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JAKARTA: Environmentalists in Indonesia are calling for the repeal of a controversial law aimed at job creation because it is seen as promoting business interests at the expense of the environment and labor.
Indonesia, the world’s largest producer of palm oil and nickel ore for electric vehicle batteries, has larger forests than any other outside the Amazon and Congo, and environmentalists say the country’s abundant nature reserves could be exploited under the new law.
The reforms are contained in a bill called “omnibus” for changes in more than 70 laws, which allowed parliament to vote in one go and pass the measure on Monday.
Thousands of people took to the streets of Indonesian cities during the last three days, as part of protests and national strikes against the law.
The government says the law is necessary to improve the investment climate and create jobs in Southeast Asia’s largest economy. It says that the environment will be protected.
READ: Indonesian President Jokowi defends new employment law, says protests fueled by disinformation
These are some of the changes to the environmental rules:
ENVIRONMENTAL IMPACT ASSESSMENT, PERMITS
The new law merges the approval of commercial permits with environmental permits.
In order to obtain an environmental permit under the previous legislation, companies that exploit natural resources had to produce an AMDAL, a study to assess the impact of investments on the environment and local communities.
The new AMDAL process has eliminated the requirement that companies consult environmental experts by only allowing “directly affected communities” to contribute information for the assessment.
A protester holds an Indonesian flag during a protest against the government’s labor reforms in a controversial job creation law in Jakarta on October 8, 2020 (Photo: Reuters / Willy Kurniawan).
“Sure, (AMDAL) is still there, but it’s weakened,” Asep Komaruddin, a prominent Greenpeace forestry activist, told Reuters.
Environment Minister Siti Nurbaya Bakar says that undermining environmental laws now will put a company at greater risk as its business permit would also be at stake.
READ: Indonesian Muslim and Trade Union Groups to Fight New Employment Law in Court
READ: Governor of Jakarta will take protesters’ demand to repeal labor law to President Widodo
MINIMUM FOREST AREA
The previous law required the islands of Indonesia to have a forest cover of at least 30 percent. This requirement has been removed, raising concerns that palm oil plantations and mining companies could dramatically intensify land clearing.
The law runs the risk of provinces such as Riau, Jambi and South Sumatra, which are home to huge palm oil plantations, losing natural forests within 20 years, said environmental group The Sustainable Madani Foundation.
“Losing forests is more than losing tree cover,” said Teguh Surya, executive director of the foundation.
“(It also means) increased intensity of forest fires, floods and landslides, crop failures, lack of clean water.”
Bambang Hendroyono, an official with the Environment Ministry, said the previous 30 percent threshold was “unscientific” and would be replaced by new metrics.
The new law requires that minimum forest areas be based on “geophysics” and “socioeconomic conditions”, but does not provide details.
Commentary: Indonesia’s clean energy ambitions hit new hurdles
SANCTIONS FOR FOREST FIRES, TOXIC WASTE
In previous regulations, companies were liable for environmental damage in their concessions, even if there was no evidence that the company was at fault.
This is known in legal terms as “strict liability”.
Environmentalists say the wording in the section is vague under the new law and that proof of wrongdoing is now required to prosecute the company.
Officials say this is to provide legal certainty in criminal investigations, but environmentalists worry it will weaken an item commonly used to prosecute companies for negligent wildfires.
The new law also eliminates the criminal penalty for illegal handling of toxic waste.
“The dumping (of toxic waste) is illegal in the United States, the Netherlands, Europe, even China. It was in Indonesia, but not now,” said Andri Wibisana, a law professor at the University of Indonesia.
While the new law does not specifically penalize the illegal dumping of toxic waste, it does prosecute those who dispose of toxic waste that causes damage to the environment.
INVESTORS FIGHT
Banks like Citibank and ANZ say that if the new employment law is implemented well, there will be a better investment climate for Indonesia.
READ: Indonesia’s new omnibus law is not a magic formula to stimulate investment, experts say
However, 35 global investors managing assets worth US $ 4.1 trillion have warned that the new law could backfire in light of investors’ growing desire for environmental protection.
“Efforts to stimulate foreign investment … by easing restrictions on land clearing in palm oil concessions are counterintuitive,” said a spokesman for Sumitomo Mitsui Trust Asset Management, part of the investor alliance.
However, their opposition to the law does not mean that they will divest the Indonesian assets they own, but the law could reduce the attractiveness of the Indonesian market.
Satu Kahkonen, the World Bank’s country director for Indonesia and Timor Leste, said in July that the reforms “would move Indonesia’s environmental law away from international best practice and this is basically not helping Indonesia.”
