Indonesian Government Takes Decisive Action Against Companies Amid Environmental Crisis

Background and Immediate Response

The Indonesian government has taken decisive action against three major companies following severe flooding in North Sumatra. Environment Minister Hanif Faisol Nurofiq ordered the immediate suspension of operations for PT Agincourt Resources, PT Perkebunan Nusantara III (a state-owned plantation company), and PT North Sumatera Hydro Energy (NSHE) ¹

Inspection Findings and Enforcement

The decision was made after comprehensive aerial and ground inspections revealed potential environmental violations contributing to the disaster. The inspections showed evidence of massive land clearing for various industrial activities including hydropower plants, industrial plantations, mining, and palm oil operations ²

Key findings included:

• Significant ecological pressure on the Batang Toru and Garoga watersheds
• Evidence of deforestation and land degradation
• Increased risk of erosion and material flow during extreme weather events
• Failure to comply with environmental protection standards

Regulatory Actions and Consequences

The Ministry has mandated that all companies operating in the upper reaches of the Batang Toru watershed must:

1. Cease operations effective December 6, 2025
2. Undergo comprehensive environmental audits
3. Face formal examination on December 8, 2025, in Jakarta

The government has warned that any violations found during the audit could lead to legal proceedings and potential criminal charges if environmental damage is confirmed ¹

Industry-Wide Implications

This enforcement action extends beyond the three companies directly involved. Minister Hanif emphasized that the government will conduct thorough evaluations of all business activities in the affected watersheds, particularly under extreme weather conditions with rainfall exceeding 300 mm per day. The ministry is tightening verification processes for environmental approvals and spatial planning compliance for all activities in steep slopes, watershed areas, and river channels ¹

Ministerial Stance and Future Actions

Energy Minister Bahlil Lahadalia has pledged to take firm action against any mining companies found violating environmental regulations, including potential revocation of mining permits. The government is coordinating across ministries to ensure comprehensive oversight and enforcement ³