine these factors in turn.
7.3.1.2.4.1 Weighing and balancing of factors relating to the measure sought to be
justified as "necessary"
Main arguments of the parties and third parties
7.303. Indonesia considers it "has demonstrated that its sustainable mining and mineral resource
management requirements further interests or values of the highest importance" .579 Indonesia
acknowledges that the challenged measures are trade restrictive580 but emphasizes that they make
"a material contribution to securing compliance with Indonesia's sustainable mining and mineral
resource management requirements" .581 Consequently, In donesia submits that " the trade
restrictiveness of the measures at issue is outweighed by the contribution they make to securing
compliance with its GATT -consistent laws or regulations, in light of the relative importance of the
interests or values protected by such laws or regulations".582
7.304. The European Union argues that Indonesia has failed to show that the measures at issue,
which are particularly trade restrictive, "are necessary to achieve those purported objectives in the
sense that they contribute sufficiently to their achievement". Further, the European Union contends
that there are less trade-restrictive alternatives reasonably available to Indonesia that would make
an equivalent contribution to the objectives allegedly pursued.583
7.305. Korea submits that a measure with actual contributing effects should be deemed as more
necessary than one that has mere potential to contribute.584

577 See definitions of "material" in para. 7.261 above.
578 See para. 7.249 above.
579 Indonesia's first written submission, para. 222.
580 Indonesia's first written submission, para. 222. Indonesia notes that "questions still remain as to
whether the domestic processing requirement entails limiting effects on trade that are separate and distinct
from the export prohibition itself". See Indonesia's first written submission, para. 222.
581 Indonesia's first written submission, para. 222.
582 Indonesia's first written submission, para. 223. See also Indonesia's first written submission,
para. 14.
583 European Union's second written submission, para. 248.
584 Korea's third-party response to Panel question No. 17.

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Analysis by the Panel
7.306. The Panel has found above that the protection of the environment is a value of high
importance for Indonesia. The European Union does not dispute this but argues that the furtherance
of this objective of the challenged measures is minimal and outweighed by their trade restrictiveness
7.307. The Panel has also found that the export ban is the most trade-restrictive measure that could
be applied and that the DPR is highly trade restrictive. The Panel also concluded that neither measure
is apt to make a material contribution to securing compliance with Article 96(c) of Law No. 4/2009
within the meaning of subparagraph (d) of Article XX of the GATT 1994.
7.308. Based on the above considerations, the Panel concludes that these factors weigh against a
finding of necessity despite the importance of the value pursued by Article 96(c).
7.3.1.2.4.2 Weighing and balancing of factors relating to the proposed alternative
measure
7.309. As noted in para graph 7.249 above the Panel will now compare the rele vant factors to be
weighed with the proposed alternative measure. The European Union submits the same alternative
measure for both the export ban and the DPR, which it argues is reasonably available to Indonesia
and less trade restrictive than the challenged measures.585
7.310. The complaining party bears the burden of identifying any alternative measures that it
considers the responding party may have taken. 586 If the complainant submits an alternative
measure, the responding party is then required to demonstrate "why its challenged measure
nevertheless remains 'necessary' in the light of that alternative or, in other words, why the proposed
alternative is not a genuine alternative or is not 'reasonably available'". If the responding party
demonstrates that the alternative is not reasonably available, a panel will find that the challenged
measure is necessary.587
7.311. To determine whether an alternative measure is reasonably available, panels have examined
a series of factors such as " (i) the extent to which the alternative measure 'contributes to the
realization of the end pursued'; (ii) the difficulty of implementation; and (iii) the trade impact of the
alternative measure compared to that of the measure for which justification is claimed under
Article XX".588 Another factor considered has been whether the alternative measure achieves the
level of compliance sought.589 In this regard, the Appellate Body has recognized that "Members of
the WTO have the right to determine for themselves the level of enforcement of their WTO-consistent
laws and regulations" .590 Measures that were "merely theoretical in nature", or that imposed an
undue economic or technical burden, or prevent ed a Member from achieving its desired level of
protection were not found to be "reasonably available".591

Main arguments of the parties and third parties
7.312. The European Union submits an alternative measure that consists of "an export authorisation
system, whereby exports of nickel ore would be permitted upon production by the exporter of a
document attesting that the nickel ore has been mined in compliance with all the environmental
requirements that Indonesia purports to enforce ".592 The European Union submits the same
alternative measure for both the export ban and the DPR because it "addresses the sh ared and

585 European Union's response to Panel question No. 108.
586 Appellate Body Reports, EC – Seal Products, para. 5.169.
587 Appellate Body Reports, China – Publications and Audiovisual Products, para. 319 (referring to
Appellate Body Report, US – Gambling, paras. 309-311).
588 Panel Report, Canada – Wheat Exports and Grain Imports, para. 6.226.
589 Panel Report, Canada – Wheat Exports and Grain Imports, para. 6.226. See also Appellate Body
Report, Dominican Republic – Import and Sale of Cigarettes, para. 70.
590 Appellate Body Report, Korea – Various Measures on Beef, para. 176.
591 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes, para. 70.
592 European Union's second written submission, para. 279.

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single objective (securing compliance with environmental standards), that Indonesia claims is
pursued by both of the measures at issue".593
7.313. The European Union states that, although the export authorization system it suggests differs
from the existing CnC certification, it may be built upon such certification. In this regard, the
European Union emphasizes that the alternative measure it is suggesting is not curr ently being
applied in Indonesia.594
7.314. The European Union argues that its alternative measure is less trade restrictive because it
does not entail a total prohibition on exports 595, and achieves the same level of protection as the
export ban because it "would ensure that only nickel ore mined in accordance with all the
environmental requirements that Indonesia seeks to enforce could be exported" .596 The
European Union comments that the risks of non -compliance that Indonesia raised could also be
addressed by the alternative measure since certification of compliance with all relevant
environmental standards would be a pre-condition for exportation of nickel ore.597
7.315. Indonesia argues that the alternative measure the European Union proposes has evolved
throughout the p roceedings. At the first meeting with the Panel, the European Union argued that
the alternative measure was Indonesia's CnC certification process, whereas in its second written
submission the European Union submits that the alternative measure is an export authorization
system.598
7.316. As regards Indonesia's CnC certification process applied to exports of nickel ore , Indonesia
submits that it is not a real alternative because it is an " existing element of Indonesia's
comprehensive policy".599 Indonesia refers to the Appellate Body finding that "unchanged elements
of a WTO Member's comprehensive policy cannot be deemed reasonably available alternatives".600
7.317. As for the export authorization system suggested by the European Union, Indonesia argues
that the European Union has failed to explain how this measure would be different from the CnC
certification and, therefore, the European Union has not discharged its burden of proof to propose a
reasonably available alternative measure. 601 Indonesia contends that the export authorization
system "is not different, in any material way" from the CnC certification process.602 It further argues
that the alternative measure suggested by the Eur opean Union has been applied and has failed to
secure compliance with Indonesia's sustainable mining and mineral resource management
requirements and, therefore, it does not constitute a less trade -restrictive, reasonably available
alternative measure for the purposes of Article XX(d) of the GATT 1994.603
7.318. Indonesia submits that the European Union has failed to submit a reasonably available
alternative measure because the European Union's proposal is "remedial in character" and,
therefore, it cannot secure an equivalent level of compliance with Indonesia's sustainable mining
and mineral resource management requirements than that Indonesia achieves with the DPR.604
7.319. Indonesia further argues that the alternative measure proposed by the European Union
"would entail significant technical, financial and resource obstacles for Indonesia, if it were even

593 European Union's response to Panel question No. 108.
594 European Union's second written submission, para. 280.
595 European Union's second written submission, para. 281.
596 European Union's second written submission, para. 282.
597 European Union's response to Panel question No. 108.
598 Indonesia's second written submission, paras. 184-186.
599 Indonesia's second written submission, paras. 184-185, referring to the European Union's opening
statement at the first meeting of the Panel, para. 75. (emphasis original)
600 Indonesia's second written submission, para. 185 (referring to Appellate Body Report,
Brazil – Retreaded Tyres, para. 172).
601 Indonesia's second written submission, para. 187.
602 Indonesia's second written submission, para. 188. (emphasis original)
603 Indonesia's second written submission, para. 189.
604 Indonesia's first written submission, para. 220; and comments on the European Union's response to
Panel question No. 108.

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possible at all" .605 In Indonesia's view, the alternative measure is "theoretical in nature and far
removed from the facts and circumstances of this case".606
7.320. Brazil comments that data Indonesia puts forward seems to demonstrate its ability to control
overall nickel exports. In light of this, Brazil suggests that instead of prohibiting the exportation of
nickel ore altogether, a less trade-restrictive measure would be to stipulate that only nickel ore that
has been extracted in a sustainable manner could be exported or domestically processed. 607 Japan
submits that the Panel should consider whether Indonesia's underlying legislative concerns centred
on the depletion of its ore reserves or predatory mining, c ould be addressed more directly and
effectively through non-discriminatory measures, rather than export restrictions.608
Analysis by the Panel
7.321. As noted above, the Panel will now weigh and balance the same factors with respect to the
proposed alternative measure. In particular, the Panel will determine whether the alternative
measure proposed by the European Union: (i) makes an equivalent contribution to the objective of
securing compliance with Article 96(c); (ii) is reasonabl y available for Indonesia, and (iii) is less
trade restrictive than the export ban and the DPR.
7.322. Before turning to these three elements, the Panel first addresses Indonesia's argument that
the European Union's alternative measure has evolved th roughout the proceedings. According to
Indonesia, the European Union has submitted three different alternative measures: (i) CnC
certification; (ii) the export authorization system; and (iii) the designation of a responsible
representative within Indonesia by the foreign purchaser.609
7.323. The Panel disagrees with Indonesia that the European Union has submitted three alternative
measures in these proceedings. Since its opening statement at the first meeting with the Panel, the
European Union has consistently advocated for an export authorization system that would allow for
the exportation of nickel ore upon verification of compliance with the relevant environmental
requirements.610 The European Union has indicated that this export authorization system coul d be
built upon Indonesia's CnC certification.611 In the Panel's view, the fact that the export authorization
system could be built upon this certification does not mean that the European Union's alternative
measure is the CnC certification itself. As far a s the designation of a representative is concerned,
the Panel notes that the European Union suggested that such a designation may constitute an
additional element to its alternative measure to address Indonesia's jurisdictional concerns. 612 In
the Panel's view, this would not change the nature of the European Union's alternative measure,
which would continue to be a "check of export documentation".613 Thus, the Panel is of the view that
the European Union has submitted a single alternative measure, which is a n export authorization
system.
7.324. Indonesia argues that the European Union has not discharged its burden of proof because it
has not explained how its proposed alternative measure differs from the existing CnC certification614
or is built upon the CnC certific ation.615 The Panel observes that both parties have addressed the
similarities and differences between these two measures. The Panel starts by recalling that Indonesia
has confirmed that CnC certification is not currently required in order to be granted a nickel mining

605 Indonesia's comments on the European Union's response to Panel question No. 111.
606 Indonesia's comments on the European Union's response to Panel question No. 111.
607 Brazil's third-party submission, para. 28.
608 Japan's third-party submission, para. 42.
609 Indonesia's second written submission, paras. 184-186; and comments on the European Union's
response to Panel question No. 111.
610 European Union's opening statement at the first meeting of the Panel, para. 75; response to Panel
question No. 49; and second written submission, para. 279.
611 European Union's response to Panel question No. 49; and second written submission, para. 279.
612 The European Union states that "there are other less trade-restrictive means to address the so-called
jurisdictional concerns and which could be applied in conjunction with the proposed check of export
documentation. For example, Indonesia could request the designation of a responsible representative within
Indonesia by the foreign purchaser." See European Union's response to Panel question No. 111.
613 European Union's response to Panel question No. 111.
614 Indonesia's second written submission, para. 187.
615 Indonesia's response to Panel question No. 110.

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licence.616 The Panel further observes that the CnC certification was a pre-requisite to be granted a
mining licence617 whereas the proposed export authorization system would apply at the point of
exportation to those IUP and IUPK holders exporting nickel ore. The Panel also observes differences
as regards their substantive coverage: the CnC certification encompasses administrative, territorial,
technical, environmental and financial requirements 618 whereas the proposed export authorization
system would encompass "the environmental standards that Indonesia claims it is seeking to secure
compliance with".619 The Panel disagrees, therefore, with Indonesia that the export authorization
system "is not different, in any material way, from the 'clear and clean' certification process that
constitutes an existing element of Indonesia's comprehensive policy".620
7.325. Having concluded that the European Union has properly raised one alternative measure that
is not the same as an existing measure already applied, the Panel now turns to the three elements
of the analysis.
Contribution of the alternative measure
7.326. The Panel has found above that the export ban and the DPR are not apt to make a material
contribution to securing compliance with Article 96(c).621
7.327. Indonesia contests the ability of the alternative measure to make an equivalent contribution
for four reasons: (i) its remedial nature; (ii) its similarity with the CnC certification; (iii) the fact that
it poses additional enforcement problems because both the supply and demand ends of the supply
chain are not under Indonesia 's jurisdiction; and (iv) the fact that it does not remove ex ante all
foreign demand for nickel ore, unlike the export ban. The Panel will address each of Indonesia's
contentions in turn.
7.328. In terms of the remedial nature of the proposed alternative compared to the preventive
nature of the measures at issue, Indonesia states that remedial measures cannot make an equivalent
contribution to the enforcement of Indonesia's sustainable mining and mineral resource
management requirements.622 Indonesia further argue s that this "type of remedial enforcement
mechanism at the point of exportation has already been tried, tested and failed to achieve
Indonesia's desired level of enforcement protection" .623 More particularly, Indonesia refers to the
CnC certification system as a remedial enforcement measure.624
7.329. The Panel has described above the differences between the export authorization system
proposed by the European Union and the CnC certification system. Therefore, the Panel does not
agree with Indonesia that this type of remedial enforcement mechanism has already been tried,
tested, and failed simply because the CnC certification was implemented. The Panel does not see a
reason to exclude without evaluation an alternative me asure using a remedial approach. Such a
measure would only be excluded if the respondent demonstrates that it cannot make an equivalent
contribution to the objective pursued. In this regard, the Appellate Body has found that a panel
should take into account the capacity of a Member to implement remedial measures, particularly if
they involved prohibitive costs or substantial technical difficulties.625
7.330. The Panel disagrees with Indonesia's argument that the export authorization system is not
a valid alternativ e because the CnC "is already part of Indonesia's currently applicable
comprehensive sustainable mining policy" .626 The Panel has already explained the export
authorization system the European Union proposes is not the same as the CnC certification. Further,

616 Indonesia's response to Panel question No. 107.
617 The Panel notes that Indonesia has stated that "[p]rior to the enactment of MEMR Regulation
No. 11/2012, nickel extraction was not subject to CnC certification". See European Union's response to Panel
question No. 107.
618 European Union's comments on Indonesia's response to Panel question No. 114 (referring to Article 1
of MEMR Regulation No. 43/2015).
619 European Union's response to Panel question No. 111.
620 Indonesia's second written submission, para. 188. (emphasis original)
621 See paras. 7.286 and 7.300 above.
622 Indonesia's first written submission, para. 220.
623 Indonesia's opening statement at the second meeting of the Panel, para. 84.
624 Indonesia's response to Panel question No. 114.
625 Appellate Body Report, Brazil – Retreaded Tyres, para. 171.
626 Indonesia's second written submission, para. 185.

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the Panel notes that that the CnC certification is no longer part of the currently applicable
comprehensive sustainable mining policy because this certification is no longer required in order to
be granted a nickel mining licence .627 Moreover, any CnC cer tifications that remain valid, that is,
those issued before the promulgation of MEMR Regulation No. 7/2020, are remnants of an earlier
legal regime.628 Finally, the absence of exports of nickel ore due to the prohibition currently in force
means that no measure – be it the CnC or any other – is being applied to check the conformity of
exports (which are not occurring) with the relevant environmental regulations. The panel in
Brazil – Retreaded Tyres' finding that an alternative to the measure at issue that i s already part of
the responding Member's comprehensive policy should be rejected,629 is consequently inapposite to
the present case.
7.331. Further, Indonesia expresses concern that the CnC would not achieve the same level of
contribution as the challenged measures, because foreign purchasers are outside its jurisdiction.
Indonesia argues that verification of compliance with the relevant regulations will become easier
"once all market operators are brought within the enforcement jurisdiction of In donesia" because
regulators can cross -check production volumes of mining companies based on their RKABs with
consumption data of processing companies. 630 Indonesia submits that "[s]uch an enhanced
enforcement mechanism is simply not available in respect of sales between domestic mining
companies and foreign purchasers of nickel ore".631
7.332. The European Union argues that Indonesia has not explained "why compliance cannot be
checked properly in the case of exported goods , particularly as the relevant legal oblig ations are
incumbent on the mining permit holder who is within the jurisdiction ".632 It further notes that
Article 96(c) contains obligations directed at Indonesian IUP and IUPK holders, not purchasers of
nickel ore and, consequently, the differences between domestic and foreign demand in terms of their
ability to enforce such obligations are not relevant.633 The European Union suggests that, as part of
an export authorization system, Indonesia could require that foreign purchasers designate a
responsible representative within Indonesia.634
7.333. The Panel agrees with the European Union that the obligation contained in Article 96(c) is
on the IUP and IUPK holders and, therefore, the Indonesian authorities should focus on them when
verifying their compliance. At the same time, the Panel understands Indonesia's position that having
both buyers and sellers of nickel ore within its jurisdiction facilitates the ability of the relevant
authorities to verify compliance. The Panel further notes that, on occasion, to verify compliance by
an economic actor, the behaviour of other economic actors may also be relevant. In the Panel's
view, the focus should be on whether the export authorization system can make an equivalent
contribution to securing compliance w ith Article 96(c) by allowing Indonesian authorities to verify
compliance. The Panel is of the view that it is not necessary to have buyers within Indonesia's
jurisdiction to verify compliance. Indonesia refers to the possibility to cross -check production
volumes of mining companies based on their RKABs with the consumption data of processing
companies. However, that is not the only possible data cross -check that would allow Indonesian
authorities to verify compliance. Nothing prevents Indonesia from cross -checking the production
volumes of mining companies found in their RKABs with their export declarations as well as the
consumption data of processing companies in Indonesia. If the sum of the nickel ore sold
domestically and abroad by a mining company exc eeded the production volume authorized in its
RKAB, this could indicate that the mining company has not acted in conformity with the relevant
sustainable mining and resource conservation requirements.

627 Indonesia's response to Panel question No. 107(a) (referring to Article 113(c) of MEMR Regulation
No. 7/2020).
628 Indonesia's response to Panel question No. 107(a).
629 Appellate Body Report, Brazil – Retreaded Tyres, para. 172. The Appellate Body reasoned that
"[s]ubstituting one element of this comprehensive policy for another would weaken the policy by reducing the
synergies between its components, as well as its total effect."
630 Indonesia's response to Panel question No. 113; and comments on the European Union's response to
Panel question No. 111.
631 Indonesia's response to Panel question No. 113. (emphasis original)
632 European Union's response to Panel question No. 111.
633 European Union's response to Panel question No. 118.
634 European Union's response to Panel question No. 111.

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7.334. As regards Indonesia's claim that remedial measures are not effective and have the added
difficulty of having to verify conformity after a transaction has already taken place 635, the Panel
refers to the discussion above that a remedial measure can be an alternative measure to a preventive
one, if it is reasonably available to the responding Member. 636 The Panel has found that the
alternative achieves at least the same level of contribution as the challenged measures. Indonesia
has opted for a preventive measure because it considers it easier to enforce. T his issue is more
properly dealt with under the alternative measure's reasonable availability and will be discussed
further below.
7.335. Based on the foregoing, the Panel is of the view that the proposed alternative measure
achieves at the very least the same l evel of contribution in terms of securing compliance with the
sustainable mining requirements in Article 96(c) by requiring proof of compliance with the relevant
environmental regulations that would be submitted by individuals within Indonesia's jurisdicti on
before the exportation of nickel ore.
Trade restrictiveness of the alternative measure
7.336. The Panel has found above that the export ban is the most trade -restrictive measure that
can be applied and that the DPR is highly trade restrictive. The export ban d irectly prohibits the
exportation of nickel ore whereas the DPR, if complied with, would mean that all nickel ore is
consumed domestically and that there is no nickel ore to export. As explained above, such refining
necessarily converts nickel ore into a different product, classified under a different HS code.637
7.337. The alternative measure proposed by the European Union would allow the exportation of
nickel ore subject to compliance with the relevant environmental standards.
7.338. The Panel therefore agrees with the European Union that its alternative measure is less trade
restrictive than the export ban and the DPR because it would permit more exports than the
challenged measures.
Technical and economic feasibility of the alternative measure
7.339. The Panel notes that Indonesia argues that it "would entail significant technical, financial
and resource obstacles for Indonesia, if it were even possible at all ".638 Indonesia explains that
border officials would not be able to determine whether the nickel ore to be exported is in compliance
with Indonesia's sustainable mining and mineral resource management requirements merely by
examining the consignment of nickel ore . This is because this examination does not concern a
product characteristic verifiable at the point of exportat ion but a process and production method
that happens prior to the arrival of the product at the point of exportation. It is Indonesia's view
that this would make the proposed alternative " simply theoretical in nature and far removed from
the facts and circumstances of this case, and the regulatory reality in Indonesia".639 Indonesia also
submits that verifying the conformity of each and every consignment of nickel ore is unreasonable.640
7.340. The Panel notes that the implementation of the proposed alternative measure may entail
costs and some technical difficulty, as usually happens when a new measure is implemented. In this
regard, the Panel recalls that the Appellate Body has found that an alternative measure is not
reasonably available "where the responding Member is not capable of taking it, or where the measure
imposes an undue burden on that Member, such as prohibitive costs or substantial technical
difficulties".641 Indonesia states that Indonesian border officials cannot determine at the point of
exportation from physical inspection of the nickel ore whether it has been mined in conformity with

635 Indonesia's response to the European Union's comment on Panel question No. 111.
636 See paras. 7.328-7.329 above.
637 See para. 2.23 above.
638 Indonesia's comment on the European Union's response to Panel question No. 111.
639 Indonesia's comment on the European Union's response to Panel question No. 111.
640 Indonesia's comment on the European Union's response to Panel question No. 111.
641 Appellate Body Report, US – Gambling, para. 308. (emphasis added) See also Appellate Body
Report, Brazil – Retreaded Tyres, para. 156 and Appellate Body Report, China – Publications and Audiovisual
Products, paras. 327-328 (noting that the respondent "did not provide evidence to the Panel substantiating the
likely nature or magnitude of the costs that would be associated with the proposed alternative, as compared
to the current system.").

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sustainable mining and mineral resource management requirements. 642 In this regard, t he Panel
notes that the alternative presented by the European Union does not refer to a physical inspection
of each consignment upon exportation, but rather a system whereby exporters produce relevant
documentation, prior to exportation, to certify compliance with the relevant requirements. These
documents could then be ve rified against the RKABs of the relevant mines. The Panel therefore
considers that Indonesia has failed to explain why it is not able to implement the proposed alternative
measure or why the costs or technical difficulties associated with its implementation are prohibitive
or substantial. Indonesia notes that not having to deal with exports makes enforcement easier. Just
because the alternative may not be as easy to implement as the challenged measures does not
mean that it is not technically or economically feasible.
Conclusion on the reasonable availability of the alternative measure
7.341. The Panel has found that the proposed alternative measure makes at least the same level
of contribution as the challenged measures , is less trade restrictive , and is technica lly and
economically feasible to Indonesia even if it s initial implementation might entail some costs and
technical difficulty . The Panel, therefore, concludes that the European Union has presented a
reasonably available alternative measure and Indonesia has failed to rebut this.
7.3.1.2.5 Conclusion on necessity
7.342. The Panel finds that the trade restrictiveness and limited contribution of the measures to the
objectives of Article 96(c) weigh towards a finding that the challenged measures are not necessary.
Moreover, the Panel has found that there is an alternative measure that is reasonably available to
Indonesia. The Panel, therefore, concludes that the result of the weighing and balancing exercise is
that the challenged measures are not necessary within the meaning of subparagraph d of Article XX
of the GATT 1994.
7.3.2 Conclusion on Article XX(d) of the GATT 1994
7.343. The Panel recalls that Article XX of the GATT 1994 sets out a two-tier test that involves, first,
an assessment of whether the measure falls under at least one of its subparagraphs and, second,
an assessment of whether the measure satisfies the requirements of the chapeau of that provision.
7.344. The Panel has found that Indonesia has failed to demonstrate that the export ban and the
DPR fall within the scope of subparagraph (d) of Article XX of the GATT 1994.
7.345. Based on the foregoing, the Panel does not find it necessary to proceed with an analysis of
the export ban and the DPR under the chapeau of Article XX of the GATT 1994.
8 CONCLUSIONS AND RECOMMENDATION
8.1. For the reasons set out in this Report, the Panel concludes as follows:
8.2. The prohibition on the export of nickel ore that began in January 2014 and is currently
implemented through Law No. 4/2009 (as amended by Law No. 3/2020), MOT Regulation 96/2019
and MEMR Regulation 11/2019 is not excluded from the applicability of Article XI:1 because it is not
a prohibition or restriction temporarily applied to prevent or relieve critical shortages of foodstuffs
or other products essential to Indonesia within the meaning of Article XI:2(a) of the GATT 1994. The
export prohibition is inconsistent with Article XI:1 of the GATT 1994. The Panel has also concluded
that the export prohibition is not justified under Article XX(d) of the GATT 1994 because it is not
necessary to secure compliance with laws or regulations that are themselves not inconsistent with
the GATT 1994.
8.3. The domestic processing requirement (DPR) that began in 2012 and is currently implemented
through Law No. 4/2009 (as amended by Law No. 3/2020), MEMR Regulation Nos. 25/2018 and
7/2020 is not excluded from the applicability of Article XI:1 becau se it is not a prohibition or
restriction temporarily applied to prevent or relieve critical shortages of foodstuffs or other products
essential to Indonesia within the meaning of Article XI:2(a) of the GATT 1994. The DPR is

642 Indonesia's comments on the European Union's response to Panel question No. 111.

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inconsistent with Article XI:1 of the GATT 1994. The Panel has also concluded that the DPR is not
justified under Article XX(d) of the GATT 1994 because it is not necessary to secure compliance with
laws or regulations that are themselves not inconsistent with the GATT 1994.
8.4. Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. The Panel concludes that the measures at issue a re not excluded from
the obligations in Article XI:1 of the GATT 1994 by Article XI:2(a) of the GATT 1994, are inconsistent
with Article XI:1 of the GATT 1994, and are not justified under Article XX(d) of the GATT 1994. As
such, they have nullified or impaired benefits accruing to the European Union under that agreement.
8.5. Pursuant to Article 19.1 of the DSU, the Panel recommends that Indonesia bring its measures
into conformity with its obligations under the GATT 1994.