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Special paper: Facing the Challenges of Greenwashing in the Indonesian Coal Industry

Indonesia, as one of the world’s largest coal producers, is not immune to various environmental challenges.

 

Indonesia, as one of the world’s largest coal producers, is not immune to various environmental challenges. According to the Ministry of Energy and Mineral Resources of Indonesia, coal production in Indonesia reached 766.95 million tons in 2023, exceeding the target achievement by 110.43%. This figure marks the highest record in Indonesia’s history (Setiawan, 2024). However, despite this significant achievement, the Indonesian coal industry, as one of the country’s economic pillars, continues to face significant pressure from the global community and local society to adopt more environmentally friendly practices. Despite often being promoted with green rhetoric, real challenges persist in addressing greenwashing practices in Indonesia, which undermine and harm the country itself by seeking to conceal the negative impacts of the industry on the environment.

 

The proliferation of sustainability concepts worldwide also brings some challenges. Greenwashing, also known as greenwashing, is a strategy in which companies or organizations attempt to portray themselves as environmentally friendly, seemingly supporting sustainability concepts, even though they continue activities that harm nature (Kusuma, 2023). In the context of the Indonesian coal industry, greenwashing often occurs through claims such as energy efficiency improvements, emission reductions, or investments in clean technology. However, in reality, coal extraction and combustion still have significant negative impacts on human health and ecosystems. As a writer who grew up in a coal-producing region in Indonesia, I have witnessed that greenwashing is indeed prevalent, causing concern and significant harm to communities.

 

Indonesia, as a country committed to reducing greenhouse gas emissions in accordance with the Paris Agreement signed in 2016 (Ministry of Environment and Forestry, 2016), must face the reality that the coal industry is one of the main contributors to these emissions. Green rhetoric alone is not enough to alleviate public concerns. Many people are still unaware of the dangers of greenwashing, although some individuals, including environmental activists, have begun to call for peaceful actions against greenwashing (Binekasari, 2023). Various regions in Indonesia have already experienced the adverse effects of environmental destruction, from excessively hot temperatures and smoky skies to mining sites that have even claimed lives.

 

With the advancement of time and the increasing understanding and demand of the public for environmentally friendly products or services, it is essential for people to understand greenwashing, which is often exploited by opportunistic individuals seeing lucrative opportunities behind the environmental-friendly trend. People need to be aware that false claims regarding environmental friendliness carry dangerous risks as they can hinder genuine environmental mitigation efforts (The Conversation, 2022). Regulations addressing this issue already exist, such as Law No. 32 of 2009 concerning environmental protection and management, which mandates businesses to provide accurate, open, and timely information regarding environmental protection and management (Ministry of Energy and Mineral Resources of the Republic of Indonesia, 2009). However, the interpretation and enforcement of these laws regarding greenwashing practices remain ambiguous, resulting in weak law enforcement and insufficient protection of the public from greenwashing practices.

 

As the scope of greenwashing widens, existing Indonesian regulations like those mentioned above are still inadequate. The limitations of these regulations fail to fully address the controversy surrounding recent greenwashing issues in labeling and advertising related to environmental sustainability. Greenwashing has become a global issue that cannot be underestimated, making it crucial for not only Indonesia but also other countries to amend or revise laws comprehensively covering greenwashing. For example, Indonesia could learn from South Korea, also situated in Asia, which has announced revisions to environmental technology industry laws to impose fines for violations of environmental labeling and advertising. South Korea’s “resource circulation and climate fieldwork plan” implemented in 2023 highlighted fair trade to create transaction environments ensuring consumer rights, enabling punishments for greenwashing practices (Law Times, 2023).

 

South Korea’s ratified revisions to environmental technology industry laws are considered effective as they have successfully fined companies found engaging in greenwashing practices. Indonesia can adopt similar approaches toward a sustainable environmental, social, and governance (ESG) future. This is crucial for Indonesia due to the challenges posed by climate change being extensive and burdensome, and greenwashing can also significantly impact Indonesia’s finances, especially since climate aid funding in the country is still in its infancy. Additionally, there has been insufficient positive response from various Indonesian actors, highlighting the need for concrete and transparent efforts to address greenwashing and enhance sustainable practices.

 

Efforts grounded in ESG principles include:

 

The Indonesian government should strengthen regulations and oversight of the coal industry by implementing stricter standards to evaluate environmental impacts, enhancing transparency in reporting, and imposing strict sanctions on violators. Indonesia can learn from other countries with extensive regulations regarding greenwashing, such as Australia, the United States, South Korea, and Sweden. Strong oversight is essential to prevent greenwashing practices and ensure companies are accountable for their environmental impacts.

 

Transparency is key in combating greenwashing. Coal companies should be required to openly report their environmental practices, including greenhouse gas emissions, waste management, and land reclamation. By providing clear and accessible information, such as online public data, communities will be better able to choose products and services aligned with sustainability values, and they can also criticize the practices of involved actors.

 

Furthermore, companies should encourage innovation and investment in clean technology. While the coal industry may not be able to entirely avoid its negative impacts, steps such as improving combustion efficiency and developing carbon capture and storage (CCS) technology can help mitigate their environmental impact. Technology knowledge transfer is also highly encouraged, but claims about investment in clean technology must be supported by tangible evidence of implementation and significant impacts to avoid baseless claims.

 

The role of civil society is also crucial in overseeing and driving changes in the coal industry. Through public awareness campaigns, advocacy, and independent monitoring, communities can increase pressure on companies and governments to act responsibly toward the environment. Concerns can be discussed together in relevant forums to ensure inclusive involvement. In an era of increasingly accessible information, civil society’s power to expose greenwashing practices and demand accountability will only grow stronger.

 

With efforts grounded in ESG principles, stringent regulations, transparency, technological innovation, and active civil society participation, Indonesia can move towards a more sustainable and environmentally responsible coal industry. Facing the challenge of greenwashing in the coal industry does not have instant or easy solutions, even large countries have faced these challenges. However, with synergy between strict regulations, enhanced transparency, investment in clean technology, and active civil society participation, Indonesia can progress towards a more sustainable and environmentally responsible coal industry. Only through concrete actions and genuine commitment can we ensure that green rhetoric is not just an empty slogan but reflects real and positive changes in protecting our planet.

 

https://moderndiplomacy.eu/2024/05/12/facing-the-challenges-of-greenwashing-in-the-indonesian-coal-industry/