Project Fees and Extortion: When Regional Heads' Authority Becomes a Tool for Profit

The practice of demanding a cut of fees from government projects and extorting business actors has resurfaced in two corruption cases implicating regional heads. The Regent of Bolaang Mongondow Utara (Bolmut), Sirajudin Lasena, allegedly set a fee of 10 percent on every procurement of goods and services within the district government. Meanwhile, the Regent of Gowa, Sitti Husniah Talenrang, allegedly instructed subordinates to collect money from developers processing the Spatial Use Activity Conformity Approval (PKKPR).

These two cases are not a new phenomenon. Executive Director of the Committee for Monitoring the Implementation of Regional Autonomy (KPPOD) Herman Nurcahyadi Suparman, known as Armand, assesses that extortion has long been one of the corruption modes used by regional heads. "That has actually become one of the modes used," he said when contacted on Monday (28/9/2026). Nevertheless, he stressed that this practice is not necessarily the most dominant mode, but one of several methods that keep emerging due to structural gaps.

Armand highlighted that the root of the problem lies in the extensive authority of regional heads that is not matched by adequate oversight. "Their authority is very large, but there are weaknesses in guidance, supervision, and transparency in the use of power," he said. This condition opens room for regional heads to divert authority that should serve the public into a tool for personal gain.

One of the most vulnerable gaps is the relationship between regional heads and the state civil apparatus (ASN). As PPK, regional heads have full authority over ASN careers, from transfers and promotions to demotions. "When they have the authority to transfer, promote, or demote, that becomes an opportunity that can be used for personal interests," Armand explained. In such a situation, regional heads have strong leverage over their subordinates. "Simply put, if a department head or ASN does not comply with a request, they could be demoted, deactivated, and so on," he added.

For the business world, such practices create costly uncertainty. Entrepreneurs seeking to process permits or join regional government project tenders are faced with unofficial additional costs that can erode margins. If left unchecked, the investment climate in the regions will be hampered because business actors tend to postpone or cancel expansion plans. In fact, the private sector is the engine of regional economic growth that is much needed to create jobs and increase locally generated revenue.

The central government actually already has oversight instruments, such as regional inspectorates and the Corruption Eradication Commission (KPK). However, their effectiveness is often constrained by the political closeness between regional heads and supervisory officials in the regions. On the other hand, civil society and the media have an important role in continuing to monitor every policy that has the potential to be abused. Transparency in goods and services procurement, for example, can be the first line of defense against illegal levies.

"When authority is so great without strong oversight, it becomes an opportunity that can be used for personal interests." — Herman Nurcahyadi Suparman, Executive Director of KPPOD

Going forward, without systemic improvement, the pattern of extortion by regional heads has the potential to keep recurring. The question is whether existing law enforcement will be enough to create a deterrent effect, or whether it will instead become a cycle that is difficult to break. What is clear is that the public has the right to demand clean regional governance oriented toward welfare, not toward the pockets of its officials.