ENVIRONMENTAL MANAGEMENT IN MINES AND ENERGY SECTOR IN INDONESIA

Dibyo Kuntjoro Director, Bureau of Environment and Technology Ministry of Mines and Energy

Introduction

Indonesia is endowed with abundant, commercially valuable natural resources. Timber harvests in its rain forests make it one of the world’s leading producers of tropical hardwood products. Its soils, particularly in volcanic areas, are fertile and support one of the most intensive rice cultivation systems in the world. It has great mineral wealth, exemplified by petroleum, natural gas (Indonesia is the world’s largest exporter of liquefied gas) and coal. As we all understand that mining activities generate employment, export earnings, and other tangible benefits for the Indonesian economy. These benefits should increase rapidly in the medium term, as some existing mines expand their production and new mines open. However, mining can also degrade environmental quality by altering the landscape and ecosystems. Some development experts have concluded from their experience in other countries that natural resources are in fact a curse, not a blessing. Their experience shows that one cannot assume a country’s economy will automatically benefit over the long term from the exploitation of its natural resources. Is it true? We are very sure that this is not true in Indonesia. We can manage to exploit the natural resources in an environmentally sustainable manner. It is proven that reclaimed mined land can be used for other purposes according to the spatial plan of the respective region.

Environmental law and regulation

Since 1930, during the colonial time, there was a regulation called the Mine Police Regulation. Most of that regulation concerned mine safety, but a small part of it related to environmental management. The Oil and Gas Act number 44 of 1960 and The Mining Act number 11 of 1967 formulated Indonesia’s mineral and oil and gas policy. Some chapter included requirements for environmental management. Following the Stockholm Conference in 1972, the Minister of Mines and Energy issued a Ministerial Decree in 1977 concerning Mitigation of Environment Damage caused by Mining, Oil and Gas Activities. It was followed later in 1977 by Director General of Mines decisions concerning Environmental Management in Open Pit Mines, and in tin mining by dredging. Indonesia’s first National Environmental Law was Act Number 4 of 1982 Concerning the Living Environment. This act was followed by Ministerial Decrees in related sectors to implement the provisions of the Act.

Indonesia has adopted the principles of environmentally sound and sustainable development (ESSD) as required by the Broad Outline of State Guidelines (GBHN) promulgated by the People’s Assemblage, 1993. This is reinforced through active participation in global efforts to lay down ESSD principles in order to enhance Global Partnerships in safe guarding the global environment and its renewable and non-renewable resources for long-term benefits of mankind. The legal basis to achieve the objective is the Act No. 4 of 1982 concerning the Living Environment, which established the principle of ESSD. This Act continues to be the basis for evaluation and adjustment of all legislation containing provisions related to aspects of the living environment. Act No.4 of 1982 mandated an environmental impact assessment for industrial projects as part of the permitting and approval process for proposed investment. Additional provisions supplementing this Act are contained in the Government Regulation Number 29/1986 concerning Environmental Impact Assessment or Amdal. Aiming at high growth of national economic development, important steps should be taken by the government. For example, simplification of bureaucratic procedures to reduce unnecessary regulatory and procedural burdens on the industry. The objective is to make Indonesia more attractive to investors, especially foreign investors. In 1993, Government Regulation number 29 of 1986 was revised and became the Government Regulation Number 51 of 1993. This Government Regulation simplifies the Amdal document and shortened the time allowed to review the Amdal document. Despite the simplification in the Amdal procedure, Government Regulation number 51/1993, created three types of Amdal, Amdal Kegiatan Terpadu/Multisektor (integrated Amdal), Amdal Kawasan (Regional Amdal) and Amdal Regional (District Amdal).

Amdal Kegiatan Terpadu/Multisektor is the process of studying the significant impacts of a proposed integrated business or activity on the environment located in a single ecosystem type and which involves more than one authorised government agency. An example would be a mine with supporting facilities such as an airport, seaport, hospital, water dam, mining town, etc. These support activities would ordinarily require a separate Amdal according to Table 2. This type of Amdal still needs to be clarified and elaborated to avoid any misinterpretation and misperception. Table 1. Difference between Government Regulation no 29/1986 and no 51/1993 Government Regulation No 29/1986 Government Regulation No 51/1993 1. Types of Amdal and Semdal documents, PIL, PEL, SEL, KA ANDAL, ANDAL, RPL and RKL.2. No significant impact : PEL and PIL3. Activities that require Amdal and Semdal determined by related sector4. Amdal is a component of the feasibility study5. Amdal approval valid for 5 years6. Members of Amdal commission not included NGO, National Board of Land Affairs, Investment Co-ordinating Board 7. Amdal document’s review time : 210 days8. ANDAL and RKL, RPL documents reviewed separately9. Amdal’s Term of Reference (TOR) reviewed and approved by the Amdal Commission10. Amdal study was not implicitly taking into consideration the regional development plan 1. Types of Amdal documents, KA ANDAL, RPL, RKL and UPL, UKL.2. No significant impact : UKL, UPL3. Activities that require Amdal determined by Minister of Environment4. Amdal is part of the feasibility study5. Amdal approval valid for 3 years6. Additional members of commission from NGO, National Board of Land Affairs, Investment Co-ordinating Board7. Amdal document’s review time : 45 days8. ANDAL and RPL, RKL documents reviewed simultaneously9. Amdal’s TOR reviewed and given comments and suggestion by Amdal Commission10. Amdal study has to take into consideration the regional development plan

Amdal Kawasan is the process of studying the significant impacts of a proposed integrated business or activity on the environment located in a single ecosystem type, which is under the authority of a single authorised government agency. An example would be an industrial estate, real estate development, or tourist resort area.

Amdal Regional is the process of studying the significant impacts of proposed businesses or activities located in a single ecosystem type in a development planning area as defined by the regional spatial plan and involves more than one authorised government agency a part of the decision-making process. An example would be mining, industrial or other businesses activities located in a district area which has been defined by the district spatial plan.

Table 2. List of activities requiring Environmental Impact Assessment Type of Activity in Mining and Energy sector Size 1. Mining area during exploitation phase, for production of :· coal· primary ores· secondary ores· Non-metallic minerals, sand and gravel· Radioactive materials, including mining, processing2. Transmission lines3. Electricity generating stations, diesel, gas, steam and combined cycle4. Hydroelectric generating stations of all types and sizes, except minihydro and direct current types5. Geothermal electricity generating stations6. Other types of electricity generating stations7. Oil and gas exploitation8. Oil and gas processing (refinery)9. Oil and gas pipelines >= 200 ha and/or>= 200,000 ton/yr>= 60,000 ton/yr>= 100,000 ton/yr>= 300,000 m3/yr> 150 kV>= 100 MW>= 55 MW>= 5 MW>= 25 km

To implement Government Regulation no. 51/93, the Minister of State for the Environment issued Decree No. Kep-11/MENLH/3/1994 concerning The Type Of Business or Activities that are Required to Prepare an Environmental Impact Assessment (Table 2). Activities that are not required to prepare Amdal, should prepare UPL and UKL (Environmental monitoring and management plan), but they shall prepare Amdal if the location of the proposed activity is located in or nearby protected areas, such as : national parks, recreation parks, protected forest, nature conservation areas, marine and freshwater conservation areas. Table 2 will be revised very soon. Experiences gained in implementing the requirements listed in Table 2, have shown that some figures in the table are not appropriate for some activities using advanced technology. These technologies are now widely used, for example, waste minimisation, water waste treatment, flue gas desulfurization, low NOx burner, bag houses, scrubbers, water injection in oil and gas production, biotechnology, reclamation and revegetation, acid mine drainage management, clean coal technology. The Office of the Minister of State for Environment sets standards after consultation with related Ministries (Departments). Some of the standards which have been set are emission standards for coal fired power plants, water and air quality standards, effluent standards, ambient air standards, and standards for the classification and handling of toxic and hazardous substances. Still in the deliberative process are effluent standards for mining activities and oil and gas activities. The Department of Mines and Energy has prepared technical Amdal guidelines specific to the nature of the project. The approved Amdal document contains the companies’ obligations to mitigate, to manage and monitor the environmental impacts, to reclaim the mined land as soon as the it is no longer utilised in accordance with the terms and conditions contained in the Amdal. The Department of Mines and Energy is drafting a regulation implementing a reclamation guarantee fund or bond to ensure the reclamation of mined land is done in accordance with the approved RKL and RPL.

Amdal process in the Departments of Mines and Energy

Every government institution (departments/ministries) has to form a Central Amdal Commission (Komisi Pusat Amdal - KPA). The Department of Mines and Energy has formed its KPA. Members of the commission consist of permanent members and non-permanent members which represent relevant departments/ministries or non-departmental. Permanent members of the KPA Department of Mines and Energy consist of representatives from: the Department of Home Affairs, National Board of Land Affairs, Investment Co-ordinating Board, Environmental Impact Management Agency (Bapedal), Office of the State Minister of Environment, experts on environment (including university members), Directorates General and Government Enterprises within the Department of Mines and Energy. Non-permanents members consist of representatives from: government institutions related to the proposed project activities, provincial Amdal commission and local non-governmental organisation where the project is located. The duties of the KPA are to: prepare Amdal (ANDAL, RPL, RKL, UPL and UKL) guidelines, review and evaluate Amdal documents submitted by proponents, assist in preparing the approval of Amdal documents by the Ministers. The Central Amdal Commission is assisted by a technical team. The Amdal review has strict time limitations. Terms of reference (TOR) must be reviewed within 12 days. The proponent is entitled to an automatic approval if the government fails to do so. The ANDAL, RPL, RKL (EIA) shall be reviewed within 45 days. If the government exceeds that limit, the proponent is once again entitled to an automatic approval.

It looks like members of the KPA have a very limited time to properly review the Amdal documents but in fact, the KPA’s members are always able to finish reviewing the Amdal documents within 30 days. The subsequent revision of the Amdal is done by consultants and sometimes takes between one and six months.

Review of UPL/UKL documents is done by the Directorates General. To date, 59 UPL/UKL have been reviewed. From 1987 to 1996, 1350 documents have been processed by the KPA. 369 documents are from electric power operations, 512 documents are from oil and gas operations and 469 documents are from mining operations.

The implementation of Amdal provisions (including UPL/UKL) are monitored and inspected by mine inspectors (in mining and oil and gas operations). Mine inspectors have the authority to remind or warn the company or close a part or the whole project for serious non-compliance. In the electricity activities, monitoring and inspection performed by "electricity project inspectors".

Challenges

Major challenges faced by the Department of Mines and Energy in balancing increased mining activity and energy production and ecological harmony throughout the archipelago include:

• Mines and energy producing activities often lie in very sensitive areas such as national parks, protected forests, wildlife sanctuaries, densely populated areas, areas of high rainfall and high seismicity. In these cases, the problems will be addressed case-by-case in coordinated actions with the related Departments/ Ministries.
• Mines are often located in remote areas where the local inhabitants still practice their traditional culture and ways of living. Mining activities can create cultural shock and create social and economic gaps.
• Land rights sometime create problems that need some additional efforts and a prudent approach. Lands "owned" by tribes and private individuals create most of the problems in the land acquisition process. Land price, land rent, land right uncertainty and land compensation are the main problems involved.
• Improvement of the co-ordination between related institutions, Department of Mines and Energy, Department of Forestry, Department of Public Works, Ministry of Environment, Department of Agriculture, Department of Interior and Provincial Government to solve environmental problems wisely.
• Inadequate environmental officials/experts both in government offices and the mining and energy producing companies. Intensive training is needed.
• Small operators with limited capability in mitigating environmental impacts are the main government concern. They need to be assisted by the government in the application of environmentally friendly and clean technologies.
• Land use planning sometimes precedes mineral exploration which can limit mining since the mineral deposit or oil and gas reservoir was found after the spatial plan was completed.
• Public perception, mining industry still always accused as a destructive enterprise, damaging environment, major caused of pollution and create social and cultural problems.

In general, mining and energy production activities are needed to support national development as well as the national economy and welfare of the people. These activities shall operate in such a manner that the environmental impacts can be mitigated and managed to avoid any significant negative impacts.

Environmental Program The Department of Mines and Energy has reviewed its mining environmental policies and strengthened its institutional and human resource capabilities and strategies. These policies support the implementation of the national development policy in economy, politics and security. To develop the national economy Indonesia still needs foreign investment, including investors in the mining and energy production. To provide an attractive and reasonable condition for foreign investor, the Indonesian Government has done a lot of "simplification" of bureaucratic procedures, including streamlining the Amdal process mentioned earlier. This simplification does not mean the government will sacrifice environmental protection for economic development, on the contrary the government is working to enhance and improve its service to the foreign investor. As further support to the implementation of national policies, the Department of Mines and Energy conducts the following programs:

• development of effective mining and energy environmental policy, regulations, guidelines and technical capability within the Department and the industry
• improvement of administrative organisation, jurisdiction, procedures and management of its mining and energy environmental regulatory programs
• development of institutional capability to identify and solve potential environmental problems from mining and energy producing activities before they degrade the environment
• improvement of mining and energy and energy utilisation practices with respect to environmental management
• strengthening the relationship between the enforcement and permitting process and the enforcement strategy in the fields of mining and energy
• conducting a variety of technical training with assistance from international organisations with expertise in the field of environment management.
• improvement of the environmental awareness in the mining and energy companies

Realising the importance of environmental management in mining and energy production operations, the Department of Mines and Energy established the Bureau of Environment and Technology in 1993 to oversee the implementation of Amdal, to monitor environmental impacts, to develop an environmental technology database and provide policy analysis on matters related to the environment. Environmental mine inspectors were also placed in the Regional Offices of the Department of Mines and Energy to more effectively and efficiently monitor and control the implementation of environmental management performed by the mining and energy operators.

In early 1995, a technical assistance agreement in the area of mining environmental policy and enforcement was signed between the Bureau of Environment and Technology (BLT), Ministry of Mines and Energy and the Office of Surface Mining Reclamation and Enforcement (OSM), U.S. Department of Interior. BLT and OSM have been working with a number of different organisations within the Ministry to develop more effective mining environmental policy, regulations, guidelines and technical capability. It is necessary to continue the development of mining environmental policy and regulatory programs which encourage environmentally sound, efficient mining practices while maintaining or improving air and water quality and encourage the reclamation of disturbed land for other productive uses after mining. These continued efforts will allow the Ministry of Mines and Energy to meet the challenges and achieve the balanced and sustainable economic growth desired by the people of Indonesia.