EPR in Indonesian law

The Extended Producer Responsibility (EPR) in Indonesia has been enshrined in the Waste Management Law 2008. Article 15 of the law states that producers are responsible for the disposal of packaging and products that cannot be composted or are difficult to compost. The problem is that there is no further explanation of what this would mean for companies and how they should comply to this regulation. In the regulation nothing has been mentioned regarding reporting requirements or penalties. Result: The regulation had no impact.

With Regulation 81/2012, the industry was required to use recyclable materials and to take care of the packaging recycling. Regulation 97/2017 (also known as Jakstranas) builds on the regulation from 2012 and formulated concrete targets for waste reduction and specified a broad range of possible measures on how to achieve these reductions. Accordingly, until 2025 household waste shall be reduced by 30 percent and 70 percent of the remaining amount shall go through a treatment process. Municipal governments were requested to develop concrete waste reduction and treatment plans to contribute to the overall targets. The municipal targets have to be reported to Indonesian Ministry of the Environment and Forestry (KLHK). In the regulation 97/2017 these municipal waste management plans are referred to as Jakstrada. In order to strengthen the industry's efforts, it was specified, among other things, that concrete savings targets should be set and that company-specific savings plans would have to be developed. The latter shall elaborate how and over what time period the respective companies concerned intend to achieve the outlined savings targets.

Waste Reduction Roadmap

So far, the culmination in regards to the development of the legal framework of the Indonesian EPR was the enactment of ministerial regulation 75/2019. This also called "Waste Reduction Roadmap" specifies the implementation of the Jakstranas targets for the consumer goods industry, the retail sector, and the hotel and restaurant industry. Table 1 will show the sectors and sub-sectors mentioned in the regulation.

Table 1: Waste composition data 2021

Sectors	Sub-Sectors
Manufacturing	Food and beverage industry; Consumer goods industry; and Cosmetics and personal care industry.
Food and beverage services	Diners; Cafes; Restaurants; Catering services; and Hotels.
Retail	Shopping centers; Modern stores; and Traditional markets.

Producers of food, cosmetics and other consumer goods must reduce the waste generated by their own products by 30 percent by 2029, in particular through recycling and reuse of resources. For the retail sector, it stipulates a ban on single-use plastic bags. For hotels and restaurants savings and recycling targets have been set which are comparable to those of the industry.

Activities	Details
Restriction of waste generation	Through the use of products, product packaging and/or containers that are easily recyclable and which generates as little waste as possible; and/or By not using non-degradable products, product packaging and/or containers.
Waste recycling	Through the use of recyclable raw materials and/or recycled raw materials for production.
Waste reuse	Through the use of reusable raw materials for production.

With this "roadmap," the development of an EPR system is expected to gain momentum. The regulation specifically addresses packaging made of plastic, aluminium (cans), glass and paper. According to the regulation, from 2030 onwards, there will be a complete ban on plastic straws, plastic bags and single-use polystyrene packaging.

In regards to the storage of waste the regulations states that the storage facilities shall protect the collected resources from heat and rain, the resources shall be kept in sealed containers and shall be classified by material and shapes. It is also stated that producers can create cooperation with government- registered waste banks, landfills implementing 3R principles and recycling centres.

Figure 1: Waste reduction roadmap

The roadmap as shown by figure 1 is divided into the planning, implementation, monitoring, evaluation, and reporting stage. The planning stage has been set for the time period 2020-2022. In this stage companies in the aforementioned sectors need to submit their strategies to the government authorities. In order to ease the process, of submitting the documents the government agencies are creating applications. After the planning phase, the government agencies and the producers will be in contact on a bi-annual basis, as producers need to monitor their activities and the government is reviewing the process and is supporting the producers to achieve their targets. In 2021 producers were expected to develop packaging take-back concepts and to strengthening/establish cooperation with waste banks and other collection points. For 2022 the implementation of pilot projects and baseline studies has been foreseen. From 2023 onwards, the implementation of the developed concepts shall begin in order to achieve the government's minimum targets by 2029 at the latest. Throughout this timeframe producers need to report their achievements ministry.

Further, the regulation mentions incentives and disincentives. Based on the performance and the degree of abiding by the regulation companies could receive either public praise or experience public pillory. Direct financial incentives or disincentives are not yet considered for producers. Instead, municipal governments can receive additional financial support from the central government for waste management related activities if they perform well. Producers have to finance their activities by themselves.

Individual responsibility system

The regulation requires producers to collect and recycle. To achieve the targets outlined in the regulation, producers, operators of restaurants, hotels, shopping centers and public markets can enter into cooperative agreements with (i) formally registered waste banks, (ii) landfills with adequate recovery systems and (iii) recycling centers. At present no collective collection efforts have been specified in this regulation. Producers have the individual responsibility to organize the collection of the required amounts of recycle resources.

In a system based on individual responsibility, each producer or importer is obliged to collect waste himself or to contract a waste management company to do so as depicted in the graph. Companies would remunerate the waste management operators for their services. In the Indonesian context this would be the informal sector primarily, including waste banks. The challenge therein: Household waste consist of recyclable items of a broad range of companies. In an individual collection system, each producer would have to start its own collection and recycling initiatives. This would be highly inefficient. That’s the reason why in most countries a collective EPR system is used. 

In a collective responsibility scheme obliged companies work collaboratively to recycle waste. As indicated in the figure, a Producer Responsibility Organisation (PRO) or a system operator takes over responsibilities of each producer and importer by organising the system. Therefore, the waste is not sorted by company anymore, which saves both time and costs. The PRO would contract waste management operators and encourage consumers to take part in the recycling system. The PRO is fully financed by the obliged Producers and Importers. 

The current regulatory framework in Indonesia does not mention the establishment of a PRO. In general, the government seems to be aware of the need of PROs, but no further plans have been communicated publicly. Therefore, all eyes are on the first industry-lead initiative. In 2020 the Indonesia Packaging Recovery Organization has been set up by private sector operators. Since the current regulatory framework does not require any collective approach, we have yet to see more producers joining IPRO or the establishment of more PROs by other organizations. Figures 2 and 3 show the difference between EPR systems that are based on individual and collective responsibility.