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Public Disclosure System as an effective tool for pollution control

The Implementation of PROPER in Indonesia

Hermien RoositaThe Ministry of Environment, Indonesia

Paris, 2-3 December 2004

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Environmental Management in Indonesia

Shifting from end-of-pipe to clean production

No regulation

No environmental institution

Lack of government & corporation interest

End of pipe management

Environmental regulation

Government intervention

Clean production

Public Disclosure System

Economic instruments

Integrated environment management

Ecological efficiency

Partnership between government & corporation

1982

1995

PRESENT

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2

3

4

FUTURE

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EnvironmentalEnvironmental Compliance Compliance ImplementationImplementation

a.a. Monitoring tools for Industrial Pollution Control : Monitoring tools for Industrial Pollution Control : PROKASIH, Blue Sky Program, Hazardous Waste PROKASIH, Blue Sky Program, Hazardous Waste Management ProgramManagement Program

b.b. Litigation Litigation

7 steps for dispute resolution :7 steps for dispute resolution : Surveillance for information and data collectionSurveillance for information and data collection Investigation for evidenceInvestigation for evidencess Legal briefLegal brief TrialTrial Appeal to high courtAppeal to high court Appeal to supreme courtAppeal to supreme court

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Weak monitoring system :

Human resources capacityHuman resources capacity

Financial supportsFinancial supports

Lack of coordination between agencies.

Lack of knowledge on environmental issue by stakeholders.

Weak monitoring system :

Human resources capacityHuman resources capacity

Financial supportsFinancial supports

Lack of coordination between agencies.

Lack of knowledge on environmental issue by stakeholders.

Current Situation: Good Environmental Law But Weak

Implementation

Current Situation: Good Environmental Law But Weak

Implementation

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Alternative Alternative solutions solutions for industrial for industrial pollution controlpollution control

• NGO and community have function as a “watch-dog” to control industrial activities.

• ISO 14001.– A voluntary scheme for company’s environmental

management system.– A commitment to improve environmental performance

of companies.– ISO 14001 does not reflect a real companies’

environmental performance• Public Disclosure system (PROPER)

– An instrument to improve industries’ environmental performance through information dissemination to public.

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Distribution of Industries

1. Crumb Rubber

2. Coal Mining

3. Petroleum Refined

4. Plywood

5. Adhesive

1. Paper

2. Textile

3. Rayon

4. Mining

5. Automotive

6. Cement

7. Petrol Chemical

8. MSG

9. Consumer goods

10. Fertilizer

11. Pharmacy

12. Electronic

13. Chemical Industry

14. Food & Drink

15. Electro Plating

16. Sugar

17. Leather Tanneries

18. Lubricating Oil

19. Basic Chemical

20. Iron & Steel Smelting Industry

21. Petroleum Refined

22. Recycling

23. Cigarettes

1. Pulp & Paper

2. Crumb Rubber

3. Crude Palm Oil

4. Coal Mining

5. Sugar

6. Tapioca

7. Petroleum Refined

8. Cement

9. Fertilizer

10. Sugar

1. Gold Mining

2. Ferro Nickel

3. Copper

4. Cement

1. Gold Mining

2. Ferro Nickel

3. Copper

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What is PROPER

PROPER (Program for Pollution Control, Evaluation and Rating) is an alternative instrument to control

pollution based on sustainable development principle through environmental compliance and

performance of companies’ improvement in environmental management through the introducing disincentive and incentive reputation by disclosing environmental performance of industries to public

and stakeholders.

?

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PROPER RATING SYSTEM 2002

- PROPER rating system consists of five colors designed to represent the entire spectrum of environmental performance.

- Ratings are based on performance in all aspects of environmental management within and outside a company

- Unlike PROPER 1995, PROPER 2003 methodology includes water, air and hazardous waste and other factors.

GOLD

GREEN

BLUE

RED

BLACK• No pollution control effort,

• Serious environmental damages

• Efforts meet minimum legal standards

• Better than legal standards by 50%, uses clean technology, waste minimization, pollution prevention, and resource conservation

• Pollution level 5% of the legal standards and near zero emissions level

• Efforts don’t meet standards

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National Environmental Act Mandates Information Dissemination to the Public

Environmental Management Compliance Monitoring

Companies’ obligation for information dissemination

Community Right for participation in environmental management

Right on environmental information

KEY WORDS

ActNo. 23/1997 Article 22 (1)

Act No. 23/1997 Article 5 (2)

Act No. 23/1997 Article 5 (3)

Act No. 23/1997 Article 7 (1)

Act No. 23/1997 Article 6 (1)

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PROPER’s PROPER’s Core Strategy-Strengthen Environmental PoliticsCore Strategy-Strengthen Environmental Politics

How to create public demand for cleaner environment? Empower external stakeholders

Public Disclosure

NGOs Communities Media Business

Empower NGOs with superior information

Legitimize public perception about env. issues

Promote social responsibility & educational journalism

Establish credibility and strategic alliance

Local Govt.

Recognize and reward high performance local agencies

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Rating Methodology : RATING ISSUES

1. Compliance with water pollution regulations

2. Compliance with air pollution regulations

3. Compliance with hazardous waste management regulations

4. Compliance with AMDAL (EIA requirements)

5. Quality of environmental management system

6. Resource management and use

7. Community development and relationship

Environmental ratings are based on performance in seven areas:

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PROPER’S 4 PRINCIPLES

TRANSPARENCY

PUBLIC PARTICIPATION

ACCOUNTABLE

FAIRNESS

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Rating Analysis

Qualitative Information

Quantitative Analysis

Visual Analysis

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New Implementation Approach: Strong Local Participation

Regular Monitoring

Sampling

Evaluation

Database system

Involvement of Provincial and District/City level

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PROPER Supports Strategic Policy Analysis

Sector Benchmarking

Province Level Benchmarking

Analysis of Key Performance Weaknesses

Set National Targets

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COMMUNICATION STRATEGY

Disclosure of companies’ rating : Press Conference

Information of the PROPER : Booklet Leaflet

Socialization to local governments and industries

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3330

14

8

0

25

32

20

8

0 3

23

51

8

00

10

20

30

40

50

60

N

UM

BE

R O

F I

ND

US

TR

IES

2002 2003 2004

PROPER 2002 - 2004

Black Red Blue Green Gold

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Administration cost of programs

61,400 / 43 industries

= US$ 2,362/industry

31,400/ case

TOTAL

38,000

5,600 5,600

1,100 5,500

Inspection and laboratories analysisCoordination meetingDewan PROPERPeer ReviewPress briefing

4,000 8,000 2,80011,000 2,800 2,800

SurveillanceInvestigationLegal briefTrialAppeal to high courtAppeal to supreme court

1234567

US$DescriptionUS$Description

PROPER **)Litigation *)No

*) Cost needed for litigation for an environmental pollution case**) Cost needed for PROPER to evaluate 43 manufacture

industries

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ADMINISTRATION COST

• Budget of US$ 31,400 must be provided in order to resolve an environmental case, not to mention the long period of time to go through.

• Cost needed by PROPER to increase the environmental performance of one industry is approximately US$ 2,362 (60% of 43 manufacture industries has improved its performance).

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Compliance costCompliance cost

Pollution control equipment investment from a pulp and paper industry

US$ 11.2 millionTOTAL

US$ 5.6 million Solid waste

(landfill and remediation)

US$ 0.6 million Air emission

(Continuous Emission Monitoring)

US$ 5.0 million Wastewater

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LimitationLimitation

• PROPER is only effective for large scale companies because they are concern with the image to market.

• PROPER cannot apply to all scale of industries.

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SUMMARY

• Based on administration cost approach, PROPER is a more effective program to be carried out compared to litigation.

• PROPER is especially effective for large scale industries.

• PROPER is a complementary instrument in controlling pollution to other environmental law enforcement programs.

• Indonesia still needs strong environmental agencies.