Indonesia, as a country striving to achieve its vision of "Golden Indonesia 2045," has undertaken various efforts to realize this goal. One of these efforts is embodied in the National Strategic Projects (PSN), which the government has established through various policies. According to Government Regulation No. 42/2021 on PSN Facilitation, PSN is defined as projects and/or programs implemented by the Central Government, Regional Governments, and/or Business Entities that have strategic significance for economic growth and equitable development, aiming to create jobs and improve public welfare. This definition explicitly emphasizes an inclusive development approach to enhance societal well-being.

To accelerate public welfare improvement through PSN implementation, projects classified as PSN receive several privileges, particularly through derivative regulations of the Omnibus Law (UU Cipta Kerja). For instance, Article 84 of Government Regulation No. 23/2021 on Forestry Management grants PSN the privilege of allowing forest release within protected and conservation forest areas. Additionally, Government Regulation No. 43/2021 on Resolving Spatial Planning, Forest Areas, Permits, and/or Land Rights Discrepancies provides regulatory flexibility for PSN projects, allowing them to proceed even if they still face spatial planning alignment issues with regional governments. However, despite these privileges, can PSN truly serve as a development policy that enhances the welfare of Indonesian society as defined by these regulations? 

These critical questions warrant discussion, especially as PSN has recently come under intense public scrutiny and sparked controversy. For example, the government recently introduced the 2025–2029 National Medium-Term Development Plan (RPJMN), which includes the development of energy estates as a national strategic project. These energy estates will mostly cultivate palm oil plantations as the main biofuel feedstock. This year, Indonesia is targeting Biodiesel with a 40% blending of palm oil, following the successful implementation of Biodiesel B35 in the last year. This program is supposed to decrease Indonesia’s dependence on imported fossil fuels, which is still very high. President Prabowo has even declared that biofuels are the main strategy to achieve energy self-sufficiency.

However, the commodity is often related to the expansion of forest areas, which is the place for customary communities. Greenpeace and the Palm Oil Smallholder Union (SPKS) estimated the need for additional palm oil land for B60 that will be implemented in 2027, which is around 2.2 million hectares. This plan potentially generates a new issue in agrarian conflicts where many Indigenous Peoples live in the forest without adequate safeguards, reflecting that more than 25 million hectares of Indigenous land remain at risk due to unrecognized Indigenous territories' legality from the government. 

Moreover, a frequently encountered cause of conflict is the failure to implement Free, Prior, and Informed Consent (FPIC) for local communities. Land acquisition processes often obscure customary rights and local authority. For instance, residents are often not fully informed about plantation development plans, even though oil palm plantation operations have significant environmental impacts that directly affect communities that rely heavily on ecosystem services. Whereas, nature, as perceived by customary communities, is like a mother who provides spiritual power to give life, so it is like an embedded component that cannot be detached from each other.

The recurrence of land and forest conflicts within PSN-designated zones underscores the need to critically evaluate how projects are selected and designated as strategic. The designation of PSN must be grounded in evidence-based, technocratic policy-making that champions equitable and just development. Yet such a process can only be meaningful if it includes robust and inclusive public participation.

Meaningful participation entails more than formal consultation between the government and the beneficiaries. As defined by the Constitutional Court, meaningful participation includes the right to be heard, the right to have input considered, and the right to receive explanations. These elements are essential for inclusive development and serve as safeguards against the marginalization of vulnerable communities. By incorporating diverse perspectives and lived experiences into the decision-making process, the government can more accurately determine which initiatives truly merit PSN status.

Moreover, the implementation of FPIC is also needed to ensure meaningful participation in particular projects. FPIC guarantees that communities have the right to give or withhold consent to projects that may affect their land, resources, or livelihoods, and that this consent is obtained without coercion, before any project begins, and based on complete and accessible information. By undertaking FPIC, the government acknowledges that affected communities are not merely passive beneficiaries of development but are rights-holders in any development efforts.

To further ensure that PSN aligns with a people-centered and holistic development approach, PSN should be aligned with comprehensive development frameworks such as the Gross National Happiness (GNH) Index. The GNH Index provides a multidimensional framework that assesses PSN beyond economic performance, incorporating fundamental human well-being components such as: psychological well-being, health, time use, education, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards.

The integration of the GNH Index into the PSN evaluation process would help ensure that strategic projects genuinely contribute to societal welfare. In Bhutan, the utilization of the GNH Policy Screening Tool, overseen by the GNH Commission led by the Prime Minister, exemplifies how a structured mechanism can guide development policies and prevent monopolized decision-making that may harm public welfare. If applied in the Indonesian context, such a tool could help identify and halt PSNs that contradict core well-being principles. Projects like the energy estates, for instance, might not pass the GNH screening due to their negative social and environmental externalities.

In conclusion, PSN should serve as a mechanism to enhance the well-being of all citizens rather than being solely an instrument for economic expansion. By integrating a more comprehensive assessment framework, such as the GNH Index, and ensuring meaningful participation, the government can guarantee that strategic projects, including energy estates, genuinely benefit society, particularly vulnerable and marginalized communities, rather than exacerbate social inequality and environmental degradation.