Corruption and conflicts of interest in the energy transition: Political economy conditions outcomes

The global shift from fossil fuels to clean energy represents one of the most significant economic transformations since the Industrial Revolution in which conflicts of interest and corruption are likely to pose major challenges.6c6fff28da619d0225ea580d Since decarbonisation of energy systems requires investments running to the hundreds of trillions of dollars, it is acknowledged that corruption may be used to extend the life of carbon-intensive industries, while low or no-carbon energy may also fall prey to corrupt practices.720d2d16bdc1

Previous research identifies that the impacts of corruption on energy transition outcomes is likely to be contingent on localised political economies, including how power holders react to the new constraints and opportunities these transitions afford.946ecfa3a094 Interventions aimed at assisting countries on their path to low or no-carbon energy systems should not ignore how conflicts of interest and corruption schemes take shape in this emerging space. Indeed, understanding and responding to these complex dynamics is vital as they can jeopardise the energy transition itself. Energy transition initiatives must include anti-corruption efforts capable of assessing and tackling the risks. Awareness of the public is essential and there must be broad momentum behind domestic efforts to protect energy resources from abusive and illegal practices.

Aims and methods

This U4 Issue pursues two main goals. First, it unpacks the potential for conflicts of interest and corruption to affect Indonesia’s transition to a low or no-carbon energy system. Second, it identifies pathways to strengthen anti-corruption resilience in Indonesia’s energy transition, given prevailing political economic conditions. To do so it examines the Just Energy Transition Partnership (JETP), a G7-plus supported initiative aiming to assist Indonesia’s transition to low or no-carbon forms of energy. Our analysis is based on a literature survey, the identification of recent illustrative legal cases, and 12 qualitative interviews with Indonesian government officials, scholars, and members of civil society and the media, conducted in 2025. In addition, this paper is informed by a workshop with representatives of Indonesian state and non-state actors held in Jakarta in November 2025.

Indonesia’s governmental anti-corruption efforts and the Just Energy Transition Partnership

In late August 2025, Indonesia experienced nationwide protests linked to anti-corruption demands. Initially fuelled by a substantial increase in the monthly housing allowance for members of parliament to nearly ten times the national minimum wage, protests escalated after the killing of a 21-year-old online motorcycle taxi driver (known locally as ojol), Affan Kurniawan, by a Mobile Brigade Corps armoured vehicle. The incident sparked further violence that killed 10 people and saw the widespread arson of cars and government buildings.72a2f54cfcf5

Among protestor grievances were extreme socio-economic inequality and the widespread sharing on social media of ostentatious lifestyles by Indonesia’s business and political elites. Corruption also played a significant role in motivating the protests, as demonstrated by the inclusion of anti-corruption goals in a 17+8 list of key demands.5d62f3cea597 To understand why these anti-corruption goals were listed among the protestors’ demands, we must revisit Indonesia’s recent governmental anti-corruption efforts.

Indonesia’s recent governmental approach to anti-corruption

Coming to power in September 2024, President Prabowo Subianto promised to continue government efforts to tackle Indonesia’s ‘pervasive’ corruption problem, addressing Indonesians’ well-documented concerns regarding corruption.3ce694bf20e2 In a 2020 study on the experiences of corruption among Indonesian businesses, for example, a third reported that they had been requested to pay a bribe by an official.088af9f1bdd1 In two sectors of vital importance for energy transitions, namely construction and the extractive industries, this encompassed nearly all respondents. Earlier research on Indonesia confirms that the state plays a strong regulatory role in the extractives sector which makes it vulnerable to rent-seeking by officials.3927f03e9e14

During the post-Suharto liberalisation process, Indonesia had overhauled its governmental anti-corruption approach, and in 2004, established an independent Corruption Eradication Commission (KPK). Despite operating in an adverse context, the KPK proved effective and became the most trusted of Indonesia’s law enforcement bodies with 1,152 arrests between 2004 and 2019, including of high-level officials.f05e6de80bf9 During the latter half of the ten-year presidency of Joko Widodo (201–2024), the KPK particularly focused its efforts on the palm oil and extractive industries, which were viewed as exacerbating ecological harms in resource-rich areas.1085d02a5d25 a121dbe35427 f54a2b83ac5c However, democratic backsliding in recent years has seen a lesser focus on enforcement.ce6e08114070 During the Widodo presidency a revised national anti-corruption strategy officially emphasised prevention and education over enforcement actions, and in 2019, the KPK was placed under increased oversight with all investigations subject to board approval.

After the 2024 presidential election, Prabowo’s government took certain actions to tackle corruption. Several high-profile corruption cases were pursued by the Attorney General’s Office and KPK, involving state losses that together exceed all corruption cases from the end of the Suharto era to the end of Joko Widodo’s presidency.16e3fab8770b New leadership was introduced to the KPK, who announced an intention to rebuild its National Program to Save Natural Resources.

Reactions to these governmental anti-corruption efforts have been mixed, however. Although welcomed by many voters,15b23e2882b9 publicity around the pursued cases also highlighted the wealth of elite members of Indonesian society to ordinary citizens. President Prabowo’s pardoning of the corruption convictions of Hasto Kristiyanto, secretary-general of the Indonesian Democratic Party of Struggle (PDI-P), and Thomas Lembong, a supporter of Prabowo’s main rival in the 2024 presidential election, were criticised by some commentators as ‘legal politicisation’ that could further erode public trust in the rule of law.475c4e25000a Some analysts argue it remains to be seen whether Prabowo’s government will tackle the truly major corruption cases – including when they touch on his own Red and White political coalition – given the dependence of political parties and candidates on election finance from extractive and other land-based industries.69d7b9f5b20e

Indonesia’s energy transition and its intersection with sectors vulnerable to corruption

The Prabowo government has pledged to reduce dependence on fossil fuels while making Indonesia a global leader in new and renewable Energy (NRE) and bioenergy. During his 2025 state visit to Brazil, Prabowo further committed Indonesia to become 100% dependent on renewable energy in the next decade.acceb2ea446b These ambitious commitments will be difficult to achieve, however. With a population of over 283 million people living across 17,000 islands, Indonesia accounts for 25% of energy consumption in the Association of Southeast Asian Nations countries.6eedaeddb087 Its economy is based on the services sector (43%), industry (including manufacturing and resource exploitation) (40%) and agriculture (12.5%).d1dc372d56cb Fossil fuels currently play a key role in the economy and politics, and Indonesia is dependent on fuel imports to remain competitive. Fossil fuel and electricity subsidies cost the national budget IDR 164,3 trillion in 2023 (USD 9.8 million).c91e339bc6f8

The difficulty of transitioning to less carbon intensive energy sources is evident from the country’s earlier energy policies. Between 2016 and 2020, 94.1% of USD 83.7 billion provided by the Government of Indonesia for energy production supported the production and consumption of fossil fuels (39% to oil and gas, 18% to coal, and 38% to electricity (of which most was generated using fossil fuels).3dd9bb7fc20f Suharsono et al33c4319dac95 found that 77% of these policies benefited energy producers rather than consumers. Attempts to grow the renewable energy sector has been offset by the requirement for the Indonesian government, as a net importer of oil amid a record high oil price, to control inflation and purchasing power by increasing fuel subsidies.1c798bbdbed5

Indonesia’s engagement with the Just Energy Transition Partnership

Against this backdrop, Indonesia has engaged with the Just Energy Transition Partnership (JETP). JETP is an initiative offering development cooperation actors a relatively inexpensive pathway to cutting global emissions by encouraging private investment in clean energy, electrification, and other green technology, thereby upholding commitments to assist countries reach UNFCCC objectives.cb50e3dcd889 The JETP model was first announced at the UNFCCC COP26 in Glasgow, initially in a USD 8.5 billion deal between the International Partners Group (consisting of the G7 and other European countries) and South Africa. The JETP with Indonesia was announced as part of the second tranche of JETP programmes at the 2021 G20 meeting in Bali and committed to mobilising USD 20 billion in private and public funding over 3–5 years.58fc814e641c A priority for Indonesia in its role as G20 President in 2022, was ‘ensuring that public money is being used appropriately and effectively to achieve […] a clean energy transition’.c5d6eb07c142 In the 2023 prospectus drafted by the Indonesian government to ‘unlock’ JETP investment, known as the Comprehensive Investment and Policy Plan (CIPP), the two main aims of Indonesia’s climate strategy are to peak CO2 emissions at 290 million tonnes and increase renewable energy production to 44% of output by 2030. The CIPP prioritises 400 projects that require USD 67.4 billion in investment.403fa5962318

The JETP programme in Indonesia faces several challenges, however, related to its funding, the involvement of civil society, the early retirement of coal fired powerplants, and further development of the electricity grid. Commitment from development partners is essential given the withdrawal of funding from USAID that had previously (in 2024) provided a fifth of global climate funding.24a5bfda2594 Current funding levels for JETP are insufficient – at least USD 97.3 billion is required to meet planned emissions cuts according to the CIPP8a7da6fa530b but the bulk of funding takes the form of concessional loans at or below market rates. Only USD153.8 million are grants.df55a94e1c39 The remaining funds will be channelled through multilateral development banks, which means that Indonesia may have to set aside USD 8.4 billion in sovereign guarantees with budget implications potentially shrinking welfare spending.3b81adeac794 Additionally, though JETP is pitched as unlocking further funding, the mechanism for facilitating this is unclear.dafb081f47cb

Another aspect of JETP is the inclusion of civil society and private actors. JETP implementation in South Africa met opposition from unions considering the government’s announced break-up of the South African utilities company, Eskom, to raise funds.eedbf7547118 In Indonesia, civil society groups had previously overturned government attempts to introduce private companies into the energy market in 2016. However, a similar process appears to be taking place in relation to the state utility firm Perusahaan Listrik Negara (PLN, which is wholly owned by the government and managed by Indonesia’s sovereign wealth fund Danatara and the State-Owned Enterprises Regulatory Agency),13abf7205ec9 where a 2020 law ‘endorsed the presence of private and cooperative energy producers’ in addition to the state utility.9c24b52d3e6c

In addition to issues of funding and the inclusion of civil society and private actors, another potential sticking point is the issue of coal fired powerplants, which provide around half of the energy in the country’s 69GW capacity grid.47938d4e3dbe Indonesia is the world’s third largest producer of coal and for its energy transition ambitions to succeed its reliance on fossil fuels must be reduced.61cc2e618916 However, rapid reduction of coal would disrupt energy access and affect employment in the extractives sector as well as related supply chains.1e0d3efe8e74 To date, the average age of Indonesia’s current coal plants is 12–13 years, and they can remain operational for an average of 45 years.3a0ced0e734a To deal with this contradiction, the CIPP explicitly carves ‘captive’ coal fired plants out of Indonesia’s energy transition and blurs taxonomies of which projects are considered ‘green’, such as the inclusion of biomass firing at coal plants which has been described as an example of ‘greenwashing’.371d02d4b9fe

The CIPP notes that Indonesia plans to retire 5.5GW, of which 1.7GW was supposedly retired by 2024. However, in addition, the country is on track to supply an additional 12.8GW of coal fired powerplants that are not connected to the grid but operate in closed industrial parks to serve the nickel industry.03a97d9fc6d6 This is because although Presidential Decree 112/2022 prohibits the creation of new coal powerplants, they can still be built if they are for public service obligations or if they mix coal and renewables (so-called ‘Frankenstein plants’).f6be1eb1db61 As argued by Hadley,d121b43b60cb commercially viable coal powerplants that currently operate under favourable regulations, must be closed before being replaced by greener solutions. Some foreign companies have pulled investments in fossil fuel projects, notably related to coal gasification.0d557ce1e177 However, withdrawn contributions have occasionally been replaced by new investors, including Danantara.1c60c5c57609

One concern is that the energy transition triggers government policies that artificially inflate the need to import resources that Indonesia may not strictly need. One interviewee highlighted this dynamic in previous ‘green’ policies such as the switch from coal to natural gas in 2009. Until then, Indonesia predominantly sold gas for export, but when former President Susilo Bambang Yudhoyono ordered the switch from coal to gas, the country had a deficit. Entrenched interests in the coal sector won out under the Widodo government of 2014, however. As several projects aimed at shifting from coal to gas failed, the PLN was instructed to resume the purchase of coal.048b124967f4

Another aspect of Indonesia’s energy transition is the development of its electrical grid. Indonesia’s energy sector is currently a monopoly under the state-owned enterprise PLN, operating across 22 subnational energy systems in 16 provinces. Unlike other emerging economies, Indonesia has a power surplus in its main industrial areas (ie Java and Bali) that limits the extent to which these areas can absorb new renewable energy.23b47358c8f7 The highest priorities outlined in the CIPP are therefore transmission and grid projects including the Sumatran backbone, the Java-Sumatra transmission line, and the Sumatra-Batam-Bintan transmission line.fdefc5e43412 While the PLN dominates electricity provision on Java and Bali, on the outer islands it is the Ministry of Energy and Mineral Resources (ESDM) that should be the operator, although PLN is the de facto provider. Expansion and improvement of Indonesia’s electrical grid is considered vulnerable to corruption through potential demand for kickbacks for project certification. In addition, our interviews revealed concerns regarding a lack of transparency in the PLN auction system.1880f721ca1b

One example provided by an interviewee related to potential difficulties if the government were to establish a powerplant in Papua. If the project were hypothetically not completed within the annual fiscal year, it would be unlikely to be finalised.35714b1192c3 Unfinished projects create loopholes and ambiguity in oversight which leave them vulnerable to corruption through manipulation of rollover budgets, renegotiations (which offer an opportunity for side-payments, collusion, and kickbacks), and pressure to disburse funds which may lead to certification of incomplete or lower quality work to show progress. This is exacerbated by the monopolistic characteristics of the PLN which extends up- and downstream in the energy sector. Attempts to ‘democratise’ or break this monopoly are challenged due to constitutional provisions that energy should be managed by the state.d887398ebee2 Moreover, due to the mandate to provide cheap energy, PLN’s debts remain chronically high. The state deals with this through the provision of subsidies or soft loans, but this debt creates future challenges in respect to the possible liberalisation of Indonesia’s energy market.73896749e934

So far, Indonesia aims to increase the share of renewables rather than substituting coal – a process that has slowly occurred but is deterred by subsidies for the coal sector. Subsidies targeting renewables such as electric cars are subsumed by the same structural obstacles. In one example provided by interviewees, a military general – through a company owned by a family member – was known to import electric busses benefitting from available subsidies.23212207bc5e This example highlights the importance of wider political considerations in shaping Indonesia’s transition to cleaner energy.87799d2e8634

The potential for conflicts of interest and corruption in Indonesia’s energy transition

Several issues exacerbate potential conflicts of interest and corruption in Indonesia’s energy transition that confront the JETP initiative. Indonesia’s current political economy, regulations and enforcement at the nexus of resource extraction, election finance, and delegation of procurement contracts, are all salient factors. Similarly, interlinkages between state office and procurement are vulnerable since discretion is centred on political office with weak oversight. This section gives an overview of the main risks based on our literature survey and interviews.

Increased discretion over resource extraction at the local level

With decentralisation of Indonesia’s political system after the end of the Suharto era, competition grew over access to lower-level elected office.c1eb0b191c52 In 2005, it was decided that district heads would become directly elected. Then in 2009, Law no. 4 on Mineral and Coal Mining (Minerba Law) granted authority to district heads and mayors to issue mining licences.d2a3c5dc22e8 Corruption and conflicts of interest in the mining sector subsequently saw considerable attention from KPK investigators during the 2010s.53fea8ffc70e0228d1461853 This initial bonanza of corruption in the mining sector is, however, viewed to have been reined in by the 2020 reform of the Minerba Law.

The cost of getting into office

The above reforms only reduced corruption risks in relation to mining licenses, however. Electoral financing by private companies, including from the mining sector, is still a mechanism used to influence politicians and obtain favourable treatment. Hence, the reform of state regulations has so far failed to address wider structural issues, including embedded cultural norms of patronage, dependencies on external finance by candidates for political office, and weak fragmented oversight in regions distant from Jakarta.

Candidates for political parties must amass large campaign funds to even be considered for elected office. Candidates are known to spend billions of rupiah for a seat, from 20–30 billion in 2018 to as high as 200 billion in 2025.55ca2322150e As noted in one interview:

Candidates are known to approach prospective private companies a few years before their planned campaign. By taking a loan, a social obligation forms whereby the funded candidate must repay their debt while in office.aa6659abaae0 Knowing this, companies often finance several candidates to manage risks.60404422cfa8

Weak enforcement

While election finance is regulated, it is rarely enforced. ‘The current government is not particularly interested in tackling these issues, often framing criticism as “foreign agents trying to smear our name”’.8b0503041ad9 Problems of enforcement are compounded when state officials and members of parliament are known to sit as beneficial or ultimate beneficial owners of energy companies:

As noted by Downs and Tacconi:194a5ef85fc9 ‘Whilst there will be variation in how much debt candidates accrue, and how much private greed might also be involved in their activities, it is the systematic nature of this campaign debt that impacts upon relationships between politicians and companies’. Summarising the political economy factors that shape corruption and conflicts of interest risks, one interviewee noted:

Energy monopolies

The PLN is recognised as a bottleneck for the energy transition. According to one interviewee: ‘they act as the regulator, distributor, and the main buyer’ and can alter policy and regulations including for renewables. However, market liberalisation of critical sectors is overshadowed by the experience of the Asian Financial Crisis of 1997, which hampers the promotion of voices seeking to liberalise the energy market.

Procurement loopholes

Oligarchic influence over Indonesian democracy has been a long-standing feature but, as Warburtone0b8fc76f8da argues, recent trends go beyond discrete cases of regulatory or institutional capture. Over half of the cabinet of former President Widodo, himself a former furniture entrepreneur, came from the private sector, a near doubling from earlier cabinets, leading to a perceived fusing of private wealth with public office. This situation directly affects regulations for government procurements. According to one interviewee, multiple permit and procurement loopholes exist where ‘the winners of procurement contracts are often politically exposed individuals’.06bc69a019cb

Revolving doors between the energy sector and public office

It has been argued that former President Widodo brought businessmen into his government because he viewed them as efficient and resourceful.b19ac5ebd84e Our interviews suggest that the flip side to this is that private interests are overrepresented in the state and that this is affecting the character and pace of the energy transition:

A particular gap is the absence of a revolving door policy:

In short, corruption and conflicts of interest are embedded in the energy transition, limiting its impact. One interviewee argued that the transition has seen slow progress to date because of the interests of fossil fuel incumbents: ‘Once the focus shifts to renewable energy, coal will no longer be in demand. Who will buy the coal if not the PLN?’.6cd0196651c0

Past prosecutions of corruption in the mining and renewable energy sectors

Despite the above information, our interviews revealed that relatively little is known about the true scope of conflicts of interest and corruption in Indonesia’s energy transition to date. Most analysis and discussions have focused primarily on the potential for conflicts of interest rather than strong evidence of actual conflicts.ce520bb99f43 Nonetheless, a series of legal cases of bribery and corruption in the mining and renewable energy sectors have been investigated and prosecuted in Indonesia in recent years. Four such cases are summarised below – illustrating the types of corruption schemes that could in principle affect the energy transition and the JETP initiative.

Bribery and nickel mining in Maluku Utara

Abdul Gani Kasuba (AGK), former Governor of North Maluku, received bribes and gratuities to issue mining business permits and permits for mining-related infrastructure in Maluku Utara in violation of tender procedures for government projects.567891ca039d Evidence presented during the trial established that between 2019 and 2023, AGK received around USD 6,709,000 and USD 90,000 in cash and through 27 bank accounts owned by his adjutants and assistants.

These illicit funds were reportedly sent by heads of regional agencies and various business entities involved in mining and mining-related infrastructure projects. The payments were intended to facilitate the issuance of nickel mining permits and to smooth the approval of several mining-related road and bridge projects in South Halmahera. Companies involved included PT Trimegah Bangun Persada, a subsidiary of Harita Group, the largest nickel mining company in Maluku Utara. In addition, the governor instructed the Head of the Procurement Unit to arrange tender allocations for government projects to several vendors with an illegal facilitation fee of between 10 and 15% of the value of each project. Investigators examined potential money laundering offences in this case. This part of the investigation was incomplete when the governor passed away, however, and the investigation was discontinued.

The Special Anti-Corruption Court of Ternate, North Maluku, rendered its decision on 26 September 2024, sentencing the governor on corruption charges to 8 years imprisonment and a fine of IDR 300 million. An additional obligation to pay for the recovery of illegal gain was also handed down. The governor appealed, but the decision of the Appeal Court on 18 November 2024 was consistent with the first instance decision. Finally, the Supreme Court decided to dismiss the case on 19 March 2025 after the governor passed away due to serious illness on 14 March 2025.

In this case, private sector actors and high-level public officials became suspects and were eventually convicted for corruption. Not all of them were linked to nickel, however, since the case involved several aspects, such as procurement, receiving bribes in exchange for appointing officials in government agencies, procurement, etc. The governor’s trial attracted significant public attention as it revealed the alleged division of mining blocks in North Sumatra, specifically under the ‘Blok Medan’ code. This code has been linked to Bobby Nasution, the husband of former President Widodo’s daughter, Kahiyang Ayu.a4abb6d2be61

Illegal nickel exploitation and corruption in a state-owned enterprise concession area

This case revolves around the collusion of public officials and private entities manipulating transactions to conduct illegal exploitation of nickel in the concession of PT Aneka Tambang Tbk (Antam), one of Indonesia’s largest state-owned mining enterprises in the di Mandiodo Concession, Konawe Utara, Sulawesi Tenggara. This case also involves the Director General of the Ministry of Energy and Mineral Resources (ESDM).

Windu Aji Sutanto, the ultimate beneficial owner of PT Lawu Agung Mining, manipulated documents and included fake transactions for personal gain. The total state loss caused by the defendants’ actions amounted to approximately USD 132,659,000, stemming from the illicit exploitation and sale of nickel ore extracted from PT Antam’s mining concession. This was carried out through unauthorised mining operations by PT Lawu Agung Mining, which had no legal entitlement to operate in this concession area.

To conceal the illegality of their actions, the defendants collaborated with high-level officials from ESDM and directors from Antam, using falsified or manipulated documents to create the false appearance of lawful operations, thereby facilitating the mining, transportation, and sale of nickel ore. The illegal gains were transferred to bank accounts under the names of junior staff to conceal the proceeds of the crimes.

Ten persons became suspects in this case and eight of them were eventually convicted, including Windu Aji Susanto (shareholder, PT Lawu Agung Mining), Glenn Ario Sudarto (Field operator, PT Lawu Agung Mining) and Ofan Sofwan (Director, PT Lawu Agung Mining). The investigation was conducted by the Attorney General’s Office (Kejaksaan Agung) and was decided by the Anti-Corruption Special Court in Jakarta. The investigation was conducted using a case-building process without a sting operation. The sheer volume of the court judgment (873 pages) indicates a thorough and detailed examination of the evidence and legal arguments presented by all parties throughout the investigative and trial phases. It should be noted, however, that the money laundering aspect of the case is still under investigation after the conclusion of the corruption-related case.

The Jakarta Special Anti-Corruption Court, in its decision dated 25th April 2023, delivered the following sentences: defendants Glenn Ario Sudarto and Ofan Sofwan were sentenced to seven and six years of imprisonment respectively. As the ultimate beneficial owner, Windu Aji Sutanto, was sentenced to eight years of imprisonment, which was then raised to ten years of imprisonment by the Supreme Court. Furthermore, Windu Aji was ordered to pay restitution of IDR 135,836,898,026 (approximately USD 816,000).08537fad64f0

Procurement manipulation in a remote solar project

This case relates to corruption in the procurement of solar cell home systems for remote villages in Kutai Timur, Kalimantan Timur. It involved embezzlement of state funds totalling around USD 3,260,000 from a project valued at around USD 5,536,000.

In 2020, the Kutai Timur Regency conducted a solar panel procurement process, through the Investment and One-Stop Integrated Services Office (DPMPTSP), for remote villages without electricity access. The project was financed through the regional government budget with a total contract value of around IDR 90 billion. A Financial Audit Board investigation revealed systematic irregularities in project execution, resulting in state losses of around IDR 53,6 billion due to mark-ups and other manipulations in the procurement and implementation process. The defendant, M. Zohan Wahyudi, served as the Managing Director of PT Bintang Bersaudara Energi, one of the project contractors. The procurement process was deliberately fragmented into smaller packages to circumvent open tender requirements and facilitate direct appointment procedures in violation of procurement regulations.

The defendant allegedly conspired with officials in the process to manipulate the project. The contracts were subsequently inflated (marked up) and not executed according to required technical specifications or contractual timelines. Numerous solar panel units did not work, and a substantial proportion were never delivered to designated recipients. The defendant made full payment withdrawals despite incomplete project progress and allegedly diverted the proceeds for personal use, including the purchase of luxury items such as a Range Rover. This case also involved the Head of the Program Planning Subdivision of the Revenue Agency, a member of the Committee for Examining the Results of Government Procurement of Goods and Services, and a public official from the Procurement Team. These three public officials have been convicted for corruption.

The East Kutai District Attorney's Office initiated investigations in 2021, subsequently designating four suspects, including M. Zohan Wahyudi and the three active civil servants. In July 2022, M. Zohan was detained and tried at the Samarinda Corruption Court. During the proceedings, prosecutors successfully demonstrated the defendant's direct involvement in project manipulation and personal profit. The evidence seized included project documentation, luxury vehicles, and recovered cash. The East Kutai Attorney’s Office recovered approximately USD 246,000 in state assets through its recovery efforts.3b1c85630110

The Samarinda Corruption Court sentenced M. Zohan Wahyudi to ten years imprisonment and he was ordered to pay around USD 46,135 in fines and a restitution payment of around USD 547,500, with additional penalties for non-compliance.b3935cdbce6c Following appeal, the East Kalimantan High Court reduced the sentence to four years imprisonment while maintaining the fine and restitution obligations. This decision drew public criticism for being disproportionately lenient given the magnitude of state losses. The Attorney General’s Office then filed an appeal to the Supreme Court. On 2 August 2023, the Supreme Court granted the prosecution’s cassation petition, imposing a revised sentence of eight years imprisonment while maintaining the fine and restitution obligations.db46f978ef69

In June 2024, M. Zohan filed for judicial review (Peninjauan Kembali) at Samarinda District Court, citing formal procedural defects in the cassation decision, including missing dates and cassation panel designation numbers, and the Supreme Court’s failure to consider the counter-cassation memorandum. However, this effort was rejected by the Supreme Court on 29 November 2024.c17dbe07b265

Corruption in the procurement of solar power plants

This case involved interference in the procurement of solar power plants for transmigration areas by the Ministry of Manpower and Transmigration, resulting in state losses of around USD 166,000–233,800 from a project valued at around USD 547,500.

In 2008, the Ministry of Manpower and Transmigration implemented a solar power plant procurement project for transmigration areas, valued at approximately IDR 8.9 billion and financed through Special Allocation Funds. Project implementation involved systematic irregularities, however, causing significant financial losses to the state.af1510a691df

Neneng Sri Wahyuni, spouse of the former Democratic Party Treasurer, Muhammad Nazaruddin, was proven to have unlawfully interfered in the procurement process. She actively participated through companies under her control, namely PT Alfindo and PT Sundaya Indonesia, and arranged improper work transfers between contractors in violation of lawful procedures.d677973d2431

The defendant unlawfully interfered in the procurement process through controlled companies, manipulating contractor work transfers in violation of procedures. She allegedly received personal benefits from the project both directly and indirectly. Audit and investigation findings established that the project was not optimally executed, with equipment that should have been installed at transmigration locations remaining uninstalled, resulting in state losses of around USD 166,000–233,800.08876ef4e40f

This case emerged during the KPK’s investigation of Muhammad Nazaruddin, who had been previously designated a suspect in multiple corruption cases. Through this investigation, the KPK discovered the involvement of Neneng Sri Wahyuni, who managed her husband's company. They then discovered she had received and arranged funds from the solar power plant project.

After initially fleeing abroad, Neneng Sri Wahyuni was apprehended by the KPK in June 2012 and detained.bc9fc3896c04 Trial proceedings commenced at the Central Jakarta Corruption Court. During trial, prosecutors presented evidence including project documentation, financial flows, and witness testimony substantiating her involvement and her receipt of corruption proceeds. Defence counsel attempted to refute the charges by arguing the absence of evidence showing funds entering her personal accounts. However, the judicial panel determined that the involvement of Neneng Sri Wahyuni need not be proven through direct financial flows but were sufficiently established through her active role in the project.b9a596963864

On 14 March 2013, the Central Jakarta Corruption Court sentenced Neneng Sri Wahyuni to six years imprisonment and ordered payment of a USD 18,500 fine and restitution of around USD 50,000.3ba25b5b487f An appeal was filed at the Jakarta High Court. In the appellate decision of 19 June 2013, the appellate panel upheld the six-year imprisonment sentence and fine but increased the restitution amount to around USD 160,000.827b6a472f69 This was because the panel found that there were significantly greater state losses than previously understood and established that the accused indirectly benefited from the project through company control.

Neneng Sri Wahyuni subsequently filed cassation to the Supreme Court. However, on 4December 2013, the Supreme Court rejected the cassation petition and upheld the entire High Court decision. Consequently, the decision became final and binding.214b90d23230

Lessons learned

A central dynamic that emerges from these four past cases of prosecutions are tensions between the central and provincial levels of government over the power to grant mining licenses; a power that has been passed back and forth between them in recent years. Our interviews further indicate that, in South, Central, and East Kalimantan, legacy permits from before 2014 were still viable, including within conservation areas, and that when permit governance was returned to the central government in 2019, ecological damage had already been done.f61b9c50b147 Investigation of such cases is complicated in the absence of rigorous administrative practices by companies. Indeed, nickel mining was later characterised by instances of bribery and regulatory confusion.

Two possibly viable pathways for improving anti-corruption resilience for the energy transition and JETP

The Indonesian government’s current approach to anti-corruption is outlined in the National Strategy for Corruption Prevention (Stranas PK)b06edcfeccf6 implemented through the Presidential Order Action Plans which sets out government workplans. The approach to anti-corruption in the energy transition contained herein is broadly focused on the reduction of state losses through prevention and the recovery of lost assets, which has recently been broadened to encompass ecological rather than merely financial losses. However, the Supreme Court interpretation of the Corruption Crime Law is that investigations for potential enforcement should be limited to cases that have incurred actual state losses, rather than potential losses.

The following section surveys two potentially viable areas for improving anti-corruption resilience by the Indonesian government related to the energy transition and JETP implementation. The first relates to beneficial ownership registration, an effort now led by the Ministry of Mining and Mineral Resources (ESDM),6b21c5baf81e and the second relates to the Conflict-of-Interest Law enforced by the Corruption Eradication Commission (KPK).

Improving beneficial ownership transparency implementation

The obscuring of beneficial ownershipa9dcce25794d exacerbates corruption risks including risks of bid rigging, conflicts of interest, tax evasion, and money laundering.d020baaf8fbb Beneficial ownership (BO) is defined differently in various jurisdictions and sectors. The extractive industries – which are at high risk of corruption and money laundering – are particularly prone to the concealment of beneficial owners.

In Indonesia, the importance of beneficial ownership transparency came into focus following a corruption case involving the state-owned company PT Timah Tbk on the islands of Bangka and Belitung. With state losses at USD 18.58 billion – a large portion of which was calculated from environmental damage – the profits from illegal business practices were funnelled to senior executives through fake invoices and corporate social responsibility funds, revealing the need for transparency in business management.9b8c7bfd36a0

However, across Southeast Asia – including Indonesia – authorities continue to face challenges in collecting, verifying, updating, and accessing beneficial ownership information, especially when such information pre-dates regulations and relies on self-declaration, as well as issues of inter-agency coordination and role duplication.4570e898edd5 Shell companies and complex corporate structures particularly obscure the ultimate beneficial owners of firms.

The Indonesian government has taken steps to improve beneficial ownership registration and thereby strengthen governance and investor confidence by integrating business registries in a central database.24a58c73be17 Presidential Regulation No. 13/2018 defined beneficial ownership of a limited liability company as: a ‘natural person’ who holds more the 25% of company shares or voting rights; someone who receives more than 25% of company profits; has the right to receive benefits, direct or indirect; or has the right to influence or control the company without authorisation from other parties.bf181cdc4bea Regulations were updated with the Minister of Law and Human Rights Regulation (MLHR) No. 2/2025 which broadened the scope to identify ultimate beneficial ownership (UBO) as including smaller corporate structures as well as emphasising continuous compliance with a window of 30 days to update UBO information and yearly reporting.d8979844f963e2f822e20908 The MLHR shares beneficial ownership data with the Directorate General of Taxes (DJP). Civil society access to this data has been helpful in identifying tax irregularities towards the authorities.88e0fce0535d

The above actions reflect Indonesia’s commitment to Financial Action Task Force (FATF) standards. Limitations to these standards, however, include the omission of persons with rights to surplus assets, those benefitting from the dissolution of a company, and the omission of references to intermediaries.313d72ba177f The definition of beneficial ownership in Indonesia encompasses all entities, including limited liability entities, civil partnerships, sole proprietors and associations, registered in Indonesia.92354d10d219 However, the current system has several shortcomings. First, ultimate beneficial ownership regulations do not cover foreign entities.a214267acc70 Second, undermining the efficiency of registers, conglomerates have previously been caught listing legal representatives or other corporate entities as beneficial owners.ff3eff21b332 Third, despite financial oversight bodies such as Indonesia’s Financial Intelligence Unit (PPATK) being able to access all beneficial owners registered at the Ministry of Law, there are still limitations in the verification process, particularly when false BOs and UBOs are registered. Fourth, sanctions for registering fake beneficial owners are currently merely administrative, rather than criminal, in character.

Improving conflict of interest regulations, monitoring, and sanctioning

Conflict of interest laws in the Indonesian legal system are diffused across legal instruments.b1e59b845415 Under former President Susilo Bambang Yudhoyono (2004–2014), the Ministry of Administrative and Bureaucratic Reform (PANRB) issued Regulation No. 37/2012 with Guidelines for Managing Conflict – applicable to all government entities – which obligates all holders of political and judicial offices (pejabat negara) to report potential conflicts of interest to supervisors. These reports were processed by PANRB. In addition, Law No. 30/2014 on Government Administration defines abuse of authority and links it to the conditions of decision-making which cannot be motivated by personal and business interests, relationships with friends, family, political parties, employees, advisors, or prohibited groups.c9f29fb7f182 All civil servants (aparatur sipil negara) must report conflicts of interest to their superiors, the reports of which are monitored and verified by the government entity involved as well as the KPK.ab058d6fc26e However, Law No. 30/2014 has been criticised for its vagueness and civil society organisations argue that more detail is necessary.58ee17f4677d In addition, a regulation from the Ministry of State-Owned Enterprises (SOEs) mandates that all SOEs should have a conflict-of-interest policy and manage such conflicts.76ff9c1a418e

The neutrality of civil servants is also iterated in Law No. 5/2014 on the State Civil Apparatus, which obligates them to be free from influence or the intervention of political parties and prohibits membership in political parties. Despite the existence of these frameworks, Sarnawa84c9ea453942 shows how the neutrality of civil service members waned under former President Widodo (2014–2024), especially regarding elections of regional government leaders. Civil society organisations have argued that current regulations are too specific in their application to individual branches of government.88571fe8777d Indeed, despite the number of laws that pertain to conflict of interest, citing the Mining Law of 2020 and the Job Creation law of 2020, Chandranegara and Cahyawati64166e2e6e49 argue that current frameworks are fragmented and inconsistent, leading to loopholes. Instead, based on historical precedent and comparative constitutional frameworks, they propose introducing a conflict-of-interest prevention clause back into the Indonesian Constitution.

Legal frameworks on conflict of interest were recently further bolstered by Article 175 of Law No. 6/2023 on Job Creation, as well as the issuing of Regulation No. 17/2024 by PANRB which replaced Regulation No. 37/2012. The new regulation identifies conflicts of interest as arising from financial ties, family and affiliate relationships, side jobs, overlapping positions, revolving doors, and gifts or other benefits. It requires government agencies to set up systems to manage, supervise, sanction, and evaluate conflicts of interest, including a complaint mechanism for suspected violations. Agencies must align with the new rules within six months, while the ministry will launch an IT system to support conflict management within three months.65c69f66b4cf The new regulation aimed at closing loopholes in Law No 30/2014, including that if a state official was able to return the loss or repay damage it cannot be considered corruption.bea6ad1e9baa However, the law has limitations including that it is only applicable to the executive branch and not parliament.1ec392cc6bc6 Despite these developments, the unequal implementation of regulations hampers the management of conflict of interest and the monitoring of violations, particularly among political exposed persons (PEPs) such as state officials, who despite existing mandates (Law No. 30/2002) may still fail to disclose their wealth.8c8acf92b329

Conclusion: Somewhere between scepticism and optimism

Though potentially important for improving the anti-corruption resilience of Indonesia’s energy transition and its engagement with JETP, institutionalised efforts such as those described in the section above are still likely insufficient for fully addressing the concerning signs of state capture in the energy sector. State capture is typically resolved only after prolonged periods of contestation and the emergence of new settlements between political and economic elites, as well as other important societal groups.e91b1efbdc6f Indeed, interviewees highlighted the barriers for progressing existing conflict-of-interest regulations into active implementation. As noted by one:

The above scepticism regarding the viability of institutionalised conflict of interest controls among several interviewees appears to find its counterpart among the anti-corruption demands of protestors in Indonesia’s recent nationwide unrest. At the same time, some interviewees found cautious grounds for optimism in Indonesia’s accession process for the OECD as well as its broader integration into regional and global business markets, which may help create some incentives for reform.

We thank GIZ Indonesia's Energy Programme for hosting the U4 workshop in Jakarta in November 2025 at which initial findings and recommendations were discussed with key state and non-state stakeholders.

GIZ Energy Programme Funding Agencies