wastewater audits indonesia

The Rise of Wastewater Audits for Hotels, Villas and Restaurants in Indonesia

  • InCorp Editorial Team
  • 16 June 2018
  • 4 minutes reading time

Nowadays, besides China, people are talking about the archipelago nation of Indonesia with its astounding growth. This paradigm shift has offered many opportunities for the hotel industry.

For the case in Nusa Dua, Bali and its surrounding areas, there is a turnover of US$400 million as a result of domestic and international events held in or around the areas, according to Gapura Bali.

Despite the glamour and reasonable profit, hotels in Indonesia, especially in the popular tourist and start-up paradise Bali, are being urged to join the wastewater treatment movement with necessary licensing and facility. This is because one of the major concerns in hotel development is wastewater management. Its regulations on the local level are still inadequate.

In Indonesia, the lack of a comprehensive wastewater facility and legislation jeopardises sustainable hotel and urban development.

Wastewater Treatment Plant

IPAL (Instalasi Pengolahan Air Limbah), also known as WWTP (wastewater treatment plant), is a wastewater treatment technology.

It is designed to dispose of biological and chemicals pollutants that are unable to be broken down in nature—pathogenic microbes, organic compounds, and suspended solids—from water, so that the water can be utilised on other activities.

IPAL License

An IPAL license is a mandatory license for all hotels, villas and restaurant. An audit—which was not done previously—has to be conducted as well to safeguard the compliance, confirmed by Badung Environment and Hygiene Agency (DLHK).

This IPAL license is very critical in addressing the environmental issues in Indonesia and definitely a positive step for the overall well-being and development of the country.

Wastewater Law in Indonesia

According to Asian Development Bank, currently, there are no specific and comprehensive wastewater management regulations in Indonesia. An example would be a law similar to the European Council Directive 91/271/EEC of 21 May 1991 regarding wastewater treatment in urban areas.

The only legal information relating to wastewater that can be found is as follows: the decision of the Minister of the Environment No. 112/2003 regarding domestic wastewater quality standards; the regulation of the Minister of Environment No. 3/2010 in regards to the standard quality of industrial zone sewage; and the decision of the Minister of the Environment for effluent standards of domestic wastewater.

In addition to those, there is a number of specific ministerial decisions and regulations available in Indonesia for certain industrial sectors. Some provincial or local laws are also established more demanding standards.

Therefore, it is always advisable to engage a consultant to make clear of the ambiguous requirements for your IPAL license application.

Factors of Non-Compliance in Wastewater Treatment

Factors for hotel’s non-compliance of wastewater and pollutant management are in the following:

  • Cost: some hotels are trying to minimise the commitment cost. The monthly tariff does serve as a major hurdle in the adoption of wastewater treatment.
  • The lack of experienced and knowledgeable technicians and operators for IPAL.
  • Poor or malfunction IPAL design that does not meet the load capacity of wastewater generated by hotels. This usually happens due to IPAL designed by inexperienced consultants engaged by the hotel or endorsed by the local authority.
  • Stringent effluent standards occur in some provincial regions.

Basic Requirements for IPAL Application

Basic requirements for IPAL application in Indonesia for industries and enterprises include:

  • Effluent standard
  • Environmental Impact Assessment (EIA) and economic instrument
  • IPAL licensing and permit
  • Compliance supervision, law enforcement
  • Technical guidelines and assistance

Cekindo, a professional consulting agency with offices in Jakarta, Bali, and Semarang, has set itself the mission to provide professional IPAL license application and consulting services for hotels and other industries. Talk to us now, and we can help you in your sustainable business development in Indonesia.  

Verified by

Hotdo Nauli

Senior Legal & Delivery Manager at InCorp Indonesia

Hotdo heads the Legal and Delivery team at InCorp Indonesia, managing Product Registration, Legal Advisory, and Business Licensing. With over 8 years of experience, she focuses on compliance and integrity, ensuring all client operations align with Indonesian laws and regulatory standards, including contract reviews and sector-specific licenses. She is also a licensed advocate and a member of the Indonesian Advocates Association (PERADI). 

Frequently Asked Questions

    In Indonesia, employment arrangements are categorized into temporary employment agreements (PKWT) and permanent employment agreements (PKWTT). Temporary contracts are for short-term, seasonal, or experimental work, while permanent contracts are for continuous employment.

    In Indonesia, the licensing system has been updated with the implementation of the Omnibus Law. Businesses are categorized into four risk levels based on the PMA company classification. Licensing requirements vary accordingly, with three main types:

    • Business Identification Number (NIB)
    • Low-risk businesses needing only an NIB

    • Standard Certification
    • Standard Certification is necessary for medium-low and medium-high-risk businesses
    • Licenses/Permits

    High-risk businesses require licenses/permits
    Additionally, basic requirements, including business location, must be met. Many licensing processes are facilitated through the Online Single Submission (OSS) platform managed by the Investment Coordinating Board (BKPM).

    In Indonesia, a PMA company is typically required to submit various reports to relevant authorities, such as:

    • Annual financial report
    • Investment realisation report
    • Manpower and employee welfare report
    • Expatriate utilisation report
    • Company loan repot
    • Foreign exchange and prudential principles report

    However, depending on the business activities and classification relevant authority may require additional reports from a PMA company.

    Dividends can be distributed from company net profits after allocating reserves, depending on a positive profit balance. Approval from the general meeting of shareholders is necessary. Interim dividends may be distributed if specific requirements are met.

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