Environmental Dispute Resolution in Indonesia: Out-of-Court Mechanisms Including Mediation and Arbitration Under UU 32/2009
Executive Summary
Law No. 32 of 2009 on Environmental Protection and Management (UU 32/2009) establishes a comprehensive framework for environmental dispute resolution in Indonesia through BAB XIII. The law creates a dual-track system where disputing parties may choose between formal court litigation or alternative dispute resolution (ADR) mechanisms conducted outside the court system.
Out-of-court resolution under this framework encompasses mediation and arbitration as primary mechanisms for reaching voluntary agreements between parties. These mechanisms can address compensation amounts, environmental restoration measures, prevention of recurrence, and mitigation of future impacts. However, the law explicitly excludes environmental crimes from ADR processes, reserving criminal matters for formal prosecution.
The framework enables communities and government to establish independent dispute resolution service providers. These institutions provide neutral mediation and arbitration services for environmental conflicts. The voluntary nature of ADR selection means parties retain autonomy over their dispute resolution pathway, though choosing ADR does not permanently waive court access if ADR fails.
Background & Context
Environmental disputes in Indonesia arise from pollution incidents, natural resource conflicts, permit violations, and environmental damage affecting communities and ecosystems. Traditional court litigation for such disputes faces challenges including technical complexity, lengthy proceedings, high costs, and adversarial dynamics that may not serve long-term environmental or community interests.
UU 32/2009 responds to these challenges by formally recognizing and structuring alternative dispute resolution within environmental law. The law reflects international trends toward ADR in environmental matters while adapting mechanisms to Indonesia's legal and social context. ADR can provide faster resolution, lower costs, preserved relationships, and flexible remedies tailored to specific environmental circumstances.
The dual-track approach acknowledges that different disputes may suit different resolution methods. Simple compensation disputes between identifiable parties may resolve efficiently through mediation. Complex technical matters might benefit from arbitration with expert arbitrators. Systemic violations affecting public interests may require court intervention and formal judgments. Parties can assess their circumstances and select accordingly.
Indonesia's decentralized governance creates additional context for environmental ADR. Environmental conflicts often involve local communities, regional businesses, and government agencies at multiple levels. ADR mechanisms can provide forums where these diverse stakeholders negotiate solutions appropriate to local conditions while adhering to national environmental standards.
Key Provisions
Dual-Track Resolution System
The law establishes two parallel pathways for environmental dispute resolution with party autonomy in selection.
Pasal 84:
"(1) Penyelesaian sengketa lingkungan hidup dapat ditempuh melalui pengadilan atau di luar pengadilan. (2) Pilihan penyelesaian sengketa lingkungan hidup dilakukan secara suka rela oleh para pihak yang bersengketa. (3) Gugatan melalui pengadilan hanya dapat ditempuh apabila upaya penyelesaian sengketa di luar pengadilan yang dipilih dinyatakan tidak berhasil oleh salah satu atau para pihak yang bersengketa."
Environmental disputes can be resolved through courts or outside courts. The choice between these pathways is made voluntarily by the disputing parties. Court litigation can only be pursued if the chosen out-of-court resolution method is declared unsuccessful by one or both parties. This sequencing provision means parties who initially select ADR preserve their right to litigate if ADR does not produce satisfactory resolution. The declaration of failure triggers court access rather than requiring complete exhaustion of ADR procedures.
Four Objectives of Out-of-Court Resolution
ADR mechanisms serve specific substantive objectives defined by law.
Pasal 85 Ayat 1:
"Penyelesaian sengketa lingkungan hidup di luar pengadilan dilakukan untuk mencapai kesepakatan mengenai: a. bentuk dan besarnya ganti rugi; b. tindakan pemulihan akibat pencemaran dan/atau perusakan; c. tindakan tertentu untuk menjamin tidak akan terulangnya pencemaran dan/atau perusakan; dan/atau d. tindakan untuk mencegah timbulnya dampak negatif terhadap lingkungan hidup."
Out-of-court resolution aims to reach agreement on four matters: the form and amount of compensation, restoration actions to address pollution or environmental damage, specific measures guaranteeing non-recurrence of pollution or damage, and actions preventing future negative environmental impacts. These objectives ensure ADR addresses both immediate harm through compensation and restoration, and future protection through prevention and mitigation commitments. Agreements can combine multiple objectives tailored to specific dispute circumstances.
Exclusion of Criminal Matters
The law clearly delimits ADR scope by excluding environmental crimes.
Pasal 85 Ayat 2:
"Penyelesaian sengketa di luar pengadilan tidak berlaku terhadap tindak pidana lingkungan hidup sebagaimana diatur dalam Undang-Undang ini."
Out-of-court dispute resolution does not apply to environmental crimes as defined in UU 32/2009. This exclusion reserves criminal prosecution authority to the state through formal judicial processes. Environmental crimes under the law include illegal dumping of hazardous waste, operating without required permits, providing false information, and other violations carrying criminal penalties. Civil compensation claims arising from the same underlying conduct may still proceed through ADR, but the criminal dimension requires separate prosecution.
Mediator and Arbitrator Services
Professional facilitators can assist parties in reaching resolution.
Pasal 85 Ayat 3:
"Dalam penyelesaian sengketa lingkungan hidup di luar pengadilan dapat digunakan jasa mediator dan/atau arbiter untuk membantu menyelesaikan sengketa lingkungan hidup."
Mediator and arbitrator services may be used in out-of-court environmental dispute resolution. Mediators facilitate negotiation between parties without imposing decisions, helping parties identify interests, explore options, and reach voluntary agreements. Arbitrators receive submissions from parties and issue binding decisions that parties have agreed in advance to accept. The choice between mediation and arbitration, or sequential use of both, depends on party preferences and dispute characteristics.
Independent Dispute Resolution Institutions
The framework enables institutional infrastructure for environmental ADR.
Pasal 86:
"(1) Masyarakat dapat membentuk lembaga penyedia jasa penyelesaian sengketa lingkungan hidup yang bersifat bebas dan tidak berpihak. (2) Pemerintah dan pemerintah daerah dapat memfasilitasi pembentukan lembaga penyedia jasa penyelesaian sengketa lingkungan hidup yang bersifat bebas dan tidak berpihak. (3) Ketentuan lebih lanjut mengenai lembaga penyedia jasa penyelesaian sengketa lingkungan hidup diatur dengan Peraturan Pemerintah."
Communities may establish independent and impartial environmental dispute resolution service providers. Central and regional governments may facilitate formation of such providers. Further provisions on these institutions are regulated by Government Regulation. The independence and impartiality requirements ensure these institutions serve neutral facilitation rather than advocacy for particular parties. Community establishment recognizes that local institutions may better understand local environmental and social contexts.
Implementation & Compliance
Parties facing environmental disputes should assess whether ADR suits their circumstances before initiating formal litigation. Considerations include the nature of harm, relationship between parties, technical complexity, desired outcomes, and time sensitivity. Disputes involving ongoing business relationships, localized impacts, and clear causation may particularly benefit from ADR's collaborative approach.
When selecting ADR, parties should clearly define the scope of matters submitted to mediation or arbitration. Written agreements establishing ADR processes should specify the issues to be resolved, the resolution method (mediation, arbitration, or sequential), selection of neutrals, procedural rules, timeline, and treatment of costs. Clear process agreements reduce procedural disputes during resolution.
Mediators and arbitrators for environmental disputes should possess relevant expertise. Technical environmental matters may require neutrals with scientific or engineering backgrounds. Legal complexity may favor lawyer-neutrals. Local community disputes may benefit from neutrals familiar with regional conditions and customs. Parties can specify qualification requirements when selecting neutrals.
Agreements reached through mediation should be documented in writing and signed by all parties. While mediation agreements are contractual in nature, parties may seek court confirmation to enhance enforceability. Arbitration awards generally have binding effect equivalent to court judgments under Indonesian arbitration law, providing strong enforcement mechanisms for arbitrated outcomes.
Conclusion
UU 32/2009's out-of-court dispute resolution framework provides structured alternatives to litigation for environmental conflicts in Indonesia. The dual-track system with voluntary pathway selection respects party autonomy while ensuring court access remains available if ADR fails. The four defined objectives for ADR outcomes ensure agreements address compensation, restoration, prevention, and mitigation comprehensively.
The exclusion of criminal matters maintains clear boundaries between civil ADR and state prosecution authority. Institutional provisions enabling community and government-facilitated dispute resolution services create infrastructure for accessible ADR across Indonesia's diverse regions. For parties facing environmental disputes, this framework offers flexible tools for achieving resolution without the costs and delays of formal litigation.
Official Source
This article analyzes Law No. 32 of 2009 on Environmental Protection and Management (UU 32/2009), specifically BAB XIII (Pasal 84-86) on Environmental Dispute Resolution focusing on out-of-court mechanisms.
The official regulation text can be accessed at:
Primary Source:
UU No. 32 Tahun 2009 - BPK Regulation Portal
Alternative Sources:
- JDIH Kementerian Lingkungan Hidup dan Kehutanan
Official Gazette: Lembaran Negara Republik Indonesia Tahun 2009 Nomor 140
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