Environmental & Building Permits

If your company has a physical location, as apposed to a virtual office address, the business needs to obtain certain environmental and building permits, depending on its business activities.

Environmental Permit

Business operations that may have an impact on the natural environment need an environmental permit to operate in Indonesia. This applies in most cases to companies that produce residual waste that may contaminate the environment.

Companies which are active in sectors such as agriculture, mining, construction or the processing of raw materials in general need to do an Environmental Impact Analysis, known as Analisis Dampak Mengenai Lingkungan (AMDAL).

According to the environmental regulations in Indonesia, an AMDAL is necessary with regard to:
  • Changes of the natural environment.
  • Exploitation of natural resources.
  • Production and processing of raw materials.
  • Possible pollution of the immediate environment and contamination of natural resources.
  • Impact on the sustainability of natural resources and cultural heritage.
  • Implementation of new technologies that impact the environment.
  • Introduction of new species of flora and fauna.

To apply for the AMDAL, companies need to submit an Environmental Impact Statement (ANDAL), and an Environmental Management & Monitoring Plan (RKL-RPL). Thereafter, the AMDAL Evaluation Commission (Komisi Penilai) will evaluate the AMDAL application and present an AMDAL recommendation to the Ministry of Environment.

Some business activities which have a limited impact on the environment do not need an AMDAL permit. Those companies can meet the requirements by submitting Environmental Management & Monitoring Efforts (UKL-UPL) or an Environmental Management Statement Letter (SPPL).

The business activities that require an environmental permit, involve 4 main steps:
  1. Draft and submit the required documents.
  2. Evaluation and recommendation of the documentation.
  3. Application for the environmental permit.
  4. Approval and issue of the environmental permit.

The Ministry of Environment & Forestry is responsible for the issuance of the environmental permits.

AdvintA can help you getting the right type of permit, by preparing the necessary documents, submit the application and guide you through the process.

Building Permit

Whenever your company needs to rent, buy or build a business space, then the premises needs to have a valid building permit, known as an Izin Mendirikan Bangunan (IMB).

The building permit registration allows the construction of new buildings in Indonesia in line with the following criteria:
  • The allocation of the land.
  • The business use of the building.
  • The safety of the construction.
  • The design of the building.

If your company plans to buy or lease and existing building, then the owner of that building must have the applicable IMB which is issued by the spatial planning department of the local government.

It is the responsibility of the owner or lessor to secure the IMB. That IMB should allow the business purpose or activities you want to employ in that building and on the land. If not, you need to request an adjustment of the IMB for that particular use at the local government.

Some buildings only allow residential use and no commercial activity. Also, some land zones are prohibited for commercial use or for certain business activities which have a substantial impact on the (living) environment.

Seek official approval of the local village head and community for your activities on location through a:
  • Disturbance permit, known as Izin Gangguan or Hinder Ordonnantie (HO).
  • Business location permit, known as Surat Izin Tempat Usaha (SITU).

The HO is a permit letter stating that the company does not cause any nuisance or hindrance to the immediate living environment, i.e. the neighbors.

The SITU is slightly different and basically states that the company is permitted to operate on that location as long as it does not cause damage or obstruct the living environment, i.e. the neighborhood.

Besides your company details and a valid IMB, you may need to present a production equipment list and a waste processing chart, depending on the type of business activity.

After getting written approval from the building owner and the local residents / the neighbors via the village head (RT/RW), you can file for the application at the local government official, who will grant you the HO a/o SITU permit.

The process of obtaining a HO or SITU is fairly straightforward if you do not employ industrial activities outside an industrial zone or city.
To accommodate businesses and investors in Indonesia, the government is working on the integration and simplification of the environmental and building permit processes.

AdvintA can help you with the IMB and related local permits, by assessment of the validity and type of the existing permits and the local regulations or by applying for an adjustment a/o new permit on your behalf.