Investment Procedure : Environmental Licenses

ENVIRONMENTAL LICENSES

An environmental permit is required to obtain a business licence for any business and/or activity for which an AMDAL or Environmental Management and Monitoring Program (UKL-UPL) is required.

The application for an Environmental Licence is submitted to the Ministry, the relevant governor or the relevant regent / mayor depending on the location of the business operations of the enterprise.

AMDAL UKL-UPL
 Indonesia’s Environment Law provides that an AMDAL is required for those businesses and/or activities which, amongst other things:

  1. change the form and contour of the environment;
  2. exploit a natural resources (renewable or non-renewable);
  3. may cause environmental pollution and/or damage and/or degradation of natural resources;
  4. result in natural and artificial environmental, social and cultural impacts;
  5. impact the sustainability of a natural resource conservation area and/or the protection of cultural heritage;
  6. introduce new species of plants, animals and micro-organisms;
  7. produce and utilise natural or non-natural raw material;
  8. are high risk activities and/or impact State defence; and/or
  9. implement new technology which is predicted to have a large impact on the environment.

On 10 April 2012, the Ministry issued Ministerial Regulation No. 5 of 2012 (“Regulation 5/2012”) which lists out the types of businesses which require an AMDAL. Regulation 5/2012 covers a wide range of business sectors which include agriculture, manufacturing and mining.
An AMDAL document consists of:

  1. the Terms of Reference;
  2. an Environmental Impact Statement (ANDAL); and
  3. an Environmental Management Plan and Environmental Monitoring Plan (RKL-RPL).

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.

Generally, there are two situations in which an enterprise would need to prepare a UKL-UPL:

  1. where the operations of the enterprise have potentially adverse effects on the environment albeit of a lesser degree than in situations where an AMDAL is required; or
  2. where the enterprise is exempted from preparing an AMDAL.

A UKL-UPL has a prescribed form, which includes:

  • the activities plan;
  • the environmental impact; and
  • the environmental management and monitoring program.

According to Ministerial Regulation No. 13 of 2010, the types of businesses which require a UKL-UPL will be further set out by governors, regents or mayors.

Procedures:
Two steps:

  1. The enterprise will submit the AMDAL to the relevant approving commission for evaluation; and
  2. The commission will forward its results of evaluation (in the form of a recommendation) to the Ministry, the relevant governor or the relevant regent / mayor for final approval.
Procedures:
One step:

  1. The enterprise will submit the UKL-UPL to the Ministry, the relevant governor or the relevant regent / mayor for approval.
Jurisdiction of Relevant Authorities

Commissions are set up at the central, provincial and regency / municipal levels, and the location of the business operations of the enterprise will determine which commission will evaluate the AMDAL prepared by the enterprise.

Final approval will correspondingly be given by the Minister, the relevant governor or the relevant regent / mayor.

 Jurisdiction of Relevant Authorities

The location of the business operations of the enterprise will determine which authority (whether the Minister, the governor or the regent / mayor) will evaluate the UKL-UPL prepared by the enterprise.

Other than AMDAL and UKL-UPL, 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. Statement of Environmental Management and Monitoring Undertaking (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup/SPPL), which is a statement regarding the company’s undertaking to monitor and manage the environmental impact of its business and/or activities which are exempted from the AMDAL or UKL-UPL requirement (Majority for services business fields).

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