IAW Demands Prabowo Government Audit of the Ramp-Up Project After Xinyi Says It Is Not Bound by Contract

Photo of housing in Tanjung Banon, Rempang Island Eco-City. (ANTARA/HO-BP BATAM)

JAKARTA - Indonesian Audit Watch (IAW) urges President Prabowo Subianto to audit the Rempang Eco City project after Xinyi Glass Holdings Limited admitted that it had never signed a contract or been involved as the developer of the project.

IAW Founding Secretary Iskandar Sitorus assessed that the recognition of the Hong Kong-based company opened questions about the government's basis for promoting investment projects of around IDR 175 trillion in the era of the 7th President of the Republic of Indonesia Joko Widodo.

"How can a company be placed as the center of the national investment narrative with a value of hundreds of trillions of rupiah, while the company itself then states that it has never reached an agreement or contract and has never been involved in the development of the project? This huge information gap should not be considered as just a change in ordinary business decisions," said Iskandar through a written statement, Wednesday, July 22.

Iskandar explained that the government did not adequately explain that the dynamics of investment were common. What needs to be explained is the extent to which the commitment of prospective investors when the Rempang project was announced as one of the national strategic projects.

Regarding the ESG Report 2025, Xinyi said that talks with the Indonesian government in 2023 were still in the early stages. The company also emphasized that it had never been a developer or proponent of Batam Eco City and finally decided not to continue the investment after considering the social and environmental impacts, especially on the community and mangrove areas.

In fact, in 2023, the government is promoting Xinyi's investment as a downstream project for the glass and solar panel industries worth around US$11.5 billion or around Rp175 trillion. The project is projected to become a new engine of economic growth while absorbing hundreds of thousands of workers in the Rempang-Galang area.

"The state must explain to the public at what stage the investment position actually is when it is announced as a strategic project," he said.

Iskandar assessed that the difference between the government's narrative and Xinyi's official explanation did not necessarily prove that there was a violation of the law. However, this condition is considered sufficient to be the basis for evaluating the project's governance in a comprehensive manner.

"The audit must answer what the government actually has when the investment is announced. Is there a written commitment, memorandum of understanding, feasibility study, certainty of funding, or just an initial exploration. The public has the right to know the difference between investment interest, commitment, contract, and realization. All stages should not be mixed into one narrative as if the investment is certain to run," he said.

Iskandar also touched on the Rempang project which was marked by land conflicts, the rejection of the Old Village community, and the findings of maladministration by the Indonesian Ombudsman regarding aspects of planning, land, and community protection.

"Interestingly, foreign companies have openly stated that social and environmental considerations are the reason for their withdrawal. Countries that have greater constitutional responsibilities have not yet shown open evaluation with the same level of transparency. This should be a material for introspection in building strategic projects in the future," he said.

Therefore, IAW encourages the Prabowo government to audit the entire Rempang project cycle, starting from the process of including the project in the PSN list, investor commitment documents, state budget use, infrastructure development, to follow-up on the Ombudsman's recommendations and various records regarding the rights of affected communities.

According to Iskandar, the audit is not to find mistakes, but to ensure that all development processes can be legally, administratively, and socially accountable.

"Rempang is not just about Xinyi or one investment project. What is at stake is public confidence in the way the state plans development. The most valuable investment is not the figures announced in the press conference, but the public's trust that the state will not sacrifice legal certainty, the environment, and the rights of the community for an investment narrative whose foundation is not really mature," concluded Iskandar.