Corporate Green Ratings Slammed as Cover  for Polluting Indonesian Companies

Environmental activists have lashed out at the government over its latest list of environmentally responsible companies, saying it has recognized firms with questionable green credentials.

Henri Subagiyo, executive director of the Indonesian Center for Environmental Law (ICEL), said on Friday that the 2011 Proper Index, in which companies volunteer to be assessed and rated for their environmental stewardship, was fundamentally flawed.

“We reject the Proper Index because its rating mechanism is not standardized,” Henri said. “It cannot be used as a legitimate measure [of a company’s environmental impact] because it doesn’t comply [with prevailing standards].”

The index assigns color codes to companies based on their environmental credentials, with black for the worst polluters and gold for those who go “beyond compliance.” While the index serves to name and shame polluting companies, it does not punish offenders or require them to clean up their acts.

In this year’s list, released late last month, the companies awarded gold ratings included oil firm Medco E&P for its Rimau oil block in South Sumatra; Chevron Geothermal Salak, operating in West Java; and Badak NGL, which runs a liquefied natural gas plant in East Kalimantan.

Others were Pertamina Geothermal for its Kamojang field in West Java, and cement producer Holcim for its Cilacap plant in Central Java.

“The government needs to be judicious about awarding these ratings because they inform public opinion,” Henri said.

“A company can claim that it has complied with environmental regulations yet still be in conflict with local residents.”

The ICEL and several other nongovernmental organizations, including the Mining Advocacy Network (Jatam), have filed a formal protest with the Environment Ministry over the 2011 Proper Index.

They contend that in addition to the gold ratings not being merited, some of the companies with a green rating, the second-highest in the index, are clearly undeserving of the honor.

They cited, among others, Newmont Nusa Tenggara, which operates the Batu Hijau copper and gold mine in Sumbawa, West Nusa Tenggara. The company’s practice of dumping tailings into the sea has earned it the ire of environmentalists and the local population, although it contends that the practice is environmentally sound.

In their protest letter, the NGOs are calling for these companies’ ratings to be rescinded and for a serious environmental evaluation to be carried out into their operations.

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