How Does PERMENPUPR 2/2024 Regulate Water Resource Business Licensing?

1.0 The Two-Track System: Business Permits vs Usage Approvals

PERMENPUPR 2/2024 establishes a dual-track framework for regulating access to Indonesia's surface water resources, distinguishing between commercial and non-commercial uses. Article 2(3) specifies: "Perizinan dan persetujuan sebagaimana dimaksud pada ayat (2) meliputi: a. Izin Pengusahaan Sumber Daya Air; dan b. Persetujuan Penggunaan Sumber Daya Air" (Licensing and approvals as referred to in paragraph (2) include: a. Water Resource Business Permits; and b. Water Resource Usage Approvals). The Izin Pengusahaan Sumber Daya Air (Water Resource Business Permit) serves commercial operators who extract or use water for profit-generating activities such as industrial processing, commercial bottling, power generation, or tourism operations. In contrast, the Persetujuan Penggunaan Sumber Daya Air (Water Resource Usage Approval) covers non-commercial activities including agricultural irrigation, community water supply, religious institutions, and public facilities. Article 1(9) defines the business permit as "legalitas yang diberikan kepada pelaku usaha untuk memperoleh dan/atau mengambil Sumber Daya Air Permukaan untuk melakukan kegiatan usaha" (legality granted to business operators to obtain and/or extract Surface Water Resources for conducting business activities). Article 2(4) further clarifies that both permit types operate within the river basin (Wilayah Sungai) framework, ensuring coordinated management across administrative boundaries. This two-track approach balances economic development needs with public access to water resources, applying stricter requirements and fees to commercial users while streamlining processes for non-commercial activities (see Matrix 1.1 below).

Matrix 1.1: Two-Track Water Resource Authorization System Under PERMENPUPR 2/2024

2.0 The Multi-Level Authority Framework: Central, Provincial, and Local Jurisdiction

The regulation distributes water resource licensing authority across three government levels based on river basin classification. Article 2(1) establishes: "Pengelolaan Sumber Daya Air diselenggarakan oleh Pemerintah Pusat, Pemerintah Daerah provinsi, atau Pemerintah Daerah kabupaten/kota sesuai dengan kewenangannya" (Water Resource Management is conducted by the Central Government, Provincial Regional Government, or Regency/Municipal Regional Government according to their respective authorities). The Minister of Public Works and Housing (PUPR) exercises authority over strategic national river basins and those crossing provincial boundaries. Governors hold jurisdiction over river basins crossing regency/municipal boundaries within a single province. Regents and Mayors manage river basins contained entirely within their jurisdictions. Article 2(2) specifies that these authorities "menyelenggarakan proses perizinan dan persetujuan" (conduct licensing and approval processes), creating a unified but decentralized system. The Directorate General of Water Resources (Direktorat Jenderal Sumber Daya Air) serves as the primary implementing body at the national level, while the Balai Besar Wilayah Sungai (BBWS) and Balai Wilayah Sungai (BWS) act as field-level technical implementation units. This distribution ensures that decisions are made at the appropriate level of government while maintaining national standards and coordination (see Matrix 2.1 below).

Matrix 2.1: Authority Distribution for Water Resource Licensing Under PERMENPUPR 2/2024

3.0 The Scope of Regulated Water Sources: Surface Water Resources

Article 3 defines the physical scope of the licensing framework, limiting it to surface water resources. The regulation specifies: "Izin Pengusahaan Sumber Daya Air dan Persetujuan Penggunaan Sumber Daya Air sebagaimana dimaksud dalam Pasal 2 ayat (3) huruf a dan huruf b dilakukan pada Sumber Daya Air Permukaan yang meliputi mata Air, sungai, danau, waduk, rawa, dan sumber Air Permukaan lainnya" (Water Resource Business Permits and Water Resource Usage Approvals as referred to in Article 2 paragraph (3) letters a and b are conducted on Surface Water Resources including springs, rivers, lakes, reservoirs, swamps, and other Surface Water sources). This enumeration excludes groundwater (air tanah), which falls under separate regulations administered by the Ministry of Energy and Mineral Resources (ESDM). Article 6(1) further specifies that water resource business operations can occur at three spatial configurations: "a. titik atau lokasi tertentu pada Sumber Air" (specific points or locations on Water Sources), "b. ruas tertentu pada Sumber Air" (specific stretches of Water Sources), or "c. bagian tertentu dari Sumber Air" (specific portions of Water Sources). This spatial precision enables regulators to manage multiple water users on the same water body while preventing conflicts and ensuring sustainable extraction levels. The distinction between point, stretch, and portion allocations allows for varied commercial activities from intake structures to river-based tourism operations (see Matrix 3.1 below).

Matrix 3.1: Surface Water Sources Covered Under PERMENPUPR 2/2024

4.0 The Technical Review Process: Verification Teams and Requirements

Chapter II establishes the technical review procedures for business permit applications, centering on the Tim Verifikasi (Verification Team). Article 1(15) defines this body as "kelompok kerja yang mempunyai tugas melakukan pemeriksaan berkas permohonan izin atau persetujuan dan penyiapan keputusan pemberi izin atau persetujuan yang terdiri atas unit kerja yang mempunyai tugas di bidang hukum, unit kerja yang mempunyai tugas di bidang penyelenggaraan perizinan, dan unit kerja terkait apabila diperlukan" (working group tasked with examining permit or approval application documents and preparing permit or approval granting decisions consisting of work units with responsibilities in the legal field, work units with responsibilities in licensing implementation, and related work units if necessary). Applications must include technical recommendations (Rekomendasi Teknis) from water resource managers, defined in Article 1(11) as "saran serta batasan-batasan yang diberikan oleh pengelola Sumber Daya Air yang secara langsung berhubungan dengan rencana penggunaan Sumber Daya Air" (suggestions and limitations provided by Water Resource managers directly related to Water Resource usage plans). The verification process ensures that applications meet both legal requirements and technical feasibility standards, with water availability assessments conducted by the relevant BBWS/BWS based on river basin hydrology and existing allocations (see Matrix 4.1 below).

Matrix 4.1: Technical Review Components Under PERMENPUPR 2/2024

5.0 The Compliance Framework: Sanctions and Supervision

Chapters VII and VIII establish the supervision and enforcement mechanisms. Business permit and usage approval holders must comply with the terms specified in their authorizations, including water volume limits, extraction schedules, and environmental protection measures. The Pembinaan dan Pengawasan (Supervision and Monitoring) provisions in Chapter VII empower authorities to conduct inspections, request reports, and verify compliance through field assessments. Chapter VIII specifies administrative sanctions (Sanksi Administratif) for violations, which may include written warnings, temporary suspension, permit modification, or complete revocation. Article 4(4) references the permit cancellation procedures: "Pembatalan Izin Pengusahaan Sumber Daya Air atau Persetujuan Penggunaan Sumber Daya Air" can occur when holders violate terms, misrepresent information, or fail to utilize the authorized water resources within prescribed timeframes. The multi-tiered sanction system provides graduated responses proportional to violation severity, distinguishing between administrative non-compliance (minor documentation issues) and substantive violations (exceeding water allocations, environmental damage). This compliance framework supports the broader goal of sustainable water resource management while maintaining operational certainty for legitimate permit holders (see Matrix 5.1 below).

Matrix 5.1: Compliance and Enforcement Framework Under PERMENPUPR 2/2024

Regulation Reference

Full Citation:
Peraturan Menteri Pekerjaan Umum dan Perumahan Rakyat Nomor 2 Tahun 2024 tentang Tata Cara Perizinan Berusaha Penggunaan Sumber Daya Air

English Translation:
Ministerial Regulation of Public Works and Housing Number 2 of 2024 on Procedures for Water Resource Usage Business Licensing

Short Citation:
PERMENPUPR 2/2024

Legal Basis: UU 17/2019 tentang Sumber Daya Air; PP 30/2024 tentang Pengelolaan Sumber Daya Air

Official Source: https://peraturan.bpk.go.id/Details/285393

Legal Analysis by the CRPG Environmental Law Team | Analysis Date: November 26, 2025 | Regulation Status: Active (Berlaku)

LEGAL DISCLAIMER: This article is provided for informational and educational purposes only and does not constitute legal advice, legal opinion, or professional consultation. The analysis presented herein is based on the authors' interpretation of PERMENPUPR 2/2024 and related regulations as of the publication date and may contain errors, omissions, or inaccuracies despite reasonable efforts to ensure accuracy. Laws and regulations are subject to amendment, judicial interpretation, and administrative clarification that may affect the applicability or interpretation of the provisions discussed. This article does not create an attorney-client relationship between the authors, the Center for Regulation, Policy and Government (CRPG), and any reader. Readers should not act or refrain from acting based solely on the information contained in this article without seeking appropriate legal counsel from qualified Indonesian legal practitioners licensed to practice environmental and water resources law. The application of water resource licensing provisions depends on specific factual circumstances including river basin classification, water source type, intended use category, extraction volume, business classification, and environmental impact assessment, all of which require case-specific legal analysis. Neither the authors nor CRPG assume any liability for actions taken or not taken based on information in this article, nor for any direct, indirect, incidental, consequential, or punitive damages arising from use of or reliance on this material. For specific legal guidance on water resource business permits and usage approvals, consult with qualified legal counsel familiar with Indonesian environmental and administrative law and current regulatory practice.

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