Answer ... (a) What environmental regulations or requirements must renewables generators in your jurisdiction observe on an ongoing basis (from pre-development to decommissioning)?
Important regulations to observe include:
- Law 32/2009 regarding Environmental Protection and Management, as amended by Government Regulation in Lieu of Law 2/2022 regarding Job Creation (‘Environmental Law’);
- Government Regulation 22/2021 on the Implementation of Environmental Protection and Management (‘GR 22/2021’); and
- MOEF Regulation 4/2021 on the List of Businesses and/or Activities Required to Secure an Environmental Impact Assessment (‘MOEF Regulation 4/2021’).
As mentioned in question 3.2, generally, each business activity requires either an AMDAL, a UKL-UPL or an SPPL, depending on the type of environmental compliance document required under MOEF Regulation 4/2021.
Renewable energy projects generally require an AMDAL, as provided under GR 22/2021. GR 22/2021 stipulates that an AMDAL is required for activities and/or business sectors that may have a significant impact on the environment, which includes renewable energy projects. The AMDAL requirement is dependent on the scale and potential environmental impact of the specific renewable energy project. Larger-scale renewable energy projects, such as hydropower plants and geothermal power plants, are typically subject to an AMDAL; while smaller-scale projects may be subject to a less comprehensive environmental assessment known as a UKL-UPL. For example, KBLI 35101, the KBLI number for electric power generation, requires:
- an AMDAL for solar power plants generating more than 50 MW;
- a UKL-UPL for projects generating 1 MW–50 MW; and
- an SPPL for projects generating less than 1 MW.
(b) What are the potential consequences of breach of these requirements – both for the renewables generator and for its directors, managers and employees?
A breach of environmental requirements can be subject to three types of liabilities – administrative, criminal and civil – pursuant to the Environmental Law and GR 22/2021.
Administrative liability: The government may impose administrative sanctions on business actors that violate the provisions regarding environmental management as stipulated in the business licensing and governmental approvals. This may take the form of:
- a written warning;
- coercive measures by the government;
- administrative fines;
- suspension of business licensing; and/or
- revocation of business licensing.
The MOEF will generally have an initial discussion with the business player before imposing administrative sanctions.
Civil liability: Any qualified party whose rights were violated or that suffered a loss due to the actions of the renewable energy generator in violation of environmental regulations may file a civil lawsuit against the company. There is no statute of limitations to file a lawsuit for environmental pollution or damage attributable to the use, production and/or management of hazardous waste.
Criminal liability: Imprisonment and fines due to breach of environmental obligations are governed under the Environmental Law and GR 22/2021 and these penalties can be imposed against the power generator. The duration of imprisonment and the amount of the fines will depend on the type of criminal action.
The Environmental Law imposes corporate criminal liability. Pursuant to Article 116(1), if the environmental crime is committed by, for or on behalf of the business entity, the penalty will be imposed on:
- the business entity; and/or
- any person that gave the order to commit such criminal activity or that acted as a leader in such crime.
If the crime was conducted by a person within the scope of his or her employment, the criminal sanction will be given to the person who gave the order or led the crime, regardless of whether the crime was committed together or individually. The perpetrator of a corporate crime in general is referred to as a ‘functional perpetrator’. Individuals are subject to prosecution for corporate criminal liability – for example, the leader of the corporation who authorised and accepted the crime. Sanctions for individuals can take the form of imprisonment and fines, and additional penalties can be imposed on the corporation. Therefore, the directors, managers or employees of a renewable energy generator can be subject to criminal liability if deemed a functional perpetrator. If the criminal charge is directed at a functional perpetrator, any jail term or fine handed down by the court will be increased by one-third.
(c) Which national and regional regulatory bodies are responsible for the enforcement of environmental obligations, and what is their general approach in regulating the renewables industry?
The main national regulatory body responsible for enforcing environmental obligations in Indonesia is the MOEF, which oversees environmental policies and regulations relating to natural resources, pollution control and biodiversity conservation. At the regional level, the local/regional environmental management agency under the regional government is responsible for enforcing environmental regulations within its jurisdiction.
The MOEF may impose administrative sanctions if it deems that the regional government intentionally refused to impose administrative sanctions for serious violations of the protection and management of the environment. Therefore, should the MOEF determine that the regional environmental authority has not imposed appropriate sanctions, it may use its authority to impose sanctions.
In addition, pursuant to Article 94(1) of the Environmental Law, environment and forestry civil servant investigators and the police are authorised to carry out investigations of criminal cases relating to the environment. Upon completion of the investigation, the public prosecutor may bring the case to court and criminal sanctions may be imposed once the court has issued a decision.
In general, the regulatory approach to the renewables industry in Indonesia is to encourage its development while ensuring that environmental obligations are met. The government has introduced various incentives and initiatives to promote renewable energy, such as feed-in tariffs and tax exemptions. However, companies must also:
- comply with environmental impact assessment requirements;
- obtain the necessary permits and licences; and
- implement measures to minimise environmental harm.