Permit revocations target major mining and pulp firms linked to environmental violations
Indonesia’s government has taken decisive action against large-scale resource companies after linking forest misuse to one of the deadliest natural disasters in recent years, signaling a tougher era of environmental enforcement.
Crackdown Following Deadly Floods
Indonesia will revoke permits held by 28 resource companies after authorities linked their alleged forest misuse to floods and landslides that killed more than a thousand people across northern Sumatra in December. The decision was outlined in a government presentation on Jan 20, covering more than one million hectares of land.
State Secretary Prasetyo Hadi said investigations found that the companies violated laws governing activities in forest areas. The permits span logging, pulpwood plantations, mining, and hydropower operations, reflecting the scale of land use now under scrutiny.
Major Corporations Affected
Among the companies impacted is PT Agincourt Resources, operator of the Martabe Gold Mine and part of the Astra International conglomerate. Pulp producer PT Toba Pulp Lestari, founded by billionaire Sukanto Tanoto, will also lose its permits, marking one of the most high-profile enforcement actions in the sector.
Market reaction was swift. Shares of PT Astra International fell as much as 13 percent on Jan 21. Trading in Toba Pulp Lestari shares has been suspended since Dec 17 after the government halted its operations pending an audit into its potential role in the floods.
Scope of Permit Revocations
Of the 28 permits, 22 cover natural forest and plantation operations spanning about one million hectares, while the remaining six relate specifically to mining, plantation, and timber extraction activities. In December, authorities said they were probing 31 land-right holders for possible involvement in the disaster.
Prasetyo said around 900,000 hectares of seized land will be restored to conservation forest. This includes nearly 82,000 hectares within Tesso Nilo National Park in Riau province, a critical biodiversity area.
Legal and Financial Consequences
The Environment Ministry has also escalated enforcement through the courts, suing six companies for more than US$280 million, or approx. S$22.4 million, over alleged environmental damage in North Sumatra. These lawsuits add financial pressure alongside the loss of operating permits.
Toba Pulp Lestari said on Jan 21 it is still awaiting official written clarification from the government and continues limited essential activities such as asset maintenance and forest security. Agincourt Resources did not immediately respond to requests for comment.
Civil Society Calls for Stronger Action
Environmental group WALHI North Sumatra welcomed the revocations but warned they must be followed by a halt to new permits in the same areas. The group cautioned against reissuing licenses to the same or similar operators, arguing that doing so would perpetuate long-term environmental damage.
WALHI also urged authorities to impose strict sanctions to ensure accountability and deter future violations, emphasizing that restoration efforts must be matched with policy reform.
The permit revocations mark a significant shift in Indonesia’s approach to managing natural resources, linking environmental accountability directly to human safety and economic consequences. For Indonesians, the move raises expectations for stronger disaster prevention and forest protection, while Singaporean investors and businesses with regional exposure are closely watching how tougher enforcement reshapes Southeast Asia’s resource and sustainability landscape.
Sources: Straits Times (2026) , Bloomberg (2026)
Keywords: Indonesia Floods, Forest Permits, Mining Companies, Environmental Violations, Sumatra Disaster
