Fidelis E Satriastanti – A fight is brewing over a new environmental law that business interests warn will harm much-needed investment in the country.
Business players in the oil and mining industry have said that the 2009 Environmental Protection and Management Law is too stringent and will hinder their ability to operate. They are backed by the Ministry of Energy and Mineral Resources, which has requested a delay in the law's implementation. The State Ministry for the Environment, however, is unswayed, and on Tuesday said the law would be implemented as is.
Initiated by the House of Representatives, the law was passed last September and was praised by analysts as a much-needed replacement for the toothless 1997 Law on Environment Management.
The new law includes much stricter regulations on environmental impact analyses, strategies and permits, and grants significant new powers to the state ministry's investigators to apprehend individuals or companies who damage the environment.
The Energy Ministry last week requested the implementation of the law be delayed for at least two years because local industries were not yet ready to comply with it, especially the new environmental quality standards.
Hermien Roosita, a deputy at the Environment Ministry, however, said there would be no budging. "We are aware of the difficulties faced by other sectors, but we will not make any amendments."
Hermien said the ministry was still working on the government regulations needed to implement the law, including new standards for industrial waste.
She said that the Energy Ministry and business interests were seeking a delay because of concerns about the ability to meet the new standards. "They are referring to the paragraph about environmental quality standards and the sanctions," she said.
The paragraph states that anyone who violates environmental quality standards for waste emissions could face up to three years in prison and fines of up to Rp 3 billion ($325,000).
The Energy Ministry has said the tough new regulation on water quality, set to take effect in April, could restrict the country's total oil output to less than 500,000 barrels a day this year, well short of the 965,000-barrel target.
The regulation would require oil and gas contractors to reduce the maximum temperature of wastewater from drilling from 45 degrees Celsius to 40 degrees. The higher temperature is considered a pollutant because it kills many aquatic organisms. The ministry said the new law would force oil producers to invest in costly new equipment and that it would eventually scare away potential investors.
Ilyas Asaad, a deputy to the environment minister for environmental compliance, said the law was designed to deal with pressing environmental issues and was not intended to block investment.
"The environmental quality standards in the new law were included in the previous [1997] law and yet never caused an outcry then, so why now?" he said.
Ilyas said business players were welcome to discuss their concerns with the Environment Ministry while the implementing government regulations were being deliberated.
Asep Warlan Yusuf, an environmental law expert from Bandung's Parahyangan University, said if the law was ultimately amended, it would simply open more doors for environmental degradation.
"The law is not meant to disrupt the country's economy or development, but it is to remind investors to conduct their activities while considering the environment," Asep said. "If development is only measured from an economic aspect, neglecting environmental and social aspects, then that is very selfish."