Cost of environment

During summers like this, residents in Bern, Switzerland, would normally flock to rivers for a swim. But most people in Jakarta, and even Bandung, would never do such a thing due to the pollution, at least for the foreseeable future. Then, we blame ourselves for being poor, having no resources to clean our air, water and land, or just to reduce the existing pollution to a globally acceptable standard.

Therefore, we applaud the environmental audit by the Office of the State Minister of Environment of selected companies, under its Company Environmental Management Assessment Program (PROPER), as a way to reduce pollution produced by factories, mining concerns and other corporations.

This PROPER audit, which has been on since 2002, is a continuation of the PROPER PROKASIH, which was suspended in 1998 due to the economic crisis. Unlike PROPER PROKASIH, which focused only on companies' efforts to control water pollution, PROPER focuses on efforts to control both water and air pollution as well as on toxic waste management (B3).

The 2004-2005 PROPER audited a total of 466 selected companies, up from 251 companies in 2003-2004 and only 85 in 2002-2003. These companies were ranked into color-coded groups in declining order: gold, green, blue, red and black -- with gold showing exemplary environmental performance and black being substandard performance. This year, not a single company got a gold mark, 23 earned green, 221 blue, 150 red and 72 black. Out of the 72 black companies, 14 were also in the black in the past two PROPER audits.

The environmental office is right in naming good companies in terms of environmental protection and shaming the bad ones. However, the office's move of giving an ultimatum to the 14 black companies to improve their environmental records in one month, or else face prosecution, raised questions, especially a question of urgency. Are they really endangering lives to the point that the government needs to prosecute them within a month? Or, maybe it is just a bluff from Environment Minister Rachmat Witoelar. But, learning from the Newmont (Buyat Bay) case, the ultimatum must be serious.

For most companies, conforming to the environmental rules is not cheap. Many companies, especially those with old production facilities, may be struggling for their financial lives amid tighter competition. Thus, forcing these companies to invest in environmental safeguards could send them into bankruptcy. But here is the trade-off; if we want a cleaner environment we might lose employment and productivity. There is always a price for our political choices, and we need to again look into it carefully, whether it would cost us more than it would benefit us. We need to ask ourselves whether it is fair enough to prosecute these 14 companies. What about other polluters which are not yet being audited under the PROPER program. Also, the timing seems not right as most companies are still recovering from the brunt of the economic crisis.

Moreover, the government also needs to consider the long-term consequences of such a policy. It surely would increase the cost of doing business in Indonesia. While the country is known for its relatively high costs to do business -- for various reasons -- raising the bar on environmental standards would just make the country less attractive for investors. Even the existing companies operating in the country could consider leaving if they are chased away because of their below-par environmental management.

It does not mean that we advocate low environmental standards or not enforcing the standards altogether. We would like to recommend that the government take a holistic approach to our problems. If our goal is to reduce pollution, let's do it, but at the lowest cost possible.

Okay, now we take on polluting companies, but what about pollution from households; millions of which pollutes our rivers more than companies. What about our emissions-spewing cars, which pollute our cities more than companies. If only our people were wealthy enough, we could tax those who dump their household waste into rivers, we could also tax those who consume more fossil fuels. Then, we would have the resources to clean up our environment, and we might be able to swim in the rivers nearby.