March 18, 2024
JAKARTA – Two Indonesian nationals working for a South Korea-Indonesia fighter jet program in Seoul have been ordered not to leave the country as authorities investigate a suspected leak of technology from Korea Aerospace Industries (KAI).
The two engineers are accused of breaching South Korea’s Defense Acquisition Program Act and leaking technology related to the KF-21, South Korea’s homegrown fighter jet that is partially backed by Indonesia.
Foreign Ministry spokesman Lalu Muhammad Iqbal confirmed on Friday that the two were employees of state-owned aircraft manufacturer PT Dirgantara Indonesia (PTDI) stationed at KAI for the fighter jet project.
Lalu refused to reveal their identities to protect their privacy as the government was still verifying the alleged involvement.
“There have been no arrests. [They’ve] only been told not to leave [South Korea] for verification matters,” he told The Jakarta Post on Friday.
Lalu said the Indonesian embassy in Seoul continued to monitor and accompany the two during the process.
South Korean police raided the KAI head office on Friday in connection with the suspected leak, a police official said.
A first raid took place on Thursday and continued for a second day, an official at the security investigation bureau of Gyeongnam Provincial Police told Reuters.
A KAI spokesperson said the company was “actively cooperating” to ensure it could provide anything needed for the police investigation to establish the truth.
The KF-21, developed by KAI, is designed to be a cheaper, less stealthy alternative to the United States-built F-35, which South Korea currently relies on. Indonesia has decided to join the project to strengthen its defense system, which also still relies on other countries like US and France.
The flagship defense cooperation between Indonesia and South Korea, however, has experienced multiple bumps along the way. In 2018, Indonesia sought to renegotiate to take pressure off its foreign exchange reserves and later offered to pay its share of the cost in the form of barter.
Indonesia also previously declined to pay 20 percent of the development cost, putting the development project for the fighter jet in limbo. South Korea and Indonesia resolved the dispute over funding for the joint fighter jet in 2022 and have since vowed to expand defense cooperation.
Foreign Minister Retno LP Marsudi met her South Korean counterpart Cho Tae-yul on the sidelines of the Group of 20 Foreign Ministers’ Meeting in Rio de Janeiro, Brazil, last month.
During the meeting, both governments agreed to resume collaboration on the development project for the next-generation KF-21.
“The two ministers agreed to continue cooperation so that the strategic cooperation projects between the two countries, including the joint fighter jet development and South Korea’s participation in Indonesia’s ‘electric car ecosystem establishment’ proceed smoothly and achieve results,” Seoul’s foreign ministry said in a statement quoted by Yonhap news agency.
The ministers also agreed to work together on revising Indonesia’s import quota and the bilateral double taxation avoidance agreement as part of efforts to offer a better business investment environment for South Korean companies.
South Korea’s Defense Procurement Agency (DAPA) has agreed to Indonesia’s exemption from paying value-added tax on its portion of the joint fighter jet development project.
Under revised calculations, Indonesia will have to pay 1.6 trillion won (US$1.35 billion) of the 8.1 trillion-won project, DAPA said.
There have been concerns in South Korea that its regulations were not strong enough to deter attempts to funnel technologies from high-tech companies. The Sentencing Commission, overseen by the Supreme Court of Korea, last year decided to toughen punishments and lengthen jail times for technology leaks.
Responding to concerns about the new regulations, Lalu said the government was gathering evidence about the allegations.
He also said the KF-21 was a strategic project for both countries and that they would manage any problems arising from this cooperation as much as possible.
“The verification process is still ongoing and it is too early to call it data theft,” he said.