🔍 Indonesia’s Accession to the OECD: A Call for Regulatory Reform
Indonesia’s bid to join the OECD presents a crucial opportunity to align its environmental and energy governance with international standards. This collaborative report by CELIOS and ICEL presents a Regulatory Gap Analysis that identifies major discrepancies between Indonesia’s legal framework and OECD instruments.
📌 Key Findings on Regulatory Gaps
✅ Regulatory Reform:
The Environmental Impact Assessment (EIA) framework remains exclusionary and lacks meaningful public participation, particularly for Indigenous Peoples. The Free, Prior, and Informed Consent (FPIC) process is not legally guaranteed. EIAs often overlook cumulative and long-term impacts especially in coal mining areas.
✅ Internalizing Environmental and Social Costs:
Energy pricing fails to reflect environmental and health externalities, making coal appear artificially cheap compared to renewables.
✅ Transparency and Access to Information:
There is no legal obligation for full public disclosure of energy pricing structures, Power Purchase Agreements (PPAs), or emissions data. Real-time ambient air quality data around coal power plants is not openly accessible.
✅ Governance and Institutional Strengthening:
Indonesia lacks a dedicated, cross-sectoral body to coordinate the energy transition. Responsibilities are fragmented across ministries without a clear mandate. Coordination between national and regional governments is weak, and no early warning system based on environmental risk exists.
✅ Enhancing Climate Finance Frameworks:
Official Development Assistance (ODA) mechanisms do not explicitly align with Indonesia’s climate goals. The country’s Nationally Determined Contribution (NDC) targets remain low and lack compliance with the Paris Rulebook.
✅ Oversight of Green Investment Instruments – Danantara:
Danantara’s governance structure is inconsistent with OECD anti-corruption and integrity standards. Dual ministerial roles, asset declaration exemptions, and legal immunity provisions create serious accountability gaps. There is no protection for third-party public funds managed through state-owned banks. A transparent, participatory 2050 Energy Transition Investment Roadmap aligned with OECD principles is urgently needed.
✅ PLN Monopoly and Market Distortion:
PLN maintains monopolistic control over electricity transmission—contradicting the OECD’s principle of competitive neutrality. Existing laws further entrench this dominance, hampering the energy transition and weakening efficiency and accountability.
📘 Read the full report to understand why systemic reform is essential for a just, inclusive, and sustainable transition in line with OECD values.
📥 [Download the report here]
