Incentives to Improve Regional Performance

KOMPAS/HERU SRI KUMORO

City workers try to push garbage toward the riverbank of the West Canal in Tanah Abang, Jakarta, on Tuesday (4/12/2018) before heavy equipment is used to lift it out of the water. Some of the garbage that has been dumped into the river is household waste, including plastic and Styrofoam.

JAKARTA, KOMPAS — The central government has issued an incentive scheme to improve regional administrations’ performance in waste management. The 2019 State Budget (APBN) allocates the new incentive fund, ranging from Rp 9 billion to Rp 11 billion, to 10 regional administrations.

According to the Finance Ministry’s website, the APBN allocates the regional incentive fund (DID) to reward provinces, regencies and municipalities for achievements in areas such as financial governance, basic public services and ease of doing business. Waste management is not included in the criteria.

Trash, waste and B3 management director general Rosa Vivien Ratnawati of the Environment and Forestry Ministry said in Jakarta on Tuesday (12/04/2018) that the waste management incentive fund was provided by the Finance Ministry based on recommendations from the environment ministry. “We will look at what the regions do to reduce [waste] and how much is reduced,” she said.

Finance Minister Sri Mulyani Indrawati declared the waste reduction incentive fund on July 6 in Bali, during a meeting with World Bank president Jim Yong Kim on plastic pollution.

Encouragement

According to the 2019 State Budget, the regions to receive the waste reduction incentive fund are: Padang (Rp 9.12 billion), Jakarta (Rp 9.02 billion), Bogor municipality (Rp 8.97 billion), Depok (Rp 9.12 billion), Cimahi (Rp 9.33 billion), Malang municipality (Rp 9.66 billion), Surabaya (Rp 9.33 billion), Banjarmasin (Rp 9.34 billion), Balikpapan (Rp 11.06 billion) and Makassar (Rp 8.9 billion).

Rosa said the regions were to use the fund to finance waste management matters, such as regulations, facilities, campaigns and law enforcement. She expressed the hope that the incentive would encourage other regions to reduce waste in their areas to achieve the 30 percent national waste reduction target and 70 percent waste management target by 2025.

She cited the steps Banjarmasin had taken through a municipal regulation that has prohibited modern retail stores to provide disposable plastic bags to customers since June 2016. This had prevented 52 million plastic bags from contributing to waste.

Balikpapan, which had followed Banjarmasin’s lead since April 2018, planned to increase its legal basis for banning plastic bags through a regional bylaw. Balikpapan Environment Agency head Suryanto said this could reduce waste by 59 tons per month. The bylaw would also have a positive financial impact for retailers.

Balikpapan Supermarket Maxi director Soeny Yoewono said the company could save Rp 40 million per month in plastic bag costs. “The savings is huge,” he said.

The Denpasar municipal administration is drafting a regulation to limit the use of disposable plastic bags that could be in place by early next year. In addition, Denpasar Environment and Sanitation Agency head I Ketut Wisada said the municipality was trying to establish 200 additional waste banks in the next two years to the 100 existing waste banks.

The central government also seeks to limit the use of plastic bags with an excise tax. Even though it is still in its early stages, the 2019 State Budget sets the revenue from the plastic bag tax at Rp 500 billion.

Fiscal Policy Agency head Suahasil Nazara of the Finance Ministry said an excise would be imposed on plastic bags because the disposable good was primarily used by the public. Different views still existed on the issue within the government, especially within the Finance Ministry.

Indonesian Retailers Association (Aprindo) chairman Roy Nicolas Mandey said the planned plastic bag excise needed to be disseminated to consumers. “The burden should not be transferred to consumers,” he said.

(ICH/PRA/COK/KRN)