Cost of environment

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.