Business and the environment are often compared to oil and water, two things that cannot mix. This is not wrong, considering that profit is the primary goal of running a business. Consequently, it is not uncommon for entrepreneurs to be willing to sacrifice their environment to maximize profits.
On the other hand, there are legal aspects that bind business and the environment. Companies are required to follow the rules of the game under the umbrella of legal regulations. Even the best ideas and implementation of a sustainable economy will be less effective without a supporting legal framework, like a tooth that isn't sharpened. Therefore, I believe legal regulations are necessary to support this.
1. Law, Companies and the Environment
From a legal perspective, regulations in Indonesia require business actors depending on the environmental impacts they may cause to have environmental documents in the form of (i) Environmental Impact Analysis (AMDAL), (ii) Environmental Management Efforts and Environmental Monitoring Efforts (UKL/UPL) or (iii) Statement of Commitment to Environmental Management and Monitoring and also (iv) Environmental Permit as regulated in Law No. 32 of 2009, before business actors can run their business.
Ideally, with the obligation for companies to obtain environmental permits before carrying out business activities, it is hoped that this will reduce the amount of environmental damage that exists or at least reduce the potential for environmental damage that may occur.
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However, the reality on the ground is different. The ease of obtaining permits and the negligence of environmental impact monitoring by companies are among the main factors contributing to the frequent environmental damage.
2. Environmental Law and its Reality on the Ground
Obtaining environmental permits is now easier than ever. I once applied for an environmental permit for a trading company. This company wasn't required to obtain an Environmental Impact Assessment (UKL-UPL) or Environmental Impact Assessment (AMDAL), so I simply had to create a template statement, similar to that used by other companies, stating that the company would comply with applicable regulations. After a simple administrative process, the company's Environmental Permit was issued and became effective.
The government is also increasingly working to make it easier for businesses to obtain permits. Following the issuance of Government Regulation No. 24 of 2018 concerning Electronically Integrated Business Licensing Services, environmental permits can be issued in advance based on commitments, even if a company does not yet meet the requirements for such a permit.
Furthermore, the lack of local government oversight, the ease of data manipulation, and, of course, money politics serve as "grease" factors in facilitating the issuance of these permits. Companies can simply sit back and ensure the necessary funding is available.
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If you do a search on Google with the keywords "Companies and Environmental Damage", you will be faced with hundreds, even thousands of articles discussing environmental damage caused by companies in various business sectors: from industry, trade, construction to commodities.
So, is environmental protection simply about obtaining a "permit"? What if environmental damage occurs while a company has obtained the permit?
3. Punishment against Violators, Is it Effective?
We are again appealing to the law to prosecute companies that have damaged the environment. As stipulated in Article 87 paragraph (1) of the Environmental Law (Environmental Law), "every person responsible for a business and/or activity that commits an unlawful act in the form of environmental pollution and/or damage that causes harm to other people or the environment is obliged to pay compensation and/or take certain actions."
But in reality, how many companies actually pay compensation? For the forest fires in 2019 alone, over 18 trillion rupiah in compensation has not been paid by 11 companies involved in forest fires. Therefore, we cannot wait until companies cause environmental damage and then simply demand compensation.
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Lawyers at Kasih Hukum (NGO)
