Indonesia Regulatory News

Presidential Regulation No. 14 of 2024 on the Implementation of Carbon Capture and Storage Activities was enacted by the Government of the Republic of Indonesia on January 30, 2024. This regulation ou...

Presidential Regulation No. 14 of 2024 on the Implementation of Carbon Capture and Storage Activities was enacted by the Government of the Republic of Indonesia on January 30, 2024. This regulation outlines a methodology for the capture and processing of carbon produced by upstream oil and gas business activities, power plants, industries, and other emission-producing activities. It also defines procedures for transporting carbon from collection and/or processing facilities to injection and storage locations. 

Although Carbon Capture Storage, or "CCS," is not a novel concept, this regulation signals an exciting phase in Indonesia’s history. This strategy will revolutionize the country's economy by creating new business opportunities and expanding the market for low-carbon goods worldwide. 

Objectives

The main focus of the recently released Presidential Regulation No. 14 of 2024 (PR No. 14/2024) is to facilitate the execution of CCS operations highlighting Indonesia's potential as a hub for carbon storage. The regulation provides two main plans for CCS operations: 

• CCS inclusion: This requires cooperative alterations to contracts for integration with oil and gas operations. 

• Licensing: Licenses will be needed for exploration and storage operations in regions that are designated as non-working areas. 

A more detailed procedure for CCS implementation plans is described in PR No. 14/2024, which includes examination by SKK Migas's ((Oil and Gas Upstream Business Activities Operational Agency) and approval by the MoEMR (Ministry of Energy and Mineral Resources). While carbon-storage licenses are not a requirement for implementing CCS in accordance with MoEMR Reg No. 2/2023, the regulation prioritizes domestic storage capacity and international collaboration. 

In order to encourage investment in CCS projects, the regulation emphasizes tax incentives and introduces a carbon transport licence. PR No. 14/2024 complements MoEMR Reg No. 2/2023 and is detailed enough for businesses to begin thinking about developing CCS projects. 

Outcome

Indonesia stands to gain greatly from the application of CCS both the environmentally and economically. In addition to promoting innovation and creating highly skilled jobs, the development and application of CCS can attract investment, particularly from abroad. Indonesia has the geographical advantages that make it even more likely to make a big impact on the global CCS scene. 

The Council of the Organization for Economic Co-operation and Development (OECD) decided on February 20, 2024, to open accession talks with Indonesia, recognising the country's progress toward meeting...

The Council of the Organization for Economic Co-operation and Development (OECD) decided on February 20, 2024, to open accession talks with Indonesia, recognising the country's progress toward meeting the requirements outlined in the Framework for Consideration of Prospective Members [C(2023)176/FINAL], as well as the criteria of like-mindedness, significant player, mutual benefit, and global considerations. 

Accession Talks Begin 

OECD Secretary- General Mathias Cormann formally presented the OECD Accession Roadmap to Indonesia's Coordinating Minister for Economic Affairs, Mr. Airlangga Hartarto, during a brief ceremony at the opening session of the OECD Ministerial Conference. Both emphasized the historic nature of the OECD's accession talks with Indonesia are, given that Indonesia is the first country in South-East Asia to make such a request. 

Accession Roadmaps and Membership Commitments 

The OECD member countries have designated priority areas for accession to the Organization, and these areas are reflected in the Accession Roadmaps, which outline the conditions, and approval procedure. As part of the subsequent accession process, Indonesia's compliance with OECD standards, rules, and practices will be subject to a thorough and meticulous assessment by 26 technical committees. One such committees is the Chemicals and Biotechnology Committee, which oversees the OECD’s work on chemical safety and biosafety. The Committee helps countries work on cost-effective ways to protect human health and the environment from chemical risks. 

The Importance of Chemical Safety 

Chemicals are an essential part of human life. They are found in many items we use on a daily basis, such as sunscreen, computers, insect repellents, and insulating materials that increase energy efficiency. While chemicals have advantages, they can also harm the environment and public health. Governments must therefore have an important role to play in ensuring the safe production and use of chemicals, and in requiring chemical companies to carry out a range of tests prior to allowing chemicals onto the market. Testing chemicals is necessary, but it can be time- and resource -consuming. 

Benefits of the OECD MAD System 

The OECD's Mutual Acceptance of Data (MAD) system, guidelines for chemical testing, and other tools have increased savings for society. Countries can minimize redundant testing and remove non-tariff barriers to trade by working together on common substances. This ensures the development of chemicals that are safer for humans and the environment, as well as more effective and sustainable.  

Objectives and Obligations 

The main objective of the accession process is to bring Indonesia closer to OECD best practices, policies, and standards. This will benefit Indonesia and its people as well as OECD members. The OECD and Indonesia will work closely together throughout the accession process to facilitate the implementation of long-term reforms that will bring Indonesia line with OECD best practices, best policies, and standards. 

In joining the OECD, Indonesia will commit to: 

1. Accept the goals and objectives of the Organization as set out in the Convention. 

2. Comply with the OECD Convention and fulfil all obligations and commitments contained therein. 

3. Adopt additional protocols to the OECD Convention. 

4. Approve decisions, resolutions, rules and regulations previously adopted by the organization. 

5. Approve the financial statements and working methods of the Organization. 

6. Ratify all relevant legal documents of the Organization. 

7. Sign a privileges and immunities agreement to ensure the independence and proper functioning of the Organization. 

Conclusion 

There is no deadline for completing the accession procedures. The final result and schedule will dend upon how quickly each candidate country makes the necessary modifications to bring itself even closer to the Organization's best practices and standards. To issue an invitation for membership, the member countries of the OECD Council must reach a final, unanimous decision after all the technical committees have completed their reviews.

The Indonesian Food and Drug Administration (FDA) has updated its list of substances that can be used in cosmetics without permission or with restrictions. The FDA issued draft amendments to the Te...

The Indonesian Food and Drug Administration (FDA) has updated its list of substances that can be used in cosmetics without permission or with restrictions.

The FDA issued draft amendments to the Technical Requirements for Cosmetic Ingredients Appendices on August 24, 2023. The final amendments were issued and became effective on December 7, 2023. It is noteworthy that cosmetic notification holders who received notification numbers from the National Agency of Drug and Food Control (BPOM) before the amendments came into force, must comply with the updated regulations within 24 months (i.e. by December 7, 2025).

The modifications took place in the following appendices of the cosmetics regulation:

• Appendix I: Restricted ingredients
• Appendix II: Approved colorants, with restrictions and usage guidelines (hair dyes solely for hair coloring)
• Appendix III: Approved preservatives with restrictions and usage guidelines
• Appendix IV: Approved sunscreens with restrictions and usage guidelines

One restricted ingredient was added to the Appendix I List of Restricted Ingredients and 7 ingredients were revised in the same list. Substances in Appendix II, III, IV (i.e. the approved lists of colorants, preservatives and sunscreens were also revised .

On 18 November 2023, the Mutual Recognition Agreements (MRAs) were signed between the Indonesian Ministry of Religious Affairs' Halal Product Assurance Agency (BPJPH) and 37 foreign Halal Certific...

On 18 November 2023, the Mutual Recognition Agreements (MRAs) were signed between the Indonesian Ministry of Religious Affairs' Halal Product Assurance Agency (BPJPH) and 37 foreign Halal Certification Bodies (LHLN). The Halal-20 Halal World 2023 event strengthened global cooperation on Halal Product Assurance, with the signing of a Mutual Recognition Agreement between the Ministry of Religious Affairs and 37 Foreign Halal Institutions. 

Indonesia prioritizes halal products over non-halal ones due to its Muslim population. In 2014, the country issued the Halal Product Assurance Law, which requires all halal products imported, distributed, and traded in Indonesia, as well as services related to cosmetics, food, beverages, medicines, and genetically modified products, to be certified halal. Halal certification for cosmetics assures that goods are free of haram (forbidden) substances such as gelatine from pigs, carrion, blood, and ethyl alcohol and that they are clean, safe, pure, and of high quality. 

Specifically, MRAs were signed between BPJPH and 9 LHLNs regarding mutual recognition and acceptance of halal certificates, and other MRAs were signed between BPJPH and 28 LHLNs in agreement to accelerate the completion of LHLN assessments for recognition and acceptance of halal certificates. 

The list of LHLNs that have signed an MRA with BPJPH regarding the recognition and mutual acceptance of halal certificates is as follows: 

The list of LHLNs that have signed MRA with BPJPH to speed up the completion of LHLN assessments for halal certificate recognition and acceptance is as follows: 

In addition to the 37 LHLNs, BPJPH established commitments with 16 LHLNs to complete assessments and with 54 LHLNs that have submitted documentation to the Sihalal application and are currently in the process of verifying and completing the relevant documentation. 

On August 24, 2023, the Indonesian Food and Drug Supervisory Agency (BPOM; Badan Pengawas Obat Dan Makanan Republik Indonesia) published a new amendment on the technical requirements for cosmetics. �...

On August 24, 2023, the Indonesian Food and Drug Supervisory Agency (BPOM; Badan Pengawas Obat Dan Makanan Republik Indonesia) published a new amendment on the technical requirements for cosmetics.  

The Indonesian government has issued regulations to protect the public from using cosmetic ingredients that do not meet safety, efficacy, and quality requirements. These regulations include Regulation Number 21 of 2020, Regulation Number 22 of 2020, and Regulation Number 24 of 2022. The regulations also require adjustments to ingredients permitted in cosmetics to reflect international technical requirements and scientific and technological advancements.  

In August 2023, the government decided to require a Decree from the head of the Food and Drug Supervisory Agency regarding changes in permitted ingredients in cosmetics. The draft was open for comments till 8 September 2023. 

Changes made in the updated version of cosmetics technical requirements 

The authority updated Companies with a Cosmetic notification number before the Head of this Agency's Decree came into force, ensuring they adhered to the provisions. 

On 2 August 2023, the Indonesian Agency for Drug and Food Control (BPOM) published the revised guidelines on the information required for the cosmetics Product Information Document (DIP). The guidelin...

On 2 August 2023, the Indonesian Agency for Drug and Food Control (BPOM) published the revised guidelines on the information required for the cosmetics Product Information Document (DIP). The guidelines were under public consultation for nine months from 31 October 2022 till August 2023.

The Guidelines, which are divided into six chapters, sixteen articles, and an annex, are intended to aid cosmetic firms in creating and collecting DIPs and to offer direction to BPOM representatives during DIP evaluations. The DIP guidelines aim to protect the public from health risks associated with the distribution of cosmetics that do not meet safety, efficacy, and quality standards, particularly for the Agency for Drug and Food Control.  The updated version replaces the 2017 Regulation of the Head of the Food and Drug Supervisory Agency Number 14 of 2017 regarding the requirements for cosmetic product information sheets.

A DIP as referred to in Article 3 of the guidelines consists of:

Part I: Administrative documents

Part II: Data on quality and safety of cosmetics ingredients

Part III: Cosmetic Quality Data

Part IV: Data on the safety and benefits of cosmetics

Article 5 calls for a DIP that is updated with changes to safety, usefulness, and quality data and is available in either Indonesian or English. All modifications must be recorded and integrated into the DIP. The DIP must be retained for at least a year after the final cosmetics manufacturing or import, whether it is electronic or non-electronic.

New Regulation on carbon pricing published by Indonesia. The Regulation of the Minister of Environment and Forestry No. 21/2022 on Procedure for Implementation of Carbon Pricing was declared in Indone...

New Regulation on carbon pricing published by Indonesia. The Regulation of the Minister of Environment and Forestry No. 21/2022 on Procedure for Implementation of Carbon Pricing was declared in Indonesia on October 22, 2022.

The Regulation comprises of measures in order to reduce the emission of greenhouse gases (GHG) which involves trading of emission quotas, emission reduction incentives,and carbon taxes.

The “economic value of carbon” which in Indonesia is referred to as NEK (Nilai Ekonomi Karbon) is considered as the value of each unit of greenhouse gas emitted both through human and industrial activities. NEK initiates to take measures like carbon trading, emission reduction incentives (RPB: Result-Based Payments), and carbon levy, to reduce the emission of GHG. The record of GHG emission reduction target is to be maintained by business operators which is to be verified by an eligible third party. The National Registry System for Climate Change (SRN PPI) needs to take charge of the establishment of NEK measures by the state government.

The measure under the Regulation includes emission trading which consist of trading of emission quotas among different industrial entities. If a business operator’s emissions are less than its quotas, it can choose to either keep the remaining emissions for two years or trade them with other entities. For this a Certificate of GHG Emissions Reduction (SPE-GRKs) for the remaining quota should be issued by the government. In the contrary case, emission quotas can be purchased from other entities. Another measure under NEK is called carbon levy which comprises of imposition of tax based on carbon content emission.