Enviro News Asia, Jakarta —The Indonesian Ministry of Environment and the Environmental Impact Management Agency (KLH/BPLH) has implemented the Corporate Environmental Performance Rating Program (PROPER) to generate tangible impacts for environmental protection, the business sector, and society.
This program is part of a multi-instrument environmental management system mandated by Law No. 32 of 2009 on Environmental Protection and Management.
This was conveyed by the Deputy for Pollution and Environmental Damage Control at KLH/BPLH, Rasio Ridho Sani, during the “Socialization of the Corporate Environmental Performance Rating Program for the 2024–2025 Period.”
The event was held in a hybrid format and attended by more than 3,000 participants via Zoom and over 2,000 participants through YouTube. Attendees included PROPER participant companies, representatives from regional KLH/BPLH Environmental Impact Control Centers, and environmental agencies at the provincial and district/city levels across Indonesia.
Deputy Rasio emphasized that all business actors and/or activities are obligated to manage and monitor all their environmental impacts.
“Law No. 32 of 2009 introduces various instruments for environmental protection and management, including economic instruments such as incentives and disincentives, as well as compliance monitoring mechanisms,” explained Deputy Rasio in his official statement.
Through PROPER, company performance is categorized into five color-coded ratings. A black rating is assigned to companies whose activities cause serious environmental harm. Red is for companies that have made efforts but are still non-compliant. Blue indicates compliance. Green is awarded to companies that exceed compliance by implementing energy and water efficiency and applying the 3R (Reduce, Reuse, Recycle) principles. The gold rating is reserved for companies that undertake significant environmental and social innovations and serve as role models for others.
“Non-compliant companies or those receiving poor ratings will face financial risks, difficulties in securing funding, and may be subject to legal sanctions. On the other hand, those with good ratings will benefit from various advantages, including easier and more affordable access to financing,” Deputy Rasio stressed.
He also stated that PROPER results are a key source of information for company owners, shareholders, and business partners to assess environmental performance, providing a basis for decision-making and internal changes. This evaluation also serves as an external performance report issued by KLH/BPLH.
“PROPER is an external control mechanism in the form of an environmental performance report card issued by the government to businesses. It serves as a reference for top company executives and encourages innovation, as criteria that go beyond compliance can drive companies to innovate in technology, such as reducing emissions intensity or using more environmentally friendly raw materials,” Rasio Ridho Sani elaborated.
Moreover, PROPER provides significant benefits to the banking sector, as it can be used to assess financing risks of business activities. It also contributes to regulatory monitoring and law enforcement. Rasio emphasized that non-compliant companies, especially those rated black and red, must be closely watched, as they are subject to legal sanctions.
In the 2024–2025 PROPER cycle, there are three main focus areas: increasing the number of participating companies to 5,476, including those in industrial zones and around priority watershed areas; strengthening the role of local governments—both at the city/district and provincial levels—as evaluators; and enhancing criteria and mechanisms to ensure the quality and validity of PROPER’s impacts on the environment, businesses, and society. Waste management performance will also become one of the evaluation criteria.
“Evaluations will not be based solely on company reports. Direct monitoring will be conducted to verify actual performance where necessary. Specifically for companies rated green and gold, we will carry out on-site monitoring,” concluded Rasio Ridho Sani. (*)
