Irregularities have been discovered by the Supreme Audit Institution (BPK) regarding the Fakfak Fertilizer Industrial Zone, and allegations of abuse of power have surfaced against Bahlil Lahadalia.
National Strategic Projects Under Scrutiny
National Strategic Projects are facing increased scrutiny and may be remembered as a problematic legacy of the administrations of Joko Widodo and Prabowo Subianto. Concerns have been raised that these projects often disregard principles of good governance and are susceptible to conflicts of interest, alongside potential social and environmental consequences.
The Fakfak Fertilizer Industrial Zone in West Papua exemplifies these concerns. Managed by Pupuk Indonesia with a planned investment of US$1.6 billion (Rp28.4 trillion), the project’s construction was initially slated for February 2023 but did not begin until 2026. President Joko Widodo laid the cornerstone in November 2023.
Relocation and Concerns
The project was originally intended to support the food estate project in Merauke, South Papua, by supplying fertilizer. However, the initiative encountered difficulties following a relocation decision. Pupuk Indonesia initially planned to establish the industrial estate in Teluk Bintuni Regency, West Papua, but Bahlil Lahadalia—then the Investment Minister and Head of the Investment Coordinating Board—directed a move to Fakfak Regency, his home region.
This relocation contradicted a feasibility study conducted by Deloitte, a risk management consultant hired by Pupuk Indonesia. Deloitte’s assessment predicted that moving the project would lead to increased costs and potentially jeopardize its success.
Bahlil’s intervention is described as both unusual and a breach of regulations, as he lacked the official authority to order the relocation. However, his influence as General Chair of the Golkar Party and a close advisor to President Joko Widodo allowed him to supersede the authority of the Ministry of State-Owned Enterprises, the shareholder of Pupuk Indonesia.
An audit by the BPK in the first semester of 2025 revealed that the relocation could result in state losses of Rp2.9 trillion, with land preparation and sunk costs already totaling Rp250.9 billion. The BPK concluded that continuing the Fakfak Fertilizer Industrial Zone is not feasible.
Conflict of Interest Allegations
Concerns have also been raised regarding a potential conflict of interest. Bersama Papua Unggul, a company in which Bahlil Lahadalia holds a majority shareholding, along with Papua Jaya, is involved in managing the Fakfak Fertilizer Industrial Zone.
As a high-ranking state official, Bahlil’s actions are alleged to violate Law No. 30/2014 on Government Administration, specifically concerning abuse of power and decisions made outside his jurisdiction. These practices are also suspected of violating the Law on State Governance Clean of Corruption, Collusion, and Nepotism (KKN).
This is not the first instance of alleged abuse of power linked to Bahlil Lahadalia. When serving as Chair of the Investment Acceleration Task Force, he was granted the authority to revoke and reinstate mining permits. An investigation by Tempo revealed that the reinstatement of at least 2,078 permits was reportedly linked to demands for money and shares.
Given Bahlil’s position as General Chair of the Golkar Party, it is considered unlikely that President Prabowo Subianto will order an investigation into these alleged irregularities. President Prabowo’s public commitments to lawfulness have been described as “omon-omon” or empty talk.
Frequently Asked Questions
What is the Fakfak Fertilizer Industrial Zone?
The Fakfak Fertilizer Industrial Zone is a project managed by Pupuk Indonesia, with a planned investment of US$1.6 billion (Rp28.4 trillion), intended to supply fertilizer for the food estate project in Merauke, South Papua.
What concerns were raised by Deloitte regarding the project’s relocation?
Deloitte, a risk management consultant hired by Pupuk Indonesia, assessed that relocating the project would cause problems such as soaring costs and the potential failure of the project.
What potential legal violations are alleged in this case?
Bahlil Lahadalia is alleged to have violated Law No. 30/2014 on Government Administration, specifically concerning abuse of power, and is suspected of violating the Law on State Governance Clean of Corruption, Collusion, and Nepotism (KKN).
What impact will these allegations have on future National Strategic Projects?
