Critical minerals in Southeast Asia and India

5. Environmental, Social and Responsible Business Conduct Considerations

The importance and growing demand for critical minerals brings with it a range of environmental and social risks that challenge policy makers governance capacity and require additional government intervention to appropriate mitigate. This section examines socioeconomic implications of critical minerals growth, noting how different considerations impact Responsible Business Conduct (RBC) practices, identifying what actions have been across the region and what gaps in implementation still remain.

5.1. Environmental considerations

Mineral extraction and refinement are resource intensive processes that pose clear environmental risks, and their impact on different ASEAN states is well documented. Environmental impacts threaten health and livelihoods in areas with close proximity to extractions sites, often acting as a driving source for conflict and threatening livelihoods for populations dependent on ecological goods and services (Meehan and Lawn, 2024[58]).

Deforestation has been one clear impact. Nickel mines in Indonesia have had pronounced impacts on forest cover, with evidence showing that deforestation increased at twice the rate in villages with nickel mines compared to other villages (Lo et al., 2024[59]). These impacts are multiplied when one considers the smelting and refining process of nickel is typically coal powered and results in heavy GHG emissions (Wei et al., 2020[60]). This deforestation has direct consequences on biodiversity, given the ecological importance of mining rich areas such as Sulawesi and Halmahera (Reuters, 2026[61]) (Wildlife Conservation Society Indonesia, n.d.[62]).

Water pollution presents an equally serious risk. Evidence of illegal mining operations along major river basins in the region poses massive health risks, particularly for peoples living along or downstream of the Irrawaddy and Mekong basins (Stimson Center, 2025[63]). Practices common for critical mineral mining, such as in-situ leeching, have a particularly significant impact on water quality. In-situ leeching is a process where miners channel river water to extract REEs, which can leave high concentrations of fertilizer or metal contaminants if left un-treated. Policy responses to monitor this contamination are increasingly being mobilised. Periodically, the Mekong River Commission - an intergovernmental organisation between Cambodia, Lao PDR, Thailand and Viet Nam - has published data on water quality but this data did not include tests for heavy metals or toxins. In 2025, after arsenic contamination was identified, commitments were made to begin monitoring heavy metal contamination across the Kok, Sai and Mekong Rivers (Mekong River Commission, 2025[64]).

ASEAN countries are taking these environmental considerations seriously, with strategies highlighting the importance of mining sustainability and mechanisms being introduced to monitor and limit environmental impacts. At the regional level, AMCAP-IV has the fulfilment of the ASEAN sustainability agenda as one of its objectives – requiring that sustainability be integrated into all aspects of mineral development and align with the ASEAN Framework for Blue Economy, the ASEAN Strategy for Carbon Neutrality, and ASEAN Blue Economy Framework (ASEAN, 2025[27]). National level policies and strategies feature a similar stress on sustainability. For instance, Indonesia’s National Energy Policy identified approaches to reduce the carbon impact of nickel production and processing (IISD, 2025[65]).

At the national level, countries are taking various approaches. The Philippines introduced several environmental safeguards for mining projects, requiring Environmental Impact Assessments prior to the development of any mining projects and baseline studies for ongoing projects surrounding biodiversity impacts (Environmental Management Bureau, 2026[66]) (Pascual, Domingo and Manejar, 2022[67]). Indonesia follows a similar approach, utilising an environmental approval mechanism that requires assessments of environmental impacts on biodiversity and requiring consistent monitoring and control mechanisms be in place for nickel mines (The Nickel Institute, 2024[68]).

5.2. Social and governance considerations

In Southeast Asia and India, social considerations linked to extractive industries are primarily felt by rural and indigenous communities. In Indonesia for example, indigenous communities report to have their land taken and their livelihoods threatened as a result of nearby nickel operations (ClimateRightsInternational, 2024[69]). India’s indigenous communities face similar risks, with large scale protest movements such as the Adivasi’s in the Bastar region leading to escalations of violence and increased tensions between local populations and mining organisations (ICCA, 2025[70]).

In addition, illicit mining places hurdles on governance and effective taxation while threatening the transparency of economies across the region. As of November 2025, data from the Stimson Center shows that there are around 2400 illegal mines in operation along Mekong tributaries, primarily mines engaging in gold and REE extraction (Stimson Center, 2025[63]). This challenges existing intergovernmental initiatives on river contamination and creates regional tensions (YaleEnvironment360, 2025[71]) (Mekong River Commission, 2025[64]). The most notable illicit mining is in Myanmar where illegal mining operations for REEs are widespread. These illegal mines do not just have a national impact, undermining rule of law and exacerbating political instability, but have regional trade impacts. Illegal operators circumnavigate export restrictions, leading to the creation and expansion of coordinated illicit mineral supply chains (UNICRI, 2025[72]).

National policy responses are present across ASEAN countries, but there is a large variation in approaches and their effectiveness has been questioned by critics. In Indonesia the Forestry Task Force alongside KPK (the Corruption Eradication Commission)’s Coordination and Supervision taskforces monitors mining operations and several notable crackdowns on illegal mining activities have occurred (Indonesia Corruption Watch, 2024[73]). In the Philippines, an executive order in 2025 strengthened the National Task Force in Diwalwal designed to combat illegal mining activities, environmental degradation, and socio-economic development in the Diwalwal Mining Reservation Area (Supreme Court E-Library, 2025[74]). In countries such as Lao PDR and Cambodia, ministries related to mining and industrial policy have cited cracking down on illicit mining efforts, but capacity gaps severely limit authorities’ ability to set up operational taskforces and observatories. Regional policy responses are close to non-existent. While AMCAP IV promotes transparency and safeguards for all mining activities, specific actions are not taken to address illicit mining operations (ASEAN, 2025[27]).