Integration of International and Indonesian Standards for Environmental and Social Project Development

Abstract

The common conundrum facing geothermal projects in Indonesia is the combination of environmental and social compliance with the Laws of Indonesia, and with International Guidelines, either from corporate standards or those dictated by project financing bodies, commonly International Finance Corporation (IFC) guidelines to Equator Principles. The two safeguard standards are not incompatible, and smart project planning can deliver both outcomes seamlessly from one effort. An IFC compliant Environmental and Social Impact Assessment (ESIA) document needs to analyze potential project impacts and performance against eight performance standards for environmental and social safeguards. Many of the social standards, particularly those referring to compensation for displacement, either physical or economic and the loss of social amenity are more closely dealt with in the land acquisition process for the project than the AMDAL per se. Recent changes in Indonesian legislation have clarified and streamlined the AMDAL process and have provided guidelines for the land acquisition. Albeit these guidelines are for government projects, they set a standard that moves toward IFC guidelines. It is now easier to nest the interests of International standards and Indonesian legislation in an integrated approach that both serves the project and achieves the objectives of both frameworks.