Indonesia’s Investment Ministry has reported a significant drop in cases of investor intimidation and illegal extortion, often referred to as “thuggery,” which has long been a concern for both domestic and foreign investors.
Deputy Minister of Investment and Downstreaming/Deputy Head of the Investment Coordinating Board, Todotua Pasaribu, emphasized that coordinated efforts between the central government and law enforcement have begun to yield results.
“Every week, regional police chiefs report to us, and the situation has now become much more manageable,” said Todotua in Jakarta on Thursday, June 19, 2025.
He added that the government is taking a firm stance against thuggery and other threats that disrupt Indonesia’s investment climate.
One of the most high-profile cases involved the alleged extortion of a factory project by PT Chandra Asri Alkali (CAA), valued at USD 312 million. It reportedly involved the Cilegon Chamber of Commerce and several mass organizations. The case is currently undergoing legal proceedings. Authorities say the situation on the ground has stabilized.
“Thuggery, firm. Our latest example is the Chandra Asri case. Now, based on weekly police reports, the situation has greatly improved,” Todotua said, as quoted by Tirto on June 19, 2025.
He noted that illegal licensing fees and safety issues are common topics brought up by investors during roadshows abroad.
“These are the kinds of issues they bring up when we meet them overseas,” he said, stressing the need for a safe and predictable investment environment.
Todotua warned that extortion could raise the operational cost of investment in Indonesia by 15–20%, deterring potential investors.
“With such additional costs, how can we expect investors to choose Indonesia?” he said.
The Chandra Asri project is part of the 2025–2029 National Medium-Term Development Plan. It has been designated as a National Strategic Project under Presidential Regulation No. 12/2025.
The petrochemical downstreaming initiative aims to increase export value to between USD 2.2 billion to USD 2.5 billion by 2040.
According to the Investment Coordinating Board data, total investment realization in Banten Province during the first quarter of 2025 reached USD 1.94 billion. The top three contributing sectors were real estate and industrial/commercial zones (USD 300 million), basic metal and fabricated metal industries (USD 256 million), and the chemical and pharmaceutical industries (USD 231 million).
To address ongoing challenges, including regulatory red tape and safety issues, the government is preparing an Investment Acceleration Task Force. It will operate under the Coordinating Ministry for Economic Affairs. The task force will focus on resolving high-risk business licensing issues. It also aims to boost investor confidence by ensuring legal certainty.
One strategy includes implementing a post-audit approach in industrial zones, allowing construction to start before all permits are finalized.
“The essence remains intact, but the process is faster. Industrial areas are now more organized and monitored,” Todotua explained.
He expressed optimism that the government’s firm actions will not only reduce security threats but also accelerate investment realization and improve Indonesia’s image among global investors.
Source: Antara, Tirto
Photo Credit: Pixabay (pexels.com)
