Forthcoming Government Regulation on Environmental Licenses to Include Dispute Mechanism

The State Ministry of Environment is currently drafting a Government Regulation to implement Law No. 32 of 2009 on Protection and Management of the Environment, specifically provisions relating to the Environmental License, which is newly required as the basis for subsequently obtaining other licenses for any activity that exploit the Indonesian environment (e.g., Mining Business License). The forthcoming regulation will notably address the revocation process for Environmental Licenses, and the appeal mechanism available for disputing a revocation.

Revocation of Environmental Licenses, said Ilyas Asaad of the State Ministry of Environment to Kompas last week (2/7), will result from: (a) fatality caused by pollution, (b) actions unpermitted by a given license, (c) transferring a business license, and (d) ignoring orders to temporarily freeze activities.

Given that the impact of a revoked Environmental License includes the revocation of all licenses that were subsequently obtained with it (and could thus be fatal to a business activity), a dispute mechanism will be made available as a form of ‘check and balance’ on the power of officials to revoke a license.

Rosa Vivien Ratnawati, also from the State Ministry of Environment, indicated to Kompas (2/7) that two avenues of dispute are available: (1) filing a lawsuit to the Administrative Court, and; (2) appealing, first with the revoking official, and then with the superior of that official. The two routes will not be mutually exclusive; filing a lawsuit will not rule out an appeal to the revoking official, and vice versa.

There are concerns in the environmental law community that particularly the lawsuit avenue will be used as a method to delay the termination of an Environmental License, and allow violators to continue environment-threatening activities as long as they possibly can.

Environmental Licenses can take time and be difficult to obtain; their issuance is generally dependent upon an Environmental Impact Assessment (‘Amdal’) – unless the proposed activity is relatively safe for the environment (which, according to Article 3 of Minister of Environment Regulation No. 13 of 2010, is arbitrarily decided by the relevant authority, be it regent/mayor or governor). The Environmental Impact Assessment Commission conducts those evaluations, which try to ascertain the extent of environmental degradation that will result from a proposed activity.

Once an Environmental License is revoked (along with all other licenses later obtained with it), in order to re-engage in an activity, parties will need to re-apply for a second Amdal assessment, Environmental License, and all other licenses subsequently required by a given activity. 

For a brief review of Amdal-related processes and regulation, see also:

ILB No. 1420 24/5/2010 on Implementing Regulation for Activities that do not Require Environmental Assessments

ILD No. 151 9/4/2010 on Environmental Protection and Management.

This Indonesian Legal Brief is based upon research conducted by the hukumonline team.