Indonesia’s government has placed increasing emphasis on environmental protection as a condition for doing business. Under Government Regulation No. 28 of 2025, environmental compliance is no longer just an administrative requirement but a core element of licensing validity.
Foreign investors must understand how these updated regulations function and how non-compliance can now result in the direct suspension or revocation of a business license.
New Licensing Rules Under GR 28/2025
Government Regulation No. 28/2025 introduces a more rigorous and time-sensitive framework for business licensing, replacing the earlier GR 5/2021. The regulation fully integrates environmental approvals into the OSS (Online Single Submission) system, which now serves as the centralized platform for securing, updating, and monitoring licenses across sectors.
Businesses are required to submit all environmental documentation digitally, and each application is subject to defined processing timelines.
For instance, technical assessments for wastewater and emissions must be completed within 30 working days, while hazardous waste approvals must be reviewed within 16 working days. If the government does not meet these deadlines, the system will automatically approve the license through a mechanism known as “fictitious positive.”
However, this automatic approval does not protect the license from later invalidation if the original environmental documents are found to be incomplete, inaccurate, or misleading.
Environmental Documentation as a License Prerequisite
The requirement for environmental approvals is determined by the business’s environmental risk level. High-risk projects, such as those in manufacturing, energy, or resource extraction, must obtain an AMDAL, or Environmental Impact Assessment. This is a comprehensive study evaluating potential environmental damage and proposing mitigation strategies.
For medium-risk businesses, the requirement is a UKL-UPL, which stands for Environmental Management and Monitoring Efforts. This document outlines how the business plans to manage environmental impacts such as emissions, waste disposal, or noise.
Low-risk businesses must file an SPPL, or Statement of Environmental Management and Monitoring Ability. This is a simpler declaration confirming that the business understands its environmental obligations and will comply with applicable standards.
All three types of documents must be uploaded and approved through the OSS system before the business license can be considered valid. Missing, outdated, or improperly completed documents — even if overlooked at the time of issuance — can trigger penalties once discovered through inspections or audits.
Revocation Grounds Linked to Environmental Failures
Licenses can be revoked for a wide range of environmental non-compliance scenarios. Operating without the required environmental approvals, failing to submit periodic environmental reports, or violating the conditions stated in the approved documents can all result in formal warnings, temporary suspension, or full revocation of the license.
The OSS platform continuously evaluates compliance by referencing submissions against license terms. When businesses breach environmental commitments or exceed permitted pollution thresholds, the system updates their risk status in real time.
This can trigger immediate follow-up by the supervising authorities, with legal consequences that escalate depending on the severity of the violation.
Enforcement in Practice and Recent Cases
Regulatory enforcement in 2025 has become more aggressive, with license revocations occurring not only in extractive industries but also in tourism and real estate. In a notable case, four nickel mining companies in Raja Ampat had their licenses revoked after authorities confirmed they had caused irreversible environmental damage.
Investigations revealed a lack of proper environmental safeguards and non-compliance with reporting requirements.
Need help navigating Indonesia’s environmental licensing rules? Contact MAP Resources Indonesia for full OSS compliance support.
Meanwhile, in Bali, over 260 foreign-owned entities were penalized for failing to update their OSS profiles with accurate licensing and environmental data.
In many instances, these companies had operated under licenses that were no longer considered valid due to missing environmental declarations. Several of them are now facing revocation proceedings.
Supervision and Dynamic Risk Monitoring
The government now conducts supervision through four mechanisms: general, sectoral, routine, and incidental. These inspections may be triggered based on risk category, complaints, or random audits.
Because OSS tracks environmental compliance digitally, even minor reporting failures can lead to an escalation in oversight.
Each business’s risk profile is dynamic and recalculated automatically based on performance.
A company that fails to meet its environmental obligations can quickly be flagged as high-risk, resulting in further inspection or license suspension.
Compliance Pressures for Foreign-Invested Companies
Foreign companies operating in Indonesia face added scrutiny, especially since their licenses, shareholder structures, and activity scopes are all recorded in the OSS. With the transition to full digitalization required by October 2025, businesses that fail to update their OSS profiles or neglect the environmental component of their licensing are at elevated risk.
Legacy paper-based documents, unsubmitted updates, or misunderstanding of local licensing categories will not be accepted under the new system. As such, foreign investors unfamiliar with the OSS platform may unintentionally miss key filings, leading to non-compliance.
This can disrupt operations, damage reputations, and in some cases, make it difficult to re-enter the market.
Strategic Actions to Protect Your License
To mitigate the risk of license invalidation, businesses must ensure their OSS profiles are fully synchronized with their environmental obligations. This includes uploading the correct AMDAL, UKL-UPL, or SPPL documents, submitting periodic environmental reports on time, and monitoring risk assessments generated by the OSS.
Investors should also avoid over-reliance on the fictitious positive mechanism. While the system may auto-approve a license if deadlines are exceeded, post-approval audits can uncover deficiencies that result in license cancellation.
Engaging qualified environmental consultants familiar with Indonesian procedures is essential, especially for businesses entering regulated sectors.
MAP Resources Indonesia Can Help You Stay Compliant
At MAP Resources Indonesia, we assist foreign investors in managing environmental compliance from day one. Contact us today at info@mapresourcesindonesia.com to ensure your business operates with confidence in Indonesia’s evolving regulatory environment.
