Foreign workers crackdown dents Indonesia’s industrial zone appeal

Reliance on foreign workers familiar with proprietary technologies, as well as slow and rigid licensing processes in Indonesia, has created incentives for foreign companies to bypass formal visa channels.

Indonesia’s drive to attract investment to industrial zones is facing fresh headwinds after a series of immigration raids targeting foreign workers. Experts warn the crackdown could rattle investor confidence, suggesting tweaks to visa procedures and improved coordination among authorities to strike a better balance between security enforcement and investment appeal.

On April 8, an operation conducted by the Bekasi Immigration Office at the Greenland International Industrial Center (GIIC) Deltamas in Cikarang, West Java, detained 78 foreign nationals suspected of violating immigration rules, 76 of whom were reportedly from China.

Ardi Sutedja, head of the Indonesia Cyber Security Forum (ICSF), underscored broader concerns about the presence of undocumented workers in sectors handling sensitive infrastructure, including data centers, particularly in automotive and digital-focused industrial areas such as GIIC Deltamas, which is owned by local conglomerate Sinarmas.

“Data centers, as critical infrastructure storing sensitive information, are highly vulnerable to such threats,” he told The Jakarta Post on Monday.

“Uncertainty over the identity and intent of undocumented workers can create serious risks for companies and institutions that rely on information security.”

On the other hand, Ardi noted that the issue also carries implications for investor confidence, as Indonesia has been positioning itself as a regional hub for data centers to attract capital from global technology firms, Ardi noted.

“In an increasingly complex digital era, Indonesia must commit to creating a secure environment for investment and technological growth,” he said.

According to Ardi, the challenge lies in maintaining a delicate balance of enforcing immigration and labor laws without disrupting the flow of investment needed to sustain its digital transformation, which includes not only tightening oversight but also investing in domestic talent.

“We must invest in education, training and the infrastructure needed to support the technology sector. By doing so, we not only protect valuable assets but also create jobs and drive innovation,” he said.

Recent cases highlight that the issue is not isolated. Last week, authorities apprehended 16 foreign nationals in Sukabumi, West Java, as part of an investigation into alleged cybercrime networks.

Meanwhile, between January and February this year, the Manpower Ministry has sanctioned 12 companies for violating regulations on the employment of foreign workers across six provinces.

In September last year, the Manpower Ministry also uncovered multiple violations involving foreign workers at the Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi, the biggest nickel processing zone in the country.

The operation found 37 expatriates employed using only special stay permits (ITK) without the required foreign worker utilization plan (RPTKA), six with expired visas and one unable to present valid visa documentation despite working in human resources, some in roles that were not in line with their approved RPTKA positions.

“When they are illegal, especially in low-skill jobs, it can trigger political and social tensions, particularly when domestic employment remains a concern,” Deni Friawan of the Centre for Strategic and International Studies (CSIS) told the Post on Tuesday.

Deni noted that the influx of foreign investment, often accompanied by imported technology and systems, may have outpaced Indonesia’s domestic capacity to supply skilled labor.

As a result, companies frequently rely on foreign workers familiar with their proprietary technologies. However, slow and rigid licensing processes have created incentives to bypass formal channels.

“As a result, shortcuts emerge through foreign workers who violate the rules, for example by using the wrong type of visa, such as a tourist visa, or working without the proper investor visa. In other words, they exploit loopholes in Indonesia’s work permit system,” he said.

He proposed a risk-based immigration and work permit system, which differentiates between high-skilled, low-risk workers and lower-skilled, higher-risk categories.

“High-skilled talent and strategic investors could be granted faster approvals and longer-term permits, while stricter scrutiny is applied to higher-risk categories,” Deni said.

He also suggested introducing project-based work visas to support time-bound needs, particularly during construction phases of large-scale projects like data centers.

Such visas would be limited in duration and directly tied to specific projects, with clear exit mechanisms once work is completed.

At the same time, stronger institutional coordination is also seen critical.

Currently, Deni said that data on foreign workers is fragmented across multiple agencies, including immigration, the Manpower Ministry and investment authorities. Integrating these databases into a unified, real-time system could improve monitoring and enable more proactive enforcement.

“A single integrated registry for foreign workers and investors would allow authorities to track entries, visa types and employment activities more effectively,” Deni said, adding that such a system could help detect violations early and prevent regulatory breaches.

Source: Asianews