DOMESTIC INSURANCE SITUATION IN INDONESIA: RESPONSE TO FINANCIAL LIMITS AND INSURANCE QUESTIONNAIRE

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DOMESTIC INSURANCE SITUATION IN INDONESIA
RESPONSE TO FINANCIAL LIMITS AND INSURANCE
QUESTIONNAIRE

• MINISTRY OF ENVIRONMENT
• REPUBLIC OF INDONESIA
• YOGYAKARTA,18 MAY 2006

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BACKGROUND (1)

• Law No. 23/1997 on Environmental Management
• - prohibits any import of hazardous waste
• - generators is strictly liable for compensation
  of damage/pollution resulted from their activity
• 2. Govt regulation No. 18/1999 on Hazardous
  Waste management Export of hazardous wastes is
  permitted subject to approval of importing
  country
• 3. Law No. 21/1992 regarding Shipping
  responsibility of ship owner/operator for
  pollution resulting from his vessel and liability
  for its insurance (should be arranged under a
  Government regulation)
• ?liability civil liability incl.
  compensation for direct/indirect loss resulting
  from pollution/damage. Liability on Ship
  owner/operator depends on contract

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BACKGROUND (2)

• Law No. 2 year 1992 regarding Insurance Company ?
  only regulates procedure to provide insurance
  services
• Type of insurance general insurance, life
  insurance and reinsurance
• General insurance Marine (marine cargo, marine
  haul), aviation, non marine (fire, earth quake,
  flood, automobile, credit, misc.)
• No environmental liability insurance available

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EXPORT-IMPORT OF HAZARDOUS WASTES (TRANSIT IN
INDONESIA)
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Q1.MINIMUM FINANCIAL LIMITS

• DIFFICULTIES WITH THE CALCULATION
• Weight of shipment
• SDR 1 USD 1.48056 (05 May 2006)
• IDR 12,954.9
• 5 tonnes 1 million units IDR 12.9 billion
• ? does not reflect the cost of recovery of
• environmental damage and personal loss
• ? does not consider the ecosystem where the
• damage occurred

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Q2.MAXIMUM FINANCIAL LIMIT

• No need to establish maximum financial limits on
  a higher level

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Q3.LIABILITY INSURANCE AVAILABLE

• Only limited to oil spill and measures should be
  taken to control the pollution to clean the
  Shipping route
• No national insurance related with liability on
  compensation for damage to environment, human
  health or communitys income affected by the
  damage
• Export of nickel sludge to Germany ? pollution
  liability USD 10,000,000 for handling and
  recycling of recyclable material
• Draft of Presidential Regulation on National
  Contingency Plan is in Cabinet Secretariat for
  approval
• ?Covers liability for pollution and
  environmental impact control, compensation for
  environmental damage and community resulting from
  oil spill and non oil spill (materials and wastes)

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Q4. CONSULTATION WITH PRIVATE INSURANCE SECTOR

• Consultation with private national insurance
  companies
• Discussion with other related institutions
  (Ministry of Communication, Ministry of Marine
  and Fishery, port authority)
• Discussion with insurance regulatory body
  (Directorate of Insurance, MOF) has not yet
  conducted

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Q5.SUGGESTIONS, IDEAS,COMMENTS ON COVERAGE FOR
LIABILITY NOT BASED ON PRIVATE INSURANCE SECTOR

• Proposal National Income non tax mechanism for
  any shipment of hazardous waste transit in
  Indonesia
• The fund can be used for emergency response
  purposes and controlling of dumping of illegal
  traffic
• Problems transparency, financial mechanism

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SUGGESTIONS, IDEAS,COMMENTS ON COVERAGE FOR
FINANCIAL LIMITS CALCULATION

• Should also be based on type of wastes and their
  characteristics and the damage in the
  environment, not only tonnage
• Use economic valuation for calculating liability
  ? oil spill cases
• - Cilacap US1,866,667 (2000)
• - Malaka Strait US10,000 (1992)
• - Batam US 3,000,000 (2004)

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Thank You