Water License Bali: The Standard Licensing of Underground Water Use for Hotels and Restaurants

In accordance with Law No. 32 Year 2004 concerning Regional Government, which was later revised to Government Regulation No 3 Year 2005, the tasks of underground water management have become the authority of the mayor or regent.

Underground Water Management

The purpose of underground water management is to realize the utilization of water resources that are sustainable and environmentally developed. Underground water is an alternative solution to be opted for if other water sources are not possible to be used.

Any persons or legal entities conducting exploration and drilling activities that include excavation, plastering and extraction of underground water for various purposes are required to obtain groundwater extraction license. Those activities can only be carried out after obtaining permission from the local government.

Advantages of Extracting Underground Water

Extracting underground water—commonly sourced through wells or boreholes—offers significant advantages, especially in areas with limited access to surface water. Here are some of the key benefits:

Reliable Water Supply

Groundwater remains available even during dry seasons or droughts, making it a dependable resource for residential, agricultural, and industrial use.

Better Water Quality

Naturally filtered through soil and rock layers, groundwater often contains fewer pollutants and requires less treatment compared to surface water sources.

Cost-Effective for Long-Term Use

While the initial setup may require investment in drilling and permits, long-term operating costs can be lower, especially for businesses and farms that need consistent volumes.

Decentralized Access

Groundwater systems can be developed independently of centralized water networks, allowing remote or growing areas to secure their own water sources.

Industrial and Commercial Use

Manufacturing facilities, hotels, and plantations often rely on underground water to meet high water demands while reducing reliance on municipal supplies.

Water License in Bali for Hotels and Restaurants

Businesses engaging in hospitality sector, i.e. restaurants and hotels, that utilise underground water for their business activities must obtain an Underground Water Permit (Surat Izin Pengambilan Air – SIPA).

What is meant by business activities that are related to the use of underground water are drilling activities that are carried out in order to get water at a depth of more than 100 meters, such as drilling wells.

The type of Underground Water Management Permit consists of a Business Permit for Drilling of Underground Water Companies, Drilling Permits, Permit for Drilling of Underground Water, Permit for Drainage of Underground Water, and Permit for Underground Water Exploration.

With regard to the permit, numerous restaurants and hotels in Indonesia, particularly in Bali, have been warned by the local government due to non compliance with the law.

The local government has now strictly carried out, supervised and controlled the extraction of underground water. In doing so, the government has implemented regular checking and collected necessary information directly to the places that are under investigation.

Each permit holder who violates this Regional Regulation can be subject to administrative sanctions in the form of business licenses revocation for underground water drilling companies, sealing of tools and points of water extraction, revocation of permits for extracting underground water, and closure of boreholes or building springs.

2024 Updates of Ground Water Utilization Licensing for Companies

In August 2024, the Indonesian government introduced GR 30/2024, replacing the previous GR 121/2015. This new regulation aims to improve water resource management in response to climate change, population growth, and increasing industrial needs. It also sets a new priority order for using groundwater and surface water: domestic use comes first, followed by agriculture, non-commercial public needs, and finally commercial use as the lowest priority.

Strategic Licensing for Businesses

As part of the transition under the new regulation, businesses must secure the appropriate licenses to ensure compliance with local laws. For commercial groundwater usage, the key permits for groundwater access include:

• Business License: Required for commercial use of groundwater. Non-commercial users may need specific approval depending on the scale and environmental impact of the activity.
• Groundwater Use Permit: Required for industrial businesses that drill wells deeper than 100 meters to extract groundwater.
• Water Resource Management Service Fee (BJPSDA): Businesses must pay a fee to the relevant water authority for using groundwater, except for construction projects that do not involve water extraction.
• Environmental Approval (AMDAL or UKL–UPL): Mandatory for water extraction projects that may cause significant environmental impact.

Obtaining Groundwater Extraction License in Bali: Requirements and Procedure

The Groundwater Use Permit (SIPA) is commonly issued for industries such as mining, bottled water depots, plantations, livestock operations, and public facilities. To apply, businesses must submit their application to the Ministry of Energy and Mineral Resources (ESDM). Below are the required documents to prepare:

• Application form
• Photocopy of applicant’s ID card
• Photocopy of applicant’s and company NPWP
• Photocopy of Drilling Permit (SIP)
• Lithological cross-sectional drawing from well recording
• Cross-sectional image of the drilled well construction
• Photocopy of physical and chemical test results of groundwater
• Minutes of supervision on construction installation and logging
• Minutes of water meter installation
• Minutes of pump installation and discharge test monitoring
• Field inspection report

The timeframe for the local government to issue the permit is 13 working days, provided that you meet all the requirements mentioned above. You are also required to submit payment for the fees in accordance with applicable laws and regulations.

Secure Your Water License in Bali with InCorp

Navigating permits for groundwater access in Bali can be complex—but you don’t have to go through it alone. InCorp Indonesia (an Ascentium Company) offers a comprehensive solution to assist you in securing the required licenses, so your operations run smoothly and stay compliant.

Why Choose InCorp Indonesia?

• Local Expertise: Our Bali-based consultants understand the regional regulations, processes, and authority requirements.
• End-to-End Support: From document preparation to submission and follow-up, we handle the entire process for you.
• Faster Process: With established networks and experience, we help avoid unnecessary delays or rejections.
• Regulatory Compliance Assurance: We ensure your licensing is aligned with the latest government regulations

Get in touch with us by filling in the form below or visit us on-site in Bali. Our other offices are also available in Jakarta, Semarang, Surabaya, and Batam.