Public Disclosure System as an effective tool for
pollution control
The Implementation of PROPER in Indonesia
Hermien Roosita
The Ministry of Environment, Indonesia
Paris, 2-3 December 2004
1
Environmental Management in Indonesia
Shifting from end-of-pipe to clean production
 No regulation
1
 No environmental institution
 Lack of government &
corporation interest
1982
2
 End of pipe management
3
 Environmental regulation
 Government intervention
4
1995
 Clean production
 Public Disclosure System
 Economic instruments
 Integrated environment management
PRESENT
FUTURE
 Ecological efficiency
 Partnership between government &
corporation
2
Environmental Compliance
Implementation
a. Monitoring tools for Industrial Pollution Control :
PROKASIH, Blue Sky Program, Hazardous Waste
Management Program
b. 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
3
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.
4
Alternative solutions for industrial
pollution control
• NGO and community have function as a “watchdog” to control industrial activities.
• ISO 14001.
– A voluntary scheme for company’s 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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1.
Paper
2.
Textile
3.
Rayon
4.
Mining
5.
Automotive
6.
Cement
7.
Petrol Chemical
8.
MSG
9.
Consumer goods
10.
Distribution of Industries
1.
Pulp & Paper
2.
Crumb Rubber
3.
Crude Palm Oil
4.
Coal Mining
1.
Crumb Rubber
1.
Gold Mining
5.
Sugar
2.
Coal Mining
2.
Ferro Nickel
6.
Tapioca
3.
3.
Copper
7.
Petroleum
Refined
Petroleum
Refined
4.
Plywood
4.
Cement
8.
Cement
5.
Adhesive
Fertilizer
9.
Fertilizer
11.
Pharmacy
10.
Sugar
1.
Gold Mining
12.
Electronic
2.
Ferro Nickel
13.
Chemical Industry
3.
Copper
14.
Food & Drink
15.
Electro Plating
16.
Sugar
17.
Leather Tanneries
18.
Lubricating Oil
19.
Basic Chemical
20.
Iron & Steel
Smelting Industry
21.
Petroleum Refined
22.
Recycling
23.
Cigarettes
6
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
GOLD
GREEN
• Pollution level 5% of the legal
standards and near zero
emissions level
• Better than legal standards by
50%, uses clean technology,
waste minimization, pollution
prevention, and resource
conservation
BLUE
• Efforts meet minimum legal
standards
RED
• Efforts don’t meet standards
BLACK
• No pollution control effort,
• Serious environmental damages
- 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.
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National Environmental Act Mandates
Information Dissemination to the Public
KEY WORDS
 Environmental
Management Compliance
Monitoring
ActNo. 23/1997 Article 22
(1)
 Right on environmental
information
Act No. 23/1997 Article 5 (2)
 Community Right for
participation in
environmental
management
 Companies’ obligation for
information dissemination
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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PROPER’s
Core Strategy-Strengthen Environmental Politics

How to create public demand for cleaner environment?
Empower external stakeholders
Public Disclosure
NGOs
 Empower
NGOs with
superior
information
Communities
 Legitimize
public
perception
about env.
issues
Media
Business
Local Govt.
 Promote social
responsibility &
educational
journalism
 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.
2.
3.
4.
5.
6.
7.
Compliance with water pollution regulations
Compliance with air pollution regulations
Compliance with hazardous waste management regulations
Compliance with AMDAL (EIA requirements)
Quality of environmental management system
Resource management and use
Community development and relationship
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PROPER’S 4 PRINCIPLES
FAIRNESS
ACCOUNTABLE
PUBLIC PARTICIPATION
TRANSPARENCY
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Rating Analysis
Qualitative Information
Quantitative Analysis
Visual Analysis
13
New Implementation Approach:
Strong Local Participation
Involvement of Provincial and District/City level
Regular Monitoring
Sampling
Evaluation
Database system
14
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
NUMBER OF INDUSTRIES
51
50
40
33
32
30
30
25
23
20
20
14
8
8
10
8
0
0
3
0
0
2002
Black
2003
Red
Blue
2004
Green
Gold
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Administration cost of programs
No
Litigation *)
Description
1
2
3
4
5
6
7
Surveillance
Investigation
Legal brief
Trial
Appeal to high court
Appeal to supreme
court
TOTAL
PROPER **)
US$
4,000
8,000
2,800
11,000
2,800
2,800
Description
Inspection and
laboratories analysis
Coordination meeting
Dewan PROPER
Peer Review
Press briefing
31,400/ case
*) Cost needed for litigation for an environmental pollution case
**) Cost needed for PROPER to evaluate 43 manufacture industries
US$
38,000
5,600
5,600
1,100
5,500
61,400 / 43
industries
=
US$ 2,362/industry
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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
Wastewater
Air emission
(Continuous Emission
Monitoring)
Solid waste
(landfill and remediation)
TOTAL
US$ 5.0 million
US$ 0.6 million
US$ 5.6 million
US$ 11.2 million
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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.
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