Jakarta – The government has stated that Environmental, Social, and Governance (ESG) practices are now a mandatory requirement, not just a buzzword. Director General of Minerals and Coal (Minerba) at the Ministry of Energy and Mineral Resources and Acting Director General of Electricity, Tri Winarno, stated on Thursday, September 25, that enforcing ESG standards is a crucial step in ensuring the energy and mining industries operate sustainably.
“ESG regulations continue to be strengthened so that mining practices that have the potential to alter the environmental balance can be suppressed and mitigated. Sustainability must be the standard, not an option,” said Tri Winarno in the webinar “Looking at ESG Achievements in the Midst of Indonesia’s 80th Anniversary.”
Tri revealed that this commitment was demonstrated by the decisive action taken by the Directorate General of Mineral and Coal, which froze the operating licenses of 190 mining companies. The reason for this was that these companies had failed to comply with the requirement to set aside funds for post-mining reclamation, with an estimated total liability of Rp35 trillion.
“Before revoking the permit, we issue a warning and allow time for follow-up. If the company demonstrates compliance, the permit can be reactivated. In principle, reclamation and post-mining environmental restoration are mandatory,” he explained.
These enforcement efforts have led to a significant increase in corporate compliance. Previously, only 39 per cent of companies provided reclamation guarantees, but now that figure has risen to 72 per cent.
In addition, the Directorate General of Mineral and Coal is developing a digital-based licensing system to reduce face-to-face interactions and minimise potential conflicts of interest. This step aligns with the implementation of good corporate governance (GCG) in the mineral and coal sector.
In the electricity sector, PT PLN Engineering President Director Chairani Rachmatullah emphasised that ESG practices are a fundamental strategy for the company in facing the challenges of climate change. He cited the construction of the Cirata solar power plant as an example of accelerating the development of renewable energy.
“Extreme weather caused by El Niño has disrupted hydroelectric power plant operations. Therefore, accelerating the transition to renewable energy is an urgent necessity. ESG is not just a buzzword, but a long-term strategy,” explained Chairani. (Hartatik)
Banner photo: Image generated by OpenAI’s DALL·E via ChatGPT (2024)
