Tuesday, January 27, 2009


The Company's

Environmental Rating Program

As alternative compliance instrument, PROPER has been acknowledged by many global parties such as the World Bank. PROPER has been one of the case studies at Harvard Institute for International Development (HIID). Since it has being developed in Indonesia in the beginning 1995, PROPER has become a model in several countries in Asia, Latin America and Africa as alternative compliance instrument. In 1996, PROPER received Zero Emission Award from United Nations University in Tokyo.


Ministry of Environment has developed Company's Environmental Performance Rating Program (PROPER) as an alternative compliance instrument since 1995. Initially this instrument has been known as PROPER PROKASIH. It is executed by disseminating company's environmental performance rating to stakeholders at national level.

In return, stakeholders are expected to respond actively by encouraging companies to improve their environmental impact caused by their activities, therefore, can be minimized.

PROPER is not a substitute for the existing conventional compliance instruments such as environmental law enforcement either civil or criminal law. This program is complementary and synergize with other compliance instruments, so that environmental quality improvement efforts can be implemented more efficient and effective.

There are several factors considered in developing this alternative compliance instrument, as follow :

  • Poor compliance level of the companies due to inefficient compliance instruments.
  • Increasing demand on transparency and public involvement in environmental management.
  • The need of incentives for environmental management efforts by companies to create added value of environmental management.
  • There is potential improvement in compliance performance through dissemination disclosing information.

Disclosing company's performance information will drive intensive interaction among companies, workers, communities, consumers, stock markets, investors and related government institutions. In doing so through mass media, stakeholders could be involved publicly and are expected to proactively participate in responding each company's compliance performance according to their respective capacity.

In addition, disclosing of company's compliance performance to public can create incentive and disincentive reputation. Stakeholders will give pressure on the company with poor environmental management performance. On the other hand, good ones will receive appreciation from stakeholders. Based on experiences, disclosing information at national level. Thus, National PROPER will be more effective in increasing company's compliance performance than the similar ones at the provincial or district/city levels.

PROPER is one of government's policies to increase the company's environmental management performance in accordance with regulations. Additionally, PROPER also an accomplishment of transparency and democracy in Indonesia's environmental management. It's application reflects the efforts of Ministry of Environment to implement good governance principles (transparency, fairness, accountability and public participation) in managing the environment.

An Implementation of PROPER is conducted integratedly by involving various stakeholders, from the first stage by formulating of PROPER assessment criteria, selecting appropriate companies, rating assessment, to disclosing of performance rating publicly.

PROPER is aimed to :

  • Improve compliance of companies in environmental management.
  • Improve commitment of stakeholders in creating environmental sustainability.
  • Improve sustainable environmental management performance.
  • Increase awareness of business players to comply with environmental legislation.
  • Reinforce principles: Reuse, Recycle and Recovery in waste management.

Goals of PROPER are :

  • Create better environment.
  • Achieve sustainable development.
  • Create natural resources security.
  • Create conducive and environmentally friendly business climate which prioritize on application of clean production principle or eco-efficiency.

PROPER : Compliance monitoring from Single to Multi Media

PROPER implementation initially was focused on performance rating of compliance of companies participated in PROKASIH (clean water program) in water pollution control system. Performance of compliance only assessed on single media, water pollution management, that was the most feasible approach based on uncomplicated procedures, less time consumption and relatively low cost. This rating, however, did not reflect the overall company's environmental management performance. Which to some extent, created public confusion. In this case, some companies rated as GREEN or BLUE in PROPER PROKASIH, even though they have not yet managed their hazardous waste and air pollution properly.

Due to the lack of conducive national situation resulted by economic and political crisis in 1998-2001, PROPER implementation has been postponed. In order to provide more comprehensive assessment of the performance of the companies. In 2002, assessment also included compliance on water pollution control, air pollution control, hazardous and toxic waste management and implementation of Environmental Impact Assessment (AMDAL). In addition, assessment of beyond compliance performance which includes implementation of environmental management system, waste management and resources conservation and community development have been in place. All these assessments could lead to the measurement of Corporate Social Responsibility (CSR) of the companies.

The benefit of multi media strategy in PROPER is reducing overlapped monitoring activities among units in MOE also in environmental offices in provinces and districts. It also could give comprehensive picture of environmental management performance of the companies. However, it is more complicated than the single-media strategy in terms of data collection from the field, rating analysis by experienced staff, more time-consuming and relatively higher cost.

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