A complaint has been filed with the Singapore Exchange (SGX) alleging that one of Southeast Asia’s largest banks may have misled investors about its exposure to coal-powered industrial plants in Indonesia.
The complaint, filed on Monday, centres on Singapore-listed OCBC bank’s financing of entities within Indonesia’s Harita Nickel Group, whose nickel processing operations on Obi Island, North Maluku, are powered almost entirely by captive industrial coal power plants.
The complainant, environmental finance watchdog Market Forces, argues that OCBC’s disclosures do not fully reflect the climate and transition risks associated with such financing, potentially breaching of SGX rules on accurate and transparent sustainability reporting.
SGX has not responded to queries from Eco-Business about the implications of the complaint at press time.
In response to Eco-Business’ queries, OCBC’s chief sustainability officer Mike Ng said that the bank’s disclosures are aligned with SGX’s rules, and said that it is guided by principles that “do not adversely impact people, communities or the environment” as a signatory to responsible financing framework, the Equator Principles.
OCBC’s Responsible Financing Framework prohibits project financing for new coal power plants and sets thresholds for corporate clients: coal power revenue or generation must not exceed 25 per cent for new clients and 50 per cent for existing ones.
Market Forces contends that OCBC’s public disclosures do not clearly detail the bank’s exposure to clients whose operations, while not classified as coal power companies, depend heavily on coal for energy – a loophole environmental groups say is used to keep fossil fuel financing off the books.
“OCBC’s funding of Harita’s entities whose operations rely on industrial coal plants powering a nickel smelter on Obi Island, Indonesia, exposes a loophole enabling financing of fossil fuels harmful to the climate and a safe future,” said Binbin Mariana, Asia energy finance campaigner at Market Forces in a statement.
She added that SGX “needs to consider launching an investigation into whether OCBC may be misleading investors and failing its compliance with the SGX Rulebooks.”
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We recognise that the transition journey is not going to be a short and quick one. In the absence of reliable renewable energy to fully supply the required power for nickel producers, the energy transition inevitably incurs trade-offs.
Mike Ng, chief sustainability officer, OCBC
According to Harita’s disclosures, the group currently operates 910 megawatts (MW) of captive coal generation and intends to nearly double the capacity to 1,670 MW to support its fast-growing nickel operations – a sector critical to the global electric vehicle supply chain. The company only operates 40 MW of solar capacity.
Harita’s emissions have also surged, rising from 3.74 million tonnes of CO2-equivalent in 2022 to 10.87 million tonnes in 2024. Market Forces notes that this increase – almost threefold – is equivalent to the annual emissions of 2.5 million fossil fuel cars.
The watchdog said such figures are crucial for investors evaluating OCBC’s climate risk exposure and its alignment with global coal phase-out pathways. OCBC is the largest financier of Harita Group over the last eight years, according to Market Force analysis published last April.
Market Forces argues that investors rely on banks’ climate commitments and coal exclusion policies to understand how financial institutions are managing the transition away from high-emissions assets. Any discrepancies between stated policies and actual financing could lead to reputational, regulatory and financial risks.
“Investors need the full picture as they rely on climate and coal phase-out commitments disclosed by banks to assess growing climate-related risk,” Mariana said. “There must be greater transparency from all banks on how financing any companies whose operations rely on coal power plants is aligned with their own policies, global climate goals and the critical transition to clean, reliable and affordable energy.”
Market Forces did not file a complaint against Singapore’s two other banks DBS and UOB – also lenders to Harita Group – because the latter two banks have “different policies, funding timelines and exceptions,” Mariana said.
But she asked: “How does funding coal-powered nickel operations in Indonesia align with the Paris Agreement’s global climate goals?” referencing the global pact to keep global temperatures at 2°C or lower.
OCBC has provided US$470 million in total to Harita Group companies in three separate finance deals enabling its coal-powered nickel operations, she added.
Renewables-powered nickel production ‘not pragmatic’
Reitering a statement made in response to criticism of its Indonesia nickel financing last year, OCBC’s Ng said that it was “not pragmatic” to expect production of the transition metal to be fully powered by renewables in Indonesia, where grid connectivity is often beyond the control of companies. Nickel processing requires a large, uninterrupted power source, which cannot be reliably supplied by location-specific wind and hydropower, or intermittent solar, he said.
Ng added that the energy transition is “not going to be a short and quick one,” and Indonesia’s nickel industry is vital for global decarbonisation, with electric vehicle battery production expected to jump ninefold over the next 25 years. “In the absence of reliable renewable energy to fully supply the required power for nickel producers, the energy transition inevitably incurs trade-offs,” he said.
Indonesia’s nickel boom is emerging with a sizeable climate cost. According to analysis by the Centre for Research on Energy and Clean Air released in January, the operational and planned captive coal capacity to power the country’s nickel smelters has reached 31 gigawatts (GW) – tripling the amount recorded in 2023.
The non-profit estimates that Indonesia’s nickel mining and processing regions of Central Sulawesi and North Maluku could lose 5,000 people to air pollution annually by 2030, and suffer US$235 million in losses for local farmers and fishers over the next 15 years.
