As the Eid al-Fitr holiday approaches, several civic organizations (ormas), local officials, and even criminal groups are exerting pressure on businesses, demanding holiday allowances from entrepreneurs across Indonesia. This practice, which often leads to unrest, has become a recurrent issue for business owners during the festive season.
Sahat Sinaga, Executive Director of the Indonesian Palm Oil Industry Association (GIMNI), highlighted the growing concern over this trend during a recent dialogue on Beritasatu TV titled Ormas Demand THR from Entrepreneurs. Sinaga explained that these groups approach companies under the guise of tradition or solidarity, requesting payments for holiday allowances, often accompanied by intimidation and coercion.
“This practice creates anxiety for business owners, especially when they face threats and undue pressure,” Sinaga said. He emphasized that the law should protect businesses from unauthorized groups entering company premises to make such demands.
Sinaga referred to the use of Article 331 of the Criminal Code, which previously served as a deterrent for unauthorized entry onto company grounds. However, he noted that this law is rarely invoked today, and questioned whether it still holds any validity. “This rule should be reinstated to protect businesses, and companies that refuse entry from ormas should receive legal protection,” he added.
The issue has escalated to the point where 43 GIMNI member companies nationwide are grappling with similar problems, with businesses across Indonesia facing mounting pressure from these groups. In response, GIMNI has urged companies to document any instances of intimidation to facilitate legal action. “We encourage businesses to keep records of these cases, ensuring that complaints are supported by concrete evidence,” Sinaga stated.
The problem of extortion and intimidation by groups posing as community organizations has been a longstanding issue in Indonesia. Despite numerous complaints from the business community, authorities have been slow to take meaningful action, allowing these groups to continue their activities with little fear of repercussions. This inaction is partly attributed to weak law enforcement and alleged collusion with corrupt officials, who are suspected of protecting these organizations.
One area of concern is the frequent targeting of cooking oil factories, which are pressured to make payments under the guise of community contributions. “Over time, businesses began to treat these payments as just another normal cost of doing business, similar to corporate social responsibility (CSR),” Sinaga explained.
In addition to demands for holiday allowances, these groups often request funds for various activities, including local anniversary celebrations. Many businesses comply with these demands to avoid disruptions to their operations.
The Indonesian Industrial Estate Association (HKI) estimates that the ongoing instability caused by these groups has resulted in significant financial losses, with hundreds of trillions of rupiah in potential investment opportunities lost. These organizations routinely disrupt industrial activities through protests, blocking access, and attempting to control key business operations such as transportation, procurement, and catering services.
As the pressure mounts on businesses, industry leaders are calling for stronger enforcement of the law to protect companies from the pervasive threat of extortion and disruption.
