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.

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

Interconnectivity of EIA Systems with Other Sustainable Development
Systems in Indonesia
Spatial
Planning
Systems

Banking Systems :
Green Banking

Business and/or Activity

Licenses/Permits
Location
License

AMDAL &
UKL-UPL
Envt Audit

Environmental
Permit

A Borrow Use
Permit

Sectoral Permit Systems

EPM
Permits

Challenges:
Strengthening
Environmental Permit
EIA Systems
EIA
Systems
Infrastructures
in order to
EIA Infrastructures
enhance
effectiveness Laws &
Technical
HRD
Institutions
of Regulation Guidelines
Financial Resources/Budget
Environmental Information Systems
Allocation
Permit

Environmental
Compliance Systems
Environmental
Inspection
Environmental
Law Enforcement

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 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.
Each company inside Industrial cluster has to
have Environmental Management Plan and
Environmental Monitoring Plan (EMP)
Each company inside industrial cluster which
managing and u lizing hazardous waste has to
have EIA

Industrial Cluster is the region

where the concentra on of
industrial ac vity are equipped
with infrastructure and support
facili es developed and managed
by a company that already has an
industrial area industrial estate
license .
Article 1 Goverment Regulation no
24 year 2009 regarding Industrial
Cluster

Industrial cluster
Industrial Cluster has to have
Environmental Impact Assesment

Pollution Control Program

One of Ministry of Environmental Program for Pollution Control is PROPER program. It is the
Corporate Performance Rating Program, in Indonesias 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.

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.
BASIC PRINCIPAL OF PROPER CRITERIA
X

Community
Development

Biodiversity
Protection

3 R of Solid
Waste

3 R of Hazardous
Waste

Water
Conservation

Emmision
Reduction

=
Energy
Efficiency

S
C
O
R
E

ENVIRONMENTAL EXCELENCES
Envromental
Management System

S
U
B

S
C
O
R
E

GOLD
Passing Grade

GREEN
Passing Grade

Best Prac ces ; Best Available Technology;

Best Corporate Social Responsibility

BEYOND COMPLIANCE AREA

SEA POLLUTION CONTROL REGULATION

HAZARDOUS WASTE REGULATION
AIR POLLUTION REGULATION
WATER POLLUTION REGULATION
EIA REGULATION

COMPLY

BLUE

INCOMPLIANCE

RED

NO EFFORT

BLACK

COMPLIANCE TO REGULATIONS

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:

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.