KONTAN.CO.ID - JAKARTA. The China Chamber of Commerce has sent a\nletter to President Prabowo Subianto to convey various complaints\nregarding the investment climate in Indonesia.<\/p>\n
In the letter circulating on Tuesday (12\/5\/2026), Chinese business\nactors highlighted several policies deemed burdensome to the business\nworld, ranging from increases in mineral royalties, regulatory\nuncertainty, to excessive law enforcement.<\/p>\n
One of the main concerns is the planned change in the mineral royalty\nscheme by the Ministry of Energy and Mineral Resources (ESDM). This\npolicy is seen as potentially increasing production costs for the mining\nindustry and nickel downstreaming in Indonesia.<\/p>\n
\u201cChinese investment companies in Indonesia have consistently\nsupported the Indonesian government and conducted business in accordance\nwith applicable laws,\u201d wrote the China Chamber of Commerce.<\/p>\n
They claim that Chinese investment contributes to economic growth,\njob creation, downstream industry development, and the fulfilment of\ncorporate social responsibility.<\/p>\n
However, they assess that in recent times, the business world has\nfaced increasingly significant challenges.<\/p>\n
\u201cCompanies operating in Indonesia face overly strict regulations,\nexcessive law enforcement, and even corruption and extortion by certain\nauthorities,\u201d the letter continues.<\/p>\n
According to the China Chamber of Commerce, this situation is\nbeginning to disrupt normal business operations and reduce investor\nconfidence in long-term investment in Indonesia.<\/p>\n
One major highlight is the increase in various taxes and levies,\nincluding mineral resource royalties that have been raised repeatedly.\nIn addition, companies complain about the intensity of tax inspections\nand large fines.<\/p>\n
\u201cTaxes and fees, including mineral royalties, have been raised\nrepeatedly, accompanied by tax inspections and fines amounting to tens\nof millions of US dollars,\u201d they wrote.<\/p>\n
The China Chamber of Commerce also protests the Natural Resource\nExport Proceeds (DHE SDA) policy. According to them, the obligation to\nplace 50% of export proceeds in national banks for at least one year\ncould disrupt company liquidity.<\/p>\n
\u201cThis will greatly harm company liquidity and long-term operations,\u201d\nthey wrote.<\/p>\n
Other complaints relate to the reduction in nickel ore quotas in the\nWork Plan and Budget (RKAB). They state that the quota cut reaches more\nthan 70%, equivalent to a production decrease of around 30 million\ntonnes.<\/p>\n
According to the China Chamber of Commerce, this situation could\ndisrupt the development of nickel-based downstream industries, including\nthe electric vehicle and stainless steel sectors.<\/p>\n
In addition, they highlight forestry law enforcement that is deemed\ntoo strict. The letter mentions that a Chinese investment company was\nfined up to US$180 million due to forest area permit issues.<\/p>\n
The China Chamber of Commerce also complains about the halt of\nseveral major projects, attributed to interference by Indonesian\nauthorities. One example is a hydroelectric power plant project accused\nof damaging forest areas and exacerbating flooding.<\/p>\n
In the labour sector, Chinese business actors assess that the process\nof obtaining foreign worker visas in Indonesia is becoming increasingly\ncomplicated. They mention rising costs, stricter requirements, and work\nlocation restrictions that hinder the mobility of experts and\nmanagement.<\/p>\n
Not only that, they also express concerns about the government\u2019s new\npolicy plans, such as potential additional export duties, reduction in\nelectric vehicle incentives, and evaluation of special economic zone\nincentives.<\/p>\n
The biggest spotlight is directed at the change in the nickel ore\nbenchmark price (HPM) regulations by the Ministry of ESDM. In the\nletter, the China Chamber of Commerce states that the HPM formula\nchange, which now includes cobalt, iron, and other mineral components,\nhas triggered a significant surge in nickel ore costs.<\/p>\n
\u201cThe implementation of this policy suddenly has caused a 200% spike\nin nickel ore costs,\u201d they wrote.<\/p>\n
The China Chamber of Commerce assesses that this cost increase could\nheighten operational losses for companies and disrupt the balance of the\nnational nickel industry chain.<\/p>\n
They also warn that the impact could extend to new investments,\nexports, and jobs for more than 400,000 workers related to the nickel\nindustry in Indonesia.<\/p>\n
\u201cThis could weaken global investor confidence in Indonesia\u2019s nickel\nsector,\u201d wrote the China Chamber of Commerce.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/china-chamber-of-commerce-writes-to-prabowo-protests-strict-regulations-royalty-burdens-and-sda-export-1778656115", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }