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August, 2018

Indonesia: Perusahaan Listrik Negara (PLN)Agency-Level Use of Country Safeguard Systems

LD 3: Acceptability Assessment of Environmental Safeguards

DRAFT FOR DISCUSSION ONLY

This assessment is a work in progress, the purpose of which is to encourage an iterative process of feedback and update. When finalized, the Borrower will verify the assessment. The materials are prepared by consultants; hence, ADB does not guarantee the accuracy, reliability, or timeliness of these materials and therefore will not be liable in any capacity for any damages or losses that may result from the use of these materials. ADB, likewise, shall not be responsible for any errors, inadvertent omissions, or unauthorized alterations that may occur in the disclosure of content on this website.

ABBREVIATIONS

ADB − Asian Development Bank

AMDAL − analisis mengenai dampak lingkungan (EIA)

ANDAL − analisa dampak lingkungan/EIS

EIA − environmental impact assessment

EIS − environmental impact statement

EMMP − environmental management and monitoring plan

HSSE

IEE −

−

health, safety, security, and environment

initial environmental examination

ISO − International Organization for Standardization

DIVK3L − Divisi Keselamatan, Kesehatan Kerja, Keamanan dan Lingkungan (PLN Occupational Health, Safety, Security and Environment Division)

MOEF/KLHK − Kementerian Lingkungan Hidup dan Kehutanan/KLHK (Ministry of Environment and Forestry)

PLN − Perusahaan Listrik Negara (State Electricity Company)

PROPER − Program Penilaian Peringkat Kinerja Perusahaan dalam Pengelolaan Lingkungan Hidup/(Program for Pollution Control, Evaluation, and Rating)

RKL-RPL − rencana Pengelolaan Lingkungan Hidup-Rencana pemantauan lingkungan hidup (EMMP)

SPPL − surat pernyataan kesanggupan pengelolaan dan pemantauan lingkungan hidup (commitment letter for environmental management and monitoring)

SPS − Safeguard Policy Statement

UIP − Unit Induk Pembangunan (PLN regional construction units for power generation and transmission)

UKL-UPL − Upaya pengelolaan lingkungan hidup-upaya pemantauan lingkungan hidup (IEE)

UPP − Unit pelaksanaan proyek (PLN project implementation units)

NOTE:

In this document, “$” refers to US dollars.

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ACCEPTABILITY ASSESSMENT OF PLN ENVIRONMENTAL SAFEGUARDS

1. This acceptability assessment for environmental safeguards evaluated the institutional capacity, implementation practices, outputs and outcomes of Indonesia’s State Electricity Company/Perusahaan Listrik Negara (PLN) headquarters and regional offices1 on the basis of compliance with applicable government laws and regulations as well as environmental safeguards procedures established by PLN itself. To fill gaps identified in the acceptability assessment, the Asian Development Bank (ADB) and PLN will agree on specific gap-filling measures to be included in an action plan. I. METHODOLOGY

2. This acceptability assessment employed the following methods:

(i) Literature review. Documents reviewed included PLN sustainability reports, statistics, and reports and other project documentation for power generation plants, transmission lines, and distribution lines constructed and operated by PLN. Additionally, for projects where ADB provided financing to PLN, implementation mission reports, environmental monitoring reports, project completion reports, and program safeguard systems assessments were reviewed.

(ii) Institutional capacity review. This review referenced the acceptability assessment of PLN completed in 2017 as part of an ADB Country Safeguards Review, PLN’s internal regulations related to environmental safeguards, organograms of PLN units that have responsibilities for environmental safeguard application, detailed staffing and budget information provided by PLN, PLN’s capacity development program, and project implementation monitoring reports.

(iii) Project assessments. Selected projects were evaluated to appraise environmental safeguards-related institutional capacity, processes and procedures, and outputs and outcomes. A combination of field visits, interviews, and desk study were completed to assess PLN’s performance in the conduct of environmental assessments and project implementation monitoring. Interviews were completed with affected persons and other stakeholders, PLN officials and field staff, and officials from other government agencies working with PLN on environmental safeguards. All projects assessed were Category A or B, according to ADB’s categorization, and included environmental impact assessments/analisis mengenai dampak lingkungan (EIA/AMDAL) of new projects which posed potential significant impacts, initial environmental examination/upaya pengelolaan lingkungan hidup - upaya pemantauan lingkungan hidup (IEE/UKL-UPL) for new projects which posed less significant impacts, and addendum environmental impact statements/analisa dampak lingkungan (EIS/ANDAL) for expansions of existing projects.

(iv) Focus group discussions and public consultations. The acceptability assessment methodology was explained to stakeholders during focus group discussions. The acceptability assessment findings and action plan have also been discussed with PLN technical staff and management. Additional public consultations conducted to obtain further feedback guided finalization of the acceptability assessment, including the action plan.

1 Regional offices include UIP which are the main development units for power generation and transmission, UPP

which are the project implementation units, and Wilayah which are the PLN operational administrative offices.

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3. The acceptability assessment covers three specific components: (i) Institutional capacity. Institutional capacity refers to PLN’s capacity and

commitment to carry out its responsibilities for complying with the PLN CSS, which encompasses primary environment Law No. 32/2009 on Environmental Protection and Management and its implementing regulations, which include regulations on environmental permits, environmental impact assessment (EIA/AMDAL) criteria, and guidelines for environmental document preparation, other relevant national laws and regulations, and corporate decrees issued by PLN. This component encompasses nine subcomponents: institutional structure, budget, staffing, institutional knowledge management, technical expertise, legal counsel, supporting equipment and facilities, capacity building program in-house training or training center, and supervision and monitoring responsibility.

(ii) Process and procedure. Process and procedure refers to PLN’s safeguards implementation practices and considers the coherence, transparency, consistency, and effectiveness of these practices. This component encompasses twelve subcomponents: compliance with national and PLN regulations and procedures, targets to assess PLN environmental performance, coordination with other bodies responsible for permits and approvals, incorporation of pollution control and hazardous waste handling into environmental management procedures, expertise for conducting environmental assessments, risk assessment, mitigation hierarchy, conduct of meaningful public consultation, grievance redress mechanism, protected areas and biodiversity conservation, screening, and scoping.

(iii) Outputs and outcomes. Outputs refers to the quality of assessment reports and satisfactory implementation of mitigation and monitoring. Outcomes refers to achievement of the PLN CSS objectives. This component encompasses eight subcomponents: content of the study report, quality of analysis, consideration of alternatives, environmental management plan, method for review of content and substance of reports submitted, arrangements for access to assessment and monitoring reports, requirements for implementation and monitoring, and environmental audit.

4. Each subcomponent was rated strong (S), moderate (M), or weak (W), according to the assessment findings.

Environmental Impact Assessment Process 5. The environmental assessment and approval process is established by Law No. 32/2009 on Environmental Protection and Management. Eight separate regulations provide further guidance on the steps that project proponents need to take to assess the environmental implications of proposed projects, and to receive a permit to operate. Figure 1 outlines the main steps in in the process. 6. According to the Minister of Environment Regulation No. 16/2012 Guidelines for Preparation of Environmental Documents, there are three types of instruments that project proponents may need to prepare, depending on the possible scale of impacts. These instruments are known as EIA/AMDAL, IEE/UKL-UPL and a commitment letter for environmental management and monitoring (surat pernyataan kesanggupan pengelolaan dan pemantauan lingkungan hidup/SPPL).

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7. EIA/AMDAL is environmental assessment carried out for projects where there is potential for significant impact. If a project is determined by the Ministry of Environment and Forestry/ Kementerian Lingkungan Hidup dan Kehutanan (MOEF/KLHK) or a relevant District Environmental Agency to require the production of an EIA/AMDAL report, the proponent will also need to include an environmental management and monitoring plan/rencana pengelolaan lingkungan hidup-rencana pemantauan lingkungan hidup (EMMP/RKL-RPL) that indicates how impacts will be managed and/or mitigated, and sets out monitoring requirements during project implementation.

Figure 1: Summary Flow Chart of the Environmental Assessment and Approval Process

8. Law No. 32/2009 provides that an EIA/AMDAL is required for those businesses and/or activities which, amongst other things:

− Change the form and contour of the environment; − Exploit a natural resource (renewable or non-renewable); − May cause environmental pollution and/or damage and/or degradation of natural

resources; − Result in natural and artificial environmental, social and cultural impacts; − Impact the sustainability of a natural resource conservation area and/or the

protection of cultural heritage; − Introduce new species of plants, animals and micro-organisms; − Produce and utilize natural or non-natural raw material;

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− Are high risk activities and/or impact State defense; and/or − Implement new technology which is predicted to have a large impact on the

environment. 9. If a project is determined to have potential impacts that may turn out to be less significant, an IEE/UKL-UPL may be required to obtain environmental approval. An IEE/UKL-UPL has a prescribed form, which includes an:

− Activities plan; − Indication of environmental impact; and − EMMP/RKL-RPL.

10. For projects with potentially little or no impact, project proponents may be required to produce a SPPL, which is a letter stating a commitment to undertake appropriate environmental management and monitoring. 11. Sometimes, PLN projects will consist of a combination of components and associated facilities. In cases such as these, the environmental assessment should be undertaken as if the project were one entity. It should also be noted that businesses that are already licensed and operating, but wishing to extend an existing activity, must complete an addendum EIS/ANDAL and EMMP/RKL-RPL.

II. SUMMARY OF FINDINGS 12. Environmental Safeguards: Summary findings of the acceptability assessment of environmental safeguards completed for PLN are discussed below.

13. A) Institutional capacity of PLN for environmental safeguards was consistently rated as moderate across all subcomponents with some areas requiring attention. Each subcomponent is discussed in the sections that follow. 14. Subcomponent A.1: Institutional Structure

(i) Occupational Health, Safety, Security and Environment Division, Environmental Subdivision

(ii) At the corporate level, the Occupational Health, Safety, Security and Environment Division (DIVK3L) at PLN HQ includes an Environmental Subdivision responsible for environmental safeguards planning and implementation. This subdivision is further divided into the Environmental Planning and Environmental Management departments. The Department of Environmental Planning is responsible for assisting regional construction units (Unit Induk Pembangunan/UIP) and project implementation units (Unit pelaksanaan proyek/UPP) in preparing EIA/AMDAL, IEE/UKL-UPL and EMMP/RKL-RPL during the project planning stage, while the Department of Environmental Management is responsible for supervising and monitoring project operations. In addition to the preparation and evaluation of environmental assessments for new projects prepared by PLN HQ, and assisting the regional units in preparing environmental assessments the Environmental Subdivision is also more generally responsible for (i) preparation and evaluation of environmental management policy, strategy, and standards and procedures, and (ii) coordinating permits administration for forest areas. DIVK3L also coordinates environmental policy and permitting processes. DIVK3L has reporting channels to PLN’s upper management, with the Senior Manager of the Environmental

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Subdivision reporting to the Head of DIVK3L, who then reports to the Director of Human Capital Management, who in turn reports to the PLN President. At the regional levels, the UIP and UPP provide field interface for project level environmental planning and implementation.

(iii) UIP/Regional Construction Units (iv) UIP are responsible for construction of power generation and transmission

infrastructure. There are eighteen UIP at the regional level around the country. Environment staff are posted across two units in each UIP: the General Planning Unit of the Planning Subdivision and the Project Control Unit of the Construction Subdivision. Environment staff in the Planning Subdivision are responsible for preparing, implementing, and evaluating environmental assessments during a project planning phase while environment staff in the Construction Subdivision are responsible for supervising implementation of mitigation measures and monitoring requirements during the construction phase. Environment staff in the UIP planning and construction subdivisions report to the respective deputy managers. Environment staff in the General Planning Unit hand over responsibility for implementing a IEE/UKL-UPL and EMMP/RKL-RPL to their counterparts in the Project Control Unit. All documents relating to environmental safeguards must be submitted through the deputy managers of the respective units to unit managers who report to the UIP General Manager. UIP general managers have primary authority for environmental safeguards at the regional level. They report to their respective regional directors and, in parallel, coordinate with the Director of the Environmental Subdivision of DIVK3L on all issues related to environmental safeguards.

(v) UPP/Project Implementation Units (vi) Under each UIP, there are typically two to three UPP, with the number varying

regionally. In UPP there are environment staff posted to the Engineering Subsection where they are responsible for supporting project planning related preparation of environmental assessments, and for overseeing implementation of mitigation measures and monitoring requirements. UPP environment staff report to the Assistant Manager for Engineering who then reports to the UPP Manager, who in turn reports to the UIP General Manager.

(vii) PLN Wilayah/Regional offices (viii) There are fifteen Wilayah around the country. There is a Supervisor for

Occupational Health, Safety, Security and Environment in each Wilayah, reporting to the Deputy Manager for Operational Control of the Distribution System.

15. PLN is assessed to have a robust, vertically-integrated institutional structure with broadly adequate staffing and sufficient budget to meet current requirements for environmental safeguards. The structure can be considered to be strong and sufficient to fulfill its legal mandate and corporate commitments at both central and operational levels. The institutional capacity for environmental safeguards is assessed as strong to moderate. Staffing levels at DIVK3L are set to increase considerably in the coming year with the transfer of an estimated 400 existing staff from regional offices to PLN headquarters in order to optimize personnel utilization and strengthen DIVK3L into a more powerful and effective entity. Due to PLN’s decentralized structure, the Environmental Subdivision of DIVK3L has only indirect authority to manage and control environmental safeguards application in UIP, UPP and Wilayah, and lacks necessary technical reporting lines, across these levels which may impact efficiency and efficacy, leaving room for improvement in the institutional structure. The assessment recommends further strengthening of the institutional structure and budget in anticipation of the expanded operation, accompanied with

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a strengthening of PLN’s capacity in environmental management and review; particularly in specialized topics. 16. Subcomponent A.2: Budget

(i) PLN HQ maintains the corporate master budget, which includes the budgets for all UIP, UPP, and Wilayah, and allocates funds for environmental management and monitoring activities at all levels: DIVK3L, UIP and UPP, and Wilayah. PLN’s budget for all environment-related work in 2016-17, planning and implementation, was approximately 0.1% of its total corporate budget or approximately $10 million. While this budget may be sufficient to meet PLN’s current requirements, PLN has indicated that additional budget will be allocated at the UIP level for preparation of environmental assessments.

(ii) Budget for DIVK3L Environmental Subdivision (iii) Excluding salaries and the cost of preparing EIA/AMDAL, PLN annually allocates

a budget for DIVK3L. For the year 2016-17, $5 million were allocated for: (i) safety and occupational health, 27%; (ii) security, 57%; and (iii) environment, 16%. Environment included broad activities in the areas of capacity building for creating awareness, advocacy, networking, knowledge dissemination, and fulfilment of donor requirements among other activities.

(iv) Budget for UIP, UPP and Wilayah (v) Each UIP, UPP and Wilayah prepares a detailed annual work plan with project-

specific budgets that include the cost of environmental assessment preparation and implementation.

17. At the corporate level, PLN has a defined system for budget allocation for environment. Current funding allocations by PLN to support DIVK3L, UPP, UIP, and Wilayah operations was found to be satisfactory for present operations. Budget allocations for the preparation and implementation of EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ANDAL, and EMMP/RKL-RPL, if increased, would have a positive impact on the quality of documents produced. 18. Subcomponent A.3: Staffing

(i) At PLN headquarters, based on 2017 figures, the Environmental Subdivision of DIVK3L employs eight full-time staff, three of whom are environmental engineers. At the UIP level there is one environment staff, environmental engineers by training in each unit: General Planning Unit of the Planning Subdivision, and Project Control Unit of the Construction Subdivision. The staffing at the Wilayah level is limited to safety and occupational health, and the function is performed by the supervisor.

(ii) All environment staff in DIVK3L, UIP, UPP and Wilayah are required to meet minimum qualifications, including for environmental safeguards and environmental auditing, as specified in the Competence Directory issued by PLN headquarters. Basic training in EIA/AMDAL is provided for PLN staff through private or public universities and PLN’s Health, Safety, Security and Environment (HSSE) Academy. DIVK3L has recently announced plans to hire additional graduate and post-graduate personnel with qualifications in environmental fields.

19. Staffing levels at DIVK3L are satisfactory and can be considered moderate, though strengthening is required at the UIP and UPP levels where the current levels may be insufficient to meet future demands. Planned staffing increases will address this. Staff competency was found to be moderately satisfactory due to mandatory environmental assessment capacity

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development, although knowledge in specialized areas is limited which impacts the ability to review environmental assessments produced. 20. Subcomponent A.4: Knowledge Management PLN has a dedicated Knowledge Management Unit, which works across PLN through a corporate policy. The Unit’s main duties are to prepare, implement, and evaluate PLN’s knowledge management policy, sharing of innovation and knowledge across PLN, and staff capacity building in competencies. At present, this is more focused on engineering and technical matters. PLN has established a knowledge management portal system to facilitate and accelerate sharing of knowledge, expertise, and experience among staff. UIP and UPP staff regularly use the system to discuss specific issues relating to ongoing projects, through conventional, teleconferencing and web-based media. 21. PLN’s knowledge management system was found to be moderately satisfactory, facilitating knowledge sharing through dissemination of good practice across the company. System content is progressively being expanded beyond engineering and technical themes but can be improved by adding more emphasis on environmental safeguards.

22. Subcomponent A.5: Technical Expertise DIVK3L environment staff prepare the terms of reference for the EIA/AMDAL experts for all PLN projects, including donor-funded projects. DIVK3L reviews the documents prepared for donor-funded projects while UIP staff review environmental documents prepared for PLN-funded projects. At present, environmental safeguards documents for PLN and donor-funded projects are prepared by external environmental experts; this is due to limited internal expertise and staffing. DIVK3L intends that IEE/UKL-UPL will increasingly be prepared in-house by UIP environment staff after capacity is enhanced, while EIA/AMDAL and addendum EIS/ANDAL and EMMP/RKL-RPL will continue to be prepared externally for the foreseeable future. The external experts who prepare the environmental safeguards documents are recruited through PLN’s Engineering Procurement Planning Unit. Most consultants hired are Indonesian nationals, with international consultants rarely being recruited due to the constraints of Indonesia’s EIA/AMDAL certification requirements. International consultants are, however, recruited to prepare environmental assessments for loan projects. PLN does not maintain a pool of experts and recruits consultants on a need basis. External expertise in areas such as environmental assessment, waste management, environmental monitoring, and permit management.is provided to PLN through public and private universities and external research centers.

23. PLN’s current in-house environmental safeguards capacity was found to be moderate and adequate to meet its current needs. In the future PLN plans to increasingly undertake IEE/UKL-UPL preparation inhouse, by UIP environment staff. For this purpose, the existing capacity may fall short as there is insufficient staff expertise and experience to prepare these documents. This knowledge base through experts needs to be strengthened as these assessments continue to be largely undertaken by external consultants and experts. 24. Subcomponent A.6: Legal Counsel Within PLN headquarters there is a Division of Corporate Law with strong procedures for ensuring compliance with internal and government regulations. This unit also supports compliance with regulations and corporate business codes related to environmental safeguards and compliance with good corporate governance principles. The division is additionally involved in settling pollution related disputes.

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25. Subcomponent A.7: Supporting Equipment and Facilities PLN has a system for testing and monitoring which relies on local universities and accredited commercial laboratories for sampling and measurement of physical, chemical and biological parameters as part of the environmental monitoring protocol. This system can be expanded to include monitoring across all operations of PLN. PLN projects are adequately equipped for monitoring of power plant operations. Power plants have instrumentation installed to measure emissions, noise, and electromagnetic force. By regulation, power plants that use coal with sulphur contents greater than 20% are required to install continuous emission monitoring systems to ensure that air quality standards are not exceeded. 26. Subcomponent A.8: In-house Capacity Building Program PLN has a capacity development master plan which includes environmental safeguards training at basic, intermediate and advanced levels. Capacity building is conducted both at the PLN Corporate University and by external training providers. PLN’s Corporate University comprises ten separate academies located in Jakarta and regionally which deliver in-house capacity-building for PLN staff. Training includes the following topics environmental protection and management, environmental audit, environmental performance rating, and safety. Mandatory courses are on aspects of EIA/AMDAL and IEE/UKL-UPL preparation; UIP and UPP staff are required to take at least one additional course each year. DIVK3L provides additional capacity building through special workshops and information dissemination on environmental management for staff working at UIP, UPP and Wilayah levels. 27. PLN has a mostly satisfactory capacity development program, largely delivered through its own Corporate University. The HSSE Academy is progressively offering a wider range of courses on environmental topics. Some specialized safeguards topics, if added, could greatly improve the impact of PLN’s capacity building master plan.

28. Subcomponent A.9: Supervision and Monitoring Responsibility UPP environment staff supervise each project, which includes ensuring that contractors comply with the provisions set out in IEE/UKL-UPL, EMMP/RKL-RPL, and contracts. Conditions related to environmental safeguards are stipulated when a tender is issued and obligations related to environmental safeguards are included in all contracts with contractors. Environmental supervision as prescribed in IEE/UKL-UPL and EMMP/RKL-RPL begins once project construction commences. UIP are responsible for carrying out monitoring and for preparing semi-annual monitoring reports. Monitoring of IEE/UKL-UPL and EMMP/RKL-RPL implementation involves checking specified inspection parameters. Monitoring reports document trends, critical parameters, and compliance. When monitoring results indicate non-compliance, the monitoring report specifies corrective actions which contractors must implement under the supervision of UPP environment staff.

29. Supervision, monitoring, and reporting responsibilities are clearly defined in PLN’s procedures. Review of implementation monitoring reports indicated that the quality of monitoring and reporting is moderately satisfactory. Report content, particularly on the evaluation of impacts and the effectiveness of mitigation measures, and the timeliness of report submission needs to be improved.

30. B) Processes and procedures applied by PLN in implementation of environmental safeguards were assessed to be moderate to strong across all subcomponents. 31. Subcomponent B.1: Compliance with National and PLN Regulations and Procedures

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PLN projects comply with both national regulations and company procedures. Assessments undertaken on PLN projects cite the relevant regulations, specific requirements applicable to different project assessment types (i.e., EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ANDAL). In order to ensure compliance with both national and internal regulatory and procedural requirements, PLN evaluates all EIA/AMDAL, IEE/UKL-UPL and addendum EIS/ANDAL and EMMP/RKL-RPL reports, initially by UIP staff and then by DIVK3L staff. Assessment reports which are considered by PLN to be satisfactory are then submitted to MOEF/KLHK for its review and approval. The system is strong; no actions are recommended. 32. Subcomponent B.2: Targets to Assess PLN Environmental Performance Clear environmental performance targets have been set by PLN. The Environmental Subdivision of DIVK3L has prepared a roadmap for the period 2018-2021 which describes progressively higher annual targets and explains planned actions to achieve these targets. DIVK3L’s Environmental Subdivision has eight categories of targets for corporate performance in 2018, six of which are related to environmental safeguards. The most directly related targets are improving PLN’s performance as measured by the PROPER rating system, expanding project monitoring, revising the Competence Directory, and training delivery. DIVK3L recognizes that while environmental assessment reports mostly satisfy Indonesian requirements, there is a need to improve overall quality. DIVK3L has set targets that 50% of AMDAL reports will exceed quality standards in 2018, increasing to 75% by 2019. 33. The system is strong; no actions are recommended. 34. Subcomponent B.3: Coordination with Other Bodies Responsible for Permits and Approvals PLN has clear procedures for consultation and coordination on spatial planning approvals and other required permits and permissions. These procedures are consistently applied as part of the environmental assessment process and are followed. Preparation of environmental safeguards documents and obtaining environmental permits involves both MOEF/KLHK, and its provincial and district offices, and other government agencies. DIVK3L is responsible for obtaining all permits. Given the large number of projects underway at any time, PLN relies on an International Organization for Standardization (ISO) based integrated management system to ensure seamless document management and control.

35. The system is strong; no actions are recommended. 36. Subcomponent B.4: Incorporation of Pollution Control and Hazardous Waste Handling into Environmental Management Procedures

i) Pollution control and mitigation measures set out in IEE/UKL-UPL and EMMP/RKL-RPL prepared for PLN projects are considered satisfactory. PLN promotes the adoption of clean technology as part of its pollution prevention efforts, including use of low nitrogen oxide burners to control and reduce nitrogen oxide emissions during operation, electrostatic precipitators to contain fly ash, and enclosure systems for noise control. PLN projects conduct quarterly emission monitoring and reporting on emissions loads, through a continuous emission monitoring system. Similar monitoring and reporting is also carried out for emissions from mobile sources and for wastewater discharges.

ii) PLN has prepared a standard operating procedure for managing waste, including hazardous wastes (e.g., sulfur hexafluoride and polychlorinated biphenyls). The procedure covers identification, collection, containment and storage, and transport of hazardous and non-hazardous wastes. In addition to waste management, PLN

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uses non-polluting technology, including a gradual phase-out of polychlorinated biphenyl use for new installations since 1998. Environmental assessments undertaken for PLN projects involving hazardous wastes mostly describe the process of obtaining permits for collection and transport of hazardous wastes and maintaining hazardous waste reporting sheets.

37. Pollution control and mitigation measures, and monitoring requirements are routinely included in the environmental assessment process; no recommended actions.

38. Subcomponent B.5: Expertise for Conducting Environmental Assessments i) The present capacity of DIVK3L and UIP to prepare environmental assessments

was found to be moderately satisfactory, with indications that in-house capacity is improving. The capacity of external consultants and experts can vary across regions, with implications for the quality of the assessments.

ii) Project proponents are required to prepare environmental assessments. Either PLN staff or their consultants undertake this task. Due to its presently limited staff capacity, PLN typically hires consultants to prepare EIA/AMDAL, IEE/UKL-UPL and addendum EIS/ANDAL and EMMP/RKL-RPL for its projects. PLN plans to increasingly have IEE/UKL-UPL prepared in-house by its own staff. Over-reliance on external consultants has implications for the quality of EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL assessments being prepared. The capacity and competence of external consultants is recognized as being variable, with the consequence that PLN’s safeguard requirements may not be consistently satisfied. This is a particular constraint in outlying regions where the availability of qualified consultants is comparatively smaller.

39. Since the capacity of external consultants varies, affecting the quality of the studies, there is a need to streamline the process by which these assessments are undertaken, and consultant selection needs to be systemized. 40. Subcomponent B.6: Risk Assessment

i) PLN’s corporate risk management policy and strategy is intended to ensure that risks are handled appropriately. This commitment includes rigorous application of environmental safeguards instruments. In practice, conduct of impact assessment and risk analysis as part of EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL preparation was found to be satisfactory.

ii) As a part of its internal supervision and control system, PLN has established a risk management policy. PLN has also created a Risk Management Division which is responsible for ensuring that risks are managed in a correct, continuous, and comprehensive manner, and that all identified risks are satisfactorily addressed. PLN is committed to rigorous application of safeguards instruments (i.e., EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ANDAL) to ensure that project impacts and risks are properly managed.

41. Although a strong risk assessment systems exists and is followed, there is nevertheless the need to increase capacity to incorporate risk assessment methods in the EIA/AMDAL and IEE/UKL-UPL processes. This may be done by incorporating capacity development actions on this topic in the capacity building master plan 42. Subcomponent B.7: Mitigation Hierarchy

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Application of the mitigation hierarchy in assessment of PLN projects was found to be satisfactory in determining the sites for projects. At the project feasibility study stage, siting of power plants is planned to avoid sensitive areas to the extent possible. Similarly, during the assessment screening stage, actions are identified to avoid, minimize or mitigate impacts, particularly in environmentally sensitive and tribal areas and for projects involving resettlement, wherever feasible. Lack of understanding of the magnitude and severity of potential impacts to ecologically sensitive areas may result in identification of ineffective avoidance and mitigation measures, and to overlook opportunities for biodiversity offsetting. 43. While the mitigation hierarchy is generally applied, it will be useful to increase PLN staff capacity in understanding how to improve this aspect. The capacity development masterplan may be updated to introduce capacity building measures on mitigation hierarchy application in EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL preparation and project implementation. 44. Subcomponent B.8: Conduct of Meaningful Public Consultation

i) PLN’s information dissemination and public disclosure procedures during the environmental assessment process were found to be moderately satisfactory, based on their effectiveness, comprehensiveness, and inclusiveness. In the initial announcement and public consultation stage of the EIA/AMDAL process, PLN makes public announcements through local newspapers, and radio and television broadcasts, and by postings at government offices, inviting the public to respond and submit suggestions, opinions, responses, or objections to a project. While information disclosure and public consultation requirements are quite limited for IEE/UKL-UPL and addendum EIS/ANDAL, most assessments do make an effort to inform and engage with potentially affected persons. However, feedback may be limited , particularly in rural areas where people are less familiar with written communication. Methods involving verbal and face-to-face interactions are well received.

ii) Potentially affected persons, community leaders, family welfare organizations, and local non-governmental organizations typically participate in public consultations as part of EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL assessments. Such consultations are supported with questionnaires that allow people to respond both orally and in writing during a consultation. Consultations are generally well documented with all suggestions, opinions, and responses being recorded, and then checked and verified by PLN. Depending on the significance and validity of the issues raised, public participation may lead to revisions to EIA/AMDAL, IEE/UKL-UPL, or addendum EIS/ANDAL reports. Assessment reports would be improved by consistently summarizing details of consultation undertaken and outcomes (i.e., project responses to issues raised).

45. While consultations are undertaken, their quality and reach can be improved by involving wider groups of affected persons. PLN may introduce a module on meaningful public consultations into the capacity building master plan for application in EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL preparation and project implementation. 46. Subcomponent B.9: Grievance Redress Mechanism PLN responds to grievances received through its existing complaint resolution process. Complaints arising during a project’s construction phase and received directly by PLN are handled by the UIP Public Relation/Communication Department which verifies and forwards the complaint to the responsible unit with authority to respond. PLN additionally notifies MOEF/KLHK of any

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complaints received for its follow-up. Grievances raised through customary community processes are forwarded by village leaders and/or customary leaders to the local PLN office. Complaints received by MOEF/KLHK offices are verified and then forwarded to PLN for resolution. When a PLN office receives a notification or warning from MOEF/KLHK or one of its regional offices, the corresponding regional office is required to act immediately. The MOEF/KLHK grievance redress mechanism has a procedure requiring local authorities to document that the complaint was identified, noted, managed and resolved. PLN also has a complaint management system accessible through a call center 123, online by using an integrated complaint-solving application, and at local customer services offices. This system allows affected persons to report any incident or complaint about PLN operations.

47. PLN’s grievance receipt and resolution process is found to be moderately satisfactory based on adherence to its existing complaint handling mechanisms and cross checks to ensure that complaints are resolved. The practices can be improved by enhancing capacity in best practices in grievance handling and redress. A module on grievance redress mechanism may be introduced into the capacity building master plan for application in EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL preparation and project implementation. 48. Subcomponent B.10: Protected Areas and Biodiversity Conservation

i) PLN’s adherence to the procedures applicable to protected areas and biodiversity conservation were found to be mostly satisfactory, with projects having to comply with both spatial planning and permitting requirements, including those applicable to moratorium and forested areas.

ii) Preventing or avoiding impacts on critical habitats is anticipated at the screening stage of the EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL process, when the MOEF/KLHK and its regional offices must evaluate compliance of the project location with the corresponding spatial plan. Project locations must also comply with the indicative map of new permit moratorium. No business and/or activity is allowed in a moratorium area, except for special cases, and with very strict requirements.

iii) EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL prepared for PLN projects which pose potential biodiversity impacts generally provide sufficiently detailed baseline information on which to assess impacts to terrestrial and marine areas. Where necessary for EIA/AMDAL and addendum EIS/ANDAL projects, a biodiversity impact assessment may be undertaken to identify endangered species and the vulnerability of their habitats.

49. While all efforts are made to identify potential biodiversity impacts, and all procedures are followed, the process may suffer due to lack of capacity and the impact assessment and risk analysis and mitigation sections of assessment reports may lack rigor, overlooking potential impacts and inadequately assessing the impacts to critical habitats and biodiversity. Capacity can be enhanced at all levels in the screening and assessment of impacts on terrestrial and marine habitats, including unprotected and protected forests, mangroves, seagrass and corals by updating the capacity building master plan in this area. 50. Subcomponent B.11: Screening Screening is routinely undertaken for all PLN projects, in consultation with MOEF/KLHK regional offices, to determine what type of assessment is required. Screening of PLN projects is considered mostly satisfactory, with all projects being screened according to legally-established criteria to determine what safeguard instrument is applicable (i.e., EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ANDAL). Additionally, all projects are checked for compliance with the respective

13

spatial plan, a confirmation of which is attached as an appendix to EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL reports. An identified omission is that screening is not done for electricity distribution lines unless they pass through protected areas; this is attributed to differing policy triggers. In general, the overall project screening process can be improved. 51. PLN should revise its screening procedure to ensure that impacts of electricity distribution lines, including lines passing through protected areas, are dealt with in environmental assessments. This is being addressed through the equivalence assessment process and has not been identified as a gap in acceptability, as the process and procedure as it currently exists is being followed. 52. Subcomponent B.12: Scoping The PLN scoping procedure was found to be mostly satisfactory, being generally consistent with assessment good practice. PLN projects requiring an EIA/AMDAL routinely undertake scoping to comply with regulatory requirements. Scoping is not applicable to IEE/UKL-UPL projects. Although addendum EIS/ANDAL projects are subject to internal peer review by PLN to ensure the thoroughness of an assessment, it is desirable to have a more thorough scoping process, particularly for projects involving large expansions. 53. PLN scoping can be expanded to include all types of developments and project expansions. PLN procedures should include a scoping process for both IEE/UKL-UPL and addendum EIS/ANDAL projects. Although scoping is not required for IEE/UKL-UPL and addendum EIS/ANDAL projects, a scoping exercise is still needed to establish the assessment coverage. This is being addressed through the equivalence gap filling measure; the process as it exists is being followed.

54. Outputs and outcomes achieved by PLN in terms of the quality of safeguards assessment reports, satisfactory implementation of mitigation and monitoring, and achievement of the legal framework’s objectives were consistently rated as moderate across all subcomponents. The individual subcomponents are discussed in detail below. 55. Subcomponent C.1: Content of the Study Report EIA/AMDAL prepared for PLN projects were found to be mostly satisfactory, generally covering all required topics. IEE/UKL-UPL typically have less content, reflecting the lack of an explicit requirement to cover some topics. Addendum EIS/ANDAL and EMMP/RKL-RPL similarly have less content that an EIA/AMDAL. There is significant room for improvement in making PLN’s environmental assessments consistent with good industry practice. The content of EIA/AMDAL reports is typically comprehensive but occasionally overlooks issues not properly identified in the assessment scoping process. Other apparent weaknesses are lack of sufficiently detailed project descriptions and inconsistent description of baseline conditions.

56. Attention should be given to strengthening the HSSE Academy’s environmental safeguards curriculum and building environment staff capacity in impact assessment and risk analysis as part of the capacity development master plan. 57. Subcomponent C.2: Quality of Analysis The quality of impact assessment and risk analysis in EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL prepared for PLN projects was found to be moderately satisfactory. Quantitative and qualitative methods are routinely used in preparing EIA/AMDAL and addendum EIS/ANDAL, while more simplified methods are used in IEE/UKL-UPL. It is apparent that some impacts are being

14

overlooked, either because of gaps in the baseline data or as an artifact of the assessment and analytical methodology. In this context there is room for improvement through utilization of better methodologies and capacity development. 58. DIVK3L and PLN capacity need to be enhanced in EIA/IEE preparation. The capacity building master plan needs to be updated to reflect this. Attention should be given to strengthening the HSSE Academy environmental safeguards curriculum and building environment staff capacity in impact assessment and risk analysis as part of the capacity development master plan. 59. Subcomponent C.3: Consideration of Alternatives Analysis of alternatives for PLN projects was found to be partly satisfactory based on the narrow range of alternatives typically considered or explained in environmental assessment reports (e.g., project modifications are often made during the feasibility stage but may not be described in assessment reports). PLN assesses alternatives on the basis of both non-financial and financial criteria. A key non-financial consideration is a project’s environmental acceptability. The financial criteria in turn are used to assess which alternatives are feasible and cost-effective. The analysis of alternatives as described in most PLN environmental assessments is overly narrow. Consideration of the ‘no project’ alternative is uncommon. Analysis of alternatives is not explicitly required for IEE/UKL-UPL projects and as such may not be undertaken. Project modifications can however be made at the project feasibility stage where technical, economic, social and environmental aspects are preliminarily considered.

60. This lack of detail is covered as part of the equivalence assessment where a more robust analysis of alternatives is recommended. PLN undertakes alternatives analysis according to national requirements. The capacity development master plan should be updated to include capacity enhancement in alternatives assessment 61. Subcomponent C.4: Environmental Management and Monitoring Plan i) EMMP/RKL-RPL and IEE/UKL-UPL prepared for PLN projects were found to be moderately satisfactory, with the reports providing standard content. Mitigation measures and monitoring requirements may not be sufficiently described (e.g., intent of planned mitigations, monitoring program design, implementation responsibilities, budget allocations). ii) Mitigation measures and monitoring requirements may not be sufficiently comprehensive, often lacking detail on the intent of planned mitigations, and their implementation arrangements. Greater clarity is needed on the nature and design of monitoring programs. Respective responsibilities for implementation of mitigation measures and conduct of monitoring should be clear. Funds allocated for mitigation and monitoring should additionally be clearly stated, ensuring transparency and sufficiency of allocated funds. 62. DIVK3L capacity should be enhanced by updating the capacity development master plan to include trainings in this aspect. Additional training should be provided to UIP environment staff in IEE/UKL-UPL preparation, review of IEE/UKL-UPL and EMMP/RKL-RPL, and for ongoing evaluation of implementation performance. 63. Subcomponent C.5: Method for Review of Content and Substance of Reports Submitted

i) PLN’s procedure for and conduct of assessment document review was found to be partly satisfactory. While routinely covering regulatory, administrative and technical content, inconsistency is apparent in the review process.

ii) PLN environment staff at the UIP level and in the Environmental Subdivision of DIVK3L at headquarters in turn review EIA/AMDAL, IEE/UKL-UPL, and addendum

15

EIS/ANDAL reports. PLN’s internal review of EIA/AMDAL, IEE/UKL-UPL and addendum EIS/ANDAL reports focuses primarily on regulatory and administrative compliance but also considers technical issues and may include making recommendations on changes to project siting and design. After PLN’s review of project assessment reports, they are forwarded to MOEF/KLHK for approval. Although MOEF/KLHK has developed a checklist for reviewing EIA/AMDAL and IEE/UKL-UPL reports, this checklist may not routinely be used, with reviewers instead relying on their own knowledge and expertise.

64. Improve capacity of PLN staff in reviewing environmental assessment documents. Update capacity development master plan to include this aspect in the training plan. 65. Subcomponent C.6: Arrangements for Access to Assessment and Monitoring Reports Disclosure of assessment and implementation monitoring reports either by MOEF/KLHK or PLN was found to be partly satisfactory. Limited access to such reports affects the transparency of the assessment process, but this is not a national legal requirement. This is being addressed through the equivalence assessment. MOEF/KLHK and its regional offices are responsible for disclosure of approved EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL reports. Some assessment and monitoring reports for PLN projects can be found on the MOEF/KLHK website and are available for access upon request. PLN makes selected reports available on its company website. Implementation monitoring reports do not, however, appear to be made publicly available. The PLN project proponent must instead submit semi-annual monitoring reports to MOEF/KLHK and its regional offices which then disclose the reports. 66. This is covered through the equivalence assessment and no acceptability gap is identified. 67. Subcomponent C.7: Requirements for Implementation and Monitoring PLN’s performance with regard to implementation and monitoring was found to be moderately satisfactory. While projects are generally in compliance with permitted levels, monitoring data can be better presented. Instances of delayed submission of monitoring reports were identified. As a project proponent, PLN is responsible for monitoring EMMP/RKL-RPL and IEE/UKL-UPL implementation on a semi-annual basis. MOEF/KLHK and its regional offices are responsible for supervising such monitoring. Monitoring parameters typically include: time series data on air and water quality, and noise; comparison of physio-chemical monitoring data with permitted levels; and identification of non-compliance for any monitoring parameter. Additionally, monitoring of electric magnetic fields and fire risk may be undertaken and reported. Monitoring reports are required to specify necessary corrective actions and/or proposed new requirements. Compliance with permitted levels such as environmental quality standards appears to be generally satisfactory but data presentation can be improved. Monitoring reports normally include a confirmation that analysis was carried out by a laboratory accredited by the Indonesia National Accreditation Committee. 68. It is recommended to increase PLN environment staffing levels to ensure sufficient time is available to prepare and submit monitoring reports in a timely manner and build capacity of UIP, UPP, and Wilayah environment staff through training in project implementation monitoring and reporting. 69. Based on the acceptability assessment findings, proposed gap-filling measures have been incorporated into the following action plan.

16

Environmental Safeguards Acceptability Assessment Action Plan 70. The following environmental safeguards acceptability assessment action plan takes into account gaps that are being addressed through the action plan for the environmental safeguards equivalence assessment and gaps identified in conduct of this acceptability assessment. Recommended gap-filling actions provided in Table 1 constitute the environmental safeguards acceptability action plan for PLN. Table 1: Environmental Safeguards Acceptability Assessment Action Plan

No.

Component/ Subcomponent

Actions Indicator Time frame

Responsible Party

1. SubcomponentsA.1, 2 & 3: Institutional structure, budget and staffing.

Prepare an indicative annual staffing projection plan to add environment staff to meet the capacity and capability requirements of units at all levels (central, regional and local). Ensure the sufficiency of annual budget allocation for EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ ANDAL, and EMMP/RKL-RPL preparation and implementation

Internal memo

from DIVK3L to

Organizational Division

(DIVORG) and

Talent Division

(DIVTLN) committing to

meet the

capacity and

capability of

units thru inidcative annual

staffing projection plan

Internal memo

from DIVK3L to

Budget Division (DIVANG) and

UIP committing

to budgeting for

preparation of environmental

document and

implementation of EMMP .

Progress report on the achievement of the committed actions above.

Prior to approval of R-Paper.

Prior to approval of R-Paper.

Prior to project approval.

DIVK3L DIVORG

Human Capital Management System (DIVHCMS)

DIVTLN

17

No.



Responsible Party

2. Subcomponents A.4 & 8: Institutional knowledge management and capacity building program in-house training or training center.

Prepare an indicative revised capacity development master plan to include the additional special topics or supplementary content on: biodiversity impact assessment, monitoring and review; hazardous waste pollution control and handling; impact assessment and risk analysis; meaningful public consultation as a good practice; gender impacts and women in the EIA/AMDAL and IEE/UKL-UPL processes; project-level grievance redress; analysis of project alternatives in the EIA/AMDAL and IEE/UKL-UPL processes; EMMP/RKL-RPL preparation and review; worker and community health and safety; international standards on pollution

Internal memo from DIVK3L to PLN Corpu committing to review and incorporate indicative revised capacity development master plan

Copy of the revised capacity development master plan.

Progress and summary reports on the adoption and implementation of the revised capacity development master plan.

Prior to approval or R-Paper

Prior to project approval


DIVK3L

18

No.



Responsible Party

prevention (i.e., World Bank Environmental, Health and Safety Guidelines); and environmental audit.

3. Subcomponent A.5: Technical expertise.

Prepare a framework for a consultant management system in support of EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ANDAL and EMMP/RKL-RPL preparation. Build capacity of environment staff in technical areas such as biodiversity, air pollution management, and noise control and modeling per job requirements.

Internal memo from DIVK3L to UIP committing to adopt the framework.

Progress report on the implementation of the consultant management system.

See A.4 & 8 indicator requiring progress and summary reports on capacity development activities.

Prior to approval of R-Paper Prior to project approval


DIVK3L Note: EIA/AMDAL consultant certification is a MOEFKLHK responsibility. PLN will ensure that consultants used are certified.

4. Subcomponent A.7: Supporting equipment and facilities.

Build capacity of relevant environment staff across PLN in emissions and other implementation monitoring per job requirements for power

See A.4 & 8 indicator requiring progress and summary reports on capacity development activities.

Prior to first power generation project approval

DIVK3L

19

No.



Responsible Party

generation projects.

5. Subcomponent B.5: Expertise for conducting environmental assessments.

See A.4 action regarding training of environment staff according to job requirements. See A.5 action regarding establishment of a consultant management system to support EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ANDAL and EMMP/RKL-RPL preparation.

See A.4 & 8 indicator requiring progress and summary reports on capacity development activities

Progress and summary reports on the establishment and implementation of the consultant management system (See A.4 and A.5).



DIVK3L

71. Table 2 presents the detailed findings of the PLN environmental safeguards acceptability assessment and corresponding recommendations that are reflected in the Environmental Safeguards Acceptability Assessment Action Plan in Table 1.

20

Table 2: PLN Environmental Safeguards Acceptability Assessment Findings and Recommendations

No. Component/

Subcomponent Rating Assessment Findings Recommendations

A. Institutional Capacity

A.1 Institutional structure M PLN’s institutional structure and environmental staffing are mostly satisfactory to fulfill its legal mandate and corporate commitments at both central and operational unit levels. However, staffing lacks necessary technical reporting lines which impacts efficiency and efficacy, leaving room for improvement in the institutional structure. PLN’s institutional structure has a number of tiers of responsibility for environmental safeguards as show in Appendix 1. Environmental Subdivision of DIVK3L

DIVK3L at PLN headquarters includes an Environmental Subdivision which is responsible for environmental safeguards at both planning and implementation stages at the corporate level. This subdivision is further divided into two groups, managed by a Deputy for Environmental Planning and a Deputy for Environmental Management as shown in Appendix 2. The Department of Environmental Planning is responsible for assisting UIP and UPP in preparing EIA/AMDAL and IEE/UKL-UPL during the project planning stage, while the Department of Environmental Management is responsible for supervising and monitoring project operations. The Environmental Subdivision also supports UIP and UPP staff in implementing IEE/UKL-UPL and EMMP/RKL-RPL. The Environmental Subdivision is more generally responsible for: (i) preparation and evaluation of environmental management policy, strategy, and standards and procedures; (ii) implementation of

− Increase staffing levels at the Environmental Subdivision of DIVK3L to ensure that it can provide needed technical support to UIP and UPP on a responsive basis.

− Increase UIP, UPP and Wilayah staffing levels to match current and future demands, and recruit staff with a broader range of expertise (i.e., not predominantly engineers).

− Revise internal communication processes between DIVK3L, UIP, UPP and Wilayah so as to avoid potentially counterproductive lines of communication.

21

No. Component/


corporate environmental policy; (iii) preparation and evaluation of environmental assessments for new projects under the responsibility of PLN headquarters2; (iv) assisting regional units in preparing environmental assessments; and (v) coordinating permits administration for forest areas. DIVK3L has improved reporting channels to PLN’s upper management, with the Senior Manager of the Environmental Subdivision reporting to the Head of DIVK3L, who then reports to the Director of Human Capital Management, who in turn reports to the PLN President. Staffing levels at DIVK3L are set to increase considerably beginning in 2018 with the transfer of an estimated 400 existing staff from regional offices to PLN headquarters in order to optimize personnel utilization and strengthen DIVK3L into a more powerful and effective entity. UIP/Project Construction Unit

UIP are responsible for construction of power generation infrastructure, including geothermal, and transmission infrastructure.3 There are eighteen UIP at the regional level around the country.4 Environment staff are posted in two units in each UIP: the General Planning Unit of the Planning Subdivision and the Project Control Unit of the Construction Subdivision. Environment staff in the Planning Subdivision are responsible for preparing, implementing, and evaluating environmental assessments during a project planning phase while environment staff in the

2 AMDAL or EIA for development partner funded projects. 3 PLN does not construct all power generation plants in Indonesia. Some are built by independent power producers that sell the electricity to PLN. 4 There are four UIP in Sumatera, five UIP in Java, three UIP in Kalimantan, two UIP in Sulawesi, one UIP in Nusa Tenggara, one UIP in Maluku, one UIP in

Papua, and one UIP in Jakarta.

22

No. Component/


Construction Subdivision are responsible for supervising implementation of mitigation measures and monitoring requirements during the construction phase. Environment staff in the UIP planning and construction subdivisions report to the respective deputy managers. Environment staff in the General Planning Unit hand over responsibility for implementing a IEE/UKL-UPL and EMMP/RKL-RPL to the their counterparts in the Project Control Unit. All documents relating to environmental safeguards must be submitted through the deputy managers of the respective units to unit managers who report to the UIP General Manager. UIP general managers have primary authority for environmental safeguards at the regional level. They report to their respective regional directors and, in parallel, coordinate with the Director of the Environmental Subdivision of DIVK3L on all issues related to environmental safeguards. UPP/Project Implementing Unit

Under each UIP, there are typically two to three UPP, with the number varying regionally. In UPP there is an environment staff posted to the Engineering Subsection where they are responsible for supporting project planning related preparation of environmental assessments, and for overseeing implementation of mitigation measures and monitoring requirements. UPP environment staff report to the Assistant Manager for Engineering who then reports to the UPP Manager, who in turn reports to the UIP General Manager. The organograms for UIP and UPP are provided in appendices 3 and 4.

23

No. Component/


PLN Wilayah/Regional offices

There are fifteen Wilayah around the country.5 There is a Supervisor for Occupational Health, Safety, and Environment in each Wilayah, reporting to the Deputy Manager for Operational Control of the Distribution System. The organogram for Wilayah is provided in Appendix 5. Due to PLN’s decentralized structure, the Environmental Subdivision of DIVK3L has only indirect authority to manage and control environmental safeguards application in UIP, UPP and Wilayah.

A.2 Budget M Current funding allocations by PLN to support DIVK3L, UIP, UPP and Wilayah operations were found to be moderately satisfactory. However, budget allocations need to be increased for EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL preparation and implementation. Increased funding planned by PLN should ensure the future adequacy of budgets. PLN allocates funds for environmental management and monitoring activities for DIVK3L, UIP and UPP, and Wilayah. PLN headquarters maintains the corporate master budget, which includes the budgets for all UIP, UPP, and Wilayah.

− Increase budget allocated for DIVK3L, UIP, UPP, and Wilayah operations, including budget provided for EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL preparation and implementation.

5 There are six PLN Wilayah in Sumatera, three in Kalimantan, two in Sulawesi, two on Nusa Tenggara, one in Maluku, and one in Papua. In addition, for

customer services, there are seven PLN Distribusi located in West Java, Jakarta Raya and Tangerang, Banten, Central Java and DI Yogyakarta, East Java, Bali, and Lampung. For generators (pembangkit), there are three PLN Pembangkit in Sumatera and Tanjung Jati. There are also two PLN P3B Sumatera and P2B Jawa Bali responsible for operating the substation and for transmission, and three PLN Transmission units (Western Java, Central Java, and Eastern Java and Bali).

24

No. Component/


PLN’s overall budget for the 2016/2017 fiscal year was approximately $9,094,353,922. For this fiscal year, the total budget6 for all environment-related work in PLN – which encompasses preparation of EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL, management and environmental monitoring, environmental research, and reforestation around power plants and other project areas – was $10,244,031 or 0.113% of the total corporate budget. Depending on the scope of study and remoteness of a proposed project, typically the cost estimate for preparing an EIA/AMDAL ranges from$35,700 to $71,400. The cost estimate for IEE/UKL-UPL preparation ranges from $21,400 to $42,800. PLN considers these budget allocations to be sufficient to prepare good quality assessments and that budget is not a constraining factor. However, PLN has indicated that additional budget wil be allocated to UIP for preparation of environmental assessments starting in 2018, suggesting that current funding levels may have only been marginally sufficient.

Budget for DIVK3L Environmental Subdivision

PLN annually allocates the budget for DIVK3L, excluding staff salaries and the cost of preparing EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL. For fiscal year 2017, the DIVK3L budget is $5,060,738, allocated as follows7:

− Safety and occupational health – 27% of the total budget

6 Laporan Keberlanjutan (Sustainability Report): Energi Berkelanjutan untak Masa Depan Semua (Sustainable Energy for the Future of All. (2016) PT PLN

(Persero). 7 Budget Recapitulation of K3L Division (2017).

25

No. Component/


− Security – 57% of the total budget

− Environment – 16% of the total budget

The environment budget was allocated to:

− Capacity building workshop and dissemination of documents on environmental management and implementation of regulations

− Review of environmental management with competent agencies/consultants

− Networking with external parties in environmental management

− Publicization of the environmental management program

− Preparation of visual document on the environment

− Development of application for environmental management

− Improvement of competence for planning human resources with MOEF/KLHK-accredited training centers

− Review on Board of Directors’ decrees on environmental management with competent parties/consultants

− Fulfillment of donor’s environmental and social safeguard policy requirements

Budget for UIP and UPP

Each UIP and UPP prepares a detailed annual work plan with project-specific budgets that include the cost of environmental assessment preparation and implementation. UIP and UPP staff confirmed that budgets for environmental safeguards are generally sufficient. Budget for Wilayah

26

No. Component/


Each Wilayah prepares an annual budget. Information on Wilayah budgets was not available.

A.3 Staffing M Staffing levels at DIVK3L, UIP and UPP appear insufficient to meet time demands. Planned staffing increases should address this issue. Staff competency was found to be moderately satisfactory due to mandatory environmental assessment capacity development, although specialized knowledge (e.g., biodiversity) is limited. At PLN headquarters, the Environmental Subdivision of DIVK3L employs a total of eight full time staff in 2017, three of whom are Environmental Engineers. Administrative staff hold graduate degrees in different fields. In UIP, environment staff are typically Environmental Engineers by profession. Each UIP has one environment staff in each of the General Planning Unit of the Planning Subdivision, and Project Control Unit of the Construction Subdivision. Each UPP has one environment staff. Wilayah employ one supervisor who is responsible for safety and occupational health, as well as environmental issues. All environment-related positions are filled by full-time staff. All environment staff in DIVK3L, UIP, UPP and Wilayah are required to meet minimum qualifications, including for environmental safeguards, as specified in the Competence Directory8 issued by PLN headquarters. This directory specifies that environment staff must at least be qualified in environmental safeguards, and environmental auditing. The directory does not specify the qualifications required for safety, occupational health and environment supervisors at the Wilayah level.

− Recruit additional staff with advanced degrees in environmental fields.

− Revise environmental assessment training courses currently provided to PLN environment staff by universities and the HSSE Academy to ensure comprehensiveness.

− Revise DIVK3L’s existing system to assess staff technical competency to carry out their duties.

8 A guidance book describing all staff positions and the generic and technical skills and knowledge required for each post.

27

No. Component/


For basic training on EIA/AMDAL (AMDAL A) and review of EIA/AMDAL reports (AMDAL C), PLN sends its environment staff to private or public universities. PLN’s HSSE Academy trains environment staff on review of EIA/AMDAL reports (AMDAL B) and preparation of IEE/UKL-UPL.

According to interviews with UIP and UPP staff, the number of environment staff is currently insufficient. PLN has recently announced plans to increase both staff and budgeting levels in UIP and UPP. DIVK3L has advised that it has plans, for the near future, to hire additional graduate and post-graduate personnel with qualifications in environmental fields.

Based on the mandatory training provided, UIP and UPP environment staff should have sufficient technical expertise in environmental assessment. Current staffing levels do however represent a constraint, limiting the availability of environment staff to review consultant assessment reports and to monitor project implementation.

A.4 Institutional knowledge management

M PLN’s knowledge management system was found to be moderately satisfactory, facilitating knowledge sharing through dissemination of good practice across the company. System content is progressively being expanded beyond engineering and technical themes but currently lacks sufficient focus on environmental safeguards. UIP and UPP staff regularly use the system to discuss specific issues relating to ongoing projects.

PLN has a dedicated Knowledge Management Unit, whose main duties are to prepare, implement, and evaluate:

− Revise the capacity development master plan and knowledge management system to expand environmental safeguards training in areas such as biodiversity, hazardous waste, worker and community health and safety, international standards on pollution prevention, meaningful community consultation, and gender and vulnerable persons.

28

No. Component/


− Strategic policy and regulation on knowledge management, knowledge transfer, and knowledge management audit

− Assessment and testing of new innovations and recommend good practices for other units

− The knowledge management program in an effort to improve staff competence, quality and overall company performance

Knowledge management is a corporate policy, applied to all PLN units, but which focuses primarily on engineering and technical matters. PLN has established a portal knowledge management system to facilitate and accelerate sharing process of knowledge, expertise, experience and collaboration among staff. At the UIP and UPP levels, every month environment staff from UPPs are invited to UIP to discuss specific topics related to ongoing projects. Knowledge sharing is also facilitated through teleconferencing and web-based media, through which UPP staff can interact with central level mentors.

A.5 Technical expertise M Current in-house environmental safeguards capacity was found to be moderately satisfactory. While IEE/UKL-UPL will increasingly be prepared by UIP environment staff, there is still insufficient staff expertise and experience to prepare EIA/AMDAL and addendum EIS/ANDAL and EMMP/RKL-RPL, with these assessments continuing to be largely undertaken by external consultants and experts. Reflecting the current staffing levels and environmental safeguards expertise and experience of PLN staff, the majority of environmental assessments

− DIVK3L should establish a consultant management system to enable UPP to identify qualified and certified consultants and experts in support of EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL preparation.

− Routinely assess the quality of IEE/UKL-UPL being prepared internally to validate DIVK3L’s decision to conduct such assessments in house.

29

No. Component/


have previously been prepared by external consultants and experts. DIVK3L intends that IEE/UKL-UPL will increasingly be prepared in-house by UIP environment staff once in-house capacity is deemed sufficient. EIA/AMDAL and addendum EIS/ANDAL and EMMP/RKL-RPL, with some exceptions, will continue to be prepared externally for the foreseeable future. DIVK3L environment staff are responsible for preparing terms of reference for national and international consultants for all donor-funded and PLN-funded projects, and for reviewing EIA/AMDAL and addendum EIS/ANDAL and EMMP/RKL-RPL for loan projects. UIP environment staff are responsible for reviewing EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL for PLN-funded projects. PLN recruits consultants through its Engineering Procurement Planning Unit. Most consultants hired are Indonesian nationals, with international consultants rarely being recruited due to the constraints of Indonesia’s AMDAL certification requirements. International consultants are however recruited to prepare environmental assessments for loan projects. PLN does not maintain a pool of experts and recruits consultants on an as when necessary and needed basis. PLN has memoranda of understanding with public and private universities and independent research centers to provide external expertise in many areas related to environmental assessment, waste management, environmental monitoring, and permit management.

A.6 Legal counsel S PLN has a corporate law division responsible for ensuring company compliance with internal and government regulations, including environmental

− No recommendations.

30

No. Component/


safeguards. The division is additionally involved in settling pollution related disputes. Within PLN headquarters there is a Division of Corporate Law responsible for ensuring compliance with internal and government regulations. This unit also supports compliance with regulations and corporate business codes related to environmental safeguards and compliance with good corporate governance principles. The division is additionally involved in settling pollution related disputes.

A.7 Supporting equipment and facilities

M PLN generally lacks in-house analytical testing facilities and mobile monitoring equipment and instead relies on commercial laboratories and local universities to support monitoring and testing. PLN projects are adequately equipped for monitoring of power plant operations. However, this needs to be expanded to include monitoring across all operations of PLN. PLN lacks in-house analytical laboratories and mobile environmental monitoring (e.g., emissions and noise) equipment. Instead, PLN utilizes local universities and accredited commercial laboratories for sampling and measurement of physical, chemical and biological parameters in support of environmental monitoring.

Power plants do however have instrumentation installed to measure emissions, noise, and electromagnetic force, and laboratories for water quality monitoring. Coal power plants, which use coal with sulphur contents higher than 20%, are required by regulation to install continous emission monitoring systems to ensure that air quality standards are not exceeded. Consultants and experts preparing environmental assessments are expected to use certified laboratories.

− Ensure that UIP and UPP are properly equipped to undertake project implementation monitoring.

− Build capacity of environment staff in emissions and other implementation monitoring.

31

No. Component/


A.8 Capacity building program in-house training or training center

M PLN has a mostly satisfactory capacity development program, largely delivered through their own Corporate University. The HSSE Academy is progressively offering a wider range of courses on environmental topics. PLN has a capacity development master plan, including for environmental safeguards training at basic, intermediate and advanced levels. Capacity building is conducted both at the PLN Corporate University and by external training providers. PLN’s Corporate University comprises ten separate academies located in Jakarta and regionally which deliver in-house capacity-building for PLN staff.9 In addition to technical engineering and administrative matters10, the HSSE Academy in Semarang, provides environmental training on a variety of topics as summarized in Appendix 6, including:

− Mentoring on environmental protection and management

− Environmental audit − Corporate performance rating program in

environmental management

− Ensure that environment staff are properly training to meet their job requirements.

− As part of the capacity development master plan, strengthen environmental safeguards curriculum in selected areas such as impact assessment and risk analysis, biodiversity impact assessment, and conduct of environmental monitoring.

9 PLN UDIKLAT BOGOR) (Project Academy). PLN UDIKLAT JAKARTA (Leadership Academy and Corporate Culture Academy). PLN UDIKLAT SURALAYA (Primary Energy and Power Generation Academy). PLN UDIKLAT SEMARANG (Transmission and Live Line Maintenance Academy). PLN UDIKLAT PANDAAN (Distribution and Commerce Academy). PLN UDIKLAT TUNTUNGAN. PLN UDIKLAT PADANG. PLN UDIKLAT PALEMBANG. PLN UDIKLAT MAKASSAR. PLN UDIKLAT BANJARBARU. PLN Unit Assessment Center (Jakarta). PLN Certification Unit (Jakarta). 10 The curriculum of all PLN Academies during 2017 can be found, in Bahasa Indonesia, at: http://simdiklat.pln-pusdiklat.co.id/tab_es_diklat_tdk_laris.php.

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− Environmental management and monitoring toward PROPER-based green company

− Preparation of environmental feasibility of electricity project’s environmental management system

− Basic electricity safety and environment − Advanced electricity safety and environment In addition to four mandatory courses in EIA/AMDAL A (basic AMDAL preparation), EIA/AMDAL B (advanced AMDAL preparation), EIA/AMDAL C (AMDAL review), and IEE/UKL-UPL preparation, UIP and UPP staff are required to take at least one additional course each year. As part of its mandate, the Environmental Subdivision of DIVK3L provides capacity building through workshops and information dissemination on environmental management for staff working at UIP, UPP and Wilayah levels. PLN has established cooperation with several prominent universities to provide training on EIA/AMDAL and other environmental topics, among them Bogor Agricultural University, Gajah Mada University, and the University of Indonesia. Examples of specialized courses offered by the University of Indonesia are: hazardous substances and hazardous waste management, environmental conflict management, and IEE/UKl-UPL and EMMP/RKL-RPL monitoring, implementation and evaluation.

With support from ADB, World Bank and other funding partners, there is an intent to establish a network of safeguards learning centers for Indonesia. The PLN Corporate University would be included in this network.

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A.9 Supervision and monitoring responsibility

M Supervision, monitoring, and reporting responsibilities are clearly defined in PLN’s procedures. Review of implementation monitoring reports indicated that the quality of monitoring and reportings is moderately satisfactory. Report content, particularly on the evaluation of impacts and the effectiveness of mitigation measures, and the timeliness of report submission needs to be improved. Environmental supervision as prescribed in IEE/UKL-UPL and EMMP/RKL-RPL begins once project construction commences. UIP are responsible for carrying out monitoring and for preparing semi-annual monitoring reports. A UPP environment staff supervises each project, which includes ensuring that contractors comply with the provisions set out in IEE/UKL-UPL, EMMP/RKL-RPL, and contracts. Conditions related to environmental safeguards are stipulated when a tender is issued and obligations related to environmental safeguards are included in all contracts with contractors. Monitoring of IEE/UKL-UPL and EMMP/RKL-RPL implementation involves checking specified inspection parameters, threshold values or quality standards, and any critical issues observed. Sampling and measurement must be done using calibrated instruments to ensure the validity of the measurements. Monitoring reports document trends, critical parameters, and compliance. When monitoring results indicate non-compliance, the monitoring report specifies corrective actions which contractors must implement under the supervision of UPP environment staff.

− Strengthen capacity of PLN environment staff to review implementation monitoring reports.

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PLN’s overall performance relating to project implementation reports is considered moderately satisfactory. There is evidence of sometimes delayed submission of semi-annual reports and uneven quality of reports submitted, likely reflecting both staffing levels and the variable capacity of UIP and UPP regionally. UIP must review all monitoring reports prior to submitting them to MOEF/KLHK offices to ensure compliance with laws, regulations, and environmental assessment requirements. There is no regulatory requirement for PLN to publically disclose monitoring reports. Public disclosure of the operational environmental performance rating of companies is done through PROPER. PLN has established a PROPER assessment team, which is responsible for ensuring compliance with national environmental quality standards. The team coordinates with the Environmental Subdivision of DIVK3L, but reports directly to the Director of Human Capital Management. The duties of the team are to: conduct pre-assessments of the consistency of PROPER compliance, evaluate assessment results, make recommedations based on assessment results, and monitor corrective actions taken by power plants. Based on PLN’s 2016 Sustainability Report, out of 81 power plants, three had green ratings (very good), 70 had blue ratings (compliance), and eight had red ratings (non-compliance). None of PLN’s plants had a gold (excellent) or black (causing environmental damage) rating.

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No. Component/


B. Process and Procedure

B.1 Compliance with national and PLN regulations and procedures

S PLN projects comply with both national requlations and company procedures Assessments undertaken on PLN projects cite the relevant regulations, specific requirements applicable to different project assessment types (i.e., EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ANDAL) In order to ensure compliance with both national and internal regulatory and procedural requirements, PLN evaluates all EIA/AMDAL, IEE/UKL-UPL and addendum EIS/ANDAL and EMMP/RKL-RPL reports, initially by UIP staff and then by DIVK3L staff. Assessment reports which are considered by PLN to be satisfactory are then submitted to MOEF/KLHK for their review and approval.

− No recommendations

B.2 Targets to assess PLN environmental performance

S Clear environmental performance targets have been set by PLN. The Environmental Subdivision of DIVK3L has prepared a roadmap for the period 2018-2021 which describes progressively higher annual targets and explains planned actions to achieve these targets. DIVK3L’s Environmental Subdivision has eight categories of targets for corporate performance in 2018, six of which are related to environmental safeguards. The most directly related targets are: improving PLN’s performance as measured by the PROPER rating system, expanding project monitoring, revising the Competence Directory, and training delivery.

DIVK3L has prepared a roadmap for the period 2018 to 2021 which sets out progressively higher targets for each year. For example, from a 50% PROPER


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certification rate in 2018, the roadmap has a target of 70% in 2019, and 100% by 2020. Similarly, DIVK3L recognizes that while environmental assessment reports mostly satisfy Indonesian requirements, there is a need to improve overall quality. DIVK3L has set targets that 50% of AMDAL reports will exceed quality standards in 2018, increasing to 75% by 2019.

B.3 Coordination with other bodies responsible for permits and approvals

S PLN has clear procedures for consultation and coordination on spatial planning approvals, and other required permits and permissions. These procedures are consistently applied as part of the environmental assessment process. Preparation of EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL, and obtaining environmental permits involves both MOEF/KLHK, and its provincial and district offices, and other government agencies. For example, project compliance with spatial planning is determined at the initial stage of screening in coordination with the national and sub-national agencies responsible for spatial planning. Such coordination variously involves the local Development Planning Agency, Public Works and Spatial Planning, Settlements and Housing, Local Coordination Agency for Spatial Plan or National Coordination Agency for Spatial Plan so as to ensure the conformance of proposed project locations with spatial plans. These agencies make recommendations regarding what PLN projects need to do to comply with spatial planning requirements. Depending on the particulars of each PLN project, additional permits may also be required from other agencies, including:

− Groundwater abstraction (Ministry of Energy and Mineral Resources or its regional offices)

− Hazardous waste storage, transport and use (MOEF/KLHK or its regional offices)


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− Forest use (MOEF/KLHK offices) Consultations may also be take place with agencies and bodies such as the General Directorate of Marine Transport. DIVK3L is responsible for obtaining all permits and managing all necessary consultations. Given the large number of projects underway at any time, PLN relies on an International Organization for Standardization (ISO) based integrated management system to ensure seamless document management and control. Review of selected EIA/AMDAL, IEE/UKL-UPL and addendum EIS/ANDAL revealed that while projects generally complied with all spatial planning, and other permitting and consultation requirements, the timing and process for obtaining approvals and permits is not always clearly described in assessment reports.

B.4 Incorporation of pollution control and hazardous waste handling into environmental management procedures

M Pollution control and mitigation measures, and monitoring requirements are routinely included in IEE/UKL-UPL and EMMP/RKL-RPL. Pollution control and mitigation measures set out in IEE/UKL-UPL and EMMP/RKL-RPL prepared for PLN projects are considered satisfactory. PLN promotes the adoption of clean technology as part of their pollution prevention efforts, including use of low nitrogen oxide burners to control and reduce nitrogen oxide emissions during operation, electrostatic precipators to contain fly ash, and enclosure systems for noise control. PLN projects conduct quarterly emission monitoring and reporting on emissions loads, through a continuous emission monitoring system. Similar monitoring and reporting is also carried out for emissions from mobile sources, and for wastewater discharges.


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PLN has prepared a standard operating procedure for managing waste, including hazardous wastes (e.g., Sulfur hexafluoride and polychlorinated biphenyls). The procedure covers identification, collection, containment and storage, and transport of hazardous and non-hazardous wastes. In addition to waste management, PLN uses non-polluting technology, including a gradual phase-out of polychlorinated biphenyl use for new installations since 1998. Environmental assessments undertaken for PLN projects involving hazardous wastes mostly describe the process of obtaining permits for collection and transport of hazardous wastes, and maintaining hazardous waste reporting sheets.

B.5 Expertise for conducting environmental assessments

M The present capacity of DIVK3L and UIP to prepare environmental assessments was found to be moderately satisfactory, with indications that in-house capacity is improving. The capacity of external consultants and experts can be variable regionally, with implications for the quality of assessments being prepared. Therefore, there is a need to streamline the process by which these assessments are undertaken. In Indonesia, project proponents are responsible for preparing EIA/AMDAL, IEE/UKL-UPL or addendum EIS/ANDAL and EMMP/RKL-RPL. These assessments can be prepared directly by project proponents or by certified consultants from the private sector and experts from universities. Due to its presently limited staff capacity, PLN typically hires consultants to prepare EIA/AMDAL, IEE/UKL-UPL and addendum EIS/ANDAL and EMMP/RKL-RPL for their projects. PLN plans to increasing have IEE/UKL-UPL prepared in-house by their own staff and occasionally will also undertake EIA/AMDAL or addendum EIS/ANDAL and EMMP/RKL-RPL in-

− Continue capacity development efforts to improve in-house capacity to initially prepare IEE/UKL-UPL and subsequently EIA/AMDAL and addendum EIS/ANDALand EMMP/RKL-RPL.

− Establish a consultant management system to manage a pool of prequalified consultants who can prepare project EIA/AMDAL and addendum EIS/ANDAL and RKL-RPL and, as needed, IEE/UKL-UPL. The consultant pool should include experts in specialized topics such as air pollution, biodiversity, climate change, and hazardous waste.

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house. DIVK3L prepares terms of reference for assessments while PLN’s Procurement Division handles the consultant/expert hiring process. Over-reliance on external consultants has implications for the quality of EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL assessments being prepared. The capacity and competence of external consultants is recognized as being variable, with the consequence that PLN’s safeguard requirements may not be consistently satisfied. This is a particular constraint in outlying regions where the availability of qualified consultants is comparatively smaller. As of December 2014, there were 936 certified individual AMDAL consultants in Indonesia, of which 40% were based in Jakarta and West Java. Reflecting the paucity of certified consultants, PLN projects in some regions typically will instead retain university-based experts to prepare EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL.

B.6 Risk assessment

M PLN’s corporate risk management policy and strategy is intended to ensure that risks are handled appropriately. This commitment includes rigorous application of environmental safeguard instruments. In practice, conduct of impact assessment and risk analysis as part of EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL preparation was found to be satisfactory. However, better systems can be incorporated whereby impact assessment and risk analysis is undertaken as normal practice. As a part of its internal supervision and control system, PLN has established a risk management policy. PLN has also created a Risk Management Division which is responsible for ensuring that risks are managed in a correct, continuous, and comprehensive manner, and that all identified risks are satisfactorily addressed.

− DIVK3L and UIP when reviewing environmental assessments should ensure that all significant impacts and risks are identified and that appropriate corresponding mitigation measures are proposed.

− Incorporate capacity development actions on this topic in the Capacity building master plan

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PLN is committed to rigorous application of safeguards instruments (i.e., EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ANDAL) to ensure that project impacts and risks are properly managed.

Notwithstanding, weaknesses in the identification of impacts and risks (i.e., some risks are overlooked) in EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL would undermine PLN efforts in this regard.

B.7 Mitigation hierarchy M Application of the mitigation hierarchy in assessment of PLN projects was found to be satisfactory. While siting of project facilities (e.g., transmission lines and towers) is frequently altered to minimize impacts, insufficient attention may be given to avoidance and offsetting of impacts (e.g., ecologically sensitive areas). At the project feasibility study stage, siting of power plants is planned to avoid sensitive areas to the extent possible. Similarly, during the assessment screening stage, actions are identified to avoid, minimize or mitigate impacts, particularly in environmentally sensitive and tribal areas and for projects involving resettlement, wherever feasible. PLN often shifts transmission line routes to avoid resettlement and impacts to tourism, natural sanctuaries, cultural heritage, and historical buildings. Lack of understanding of the magnitude and severity of potential impacts to ecologically sensitive areas may result in identification of ineffective avoidance and mitigation measures, and to overlook opportunities for biodiversity offsetting.

− Update the capacity development masterplan to introduce capacity building measures on mitigation hierarchy application in EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL preparation and project implementation.

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B.8 Conduct of meaningful public consultation

M PLN’s information dissemination and public disclosure procedures were found to be moderately satisfactory, based on their effectiveness, comprehensiveness, and inclusiveness. In the initial announcement and public consultation stage of the EIA/AMDAL process, PLN makes public announcements through local newspapers, and radio and television broadcasts, and by postings at government offices, inviting the public to respond and submit suggestions, opinions, responses, or objections to a project. While information disclosure and public consultation requirements are quite limited for IEE/UKL-UPL and addendum EIS/ANDAL, most assessments do make an effort to inform and engage with potentially affected persons. However, it is unclear whether the aforementioned information dissemination and public consultation efforts are effective, as evidenced by the typically limited feedback received by project proponents, particularly in rural areas where people are less familiar with written communication. In contrast, methods involving verbal and face-to-face interactions are well received. Potentially affected persons, community leaders, family welfare organizations, and local non-governmental organizations typically participate in public consultations as part of EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL assessments. Such consultations are supported with questionnaires that allow people to respond both orally and in writing during a consultation. Consultations are generally well documented with all suggestions, opinions, and responses being recorded, and then checked and verified by PLN. Depending on the significance and validity of the issues raised, public participation may lead to revisions to EIA/AMDAL, IEE/UKL-UPL, or addendum EIS/ANDAL reports. Assessment reports

− Introduce a module on meaningful public consultations into the capacity building master plan for application in EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL preparation and project implementation.

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would be improved by consistently summarizing details of consultation undertaken and outcomes (i.e., project responses to issues raised). Review of assessments undertaken for PLN projects reveals that consultations are partly satisfactory in large part because participation may not reflect all interested parties. Consultations will normally involve officers from district or provincial environmental agencies, the army and police, technical agencies, local leaders, and sometimes non-governmental organizations. Affected people are not always directly involved, instead being represented by local leaders. Participation of women and most vulnerable groups can be limited, with few women attending consultations unless they are the heads of their households, and other vulnerable groups may not be adequately engaged with by a project proponent.

B.9 Grievance redress mechanism

M PLN’s grievance receipt and resolution process was found to be moderately satisfactory based on adherence to their existing complaint handling mechanisms and cross checks to ensure that complaints are resolved. PLN responds to grievances received through its existing complaint resolution process. Complaints arising during a project’s construction phase and received directly by PLN are handled by the UIP Public Relation/Communication Department which verifies and forwards the complaint to the responsible unit with authority to respond. PLN additionally notifies MOEF/KLHK of any complaints received for their follow up. Grievances raised through customary community processes are forwarded by village leaders and/or customary leaders to the local PLN office.

− Introduce a module on grievance redress mechanism into the capacity building master plan for application in EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL and EMMP/RKL-RPL preparation and project implementation.

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Complaints received by MOEF/KLHK offices are verified and then forwarded to PLN for resolution. When a PLN office receives a notification or warning from MOEF/KLHK or one of its regional offices, the corresponding regional office is supposed to act immediately. The MOEF/KLHK grievance redress mechanism has a procedure requiring local authorities to document that the complaint was identified, noted, managed and resolved.

PLN also has a complaint management system accessible through a call center 123, online by using an integrated complaint-solving application, and at local customer services offices. This system allows affected persons to report any incident or complaint about PLN operations. Documentation of the functioning of the PLN’s grievance mechanism appears to be limited (i.e., maintenance of a grievance log indicating date of receipt of complaints, and evidence of how they were addressed), making it difficult to track PLN’s performance for this sub-component.

B.10 Protected areas and biodiversity conservation

M PLN’s procedures applicable to protected areas and biodiversity conservation were found to be mostly satisfactory, with projects having to comply with both spatial planning and permitting requirements, including those applicable to moratorium and forested areas. Preventing or avoiding impacts on critical habitats is anticipated at the screening stage of the EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL process, when the MOEF/KLHK and their regional offices must evaluate compliance of the project location with the corresponding spatial plan. Project locations must also comply with the indicative map of new permit

− While all efforts are made to identify potential biodiversity impacts, and all procedures are followed, the process may suffer due to lack of capacity and the impact assessment and risk analysis and mitigation sections of assessment reports may lack rigor, overlooking potential impacts and inadequately assessing the impacts to critical habitat and biodiversity. Capacity can be enhanced at all levels in the screening and assessment of biodiversity impacts to typical terrestrial and marine habitat, including unprotected and protected forest, mangrove, seagrass and coral

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moratorium.11 No business and/or activity is allowed in a moratorium area, except for special cases, and with very strict requirements. EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL prepared for PLN projects which pose potential biodiversity impacts generally provide sufficiently detailed baseline information on which to assess impacts to terrestrial and marine areas. Where necessary for EIA/AMDAL and addendum EIS/ANDAL projects, a biodiversity impact assessment may be undertaken to identify endangered species and their vulnerability. Notwithstanding efforts made to identify potential biodiversity impacts, the impact assessment and risk analysis and mitigation sections of assessment reports can be insufficiently rigrous, in some cases overlooking potential impacts and inadequately assessing the impacts to critical habitat and biodiversity.

by updating the capacity building master plan in this area.

B.11 Screening M PLN’s screening procedure was found to be mostly satisfactory, on the basis of its consistent application in categorizing proposed projects for assessment purposes. Projects are additionally screened against spatial plans. An identified omission is that screening is not done for electricity distribution lines unless they pass through protected areas. In general, the overall project screening process can be improved. Screening is routinely undertaken for all PLN projects, in consultation with MOEF/KLHK regional offices, to determine what type of assessment is required.

− Include improved screening methodology in the in the capacity development content

11 As stipulated in Presidential Instruction No. 10/ 2011 on Moratorium of New Permit Issuance and Refining of Primary Forest and Peat Land Management, or its

revision as well as issuance of new regulation.

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Screening of PLN projects is considered mostly satisfactory, with all projects being screened according to legally-established criteria to determine what safeguard instrument is applicable (i.e., EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ANDAL). Additionally, all projects are checked for compliance with the respective spatial plan, a confirmation of which is attached as an appendix to EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL reports. An identified exception in the screening process concerns electricity distribution lines which are not currently subject to assessment if they do not pass through protected areas, but which have the potential to cause environmental and social impacts.

B.12 Scoping M The PLN scoping procedure was found to be mostly satisfactory, being generally consistent with assessment good practice. This can be expanded to include all types of developments and project expansions. PLN projects requiring an EIA/AMDAL routinely undertake scoping to comply with regulatory requirements. Scoping is not applicable to IEE/UKL-UPL projects. Although addendum EIS/ANDAL projects are subject to internal peer review by PLN to ensure the thoroughness of an assessment, it is desirable to have a more thorough scoping process, particularly for projects involving large expansions.

− PLN should include a scoping process for both IEE/UKL-UPL and addendum EIS/ANDAL projects. Although scoping is not required for IEE/UKL-UPL and addendum EIS/ANDAL projects, a scoping exercise is still needed to establish the assessment coverage this should be added to the content in the trainings in the capacity development master plan.

No. Component/


C. Output/Outcome

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C.1 Content of the study report

M EIA/AMDAL prepared for PLN projects were found to be mostly satisfactory, generally covering all required topics. IEE/UKL-UPL typically have less content, reflecting the lack of an explicit requirement to cover some topics. Addendum EIS/ANDAL and RKL-RPL similarly have less content that an EIA/AMDAL. There is significant room for improvement in making PLN’s environmental assessments consistent with good industry practice. The content of EIA/AMDAL reports is typically comprehensive but occasionally overlook issues not properly identified in the assessment scoping process. Other apparent weaknesses are lack of sufficiently detailed project descriptions and inconsistent description of baseline conditions. IEE/UKL-UPL reports are typically less comprehensive, as is normal for this type of assessment, but can lack sufficient content on topics such as baseline conditions, analysis of alternatives, impact assessment and risk analysis, information disclosure, and public consultation. While some topics are not explicitly required for IEE/UKL-UPL projects, coverage should still be sufficient to ensure good quality assessments. Similarly, while addendum EIS/ANDAL and EIA/AMDAL assessment requirements differ (e.g., more limited scoping, analysis of alternatives, information disclosure and public consultation for EIS/ANDAL), large expansions of existing projects covered under the addendum EIS/ANDAL and RKL-RPL process would benefit from more comprehensive analysis and disclosure.

− Attention should be given to strengthening the HSSE Academy environmental safeguards curriculum and building environment staff capacity in impact assessment and risk analysis as part of the capacity development master plan.

C.2 M

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Quality of analysis12 The quality of impact assessment and risk analysis in EIA/AMDAL,IEE/UKL-UPL, and addendum EIS/ANDAL prepared for PLN projects was found to be moderately satisfactory. Quantitative and qualitative methods are routinely used in preparing EIA/AMDAL and addendum EIS/ANDAL, while more simplified methods are used in IEE/UKL-UPL. It is apparent that some impacts are being overlooked, either because of gaps in the baseline data or as an artifact of the assessment and analytical methodology. In this context there is room for improvement through utilization of better methodologies and capacity development.

EIA/AMDAL and addendum EIS/ANDAL typically utilize a combination of qualitative and semi-quantitative impact and risk analysis assessment, augmented by modelling as needed, to evaluate the magnitude and significance of potential adverse impacts. IEE/UKL-UPL mostly utilize a more simplified analysis of impacts. Despite the application of a comprehensive impact assessment and risk analysis methodology, some impacts may go unnoticed or not be fully particularized, possibly due to incomplete or inadequately detailed baseline information (e.g., incomplete data on wildlife species that could potentially be affected by project activities will affect the quality of the impact assessment and risk analysis).

− DIVK3L and PLN capacity need to be enhanced in EIA/IEE preparation. The capacity building master plan needs to be updated to reflect this.

− Attention should be given to strengthening the HSSE Academy environmental safeguards curriculum and building environment staff capacity in impact assessment and risk analysis as part of the capacity development master plan.

C.3 Consideration of alternatives

M Analysis of alternatives for PLN projects was found to be partly satisfactory based on the narrow range of alternatives typically considered or explained in environmental assessment reports

− Capacity development master plan should be updated to include capacity enhancement in alternatives assessment

12 Depth of analysis is one of four criteria on which the quality of all documentation associated with the environmental impact assessment process is to be

evaluated. The other criteria are: 1) consistency; 2) compliance (mandatory); and 3) relevance (Regulation of Minster of Environment and Forestry No. 08/2013 on Procedure for Review and Examination of Environmental Documents and Issuance of Environmental Permit).

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(i.e., project modifications are often made during the feasibility stage but may not be described in assessment reports). PLN assesses alternatives on the basis of both non-financial and financial criteria. A key non-financial consideration is a project’s environmental acceptability. The financial criteria in turn assess which alternatives are feasible and cost effective. Analysis of alternatives typically considers production capacity, location of project components, production technology, and building layout, and timing and duration of operations. Alternative locations are particulary considered in the siting of new power plants, and the siting of transmission towers and alignment of transmission lines to avoid impacts on environmentally and/or socially sensitive areas. The analysis of alternatives as described in most PLN environmental assessments is overly narrow. Consideration of the ‘no project’ alternative is uncommon. Analysis of alternatives is not explicitly required for IEE/UKL-UPL projects and as such may not be undertaken. Project modifications can however be made at the project feasibility stage where technical, economic, social and environmental aspects are preliminarly considered.

This lack of detail is covered as part of the equivalence assessment where a more robust analysis of alternatives is recommended. As far as the national requirements are concerned, the analysis of alternatives is undertaken as required.

C.4 Environmental management plan

M EMMP/RKL-RPL and IEE/UKL-UPL prepared for PLN projects were found to be moderately satisfactory, with the reports providing standard content. Mitigation measures and monitoring requirements may not be sufficiently described (e.g., intent of planned mitigations, monitoring

− DIVK3L capacity should be enhanced in improved procedures for ensuring satisfactory EMMP/RKL-RPL and IEE/UKL-UPL content and format by updating the capacity

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program design, implementation responsibilities, budget allocations). EMMP/ RKL-RPL and IEE/UPL-UPL generally provide an adequate description of mitigation measures and monitoring requirements during project construction and operation phases, and adhere to the required format. Projects assessed prior to a change of the applicable regulation in 2012 have less mitigation and monitoring related content compared to more recent EMMP/ RKL-RPL and IEE/UKL-UPL. Mitigation measures and monitoring requirements may not be sufficiently comprehensive, often lacking detail on the intent of planned mitigations, and their implementation arrangments. Greater clarity is needed on the nature and design of monitoring programs. Respective responsilbilities for implementation of mitigation measures and conduct of monitoring should be clear. Funds allocated for mitigation and monitoring should additionally be clearly stated, ensuring transparency and sufficiency of allocated funds.

development masterplan to include trainings in this aspect

− .

C.5 Method for review of content and substance of reports submitted

M PLN’s procedure for and conduct of assessment document review was found to be partly satisfactory. While routinely covering regulatory, administrative and technical content, inconsistency is apparent in the review process. PLN environment staff at the UIP level and in the Environmental Subdivision of DIVK3L at headquarters in turn review EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL reports. PLN’s internal review of EIA/AMDAL, IEE/UKL-UPL and addendum EIS/ANDAL reports focuses primarily on regulatory and administrative compliance but also considers technical issues, and may include making recommendations on changes to project siting and design.

− Improve capacity of PLN staff in reviewing environmental assessment documents. Update capacity development master plan to include this aspect in this training plan.

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After PLN’s review of project assessment reports they are forwarded to MOEF/KLHK for approval. Although MOEF/KLHK has developed a checklist for reviewing EIA/AMDAL and IEE/UKL-UPL reports, this checklist may not routinely be used, with reviewers instead relying on their own knowledge and expertise.

C.6 Arrangements for access to assessment and monitoring reports

S Disclosure of assessment and implementation monitoring reports either by MOEF/KLHK or PLN was found to be satisfactory. Limited access to such reports affects the transparency of the assessment process, however, this is not a national legal requirement. This is being addressed through the equivalence assessment. MOEF/KLHK and its regional offices are responsible for disclosure of approved EIA/AMDAL, IEE/UKL-UPL, and addendum EIS/ANDAL reports. Some assessment and monitoring reports for PLN projects can be found at the MOEF/KLHK website and are available for access upon request. Although there is no legal requirement for PLN to themselves disclose EIA/AMDAL, IEE/UKL-UPL, addendum EIS/ANDAL, and implementation monitoring reports, PLN does however make selected reports available on the company website. Implementation monitoring reports do not however appear to be made publically available. project proponent must instead submit semi-annual monitoring monitoring reports to the MOEF/KLHK and its regional offices who then disclose the reports.13

C.7 Requirements for implementation and monitoring

M PLN’s performance with regards to implementation and monitoring was found to be moderately satisfactory. While projects are generally in compliance with permitted levels,

− Increase PLN environment staffing levels to ensure sufficient time is available to prepare and submit

13 Permen LH No. 06/2011 on Public Information Service.

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monitoring data can be better presented. Instances of delayed submission of monitoring reports were identified. As a project proponent, PLN is responsible for monitoring EMMP/AMDAL and IEE/UKL-UPL implementation on a semi-annual basis. MOEF/KLHK and its regional offices are responsible for supervising such monitoring. Monitoring parameters typically include: time series data on air and water quality, and noise; comparison of physio-chemical monitoring data with permitted levels; and identification of non-compliance for any monitoring parameter. Additionally, monitoring of electric magnetic fields and fire risk may be undertaken and reported. Monitoring reports are required to specify necessary corrective actions and/or proposed new requirements. Review of selected projects under implementation indicated that submission of monitoring reports is not uniformly timely with some projects being late in submitting reports. Project compliance with permitted levels such as environmental quality standards appears to be generally satisfactory but data presentation can be improved. Monitoring reports normally include a confirmation that analysis were carried out by an Indonesia National Accreditation Committee accredited laboratory.

monitoring reports in a timely manner.

− Build capacity of UIP, UPP, and Wilayah environment staff through training in project implementation monitoring and reporting.

C.8 Environmental audit M PLN’s performance in undertaking environmental audits was found to be moderately satisfactory.

− Update the capacity development masterplan to improve the trainings

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Although formal environmental audits are seldom considered necessary, Wilayah conduct regular audits of project operations. Additionally, PLN power plants self-assess and report as part of PROPER. High-risk projects and activities and those that are suspected of violations may be subjected to environmental audit. Although conduct of an environmental audit in stipulated circumstances is a regulatory requirement, such audits are seldom considered necessary. Instead, as part of PLN’s integrated management system, which includes ISO 14001 on environmental management, Wilayah conduct regular audits of power plant operations. PLN power plants also participate in PROPER, which requires self-assessment and reporting on the basis of internal and external audits. The moderately satisfactory PROPER ratings of PLN projects indicate that improvements can be achieved if additional resources are allocated to enhance project environmental performance.

on environmental audit for power plants.

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Appendix 1 Organogram of PLN and Highlights of DIVK3L Organization

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Appendix 2 Organogram of DIVK3L Environmental Subdivision

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Appendix 3 Organogram of UIP

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Appendix 4 Organogram of UIP and Its Relationship with UPP

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Appendix 5 Organogram of PLN Wilayah

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Appendix 6 Curriculum of PLN HSSE Academy and Target Staff Groups