How Do Bank Sampah Operate Under Indonesian Waste Management Law?

Executive Summary

Bank Sampah (waste banks) are community-based waste management facilities established under Indonesian environmental law to implement reduce-reuse-recycle (3R) principles while promoting circular economy practices. PERMENLHK 14/2021 establishes the regulatory framework for waste banks, introducing a two-tier hierarchy of BSU (Bank Sampah Unit) at neighborhood levels and BSI (Bank Sampah Induk) at district/city levels. The regulation defines waste banks not merely as collection points but as facilities serving three distinct purposes: education, behavior change, and circular economy implementation. Operating under the shared responsibility framework established by PP 81/2012, waste banks may be formed by communities, businesses, or local governments through independent or partnership-based arrangements.

Background: Community-Based Waste Management

Indonesia's waste management legal framework, anchored in Law No. 18 of 2008 (UU 18/2008), recognizes community participation as essential to addressing the nation's waste challenges. PP 81/2012 operationalizes this principle by granting communities legal authority to conduct independent or partnership-based waste handling. PERMENLHK 14/2021, issued by the Ministry of Environment and Forestry in 2021, provides specific requirements and operational procedures for Bank Sampah as formalized community waste facilities.

The regulation emerges from recognition that comprehensive waste management requires integration "from upstream to downstream" using circular economy approaches. Rather than treating waste solely as a disposal problem, the waste bank framework positions waste as an economic resource requiring systematic handling, community education, and behavioral transformation.

Circular Economy Foundation

PERMENLHK 14/2021 introduces Ekonomi Sirkular (Circular Economy) as a formal regulatory concept within Indonesian waste management law. The regulation defines circular economy through its preamble and definitional provisions:

Preamble: Circular Economy Rationale

"Menimbang: a. bahwa pengelolaan sampah perlu dilakukan secara komprehensif dan terpadu dari hulu ke hilir dengan pendekatan ekonomi sirkular oleh pemerintah pusat, pemerintah daerah dan masyarakat, sehingga memberikan manfaat secara ekonomi, sehat bagi masyarakat, dan aman bagi lingkungan; b. bahwa pengelolaan sampah sebagaimana dimaksud dalam huruf a dapat dilakukan secara sinergis melalui bank sampah;"

Considering: a. that waste management needs to be conducted comprehensively and integrated from upstream to downstream using a circular economy approach by central government, local governments, and communities, providing economic benefits, healthy for communities, and safe for the environment; b. that waste management as referred to in letter a can be conducted synergistically through waste banks.

This philosophical foundation establishes three intended outcomes from circular economy waste management: economic benefits, community health, and environmental safety. Waste banks serve as the operational mechanism for achieving these outcomes at the community level.

Pasal 1(5): Circular Economy Definition

"Ekonomi Sirkular adalah pendekatan penerapan sistem ekonomi melingkar dengan memanfaatkan sampah untuk digunakan sebagai bahan baku industri."

Circular Economy is an approach applying a circular economic system by utilizing waste as industrial raw materials.

This definition positions waste not as end-of-life material requiring disposal, but as input material for industrial production. Under this framework, waste banks function as intermediary facilities that collect, sort, and process waste so it can re-enter production cycles as raw materials.

Bank Sampah Definition and Purpose

PERMENLHK 14/2021 defines Bank Sampah with explicit emphasis on its educational and behavioral transformation roles alongside waste handling functions.

Pasal 1(6): Bank Sampah Definition

"Bank Sampah adalah fasilitas untuk mengelola Sampah dengan prinsip 3R (reduce, reuse, dan recycle), sebagai sarana edukasi, perubahan perilaku dalam pengelolaan sampah, dan pelaksanaan Ekonomi Sirkular, yang dibentuk dan dikelola oleh masyarakat, badan usaha, dan/atau pemerintah daerah."

Waste Bank (Bank Sampah) is a facility for managing waste using 3R principles (reduce, reuse, recycle), serving as a means for education, behavior change in waste management, and implementation of Circular Economy, formed and managed by communities, businesses, and/or local governments.

This definition establishes four core characteristics of waste banks:

1. 3R Implementation: Waste banks must implement reduce, reuse, and recycle principles in their operations
2. Educational Function: Waste banks serve as teaching facilities for proper waste management practices
3. Behavior Change: Waste banks aim to transform community waste handling behaviors
4. Circular Economy Vehicle: Waste banks operationalize circular economy principles at the community level

The definition explicitly authorizes three types of entities to establish and manage waste banks: masyarakat (communities), badan usaha (businesses), and pemerintah daerah (local governments). This multi-stakeholder approach enables diverse governance models from grassroots community initiatives to government-sponsored facilities to business-operated programs.

Two-Tier Hierarchy: BSU and BSI

PERMENLHK 14/2021 establishes a hierarchical structure of waste banks based on geographic service areas and administrative coverage.

Pasal 1(7): Bank Sampah Unit (BSU)

"Bank Sampah Unit yang selanjutnya disingkat BSU adalah Bank Sampah yang area pelayanannya mencakup wilayah administratif setingkat rukun tetangga, rukun warga, kelurahan, atau desa/sebutan lainnya."

BSU (Bank Sampah Unit) is a Waste Bank with service area covering administrative regions at the RT (neighborhood), RW (community unit), kelurahan (urban village), or village level.

BSU operates at the most local level, serving neighborhoods (rukun tetangga/RT), community units (rukun warga/RW), urban villages (kelurahan), or villages (desa). These are the frontline waste bank facilities where households and small businesses deposit sorted waste for 3R processing.

Pasal 1(8): Bank Sampah Induk (BSI)

"Bank Sampah Induk yang selanjutnya disingkat BSI adalah Bank Sampah yang area pelayanannya mencakup wilayah administratif kabupaten/kota."

BSI (Bank Sampah Induk) is a Waste Bank with service area covering the administrative region of a district/city (kabupaten/kota).

BSI serves as the main or parent waste bank operating at the district (kabupaten) or city (kota) level. BSI coordinates multiple BSU within its jurisdiction, aggregates collected materials, and facilitates connections with industrial buyers or recycling facilities. The hierarchical relationship enables small neighborhood-level BSU to access larger markets and technical resources through BSI coordination.

This two-tier structure mirrors Indonesia's administrative hierarchy and enables scalable waste management from the household level (BSU) to district-wide coordination (BSI). The regulation does not mandate formation of both tiers, allowing flexible implementation based on local conditions and capacity.

Three Requirement Categories

PERMENLHK 14/2021 establishes three categories of requirements that waste banks must fulfill for formal registration and operation.

Pasal 3: Waste Bank Requirements

"Bank Sampah sebagaimana dimaksud dalam Pasal 2 ayat (3) harus memenuhi persyaratan: a. Pengelolaan Sampah; b. fasilitas Bank Sampah; dan c. tata kelola Bank Sampah."

Waste Banks as referred to in Article 2 paragraph (3) must meet requirements for: a. Waste Management; b. Waste Bank facilities; and c. Waste Bank governance.

These three categories structure the regulatory compliance framework:

Category A: Pengelolaan Sampah (Waste Management)

This category covers the waste handling activities and operational procedures that waste banks must implement. Requirements include proper waste reduction practices, sorting procedures, collection methods, and processing techniques compliant with 3R principles.

Category B: Fasilitas Bank Sampah (Waste Bank Facilities)

This category addresses physical infrastructure requirements including collection areas, sorting spaces, storage facilities, weighing equipment, and record-keeping systems. Facilities must support safe and hygienic waste handling operations.

Category C: Tata Kelola Bank Sampah (Waste Bank Governance)

This category establishes organizational and administrative requirements including organizational structure, operational procedures, financial management, member registration systems, and reporting mechanisms. Governance requirements ensure accountability and transparency in waste bank operations.

The regulation does not specify detailed technical standards for each category in PERMENLHK 14/2021 itself. Detailed requirements are left to implementing regulations and local government technical guidelines, allowing flexibility for different scales and contexts of waste bank operations.

Operational Scope of Waste Banks

PERMENLHK 14/2021 defines what activities waste banks perform and, implicitly, what activities fall outside their operational scope.

Pasal 4: Waste Management at Bank Sampah

"(1) Pengelolaan Sampah sebagaimana dimaksud dalam Pasal 3 huruf a meliputi: a. pengurangan Sampah; dan b. penanganan Sampah. (2) Pengurangan Sampah sebagaimana dimaksud pada ayat (1) huruf a dilakukan melalui kegiatan pemanfaatan kembali Sampah. (3) Penanganan Sampah sebagaimana dimaksud pada ayat (1) huruf b dilakukan melalui kegiatan: a. pemilahan Sampah; b. pengumpulan Sampah; dan/atau c. pengolahan Sampah."

(1) Waste Management as referred to in Article 3 letter a includes: a. waste reduction; and b. waste handling. (2) Waste reduction as referred to in paragraph (1) letter a is done through waste reuse activities. (3) Waste handling as referred to in paragraph (1) letter b is done through: a. waste sorting; b. waste collection; and/or c. waste processing.

This provision establishes that waste banks conduct five types of activities:

1. Pemanfaatan kembali (Reuse): Using waste items for their original or adapted purposes without reprocessing
2. Pemilahan (Sorting): Separating waste by type, material, or recyclability
3. Pengumpulan (Collection): Gathering sorted waste from members or sources
4. Pengolahan (Processing): Basic processing activities such as cleaning, compacting, or preparing waste for sale to recyclers

Notably absent from this list are:
- Pengangkutan (Transportation) to final facilities
- Pemrosesan akhir (Final processing) at disposal sites

This operational scope indicates that waste banks function as intermediate facilities focusing on 3R activities. They do not replace municipal waste collection services or operate final disposal facilities. Instead, waste banks divert recyclable and reusable materials from the waste stream before they reach collection trucks or disposal sites. Non-recyclable residual waste remains the responsibility of municipal waste management systems.

The regulation uses "dan/atau" (and/or) in describing sorting, collection, and processing activities, indicating that waste banks may perform one, two, or all three of these functions depending on their capacity and local needs. This flexibility accommodates different operational models from simple collection points to more comprehensive processing facilities.

Legal Basis for Community Participation

The authority for communities to establish and operate waste banks derives from PP 81/2012, which PERMENLHK 14/2021 implements at a more specific level.

PP 81/2012 Pasal 35: Community Participation

"(1) Masyarakat berperan serta dalam proses pengambilan keputusan, penyelenggaraan, dan pengawasan dalam kegiatan pengelolaan sampah rumah tangga dan sampah sejenis sampah rumah tangga yang diselenggarakan oleh Pemerintah dan/atau pemerintah daerah. (2) Peran serta masyarakat sebagaimana dimaksud pada ayat (1) dapat berupa: a. pemberian usul, pertimbangan, dan/atau saran kepada Pemerintah dan/atau pemerintah daerah dalam kegiatan pengelolaan sampah; b. pemberian saran dan pendapat dalam perumusan kebijakan dan strategi pengelolaan sampah rumah tangga dan sampah sejenis sampah rumah tangga; c. pelaksanaan kegiatan penanganan sampah rumah tangga dan sampah sejenis sampah rumah tangga yang dilakukan secara mandiri dan/atau bermitra dengan pemerintah kabupaten/kota; dan/atau d. pemberian pendidikan dan pelatihan, kampanye, dan pendampingan oleh kelompok masyarakat kepada anggota masyarakat dalam pengelolaan sampah untuk mengubah perilaku anggota masyarakat."

(1) The community participates in decision-making processes, implementation, and supervision in household and household-type waste management activities conducted by the Government and/or local governments. (2) Community participation as referred to in paragraph (1) may include: a. providing suggestions, considerations, and/or advice to the Government and/or local governments in waste management activities; b. providing advice and opinions in formulating household and household-type waste management policies and strategies; c. implementing household and household-type waste handling activities independently and/or in partnership with district/city governments; and/or d. providing education and training, campaigns, and mentoring by community groups to community members in waste management to change community member behavior.

Paragraph 2(c) provides the direct legal authority for communities to conduct waste handling activities, either "secara mandiri" (independently) or "bermitra dengan pemerintah kabupaten/kota" (in partnership with district/city governments). This enables two operational models:

Independent Model: Community groups establish and operate waste banks using their own resources, governance structures, and management systems without direct government involvement beyond regulatory compliance.

Partnership Model: Community groups operate waste banks in cooperation with local governments, which may provide technical assistance, financial support, facilities, or coordination services while communities handle day-to-day operations.

Paragraph 2(d) also authorizes community education and behavior change activities, which aligns with PERMENLHK 14/2021's definition of waste banks as educational facilities. Community waste bank operators are legally empowered to conduct training, campaigns, and mentoring programs aimed at transforming waste management behaviors among their members and broader community.

Partnership Framework (Kemitraan)

PERMENLHK 14/2021 introduces the concept of Kemitraan (Partnership) as a formalized cooperation mechanism for waste bank operations.

Pasal 1(9): Partnership Definition

"Kemitraan adalah kerjasama antara masyarakat, badan usaha dengan pemerintah daerah disertai pembinaan dan pengembangan oleh pemerintah daerah dengan memperhatikan prinsip saling memerlukan, saling memperkuat dan saling menguntungkan."

Partnership (Kemitraan) is cooperation between communities, businesses, and local government accompanied by guidance and development by local government, based on principles of mutual need, mutual strengthening, and mutual benefit.

This definition establishes partnerships as tripartite arrangements involving three stakeholder types: masyarakat (communities), badan usaha (businesses), and pemerintah daerah (local governments). The partnership framework includes two components:

Component 1: Kerjasama (Cooperation)

Parties work together to establish and operate waste banks, potentially contributing different resources: communities provide labor and local knowledge, businesses offer technical expertise or markets for recyclables, and local governments supply regulatory support or infrastructure.

Component 2: Pembinaan dan Pengembangan (Guidance and Development)

Local governments play a specific role in providing pembinaan (guidance, capacity building, training) and pengembangan (development, improvement, scaling) to strengthen waste bank operations. This is not merely passive cooperation but active government support for community and business-led initiatives.

The regulation mandates three partnership principles:

1. Saling Memerlukan (Mutual Need): Each party brings necessary resources or capabilities that others lack
2. Saling Memperkuat (Mutual Strengthening): Cooperation enhances each party's capacity
3. Saling Menguntungkan (Mutual Benefit): All parties gain value from the partnership

These principles establish partnership as genuine collaboration rather than one-sided extraction or purely transactional relationships. For example, a business gaining access to collected recyclables must also provide benefits to the community (such as training or income) and support local government waste reduction goals.

Shared Responsibility Framework

PERMENLHK 14/2021 operates within the broader shared responsibility framework established by Indonesian waste management law.

Pasal 2: Stakeholder Responsibility

"(1) Pemerintah, Pemerintah daerah dan masyarakat bertanggung jawab melakukan pengelolaan Sampah. (2) Sampah sebagaimana dimaksud pada ayat (1) meliputi: a. Sampah Rumah Tangga; dan b. Sampah Sejenis Sampah Rumah Tangga. (3) Dalam melakukan pengelolaan Sampah, Pemerintah, Pemerintah daerah dan masyarakat dapat membentuk Bank Sampah."

(1) The Government, local governments, and communities are responsible for waste management. (2) Waste as referred to in paragraph (1) includes: a. Household Waste; and b. Household-type Waste. (3) In conducting waste management, the Government, local governments, and communities may establish Waste Banks.

Paragraph (1) establishes joint responsibility across three governance levels: Pemerintah (central Government), Pemerintah daerah (local governments), and masyarakat (communities). This shared responsibility framework rejects the notion that waste management is solely a government function. All three stakeholders bear legal responsibility for waste handling.

Paragraph (2) defines the scope of waste covered by waste banks: Sampah Rumah Tangga (household waste from residential sources) and Sampah Sejenis Sampah Rumah Tangga (household-type waste from commercial, industrial, or institutional sources with similar characteristics to household waste). This excludes hazardous waste (B3) and specialized industrial waste requiring different handling protocols.

Paragraph (3) uses "dapat membentuk" (may establish) rather than mandatory language, indicating that waste bank formation is voluntary rather than compulsory. Government, local governments, and communities have the authority and are encouraged to establish waste banks, but no legal obligation to do so exists. This voluntary framework allows waste bank development to proceed based on local conditions, capacity, and stakeholder readiness rather than through top-down mandates.

Waste Bank Types and Waste Covered

While the regulation establishes BSU and BSI as geographic categories, waste banks can serve different source types based on their location and membership structure.

Waste banks may operate in:
- Residential areas: Serving households at RT/RW or kelurahan levels
- Commercial areas: Serving shops, restaurants, and business establishments
- Institutional facilities: Serving schools, government offices, or hospitals
- Industrial areas: Serving factories producing household-type waste

The regulation limits waste banks to handling Sampah Rumah Tangga (household waste) and Sampah Sejenis Sampah Rumah Tangga (household-type waste). Materials typically managed include:
- Paper and cardboard
- Plastic bottles and containers
- Glass bottles and jars
- Metal cans and scrap
- Textiles and clothing
- Organic waste suitable for composting

Waste banks do not handle:
- Limbah B3 (hazardous and toxic waste) requiring specialized permits
- Medical waste from health facilities
- Construction and demolition waste
- Specialized industrial process waste

Regulatory Matrix: Bank Sampah Framework

The following matrix summarizes key regulatory provisions across PERMENLHK 14/2021 and related regulations:

Implementation Context

Several factors influence waste bank operations in practice:

Economic Incentives: Many waste banks operate savings book systems where members receive financial credits for deposited waste based on weight and type. This creates economic incentives for household sorting and waste reduction while generating income for community members.

Market Access: Waste banks aggregate small quantities of recyclables from individual households into larger volumes attractive to recyclers and industries. BSI coordination further improves market access for materials collected by multiple BSU.

Behavioral Change: By making waste management visible and participatory, waste banks transform perceptions of waste from worthless garbage to valuable resource. Regular participation in sorting and depositing waste reinforces environmentally responsible behaviors.

Local Government Support: While waste bank formation is voluntary, many local governments provide support through training programs, facility provision, equipment grants, or recognition schemes (such as Adipura environmental awards) that incentivize waste bank development.

Integration with 3R Targets: PERPRES 97/2017 establishes national waste reduction and handling targets (30% reduction, 70% handling by 2025). Waste banks contribute to achieving these targets by diverting recyclables and compostables from landfills.

Official Sources

Primary Sources:

Related Regulations:
- UU 18/2008: Pengelolaan Sampah (Parent Law)
- PERPRES 97/2017: Kebijakan dan Strategi Nasional Pengelolaan Sampah Rumah Tangga dan Sampah Sejenis Sampah Rumah Tangga

Conclusion

Bank Sampah represent Indonesia's institutionalization of community-based waste management within the formal regulatory framework. PERMENLHK 14/2021 establishes waste banks as multi-purpose facilities serving waste handling, education, and behavioral transformation functions while implementing circular economy principles that reposition waste as industrial raw material. The two-tier BSU/BSI hierarchy enables scalable operations from neighborhood collection to district-wide coordination. The partnership framework balances community autonomy with government support, allowing flexible implementation through independent or cooperative arrangements. Waste banks operate under shared responsibility principles that recognize communities as essential stakeholders in achieving Indonesia's waste reduction targets, with legal authority to conduct independent waste handling activities within defined operational boundaries of reuse, sorting, collection, and basic processing.

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