United NationsDepartment of Economic and Social Affairs Sustainable Development

Indonesia

INDONESIA-8 MAY 2006, CONFERENCE ROOM #4 PM
Contribution of private sector and other stakeholders in addressing air pollution, and
atmospheric problems, combating climate change and promoting industrial
development
STATEMENT BY
MR. DANA A. KARTAKUSUMA
ASSISTANT MINISTER, TECHNOLOGY AND SUSTAINABLE DEVELOPMENT
MINISTRY OF ENVIRONMENT OF THE REPUBLIC OF INDONESIA
8 May 2006, 10.00 am ? 01.00 pm, Conference Room 4
The role of private sector in investment for energy and industrial development
is of paramount importance in Indonesia. Indonesia has long been promoting
good governance at private sector in environment management through a
number of programs like the Industrial Rating (Proper) Program, the Cleaner
Production Program, and through indirect measure such as the cooperation
between the Indonesian Central Bank (Bank Indonesia) with the Ministry of
Environment.
Through the Industrial Ratings Program which is mandatory to medium to high
scale companies, companies are pushed towards the application of a Corporate
Social Responsibility (CSR). Companies ?voluntarily? engaged in the CSR
through a variety of program leading to community development programs with
community empowerment objectives. Through such programs, it is expected
that the day-to-day life of companies will unite with the activities of the local
community and thus, be accepted locally.
The cleaner production program in Indonesia also promote active role of the
private sectors in innovation of environmentally sound technology which could
reduce the operation cost and thus generating source of fund to be used for
community development purposes.
A Memorandum of Understanding (MoU) between the Minister of Environment
(MoE) and the Governor of the Central Bank has been signed last year. The
purpose of the MoU is to promote green investment through the impose EIA to
medium-high scale projects as well as to promote the CSR from the part of
companies participating in the Proper Program. The Central Bank, in
cooperation with Commercial Banks and the MoE, will review the environment
performance of companies who get funding from the banking system.
Companies are then monitored in their environment performance which could
bring them getting incentive from the Government.
It is to be noted, however, that some multinational companies, although
engaging themselves in such investments for environment management, are
reluctant in participating in Proper Program, which drives the Government in
getting them involved by regulation as not to give an impression of bad
governance.
In terms of potential CDM projects, the Government has established its DNA
and the DNA has encouraged private sectors to take benefit of the CDM scheme.
A number of CDM projects have therefore been submitted for approval by the
Indonesian DNA, one of which has been submitted to the Executive Board in
Bonn.
It is expected that more projects be submitted through the CDM scheme which
will provide funding for investment in cleaner energy and renewable energy
development.
Thank you.
Stakeholders