Indonesia Revokes Permits for Major Projects in Environmental Enforcement

Jakarta, January 21, 2026 — In one of the Indonesian government’s most sweeping environmental actions in recent years, authorities have revoked the operating permits of multiple companies, including a China-backed hydropower plant and the gold mining unit of a leading Indonesian conglomerate. This decision comes amid growing concerns that environmental degradation significantly worsened the deadly floods on the island of Sumatra in late 2025.

Permits Revoked in Crackdown

On Tuesday, Indonesian President Prabowo Subianto announced that the government had stripped the licenses of 28 companies across different sectors — including forestry, palm oil, cocoa, mining and power generation — for failing to uphold environmental standards. Among those affected were:

• PT North Sumatra Hydro Energy (NHSE), linked to a hydropower project backed by China’s SDIC Power Holdings Co. Ltd.
• PT Agincourt Resources, the operator of the Martabe gold and silver mine under Indonesia’s Astra International.
• PT Toba Pulp Lestari, a large pulp producer.

Government officials cited widespread environmental damage — especially deforestation — as contributing to last year’s catastrophic floods and landslides that killed over a thousand people and displaced more than a million residents in Sumatra. Experts have repeatedly emphasized that land clearing for plantations and mining destabilized the region’s natural defenses against extreme weather.

Impact on Power and Mining Projects

The hydropower project in North Sumatra — with an intended installed capacity of around 510 megawatts — had been under construction and was expected to be fully operational later this year. Local environmental groups had long criticized the project for its impact on fragile ecosystems and biodiversity.

Meanwhile, the Martabe gold and silver mine, one of Indonesia’s largest gold operations, previously downplayed links between its activities and the floods. Company representatives had described such connections as “premature,” but have not yet issued immediate responses following the permit revocations.

International Response

China’s consulate general in North Sumatra has publicly stated that the construction of the Batangtoru hydropower plant complied with Indonesian laws, and expressed hope that the project could resume. However, these comments have not changed the Indonesian government’s enforcement stance.

Reaction from Other Companies and Environmental Advocates

PT Toba Pulp Lestari has indicated it is seeking clarification from the government and assessing potential impacts on business operations. The company pointed out that the revocation could affect its ability to harvest timber — a core raw material for production.

Environmental organizations, including WALHI (the Indonesian Forum for the Environment), have welcomed the government’s actions but called for stronger measures to rehabilitate lost forests and prevent revoked assets from simply being transferred to other owners. WALHI’s executive director, Boy Jerry Sembiring, urged that any future land use must prioritize ecological restoration.

Historical Forest Loss in Sumatra

Environmental researchers report that from 2001 to 2024, Sumatra lost more than 4.4 million hectares of forest — an area larger than Switzerland — due to logging, plantations and industrial development. Satellite images showing vast amounts of logs swept away during floodwaters sparked national outrage and highlighted the scale of land degradation.

Broader Environmental Policy Push

The Indonesian government’s action against major companies aligns with broader efforts to tighten environmental governance and combat land misuse. While this particular crackdown has drawn attention due to its scale and the prominence of affected companies, authorities have previously revoked thousands of mining and resource permits in attempts to improve compliance and shore up environmental stewardship.

Uncertainties and Future Prospects

It remains unclear how the revocations will affect the future of the impacted power and mining projects. Analysts say the decisions could significantly alter investment strategies in Indonesian resource sectors and signal a stronger regulatory environment moving forward. Some industry observers argue that clear guidelines and rehabilitation plans will be essential to balance economic development with environmental protection.

For now, the Indonesian government’s stance sends a clear message: environmental consequences are taking center stage in decisions that were once dominated by economic considerations alone.

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