Business Update: Readjustment of Business Plans Required to Have AMDAL

The Minister of Environment and Forestry issued Regulation 38/2019 on Types of Business and/or Activity Plans Which are Obliged to Possess Environmental Impact Analyses (AMDAL) to enhance the business climate in Indonesia. This regulation became effective on September 5, 2019.

Regulation 38/2019 made adjustment to the types of businesses and activities that are required to secure the AMDAL with the following main areas discussed:

• Business types and activities that require the compulsory AMDAL
• Categories of AMDAL
• Screening process for determining if businesses/activities are subject to AMDAL

Business Type and Activities Requiring the Compulsory AMDAL in Indonesia

Businesses and activities having significant adverse impact on the environment will have to obtain an AMDAL, including those meeting the following conditions:

• Natural resources (renewable and non-renewable ) exploitation
• Landscapes and landform changes
• Activities that will potentially cause emission pollution and/or environment degradation
• Activities that will potentially cause effect to the natural environment, social environment or artificial environment
• Activities that will potentially disturb the natural resource preservation and/or culture reserves protection

Regulation 38/2019 specifies the business sectors that must acquire an AMDAL:

• Transportation
• Satellite technology
• Agriculture
• Hazardous and toxic waste material (B3 Waste) management

The regulation also makes specifics of which business activities that must obtain the compulsory AMDAL:

• Activities performed at areas that are directly adjacent to preserved areas
• Activities that affect the functions of protected areas based on scientific evidence

Businesses/Activities Exempted from AMDAL in Indonesia

Some businesses and activities are exempted from AMDAL:

• Non-commercial technological research and development
• Explorations that do not change the landscape or landform; non-commercial scientific and developments that do not disturb the functions of the protected areas; activities that support the preservation of protected areas
• Activity locations that are included in the KLHS; activity locations that are in relevance to the use of timber forests for the protection of peatland ecosystems; activity locations that are used for emergency disaster responses
• Businesses/activities that involve special economic zones, ports, free-trade areas and industrial areas
• Activities for the environmental restoration in unlicensed areas

Businesses still need to apply for relevant permits even though they are exempted from the compulsory AMDAL. These important permits are the UKL-UPL or SPPL.

Categories of AMDAL

All business sectors and activities that must acquire AMDAL are put into different AMDAL categories, depending on the level and complexity of their impact on the environment:

• Category A: business sectors and activities that are highly sensitive and complex with >9 cumulative values
• Category B: business sectors and activities that are moderately sensitive and complex with 6-9 cumulative values
• Category C: business sectors and activities that are neither sensitive nor complex with <6 cumulative values

Screening Process for Determining if Businesses/Activities are Subject to AMDAL

It is important for relevant business sectors or businesses with related activities to do a self-screening to determine if your business/activities are subject to mandatory AMDAL:

1. Fill out information with regard to relevant business sectors/activities on the form according to Appendix III in Regulation 38/2019.
2. Determine the suitability of the activity location in accordance with related spatial and local regulations.
3. Once you have passed the first two steps, you shall decide if you should secure, AMDAL, UKL-UPL, or SPPL. Then, you need to research your approach to the relevant business/activities subject to the compulsory AMDAL. And finally, you need an AMDAL assessment from the authorities, as well as going through SPPL or UKL-UPL exams.

Consult with Cekindo

Cekindo is one of the top business consulting firms in Indonesia by providing business and legal consultation to businesses. We work directly with the business owners and the top management team to get to know your business from top to bottom in order to provide you with the most suitable advice and solutions.

Still confused about the AMDAL requirements? Simply contact us by filling in the form below.

We are confident that you will receive legal and business advice that allows you to make informed, calculated business decisions.