On December 12, some 300 workers at PT. CTLI (Shengtuo Company), a Chinese-owned company operating inside Indonesia’s Morowali Industrial Park, walked off the job. Their demands were neither radical nor vague. They asked for payslips that arrive on time, personal protective equipment that fits their work, rest days that are not quietly erased, meals on overtime shifts and an end to unilateral dismissals. In short, they asked to be treated as workers with rights, not as expendable inputs in a global supply chain.

That these demands had to be shouted through a protest is the real scandal. And responsibility for it rests less with Beijing than with Jakarta.

A decade of ambition meets regulatory challenges

Over the past decade, Indonesia has eagerly courted Chinese investment, particularly in nickel processing and downstream industries critical to the global energy transition. The Indonesia Morowali Industrial Park, or IMIP, has become a symbol of that ambition: a sprawling industrial complex producing stainless steel and battery materials for the world. It has delivered jobs, export revenue and geopolitical leverage. But it has also revealed a troubling pattern: when foreign capital arrives faster than state capacity to regulate it, workers pay the price.

The Morowali protest exposes systemic failures that go well beyond one company. Workers complained of missing payslips, inadequate safety gear, excessive physical workloads for women, the elimination of rest days without additional staffing, opaque bonus systems and punitive policies that cancel overtime pay when workers take sick leave. These are not obscure technical disputes. They are violations of basic labor protections already enshrined in Indonesian law.

Gaps in enforcement, not labor regulations

Indonesia does not lack labor regulations. What it lacks is enforcement — especially when the employer is a powerful foreign investor embedded in a strategic national project. Local officials are often reluctant to confront companies that promise jobs and infrastructure. National authorities, meanwhile, are torn between protecting workers and maintaining Indonesia’s reputation as an “investor-friendly” destination. Too often, the balance tilts decisively against labor.

Chinese companies operating abroad frequently bring management practices shaped by China’s own development experience: long hours, top-down discipline and weak independent unions. That context helps explain some of the tensions in Morowali, but it does not excuse them. When companies operate in Indonesia, they must follow Indonesian law. Ensuring that they do so is not China’s responsibility. It is Indonesia’s sovereign duty.

Indeed, failing to impose strict and consistent rules ultimately undermines Indonesia’s own long-term interests. Labor unrest disrupts production, damages investor confidence and fuels public resentment toward foreign involvement. Worse, it risks turning strategic industrialization into a race to the bottom, where competitiveness is built on suppressed wages and compromised safety rather than productivity and innovation.

Toward a proactive and transparent regulatory framework

The government’s current approach — intervening sporadically after protests erupt — is inadequate. What is needed is a proactive regulatory framework specifically tailored to large foreign-dominated industrial zones like IMIP. This should include regular, unannounced labor inspections; mandatory public reporting on wages, safety incidents and employment practices; and meaningful penalties for violations, including suspension of operating licenses for repeat offenders.

Transparency is crucial. Workers at PT. CTLI demanded something as basic as payslips issued on time. That request alone speaks volumes about how opaque employment relations have become. Requiring standardized payroll documentation, clear overtime calculations and accessible grievance mechanisms would go a long way toward preventing disputes before they escalate.

Equally important is empowering workers themselves. Independent unions must be allowed to operate freely inside industrial parks, without intimidation or co-optation. Outsourced and contract workers — often the most vulnerable — should enjoy the same protections against arbitrary dismissal as permanent staff. Policies that punish workers for taking sick leave, as alleged at PT. CTLI should trigger immediate sanctions.

None of this means turning away foreign investment. On the contrary, clear and enforced rules benefit responsible investors by creating a level playing field. Companies willing to respect labor standards should not have to compete with those that cut costs by ignoring them. Indonesia’s goal should not be cheap industrialization, but sustainable industrialization.

The Morowali protest should be a warning. Indonesia is at a pivotal moment, seeking to transform its natural resource wealth into industrial power. That transformation will succeed only if it carries workers along with it. If the government continues to look the other way when labor rights are trampled, it risks building its industrial future on fragile foundations.

Stricter rules for Chinese companies — and for all foreign investors — are not an act of hostility. They are an assertion of sovereignty. And they are long overdue.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.