People

Human trafficking is a widespread criminal market in the Republic of Korea (South Korea), with national and foreign victims being exploited. Forced labour is the most common form of exploitation, with men from Vietnam, the Philippines, Thailand, Cambodia, Indonesia, and Mongolia being the most vulnerable. They are forced to work on fishing vessels, farms, and salt mines. Sex work is also prevalent, with more than a million South Korean women working in red-light districts. Women are lured into sex work with advance payments, but the contracts involve hidden costs and heavy penalties that make them indebted to procurers. There has been an increase in South Korean entertainment-promotion agencies and Russian recruitment agencies in regions close to the Republic of Korea, where falsified documents are used to traffic women into the country. However, increased prosecutions of trafficking offenders and stricter guidelines on the protection of fishermen vulnerable to trafficking have slightly scaled down the illicit market.

The Republic of Korea is a source and destination country for human smuggling, with people from the Democratic People’s Republic of Korea (DPRK, North Korea) fleeing to the country with the help of organized smuggling networks in the Republic of Korea and China. North Korean defectors are not considered to be smuggled when they arrive in the Republic of Korea, but brokers in China help smuggle North Koreans out of the country in exchange for payment, while many volunteers do the same for free. Human smuggling between the DPRK and the Republic of Korea generates millions annually, with immigration authorities in China and the DPRK accepting bribes from smugglers or victims. The country is a destination for people smuggled from South Asia and South East Asia. South Koreans attempt to enter the US, Japan, and France through irregular means, though the extent of organized crime networks involved in these flows is unclear.

Extortion and protection racketeering are not widespread in the country as victims of such crimes can report to the police and inform media outlets. Recent cases of extortion have been linked to sex work establishments.

Trade

The Republic of Korea experiences limited arms trafficking. However, the country is increasingly becoming a prominent international arms exporter, particularly in the ammunition field. This could pose a risk of leakage from state armouries, and fuel insurgencies and transnational criminal organizations. To mitigate this risk, the Republic of Korea has implemented firearm surrender schemes and weapon seizure programmes, contributing to the reduction of illicit firearms. Violence related to firearms in the Republic of Korea is minimal because of the country’s strict laws and regulations on arms trafficking. Even the criminal groups, if any, do not possess and use guns, which could be deterring illicit trade in firearms into the country.

The Republic of Korea has a problem with counterfeit goods, especially in the luxury market, with most of the fake products originating in China. Although the Republic of Korea’s strict law enforcement has limited its expansion, there is still a significant and growing market for counterfeit goods. In recent years, authorities have noticed an increasing variety of counterfeit products, including low-end essentials, drugs, processed meats, electronics, and vehicle and train engine parts. The COVID-19 pandemic has spurred sales of counterfeit goods online.

Despite the Republic of Korea being considered a high-performing country in terms of trade and transparency, excise goods still avoid controls at the country’s ports. The country serves as a transit point for illicit cigarettes purchased in Vietnam and Thailand, shipped to Cambodia, hidden in luxury travel bags, and then transported to China via the Republic of Korea.

Environment

The Republic of Korea is a major importer of timber and wood-based products and is one of the top five consumers of illegal wood globally. The country’s high per-capita demand for illegal wood is met by large volumes of tropical wood from South East Asia and the Russian Far East, as well as plywood from China. Although illegal timber imports have decreased over the past decade, illegal trade in timber from Indonesia to the Republic of Korea persists. There is evidence of South Korean conglomerates causing deforestation in the Papua province of Indonesia by converting rainforests into palm oil plantations. In addition to illegal timber, there have been cases of traffickers attempting to smuggle other protected flora species into the Republic of Korea, leading to arrests and fines.

The Republic of Korea has been identified as a destination country for wildlife trafficking, particularly for products like elephant tusks, rhino horns, and ivory that are smuggled from Africa, albeit with decreasing demand in recent years. The country also serves as a transit point for trafficking of such wildlife products into China. Although pangolins and ivory are not primary goods in the South Korean market, smugglers use the country as a transit point to evade controls and seizures. International organizations have urged that the Republic of Korea-China shipping route should be labelled a high-risk route for wildlife trafficking because of organized crime groups’ involvement in the trade. The recent prohibition of bear-bile farming in the Republic of Korea is expected to significantly reduce bear trafficking into the country, which has been an important market. However, there is still high demand for tiger parts in the Republic of Korea, and the country faces significant issues regarding illegal, unreported, and unregulated fishing.

The Republic of Korea is a transit country for non-renewable resource smuggling because of its developed infrastructure. Cases of illegally-imported coal and organized gold smuggling have been reported. South Korean gold mining companies have been found operating in Central Africa, which may enable illicit trade between Africa and the Republic of Korea. Although the Republic of Korea has imposed strict sanctions prohibiting any trade with the DPRK, smugglers have previously exported natural resources, such as coal, into the Republic of Korea, violating international sanctions. Although there is a lack of data on the matter, it appears that there is no major criminal market for non-renewable resources in the Republic of Korea.

Drugs

The Republic of Korea is not a significant consumer or producer of illegal drugs, but there has been a steady increase in drug use among the youth in recent years. Heroin is not commonly used in the Republic of Korea, however, there seems to be a stable heroin market in the country with unchanged retail prices despite an increase in the seizures of poppy plants and heroin in recent years. The country serves primarily as a transit point for cocaine coming from countries like Colombia, Mexico, and Honduras and heading to other parts of Asia and Oceania, including Australia, China, Hong Kong, and Macau. Although cocaine use is not popular, local criminal networks are involved in its trafficking. The amount of cocaine seized by authorities in the Republic of Korea has increased in recent years, and drug traffickers are using messenger services, the dark web, and international mail to smuggle and trade drugs into the country, making it difficult for law enforcement to discover such activities.

The Republic of Korea has strict regulations on the sale and consumption of recreational cannabis, resulting in a relatively small cannabis market. Despite being the first East Asian country to legalize medical cannabis, the Republic of Korea still classifies cannabis as an illicit substance. Attempts to smuggle liquid cannabis and cannabis-infused foods have increased in recent years, and cannabis is being sold on overseas-based websites with direct delivery services in major cities like Seoul. Seizures of cannabis by national authorities and cannabis-related crimes have been increasing in recent years due to the growing addiction rates among users.

The Republic of Korea is a source, transit, and destination country for synthetic drug trafficking. Synthetic cannabinoids are the most common new psychoactive substances seized in the country. Other synthetic drugs, such as LSD analogues and Ecstasy, have seen an increase in seizures and consumption. Methamphetamine is a favoured drug in the Republic of Korea, often produced in the DPRK, China, and Myanmar. The use of crystalline methamphetamine is increasing in the country, and precursor chemicals are being smuggled from the Republic of Korea to the Golden Triangle area of Thailand, Loas, and Myanmar for the production synthetic drugs. Similar to other illicit substances, drug traffickers have been increasingly using international delivery services for the smuggling of synthetic drugs into the country.

Cyber Crimes

In recent years, the Republic of Korea has seen a sharp rise in cybercrime attacks, including ransomware attacks and cyber-fraud. Despite law enforcement efforts, these attacks have persisted, with ransomware groups targeting private and public organizations. With the Republic of Korea having one of the highest cryptocurrency adoption rates in the world, several crypto fraud schemes have been detected in the country, resulting in millions of dollars lost to these operations. In 2021, South Korean authorities conducted the largest tax seizure relating to cryptocurrency in history.

Financial Crimes

Financial crimes have been on the rise in the Republic of Korea, with embezzlement being a recurring issue. Various companies have reported cases of employees embezzling funds, resulting in arrests and detentions. Politicians have also been involved in fraud scandals related to corruption and bribery in land development.

Criminal Actors

Foreign criminal actors play a major role in South Korean criminal markets and cooperate with local organizations in major South Korean cities such as Seoul, Incheon, and Busan. Mainland Chinese Triads, Japanese Yakuza, and Russian mafia gangs are reportedly involved in various criminal activities in the country, including drug and human trafficking, real estate purchases, and tax evasion in the fishing industry. The Republic of Korea has become an important transit and destination country for drug and wildlife trafficking, with organized criminal networks from China, Mexico, and Africa using the country as a hub for smuggling methamphetamine and other synthetic drugs. Law enforcement agencies have found that several organized crime groups are operating in the Republic of Korea, primarily related to drug crimes and the operation of illegal businesses, with many of these operations carried out by foreign nationals.

Since the 1990s, the Republic of Korea has embarked on a campaign to eradicate almost all mafia-style groups in the country. The few remaining organizations are small and do not exert control over territories or engage in intensive violence. However, they still dominate entertainment, drug-smuggling, extortion, real estate, and sex trade businesses, with a focus on targeting small and medium-size enterprises in specific neighbourhoods. Extortion was the traditional means of income generation for these groups, but it appears to be declining as they diversify their operations.

Criminal networks operate in the entertainment industry, drug trafficking, sex trafficking, and illegal moneylending/loansharking. Organized crime is mainly found in Seoul, Incheon, and Busan, with linkages to criminal networks or organizations in the US, Japan, Russia, China, and Taiwan. The use of guns and violent crime are low in the Republic of Korea, so these criminal groups have expanded into China, South East Asia, and the US, where they operate gambling businesses and engage in extortion of members of the South Korean community. The sex trafficking business is well-organized in the Republic of Korea.

The private sector in the Republic of Korea has seen several high-profile cases of corruption and illegal activities involving prominent private and political figures. Losses from tax evasion, embezzlement, bribery, and concealment of criminal proceeds have been estimated in the millions of dollars. There are a limited number of cases of state-embedded actors’ involvement in illicit activities, however there have been instances of their involvement in human trafficking operations. Criminal actors aim to gain influence among decision-makers by investing in relationships with legitimate businesses, the police, and politicians. Elected politicians have been involved in scandals linking them to criminal syndicates, and corruption remains a significant issue in the country.

Leadership and governance

The South Korean government is committed to fighting organized crime with an efficient system to tackle criminal markets, which involves gathering and distributing information to law enforcement agencies. The ongoing conflict on the Korean Peninsula may be an obstacle to countering organized crime activity, including human smuggling, and may be having an impact on the country’s international security cooperation. However, the government is determined to cooperate with other countries in its battle against criminality and it is open to new practical solutions to address the country’s situation.

Even though the democratic process is considered to be independent, corruption remains a challenge. The Republic of Korea has made significant strides in its fight against corruption, with the government establishing an anti-corruption investigation agency that has proven effective in its first months of operation. The current government is committed to improving transparency at the state level and the situation is expected to evolve in a positive way in the coming years. Despite that, cases of high-ranking officials or CEOs of large companies found to be corrupt continue to hinder the progress.

The Republic of Korea is actively involved in international cooperation to combat organized crime, including people smuggling, trafficking, cyber-enabled financial crimes, and drug cartels. The country is a member of various conventions and protocols, and it works closely with organizations like INTERPOL and Europol to share information and coordinate operations. Overall, the Republic of Korea’s proactive efforts to strengthen knowledge in international police cooperation and mutual assistance against transnational crimes suggest a constructive present and future of fighting the roots of organized crime issues. The Republic of Korea has a strict legal framework in place to prevent and combat various forms of crime, and the mere formation of or participation in a criminal organization is penalized, which enables an effective response against organized crime. The country consistently updates its regulatory framework to effectively address emerging forms of criminal activities that pose risks.

Criminal justice and security

The Republic of Korea’s judicial system is generally considered independent, reliable and efficient in handling cases. Criminal proceedings are usually fair. A few cases of corruption involving senior judges have raised concerns about political interference, but government’s recent efforts have sought to fight any potential politicization of the criminal justice system. Prison conditions meet international standards and there are no reports of severe abuse such as torture or overcrowded prisons with unsanitary conditions. Law enforcement is a key source of resilience in the country. The Korean National Police Agency (KNPA) is watched by the media, and any corrupt activities tend to be reported. The KNPA has a high clearance rate for serious crimes, far above those of countries like the US, UK, and Japan. The Republic of Korea has one law enforcement unit dedicated solely to organized crime, and the Seoul Central District Court’s prosecuting office has been a key instrument in convicting important leaders of criminal organizations.

The proximity of the Republic of Korea to the DPRK, which is a major source of organized crime, has raised concerns about negative impacts and spill-over effects. The DPRK is allegedly involved in various illegal activities, including the manufacture and trade of illegal drugs and counterfeit goods, human trafficking, arms trafficking, wildlife trafficking, counterfeiting currency, and terrorism. The most concerning crime is the smuggling of methamphetamine, which is manufactured in the DPRK. However, the border between the Koreas is highly controlled and monitored, unauthorized crossings and trafficking are rare, and the border is not porous to organized crime. Despite recent agreements to end the war between the Koreas, the border between the countries remains one of the most fortified in the world. The COVID-19 pandemic has made the border even stricter, leading to a reduction in human smuggling cases of people trying to escape the DPRK. However, there are concerns about the country becoming a major trafficking route in East Asia, with criminal networks from countries like China and Mexico using it as a transit point to avoid law enforcement controls in other countries.

Economic and financial environment

The Republic of Korea has robust anti-money laundering regulations in place, with the Korea Financial Intelligence Unit playing a crucial role in international efforts to combat money laundering. However, money laundering using cryptocurrencies has emerged as an issue in the Republic of Korea, prompting the government to introduce sanctions against companies that fail to report suspicious transactions. In anticipation of upcoming domestic and global anti-money laundering regulations, major cryptocurrency exchanges in the country have formed a joint venture to develop a system that will enable them to comply with these standards.

The Republic of Korea’s economy is one of the fastest growing in the world, primarily driven by education and human resources. However, the country is facing challenges posed by criminal organizations involved in illegal activities, including human trafficking, which have infiltrated industries such as entertainment and nightclubs. Although there are laws in place to address unlawful debt collection, there have been no significant changes to national legislation to regulate the involvement of criminal groups in the country’s economy. These groups have diversified their activities to include construction, real estate, gambling, and loan and stock markets.

Civil society and social protection

The Republic of Korea has established laws and institutions to protect and support victims of crime, with NGOs providing legal advice and representation to those without financial resources or legal knowledge. Support centres are available throughout the country, and the government has increased the number of officials working to support victims of digital sex crimes. However, despite government efforts to protect sex trafficking victims, there is a lack of protection for labour trafficking victims, and the government does not have formal procedures to refer victims to care. Law enforcement officials are not adequately trained to identify and refer trafficking victims to support services. Along these lines, the government has made several efforts to address shortcomings which include the introduction of training programmes for prosecutors and labour inspectors as well as the initiation of the drafting process for new victim identification guidelines. Additionally, foreign trafficking victims are not encouraged to participate as witnesses during investigations because they cannot obtain long-term or permanent residency permits. Civil society organizations are aiding drug addicts and helping official institutions to tackle drug addiction in the country.

The Republic of Korea has implemented various measures to prevent different types of crimes, including human trafficking, drug trafficking, timber trafficking, and cyber-attacks. The government has amended laws, established task forces, and conducted policy-relevant research to prevent crime. Municipal governments have successfully used crime prevention through environmental design programmes to reduce crime opportunities and citizens’ anxiety about crime. The government has developed several awareness campaigns and set up hotlines to prevent and combat human trafficking, although NGOs have criticized the effectiveness of these measures.

The Republic of Korea generally allows human rights groups and NGOs to operate freely, but these groups have faced political pressure when criticizing the government or powerful stakeholders. Multiple NGOs actively fight organized crime activities like human trafficking, with some being funded by the government. Overall, NGOs and civil society organizations in the Republic of Korea do not fear government persecution, and likewise these organizations are not considered a significant threat to national or international security. The media are free and competitive, but a defamation law encourages self-censorship, and journalists at major news outlets often face political interference. The South Korean government launched a new corruption investigative body which requested phone records from telecommunications companies without a warrant, and many journalists had their phone data accessed with no explanation. Despite this, the Republic of Korea has shown significant improvement in press freedom in recent years.

People

Human trafficking is a significant problem in Indonesia, which serves as a source, transit and destination country for trafficked people. Labour traffickers exploit Indonesians through coercion, including force and debt, in Asia and the Middle East. Fraudulent labour recruitment agents and subagents are responsible for more than half of the Indonesian female trafficking cases overseas. Women and children are particularly vulnerable to sexual exploitation, and tens of thousands of them become victims annually. Additionally, traffickers exploit women and girls in forced labour for domestic service, and children may be forced to participate in drug trafficking. The pandemic has made working-class Indonesians more vulnerable, especially women and children who have lost their savings and are more susceptible to exploitation. In fact, the scale of human trafficking in the country is estimated to have increased. Myanmar nationals are also reported to be increasingly vulnerable to human trafficking in Indonesia.

Indonesia is also a significant source, transit and destination country for human smuggling, often linked to labour migration, which is facilitated by recruitment agents. Despite efforts to crack down on the fees charged by recruitment agencies, the practice continues, and corrupt officials reportedly facilitate the market. People transiting through Indonesia stay for an average of two to four weeks before switching smugglers, and border officials are believed to engage in bribery to provide falsified identity documents. Human smuggling serves as a means of economic survival for many Indonesians, especially in eastern regions such as Nusa Tenggara and Maluku. Migration flows along maritime routes from Indonesia to Malaysia continue to be dangerous and sometimes fatal, with smuggling mainly facilitated by Indonesian fishermen transporting asylum seekers. The reopening of the Malaysian economy is fuelling demand for foreign labour, and many Indonesians are seeking to return to Malaysia, where there are more than a million undocumented Indonesian workers. Rohingyas have also been smuggled from Indonesia to Malaysia.

Extortion and protection racketeering are prevalent in Indonesia's informal economy, where syndicates control markets such as gambling and counterfeit goods. Financial crime syndicates have also taken advantage of the surge in online and delivery services, with illegal online lending syndicates, often collaborating with local authorities, becoming a growing problem. Historically, gangs of thugs and militias have controlled street markets and several types of economies, and new types of gangs and aggressive rent seekers continue to collect payments from local businesses.

Trade

Arms trafficking is a moderate problem in Indonesia, with the country serving as a destination for trafficked arms from neighbouring countries such as Cambodia, Myanmar and the Philippines. The demand for arms is generated by local actors such as rebel groups, separatist movements and terrorists, who use both online and offline networks to conduct transactions. This market has been fueled by internal conflicts, and the challenge of detecting and monitoring arms circulation has further exacerbated the situation. The proliferation of arms has resulted in rising rates of violence and communal conflict in regions such as Ambon, Maluku and Poso in Central Sulawesi. However, the arms market is smaller than other criminal markets in Indonesia, and the country has low distribution of small arms compared to other countries in the region.

Counterfeit goods are a significant problem in Indonesia, as the country serves as a transit point for fake goods due to its proximity to China and its own local market for counterfeit goods. The trade has increased significantly, with e-commerce playing a major role in distribution. Despite complaints, e-commerce platforms in Indonesia have been slow to take down counterfeit materials, leading to calls for increased enforcement and specialized police forces to tackle the issue. Indonesia has been flagged as a country of concern internationally due to insufficient intellectual property protection and enforcement actions.

The COVID-19 pandemic has caused a surge in illegal tobacco sales in Asian countries, with cigarettes being one of the most commonly smuggled goods in the region. Organized crime groups and syndicates are behind networks that smuggle these goods through countries in the region, with Malaysia’s and Indonesia’s lax laws making it harder to prosecute illegal trading syndicates. The complex excise tax system in Indonesia has incentivized domestic manufacturers to under-declare their liabilities, leading to a high demand for illegally produced cigarettes domestically.

Environment

Indonesia is a major hub for illegal logging, driven primarily by wood harvesting and the conversion of land for palm oil plantations. The industry involves powerful brokers, private sector entrepreneurs and local political leaders, with most profits staying within the country. The trade has major negative impacts on the environment, social relations and the Indonesian economy, with losses of billions of dollars per year in uncollected non-tax revenues. Despite attempts to curb the trade, including the introduction of a timber legality verification system, implementation remains weak, and the legal system has failed to punish those responsible for the crime. In fact, locals who engage in illegal logging are often punished while those who fund and profit from it avoid prosecution. During the COVID-19 pandemic, illegal logging of rainforests on the Indonesian island of Sulawesi is reported to have increased by almost three-quarters due to reduced monitoring activities.

Indonesia also faces massive illegal wildlife trade, with poachers targeting endangered species such as tigers, pangolins, cockatoos and orangutans. The market is one of the largest criminal markets in the country, with significant overlap with the legal wildlife trade market. There is no accreditation mechanism to differentiate between animals that are commercially bred and those captured in the wild. The illegal wildlife trade is expanding due to hobby communities and social media networks, with almost all traded animals believed to be poached. In addition, Indonesia has a significant illegal, unreported and unregulated fishing industry, with foreign actors from neighbouring countries such as the Philippines, Vietnam and China involved in the crime.

Illegal mining and drilling of non-renewable resources is a major issue in Indonesia, with millions of people participating across the country. The COVID-19 pandemic has led to an increase in artisanal mining, associated with safety concerns and environmental damage. Illegal mining for gold and other metals has resulted in fatalities, and illegal tin mining has raised tensions between miners and fishermen. The illegal mining market generates billions of dollars annually, making it one of the most significant criminal markets in Indonesia and South East Asia. Corruption is prevalent in the market, with low-level officials and the military allegedly receiving bribes to turn a blind eye to illegal activities. South Sumatra, home to Indonesia's largest coal reserves, has hundreds of thousands of hectares of land occupied by illegal mining operations. Illegal oil drilling also takes place in various provinces.

Drugs

Indonesia is a transit and destination country for heroin that is smuggled from Thailand, Laos and Myanmar. Although drug trafficking is a significant criminal market in Indonesia, the heroin trade is relatively small compared to other countries in the region. Corruption is rampant in the market, with reports of state-embedded actors accepting payments to facilitate illegal drug trades. The heroin trade in Indonesia is profitable for both domestic and foreign actors, and demand primarily comes from within the country.

Bali is one of the most popular places for cocaine consumption and other drug use. While cocaine use in Indonesia is moderate, the drug is increasingly sold through social media platforms and transported via post. In 2022, the country's biggest cocaine seizure to date was made. Cannabis is mainly used in the northern part of Sumatra for cooking and producing cigarettes and herbal medicine, and it is mostly grown for domestic consumption. Although both locals and foreign nationals participate in the cannabis trade, locals play a more significant role in the market.

The synthetic drug trade in Indonesia is thriving, with methamphetamine being the most widely used and seized drug. Methamphetamine in the country is produced by Middle Eastern and Chinese criminal organizations, and Indonesia serves as a transit country for methamphetamine being transported to Australia and New Zealand. The synthetic drug market is highly sophisticated, with major established domestic producers enjoying state backing. The synthetic drug trade continues to become more prevalent, and drug consumption in general has risen significantly in the country.

Cyber Crimes

Indonesia boasts one of the world's largest digital economies, but its vulnerability to cyber-attacks is a growing concern. This is due in part to a shortage of skilled professionals and inadequate digital infrastructure. During the COVID-19 pandemic, cyber-attacks increased fivefold, making it even more challenging to regulate and enforce data protection, especially when the government is accused of using cyber-malware and surveillance software against its critics. Data breaches are prevalent in Indonesia, but there has been little effort to address security vulnerabilities or provide recourse for victims. Cybercriminals have capitalized on the pandemic by creating fake apps to monitor COVID-19, which has resulted in unsuspecting victims inadvertently installing malware on their devices. The most common cybercrime methods in Indonesia include malware and distributed denial-of-service, with no specific targets. The origin of these attacks is challenging to identify, but there may be transnational criminal networks profiting from these operations.

Financial Crimes

Illegal online trading platforms have proliferated in Indonesia, with influencers promoting fraudulent apps that attract investors to trade stocks, resulting in millions of dollars in losses. Financial crime syndicates are constantly coming up with new ways to infiltrate financial systems for a profit, and many banks in the Asia-Pacific region report that new digital services have led to increased losses to online financial fraud. Every hour, tens of thousands of reports of financial fraud flood into Indonesia, with senior management of companies found to be responsible for most cases, often by recording fictitious sales.

Criminal Actors

Over the past two decades, mafia-style groups in Indonesia have evolved into looser and more mobile networks. Although the government does not officially recognize their existence, some of these groups have existed since the 1980s and have been supported by wealthy and/or military families. These groups are involved in a range of sectors, including property, gambling, drugs, car dealerships, forestry, mining and manufacturing. They typically have low membership and secretive internal structures. Other mafia-style groups in Indonesia include paramilitary-style militias, which have a long history in the country and are linked to police and military elites, or to competition between regional and national political parties. These groups often make money through debt collection, informal security provision and other coercive tactics.

State-embedded actors have significant control over criminal markets in Indonesia, and corruption is rampant at both national and regional levels. This includes the procurement of goods and services, licensing, bribery, budget misuse, illegal taxation, money laundering and obstruction of corruption investigations. Prison officers and border control officers are believed to facilitate drug trafficking operations. State-embedded actors also appear to influence the democratic process by buying votes to acquire strategic political positions.

Criminal networks are significant in Indonesia and are believed to be involved in various forms of organized crime, including drug trafficking, human trafficking and terrorism. Many criminal networks include state actors, making it difficult to distinguish between criminal and corrupt state networks. The networks often influence the democratic process by participating in political campaigns and buying votes. Larger criminal networks adhering to religious interests have also carried out terror-like operations. Criminal human trafficking networks are believed to exist primarily in rural areas, especially in eastern Indonesia.

Foreign criminal actors are heavily involved in Indonesia's human trafficking and drug trafficking markets. Chinese and Myanmar organizations reportedly fund the production of methamphetamine in Myanmar and transport the drugs through Malaysia into Indonesia. Meanwhile, Middle Eastern organizations produce methamphetamine in the Pakistan–Afghanistan border region and transport it using vessels with Iranian crews. Motorcycle gangs have also expanded internationally, with ad hoc and disorganized connections to amphetamine and weapons trafficking. Foreign and local criminal actors in Indonesia reportedly have a high level of interaction.

Private sector corruption is a serious concern in Indonesia. Private companies control most of the country's land mass, often paying the police and military to guard their concessions in mining and logging industries, which results in the persecution of local communities. The powerful elites controlling landed interests are linked to issues like deforestation, illegal logging and illegal palm oil development, with one in five hectares of palm oil being illegal. Private sector actors are also involved in illegal plastic supply chains, with many legal businesses mislabelling waste and plastic shipments to raise profits and engaging in money laundering and other illegal activities.

Leadership and governance

In recent years, Indonesia's political leadership and governance have faced criticism for a decline in state legitimacy, human rights, economic equality and security. The current administration has been accused of attempting to maintain its power and potentially avoid elections, with calls from ministers to defer elections and amend the constitution to allow the president to stay in office for three consecutive administrations instead of two. Polling shows that Indonesians are not interested in postponing elections, and the current president's approval has fallen steeply, largely due to a rise in cooking oil prices and allegations of government corruption and the existence of palm oil cartels. It is reported that organized crime is not seriously dealt with, and several internal conflicts between the government and separatist movements threaten government resilience to organized crime.

The hobbling of the anti-corruption commission has made it difficult to root out illegality and criminality in Indonesia. The current president has been accused of using the threat of crime, particularly illegal drugs, to secure favourable election results. This has also further politicized the police, who are known to be politically loyal to the president. Currently, the anti-corruption agency's role has shifted away from prosecution to prevention. Despite attempts to weaken the institution, they continue to investigate high-profile politicians and government officials for their involvement in corruption.

Indonesia has ratified all international treaties related to organized crime and established extradition agreements with several countries. It prioritizes international cooperation to combat organized crime and contributes to the efforts of regional organizations, including the Association of Southeast Asian Nations, to address transnational organized crimes such as people smuggling, human trafficking, drug trafficking and cybercrime. Indonesia has been strengthening its collaboration efforts to tackle cybercrime with other allies in the region, such as Australia. However, several countries believe that Indonesia is not doing enough against Chinese cyber and physical capabilities.

Indonesia has a legal framework in place to combat organized criminal activities, with most anti-crime legislation focusing on drug, flora and fauna crimes and forestry and illegal fishing crimes. However, concerns have been raised about the revision of the Corruption Act, which may weaken state capacities to tackle corruption. Despite the government's aim to improve the country's fight against crime, critics worry that projected changes in the penal code will allow authoritarian action against certain minorities.

Criminal justice and security

Indonesia's judicial system lacks specific units to deal with organized crime, and corruption and fraud persist in all state spheres, giving criminals a means to interfere with prosecutions. Judicial authorities have a low awareness of trafficking crimes and relevant legislation, and illegal logging cases are not frequently pursued, with only a handful of companies facing legal action. Prisons are overcrowded and conditions are harsh, with some drug networks operating inside them. Although the police have a mandate to combat organized crime, Indonesia's law enforcement agencies lack specific units dedicated to tackling it. Many believe that current capacities remain insufficient, particularly due to a lack of training in controlling Indonesia's maritime boundary. Corruption at all levels of government impedes law enforcement's efforts to address criminal markets, with the police having a reputation for corruption. The police have also been accused of being politicized, with weak horizontal accountability.

Indonesia's vast number of remote areas and weak border infrastructure make it particularly vulnerable to transnational organized crime. Efforts to combat drug trafficking have been hampered by poor border management and lack of necessary infrastructure. However, the government has been working on developing border infrastructure for almost a decade and has collaborated with neighbouring countries to improve border control. During the pandemic, Indonesia limited crossings at several check-points, but experts expected a rebound in illegal border crossings as the country reopened. Insufficient information and communications infrastructure make it challenging to connect Indonesia's geographically dispersed population digitally. The government's plan to create three new provinces in Papua has been met with opposition from native Papuans, who see it as an attempt to break up the separatist movement rather than an effort to address border issues.

Economic and financial environment

Indonesia has made significant efforts to combat money laundering by implementing legislation and adopting standard international recommendations. The country's financial intelligence agency is responsible for preventing money laundering, managing data and information, supervising compliance and investigating financial transactions. Although disclosing beneficial ownership is mandated, no tangible outcomes have been seen yet. In June 2021, the Constitutional Court expanded the interpretation of the money laundering law, allowing all civil servants authorized to investigate crimes to conduct parallel money laundering investigations. This move is expected to increase investigations related to environmental crimes such as illegal logging. In recent years, the majority of cases reported on this crime have been related to terrorist financing, followed by corruption and tax evasion.

The Indonesian government is working to improve the country's economic competitiveness and accelerate post-pandemic economic recovery. New legislation includes provisions to lower corporate taxes, simplify business licences, reform labour laws and reduce bureaucratic and regulatory investment barriers. However, some experts question the ability of the new laws to guarantee economic regulatory capacity or sustainable growth. The government is also considering introducing new taxes, including a value added tax increase and a wealth tax on the rich, to rebalance the country's finances after borrowing and spending during the COVID-19 crisis. The pandemic has forced the government to borrow heavily and invest large sums of money, leading to a crackdown on tax evasion with the aid of training, financial data and international agreements to follow the money trail more efficiently. Preventative laws are in place to combat tax crimes, and those found guilty may face fines of two to four times the failed payment value and prison sentences ranging from six months to two, or even six, years. E-commerce is rapidly growing as a market platform for advertising in Indonesia, but criminal actors have taken advantage of these platforms to sell illicit items such as drugs, fauna and flora. While there is no evidence of criminal groups being involved in the regulation of economic markets, it is possible that corrupt officials have aided criminal actors in influencing economic decisions.

Civil society and social protection

Indonesia has implemented measures to support victims of and witnesses to crimes, including human trafficking and drug-related crimes. However, there have been allegations that the witness and victim protection agency has had slow response times and been oppositional to witnesses. Limited support is available for whistle-blowers, and victims of sexual assault often hesitate to report incidents due to cultural norms and conservative Muslim beliefs. Civil society organizations supplement government services for male victims, and funds have been allocated to support Indonesian victims of human trafficking abroad. NGOs have established rehabilitation centres for drug users and victims of drug-related crimes.

To combat organized crime, including human trafficking, forced labour and drug abuse, the Indonesian government has established prevention strategies. The government has created various task forces and distributed awareness materials to address these issues. However, NGOs have raised concerns about the effectiveness of the government's ban on Indonesian fishermen working aboard Chinese-flagged vessels to prevent trafficking for forced labour. The government also lacks standard operating procedures for proactive victim identification and referral to rehabilitation services. Nevertheless, mechanisms are available for local communities to report organized crime through call centres, texts or online platforms. Efforts to increase financial inclusion and literacy among the population, particularly the 97% of the workforce that lacks access to formal banking, are being made. However, the country faces challenges in preventing financial crimes such as online trading and gambling, which pose a threat to the economy.

Indonesia's government has been accused of failing to grant press freedom, with a rise in attacks on journalists, particularly those covering the environment and natural resources. While an independent media is protected by the Constitution, the government sometimes restricts the media using regulations relating to blasphemy, hate speech, defamation and false information. In addition, concerns have been raised over the operation of cyber police units, which experts believe to be detrimental to free speech, and a new agency regulating academic research has raised questions about the independence of scholarship. Civil society is under constant threat, and its space is shrinking. NGOs and other non-governmental groups are obliged by law to register in a government database, and they suffer harassment from government and religious groups. Attacks against human rights defenders have increased in recent years.