Additional Information on Indonesian Country Report Regional Workshop on Eco-Industrial Clusters, Tokyo, 2-4 December 2013

Environmental Regulation related to Industrial Cluster in Indonesia Prepared by Sinta Saptarina Soemiarno Ministry of Environment (MoE) Republic of Indonesia

Background

In order to ensure legal certainty and protection of the right of everyone to get a good environment and healthy living as part of the protection of the ecosystem, Indonesia has Law No. 32 of 2009 on the Environmental Management and Protection.

Meanwhile, the Industrial arrangement in Indonesia refers to Law No. 5 of 1984 on Industry. Under its law, the Industrial Cluster are regulated by Government Regulation No. 24 of 2009 concerning Industrial Cluster.

According to Government Regulation no 24 of 2009 on Industrial Cluster: o Article 13 ( 3 ) d. stated that any business activity called the industrial cluster shall

have an Environmental Impact Assessment (Indonesian terminology : AMDAL). o Article 23 ( 1 ) stated that every company inside the industrial cluster shall have

Environmental Management Plan and Environmental Monitoring Plan (Indonesian terminology: UKL UPL). However, Article 23 ( 2 ) stated that every company inside the industrial cluster which managing and utilizing hazardous waste has to have EIA.

o Article 21 ( 2 ) request company to implement the environment management and monitoring system as stated at Environmental Impact Assessment, Environmental Management Plan and Environmental Monitoring Plan.

The following explanation will provide an overview of environmental regulatory related to EIA and environmental management obligations in the Industrial Cluster.

Environmental Impact Assessment Policy

As a consequence of the development, it is aware that the potential negative impacts will be exist. The impact of control should be managed and developed at an early stage. Environmental Impact Assessment ( EIA ) is one of the pre-emptive management of the environment that has to be strengthened through increased accountability of EIA process. There is a serious legal sanctions for violators in the field of environmental analysis. EIA in Indonesia is also one of the main requirements in obtaining environmental permits before obtained a business license.

Environmental

Permit

Spatial

Planning

Systems

EPM

Permits

AMDAL &

UKL-UPL

Env’t Audit

EIA Systems

Institutions Laws &

Regulation HRD

Technical

Guidelines

Information Systems Financial Resources/Budget

Allocation

EIA Infrastructures

Environmental Permit

Systems

Environmental

Inspection

Environmental

Law Enforcement

Environmental

Compliance Systems

Business and/or Activity

Licenses/Permits

Location

License

A Borrow Use

Permit

Sectoral Permit Systems

Banking Systems :

Green Banking

Interconnectivity of EIA Systems with Other Sustainable Development

Systems in Indonesia

Challenges:

Strengthening

EIA

Infrastructures

in order to

enhance

effectiveness

of

Environmental

Permit

The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

Environmental Impact Assessment , which is hereinafter referred to as EIA or AMDAL , is a study on a business and / or planned activities that has significant impact on the environment that important to set up the decision making process. While, Environmental Management Plan and Environmental Monitoring Plan, called EMP or UKL - UPL, is the environmental management and monitoring plan of the business and / or activities that do not significant impact on the environment that importa to set up the decision making process.

Regulation regarding Environmental Impact Assessment and other related study is regulated by Minister of Government Regulation number 27 year 2012 regarding Environmental Permit. The content of EIA and Environmental Management and Monitoring Plan will be based on MoE Regulation number 16 year 2012.

Pollution Control Program One of Ministry of Environmental Program for Pollution Control is PROPER program. It is the “Corporate Performance Rating Program”, in Indonesia’s acronym called PROPER. Begun in 1996, PROPER was originally intended to encourage companies to comply with environmental regulations by publishing the results of environmental monitoring to the public. Public is expected to put pressure on companies that do not adhere to environmental regulations, in turn will give appreciation to companies that adhere to environmental regulations. With the increasing awareness of the company on environmental issues, the purpose of PROPER is also changing. Now, the PROPER awards aim to drive companies to comply to environmental regulations and achieve environmental excellence through: (i) the integration of sustainable development principles in production and services, (ii) the implementation of environmental management systems, (iii) 3R (reuse, reduce, recycle) of solid waste and hazardous and toxic waste, (iv) energy efficiency, (v) resource conservation, (vi) biodiversity protection, and (vii) community development programs. A color-coded rating scheme was developed under PROPER to grade companies performance against the regulatory standards. The color coding system is based on five colors: gold, green, blue, red, and black.

IndustrialClusterhastohaveEnvironmentalImpactAssesment

Industrial cluster

EachcompanyinsideIndustrialclusterhastohaveEnvironmentalManagementPlanand

EnvironmentalMonitoringPlan(EMP)Eachcompanyinsideindustrialclusterwhichmanagingandu lizinghazardouswastehasto

haveEIA

IndustrialClusteristheregionwheretheconcentra onofindustrialac vityareequippedwithinfrastructureandsupportfacili esdevelopedandmanagedbyacompanythatalreadyhasanindustrialareaindustrialestatelicense.Article 1 Goverment Regulation no

24 year 2009 regarding Industrial

Cluster

PROPER assessment criteria consist of two categories, (i) compliance assessment criteria and (ii) beyond compliance assessment criteria. Compliance assessment criteria : If the company comply with environmental regulation than it will be awarded Blue rating. The company will receive a red rating if not been able to meet the environmental regulations but already have efforts to improve its management of the environment. The Company received ratings of black, if they do not pollute or damage the environment, or no attempt to manage the environment.

In order to obtain a green and gold assessment, companies must adhere to regulations or a rating of blue. Assessment green rating is based on benchmarking the performance of corporate environmental management in the implementation of environmental management systems, energy efficiency, emissions reduction, 3 R toxic waste and solid waste, water conservation and the reduction of pollution load, biodiversity protection, and the implementation of community empowerment. Gold Rank awarded to the best and most consistent companies in managing the environment.

PROPER participating companies mostly come from the Oil Industry, Exploration and Production of Oil and Gas, food and beverage, oil distribution, Hospital, textiles, coal mines, the sugar industry and others. Data of Indonesian cluster industry that participate on PROPER program is below:

BEYONDCOMPLIANCEAREA

COMPLIANCETOREGULATIONS

BASICPRINCIPALOFPROPERCRITERIA

BLUE

RED

BLACK

SEAPOLLUTIONCONTROLREGULATION

HAZARDOUSWASTEREGULATIONAIRPOLLUTIONREGULATION

WATERPOLLUTIONREGULATION

EIAREGULATION NOEFFORT

INCOMPLIANCE

COMPLY

GOLD

GREEN

SUBSCORE

SCORE

PassingGrade

PassingGrade

BestPrac ces;BestAvailableTechnology;BestCorporateSocialResponsibility

X

=

Energy

Efficiency

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Bio

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ENVIRONMENTALEXCELENCES

Ministry of Environment has set wastewater quality standard for industrial cluster on MoE Regulation no 3 year 2010. Article 9 state that Person in charge of the industrial cluster shall: a. comply with waste water quality standards as set out in the Annex of this Regulation ; b. managing waste water so that the quality of wastewater discharged into water sources does

not exceed the water quality standard of waste set out in Annex of this Regulation ; c . using wastewater sewer watertight so that no seepage of wastewater into the environment ; d . do not waste dilution water , including water used to mix the coolant discharge into

wastewater effluent from centralized WWTP ; e . separate sewer lines to channel rainwater runoff ; f . set point of compliance for test sampling ; g . installing gauges discharge or wastewater flow rate and shall record daily discharge waste

water ; h . daily monitoring water quality parameter levels of waste , for the parameters pH and COD ; i . examined levels of waste water quality parameters as set out in the Annex to Regulation

Ministerial regularly at least 1 ( one ) times in one (1) month to a laboratory that has been accredited and registered in the Ministry of Environment ;

j . submit a report of waste discharge of water daily , daily monitoring of levels of wastewater parameters , and results of laboratory analysis of waste water quality standards as set forth in the letters g , h , and i is regularly at least 1 ( one ) times within three (3 ) months to the regent / mayor with a copy to the governor , minister , and related agencies in accordance with the laws and regulations , and

k . report to the regents / mayors and governors with a copy of the Minister regarding the occurrence of emergency and / or abnormal events that resulted in the waste water quality standard is exceeded as well as efforts to overcome more than 2 x 24 hours .

Conclution

Indonesia encourage to establish Eco-Industrial Cluster, the advantage will be: o To improve the economic performance of the industries in it in ways that minimize

environmental impact. o Pattern design approaches used include regional infrastructure and environmentally

sound plants, cleaner production , energy efficiency , and inter- company partnerships o Eco-Industrial Cluster will be good in developing the community sorrounding the

industrial cluster.

Challenges faced: o land acquisition, social conflict, lack of infra-structure such as limited availability access

road, energy support, etc. o strengthen the role of local government providing rules or policies that regulate the

development of Eco Industrial Cluster. o need of good cooperation between government, industry and the community to build the

Eco Industrial Cluster which can improve the efficiency of environmental, economic, and social.