Regulatory Compliance Insights · Government Regulation No. 28 of 2025

Since the enactment of Government Regulation No. 28 of 2025, the Environmental Approval (Persetujuan Lingkungan) has become the foundational permit that must be obtained before a Business License can be issued. The position is unambiguous: no Environmental Approval = no Business License. Any business currently operating without this document is running on a legal foundation that can be challenged — or dismantled — at any time.

Where It Sits in the Licensing Hierarchy

Think of your Business License as a building. The Environmental Approval is its foundation — and that foundation must be laid first, not added later.

Business License (NIB, operational license, commercial license) 

↑ requires 

Environmental Approval (SKKL from AMDAL, or PKPLH from UKL-UPL) 

↑ issued based on 

Environmental Document (AMDAL · UKL-UPL · SPPL)

Three Types of Environmental Documents — Which One Applies to You?

The type of document required is determined by the scale of your operation's environmental impact — not by the size of your investment or the category of your business.

AMDAL — High Impact Environmental Impact Assessment. A comprehensive study of the significant environmental effects of a planned business activity. Typically required for: large-scale industrial estates, mining, and energy projects · large hotels and resorts · large residential and mixed-use developments · operations generating significant volumes of waste or pollutants

UKL-UPL — Medium Impact Environmental Management and Monitoring Plan. For businesses with an environmental footprint that does not reach the threshold of significant impact. Typically required for: mid-scale villas, cafés, and restaurants · small-to-medium manufacturing facilities · healthcare and service facilities · limited-scale residential developments

SPPL — Low Impact Environmental Management Statement. A compliance declaration for small businesses with minimal environmental impact — integrated directly into the NIB business registration number. Typically required for: micro and small enterprises · local retail shops, food stalls, and service businesses · non-industrial activities generating negligible waste · registered home-based businesses

The classification cannot be self-determined. The appropriate category is established through an automated screening process in the AMDALNET system, which is integrated with the OSS-RBA business licensing platform. Misclassification — even if unintentional — can render the document legally invalid.

Why This Cannot Be Deferred

The longer the gap between operations and environmental legal compliance, the greater the exposure. Here is what business owners most often fail to anticipate:

Critical Risk — Your Business License lacks a legal foundation Without a valid Environmental Approval, your NIB and operational licenses are vulnerable to revocation at any point — regardless of how long the business has been running.

Critical Risk — Administrative fines and escalating sanctions Penalties begin with a written warning and can escalate all the way to the revocation of your Business License. Each stage carries a strict deadline for remediation.

High Risk — Barriers to financing and investment Institutional investors and banks are applying increasingly rigorous ESG and compliance standards. The absence of a valid Environmental Approval frequently becomes a deal-breaker during due diligence.

Worth Noting — Business changes create new obligations Expanding capacity, enlarging your premises, or changing the responsible party on record — each of these can trigger a requirement to update your Environmental Approval. Overlooking this effectively resets your compliance standing to zero.

The Sanction Ladder

Sanctions are applied progressively. Each stage is triggered when the previous one is ignored.

1 → Written Warning — The first step. A deadline is given for corrective action. 

2 → Government Enforcement Order — If the warning is ignored; may include an order to suspend part of operations. 

3 → Administrative Fine — Imposed for operating without an Environmental Approval or exceeding permitted environmental thresholds. 

4 → Suspension of Business License — All operations may be halted. 

5 → Revocation of Business License — The most severe sanction, applied when all prior stages have been disregarded.

Legal Basis: Government Regulation No. 28 of 2025 · Government Regulation No. 22 of 2021 · Job Creation Law · Ministry of Environment and Forestry Regulation No. 5 of 2021 · Ministry of Environment/BPLH Regulation No. 22 of 2025

This article is intended for informational and educational purposes only and does not constitute legal advice.

By: Adv. Dipo Farizi, S.H., CLA