In recognition of the threat posed by man-made climate change, governments all over the world are stepping up their efforts to reduce their reliance on fossil fuels. But their urgency to build renewable energy infrastructure must be tempered by a commitment to protect the planet’s biodiversity as well as the full spectrum of human society and culture. The tropical archipelago of Indonesia, with its dense rainforests, exotic wildlife, and large number of indigenous communities is one country that faces a particularly tough balancing act if it is to meet this challenge. Regulatory requirements like AMDAL and ESIA are an attempt to keep sustainability at the heart of renewable infrastructure development in Indonesia.
Sustainable green transition
The world’s ninth largest emitter of greenhouse gasses plans to double its renewables share from around 16% today to 31% by 2030, which will require an enormous investment of time, money, and resources. But to get the go-ahead to start building in the country, developers must conduct an AMDAL study (Analisis Manajemen Dampak Lingkungan, translated as environmental impact assessment), to make sure that the renewable infrastructure needed to meet such ambitious targets is being developed in a sustainable way. Furthermore, funding from international institutions such as the IFC or ADB for development projects in Indonesia is nowadays dependent on the satisfactory completion of an ESIA study (Environmental and Social Impact Assessment), which should address not only the impacts on plants and animals but also on those on humans and their communities.
AMDAL: the national standard
Established in 1982 amid growing concerns for the environmental effects of rapid industrialisation, the AMDAL requirement is necessary for any company seeking an environmental permit to operate in Indonesia. This regulation applies to a broad range of activities including the exploitation of natural resources (renewable and non-renewable); utilisation and production of raw material (both natural and non-natural); or any changing of the form of the environment. To fulfill their AMDAL requirements, companies must also produce a report based on their findings, including an environmental management plan detailing the necessary measures to limit the impact of their activities (ANDAL). These documents must be prepared by a qualified environmental consultant such as those at ESC.
ESIA: the international standard
ESIA is an updated format for what was previously known as an EIA (Environmental Impact Study). Unlike with the previous iteration, an ESIA recognises that the social costs of infrastructure development need to be considered alongside environmental ones and that the impacts on affected communities are kept to a bare minimum. An ESIA study is a multi-stage process beginning with initial screening and scoping phases to determine the extent of assessment required. These are followed by the key assessment phase which should include a Baseline Study, an Impact Evaluation (including the consideration of alternatives), and a Mitigation Study. On completion of these assessments, an Environmental and Social Impact Plan and an Environmental Impact Statement are drawn up. Importantly, at each stage of the process, the affected communities have the opportunity to make their voices heard during public consultations.
Although ESIA is not part of Indonesia’s national regulatory framework, it is a key requirement in the IFC’s Performance Standards, which must be met by any company looking to secure international financing for its development project. ESIA, therefore, acts as an important incentive for developers to leave no stone unturned in their efforts to limit the negative environmental and social impacts of their development projects.
Smoothing the transition with integrated consultancy solutions
ESC has recently successfully conducted both AMDAL and ESIA studies for the laying of a subsea cable through Indonesia’s territorial waters as part of the world’s largest solar power project, as well as for a 70 MW wind power project in central Java. The consultancy firm, therefore, has a proven track record in helping companies get the permits and financing they need to begin their projects in Indonesia. In offering a fully integrated service which promises to deliver both AMDAL and ESIA studies as part of a “package deal”, ESC’s clients benefit from having a single point of contact for dealing with all their issues and concerns surrounding environmental regulatory compliance.
With Indonesia looking to push ahead with its plans to reduce its reliance on fossil fuels in the coming decade, environmental consultants such as ESC are playing an increasingly important role in the country in facilitating energy transition while ensuring that the associated environmental and social impacts are kept in check.