Indonesia's Land Seizures Put Millions of Hectares Under State Control and Resource Markets on Alert

Four million hectares and a new centre of economic power

Indonesia's government has taken control of more than 4 million hectares of land, roughly the size of Switzerland, in a campaign reaching plantations, mining concessions and processing facilities. By January 6, 2026, President Prabowo Subianto's drive to recover land classified as state forest had become a major reorganisation of the country's natural resource economy, with consequences for farmers, international investors and the supply of everyday products.

Indonesia is the world's largest exporter of coal and palm oil, its biggest nickel producer, and a leading source of copper and tin. Palm oil goes into food and other consumer goods, while nickel is used in batteries for electric vehicles. Changes in how Indonesia manages these resources can therefore affect businesses and households far beyond its borders.

The Forest Area Enforcement Task Force was established in January 2025 under Defense Minister Sjafrie Sjamsoeddin, a longtime ally of Prabowo from their military careers. The seizure campaign gathered force in March. The task force has broad authority to impose fines, transfer ownership and reclassify territory, while much of the recovered plantation land has been assigned to a new state enterprise, PT Agrinas Palma Nusantara.

Agrinas has become the world's largest holder of palm oil plantation land by area, managing approximately 1.7 million hectares. Its expansion has come mainly from transfers of seized assets rather than from buying or developing plantations through the usual commercial process. The wider campaign is among the largest reorganisations of natural resource control in Indonesia's history since independence.

Prabowo presents the campaign as a defence of ordinary Indonesians against business elites and foreign interests that he believes have taken too much of the country's natural wealth. He uses the term "greedy-nomics" to describe that behaviour. At an event discussing the campaign, the president said:

This is just the beginning.

We are on the right and noble path of defending the interests of millions of Indonesians.

The message has found support among parts of the public. Investors, economists and environmental organisations are concerned about how the campaign is being carried out, who bears its costs, and whether state management will protect both production and forests.

Why a cultivation or mining permit may be insufficient

Presidential Regulation Number 5 of 2025 established the task force and provides the main legal basis for its operations. The government's central argument is that plantations and mines operating inside designated forest areas without the necessary forestry permission are liable to seizure and financial penalties.

Indonesia's overlapping land classifications make that rule complicated in practice. A plantation may have permission to grow crops while the same land remains classified as forest by the national government. A mine may hold a mining permit but lack the separate permission needed to use forest land. Companies and communities can consequently face enforcement even when another public authority previously allowed their activities.

Military personnel, prosecutors and other officials typically arrive at a targeted property, install signs declaring government control, and then either negotiate continued operations or assume management. Febrie Adriansyah, a senior prosecutor at the Attorney General's Office, said the task force had identified approximately 4.2 million hectares managed by 51 companies that lacked the required forestry permits.

The transfer process moves the property through several state institutions. The task force first takes control of assets considered illegally occupied within state forest areas. Those assets become state property, and the Attorney General's Office transfers them to the Ministry of State-Owned Enterprises. The ministry then directly appoints Agrinas to manage the land, without a competitive auction.

Febrie defended that process as the recovery of public property rather than the takeover of assets that legitimately belonged to private owners. He said:

This policy is not nationalization, but the return of state assets that were held without authorization. Every step is carried out transparently, through a clear legal process, and with consideration for the social and economic impacts on local communities.

Achmad Sukarsono, at the consultancy Control Risks, questioned how such extensive operations could have developed without cooperation from public officials. His concern reaches back to the approvals, formal or informal, that companies relied upon over many years:

How did it come to this? Such a vast amount of land couldn't have been taken illegally by palm oil companies without approval from local governments and military officials.

Businesses that believed they had government approval now face the loss of land and large bills. That history makes fair process and punishment for past activities central issues, alongside the enforcement of forest boundaries.

Fines turn permit violations into major financial exposure

The government has ordered 48 palm oil companies to pay approximately $560 million in fines. Another 22 mining companies face more than $1.7 billion. Together, those penalties exceed $2.2 billion, giving the campaign a substantial revenue role as well as a role in recovering assets.

Palm oil penalties are calculated at $1,497 per hectare for each year since clearing began. The formula allows a five year exemption to account for the period before oil palms become productive. A hectare is a measure of land area; applying an annual charge across thousands of hectares can produce a large liability for an estate that has operated for decades.

Nickel miners face a much higher rate, $389,000 per hectare. Two miners affected by enforcement said penalties at that level exceeded their ability to pay. Smaller operators could be forced to close or transfer ownership to state entities. Coal, bauxite and tin producers face lower penalties, though the charges remain large enough to affect their business plans and investment decisions.

The differing rates reflect the strategic attention given to nickel in Indonesia's industrial plans, particularly processing for battery production. Downstream processing means turning a raw resource into more valuable products inside the country, rather than simply exporting the unprocessed material.

Enforcement is occurring alongside existing requirements for investment in Indonesian smelters and refineries and bans on exports of raw ores. Mining businesses therefore face the cost of adapting to industrial policy while also checking their exposure to forest rules.

Palm oil estates move into state hands

Approximately 3.7 million hectares of palm oil plantations have come under government review, described as roughly 30% of Indonesia's total palm oil land. The industry produces more than half of the world's supply, making the scale of the review important for both domestic business and international buyers.

The March 2025 seizure of 221,000 hectares from the Duta Palma Group helped establish the direction of the campaign. The group belonged to Surya Darmadi, formerly one of Indonesia's wealthiest people, who became the subject of money laundering and corruption investigations. Action against such a large business showed that prominent operators could also lose control of their estates.

Singapore based Wilmar International, the world's largest palm oil trader, expects a few thousand hectares of its plantations to be affected and has entered discussions with authorities. Malaysian listed IOI Corporation operates plantations and mills in Kalimantan. Its chief executive, Lee Yeow Chor, said the company would undertake more risk assessments before making further investments in Indonesia.

First Resources, SD Guthrie, Golden Agri-Resources and Cargill have generally remained silent about specific effects on their operations. Industry contacts indicated that many companies were reviewing their Indonesian holdings internally. Businesses are weighing how to protect their assets while avoiding a public confrontation with the government.

The Indonesian Palm Oil Entrepreneurs Association, known as Gapki, has raised concerns about interruptions to production and complaints from members about payments under the new management arrangements. Its members reported that harvest proceeds were paid fully into Agrinas's account, while partners sometimes waited more than 30 days to receive their share.

Those delays matter because growers need regular cash to pay workers, maintain trees and buy fertiliser. A plantation can continue producing fruit while its operator runs short of the money needed to keep it productive.

Farmers resist losing control of land they cultivated

Ujung Gading Julu village in northern Sumatra illustrates the consequences for small farmers. In March 2025, approximately 20 to 30 officials arrived, many wearing military or prosecutor's office uniforms, to declare government control over 2,000 hectares of farmland belonging to about 500 families.

Rubahan Hasibuan, a farmer aged 48 whose family had worked the land for generations, described the labour that families had invested in their plantations:

We planted the trees, and we worked hard to take care of them.

After four meetings with officials, the farmers were offered a 15% share of revenue if they stayed under Agrinas's joint operation scheme. Hasibuan and his neighbours rejected that arrangement. He travelled for 11 hours to the governor's office in Medan to seek support from local officials, where he explained their decision:

We turned it down to keep our independence.

We will not give up.

The farmers were continuing to work the land despite uncertainty about further state intervention. Their experience reflects the position of thousands of smallholders caught between longstanding cultivation and national forest designations.

Some small farmers obtained land through government programmes encouraging migration within Indonesia. They say the state encouraged them to settle and grow crops, then later classified the area as forest and took control. For those families, the dispute concerns both livelihoods and the reliability of earlier government decisions.

Agrinas's usual joint operation arrangements allow growers to retain about 55% to 60% of revenue, with the remainder going to the state enterprise. The share for smallholders can be higher, but the terms offered in Ujung Gading Julu were much lower. Some farmers find the arrangements unattractive enough to consider leaving their farms rather than accepting them.

Uncertainty is already affecting plantation upkeep

At the Melati Hanjalipan palm oil plantation on Borneo, monthly output fell from as much as 100 tonnes of fruit bunches to approximately 23 tonnes. Sabarani, the cooperative head, said the caretaker had stopped maintaining the estate because its legal position was unclear. He expressed his anger at the takeover:

Why is the state becoming the king of thieves?

The fall from 100 tonnes to 23 tonnes amounts to a 77% reduction at that plantation. It shows how a dispute over management can quickly affect harvesting and care, before any broader change in the country's production becomes apparent.

Executives at major palm companies said they had begun reducing maintenance and fertiliser use on estates they feared would be taken over. Some feared retaliation if they objected publicly. Lower spending today can reduce future yields, particularly when the trees require continuing care.

Oil palms usually need replanting every 20 to 25 years to maintain productivity. Many smallholders have postponed that expensive work because they are unsure whether they will retain the land or benefit from the replacement trees. Delayed replanting adds a longer term production risk to the immediate disruption.

Concern about seizures and fines was widespread at a major palm industry gathering in Bali in November 2025. Thomas Mielke, executive director of Oil World and a leading industry analyst, warned that the production damage could be greater than participants were prepared to discuss:

The risk that production will suffer more than we dare to say now is probably bigger than vice versa. This is a very critical and very sensitive situation.

Global demand for palm oil continues to grow, increasing the importance of keeping plantations productive through any management transition. Gapki's payment complaints add another problem: an operator waiting for harvest proceeds may have to reduce maintenance even if it wants to continue investing.

Nickel and tin enforcement reaches major operations

Indonesia's mining campaign extends across commodities and company sizes. In Bangka and Belitung Islands, Prabowo said authorities had dismantled approximately 1,000 illegal mines, leading to an 80% reduction in national tin production. He put estimated state losses from illegal tin mining in the PT Timah area at approximately Rp300 trillion.

On Halmahera island in northeast Indonesia, soldiers arrived with a television crew in September 2025 to seize part of the world's largest nickel mine, operated by PT Weda Bay Nickel. The action covered 148 hectares within a site of 45,000 hectares and briefly pushed global nickel prices higher.

The government demanded a penalty of approximately 3 trillion rupiah, or $179 million, from Weda Bay Nickel. Its largest shareholder is China's Tsingshan Holding Group, which spearheaded metals investment in Indonesia and helped transform the nickel industry. A Weda Bay spokesperson said the company was complying with authorities and checking the fines.

Rilke Jeffri Huwae, an official at the mining ministry, explained that the dispute concerned forest permission rather than the absence of a mining licence:

They have the mining permit, but they don't have the borrow-to-use permit for the forest.

Eramet Indonesia, a partner in Weda Bay, said the seized plot was a quarry supplying construction rock rather than the area used for nickel extraction. The company did not expect a substantial effect on operations. The seized land represented about 0.33% of the full 45,000 hectare site, although the associated fine was substantial.

The task force also seized 173 hectares managed by PT Tonia Mitra Sejahtera in Southeast Sulawesi. These actions show that the campaign reaches beyond plantations and into the forest permissions attached to mineral development.

The Indonesian Mining Association and the Indonesia Nickel Miners Association did not respond to requests for comment. Companies were assessing their liabilities and legal options while taking a cautious approach to public statements. For smaller nickel miners, which still account for a large part of output, the penalty rate raises the prospect of closure or a change in ownership.

Investors weigh resources against regulatory risk

International investors generally accept that regulations can change in developing economies. Indonesia's combination of rapid seizures, extensive territory and a prominent military role has nevertheless created unusually severe uncertainty. Businesses need to know not just whether a project is profitable, but whether its permissions will continue to be accepted.

Malaysian plantation companies are particularly exposed because of their substantial Indonesian land holdings. SD Guthrie Bhd, Kuala Lumpur Kepong Bhd, IOI Corp Bhd and Genting Plantations Bhd all have estates that could be affected.

Malaysian securities firm CIMB warned that these companies were "grappling with mounting regulatory risks after the government began seizing oil palm estates found to lack proper forestry permits or to be in breach of land-use laws." It also warned that enforcement could bring greater scrutiny from investors concerned with environmental, social and governance matters, often shortened to ESG.

A higher risk premium means investors demand a greater return to compensate for uncertainty. For companies heavily exposed to Indonesia, that can make borrowing and raising capital more expensive, even before an estate or mine is targeted.

Eve Warburton of Australian National University, who studies governance and resource nationalism in Indonesia, compared the breadth of the campaign with an earlier period of sweeping changes in ownership:

The campaign's breadth has echoes of the nationalizations and dramatic reorganization of property under Indonesia's first president after the end of the colonial era.

Warburton also warned about the task force's freedom to choose its targets and timing:

The clean-up is also being led by a task force with a great deal of discretion in terms of who it goes after, when and why. The risk of politicization is high. This can undermine investor confidence and the credibility of resources governance more broadly.

Businesses face difficulty planning when they cannot determine which operations will be targeted. Indonesia's valuable resources remain essential to international supply chains, but uncertain land status can discourage commitments that take many years to recover their costs.

Commentary on the campaign has described the possibility of major changes for palm oil, mining and sustainable development, alongside uncertainty for Indonesian and foreign businesses. Some investors see openings for new operators and alternative suppliers if control over agricultural and mining assets changes quickly. Most assessments describe the immediate disruption as outweighing potential benefits in the foreseeable future.

Commodity prices have so far reflected less concern than industry executives. Benchmark palm oil futures were trading not far from lows reached over six months. Nickel prices rose briefly after the Weda Bay seizure and then stabilised. Supply concerns were only beginning to enter market expectations and could grow if enforcement continued at the same pace.

Foreign governments have responded relatively quietly, reflecting diplomatic sensitivities. If the campaign begins to affect global supply or prices more substantially, they may face greater pressure to engage Indonesia on behalf of companies from their countries.

Environmental enforcement brings disputes over fairness

Indonesia has lost millions of hectares of forest in recent decades, much of it through palm oil and mining expansion. The losses contribute to climate change and damage habitats. Deforestation also helped worsen floods and landslides in Sumatra that killed more than 1,000 people, giving greater urgency to the recovery and protection of forest areas.

The government presents the seizures as part of environmental protection and sustainable resource management. State control could allow restoration and better oversight. Environmental organisations, however, say the implementation has concentrated on recovering assets and revenue while leaving forest repair and community rights insufficiently addressed.

Walhi, Indonesia's largest environmental organisation, says the task force regulation fails to distinguish large corporate operations from local communities, including Indigenous peoples. Many communities have longstanding disputes over land that the government classified as forest without their agreement.

In Aceh province, the task force seized 15,000 hectares cultivated by communities with crops including durian and candlenut. Major companies in the same province reportedly continued operating despite similar permit violations. Environmental groups see that difference as evidence of selective enforcement.

In Jambi province, nine companies operate plantations inside forest areas, but only one reportedly had land seized. The task force also took community land that had already received government recognition, including 820 hectares of community plantation forests covered by a scheme granting leases for 35 years to manage state forests.

Ginda Harahap, Walhi's director in Jambi, criticised the financial arrangement imposed on those communities. His description referred to profits, while other Agrinas arrangements have been described in terms of revenue:

The communities do all the work and bear the costs, yet 40% of the profits go to Agrinas. We believe there's no need to share profits with Agrinas, especially since the government has already granted these rights to the communities in the form of community timber plantations.

Revenue is the money received from sales; profit is what remains after costs. The amount communities retain therefore depends on both the percentage and the basis used to calculate it.

Tesso Nilo confronts relocation and school closures

Tesso Nilo National Park in Riau province, Sumatra, contains one of the highest levels of lowland plant diversity known to science and provides habitat for critically endangered Sumatran tigers and elephants. Around 70,000 hectares, nearly 90% of the park, have been cleared and planted with oil palms, mostly by smallholder farmers.

The task force began action against plantations it considered illegal in June 2025. Officials installed fences, built guard posts and deployed 380 personnel. Approximately 11,000 households, comprising about 40,000 people, faced relocation under an August deadline. Indigenous land tenure in the area dates to 1999, five years before the park was established.

The crackdown reportedly led to the closure of dozens of schools inside the park. A widely shared video showed children in uniform sitting on a blue tarp among oil palms after being shut out of their school. The effect on education brought the campaign's consequences beyond land ownership and plantation income.

Munafrizal Manan of the Ministry of Law and Human Rights said government policy needed to protect basic rights, including continued schooling:

Policies must be framed around the protection and fulfillment of citizens' basic rights, including children's right to education in Tesso Nilo.

Police arrested Jasman, a customary village leader, for selling parcels of land that were subsequently planted with oil palms. Suyadi, a local legislator who had operated a plantation covering 311 hectares in the park since 2009, was not arrested after surrendering the land. Police said they prioritised "restorative justice," an approach that seeks to repair harm rather than rely solely on criminal punishment.

Roni Saputra, legal director of environmental organisation Auriga Nusantara, challenged the use of that approach for Suyadi's case:

Restorative justice doesn't apply in this case, as the crime involved a protected forest, caused ecological harm, and exceeded the financial threshold that would qualify it as a minor offense.

Environmental justice advocates argue that lasting conservation requires action on poverty, insecure land rights and the shortage of other ways for forest communities to earn a living. Punishment and displacement, they say, will have limited results without addressing those causes.

Difa Shafira of the Indonesian Center for Environmental Law, known as ICEL, said Presidential Regulation Number 5 of 2025 gives no clear guidance on when officials should use administrative penalties, civil proceedings or criminal prosecution. She warned that this leaves excessive room for individual decisions:

Right now, there's too much room for discretion, creating the potential for abuse.

This oversimplifies through enforcement what is a deeply complex issue of illegal activities in forest areas that stem from a wide range of factors—from policy failures, to intentional corporate encroachment, to smallholder and Indigenous land uses.

Difa called for a new forestry law that "centers justice, ecological restoration and meaningful governance," and "recognizes and protects Indigenous and local communities with historical ties to the forest, as well as distinguish between corporate violations and smallholder land use." Her proposed reform would separate deliberate corporate violations from the historical land use of communities and small farmers.

Prabowo's campaign draws on a history of state control

Article 33 of Indonesia's Constitution requires state control over natural resources considered vital to national interests. It has supported different approaches since independence, including nationalisations under Sukarno, Suharto's system of political patronage, and later reforms giving markets a greater role.

Warburton's historical comparison also contains an important difference. Sukarno's nationalisations explicitly targeted foreign colonial interests. Prabowo's campaign focuses on permit violations and domestic actors, although foreign companies operating in Indonesia are also affected.

Prabowo, a former general, has appointed numerous retired military officers to the enforcement apparatus and Agrinas. The use of military leadership in economic management contrasts with the more technocratic approach associated with his predecessor, Joko Widodo.

Agrinas President Director Agus Sutomo, a retired special forces commander, told lawmakers that managing palm oil was now his official "mandate," despite his lack of experience in the industry. The appointment illustrates the administration's preference for command and control in handling the newly acquired assets.

Bhima Yudhistira Adhinegara, executive director of the Jakarta based Center of Economic and Law Studies, said the approach could discourage investment in both agriculture and environmental protection:

This increasingly shows the character of a Prabowo-style command economy. Methods like this reduce interest from investors, both in the plantation sector and in conservation.

A command economy gives the state a central role in directing production and allocating resources. In this case, the concern is that government decisions about ownership and management could displace commercial judgement without providing sufficient certainty or technical expertise.

Agung Baskoro, executive director of survey and research institution Trias Politika, offered a different interpretation. He described the campaign as "the end of state tolerance for violations in the natural resources sector under President Prabowo Subianto's administration." He said:

The message is simple: investment is welcome, but not if it violates regulations and harms the state.

That view presents enforcement as a reset of compliance expectations rather than a permanent expansion of government ownership. The scale of the transfers and the military's involvement nevertheless leave businesses uncertain about the direction of resource management.

Agrinas faces ambitious goals and difficult management work

Agrinas aims to supply one third of Indonesia's cooking oil and begin biodiesel production by 2029. Biodiesel is fuel made from biological materials, including vegetable oil. Those plans would give the state greater influence over supplies important to both food security and energy policy.

The campaign combines immediate fine revenue with the creation of productive assets under state control. Managing plantations and processing their output would allow the government to influence domestic prices as well as export earnings. Control over resources also supports Indonesia's wider ambition to process more commodities within its own borders.

Prabowo's actions against powerful business figures such as Surya Darmadi reinforce his political message that he is defending national interests against domestic elites and foreign interests. That message appeals to people who believe they have received too little benefit from Indonesia's resource wealth.

The practical task is substantial. Managing more than 4 million hectares of recovered plantations and mining areas requires administration, skilled staff, investment and workable arrangements with previous operators. Agrinas must negotiate partnerships, organise harvesting and maintain production while absorbing land that was not acquired through a gradual commercial expansion.

Agus Sutomo told parliament that less than half of Agrinas's large land bank was planted with productive trees. The portfolio also includes many small plots that lack an efficient scale for cultivation on their own. Consolidating and developing those holdings will require agricultural expertise and rehabilitation.

Investment needed for restoration and better productivity could reach billions of dollars. That spending would place pressure on state budgets already supporting ambitious policy programmes. Gaps in technical expertise could also lead to lower output or inefficient management of the recovered agricultural and mining assets.

Indonesia's history of state enterprises includes problems with inefficiency, corruption and mismanagement. The international record of government resource management contains both successes and failures. The economic test for Agrinas is whether it can manage its expanded holdings effectively while meeting domestic policy goals.

Indonesia's approach also fits a wider movement towards resource nationalism, meaning efforts by governments to exercise more control over natural wealth. Chile's debates over lithium nationalisation and changes to mining codes in Africa illustrate that trend. Indonesia's campaign stands out chiefly for its speed and scale.

Regulatory complexity was already a difficulty for investors before the seizures. Companies now also have to consider whether land covered by an existing permit could later be classified as forest. That possibility makes planning over many years harder, even for operators that believe their documentation is valid.

Legal disputes and supply risks extend beyond the takeovers

The task force has identified approximately 5 million hectares of potentially illegal palm oil plantations. Official statements at different stages put the verified and reclaimed area between 3.1 million and 3.7 million hectares. The government still faces the work of examining additional territory while maintaining order and production in land already taken under its control.

The campaign's main dates and stated targets show how quickly enforcement developed:

• January 2025: The Forest Area Enforcement Task Force was established under Presidential Regulation Number 5 of 2025.
• March 2025: The seizure campaign gathered momentum, including 221,000 hectares from Duta Palma and action affecting families in Ujung Gading Julu.
• June 2025: Enforcement began against oil palm plantations in Tesso Nilo National Park.
• August 2025: The relocation deadline set for approximately 11,000 households in Tesso Nilo fell due.
• September 2025: Authorities seized 148 hectares at Weda Bay Nickel on Halmahera.
• November 2025: Palm industry participants meeting in Bali voiced concern about production and investment.
• 2028: The government aims to generate up to $65 billion from carbon credits.
• 2029: Agrinas aims to begin biodiesel production.

Specific seizure cases may move through Indonesian courts for years. The regulation's treatment of large companies and smallholders could face challenges involving constitutional protections for property and livelihoods. International investors may also seek arbitration if they believe assets were taken without fair compensation or proper process. Arbitration allows a dispute to be decided outside the ordinary national court system under applicable agreements.

Indonesia's decentralised government structure creates another difficulty. Regional governments have substantial authority over land use and economic development. Cooperation between national ministries, regional officials and enforcement agencies will require continuing negotiation.

Sahat Sinaga, chairman of the Indonesian Palm Oil Council, or DMSI, said resolving forest land problems requires more than prosecution:

The issue of forest areas is a cross-sector problem whose resolution cannot be expected solely from law enforcement. Each relevant ministry needs to collaborate to effectively implement forest area governance.

World commodity prices will influence the economics of state management. If Indonesian supply falls and prices rise, higher revenue could help finance public operations. Higher prices could also encourage buyers to use other materials or obtain supplies from other countries, reducing Indonesia's market share over time.

Nickel disruption could encourage investment in alternative sources or battery technologies. That would work against Indonesia's plan to use its nickel reserves to build an industry producing batteries for electric vehicles. Importing countries may also diversify supply chains to reduce their exposure, increasing competitive pressure on Indonesian producers.

International investors' legal options and government ownership policies could create pressure to renegotiate bilateral investment treaties. Multilateral trade agreements may also need adjustment if state enterprises expand and domestic buyers receive preferential allocations. Constitutional amendments strengthening state control remain a possibility, although the present campaign operates under existing law.

The success of current enforcement may influence support for further state authority. Prabowo's description of the campaign as "just the beginning" suggests possible expansion, while the administrative burden and investment needed may affect how fast it proceeds.

Forest restoration and carbon income remain central tests

Indonesia contains the world's third largest expanse of tropical rainforest and more than a third of its peatlands. Forests and peat store carbon, making their protection important to efforts to limit climate change. How the recovered land is used therefore matters beyond the country's borders.

Prabowo has announced a plan to generate up to $65 billion by 2028 through carbon credits from restoring and protecting forests and peatlands. The government calls this a "restorative economy." Carbon credits are units associated with reductions in emissions or the protection and storage of carbon that can be sold to buyers.

Critics question whether the emphasis on state control, fines and continued production is matched by investment in restoration. Changing the manager of a plantation or mine still leaves the practical work of repairing damaged ecosystems, protecting remaining forest and supporting communities.

Uli Arta Siagian, Walhi's forest and plantation campaign manager, said recovering forest assets should mean restoring the forest itself:

What's the point of them being in the task force if they can't advocate for environmental restoration? If we talk about asset recovery... that's the forest itself, which must be restored. If they're not advocating for forest restoration, then they don't deserve to call themselves environmental stewards.

Carbon markets face difficulties in calculating the starting level of emissions, verifying the savings claimed, and avoiding double counting. Double counting occurs when the same reduction is claimed more than once. Those issues could affect the credibility and value of Indonesia's planned sales.

Kate Dooley, an expert on carbon accounting at the University of Melbourne, expressed concern about the information countries can withhold in carbon transactions:

Nations can opt to keep much of the information about those deals confidential.

Dooley believes Indonesia is likely to make extensive bilateral deals, agreements directly between countries, that avoid United Nations oversight. She described that route as an "easy way to transact large volumes of credits." The concern is whether sufficiently transparent accounting and verification will accompany the planned volume of sales.

Communities face more immediate pressures from displacement, interrupted livelihoods and perceived unequal treatment. If those problems are handled poorly, they could generate unrest. The government's ability to combine enforcement with protection of local needs will influence how the campaign is received across Indonesia's diverse regions.

The final economic, social and environmental results were not yet known as of January 6, 2026. Potential gains include higher state revenue, better resource management and greater control over national assets. Risks include reduced investment, declining productivity, disruption to communities and environmental damage where restoration receives insufficient funding.

Indonesia must keep its exports competitive while using state control to meet domestic goals. Agrinas's operational performance, the treatment of farmers, and measurable forest restoration will determine whether the campaign benefits the people Prabowo says it is intended to protect.

The Essentials

• Indonesia has taken control of more than 4 million hectares of plantations, mining concessions and other resource assets.
• The Forest Area Enforcement Task Force was established in January 2025 under Defense Minister Sjafrie Sjamsoeddin.
• Agrinas manages approximately 1.7 million hectares and has become the world's largest palm oil plantation holder by area.
• Authorities ordered 48 palm oil companies to pay approximately $560 million and 22 mining companies to pay more than $1.7 billion.
• Palm oil penalties are $1,497 per hectare for each liable year; nickel penalties reach $389,000 per hectare.
• Wilmar expects several thousand hectares to be affected, while IOI is increasing investment risk assessments.
• Farmers in Ujung Gading Julu rejected an offer to retain 15% of revenue under an Agrinas arrangement.
• Environmental groups have challenged selective enforcement, community land seizures and the emphasis on asset recovery over restoration.
• Tesso Nilo enforcement affected approximately 11,000 households and reportedly closed dozens of schools.
• Agrinas aims to supply one third of Indonesia's cooking oil and begin biodiesel production by 2029.
• The government targets up to $65 billion in carbon credit revenue by 2028, while questions about accounting and transparency persist.
• Production, investment, community rights and forest restoration are the main tests of the expanding campaign.