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Analysis: Conflict of interest, Minister Bahlil and Fakfak fertilizer industrial area

Tenggara Strategics (The Jakarta Post)
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Wed, December 13, 2023 Published on Dec. 12, 2023 Published on 2023-12-12T14:02:46+07:00

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Analysis: Conflict of interest, Minister Bahlil and Fakfak fertilizer industrial area Investment Minister Bahlil Lahadalia speaks on April 28, 2023, during a press conference in this screenshot from the Investment Ministry's Youtube account. (YouTube/Investment Ministry)

L

ess than a month after President Joko "Jokowi" Widodo officially initiated the construction of the government's fertilizer industrial area in Fakfak regency, West Papua, controversy has loomed over the National Strategic Project (PSN). At the center of the controversy is Investment Minister Bahlil Lahadalia and his associates, whose ties with the project have raised concerns about conflicts of interest.

Targeted for operation in 2028, the construction of this Rp 30 trillion (US$2 billion) fertilizer industrial area will be the first in Indonesia’s eastern region and the first in the last 40 years after the country last built a fertilizer industrial area in Aceh in 1982. Led by PT Pupuk Kalimantan Timur (Pupuk Kaltim), the Fakfak fertilizer industrial area will use natural gas from the area as raw material and is expected to come on stream in 2028, producing up to 1.15 million tonnes of urea and 825,000 tonnes of ammonia per year.

According to Jokowi, who broke ground in the Fakfak fertilizer industrial area on Nov. 23, the fertilizer industrial area is being built as part of the country’s strategy to achieve food sovereignty. He argued that an increase in domestic fertilizer production could support the independence of Indonesia’s food industry, therefore, should a food crisis occur in other countries, Indonesia would not be affected.

Furthermore, the Fakfak fertilizer industrial area is forecasted to strengthen the food industry of Indonesia’s eastern region. The industrial area’s fertilizer production will support the implementation of future food programs in the region, specifically a food estate in Papua, which is expected to begin development next year. Jokowi had highlighted that without support from the fertilizer industry, it would be a challenge to establish the food estate.

However, controversy has already surrounded this ambitious project as Bahlil, whose ministry is tasked with monitoring the Fakfak fertilizer industrial area together with the State-Owned Enterprises (SOEs) Ministry, has been accused of having a conflict of interest with Pupuk Kaltim independent commissioner Eka Sastra. Eka, who was appointed to this role in 2020, also holds the position of special staffer to Bahlil – a role he has held since 2019 following Bahlil’s appointment as Investment Minister.

According to reports, Eka’s dual roles in Pupuk Kaltim and the Investment Ministry have the potential for him and Bahlil to use their positions of authority to seek maximum benefit through the Fakfak fertilizer industrial area and facilitate the interest and business relations of Pupuk Kaltim.

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Bahlil’s alleged conflict of interest in the Fakfak fertilizer industrial area looks to be further exacerbated by reports of Bahlil’s connection with businessman Santoso Banda, whose name is registered as director of PT Papua Jaya, a construction company reportedly hired to help build a part of Siboru Airport located in the Fakfak fertilizer industrial area.

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