- Indonesian President Jokowi has endeavored to make it easier for companies to get permits, and Jakarta Governor Ahok is following his example.
- In January, the environment ministry rejected Ahok’s proposal to ease up on environmental permitting requirements; now, Ahok is taking his proposal straight to Jokowi.
- Jakarta is not free of environmental problems, and some express concern about the governor’s initiative.
Last year, Jakarta Governor Basuki “Ahok” Tjahaja Purnama signed a gubernatorial instruction meant to change Indonesia’s reputation as a cumbersome, bureaucratic place to invest. He proposed reducing the number of permits needed to start a business. First up on the governor’s cutting block was environmental impact assessments, or AMDALs.
Ahok recommended that in lieu of an AMDAL investors be required to submit an environmental management and monitoring form (UKL-UPL). At the end of January 2016, the national environment ministry rejected this proposal. Unfazed, Governor Ahok said he would send the proposal to Indonesian President Joko Widodo, who initiated the national One-Stop Integrated Services Agency in January 2015. The center was designed as an office where foreign investors could find projects and process permitting all in one place.
“Perhaps this is a step that the governor is taking to meet the president’s 2016 target of making it easier for companies to get permits,” said Ariesta Riendrias Puspasari, head of public relations at the Indonesian Chamber of Commerce. “AMDALs are definitely harder to get than UKL-UPLs.”
The environmental impact assessments are detailed analyses. To compile them, companies have to hire teams with a minimum of three members (including a team leader, a writer and a subject expert). The assessment team must lay out a study method for each of the AMDAL’s four documents. The entire process can take up to 125 business days to complete and ends in a 10-day public comment period.
In contrast, the UKL-UPL consists of only one form. Business owners do not need to hire any extra staff to complete the document. They can simply lay out the dimensions of their plans along with a monitoring and management plan for the intended activities. The whole process takes 14 business days.
Some aren’t so sure about the governor’s initiative. “By saying an UKL-UPL is enough, the government would be sending a signal that the environment isn’t important,” said Andri Gunawan, a lecturer on environmental law at the University of Indonesia. “The decision to change rules should be based on environmental reasons, not on attracting investment.”
To date, the laws on AMDAL state that environmental assessments are mandatory for any project that alters landforms, exploits natural resources, causes pollution or environmental degradation, impacts heritage sites, introduces invasive species or hinders national defense.
More specifically, within an urban context like Jakarta province, AMDALs are required for any building five hectares or larger, and any facility manufacturing cement, processing petrochemicals, explosives, solvents or waste, whether that be in terms of sewage, landfill or compost. The assessment is also required for licensing of industrial estates on the outskirts of Jakarta, like the textile manufacturing areas of Bekasi and Tangerang where Nike, Columbia Sportswear and other international brands source T-shirts and other apparel. Public infrastructure initiatives like dredging rivers and building toll roads longer than five kilometers also require AMDALs.
In 2005 and as recently as 2011, shoe and garment factories on the outskirts of Jakarta were exposed for inhumane “sweatshop” conditions with poor air circulation – conditions that could potentially be preempted, or at least exposed, with an environmental assessment. Also, many parts of the metropolis proper are sinking because of the amount of groundwater that development is extracting, prompting yet another reason why AMDALs might be helpful.
Given these large environmental and social problems, professor Gunawan thinks that instead of going lighter on environmental licensing, Jakarta and Indonesia in general should actually be more stringent.
“The Lapindo crisis was created during exploratory drilling,” he said, referring to the mud volcano unearthed in East Java in 2006 by Indonesian oil and gas firm Lapindo Brantas. Twenty people died and the river of mud displaced 40,000. In the 2011 law updating which companies should fill out an environmental impact statement, those “exploring” an area for mining, oil, gas or geothermal were not added. In January, Lapindo announced plans to start drilling five kilometers from its 2006 site.
There is no exploratory oil drilling in downtown Jakarta. Instead “most of the companies are from the service sector,” Puspasari from the Chamber of Commerce said. “In those instances, I too think that UKL-UPL is enough.” But the three single largest contributors of Jakarta’s GDP are construction, wholesale retailing and automotive repair – sectors that definitely cause pollution and environmental degradation.
