Indonesia has recently canceled the permits of 28 resource companies as part of an investigation into their potential role in last year’s catastrophic floods that resulted in over 1,000 fatalities. President Prabowo Subianto made the decision following a report from a government task force that found these companies had breached various regulations.
According to State Secretary Prasetyo Hadi, the investigation revealed serious violations, prompting the president to revoke the permits. “We are dedicated to ensuring that businesses in the natural resource sector adhere to local laws and regulations,” Hadi stated.
Of the 28 companies affected, 22 are engaged in work in natural forests and plantations, covering around 1 million hectares. The remaining six are involved in sectors like mining and timber. Indonesia, rich in natural resources, is a leading producer of palm oil and nickel, but the industry has faced consistent criticism for causing deforestation and significant environmental damage, especially in areas like Sumatra.
In the wake of the devastating floods that occurred in late November, which claimed 1,190 lives, the government intensified its scrutiny of possible regulatory violations. Officials have pointed to mining operations and palm oil plantations as contributing factors to the flooding and landslides, promising increased oversight.
Among the revoked permits is that of Agincourt Resources, linked to Jardine Matheson, which runs the Martabe gold mine in Sumatra. This mine has attracted controversy for its environmental impact, particularly on the endangered Tapanuli orangutan. In 2024, Norway’s sovereign wealth fund divested from Jardines, citing severe environmental concerns tied to the mine.
The Martabe mine has been closed since December as investigations by Indonesian authorities continue. Agincourt expressed its respect for the government’s decision but did not provide further comments.
Other affected companies include North Sumatra Hydro Energy, associated with China’s SDIC Power Holdings, and Toba Pulp Lestari. While Toba announced its intention to cooperate with authorities, North Sumatra Hydro Energy did not respond to inquiries.
This month, the Indonesian Environment Ministry also launched civil lawsuits against six companies suspected of causing environmental harm in North Sumatra, alleging they disrupted crucial watershed systems. The authorities have indicated that criminal charges could follow against certain firms and individuals involved.