5 November, 2015
Legislative framework
1 Do you have any statutes specifically relating to land contamination?
There is a general law on environmental management (which includes contamination), i.e., Law No. 32/2009 on Environmental Management (“Law No. 32/2009”), issued on 3 October 2009. This law replaces Law No. 23/1997 with regard to the same subject.
Law No. 32/2009 mandates the government to revise existing regulations on the environment within the next few years. In the interim, however, existing regulations will remain in force. The following discussions are based on these existing regulations, modified where necessary to take Law No. 32/2009 into account.
According to recent clarification from the Ministry of Environmental affairs, pending new regulations, the ministry will refer to Government Regulation No. 150 of 2000 regarding Control of Contamination of Land Used for Biomass Production specifically for land being used for agriculture, plantation and forestry to produce plants or parts of plants (e.g., flowers, seeds, fruits, leaves, sticks and roots).
2 Is there a definition of contaminated land in your laws?
Government Regulation No. 150 of 2000 defines contamination of land used for biomass production as contamination that changes the basic characteristics of the land and exceeds standard criteria. This should be read in conjunction with Law No. 32/2009, which defines environmental contamination as the insertion of a substance (e.g., organism, substance or energy) into the environment due to human activities such that environmental quality standards are exceeded.
There is currently no general definition of land contamination.
Statutory responsibility for cleanup
3 Are there any cleanup or remediation laws with regard to contaminated land?
There is no specific law/regulation on the cleanup of contaminated soil/land. However, Law No. 32/2009 stipulates the imposition of administrative penalties in the form of recovery actions or the reimbursement of recovery costs and cleanup costs for any environmental damage (which includes land contamination).
The Ministry of Environment issued Ministry of Environment Regulation No. 13/2011 on the Compensation of Environment Contamination or Damage (“MOE Regulation No. 13”). Based on this MOE Regulation No. 13, anyone who is responsible for a violation of law by contaminating/damaging the environment that harms other people and/or the environment or state is required to do certain actions, and/or pay compensation. The actions could be in the form of prevention, countermeasures or recovery of the contaminated environment. The compensation must be calculated by an expert who has the certificate of competence, and/or has done scientific research or has the expertise in the related field of environmental contamination or economic environment valuation.
4 If so:
4.1 Who is primarily responsible for the cleanup?
There is no specific law/regulation on this matter.
Law No. 32/2009 provides that the polluter shall be responsible for the necessary restoration. Law No. 32/2009 provides strict liability in which a party will be strictly liable for losses if the party’s operation has a significant impact and uses hazardous and toxic substances, or generates hazardous and toxic waste. The party can be released from strict liability if it can prove that the pollution and environmental damage were caused by natural disaster or war, force majeure, or a third party’s action.
Government Regulation No. 18/1999 as amended with Government Regulation No. 85/1999 and lastly amended with Government Regulation No. 101/2014 (“GR 101/2014”), which was issued under Law No. 32/2009 on management of hazardous and toxic waste, stipulates that hazardous and toxic waste are supervised from their creation to their ultimate storage and disposal, and licenses are required for the production, transport, storage, processing and land filling of such materials.
Companies are prohibited from disposing of hazardous and toxic (“B3”) waste into the environment without conducting any preliminary processing of the waste. The polluter of hazardous and toxic waste is responsible for the management of such waste from its creation to its ultimate storage and disposal. The government issued Government Regulation No. 30/2009 on the Licensing and Supervision of Hazardous and Toxic Waste Management Procedure. The regulation stipulates that in order to deal with hazardous and toxic waste, a business is required to obtain specific licenses from the governor or regent/mayor.
Based on MOE Regulation No. 13, the management of the business and/or activity that contaminates/damages the environment is the one who is responsible for the clean up.
4.2 If it is the polluter, what happens if the polluter cannot be found? Is the liability passed on to the owner or the occupier?
There is no specific law/regulation on this matter. However, Indonesian environmental law recognizes the principle of joint and several liabilities for environmental damage. This principle may apply when more than one party is involved in environmental damage. Arguably, if the owner or occupier has some participation in the polluter’s operation, it could be held jointly and severally liable.
4.3 If the polluters are both the owner and the occupier (e.g., the landlord and a tenant), how is the liability apportioned between them?
There is no specific law/regulation on this matter. Arguably, the liability can be apportioned based on the degree of participation of the owner and the occupier in the polluter’s operation.
4.4 Does the liability to clean up include historical contamination? If not, who pays for this cleanup?
There is no specific law/regulation on this matter. Arguably, the liability to clean up includes historical contamination. In this case, the current owner and occupier may have to pay for this cleanup if they have participated in certain operations.
Cleanup standards
5 How is it decided whether cleanup is required? For example, are there regulations specifying limits to polluting substances that are
permitted, or is some form of risk assessment carried out?
For land used for biomass production, Government Regulation No. 150/2000 stipulates standard criteria of land contamination in dry land and wet land, which contain some contamination parameters, such as quantity of microbe and land pH.
For general environmental contamination, in practice, the relevant environmental officials could decide on the requirement to clean up as one of the administrative penalties. Before conducting the cleanup, the officials may request an environmental audit on the contaminated land.
6 What level of cleanup is required?
There is no specific law/regulation on the level of a cleanup.
Law No. 32/2009 provides that the purpose of a cleanup is to restore the functions of the environment and includes the following steps:
- Stopping the source of pollution and clearing the air land of any pollutants
- Remedying environmental conditions
- Rehabilitating the environment
- Other remedies as appropriate
These steps are to be further specified by a government regulation which will be issued within the next few years.
Government Regulation No. 150/2000 stipulates certain methods to clean up contaminated land caused by biomass production, among
which are the following:
- Planting plants that are suited to land condition and surrounding environment.
- Conducting amelioration by spreading fertilizer and organic materials.
- Conducting land conservation
In practice, the level of cleanup will depend on the discretion of the officials who ordered the cleanup, that is, to the level that meets the expectation/satisfaction of such officials, with the possibility of a third party challenging this expectation/satisfaction in court.
7 Are there different provisions relating to the cleanup of water?
In general, there is no difference. However, there are more specific provisions in relation to contamination at sea, especially oil spills.
Penalties, enforcement and third-party claims
8 Is it a criminal offense to contaminate land or to own contaminated land? If so, what are the penalties?
It is a criminal offense to contaminate land, although there is no specific criminal offense in relation to the ownership of contaminated land. The criminal offense could occur if such owner contaminates the land that he or she owns (with or without any specific intention).
Any party who intentionally carries out an action resulting in pollution and damage to the living environment (such as contamination of land) is subject to a minimum of three years’ imprisonment and a maximum of 10 years’ imprisonment, and a minimum fine of IDR3 billion (USD300,000). A minimum of five years’ imprisonment and a maximum of 15 years’ imprisonment and a minimum fine of IDR5 billion (USD500,000) can be imposed if the above action has severely injured a person or caused his or her death. Profits arising from these criminal offenses may be forfeited in favor of the Republic of Indonesia.
9 Is it a criminal offense not to comply with the requirement to clean up? If so, what are the penalties?
Law No. 32/2009 does not provide noncompliance with cleaning up as a separate criminal offense.
10 What authority enforces cleanup?
In practice, officials of the Ministry of Environment and Local Environment Office (under the auspices of the governor of the affected province) can enforce a cleanup. Law No. 32/2009 provides for the possibility of enforcement by the local government in line with the local autonomy.
Specifically, the Ministry of Environment has issued Ministry of Environment Regulation No. 2/2013 on the Procedure to Impose Administrative Sanctions in the Sector of Environmental Protection and Management (“MOE Regulation No. 2”). Based on MOE Regulation No. 2, the minister, governor or regent/mayor based on their authority are authorized to enforce cleanup.
11 Are there any defenses?
Law No. 32/2009 stipulates that the polluter can be released from strict liability if it can prove that the pollution and environmental damage were caused by natural disaster or war, force majeure, or a third party’s action.
12 Can third parties / private parties enforce cleanup?
Law No. 32/2009 recognizes the right of the public, including environmental NGOs, to make environmental claims in court or to report environmental problems to law enforcement officials. The claims and reports to the court could include an order for a cleanup at the contaminated site.
Specifically, Ministry of Environment Regulation No. 4/2013 on the Environment Settlement Dispute Procedure (“MOE Regulation No. 4”) stipulates that any one (including a third party/private party) has the right to file a complaint based on the allegation of contamination and/or environment damages to the ministry, governor, regent/mayor, or head of the local institution who is responsible in the environment sector. This complaint may be followed with a settlement of dispute. Based on the complaint or the settlement of the dispute, there might be an order to force a cleanup of the contaminated land.
13 Can third parties claim damages?
The civil court, based on third parties’ claims, can order the polluter to pay damages and/or to conduct certain actions (Article 84 of Law No. 32/2009). It is emphasized in Regulation No. 13 that the polluter can be ordered to pay the damages that were calculated based on the procedure set out in the Annexure of Regulation No. 13. Regulation No. 13 stipulates that in calculating the damages, the expert has to consider whether there has been contamination or damage; who caused the contamination or damage; who suffered the losses due to contamination or damage; land ownership status of the contaminated land; types of loss (direct or indirect); amount of losses; duration of the environmental damage or contamination; types of environmental damage (water, soil or air); and ecosystem value (whether it can be economically assessed or not).
From a civil law perspective, a party may raise a claim on an unlawful act for compensation of damages. The basis of such claim is Article 1365 of the Indonesian Civil Code (ICC), which stipulates that:
“Any unlawful act, which causes loss to other party(ies) will oblige the party who did the unlawful act to compensate for the loss.”
The definition of “unlawful act” is extensive. Article 1366 of the ICC provides that an “unlawful act” includes any negligent or careless act. Under this concept, no element of “intention” is needed for a party to commit an unlawful act (although unlawful acts also include breaches of criminal law, which generally require an element of “intention”).
Pursuant to Article 1367 of the ICC, the polluter may be held liable for the loss and damage associated with the contamination if it can be shown that the losses and damages are caused by:
- the polluter’s assets, including machinery; or
- acts or omissions of the polluter’s employees if an act or omission has been committed by employees while performing their duties within their scope of work as employees of the polluter.
Acquisition of contaminated land
14 Is it a legal requirement in your jurisdiction to conduct investigations for potential contamination in connection with the sale of property?
There is no specific legal requirement in Indonesia on this matter. However, it would be prudent for the purchaser before purchasing a property to conduct proper due diligence on whether there is any potential contamination in the property, and if so, specific actions should be taken to remediate the contamination.
15 Can a party responsible for cleanup under statutory law pass on its cleanup liability to the purchaser?
There is no specific law/regulation on this matter. Arguably, it is possible for the polluter to pass on the cleanup liability to the purchaser, particularly if the purchaser does not have any information on past usage of land and did not conduct any environmental audit/due diligence before the purchase.
15.1 Under the general law?
Yes. It is possible for the polluter to pass on the cleanup liability to the purchaser, particularly if the purchaser does not have any information on past usage of land and did not conduct any environmental audit/due diligence before the purchase.
15.2 Contractually?
The parties can incorporate the liability provisions in their contract. These can include a provision on “Indemnification of Liability,” which states that any liability in relation to the operations, whether caused by gross negligence, willful misconduct, or omission/negligence, is indemnified by the operator. Arguably, the other party can be entitled to bring in the operator as a third party in any civil claim and receive indemnification from it. Please note, however, that this may not enable the other party to evade any criminal or environmental liability, but only to be compensated if it is found liable.
16 Is there anything else about contaminated land that you would bring to the attention of a potential purchaser of that land?
It is recommended that a potential purchaser conduct an environmental due diligence or audit before it purchases the land, to find out, among others, whether the land is contaminated or not and if contaminated, to take action to remediate such contamination. Usually, this due diligence or audit will also be needed for the drafting of the Environmental Impact Analysis (AMDAL) or Environmental Management Efforts (UKL) and Environmental Monitoring Efforts (UPL), which are some of the prerequisites required before the purchaser applies for a license to develop such land further (e.g., for the construction of a building/factory). Further, Law No. 32/2009 provides for an “Environmental Permit,” which will be mandatory for all businesses that are subject to AMDAL, UKL and UPL requirements due to their scope and possible environmental impact.
