Bahlil's Home Region Fertilizer Factory Faces Major Irregularities

TEMPO.CO, Jakarta - The BPK found many irregularities in the Fakfak Fertilizer Industrial Zone. Bahlil Lahadalia has been embroiled in abuse of power. NATIONAL Strategic Projects may well become one of the worst economic development legacies from the administrations of Joko Widodo and Prabowo Subianto. As well as creating social and environmental problems, these projects ignore the principles of good governance and are rife with conflicts of interest. The Fakfak Fertilizer Industrial Zone in West Papua is an example of these problematic strategic projects. The program, which is being managed by Pupuk Indonesia with a total investment of US$1.6 billion, or Rp28.4 trillion, was originally planned to begin construction in February 2023, but only commenced in 2026. Jokowi laid the first stone in November 2023. The project was touted as a major boon, intended to supply fertilizer for the food estate project in Merauke, South Papua. But in fact, the initiative has major problems due to mistakes in the planning. Initially, Pupuk Indonesia was to establish the industrial estate in Teluk Bintuni Regency, West Papua. However, this plan went astray because Bahlil Lahadalia—then the Investment Minister and Head of the Investment Coordinating Board—insisted the project be relocated to Fakfak Regency, his home region. Moving the project went against a feasibility study done by Deloitte, a risk management consultant that Pupuk Indonesia hired. According to the firm’s assessment, the decision to move the project would cause many problems, such as soaring costs and the potential failure of the project. Bahlil’s intervention was both peculiar and a violation of regulations. Officially, he held no authority to order Pupuk Indonesia to relocate the project. However, wielding immense influence as the General Chair of the Golkar Party and a minister closely aligned with President Joko Widodo, Bahlil freely usurped the authority of the Ministry of State-Owned Enterprises, the shareholder of Pupuk Indonesia. Subsequently, this decision has proven problematic and potentially risks dragging Pupuk Indonesia to the verge of bankruptcy. An audit by the Supreme Audit Institution (BPK) in the first semester of 2025 found that the relocation of the fertilizer project in Fakfak could result in state losses of Rp2.9 trillion. The state auditor also found land preparation costs and sunk costs totaling Rp250.9 billion. The BPK concluded that the Fakfak Fertilizer Industrial Zone is not feasible to continue. As well as forcing the relocation of a fertilizer factory to his home region, there are indications that Bahlil has a conflict of interest in relation to this decision. Bersama Papua Unggul, a company in which Bahlil has a majority shareholding, along with Papua Jaya, is also managing the Fakfak Fertilizer Industrial Zone. As a high-ranking state official, Bahlil has violated various laws. Under Law No. 30/2014 on Government Administration, there are clear indications of abuse of power, as he made decisions outside his jurisdiction and beyond his official remit. Furthermore, these deceitful practices are suspected of violating the Law on State Governance Clean of Corruption, Collusion, and Nepotism (KKN). This is not the first time Bahlil has been traced to alleged abuses of power. When Jokowi appointed him as Chair of the Investment Acceleration Task Force, he gained the authority to revoke non-operational mining permits and subsequently reinstate them. At that time, at least 2,078 non-operational mining permits were identified, and some of them were subsequently reauthorized. Tempo’s investigation found that this restoration of permits was not for free. There were demands for money and shares from companies wanting to resume operations. Yet, Bahlil’s formidable political standing has left law enforcement officers toothless in sniffing out the rot behind those decisions. The same thing is about to happen again. With Bahlil’s position as Golkar General Chair, it is difficult to expect President Prabowo Subianto to order the authorities to investigate these infringements. Given Bahlil’s political clout as the Chair of Golkar, it is difficult to expect President Prabowo Subianto to order law enforcement to investigate these various irregularities. Despite his boasts of upholding a law-abiding administration, Prabowo’s speeches have once again proven to be nothing more than omon-omon or empty talk—a recurring practice that continues to embarrass his government.