Indonesias Batang Toru crackdown puts China on green notice

The revocation of permits for dozens of companies operating in Indonesia’s fragile forests—most notably the China-backed Batang Toru hydropower project—has been hailed as a bold environmental stand by President Prabowo Subianto.

After years of ecological controversy surrounding the project, including concerns over biodiversity loss and disaster risk, the move signals a willingness to confront environmentally harmful development, even as it emerged that Indonesia’s Ministry of Energy and Mineral Resources was not consulted before the decision was made.

But revoking a permit, however dramatic, is not a climate policy. It is a corrective measure. The deeper challenge facing Indonesia is not whether it can cancel projects after damage is done, but whether it can ensure that companies operating within its borders meet strict environmental standards from the outset—and that those standards are enforced consistently, transparently and without exception.

Batang Toru offers a stark lesson. Marketed as part of Indonesia’s clean energy future, the hydropower plant was built in one of the country’s most ecologically sensitive regions, home to one of the world’s last remaining populations of Tapanuli orangutans.

Local communities raised concerns about reduced water flow, habitat destruction, and landslide risks long before the state intervened. Yet oversight failed to prevent the project from advancing to a point where revocation became the only option.

This pattern is not unique. Across Indonesia, particularly in resource-rich regions such as Sulawesi, North Maluku, and Sumatra, foreign-funded projects—many backed by Chinese capital—have delivered economic growth while leaving behind polluted seas, degraded forests, and displaced livelihoods.

From nickel processing hubs to coal-powered industrial parks, communities report contaminated water, toxic dust, declining fisheries, and rising respiratory illness. These are not isolated accidents; they are systemic failures of governance.

Importantly, the environmental degradation associated with Chinese-backed projects should not be understood as the result of Chinese actions alone. In many cases, the deeper problem lies in Indonesia’s own regulatory system—specifically, weak enforcement, inconsistent monitoring, and fragmented institutional oversight.

When environmental rules exist on paper but are poorly implemented in practice, even well-designed projects can cause harm, and less responsible actors can operate with impunity. Responsibility, therefore, is shared, and reform must begin at home.

Indonesia has pledged to achieve net-zero emissions by 2060 and to increase the share of renewable energy in its power mix. These commitments require massive investment, and China has been positioned as a potential partner in that transition.

Yet much of Chinese investment remains concentrated in extractive industries and coal infrastructure, not in genuinely sustainable energy systems. When green projects themselves—like Batang Toru—end up damaging ecosystems, the credibility of Indonesia’s energy transition is put at risk.

The solution is not to reject foreign investment, nor to abandon renewable energy development. It is to strengthen the rules of engagement. Prabowo must ensure that every company operating in Indonesia—foreign or domestic—adheres to rigorous environmental standards, and that those standards are not negotiable, flexible, or selectively enforced.

This requires more than regulatory frameworks on paper. It demands a monitoring regime that is independent, well-resourced, and empowered to act. Environmental impact assessments must be transparent and subject to public scrutiny.

Compliance audits should be routine, not reactive. Sanctions must be predictable, proportionate, and enforced without political interference. And communities affected by development must have meaningful avenues to voice concerns before harm occurs—not after.

Indonesia already possesses many of the legal instruments needed to regulate environmentally risky projects. What has been missing is consistent implementation.

Too often, enforcement has been weakened by overlapping authorities, political pressure or economic urgency. As a result, environmental protection becomes episodic—triggered by disasters or scandals—rather than institutionalized.

Batang Toru should mark a turning point. Not because a permit was revoked, but because it exposes the cost of delayed enforcement. The country cannot afford to rely on after-the-fact corrections in the face of accelerating climate change and biodiversity loss. The environmental damage caused by poorly regulated development is often irreversible, even when licenses are withdrawn.

Prabowo has an opportunity to redefine Indonesia’s development model. A truly green transition does not mean simply replacing coal plants with hydropower dams or nickel mines with battery factories.

It means building an economy compatible with ecological limits, community well-being, and intergenerational justice. That vision will remain rhetorical unless backed by institutions that can say “no” early, clearly and consistently.

Indonesia’s forests, rivers, reefs and communities are not collateral for development—they are its foundation. If the government wants to lead Southeast Asia’s energy transition, it must first prove that environmental law in Indonesia is not symbolic, but sovereign.

The future of Batang Toru should not be remembered only for what was cancelled, but for what Indonesia finally chose to enforce.

Muhammad Zulfikar Rakhmat is director of the China-Indonesia Desk at the Jakarta-based Center of Economic and Law Studies (CELIOS)independent research institute.