Towards a Public Pathway Approach to a Just Energy Transition: Trade Union Initiative through “Article 33 Scenario” Position Paper

In responding to a wave of energy transition pushed by the decarbonization and sustainable development agenda, trade unions in energy sector in Indonesia such as Serikat Pekerja PT PLN Persero (SP PLN), Persatuan Pegawai PT PLN Indonesia Power (PP-IP), and Serikat Pekerja PT PLN Nusantara Power (SPNP), took a strategic step by publishing their position paper: Article 33 Scenario: Towards a Public Pathway Approach to a Just Energy Transition in Indonesia’s Electricity Sector.” (English version: click here)

The position paper was written in responding the tendency of national energy policy that increasingly market driven, depends on foreign investments and green financing-based debts. Trade unions asses that the direction of energy transition in Indonesia is getting further and further away from the principle of justice, and at the same time, against the constitutional mandate.

Through this position paper, the trade union offers an alternative path for a state-managed public transition in accordance with the spirit of Article 33 of the 1945 Constitution. This approach emphasizes the importance of state control over strategic sectors, including electricity, to ensure the energy transition is just, sovereign, and in the interests of the people. This position paper reflects workers’ serious efforts to actively participate in the formulation of sustainable and democratic energy policies.

Trade unions realize that the currently prominent narrative of “energy transition,” mainly under the Just Energy Transition Partnership (JETP) scheme, does not guarantee justice and energy sovereignty. The General Chairman of SP PLN, M. Abrar Ali, said that “We must not measure energy transition only by calculating the portion of renewable energy in the energy mix, but also by factoring the actor who controls energy, who benefits from it, and who bears the burden mostly.” 

Meanwhile, the General Secretary of PPIP, Andy Wijaya, added, “Energy transition to replace a form dependency with another form of dependency, from coal to IPP and debt, is not a just transition. We want to return to the Article 33 of our Constitution mandate, that is to the national energy policy.”

The position paper consists of four parts and is written in a systematic way: it starts with the national and global context, unraveling the legacy of neoliberal policy, criticizes the transition finance under JETP, and offers a public pathway scenario as a solution. The position paper is a working paper that will update following the

Part One: Indonesia’s Energy Reality – Not a Transition  but an Expansion 

The position paper starts by unraveling the basic assumption widely accepted in Indonesia’s  energy policy discourse: that Indonesia is on the energy transition track. Based on the analysis on the available data and observation on the current trend, the position paper concludes that what is happening now is not an energy transition, instead, it is an energy expansion under the old framework that actually depends more on the fossil fuels, particularly coal.

The facts contained in the paper show that Indonesia’s coal export is currently reaching a record in history. Meanwhile, the domestic use of coal is only a quarter of total national production. This means that domestic energy emand depends highly on export as its source of profit, and not on the energy as peoples’ basic right. Under this situation, rew renewable energy deployment is stagnant. Renewables development is very slow and unable to reach the massive potential in Indoneisa, such as hydro and geothermal.

On the other side, Indonesia’s carbon emission is growing rapidly. The country’s committment to decarbonization is not directly proportional to the actual policy. Energy transition supposed to be a systemic change and a move away from fossil fuel dependency to a clean, just, and sustainable energy. However, in practice, Indonesia’s energy poliby is heading towards the continuation of old growth model that relies heavily of natural resources extraction and market-based energy provision.

“Such policy direction does not answer the challenge posed by climate change, and it is unjust for the people, and will likely worsen the corporate domination on the energy sector management. Instead of promoting energy democracy and access to all groups of the people, this policy will only facilitate the continuation of market control and limit state’s role in guaranteeing the energy sovereignty,” Abrar said.

Thus, the government’s narrative of “energy transition” has no strong basis in reality. What’s happening is an expansion of energy within the framework of neoliberalism, not a structural transformation towards an energy system that is just and in the public interest.

Part Two: Energy Privatization within the Framework of Neoliberalism

The second part of this position paper traces the historical roots of Indonesia’s energy policy direction, which is increasingly shifting away from public control towards market dominance. The labor union sharply dissected how the neoliberal reforms implemented since the New Order era have laid the foundation for the liberalization of the electricity sector. Interventions by international financial institutions such as the World Bank and the IMF, particularly after the 1997–1998 Asian financial crisis, marked a turning point in the shift of energy management structures from being state-based to being open to private and foreign investment.

Through structural adjustment policies, Indonesia was compelled to open its energy sector to third parties under the Independent Power Producer (IPP) scheme. The entry of IPPs not only created new business opportunities but also marked the beginning of the state’s gradual loss of control over electricity generation. Although the 2002 Electricity Law was briefly annulled by the Constitutional Court for violating Article 33 of the 1945 Constitution, the liberalization agenda embedded in the policy has continued to influence subsequent regulations.

The 35,000 MW program and fast-track policy launched during the Susilo Bambang Yudhoyono administration and continued by Joko Widodo expanded the dominance of IPPs, with various incentives and long-term contracts that burdened PLN. Take-or-pay contracts, where PLN still had to pay for electricity even if it wasn’t used, strained the state-owned company’s finances and created a crisis that the workers’ union called a “synthetic crisis.”

Recent policies such as the 2020 Omnibus Law and Presidential Regulation No. 112 of 2022 on Accelerating Renewable Energy further solidify the direction of liberalization. The pretext of accelerating the energy transition is used to perpetuate corporate dominance and reduce the state’s obligation to equitable energy development. Foreign investment is prioritized, while protection for national industries like the Local Content Requirement (LCR) is considered an obstacle.

In Andy Wijaya’s view, all of this is a new form of economic colonization: “privatization for decarbonization.” Behind the narrative of transition and sustainability lies a profit-and-loss logic that sacrifices the interests of the people and national sovereignty. Decarbonization is not being implemented within a framework of public ownership, but rather through schemes that deepen dependence on global capital and narrow the state’s space for regulation.”

Part Three: The JETP Scheme and the Transition Financing Crisis

In the third section of this position paper, the trade union critically examines the JETP scheme, which is often promoted as a form of global partnership to support the energy transition of developing countries. However, for the trade union, the JETP is not a true partnership, but rather a new form of subordinating national policies to the agenda and interests of international capital. Instead of creating a just transition, JETP actually gives rise to an illusion of fairness that conceals the structural power imbalances between donor and recipient countries.

One of the key elements in JETP is the Comprehensive Investment and Policy Plan (CIPP) document. Trade unions highlighted that the CIPP was drafted in secret, full of assumptions not publicly tested, and weakened the state’s role in strategic planning and decision-making. This kind of planning makes the government lose sovereignty in determining the direction and national energy priorities, as it is driven more by investment interests than the needs of the people.

The financing scheme used in JETP relies on a blended finance and de-risking approach. In this concept, the state takes over the investment risk so that the private sector feels “safe” to participate. However, in reality, profits remain monopolized by investors, while the risk of losses is borne by the public through the state budget, concessional loans, or state guarantees. In this context, trade unions firmly state that the de-risking scheme is not a solution, but rather a fiscal trap that burdens the country and diverts public funds from more pressing sectors.

The financing scheme used in JETP relies on a blended finance and de-risking approach. In this concept, the state takes over the investment risk so that the private sector feels “safe” to participate. However, in reality, profits remain monopolized by investors, while the risk of losses is borne by the public through the state budget, concessional loans, or state guarantees. In this context, trade unions firmly state that the de-risking scheme is not a solution, but rather a fiscal trap that burdens the country and diverts public funds from more pressing sectors.

The bankability crisis, or investment viability, is also a significant focus. Many public energy projects are not attractive to investors because they are considered financially unprofitable, despite having high social and environmental benefits. As a result, projects that are truly needed by the people can only proceed if the state provides significant subsidies or guarantees, which again places a burden on public finances.

In Indonesia, de-risking schemes have been implemented through initiatives such as SDG Indonesia One, which aims to consolidate financing for sustainable projects. However, in practice, this program shows how the state is constantly pressured to provide incentives and protection to investors, while the benefits received by the public are very minimal. In the union’s view, this type of financing model perpetuates inequality and exacerbates the crisis of confidence in market mechanisms.

Trade unions firmly concluded that the JETP scheme and the entire approach to debt-based financing and private investment have failed to address the challenges of justice in the energy transition. Abrar stated, “The de-risking scheme has failed. A transition that relies on debt and private investment will never be fair and sustainable.” This statement not only reflects a rejection of existing practices but also serves as an affirmation that the energy transition must be returned to public hands—managed by the state and designed based on social needs, not investor interests.

Part Four: Scenario Article 33 – Public Path as an Alternative

The final section of this position paper is the core of the entire argument and strategic proposal put forward by the trade union: an energy transition scenario based on Article 33 of the 1945 Constitution. Through this approach, the union proposes an alternative path that places the state as the main actor, with the principles of social justice, economic sovereignty, and public control over strategic sectors as its main foundation. This path was developed in response to the failure of the liberal approach and foreign investment to achieve a just transition.

The first recommended step is to ensure that the funding for the energy transition comes from public sources. The state must cease various forms of subsidies to Independent Power Producers (IPPs) and redirect public funds—from the State Budget (APBN), State-Owned Enterprises (BUMN), and public banks—to directly finance sustainable energy projects. The development of hydroelectric power plants (HPPs), geothermal energy, and other renewable energy sources must be based on domestic needs and the interests of the people, not on the interests of foreign investors. The transition should not be determined by the logic of profitability, but by public service orientation and long-term sustainability.

The second step is to reclaim PLN’s central role as a state-owned enterprise responsible for the national electricity system. Trade unions revealed how PLN’s financial crisis was not due to internal inefficiencies, but rather the result of unfavorable contracts, such as the take-or-pay scheme which requires PLN to pay for electricity from IPPs even if it is not used. In this context, the union is pushing for a comprehensive renegotiation of power purchase agreements (PPAs) with independent power producers (IPPs), citing similar steps taken by Mexico in reforming its energy sector. Additionally, the energy planning mandate, which has been increasingly controlled by international schemes and investors, must be fully returned to PLN, and the logic of cost recovery as the basis for electricity tariffs must be ended. Energy is a right of the people, not a commodity.

The third step proposed is the restoration of the state’s energy planning function. Trade unions assert that transition planning cannot be left to market mechanisms. The government must develop a realistic, measurable roadmap rooted in social, geographical conditions, and national production capacity. The main focus needs to be directed towards strengthening energy transmission and storage infrastructure, as well as developing technologies that are suitable for the needs and capabilities of the Indonesian people. Renewable energy projects developed must truly reach the community, not just serve the export market or the interests of global corporations.

Furthermore, the trade union views Indonesia as having a strategic role in building a more just global energy governance. In this concluding section, they call for the spirit of “Bandung 2.0″—a vision for building solidarity among developing countries (the Global South) in countering the dominance of developed countries and international financial institutions in the energy transition agenda. Indonesia is encouraged to become a pioneer in promoting a just and managed global agreement on the coal phasedown, and in advocating for the recognition of energy as a global public good.

By adopting the Article 33 Scenario, the labor union not only rejects the transition path imposed by external interests but also demonstrates that there are more democratic, just, and sovereign alternatives. This public path is not a utopian dream, but a realistic road if the state has the political will to side with the people and make energy a tool for collective well-being. For labor unions, this is the momentum to return energy to the hands of the people and truly implement the mandate of the constitution in the national electricity sector.

Conclusion: Energy as a Right, Not a Commodity

Through this position paper, the trade union aims to restore basic logic in energy management: that energy is a right of the people, not a market commodity. The energy transition will only be just if it is controlled by the state, designed by the public, and directed towards social welfare, not corporate profit.

At the very least, this position paper is a political declaration from workers who refuse to submit to the logic of debt and market dominance. The union call for an end to dependence on IPPs and the establishment of a transition path based on Article 33 of the 1945 Constitution. They believe that only with a public approach can Indonesia achieve a truly just energy transition.

As Andy Wijaya emphasized, “We are not just talking about electricity. We are talking about the future of the nation. A just energy transition is a shared responsibility.”