13-05-2025
‘Be firm on thugs': Indonesia to tackle protection rackets as investments threatened
JAKARTA: A grainy photo shows a 3m-wide banner hanging at the entrance of a rubber processing factory in Central Kalimantan province in Indonesia. The banner reads: 'This plant's operations have been shut down by Grib Jaya Kalteng.'
Grib, short for Gerakan Rakyat Indonesia Bersatu, is one of the country's many organisasi kemasyarakatan (ormas) or community groups said to be engaging in extortion and protection rackets, at the expense of business.
On April 26, a video surfaced on social media showing its members putting up the banner.
After the video went viral, police investigated and found that Grib's intimidation tactics were aimed at collecting a supposed debt from the factory, on behalf of the group's client.
This practice of ormas members forcing companies to pay up by threatening harassment, disruption and even violence has been prevalent for decades.
But politicians are now vowing to crack down on it, not least because it impedes commerce and the ambitious 8 per cent annual growth target set by Indonesian President Prabowo Subianto.
West Java Governor Dedi Mulyadi recently pledged to stamp out thugs masquerading as community groups in his province, which houses the highest number of industrial estates in the country. This came after the police arrested Grib members who had set fire to three police cars on April 18 in Cimanggis.
The governor's promise itself was met with threats.
'Don't mess with us... We never mess with you. It is a warning to you to not create chaos,' Grib spokesman Razman Nasution told reporters, referring to Dedi.
Meanwhile, Grib chairman Rosario de Marshall, also known as Hercules, said he could mobilise 50,000 members to storm the governor's office in Bandung. The group's membership across Indonesia is believed to number in the hundreds of thousands.
Neither Razman nor Rosario responded to The Straits Times' queries.
Other incidents revealed via social media have highlighted how thuggery by errant community groups is hampering investment and raising the cost of doing business in Indonesia.
In an Instagram post on April 21, Eddy Soeparno, a member of the parliamentary committee on energy, environment and investment, disclosed that Chinese electric vehicle giant BYD came across thugs who tried to disrupt construction of its 11.7 trillion rupiah (S$920 million) plant in Subang, West Java.
He did not reveal when the incident took place nor which ormas was involved.
'Regional governments have to be firm against thuggery. Don't let foreign investors here be without a guarantee of security,' said Eddy.
Local business leaders say these incidents have been on the rise, partly due to increasing unemployment in the country.
Ahead of Muslim Aidil Fitri celebrations at the end of March, groups of people calling themselves ormas visited factories in their respective districts seeking a 'Hari Raya bonus' payment, said Abdul Sobur, chairman of Indonesia's furniture and handicraft producers' association.
'This disturbs businesses although it seems like a small thing,' said Abdul. Association members have reported more such cases recently, with ormas personnel getting paid as much as 500,000 rupiah each.
Former chairman of Indonesia's employers' association Hariyadi Sukamdani put this higher incidence down to the rising number of jobless people, who are drawn to joining these groups to earn some money.
'It's mutually beneficial. The larger the groups, the greater their influence. And the greater their chances at extracting payment,' he told ST.
As at end-February, Indonesia's unemployment rate stood at 7.28 per cent.
Dr Esther Sri Astuti, executive director of the Jakarta-based Institute for Development of Economics and Finance, said the government's budget cuts have led to reduced social spending, including on allocations to community groups for vocational training and other activities.
'Last time, the government had kept them busy and useful, hence they didn't cause trouble. Now, the government has cut spending,' Dr Esther told ST.
Data from the domestic affairs ministry as at March 2024 shows there were 553,692 community groups nationwide, with their stated activities covering diverse issues like smoking prevention, child protection, tourism and the environment.
Tenggara Strategics, a Jakarta-based investment research and advisory institute, noted in its analysis that some of these community groups have close links with political parties or leaders, who rely on their support during election season.
'While some of the groups have proven to violate the law, it looks difficult for the law enforcers to act against them, simply because of their connection to, and hence support from, political elites, if not the military or the police top brass,' said the institute in its report published in The Jakarta Post on May 9.
On April 30, Investment Minister Rosan Roeslani said the government is stepping up coordination with provincial governors, mayors and regents to ensure protection rackets and similar practices are both prevented and eradicated. Details of the plan, however, have not been disclosed. - The Straits Times/ANN
