Foreigners are required to undergo an Environmental Impact Analysis (AMDAL) when starting a business in Indonesia in sectors such as industry, construction, agriculture and mining. If a company or construction project does not have an AMDAL, it may be subject to sanctions such as warnings, license suspension or even revocation of its operating license, especially if the project is deemed likely to have a significant impact on the environment.
1. What is an Environmental Impact Assessment Report (AMDAL)?
Indonesia's Environmental Impact Assessment system is regulated by the following laws and regulations:
• Law No. 32 of 2009 (Environmental Protection and Management Law): stipulates the basic framework of environmental impact assessment.
• Law No. 11 of 2020 (Job Creation Law) and its implementing regulations: clarify the environmental impact assessment obligations and exemption conditions for specific companies.
• Government Regulation No. 22 of 2021 (Environmental Protection and Management Regulation): details the technical specifications and implementation procedures of environmental impact assessment.
II. Scope of application of the Environmental Impact Assessment Report (AMDAL)
1. Projects that must undergo environmental impact assessment
The following projects require AMDAL environmental assessment:
Projects that may have significant impacts on the environment and communities;
Developments involving ecologically sensitive areas such as forests, land, oceans, water resources, etc.;
Large-scale industrial, mining, infrastructure, energy, power and tourism development projects.
2. Exempted items
Projects with less impact on the environment may be exempted from AMDAL but need to submit a simple UKL-UPL (Environmental Management and Monitoring Plan);
Small and micro enterprises (UMKM) or projects not involving sensitive areas may only need to submit SPPL (Environmental Management Statement).
III. Key Steps in Applying for an Environmental Impact Assessment Report (AMDAL)
The AMDAL process involves multiple steps to ensure that environmental impacts are considered early in project planning and development. The steps to apply for AMDAL are summarized below:
1. Preliminary review
Determine if the project requires an AMDAL assessment, or just a UKL-UPL/SPPL submission.
The Department of the Environment or Local Environment Directorate (DLH) conducts the initial classification.
2. Compile AMDAL file
KA-ANDAL (Environmental Assessment Clause): a planning document for the content and scope of the assessment;
ANDAL (Environmental Impact Analysis): a comprehensive environmental impact assessment report;
RKL (Environmental Management Plan): an environmental management plan for project implementation;
RPL (Environmental Monitoring Plan): an arrangement for environmental monitoring of the project.
3. Review and approval
After submitting the AMDAL document, it will be reviewed by the AMDAL Review Committee of the Ministry of Environment or local government;
The review includes technical feasibility, legal compliance and public feedback;
After passing the review, the environmental license will be issued.
4. Implementation and supervision
After the project is launched, the enterprise shall implement environmental management and monitoring in accordance with the RKL and RPL in the AMDAL document;
The environmental department shall conduct regular supervision and check whether the enterprise complies with the commitment.
5. Time and cost of environmental impact assessment
Approval time: usually 3-6 months, depending on the complexity of the project and the quality of the documents;
Cost: varies according to the size, type and level of expert involvement of the project, and companies need to pay consulting fees, government review fees and other technical service fees.
6. Public participation in environmental impact assessment
The environmental assessment system emphasizes public participation, especially in projects involving environmentally sensitive areas, where public opinions play an important role:
Public consultation meetings are held during the preparation of the AMDAL;
The EIA Review Committee is required to consider public feedback and suggestions.
7. Consequences of failure to comply with environmental impact assessment requirements
If the company fails to complete the AMDAL or environmental management plan as required, it will face the following consequences:
Project permits (such as building permits) may be denied;
Illegal projects may be ordered to stop or demolish;
Heavy fines or even criminal liability may be imposed;
If damage is caused to the environment, the cost of environmental restoration must be borne.
8. Relationship between environmental impact assessment and job creation law
According to the Job Creation Law No. 11 of 2020, Indonesia has simplified the environmental impact assessment system:
Exempt AMDAL requirements for some small projects or development in insensitive areas;
Environmental impact assessment documents need to be processed in an integrated manner with other licenses (such as commercial licenses);
Improve the approval process to reduce the burden on enterprises, but at the same time strengthen subsequent supervision.
9. Environmental management of small projects
For projects with less environmental impact, the following alternatives may be adopted:
UKL-UPL (Environmental Management and Monitoring Plan): Small and medium-sized enterprises need to submit a simple environmental management and monitoring plan;
SPPL (Environmental Management Statement): Micro-enterprises can operate by submitting an environmental compliance statement.
IV. Technical approvals that must be included in the environmental impact assessment report (AMDAL)
2. Technical Approval for Traffic Impact Analysis (ANDALALIN);
3. Technical Approval for Wastewater Quality Standards (IPAL);
4. Technical Approval for Hazardous and Toxic Substances Management (Pertek Pengelolaan Limbah B3).
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