JakartaGlobe-March 17, 2025
Businesses across Indonesia continue to face intimidation and extortion by criminal groups posing as civic organizations, discouraging investors and disrupting industries, business leaders say. These groups, commonly referred to as ormas, have plagued the country’s business climate for years. Despite widespread complaints, authorities have yet to take concrete action to eliminate the problem. Weak law enforcement and alleged protection from rogue officials have allowed them to operate with impunity. “What we need is legal certainty and a stable business environment so that production activities remain uninterrupted,” said Edi Rivai, Legal and External Affairs Director at Chandra Asri Petrochemical, during a discussion on Sunday. Edi acknowledged that these groups frequently disrupt industrial operations and warned that continued inaction could further damage Indonesia’s investment climate.
Sahat Sinaga, Executive Director of the Indonesian Vegetable Oil Industry Association (GIMNI), said cooking oil factories have been frequent targets of extortion under the guise of community contributions. “Over time, businesses have come to accept it as a normal cost, treating it like corporate social responsibility (CSR),” he said. These groups also demand payments from companies for various activities, such as funding their anniversaries. Many businesses comply rather than risk disruptions. Ning Wahyu, Chairman of the Indonesian Employers Association (Apindo) in West Java, outlined several coercive tactics used by these groups, including forced payments, interference in employee hiring with illegal fees, mandatory procurement from specific suppliers, and exclusive catering contracts. “They even impose security fees on logistics vehicles entering industrial areas and sometimes block access to business sites,” she said. Ning attributed their unchecked growth to weak law enforcement. “The lack of firm legal action is worsening the business climate and could further erode investor confidence,” she added, urging the government to protect businesses. Read more at:
https://jakartaglobe.id/business/indonesias-business-sector-struggles-against-organized-extortion
