Crackdown or land grab? The Asian leader targeting resource companies

Indonesian economyAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTCrackdown or land grab? The Asian leader targeting resource companiesIndonesia’s Prabowo Subianto has vowed to get tough with those breaching environmental regulationsSmoke rises during the deforestation of a new planting area for palm oil plantations in Lamno, Indonesia’s Aceh province © Chaideer Mahyuddin/AFPCrackdown or land grab? The Asian leader targeting resource companies on x (opens in a new window)Crackdown or land grab? The Asian leader targeting resource companies on facebook (opens in a new window)Crackdown or land grab? The Asian leader targeting resource companies on linkedin (opens in a new window)Crackdown or land grab? The Asian leader targeting resource companies on whatsapp (opens in a new window) Save Crackdown or land grab? The Asian leader targeting resource companies on x (opens in a new window)Crackdown or land grab? The Asian leader targeting resource companies on facebook (opens in a new window)Crackdown or land grab? The Asian leader targeting resource companies on linkedin (opens in a new window)Crackdown or land grab? The Asian leader targeting resource companies on whatsapp (opens in a new window) Save A. Anantha Lakshmi in JakartaPublishedMarch 23 2026Jump to comments sectionPrint this pageUnlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Indonesia has seized millions of hectares of land from resource companies and revoked several permits over alleged environmental violations, in what critics describe as an arbitrary crackdown by President Prabowo Subianto that is deterring investors from south-east Asia’s largest economy. Since launching a campaign in March last year, the government has confiscated and taken over about 5mn hectares of land from palm oil and mining companies for allegedly operating in forest areas illegally. More than 100 companies have been penalised, and Prabowo has said an additional 4-5mn hectares could be seized this year.His government has also revoked permits of 28 resource companies operating in more than 1mn hectares of land for alleged breach of environmental rules that Jakarta says exacerbated deadly floods late last year, and has vowed to transfer the operations to state-owned enterprises. While green groups have welcomed the crackdown, they have criticised the transfer of business operations to state-owned companies and warn that state control does not guarantee environmental protection. “Nationalisation in Indonesia has rarely driven nature protection or economic success . . . Instead it has left a damaging legacy that Indonesia still struggles with,” said Mighty Earth chief executive Glenn Hurowitz.Businesses say Prabowo is using the crackdown not just to levy penalties but to nationalise key strategic assets. “There has been zero due process. Many people feel quite shaken down,” said one mining industry executive. “What is happening is an inappropriate transfer of assets.”The unprecedented scale of the enforcement drive alarms investors, already concerned about Prabowo’s fiscal and economic policies. A decline in investments could have a global impact as Jakarta is the world’s largest exporter of palm oil, nickel and thermal coal.“Most firms in the resources industries have committed some kind of violation over the years . . . But the highly discretionary and untransparent nature of the seizures mean many insiders believe there are political motivations at play,” said Eve Warburton from the Australian National University and an author of a book on Indonesia’s resource nationalism. The private sector in Indonesia is now nervous, said Wijayanto Samirin, an economist at Paramadina University and former adviser to the vice-president. “They don’t want to invest because they don’t see that in the future private sector [companies] will have enough room to play. Companies are [also] scared to do business because of the potential of criminalisation.”Prabowo, a former military general, has framed the seizures and permit revocations as part of his efforts to crack down on corruption and protect forests. “We have in fact enacted the boldest, the most daring forest law-enforcement effort in the history of Indonesia,” Prabowo said in a speech at Davos in January. “There can be no compromise, there can be no turning back.”Barita Simanjuntak, spokesperson for the forestry task force leading the enforcement actions, dismissed criticism that the government’s action was arbitrary and amounted to nationalisation.“It is important to emphasise that the government is not confiscating land, but rather regaining control of areas that have always belonged to the state,” he told the FT. Legal action could be taken against companies if “indications of criminal acts” are identified, he said. The government has said “the potential fines” from the palm oil and mining sectors in 2026 from the enforcement action could reach Rp142tn ($8.5bn). Indonesia’s goal appears to be revenue recovery rather than environmental protection, said Matt Sechovsky, head of ESG Country Risk, at BMI, a unit of Fitch Solutions, citing a lack of “meaningful follow-up with more aggressive environmental protection policies”. “Indonesia has a legacy of opaque decision-making when it comes to state-owned companies and local governance, which will be difficult to fix quickly.”The crackdown has so far impacted dozens of companies, including Hong Kong conglomerate Jardine Matheson, French miner Eramet and Chinese steel and nickel producer Tsingshan. About 1.7mn hectares of the confiscated palm oil plantations have been handed over to Agrinas, a newly established state-owned company that has become the world’s largest palm oil company by land size thanks to the seizures. Prabowo set up Agrinas in early 2025 as part of efforts to strengthen food security. Several former military officers hold leadership roles. Agrinas did not respond to a request for comment. Some of the 100-plus companies that have been penalised have contested the allegations, saying they have the right permits or that the authorities have overestimated the size of the land involved in the alleged breach, the task force said this month. Jakarta has already said it would reconsider its decision to take over the Martabe gold mine operated by a unit of Jardines on Sumatra island, amid an industry outcry over the government’s failure to follow due process.The government revoked Jardines’ permit in January, along with those of dozens of other companies, for alleged breach of unspecified regulations. A minister said the companies’ activities may have worsened the impact of floods in Sumatra that killed more than 1,000 people last year. Jardines declined to comment. Tsingshan did not respond to a request for comment. Eramet said it was working with authorities to ensure that the Weda Bay nickel mine — which it operates along with Tsingshan — complied with rules. “As a foreign investor, we believe that transparent regulatory processes and a clear, predictable legal framework are important for maintaining a stable investment climate,” Eramet told the FT.In some cases, soldiers have arrived with investigators to inspect alleged breaches, executives from affected companies told the FT. “Active soldiers are on the ground. That’s a problem. There is no room for discussion,” said one executive. Additional reporting by Diana MariskaReuse this content (opens in new window) CommentsJump to comments section Follow the topics in this article Asia-Pacific companies Add to myFT Indonesian economy Add to myFT Prabowo Subianto Add to myFT A.

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