Environmental Administrative Fines in Indonesia: The Investment-Based Penalty System and Pollutant Load Calculations Under PP 22/2021

Executive Summary

Government Regulation No. 22 of 2021 (PP 22/2021) establishes a comprehensive administrative fine framework for environmental violations through BAB XI Paragraf 4 (Articles 514-520). The system links penalties to measurable factors including investment values and pollutant load calculations, creating proportional consequences that scale with violation severity and operator size.

The regulation identifies seven distinct violation categories triggering administrative fines, ranging from operating without environmental approval to negligently causing pollution. Calculation methods vary by category, from percentage-of-investment formulas to pollutant load unit calculations that multiply concentration exceedances by flow rates and violation duration.

A maximum cap of Rp 3 billion applies across most categories, ensuring significant deterrent effect while preventing potentially disproportionate penalties for very large investments. Administrative fines constitute non-tax state revenue deposited to the state treasury, integrating environmental enforcement into national revenue frameworks.

The system applies fines concurrently with government coercion measures rather than as alternatives. This dual application ensures violators face both financial consequences and compulsory compliance measures, addressing both deterrence and remediation objectives simultaneously.

Background & Context

Administrative sanctions serve as the primary enforcement mechanism for environmental regulation in Indonesia's business licensing system. While criminal prosecution addresses the most serious violations, administrative sanctions including fines, license suspension, and license revocation handle the majority of compliance failures within regulatory frameworks.

The challenge in designing administrative fine systems lies in creating proportional consequences. Flat penalty amounts may prove trivial for large corporations while devastating small businesses for equivalent violations. Percentage-based calculations tied to investment values address this by scaling penalties to operator capacity, though they require caps to prevent extreme outcomes.

Environmental violations present additional calculation challenges because harm often relates to pollution quantities rather than business size. The pollutant load approach in PP 22/2021 addresses this by calculating fines based on actual pollution exceedance, creating direct connection between environmental impact and financial consequence.

The regulation also distinguishes between violations with and without environmental harm, recognizing that procedural violations like operating without proper documentation differ fundamentally from violations actually causing pollution or damage. This distinction influences both which violation category applies and how penalties are calculated.

Key Provisions

Seven Violation Categories

The regulation identifies seven distinct categories triggering administrative fines based on violation type and circumstances.

Pasal 514 Ayat 1:

"(1) Penanggung jawab Usaha dan/atau Kegiatan dikenai denda administratif sebagaimana dimaksud dalam Pasal 508 ayat (1) huruf c dengan kriteria: a. tidak memiliki Persetujuan Lingkungan namun telah memiliki Perizinan Berusaha; b. tidak memiliki Persetujuan Lingkungan dan Perizinan Berusaha; c. melakukan perbuatan yang melebihi Baku Mutu Air Limbah dan/atau Baku Mutu Emisi, sesuai dengan Perizinan Berusaha; d. tidak melaksanakan kewajiban dalam Perizinan Berusaha terkait Persetujuan Lingkungan; e. menyusun Amdal tanpa sertifikat kompetensi penyusun Amdal; f. karena kelalaiannya, melakukan perbuatan yang mengakibatkan dilampauinya Baku Mutu Udara Ambien, Baku Mutu Air, Baku Mutu Air Laut, baku mutu gangguan, dan/atau Kriteria Baku Kerusakan Lingkungan Hidup, yang tidak sesuai dengan Perizinan Berusaha terkait Persetujuan Lingkungan yang dimilikinya; dan/atau g. melakukan perbuatan yang mengakibatkan Pencemaran Lingkungan Hidup dan/atau Kerusakan Lingkungan Hidup, di mana perbuatan tersebut dilakukan karena kelalaian dan tidak mengakibatkan bahaya kesehatan manusia dan/atau luka dan/atau luka berat, dan/atau matinya orang."

Categories include operating without Environmental Approval, operating without any permits, exceeding pollution standards, violating license obligations, preparing AMDAL without certification, negligently exceeding ambient quality standards or damage criteria, and causing pollution or damage through negligence not resulting in human harm.

Investment-Based Penalties

Operating without proper environmental approval triggers investment-percentage penalties.

Pasal 515:

"(1) Besaran denda administratif dengan kriteria tidak memiliki Persetujuan Lingkungan namun telah memiliki Perizinan Berusaha sebagaimana dimaksud dalam Pasal 514 ayat (1) huruf a dihitung sebesar 2,5% (dua koma lima persen) dikali nilai investasi Usaha dan/atau Kegiatan. (2) Denda administratif sebagaimana dimaksud pada ayat (1) diterapkan paling banyak Rp3.000.000.000,00 (tiga miliar rupiah)."

Operating with Business License but without Environmental Approval incurs a fine of 2.5% of investment value, capped at Rp 3 billion.

Pasal 516:

"(1) Besaran denda administratif dengan kriteria tidak memiliki Persetujuan Lingkungan dan Perizinan Berusaha sebagaimana dimaksud dalam Pasal 514 ayat (1) huruf b dihitung sebesar 5% (lima persen) dari nilai investasi Usaha dan/atau Kegiatan. (2) Denda administratif sebagaimana dimaksud pada ayat (1) diterapkan paling banyak Rp3.000.000.000,00 (tiga miliar rupiah)."

Operating without both Environmental Approval and Business License doubles the percentage to 5% of investment value, also capped at Rp 3 billion. The doubled rate reflects the compounded regulatory failure of proceeding without any proper authorization.

Pollutant Load Calculations

Exceeding pollution standards triggers technically calculated penalties based on actual environmental impact.

Pasal 517:

"(1) Besaran denda administratif dengan kriteria melakukan perbuatan yang melebihi Baku Mutu Air Limbah dan/atau Baku Mutu Emisi sebagaimana dimaksud dalam Pasal 514 ayat (1) huruf c dihitung berdasarkan unit beban pencemar yang melebihi Baku Mutu Air Limbah dan/atau Baku Mutu Emisi sumber tidak bergerak. (2) Unit beban pencemar yang melebihi baku mutu sebagaimana dimaksud pada ayat (1) dihitung berdasarkan selisih konsentrasi aktual Air Limbah atau Emisi dengan konsentrasi baku mutu dikali dengan debit/laju alir dan lamanya waktu pelanggaran. (3) Denda administratif pelanggaran sebagaimana dimaksud pada ayat (2) dihitung secara akumulasi setiap parameter yang dilampaui baku mutunya diterapkan paling banyak Rp3.000.000.000,00 (tiga miliar rupiah)."

The pollutant load formula calculates excess concentration times flow rate times violation duration, applied cumulatively for each parameter exceeded. This creates direct relationship between pollution quantity discharged and financial penalty, with a Rp 3 billion cap.

Tiered License Obligation Fines

Violations of license obligations incur fines based on three severity tiers.

Pasal 518 Ayat 1-2:

"(1) Besaran denda administratif dengan kriteria tidak melaksanakan kewajiban dalam Perizinan Berusaha terkait Persetujuan Lingkungan sebagaimana dimaksud dalam Pasal 514 ayat (1) huruf d ditentukan berdasarkan tingkat pelanggaran: a. ringan; b. sedang; atau c. berat. (2) Tingkat pelanggaran sebagaimana dimaksud pada ayat (1) dengan besaran denda administratif: a. ringan, paling sedikit Rp1.000.000,00 (satu juta rupiah) dan paling banyak Rp5.000.000,00 (lima juta rupiah); b. sedang, paling sedikit Rp10.000.000,00 (sepuluh juta rupiah) dan paling banyak Rp15.000.000,00 (lima belas juta rupiah); atau c. berat, paling sedikit Rp20.000.000,00 (dua puluh juta rupiah) dan paling banyak Rp25.000.000,00 (dua puluh lima juta rupiah)."

Minor violations (ringan) incur Rp 1-5 million per violation. Moderate violations (sedang) incur Rp 10-15 million. Severe violations (berat) incur Rp 20-25 million. Cumulative calculation applies, with an overall Rp 3 billion cap. Appendix XV defines which violations fall into each tier.

AMDAL Certification Penalty

Preparing AMDAL documents without proper certification triggers cost-based penalties.

Pasal 519:

"Besaran denda administratif dengan kriteria menyusun Amdal tanpa sertifikat kompetensi penyusun Amdal sebagaimana dimaksud dalam Pasal 514 ayat (1) huruf e sebesar 10% (sepuluh persen) dari biaya penyusunan Amdal."

Preparing AMDAL without competency certification incurs a fine of 10% of the AMDAL preparation cost, targeting unauthorized consultants who prepare environmental assessment documents without required qualifications.

Revenue Classification and Concurrent Application

Administrative fines integrate into national revenue frameworks and apply alongside other sanctions.

Pasal 514 Ayat 2-3:

"(2) Denda administratif sebagaimana dimaksud pada ayat (1) merupakan penerimaan negara bukan pajak yang wajib disetorkan ke kas negara sesuai dengan ketentuan peraturan perundang-undangan mengenai penerimaan negara bukan pajak. (3) Denda administratif sebagaimana dimaksud pada ayat (1) diterapkan bersamaan dengan paksaan pemerintah."

Fines constitute non-tax state revenue (PNBP) deposited to the state treasury. Critically, fines apply concurrently with government coercion measures, not as alternatives. Violators thus face both financial penalties and compulsory compliance requirements simultaneously.

Implementation & Compliance

For Business Operators

Understanding the fine calculation methods enables informed compliance risk assessment. Investment-based penalties mean larger operations face proportionally larger financial exposure for permit violations, up to the Rp 3 billion cap. Small businesses may reach the cap quickly relative to their investment size at the 2.5-5% rates.

Pollutant load calculations create ongoing exposure for operations discharging wastewater or emissions. Each parameter exceedance accumulates fines based on concentration differential, flow rate, and time. Rapid identification and correction of exceedances limits financial exposure under this formula.

License obligation compliance requires understanding which violations fall into minor, moderate, or severe tiers under Appendix XV. Multiple violations accumulate, potentially reaching the Rp 3 billion cap through numerous smaller individual fines.

For Environmental Consultants

AMDAL preparation without proper certification exposes consultants to 10% of preparation cost penalties. Given typical AMDAL costs of tens to hundreds of millions of rupiah for significant projects, this represents meaningful financial risk for uncertified practitioners.

Certification maintenance becomes a business risk management issue beyond professional qualification requirements. The regulatory penalty creates financial consequences for certification lapses beyond mere inability to accept work.

For Regulators

The concurrent application requirement means fines supplement rather than substitute for government coercion measures. Enforcement decisions should apply appropriate coercion measures alongside fine calculations rather than choosing between them.

Pollutant load calculations require monitoring data enabling concentration differential determination. Investment-based calculations require verified investment value documentation. Building enforcement case files requires attention to documentation supporting calculation inputs.

Conclusion

PP 22/2021's administrative fine framework creates proportional financial consequences for environmental violations through sophisticated calculation methods. Investment-based penalties scale with business size while caps prevent potentially extreme outcomes. Pollutant load calculations directly connect pollution quantities to penalty amounts, creating precise relationship between environmental impact and financial consequence.

The seven violation categories cover the spectrum from procedural failures to actual environmental harm, with calculation methods appropriate to each. The concurrent application requirement with government coercion ensures violators face both financial deterrent and remediation requirements simultaneously.

This framework positions administrative fines as meaningful enforcement tools rather than cost-of-doing-business tolls that sophisticated violators can budget and absorb. The integration with national non-tax revenue systems ensures institutional stake in enforcement effectiveness while maintaining legal structure appropriate to administrative rather than criminal proceedings.

Official Source

This article analyzes Government Regulation No. 22 of 2021 on Environmental Protection and Management Implementation (PP 22/2021), specifically BAB XI Paragraf 4 (Pasal 514-520) on Administrative Fines.

The official regulation text can be accessed at:

Primary Source:
PP No. 22 Tahun 2021 - BPK Regulation Portal

Alternative Sources:
- JDIH Kementerian Lingkungan Hidup dan Kehutanan

Official Gazette: Lembaran Negara Republik Indonesia Tahun 2021 Nomor 32

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