Certain business activities in Indonesia which impact the environment require an environmental licence. The approval process for such a licence involves three stages.
1. Drafting an Environmental Impact Analysis (AMDAL) or Environmental Management Efforts and Environment Monitoring Efforts (UKL-UPL);
2. Evaluation of the AMDAL or UKL-UPL and obtaining an AMDAL approval or UKL-UPL recommendation; and
3. Application for an Environmental Licence.
The application for the Environmental Licence will be submitted to the relevant level of government; either the national Minister for the Environment, the Governor of the relevant Province or the Regent/Mayor of the relevant regency/city.
Indonesia’s Environment Law provides that an AMDAL is required for those businesses and/or activities which, amongst other things:
A Ministerial Environmental Decree also sets out certain businesses and/or activities which require an AMDAL.
Businesses and/or activities that impact the environment but which are not identified as requiring an AMDAL under the Environment Law (including in the Environmental Decree) must prepare a UKL-KPL.
An AMDAL document consists of:
The document must be prepared by a certified AMDAL consultant.
As part of the AMDAL documents, an activities plan must be prepared and publicly announced. The public must be given 10 business days to provide feedback on the activities plan.
The AMDAL will be evaluated by the AMDAL Evaluation Commission (Komisi Penilai AMDAL) established at the relevant level of government, which will issue a recommendation to that government.
Theoretically, the Commission’s evaluation should take 125 business days (including the 10 business days for public feedback), however in practice it may take much longer.
A UKL-UPL is required for certain business activities which have a lesser, or no significant, impact on the environment, but which still require environmental approval.
A UKL-UPL has a prescribed form, which includes:
The UKL-UPL is submitted to the relevant level of government and, according to the environment regulations, a decision to recommend or reject the UKL-UPL should take only take 14 business days. Once again, in practice the process may take longer.
Some businesses or activities (or both) do not require either an AMDAL or a UKL-UPL, but these must submit a Statement of Ability to Manage and Monitor the Environment (SPPL) to the relevant level of government. There is no specified timeframe for approving an SPPL application.
Once an AMDAL or UKL-UPL is approved, an application must be submitted for an Environmental Licence, which requires:
After submission of complete documents, the relevant government is required to announce the application for public feedback of 10 business days for AMDAL applicants and 3 business days for UKL-UPL applicants.
If a proponent obtained its AMDAL approval or UKL-UPL recommendation before 23 February 2012, the proponent is not required to obtain an Environmental Licence (with the approval or recommendation treated as the Environmental Licence).
The holder of an Environmental Licence must:
Breach of an Environmental Licence may result in sanctions including written warnings, suspension or revocation of the business licence, and enforced cessation of all activities and environmental restoration.
A breach may also constitute an act of environmental pollution which is a breach of the Environment Law itself, giving rise to civil and criminal penalties.
Importantly, the AMDAL approval or UKL-UPL recommendation process involves dialogue between the proponent and the relevant level of government, which should result in terms and conditions which are mutually acceptable. If compliance with such terms and conditions proves difficult, or circumstances otherwise change, the proponent can seek amendments to the AMDAL or UKP-UPL documents. As such, we are not aware of any high-profile projects which have not proceeded on environmental grounds or have been suspended or revoked because of a breach of the relevant AMDAL or UKP-UPL documents or an Environmental Licence.
Jared Heath is a Senior Associate currently seconded to one of Indonesia’s leading law firms, Soemadipradja & Taher (S&T) as Foreign Counsel. More information on S&T is available from its website.
Corrs is not licenced to practice law in Indonesia and this should not be construed as providing Indonesian legal advice. If you would like further advice, please contact S&T.
The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.