The government has drawn up a draft of the Omnibus Law Bill which consists of Employment Creation Law, Tax Facilities Law and State Capital Law. On 12 February 2020 the chief of the House of Representatives has received an academic paper and a draft of the Employment Creation Law for further discussion. The Employment Creation Law consists of 174 articles and 79 affected laws one of which is Law No. 32 of 2009 on Environmental Protection and Management (“Law No. 32/2009”). Article 23 of the draft of Employment Creation Law regulates amendment to Law No. 32/2009 concerning Environmental Approval, Business Permit, environmental impact analysis (“EIA”) and environmental management efforts and environmental monitoring efforts (“UKL-UPL”), changes of authorities and sanctions.
This writing will only focus on the effect of draft of Employment Creation Law to Law No. 32 of 2009 on Environmental Protection and Management.
Environmental Approval and Business Permit
The draft of Employment Creation Law amends Article 1 number 35 of Law No. 32/2009 regarding Environmental Permit. In the draft of Employment Creation Law, the terminology of the Business License is changed to a Business Permit and the Environmental Permit is changed to an Environmental Approval. Environmental Approval is a decree of environmental feasibility or a statement of the ability to manage the environment. The environmental feasibility decree is a decree for business activities that has important impacts on the environment while the statement of the ability to manage the environment is a decree for business activities that have no significant impact on the environment.
The draft of Employment Creation Law removes Article 40 of Law No. 32/3009 which requires an Environmental Permit as a requirement of a Business License, however, the draft of Employment Creation Law still requires an Environmental Approval as a requirement for the issuance of Business Permit. Some articles which accommodate these obligations are contained in amendments to Article 24 and amendments to Article 34 of Law no. 32/2009. Furthermore, the scheme for the issuance of the Environmental Approval is also amended in the draft of Employment Creation Law. If in Law No. 32/2009 EIA is used as the basis for stipulation of environmental feasibility decree then in the draft of Employment Creation Law EIA is only used as a basis for environmental feasibility testing. This environmental feasibility test is conducted by the Central Government and from the results of the feasibility test the Central Government will stipulate the environmental feasibility decree, which is a requirement for the issuance of Business Permit. The same thing applies to the issuance of Business Permit for activities and/or businesses that are required to have UKL-UPL. Issuance of Business Permit is issued based on a statement of the ability to manage the environment. Furthermore, the authority in the procedures related to the Environmental Approval from the feasibility test stage until the issuance of the Environmental Approval which previously could be conducted in stages starting from the Regional Government, the EIA Commission up to the Minister will be changed so that all the authority is in the Central Government. This change of authority also applies to the issuance of related permits such as hazardous and toxic waste management permits and dumping permits.
EIA and UKL-UPL
If in Law No. 32/2009 types of environmental permits are divided into 3 categories, namely EIA, UKL-UPL and environmental management and monitoring statements, then in the draft of Employment Creation Law there are only 2 categories namely i) activities and/or businesses that have significant impact on the environment and ii) activities and/or businesses that have no significant impact on the environment. Activities and/or businesses that have significant impact on the environment will be required to have an EIA while activities and/or businesses that have no significant impact on the environment will be required to meet UKL-UPL standards which are then stated in a statement of the ability to manage the environment.
Furthermore, there are several articles related to EIA in Law No. 32/2009 which was amended by the draft of Employment Creation Law. The criteria for activities and/or businesses that are required to have an EIA which are previously detailed clearly in Article 23 of Law no. 32/2009 is amended. The criteria is no longer specified in the draft of Employment Creation Law but will be stipulated in the Government Regulation. Then the draft of Employment Creation Law also removes Article 29 to Article 31 of Law No. 32/3009 which regulates the EIA Commission. In the draft of Employment Creation Law the authority to assess environmental impact analysis is only controlled by the Central Government so that the existence of the EIA Commission is eliminated. Article 26 of Law No. 32/2009 is also amended so that environmental observers and/or other parties affected by all kinds of EIA process decisions can no longer be involved in the preparation of EIA documents. In the draft of Employment Creation Law the parties that can be involved in the drafting of EIA documents are only those in charge of the activities and/or businesses and the affected communities.
Changes of Authorities
As explained in the paragraphs above, in the draft of Employment Creation Law all authorities related to the Environmental Approval and Business Permit are transferred to the Central Government. This authority is carried out from the assessment stage, the determination of requirements up to the issuance of Environmental Approval and Business Permit including licensing for derivatives such as permits to manage hazardous and toxic waste and permits for dumping. In addition, the draft of Employment Creation Law also transfers the authority of the Regional Government to the Central Government in i) environmental protection and management, ii) supervision of business and/or activity compliance, iii) providing administrative sanctions to business and/or activity person in charge and iv) authority to force the person in charge of a business and/or activity to carry out environmental recovery due to environmental pollution and/or damage.
Sanctions
The draft of Employment Creation Law amends sanctions for violations of environmental provisions including violations of hazardous and toxic waste management, waste dumping activities and activities and/or businesses that do not have an Environmental Approval. In Law No. 32/2009 sanctions are given in the form of criminal sanctions with 3 years to 10 years of imprisonment accompanied by fines of Rp. 3,000,000,000 to Rp. 10,000,000,000, then in the draft of Employment Creation Law the imposition of imprisonment sanctions will be imposed when fines are not conducted.
Conclusions
It is stated clearly in Article 22 of the draft of Employment Creation Law that the main objective of amending Law No. 32/2009 is to make the obtainment of Environmental Approval is more convenient for business actors. Therefore, several adjustments are made including simplification of the Environmental Approval and Business Permit.
Broadly speaking, the Environmental Approval (previously referred to as an Environmental Permit) is still a requirement for the issuance of Business Permit (previously referred to as a Business License). In the draft of Employment Creation Law the classification of Environmental Approval is made simpler which are the requirement to have an EIA for activities and/or businesses that have significant impact on the environment and the requirement to have UKL-UPL for activities and/or businesses that have no significant impact on the environment. The formal forms of each of the Environmental Approval are EIA documents and statement of the ability to manage the environment. The Environmental Approval is a requirement for the Central Government to issue Business Permit for businesses.
Other facilities provided to business actors are regarding the parties involved in the drafting of EIA documents. If previously the EIA document preparation was carried out by business actors involving the affected community, environmental observers and/or parties affected by the EIA decree, then in the draft of Employment Creation Law the parties involved are only limited to the affected communities. This, of course, makes it easier for business actors to manage the Environmental Approval since it prevents business actors from rejection or resistance from many parties.
In addition, the centralization of authority in the Central Government for all stages of the management of the Environmental Approval and Business Permit up to the stage of supervision and sanctions make the process of applying for licenses arguably easier. Especially with the relief of sanctions for violations of environmental protection and management is an indication that the Government’s intention is more to motivate the business actors to comply with the requirements than to punish promptly.
On the other hand, with the removal of authority of the Regional Government and the removal of the involvement of environmentalists in the Environmental Approval process may lead to wrong perceptions of the Central Government as the holder of power, that the Central Government uses its power to prioritizing the interest of business actors only. Therefore the related policies need to be further processed so that their implementation will not only accommodate the interests of certain parties.
Herdiasti Anggitya
