Public Disclosure System as an effective tool for pollution control The Implementation of PROPER in Indonesia

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Public Disclosure System as an effective tool for
pollution controlThe Implementation of PROPER in
Indonesia

• Hermien Roosita
• The 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
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Environmental Compliance Implementation

• Monitoring tools for Industrial Pollution Control
  PROKASIH, Blue Sky Program, Hazardous Waste
  Management Program
• Litigation
• 7 steps for dispute resolution
• Surveillance for information and data collection
• Investigation for evidences
• Legal brief
• Trial
• Appeal to high court
• Appeal to supreme court

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Current Situation Good Environmental Law But
Weak Implementation

• Weak monitoring system
• Human resources capacity
• Financial supports
• Lack of coordination between agencies.
• Lack of knowledge on environmental issue by
  stakeholders.

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Alternative solutions for industrial pollution
control

• NGO and community have function as a watch-dog
  to control industrial activities.
• ISO 14001.
• A voluntary scheme for companys 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. 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

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. Crumb Rubber
2. Coal Mining
3. Petroleum Refined
4. Plywood
5. Adhesive

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.

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

GOLD

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

GREEN
BLUE

• Efforts meet minimum legal standards

RED

• Efforts dont meet standards

• No pollution control effort,
• Serious environmental damages

BLACK
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National Environmental Act Mandates Information
Dissemination to the Public
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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PROPERs Core Strategy-Strengthen Environmental
Politics

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

Public Disclosure
NGOs
Communities
Media
Business
Local Govt.

• Promote social responsibility educational
  journalism

• Empower NGOs with superior information

• Legitimize public perception about env. issues

• Establish credibility and strategic alliance

• Recognize and reward high performance local
  agencies

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Rating Methodology RATING ISSUES
Environmental ratings are based on performance in
seven areas

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

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PROPERS 4 PRINCIPLES
FAIRNESS
ACCOUNTABLE
PUBLIC PARTICIPATION
TRANSPARENCY
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Rating Analysis

• Qualitative Information

Quantitative Analysis
Visual Analysis
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New Implementation Approach Strong Local
Participation
Involvement of Provincial and District/City level

• Regular Monitoring
• Sampling
• Evaluation
• Database system

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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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PROPER 2002 - 2004
60
51
50
40
33
32
30
NUMBER OF INDUSTRIES
30
25
23
20
20
14
8
8
8
10
3
0
0
0
0
2002
2003
2004
Black
Red
Blue
Green
Gold
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Administration cost of programs
PROPER )
Litigation )
No
US
Description
US
Description
38,000 5,600 5,600 1,100 5,500
Inspection and laboratories analysis Coordination
meeting Dewan PROPER Peer Review Press briefing
4,000 8,000 2,800 11,000 2,800 2,800
Surveillance Investigation Legal
brief Trial Appeal to high court Appeal to
supreme court
1 2 3 4 5 6 7
61,400 / 43 industries US 2,362/industry
31,400/ case
TOTAL
) 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 cost

• Pollution control equipment investment from a
  pulp and paper industry

US 5.0 million
Wastewater
US 0.6 million
Air emission (Continuous Emission Monitoring)
US 5.6 million
Solid waste (landfill and remediation)
US 11.2 million
TOTAL
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Limitation

• 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.