“Corruption is paid by the poor” – Pope Francis
Indonesia, a significant global player in tin production, has recently been rocked by what is arguably its largest corruption scandal to date, involving the state-owned tin mining company, PT Timah. This sprawling case, primarily centered in the tin-rich Bangka Belitung Islands, has exposed systemic corruption, leading to staggering financial losses for the state and severe environmental devastation.
The PT Timah Corruption Scandal: A Web of Illicit Deals
The core of the corruption scheme within PT Timah spanned from 2015 to 2022, operating within the company’s mining concession areas. Prosecutors allege a sophisticated web of collusion between PT Timah executives and various private entities, including shell companies, designed to launder illegally mined tin into the legitimate supply chain. The estimated state losses from this illicit trade are an astronomical Rp 300 trillion (approximately US$20 billion), a figure that primarily accounts for irreparable environmental damage in addition to financial losses for the state-owned enterprise.
Prominent figures implicated in the scandal include businessman Harvey Moeis and socialite Helena Lim, alongside former top executives of PT Timah, such as its former CEO Mochtar Riza Pahlevi Tabrani. The modus operandi involved PT Timah executives facilitating the purchase of tin from illegal miners operating within their own licensed concessions. Records were manipulated to “whitewash” these illicit purchases, giving them a veneer of legality. Harvey Moeis, in particular, was found to have brokered deals for at least four smelting companies to process illegally sourced tin, receiving substantial payments per tonne.
The scale of the operation was vast. The Gecko Project, an investigative journalism organization, revealed that PT Timah paid one intermediary company alone $58 million. Furthermore, in 2018, PT Timah executives struck deals with five private tin smelting companies, agreeing that these smelters would send five percent of their “surplus” tin ore—which was, in fact, illegally sourced—to PT Timah. When these agreements faltered, a new arrangement was forged: PT Timah would assist the smelters in obtaining regulatory approvals in exchange for a guaranteed supply of illicit tin, which the smelters would process and then sell back to the state-owned company.
Legal and Regulatory Frameworks in the Spotlight
The PT Timah scandal has cast a harsh light on the adequacy and enforcement of Indonesia’s legal and regulatory frameworks governing the mining sector and anti-corruption efforts.
The primary legislation for the mining industry is Law No. 4 of 2009 on Mineral and Coal Mining (Minerba Law), as amended by Law No. 3 of 2020. This law outlines provisions for Mining Business Licenses (IUPs) and Special Mining Business Licenses (IUPKs) and is intended to promote good mining practices, prevent illegal operations, and regulate investment in the sector. Supporting regulations include Government Regulation No. 96 of 2021 on the “Implementation of Mining Business Activities” and its subsequent amendments.
For prosecuting the corruption itself, the cornerstone is Law No. 31 of 1999 concerning the Eradication of Criminal Acts of Corruption, as amended by Law No. 20 of 2001. These laws define various corrupt acts and provide the legal basis for investigations and prosecutions by institutions such as the Attorney General’s Office (AGO).
A critical aspect of the PT Timah case has been the inclusion of environmental damages in the calculation of state losses. This aligns with a growing emphasis on “environmental corruption,” where ecological destruction is recognized as a tangible loss to the state. Minister of Environment Regulation Number 7 of 2014 concerning losses due to environmental pollution and/or damage has been instrumental in quantifying these ecological costs.
In response to such large-scale corruption, the Indonesian government has initiated efforts to improve governance. The Coordinating Minister for Maritime Affairs and Investment announced plans to digitize the tin management system by June 2024, aiming for greater transparency in tracing tin origins, tax payments, and royalty collections. This initiative, including the integration of tin and nickel into the SIMBARA platform, seeks to mitigate future corruption risks. Furthermore, an anti-Strategic Lawsuit Against Public Participation (SLAPP) regulation was introduced in September 2024 to protect environmental defenders who speak out against such crimes.
Profound Public and Environmental Impact
The ramifications of the PT Timah corruption case extend far beyond financial figures, inflicting profound damage on Indonesia’s environment and society.
The Bangka Belitung Islands have suffered an “Environmental Catastrophe” due to unchecked illegal mining, leading to an estimated US$16.6 billion in damages. This includes scarred landscapes, polluted waters, destroyed mangrove forests, degraded marine ecosystems, deforestation, and biodiversity loss, severely impacting local livelihoods (especially fishermen, whose incomes are halved) and earning the islands the nickname “Dead Islands.” Wildlife is also affected, with increased crocodile attacks. Beyond environmental damage, there are “Social and Economic Consequences,” including at least 38 deaths on illegal mining platforms from 2021-2024, and unequal distribution of mining’s economic benefits, leaving communities to bear the brunt of the degradation without proper compensation.
The scandal has also highlighted the vulnerability of environmental activists and experts. Bambang Hero Saharjo, who quantified the environmental damages, has faced SLAPP lawsuits, underscoring the systemic attempts to silence those who expose environmental crimes. Finally, the sheer scale of the corruption, involving state-owned enterprises and high-profile individuals, has undoubtedly eroded public trust in governmental institutions and the rule of law. Despite the nationwide attention and ongoing legal proceedings, reports suggest that illegal tin extraction persists in Bangka Belitung, often under the protection of influential individuals, indicating the deep-seated nature of the problem.
Conclusion
The PT Timah corruption case stands as a stark reminder of the devastating consequences of unchecked greed and systemic failures in governance. The immense financial and environmental losses underscore the urgent need for robust enforcement of existing laws, greater transparency in natural resource management, and unwavering protection for those who bravely expose corruption and environmental crimes. Addressing this multi-faceted crisis requires not only judicial accountability for those involved but also comprehensive efforts to restore the environment and ensure equitable and sustainable development for the communities dependent on Indonesia’s rich natural resources.
Sources
- “The Tin Racket,” The Gecko Project, May 13, 2025.
- “Harvey Moeis Sentenced to 6.5 Years in Prison and Fined Rp 210 Billion,” Jakarta Globe, December 23, 2024.
- “Corruption at the heart of Indonesia’s state-owned tin mining sector that is wrecking the environment,” Global Initiative Against Transnational Organized Crime, September 11, 2024.
- “Mining in Indonesia: Investment, Taxation and Regulatory – 14th Edition,” PwC, February 18, 2025.
- “Extensive interpretation of state financial losses in tin sector corruption,” Integritas: Jurnal Antikorupsi.
- “Indonesian scientist under fire for revealing extent of illegal tin mining,” Mongabay, January 14, 2025.
- “Indonesian govt to digitize tin management to prevent corruption,” ANTARA News, April 4, 2024.
- “Top 10 Biggest Corruption Scandals in Indonesia That Cost the Nation Trillions!” Digivestasi, February 27, 2025.
