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The AMDAL Process and the Equator Principles Common themes and apparent differences 1

Today’s buzzwords in environmental assessment are ‘The Equator Principles’ or EP in short. Differentiation is made between the regulatory environmental impact assessment (EIA) of the host country (in Indonesia referred to as the AMDAL process) and the international EIA adopting EP requirements, the adopted EIA standards for most financial institutions. In Indonesia, compliance with the AMDAL process for new mining projects is compulsory by law, while additional EP compliance is increasingly a reality of project financing. Much confusion, however, exists about the differences between the AMDAL and EP requirements. This paper argues that the AMDAL framework is sufficiently comprehensive to conduct, at least in theory, a high quality environmental impact assessment study, with supporting documentation that can conform to EP expectations. It is also argued that comparing the AMDAL process with EP requirements is not a black and white affair, easily achieved by ticking boxes. The main differences between the AMDAL and the EP requirements are seen in the extent to which the project owner has to demonstrate (1) the commitment to maximize socio-economic benefits for the host region of the mine, and (2) the commitment and the capability to implement agreed environmental action plans. The Equator Principles are as much concerned about planning (the preparation of the EIA documentation is part of it) as they are about implementation and monitoring of success. It is the latter two aspects in which EP requirements go beyond the usual AMDAL practice. Enforcement of environmental commitments is not left alone with the regulatory government authorities; the Equator Principles extend enforcement responsibility to involved financial institutions.