Jakarta. The Indonesian Chamber of Commerce and Industry (Kadin) is launching an internal investigation and regulatory overhaul following allegations that local business actors in Cilegon, Banten, misused the Kadin name to coerce involvement in a multi-trillion rupiah petrochemical project.

A recent viral video showed individuals claiming to represent Kadin Cilegon appearing to request Rp 5 trillion ($300 million) in "compensation" from Chinese firm Chengda Engineering Co., which is building Barito Pacific Group's Chandra Asri Alkali (CAA) project.

Currently, CAA is constructing a Rp 15 trillion chlor alkali and ethylene dichloride (CA-EDC) plant in Cilegon. Once operational, the facility is expected to produce 400,000 tons of solid caustic soda (or 827,000 tons and 500,000 tons of Ethylene Dichloride (EDC) annually. The project, slated for completion in 2027, has been designated a National Strategic Project (PSN) by the Indonesian government.

Kadin Chairman Anindya Bakrie acknowledged the potential damage to investor confidence and confirmed plans to deploy a fact-finding team. “Of course it disrupts our investment climate. We’ve worked hard to attract foreign investors, so we must respond wisely,” Anindya told reporters on Tuesday.

He emphasized that Kadin Indonesia promotes a healthy and transparent business environment, job creation, and regional empowerment. “We are pro-business, pro-employment, and pro-local development,” he added.

Anindya confirmed that Kadin would visit Cilegon on Wednesday with Banten Governor Andra Soni, the Investment Coordinating Board (BKPM), and law enforcement agencies to further investigate the incident. “We will take objective and coordinated steps on the ground,” he said.

In response to the controversy, Kadin announced plans to introduce a Standard Operating Procedure (SOP) to guide regional involvement in investment projects and set ethical boundaries for engagement with investors and contractors.

“To prevent similar incidents, Kadin will develop a code of conduct for regional participation in strategic investments,” the organization said in a formal statement issued Wednesday.

Kadin will also form a membership verification team to assess the roles and conduct of Kadin Cilegon and its affiliates. Potential sanctions include written warnings, suspension of authority, or leadership replacement. An internal audit will be submitted to BKPM and the Banten provincial government.

Kadin reaffirmed its commitment to uphold the law and serve as a reliable partner to both government and industry. “We reject any form of pressure, intimidation, or misuse of Kadin’s name in investment projects,” the statement concluded.