THE INDONESIAN EXPERIENCE SO FAR
3. THE FUTURE EMA
3.2. Integrated Licences
The concept of integrated licence or in Indonesian terminology often called
‘izin terpadu’ has been discussed as a ramification of integrated environmen- tal management. Many environmental lawyers are attracted to discussing the concept of an integrated licence because existing licences are fragmented and overlapping.16Under different regulatory regimes, there are currently several licences that are directly or indirectly related to environmental management and particularly relevant to pollution control. They are (1) the licence to engage in business, for example, industrial licences, mining concessions, logging concessions; (2) nuisance licence; (3) site licences; (4) building licences; (5) licences to discharge waste water; (6) licences to dump waste in an environmental medium; (7) licences to operate hazardous waste facilities.
The power to issue these licences is today assigned to different governmental agencies. Table 6.1 describes the current licences, their functions and the authorities who have the power to issue them.
16 See, for example, Rangkuti (1992); also Santosa (2001, pp. 250–2).
Among these licences is the licence to engage in a business or to operate an activity that is connected to the environmental impact assessment procedure.
Under current environmental regulations, in order to get a licence to engage in a business or activity that has a significant impact on the environment, a proponent of the activity has to conduct an environmental impact assessment.
The current licence system not only involves an unnecessarily high cost to investors because they need to get several licences for an activity, but also creates difficulties and inconsistencies in law enforcement.
Therefore, the Indonesian environmental lawyers have proposed the Table 6.1 Types of existing licences, their functions and authorities respon-
sible for issuing the licences
No. Type of licence Main function Authorities
1 Licence to Legality for operating Sectoral ministers, e.g.
engage in an activity and also Ministers of Industry, business/to used for environmental Mining, Forestry, and operate an activity, protection Transportation e.g. industrial
licences, mining concessions, logging concessions, licence to transport hazardous wastes
2 Nuisance licence Protecting people from Heads of District or smell and noise Mayor
3 Site licences Insuring consistency Heads of District or with spatial planning Mayors
4 Building licences Insuring consistency Heads of District and with spatial planning Mayors
5 Licences to Water and soil Heads of District or discharge waste pollution control Mayors
water
6 Licence to dump Environmental The Minister of the protection and pollution Environment control
7 Licence to operate Pollution control The Minister of the
hazardous waste Environment
facilities
concept of an integrated licence. The discourses on an integrated licence actu- ally rose when the government of the Republic of Indonesia decided to replace the EMA of 1982 with the new EMA that is promulgated as the EMA of 1997.
The fact that the EMA of 1997 has not brought about any change in the licence regime proves that the idea of an integrated licence system has never received support from the bureaucrats in the sectoral departments. In addition, the district and municipal governments would also like to maintain the current regulatory regime because they tend to treat these licences as sources of local revenue. Every licence is usually accompanied by a fee. Although the national and regional governmental decision-makers are reluctant to adopt the idea of an integrated licence system, discourses concerning this issue have never ended after the enactment of the EMA of 1997 and are still flourishing today.
Although the Indonesian environmental lawyers recognize the need for an integrated licence, they have different concepts of what they mean by an inte- grated licence. One argues that merging existing licences to become one licence is not necessary, but an integrated procedure is needed.17The propo- nent of this idea has not discussed further what he means by an integrated procedure. This idea still holds some weaknesses. First, it keeps the already existing licences so that the idea is unable to overcome unnecessary high cost regulation and is also inconsistent with the notion of an efficient regulatory regime. As a developing country, Indonesia needs to develop an efficient regu- latory regime so that many investors will be attracted to invest their money in Indonesia. Efficiency as a criterion to judge the adequacy of a law or a policy has been proposed by some scholars under the banner of the economic approach to law.18Secondly, the idea ignores the fact that the nuisance licence is inadequate at protecting environmental interests in the modern era. The nuisance licence is based upon the Hinder Ordonnantie of 1926 that is designed to protect the interests of people living around 200 metres from an installation only, while an installation nowadays may create negative effects, such as air or water pollution, that can reach miles away from its source.19The first concept may not face any resistance or objection from national and local bureaucrats because it does not remove their powers.
The second concept of an integrated licence would like to integrate or unify five of the existing licences. These are: (1) the nuisance licence under the
17 See Moestadji (2003).
18 See, for example, Posner (2003, pp. 10–16); Posner (2003, pp. 31–144);
Chand (1994, pp. 225–38). For a discussion of the economic analysis of environmen- tal law and policy, see, for example, Stewart and Krier (1978) and also Faure and Skogh (2003).
19 For discussion weaknesses of Hinder Ordonnantie of 1926, see Rangkuti (2000, pp. 148–9).
Hinder Ordonnantie of 1926, (2) the licence to engage in industry under the Industrial Act of 1984, (3) the licence to discharge liquid waste under the pollution control regulation, (4) the licence to operate hazardous waste under the regulation concerning hazardous waste and (5) the licence to dump waste in an environmental medium under the EMA of 1997.20Although the propo- nents of the second concept use the terminology of an integrated environmen- tal licence, it only embraces licences related to pollution issues. The proponents also suggests that the Ministry of the Environment should be assigned to issue such an integrated pollution licence system and the status of the Ministry of the Environment should be changed from a ministry without department to being one with department.21The second concept may meet the criterion of an efficient licence regime, but it is inconsistent with the trends or notions of regional autonomy.
The third concept of an integrated licence would like to integrate four of the existing licences. These are: (1) the nuisance licence under the Hinder Ordonnantie of 1926, (2) the licence to discharge liquid waste under the pollu- tion control regulation, (3) the licence to operate hazardous waste under the regulation concerning hazardous waste and (4) the licence to dump waste into the environmental medium under the EMA of 1997.22Thus, the third concept also embraces licences related to pollution issues only. According to the third idea, the status of the licence to engage in industry under the Industrial Act of 1984 should be changed to become an ‘approval’ only.23The proponents of the third concept suggest that the power to issue such an integrated licence should be assigned to both the national governmental agency and to the local govern- ment agency. The national agency, for instance, the Ministry of the Environment, is assigned with the power to issue an integrated licence for activities with very sophisticated technologies, while the district or municipal governments have the power to issue an integrated licence for activities with non-sophisticated technologies.24The third concept may also meet the crite- rion of an efficient licence regime and is also consistent with the notion of regional autonomy. The weakness is that it is concerned with pollution issues only.
The fourth concept could also be proposed here. It is the one that integrates or unifies the seven licences into one licence. The power to issue this could be distributed between the national and local government on the basis of activi- ties with high and ordinary technologies as under the third concept. The
20 See Rangkuti (1999a); Rangkuti (1999b, pp. 3–11).
21 Ibid.
22 See Santosa (2001, pp. 250–2); and also Rahmadi and Santosa (1998).
23 Ibid.
24 Ibid.
national agency, for example, the Ministry of the Environment, could be assigned the power to issue licences for activities with high technologies, while the local governments could issue licences for activities with ordinary technologies. This idea may fully meet the criteria of an efficient licence regime and also of an integrated environmental licence because it deals not only with issues of pollution but also with issues of spatial planning. The fourth concept may be the ideal, but it may face strong opposition from the current licensing power holders because they would lose their powers.
3.3. Combination of Command and Control, Voluntary Approach and