Over the years, environmental problems still create homework for the government as policy makers and the community as parties regulated through laws and regulations. One of the factors of these problems is the establishment of a business that is held either directly or indirectly in contact with the environment, which is often only profit-oriented and ignores environmental sustainability. Therefore, the government has begun to make a policy that environmental permits are a condition for obtaining business and/or activity permits. Through this article, business actors who want to set up a business in Indonesia will know the provision and requirement of issuing environmental permits for their businesses.
Governing laws and regulation
- Law No. 32/2009 concerning environmental protection and management as amended by Law No. 11/2020 concerning Job Creation
- Government Regulation (PP) No. 22/2021 concerning Implementation of Environmental Protection and Management
Environmental permit as a requirement for business license
Since the issuance of PP No. 22/2021, business actors who wish to establish a business in Indonesia are required to have environmental approval. Environmental Approval is an Environmental Feasibility Decision or a statement of Environmental Management Ability that has obtained approval from the central government or regional government. This environmental approval will also be a prerequisite for the issuance of a Business License, namely the legality of business actors to start and run their business and/or activities. The Environmental Approval is not valid if the business license has expired. In the event that the business license expires and there are no changes to the business and/or activity, the extension of the business license may use the basis of the existing environmental approval.
Environmental approval is carried out through the preparation of the Environmental Impact Analysis (Amdal) and the Amdal feasibility test or the preparation of the Environmental Management Efforts and Efforts Environmental Monitoring (UKL-UPL) form and examination of the UKL-UPL form. For business actors whose businesses or activities do not have a significant impact on the environment, environmental approval is obtained through the preparation and feasibility test of the Amdal. The significant impact in this case is a very basic environmental change caused by a business and/or activity. On the other hand, for business actors whose businesses and/or activities do not have a significant impact on the environment, environmental approval is obtained through the preparation and examination of the UKL-UPL form. Besides Amdal and UKL-UPL particular business and/or activity plan that has an impact on the environment must have a Environmental Management Statement Letter (SPPL).
Amdal
The criteria for businesses and/or activities that have a significant impact on the environment that are required to have an Amdal consist of:
- changing landforms and landscapes;
- exploitation of natural resources, both renewable and non-renewable;
- processes and activities that have the potential to cause environmental pollution and/or environmental damage as well as waste and degradation of natural resources in their utilization;
- processes and activities whose results can affect the natural environment, the artificial environment, as well as the social and cultural environment:
- processes and activities whose results will affect the preservation of natural resource conservation areas and/or the protection of cultural heritage;
- introduction of types of plants, animals, and micro-organisms;
- manufacture and use of biological and non-biological materials;
- activities that have a high risk and/or affect national defense and/or
- application of technology that is estimated to have great potential to affect the environment.
Amdal is prepared by the person in charge of the business at the planning stage of a business. The Amdal can be prepared by the person in charge of the business himself or appoint another party in the event that he is unable. The preparation of the Amdal must be carried out by the compiler who has a certificate of competence. The results of the Amdal preparation by other parties are the responsibility of the person in charge of the business. In the preparation of the Amdal, the location of the business or activity plan must be in accordance with the spatial plan. This conformity is proven by confirmation of the suitability of space utilization activities or recommendations for the suitability of space utilization activities. In preparing the Amdal, the person in charge of the business and/or activity uses a single, integrated, or regional study approach.
The requirements for submitting environmental approval through Amdal Preparation and Amdal Feasibility Test can be accessed through this link.
UKL-UPL
UKL-UPL must be owned by the type of business and/or activity plan that:
- has no significant impact to the environment
- the location of the business and/or activity is carried out outside and/or not directly adjacent to the protected area
- that are excluded from Amdal obligations.
Several business plans or activities that are exempt from Amdal obligations include:
- the location is in a district/city that has a detailed spatial plan that has been equipped with a strategic environmental study that is made and implemented in a comprehensive and detailed manner in accordance with the provisions of the legislation
- the location is in a forest area that already has a forest management plan that has been equipped with a strategic environmental study that is made and implemented in a comprehensive and detailed manner in accordance with the provisions of the legislation.
- government and/or regional government programs that already have policies, plans, and/or programs in the form of master plans that have been completed with strategic environmental studies that are made and implemented in a comprehensive and detailed manner in accordance with the provisions of the legislation
- business plans and/or activities carried out within and/or directly adjacent to protected areas that are exempted include:
- mining, oil and gas, and geothermal exploration that is not followed by supporting businesses and/or activities whose scale/size requires Amdal
- non-commercial research and development in the field of science that does not interfere with the function of protected areas
- activities that support/support the conservation of protected areas
- activities related to the interests of state defense and security that do not have a significant impact on the environment
- the activity does not have a significant impact on the environment; and/or
- cultivation is permitted for indigenous people with a fixed area and does not affect the protected function of the area and is under strict supervision.
- government and/or regional administration activities carried out in the context of research and not for commercial purposes
- located in an area that has been completed with the regional Amdal and regional Environmental Approval
- located in an area where based on statutory regulations, businesses and or activities within the area are required to prepare detailed RKL-RPL which has been completed with the area Amdal and environmental approval of the area
- carried out in disaster emergency response conditions
- in the context of restoring environmental functions carried out by the government and/or regional governments in areas that are not encumbered with a business licensing; and/or
- business and/or activity plans other than those referred to in article 5 paragraph (2) letter a, which are directly adjacent to or located in protected areas, which have obtained an Amdal mandatory exemption determination from the authorized agency and are responsible for the management of the protected area.
The requirements for submitting an environmental approval through the preparation of the UKL-UPL form and the examination of the UKL-UPL form can be accessed through this link.
SPPL
SPPL must be owned for businesses and/or activities that:
- does not have a significant impact on the environment and is not included in the mandatory UKL-UPL criteria.
- is a micro and small business and/or activity that does not have a significant impact on the environment
- including types of business and/or activity plans that are exempt from the mandatory UKL-UPL.
To determine a business plan that is required to have an Amdal, UKL-UPL, or SPPL, the person in charge of the business and/or activity carries out a screening process independently. If it cannot be carried out independently, the person in charge of the business shall propose the determination of the screening from the central environmental agency, regional apparatus organization in charge of the provincial environment, or regional apparatus organization in charge of regency/municipal environment in accordance with their respective authorities.
Sanctions
Administrative sanctions are applied to the person in charge of the business and/or activity if a violation is found of the provisions on business licensing related to Environmental Approval and laws and regulations in the field of Environmental Protection and Management. Administrative sanctions can be in the form of written warnings, government coercion, administrative fines, freezing of business licenses and/or revocation of business licenses.
A written warning is applied if the person in charge of the business and/or activity violates the provisions of an administrative nature. Administrative sanctions in the form of government coercion are applied to those in charge of businesses and/or activities who do not carry out the orders in a written warning within the stipulated time period. Government coercion is carried out in the form of temporary cessation of production activities, relocation of production facilities, closure of waste or emission water disposal channels, demolition, confiscation of goods or equipment that have the potential to cause violations, temporary suspension of part or all of the business, obligation to prepare DELH (Environmental Evaluation Document) or DPLH (Environmental Management Document), other actions aims to stop violations and restore the function of the environment.
