BKPM to Establish Business Partnership Mechanism Following Cilegon Extortion Case
The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) has responded to an extortion case involving demands for project allocations in Cilegon. BKPM plans to create a business partnership mechanism between local entrepreneurs and investors to maintain a conducive investment climate in the country.
The case involved individuals acting on behalf of the Cilegon Chamber of Commerce and Industry (Kadin) who intimidated the management of PT Chengda, the main contractor of PT Chandra Asri Alkali (CAA), a petrochemical company in Cilegon, Banten.
Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM Todotua Pasaribu explained that the mechanism would be implemented through regional governments via the Investment and One-Stop Integrated Services Office (DPMPTSP), which would conduct permit screening, whilst investors would provide a list of work packages that could be undertaken by vetted local businesses.
"The regional government will carry out the selection process, and investors will also provide a list of work that can be contributed to local business operators," he said, as quoted by Antara on Thursday (15/5/2025).
Todotua added that the business partnership would be managed through the Online Single Submission (OSS) system, with the aim of making investment project management in the regions transparent whilst mitigating activities outside proper channels.
He further stated that the intimidation case involving individuals acting on behalf of Kadin Cilegon should serve as a turning point for his office to address such disruptive activities comprehensively.
The government is currently focused on achieving economic growth above 8 per cent, with one of its key strategies being the promotion of investment growth. Todotua said his office regretted the incident in Cilegon and would refer the matter to law enforcement authorities for further processing.
"The essence going forward is to provide a deterrent effect," he added.
Previously, the Indonesian Chamber of Commerce and Industry (Kadin) announced it would develop standard operating procedures (SOPs) regarding Kadin's involvement in strategic projects following the incident involving Kadin Cilegon members at the PT Chandra Asri Alkali (CAA) project.
The SOP initiative was announced alongside Kadin's firm stance rejecting all forms of pressure and intimidation that could disrupt the investment climate.
"To prevent similar incidents in the future, Kadin will develop SOPs for regional participation in investment projects, including a code of ethics for interactions with investors and contractors," read one of the points in Kadin Indonesia's official statement released in Jakarta on Wednesday.
Meanwhile, the Indonesian Employers' Association (Apindo) has called on the government to investigate the extortion activities disrupting the business climate in Cilegon, emphasising its importance for the security of investors operating in Indonesia.
Apindo Chairwoman Shinta W Kamdani said the extortion by civil society organisations was deeply troubling for business security.
"Regarding Cilegon, I would simply say that we need to understand the full picture. I believe they [Kadin Indonesia] will investigate further whether this was done on behalf of an organisation or an individual," Shinta said at a press conference quoted by Antara on Wednesday (14/3/2025).
"We don't want to focus too much on that side. What we want to underline is the security aspect and the role of civil society organisations. This is a matter of great concern because it also disrupts a healthy business climate," she added.
Shinta urged the government to conduct an immediate investigation to prevent recurrences. "This is perhaps our concern, but the Cilegon incident needs to be investigated further to understand the full picture," she said.
The case involved individuals acting on behalf of the Cilegon Chamber of Commerce and Industry (Kadin) who intimidated the management of PT Chengda, the main contractor of PT Chandra Asri Alkali (CAA), a petrochemical company in Cilegon, Banten.
Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM Todotua Pasaribu explained that the mechanism would be implemented through regional governments via the Investment and One-Stop Integrated Services Office (DPMPTSP), which would conduct permit screening, whilst investors would provide a list of work packages that could be undertaken by vetted local businesses.
"The regional government will carry out the selection process, and investors will also provide a list of work that can be contributed to local business operators," he said, as quoted by Antara on Thursday (15/5/2025).
Todotua added that the business partnership would be managed through the Online Single Submission (OSS) system, with the aim of making investment project management in the regions transparent whilst mitigating activities outside proper channels.
He further stated that the intimidation case involving individuals acting on behalf of Kadin Cilegon should serve as a turning point for his office to address such disruptive activities comprehensively.
The government is currently focused on achieving economic growth above 8 per cent, with one of its key strategies being the promotion of investment growth. Todotua said his office regretted the incident in Cilegon and would refer the matter to law enforcement authorities for further processing.
"The essence going forward is to provide a deterrent effect," he added.
Previously, the Indonesian Chamber of Commerce and Industry (Kadin) announced it would develop standard operating procedures (SOPs) regarding Kadin's involvement in strategic projects following the incident involving Kadin Cilegon members at the PT Chandra Asri Alkali (CAA) project.
The SOP initiative was announced alongside Kadin's firm stance rejecting all forms of pressure and intimidation that could disrupt the investment climate.
"To prevent similar incidents in the future, Kadin will develop SOPs for regional participation in investment projects, including a code of ethics for interactions with investors and contractors," read one of the points in Kadin Indonesia's official statement released in Jakarta on Wednesday.
Meanwhile, the Indonesian Employers' Association (Apindo) has called on the government to investigate the extortion activities disrupting the business climate in Cilegon, emphasising its importance for the security of investors operating in Indonesia.
Apindo Chairwoman Shinta W Kamdani said the extortion by civil society organisations was deeply troubling for business security.
"Regarding Cilegon, I would simply say that we need to understand the full picture. I believe they [Kadin Indonesia] will investigate further whether this was done on behalf of an organisation or an individual," Shinta said at a press conference quoted by Antara on Wednesday (14/3/2025).
"We don't want to focus too much on that side. What we want to underline is the security aspect and the role of civil society organisations. This is a matter of great concern because it also disrupts a healthy business climate," she added.
Shinta urged the government to conduct an immediate investigation to prevent recurrences. "This is perhaps our concern, but the Cilegon incident needs to be investigated further to understand the full picture," she said.