Retail and Import Waste Responsibility Under Indonesian EPR Law
Indonesia's extended producer responsibility framework under Ministerial Regulation Number 75 of 2019 (PERMENLHK 75/2019) extends waste management obligations far beyond traditional manufacturing sectors to encompass the retail sector and importers of packaged goods. This regulatory approach recognizes that responsibility for packaging waste must include all actors who place packaged products into the Indonesian market, regardless of whether they manufacture the products themselves or simply distribute goods produced elsewhere. The inclusion of retailers and importers as "producers" under Indonesian environmental law represents a significant expansion of waste management accountability, creating obligations for shopping centers, modern stores, traditional markets, and companies importing packaged goods into Indonesia.
The definitional framework in Article 1 of PERMENLHK 75/2019 establishes this expansive concept of producer responsibility. The regulation defines "Produsen" as "pelaku usaha yang memproduksi barang yang menggunakan kemasan, mendistribusikan barang yang menggunakan kemasan dan berasal dari impor, atau menjual barang dengan menggunakan wadah yang tidak dapat atau sulit terurai oleh proses alam" (business actors who produce goods using packaging, distribute goods using packaging that originate from imports, or sell goods using containers that cannot or are difficult to decompose through natural processes). This definition creates three distinct categories of entities subject to producer responsibility: manufacturers who produce packaged goods, distributors who import packaged goods, and retailers who sell goods using non-degradable containers.
The inclusion of importers within the producer definition addresses a critical gap in traditional manufacturing-focused extended producer responsibility systems. Many products sold in Indonesia are manufactured abroad and imported by domestic distributors. Without including importers in the producer responsibility framework, a significant portion of packaging waste entering the Indonesian market would escape regulatory accountability. By defining distributors of imported packaged goods as "producers," PERMENLHK 75/2019 ensures that waste reduction obligations attach to products at the point they enter Indonesian commerce, regardless of where manufacturing occurred.
Article 3 of PERMENLHK 75/2019 explicitly categorizes the sectors subject to producer responsibility. The regulation states "Produsen sebagaimana dimaksud dalam Pasal 2 meliputi pelaku usaha dan/atau kegiatan di bidang: a. manufaktur; b. jasa makanan dan minuman; dan c. ritel" (Producers as referred to in Article 2 include business actors and/or activities in the sectors of: a. manufacturing; b. food and beverage services; and c. retail). The retail sector stands alongside manufacturing and food service as a primary category of producer responsibility, reflecting regulatory recognition that retail businesses play a critical role in packaging waste generation through their sales activities and provision of shopping bags and containers.
The retail sector categories subject to producer responsibility are specifically enumerated in Article 3(4) of PERMENLHK 75/2019. The regulation identifies three types of retail establishments: "a. Pusat Perbelanjaan; b. Toko Modern; dan c. Pasar Rakyat" (a. Shopping Centers; b. Modern Stores; and c. Traditional Markets). This comprehensive categorization ensures that producer responsibility obligations apply across the entire retail spectrum, from large shopping malls to hypermarkets to traditional wet markets, preventing regulatory arbitrage where businesses might restructure operations to avoid extended producer responsibility requirements.
Shopping centers (Pusat Perbelanjaan) are defined in Article 1(3) as "suatu area tertentu yang terdiri dari satu atau beberapa bangunan yang didirikan secara vertikal maupun horizontal, yang dijual atau disewakan kepada pelaku usaha atau dikelola sendiri untuk melakukan kegiatan perdagangan barang" (a certain area consisting of one or several buildings constructed vertically or horizontally, which are sold or leased to business actors or self-managed to conduct goods trading activities). This definition encompasses traditional shopping malls, strip malls, and mixed-use commercial developments where multiple retail vendors operate within a managed property. Shopping center operators bear producer responsibility for waste generated within the facility, creating incentives to implement building-wide waste reduction and recycling programs.
Modern stores (Toko Modern) receive detailed definition in Article 1(4) as "toko dengan sistem pelayanan mandiri, menjual berbagai jenis barang secara eceran yang berbentuk minimarket, supermarket, department store, hypermarket ataupun grosir yang berbentuk perkulakan" (stores with self-service systems, selling various types of goods retail in the form of minimarkets, supermarkets, department stores, hypermarkets or wholesale in the form of wholesalers). This category includes the full range of modern retail formats characterized by self-service shopping systems. The specific mention of minimarkets through hypermarkets ensures that producer responsibility scales with business size and impact, applying equally to neighborhood convenience stores and massive hypermarket operations.
Traditional markets (Pasar Rakyat) are defined in Article 1(5) as "pasar yang dibangun dan dikelola oleh Pemerintah, Pemerintah Daerah, swasta, badan usaha milik negara dan badan usaha milik daerah termasuk kerja sama dengan swasta dengan tempat usaha berupa toko, kios, los dan tenda yang dimiliki/dikelola oleh pedagang kecil, menengah, swadaya masyarakat atau koperasi dengan usaha skala kecil, modal kecil dan dengan proses jual beli barang dagangan melalui tawar menawar" (markets that are built and managed by the Government, Regional Government, private sector, state-owned enterprises and regionally-owned enterprises including cooperation with the private sector with business premises in the form of shops, kiosks, stalls and tents that are owned/managed by small, medium traders, community self-help groups or cooperatives with small-scale businesses, small capital and with the process of buying and selling merchandise through bargaining). The inclusion of traditional markets recognizes that these important community institutions generate significant packaging waste and must participate in national waste reduction efforts despite their informal character and limited resources.
The application of producer responsibility to traditional markets presents unique implementation challenges. Unlike shopping centers with professional management or modern stores with corporate systems, traditional markets consist of numerous small independent vendors with limited capital and organizational capacity. The regulatory framework acknowledges this reality by allowing collective compliance mechanisms where market management entities can coordinate waste reduction programs on behalf of individual vendors. This approach balances the need for comprehensive coverage with recognition of the practical limitations facing small-scale traders.
Single-use plastic bags distributed at retail establishments represent a primary focus of producer responsibility requirements. PERMENLHK 75/2019's roadmap establishes progressive restrictions culminating in complete prohibition of single-use plastic shopping bags. The regulation's appendix specifies "Larangan penggunaan: 1. Kantong Plastik; dan 2. Alat Makan dan Minum Sekali Pakai" (Prohibition of use: 1. Plastic Bags; and 2. Single-Use Eating and Drinking Utensils) with effective dates requiring retailers to eliminate these items from their operations. This prohibition directly impacts retail sector compliance, requiring fundamental changes in how stores provide carrying containers to customers.
The retail sector's responsibility for single-use plastic bags connects to broader waste reduction targets. Article 2 of PERMENLHK 75/2019 establishes "pengurangan Sampah oleh Produsen sebesar 30% (tiga puluh persen) dibandingkan dengan jumlah timbulan Sampah di tahun 2029" (waste reduction by Producers of 30 percent compared to the amount of waste generation in the year 2029). This 30 percent reduction target applies equally to retailers, importers, and manufacturers. For retail businesses, achieving this target requires not only eliminating single-use plastic bags but also reducing packaging waste from products sold and implementing comprehensive recycling programs for unavoidable packaging materials.
The material categories subject to retail producer responsibility are specified in Article 4(2) of PERMENLHK 75/2019. The regulation identifies "a. plastik; b. kaleng alumunium; c. kaca; dan d. kertas" (a. plastic; b. aluminum cans; c. glass; and d. paper) as the priority materials requiring reduction efforts. These materials encompass the vast majority of packaging waste generated through retail sales, from plastic bottles and food containers to aluminum beverage cans to cardboard boxes. Retailers must develop strategies addressing each material category to achieve overall waste reduction targets.
Article 4(1) establishes the criteria for materials subject to producer responsibility, stating that waste reduction applies to "produk, kemasan produk, dan/atau wadah yang: a. sulit diurai oleh proses alam; b. tidak dapat didaur ulang; dan/atau c. tidak dapat diguna ulang" (products, product packaging, and/or containers that: a. are difficult to decompose through natural processes; b. cannot be recycled; and/or c. cannot be reused). This criteria-based approach focuses regulatory attention on the most problematic waste streams, particularly single-use plastics and non-recyclable composite materials that create long-term environmental burdens when disposed in landfills or leaked into the environment.
Importers face specific producer responsibility obligations under PERMENLHK 75/2019's framework. Companies importing packaged products into Indonesia must assume responsibility for the packaging waste generated when those products are sold and consumed domestically. This requirement creates direct accountability for foreign manufacturers' packaging choices, transmitted through the importer who serves as the domestic market entry point. Importers cannot disclaim responsibility by pointing to overseas manufacturing; their act of bringing packaged goods into Indonesian commerce establishes full producer responsibility under the regulation.
The practical implementation of importer responsibility presents enforcement challenges. Indonesian environmental authorities must identify and track companies importing packaged goods, verify compliance with waste reduction obligations, and penalize non-compliance. The cross-border dimension complicates enforcement, particularly where importers are small businesses or where products enter through multiple distribution channels. Effective implementation requires coordination between environmental agencies and customs authorities who process import declarations and can identify entities bringing significant volumes of packaged goods into Indonesia.
The foundational legal basis for producer responsibility appears in Law Number 18 of 2008 on Waste Management (UU 18/2008). Article 15 establishes that "Produsen wajib mengelola kemasan dan/atau barang yang diproduksinya yang tidak dapat atau sulit terurai oleh proses alam" (Producers must manage packaging and/or goods that they produce that cannot or are difficult to decompose through natural processes). This statutory requirement provides the legal authority for PERMENLHK 75/2019's detailed roadmap provisions. The regulation operationalizes the general producer management obligation established in statute by specifying reduction targets, timelines, and sector-specific requirements.
Article 14 of UU 18/2008 requires that "Setiap produsen harus mencantumkan label atau tanda yang berhubungan dengan pengurangan dan penanganan sampah pada kemasan dan/atau produknya" (Every producer must affix labels or marks related to waste reduction and management on packaging and/or products). This labeling requirement applies to retailers and importers as well as manufacturers, requiring clear communication to consumers about proper handling and disposal of packaging materials. For importers, this may require adding Indonesian-language labels to products originally packaged for other markets.
The implementation mechanisms for retail producer responsibility combine regulatory requirements with market-based incentives. Retailers can achieve waste reduction targets through multiple pathways: eliminating single-use packaging, substituting biodegradable or recyclable materials, implementing deposit-return systems for beverage containers, establishing take-back programs for packaging materials, partnering with waste banks to facilitate customer recycling, and educating consumers about waste reduction practices. This regulatory flexibility enables retailers to choose compliance strategies suited to their specific business models and customer bases.
Shopping centers have unique opportunities to implement collective producer responsibility compliance mechanisms. A mall operator can establish centralized recycling facilities serving all tenant retailers, coordinate packaging standards across food court vendors, implement building-wide bans on single-use plastics, and conduct consumer education programs reaching thousands of daily visitors. These collective approaches achieve economies of scale impossible for individual retailers operating independently, potentially reducing compliance costs while improving environmental outcomes.
Modern retail chains with multiple locations can leverage corporate systems to achieve efficient producer responsibility compliance. A supermarket chain can negotiate with suppliers to reduce packaging, implement standardized recycling programs across all stores, train employees on waste reduction practices, collect data on waste generation for reporting purposes, and communicate sustainability efforts to customers through marketing channels. The corporate structure of modern retail enables systematic approaches to extended producer responsibility that smaller independent retailers cannot easily replicate.
Traditional markets face the greatest challenges in implementing producer responsibility requirements. Individual vendors typically lack the capital to invest in waste reduction infrastructure, the education to understand complex environmental regulations, or the organizational capacity to document compliance. Effective implementation in traditional markets requires government support through technical assistance programs, provision of shared waste separation facilities, coordination of relationships with waste banks or recyclers, and simplified compliance mechanisms recognizing the realities of small-scale informal commerce.
The consumer interface dimension of retail producer responsibility creates both challenges and opportunities. Retailers serve as the primary point where consumers encounter packaging materials and make decisions about shopping bags, product selection, and waste disposal. Retail compliance with producer responsibility requirements necessarily impacts customer experience through changes in available packaging options, introduction of fees for shopping bags, availability of recycling facilities, and messaging about environmental responsibility. Managing this interface requires retailers to educate customers, address resistance to changes in shopping practices, and frame waste reduction as a shared responsibility rather than an imposition.
Price implications of producer responsibility compliance present competitive concerns for retailers. Investments in recycling infrastructure, substitution of more expensive biodegradable packaging, and labor costs for waste separation represent real expenses that must be absorbed or passed to consumers. Retailers competing primarily on price may resist compliance if enforcement is uneven, creating incentives to free-ride on competitors' compliance efforts. Effective regulatory implementation requires consistent enforcement across all retail categories, preventing compliant retailers from suffering competitive disadvantage.
The monitoring and reporting requirements for retail producer responsibility create administrative burdens scaled to business capacity. Large shopping centers and modern retail chains can deploy corporate sustainability staff to track waste generation, document reduction efforts, and submit compliance reports. Small traditional market vendors cannot realistically meet sophisticated reporting requirements. Regulatory systems must therefore employ graduated compliance mechanisms, with simplified reporting for small businesses and detailed documentation requirements for larger retail operations with professional management capacity.
Verification of retail compliance with producer responsibility obligations requires on-site inspection and waste auditing. Environmental authorities must visit retail establishments to observe actual practices regarding shopping bag distribution, availability of recycling facilities, implementation of packaging reduction measures, and coordination with waste banks or recyclers. These inspections must cover the full spectrum of retail formats from luxury shopping malls to neighborhood wet markets, requiring inspection resources far exceeding what manufacturer-focused extended producer responsibility systems demand.
The integration of retail producer responsibility with upstream packaging design decisions creates potential for systemic waste reduction. When retailers bear responsibility for packaging waste, they gain incentives to pressure manufacturers and importers to reduce packaging, use recyclable materials, and design for easy disassembly and material separation. This supply chain pressure can drive packaging improvements beyond what direct regulation of manufacturers alone achieves, particularly for imported products where Indonesian authorities have limited direct influence over foreign manufacturing practices.
Recent implementation experience reveals significant variation in retail sector compliance with producer responsibility requirements. Major shopping centers in Jakarta and other large cities have implemented comprehensive waste reduction programs including recycling facilities, plastic bag bans, and partnerships with waste banks. Modern retail chains have announced corporate sustainability commitments aligned with PERMENLHK 75/2019 targets. However, smaller retailers and traditional markets lag substantially in compliance, reflecting resource constraints and limited enforcement capacity in the complex retail sector.
The role of industry associations in facilitating retail producer responsibility compliance merits attention. Organizations representing shopping center operators, supermarket chains, and traditional market vendors can develop sector-specific guidance, coordinate collective compliance mechanisms, facilitate relationships with recyclers and waste processors, represent member interests in regulatory discussions, and promote best practices. Regulatory frameworks should engage these associations as implementation partners rather than treating every retail establishment as an independent compliance unit.
Looking forward, the success of retail producer responsibility under PERMENLHK 75/2019 will depend substantially on enforcement consistency and fairness. Retailers and importers are more likely to invest in genuine compliance if they observe that competitors face similar requirements and that non-compliance carries real consequences. Selective enforcement that targets visible large retailers while ignoring small shops and informal vendors will undermine the regulation's legitimacy and effectiveness. Building comprehensive enforcement capacity across the diverse retail sector represents a significant ongoing challenge for Indonesian environmental authorities.
In conclusion, the inclusion of retailers and importers within Indonesia's extended producer responsibility framework under PERMENLHK 75/2019 represents a significant expansion of waste management accountability beyond traditional manufacturing sectors. By defining distributors of imported packaged goods and retailers selling products in non-degradable containers as "producers" subject to waste reduction obligations, the regulation creates comprehensive coverage of all pathways through which packaging waste enters the Indonesian market. The specification of shopping centers, modern stores, and traditional markets as retail categories subject to producer responsibility ensures that waste reduction efforts extend across the full spectrum of Indonesian commerce from luxury malls to neighborhood wet markets. The foundational producer management obligations established in UU 18/2008 provide statutory authority for these detailed regulatory requirements. Implementation challenges include the administrative burden of tracking numerous small retailers, enforcement consistency across diverse retail formats, competitive concerns about compliance costs, and the unique difficulties facing traditional markets with limited organizational capacity. The consumer interface dimension of retail producer responsibility creates opportunities for widespread education and behavior change but also risks resistance if customers perceive waste reduction measures as inconvenient or expensive. As Indonesia works toward the 30 percent waste reduction target established for 2029, the effectiveness of retail and importer compliance with extended producer responsibility requirements will prove critical to achieving national waste management goals and reducing the flow of packaging materials to landfills and the environment.
Official Regulation:
PERMENLHK 75/2019: https://peraturan.bpk.go.id/Details/133334
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