Indonesia’s Prabowo Revokes Permits for Forest Damage, Rattling Investors

Jakarta – Indonesian President Prabowo Subianto’s administration has begun revoking permits for companies found to be damaging forests, a move welcomed by environmental groups but raising concerns about transparency and investor confidence. The decision, announced in January 2026, impacts a major China-backed hydropower project and signals a more assertive approach to forest law enforcement.

Permit Revocations and the Batang Toru Project

On January 20, 2026, President Prabowo’s government revoked the licenses of 28 corporations controlling over 1.01 million hectares of land, citing violations of forestry laws. Among those affected is North Sumatera Hydro Energy (NSHE), the developer of the US$1.67 billion Batang Toru hydroelectric project . The cancellations followed an expedited audit conducted by the Forest Area Regulation Task Force across Aceh, North Sumatra, and West Sumatra provinces.

Disaster Response and Deforestation Link

The permit revocations follow devastating floods and landslides that struck Sumatra in late November 2025, triggered by tropical cyclone Senyar. Official figures indicate that over 1,200 people were killed . Environmentalists argue that deforestation, linked to extractive industries and infrastructure projects, exacerbated the impact of the disaster .

Prabowo’s Commitment to Forest Law Enforcement

President Prabowo highlighted the permit revocations during his keynote address at the World Economic Forum on January 22, 2026, framing it as a significant enforcement effort. He stated that, combined with the previous confiscation of 4 million hectares of plantations, this represents “the boldest, the most daring forest law-enforcement effort in the history of Indonesia” .

Concerns About Transparency

While environmental groups have praised the move, questions have been raised regarding transparency and due process. Officials acknowledged that even senior energy regulators were not fully informed about the permit revocations .

Impact on Investment

The revocation of permits, particularly for the Batang Toru hydroelectric project, has rattled investor confidence in Indonesia’s renewable energy market. The project, backed by China, was seen as a key component of Indonesia’s efforts to increase its renewable energy capacity.

As of February 16, 2026, Prabowo Subianto serves as the eighth president of Indonesia, having assumed office on October 20, 2024 .