I was going to reply to Geeham's post before he deleted it. The only thing I'd like to add is that there are many other expat pilots working in Indonesia legally for airlines such as Lion Air, Wings Air, MAF, Sky Aviation, Airfast, Travira Air, Merpati etc .. and all have gone through the process of getting the work permit and correct visas.
The reason why it's important to have the work permit and go through the correct process is both an ethical one, as well as a legal one. Expats are brought in to Indonesia so that their contribution can be of benefit to the country in improving the skills of the local labour workforce.
For every expat the company employs, the local company must pay $1200 USD a year to the Kementrian Tenaga (Minsitry of Manpower) which goes in to a fund to help improve the skills of locals doing the job that the expat has been brought in to do. If a company does not comply with this, then obviously, the local Indonesian workforce will not benefit from having expats in the country.
So the employing of expats is meant to be a two way street. The expat benefits from the job opportunity, and the locals benefit from the funds generated to upgrade their skills, and from the extra skills that expat brings in to the country.
If what has been alleged is true, and that Susi Air are not providing their expat employees with a work permit and the subsequent costs that this involves, then the only beneficiaries of this program are the foreign pilots themselves. They gain the hours and flight experience that they can't get in their home country, but where's the benefit to the country and the locals? If it's true that Susi Air employs 99% foreign pilots, then how can local pilots benefit from this?
Therefore, I agree with Rustam, that this is very much an ethical issue as well as legal one and it undermines the whole reason for why the Indonesian Ministry of Manpower brings in expat workers to Indonesia and that is to benefit the country.