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A disastrous award?

Environmental NGOs, including the Mining Advocacy Network (Jatam), strongly protested last week the results of a Ministry of Environment audit on 516 companies, since this included an environmental award for PT Lapindo Brantas, allegedly responsible for an environmental disaster.

Activists doubted the audit’s transparency and objectiveness. NGOs protested some audit results and awards, especially those involving companies thought to have a poor record on environmental damage, local community relations and human rights.

State Minister for the Environment Rachmat Witoelar openly questioned the auditing team — which he himself selected — about the validity of published rankings, “as some big companies which have come under public scrutiny were awarded high marks.”

The ministry also has a program to present environmental awards for individuals (Kalpataru) and for cities (Adipura). The awards for cities have also often been controversial.

The NGOs have reason to protest. The inclusion in the award list of gas exploration company PT Lapindo Brantas, which allegedly caused the mud disaster in Sidoarjo, East Java, is very questionable. It is hard for the general public, especially the mudflow victims, to accept that the government gives an environmental award to this company.

The check and balance role of environmental NGOs deserves praise, since the environment is one of our critical problems, but one which receives relatively little attention from government. No matter the shortcomings of the ministry in auditing these companies, the audit is important as a means to encourage state-owned and private companies to improve environmental performance.

Companies are facing more pressure to contain pollution and environmental damage, to adopt environmental targets and go green. Local communities are becoming more courageous and knowledgeable on the environment. Investors and trading partners from advanced countries are more demanding on environmental requirements. Overseas companies are under pressure to be environmentally friendly to follow legislation, maintain their markets, keep good community relations and access bank credits.

On Wednesday, the ministry announced the results of its audit on 516 companies for the 2006-2007 period. These companies voluntarily took part in an environmental rating program, popularly known as Proper. The program classified companies into gold, green, blue, blue minus, red, red minus and black categories. They were judged according to achievements in controlling air and water pollution and in fulfilling environmental impact analyses (Amdal). Corporate social responsibility (CSR) program performance was also included.

There was only one winner in the red category, which went to Bandung-based geothermal firm Magna Nusantara Ltd. The company is praised for its energy-saving efforts. The green category was won by 46 companies, including PT Unilever Indonesia, PT Riau Andalan Pulp and Paper Mill, PT Newmont Nusa Tenggara, PT Indah Kiat Pulp and Paper and PT Astra Daihatsu Motor.

The blue category was won by 180 companies. There are big names in the list, including PT LG Electronics Indonesia, PT Indorama Synthetics, Bandung and Purwakarta and pharmaceutical company PT Otsuka Indonesia. Meanwhile 43 companies were categorized as being in the worst polluter group.

Indonesia has one of the worst environmental records in the world, especially given its poor forestry management. Amid worsening global warming indicators companies are eager to go green either to boost earnings or to win prestige. Many companies have no choice but to produce environmentally friendly products, to meet the demands of increasingly aware buyers.

The ‘Proper’ audit program deserves our support, although since it started in 2003 it remains a voluntary scheme. The government needs to provide incentives, including fiscal rewards to encourage more companies to go green. There should also be sanctions against companies which damage our environment.

The award to PT Lapindo Brantas is a disastrous decision. Perhaps only a few people, including the auditing team members and the company, believe this award is deserved.

The Jakarta Post

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