EN ID

Environmental Quality and Carrying Capacity Improvement

The commitment in environmental aspect promotes the improvement of the environmental quality and carrying capacity to address following issues:

Climate Crisis

PT SMI is committed to support the Government in achieving national target as determined in the Enhanced NDC and the Long Term Strategy documents. The Company pursues positive contributions toward climate mitigation and adaptation, by promoting and financing among others renewable energy, energy efficiency, sustainable transportation, clean water supply, waste management, and climate-resilient infrastructures across the country. Since 2019, PT SMI has not provided any new financing or investments aimed at increasing the capacity of coal-fired power plants. The Energy Transition Mechanism (ETM) scheme is one of PT SMI’s approaches to realize an equitable or just energy transition while also focusing on carbon reduction and green energy scaling up4.

Biodiversity and Ecosystem Services

PT SMI is committed to support projects that protect and restore ecosystems, maintain or promote biodiversity, and provide essential environmental services in Indonesia. The commitment also covers the management of habitat ecosystem through preserving natural and critical habitat, and striving to achieve no net loss & net gain5.

Resource Use

PT SMI is committed to finance projects that promote sustainable use of natural resources, for instance in water, energy, and land. This commitment also ensures the negative impact due to changes in land use related to business activities to be prevented or minimized.

Pollution

PT SMI encourages that the project emphasizes the importance of pollution prevention and abatement on soil, water, air, and other environmental components including minimizing and managing hazardous and non-hazardous waste. Those efforts aim to avoid, or if not possible, attempt to minimize or mitigate adverse impacts on humans health and the environment. The commitment covers advise provision to the design, construction, and operation of business activities. 

Natural Resources
Land Use

Changes in land use might bring negative impacts, such as loss of habitat and ecosystem services. This may result in increased vulnerability and community safety-related risks and impacts. Therefore, this principle ensures the negative impact due to changes in land use related to business/activity to be prevented or minimized. The impacts also include potential for natural disasters such as landslides or floods.

Resource Efficiency

Prevent or minimize negative impacts that are detrimental due to business/activity related to land, water and other natural resources that are used by the surrounding community. Promote more sustainable use of resources, including energy and water. 

Manage natural resources with the aim of conserving biodiversity, and to encourage the use of natural resources as planned and directed in a sustainable manner as well as give special attention to ancestral lands and related natural resources used by indigenous people.

Raw Material Sourcing

This principle encourages efficient consumption of raw materials. Such measures will integrate the principles of cleaner production into product design and production processes to conserve raw materials. These measures can include reuse or recycling of materials. Use of hazardous and toxic materials as raw material should be avoided or minimized.

Biodiversity
Natural and Critical Habitat

Natural habitats are area where the biological communities are formed largely by native plant and animal species, and where human activity has not essentially modified the area’s primary ecological functions. Critical habitat is habitat of significant importance to supporting endangered populations (IUCN red list, protected by national law or listed in CITES) or endemic animal or plant species, called as high biodiversity value area. This includes locally or nationally rare and threatened plant habitats and habitats of high value for the provision of other ecosystem services (eg protection of floods, erosion and landslides, support for infiltration function and supply of water resources).  SMI commits to support the management of habitat ecosystem through undertaken the prevention of natural and critical habitat conservation. Critical habitats are avoided if possible; if not, make sure that there are no measurable adverse impacts or likelihood of such;  no leading to reduction in the population of any recognized endangered or critically endangered species; and having mitigation in smaller impact to achieved no net loss of biodiversity.

High Biodiversity Value and Special Status Species

High biodiversity value comprising habitat required for the survival of critically endangered or endangered species; areas having special significance for endemic or restricted-range species; sites that are critical for the survival of migratory species; areas supporting globally significant concentrations or numbers of individuals of congregatory species; areas with unique assemblages of species or that are associated with key evolutionary processes or provide key ecosystem services; and areas having biodiversity of significant social, economic, or cultural importance to local communities.

No Net Loss & Net Gain

No net loss is defined as the point at which project related impacts on biodiversity are balanced by measures taken to avoid and minimize the project’s impacts, to undertake on-site restoration and finally to offset significant residual impacts, if any, on an appropriate geographic scale (e.g., local, landscape level, national, regional). Mitigation measures will be designed to achieve at least no net loss of biodiversity. During the management of biodiversity impacts should also respect the ongoing use of such biodiversity by Indigenous Peoples or traditional communities, and compensation to direct users of biodiversity.

Climate Crisis
Carbon Emissions

This principle encourage reduction of Greenhouse Gases (GHG) emission from business/activity; implement GHG mitigation actions and estimate potential GHG emissions in various business/activity cycles from pre-construction, construction, and post-construction, as well as the operational stage; and ensure that GHG calculations or monitoring are carried out periodically for business/activity that have the potential to generate large GHG emissions.

Climate Change Adaptation

Climate change adaptation is a response to global warming that seeks to reduce the vulnerability of social and biological systems to the impact of climate change. This principle encourages various measures to adapt to the impacts of climate change that aim to minimize the impact of climate change on community, reduce vulnerability and increase community resilience in facing the risks of climate change in various sectors.

Climate Change Mitigation

Climate change mitigation consists of actions to limit the magnitude or rate of long-term global warming and its related effects. This principle encourage the reduction of Green House Gases (GHG) from business/activity, implement GHG mitigation actions and estimate potential GHG emissions in various business/activity cycles, and ensure that GHG calculations or monitoring are carried out periodically for business/activity that have the potential to generate large GHG emissions.

Pollution
Waste Management

Implement non-hazardous and toxic solid waste and wastewater management standard through reuse, reduce, and recycle.

Hazardous Materials

Implement management standard based on relevant regulation related to hazardous material and hazardous and toxic waste including storage, use (for hazardous material), transportation, and processing/treatment.

Emissions/Pollution

PT SMI commited to prevent and reduce pollution in its’ business/activity. It is important to ensure that the projects take into account the surrounding conditions and carry out pollution prevention and control, in the design, construction, and operation, technically and operationally in the most appropriate way to avoid, or if not possible, attempt to minimize or mitigate negative impacts on humans’ health and the environment with the ALARP (As Low As Reasonably Practicable) principle. Pollutants that should be managed includes hazardous and toxic waste, non-hazardous and toxic waste, hazardous an d toxic material, pesticides, herbicides, and fungicides. Ambient condition, such as air quality, noise level, groundwater, surface water, and soil should be maintain and monitored.

  1. PT SMI’s role in ETM is reinforced with the issuance of Minister of Finance Decree 275/KMK.010/2022 concerning the Assignment to the Company PT Sarana Multi Infrastruktur (Persero) in the Context of Providing Fiscal Support through the Funding and Financing Framework for Accelerating the Energy Transition in the Electricity Sector.
  2. No net loss is defined as the point at which project related impacts on biodiversity are balanced by measures taken to avoid and minimize the project’s impacts, to undertake on-site restoration and finally to offset significant residual impacts, if any, on an appropriate geographic scale (e.g., local, landscape level, national, regional). Mitigation measures will be designed to achieve at least no net loss of biodiversity. The management of biodiversity impacts should also respect the ongoing use of such biodiversity by Indigenous Peoples or traditional communities, and compensation to direct users of biodiversity. (source: IFC Performance Standard, PT SMI ESS Guideline)