FINAL PAPER

ENVIRONMENTAL POLICY

Safyra Nurshafiyana 18R57013

Shinya Hanaoka Lab

Department of Transdisciplinary Science and Engineering

Tokyo Institute of Technology

2018
A. Basic Concept of Environmental Policy
Environmental policy is consist of two major aspects: environment and policy. Environment
is physical ecosystem that includes social dimension such as quality of life and health, and
economic dimension such as resource management and biodiversity. While policy is a series of
activities that change “social system” for specific purpose. It can be concluded that, environmental
policy is focus on problems regarding the human impact on the environment, that includes the
negative impact on human values such as health and the quality of environment. In considering
environmental policy, there two terms: natural sciences and social sciences. The aim of natural
sciences is reduce the uncertainties on physical and natural behaviors related to human activities
and improve social lives technically. While social science is focusing on human activities and how
to manage “social system” which control public behaviors. In addition, social system is the general
term that includes law, agreement, and habit.
Environmental policy is covered environmental issues that includes air and water pollution,
waste management, ecosystem management, biodiversity protection, the protection of natural
resources, wildlife and endangered species, and the preservation of these nature aspects for the
future. Environmental policy is take into consideration of the systems that required to resolve the
environmental issues that stated above. Not only the system, but also the improvement of current
system that should be changed, and kind of policies that rationally implemented, are the
considerations in environmental policy.

B. Principles of Entities and Methods for Policy Implementation

Based on OECD’s point of view, the initial purpose of Polluters Pay Principle is to build
incentives in reducing damages that included environmental pollutions by reflecting external cost of
pollution to the price of products and/or services. The costs that have to be paid by the polluter are
including the pollution control devices which is decided by public authorities, and for compensation
and clean up measures after the process that produces pollutions. OECD stated that polluter who
responsible in paying the cost, is the one who has substantial roles for generation of pollutions, not
the polluters that generate pollutions directly, in order to considering economic efficiency and
administrative convenience. For example, the pollution that produced form automobile will be paid
by the production companies, rather than the users. On the other hand, Japanese PPP is quiet
different compared with OECD’s statement. The one who will pay the cost of pollution is polluter
who generate pollutant directly and stakeholders who are involved in generating the pollution
indirectly through provision or consumption of goods or services. Unless the polluters are including
in guarantee of national minimum; official assistance due to emergency, technological development
or redress regional gaps; impossible in identifying the polluters; or the polluters can not pay the
cost. In Japan, the system that used in PPP is promotion of pollution with surcharge for excess
volume more than emission standard.
In prevention of environmental pollution in the stage of products use and disposal, there is
extended producers responsibility or called as EPR. This is another approach of environmental
policy that extending the producers’ responsibility to pay the cost for pollutions not only during the
production, but also the stage after consumption. EPR is giving the signal on environmental impacts
after consumption, and internalizing the social cost of environmental impacts after consumption.
EPR is aiming in promoting production and consumption activities for environmental consideration
based on cost of products and cost of environmental measures. On EPR the producer means that the
entities which can change the design of products. Furthermore, based on Japanese EPR the
producers have several responsibility for environmental impacts in production, utilization, and
disposal; the product design that encourage the consumers to use the product longer and easy to
reuse and recycle, construction of recycling system for end-of-life products and implementation of
recycling, and spreading information of the product. Different with OECD’s EPR, Japanese EPR
requires producer to internalize the disposal cost, furthermore the extent of the responsibility is
limited compared with OECD’s EPR.
There are common principles in environmental and social aspect that have been used in
international level. Furthermore, environmental policy is based on the precautionary and preventive
principles. Precautionary principle may be requested when the effect of dangers phenomenon,
product, or process are identified by scientific and objective evaluation. In addition, the evaluation
does not allow the risk to be determined with sufficient certainty. The results form precautionary
principle may take the form of a decision of action; to act or not to act. This is depend on the
political decision and level of the risk that considered by the society.
Preventive principle is concerning in human activities and biological impacts as the
consequences for the environment as a whole. Thus, the negative impacts should be prevented
before it happened. There are several standards of prevention, the first one is area-based, it is
environmental standards for mainly residential area, that includes air, noise, water, soil, and dioxins.
Furthermore, the second standard is source-based, this standards is based on emission standards for
pollution sources that includes material based, dust, noise, soil, waste, and special standards. The
last standard is others that includes utilization-based, occupational environment, and indoor
environment which is management standard of environmental sanitation for buildings and indoor
concentration standard for chemical substances.

C. Specific Methods for Implementation

The specific methods for implementation are include regulatory method and economic
method. In regulatory method there are specific systems regarding environmental policy
implementation; (1) Regulation of discharge for pollution control, that includes discharge of
pollutants; act that produces noise, vibration, and operation that may cause ground subsidence; and
production, retail, export, or import management of hazardous substances, (2) Regulation of land
use and facility siting, that includes of land use which consists of city planning, building standard,
environmental control along the main roads, and factory construction, (3) Protection of spatial
natural environment, (4) protection of specific species, (5) and integration of pollution control and
the protection of environment.
The approaches of regulatory method are regulation on activities, regulation on
performances, and regulation on procedures. This method is aiming to control pollutions by
regulations which set emission standards. Regulation on activities is the obligation of to do and not
to do certain activities, this regulation is order the regulation or what should be done by the entities
directly. However, the effectiveness of this regulation is depend on judgement and the ability to
collect the information, and there is no chance for companies or people to develop their creative
ideas. While regulation on performance is the obligation to keep a certain level of environmental
performance based on impact and degree of improvement. Regulation on performance is freeing the
companies and people to choose the methods for regulation, thus they can developed their ideas and
creativity. On this regulation, all-time monitoring is necessary to in controlling any violations.
Furthermore, the last regulation is regulation on procedure, this regulation is refer to environmental
managements and focus only on procedures. This method is allow the companies and people to
implement their ideas and creativity in methods. In addition, this method is also able to implement
in wide range of emission sources. However, this method does not regulate the environmental
performances, the effectiveness is depend on the behaviors of each company.
Besides regulatory method, there is another method that called as economic method. The
aim of economic method is to lead targets into eco-friendly behavior with market mechanism.
Based on OECD’s discussion, the aim of economic method is to guide companies or people in
choosing activities that environmental friendly by stimulating their costs and benefits. While based
on Japan 2nd Environmental Plan, economic method is a method in achieving policy target to guide
companies or people with economic encouragement, specifically in economic assistances that
includes subsidies and tax benefits, and economic burdens that includes tax/charge, deposit system,
and emission trading. Economic considerations are expecting to maximization of social prosperity
with appropriate tax rate, by using internalization of external cost. furthermore, it would be possible
to achieve certain target with minimum implementation cost, even if the policy makers do not know
the ability in implementing for each company. However, there is some issues that arise from
economic method, the high number of polluters that produced small environmental negative
impacts, which is hard for regulatory method to be implemented. In monitoring the activities and
performance regulations as well as administrative power to regulation, the high value of cost is
needed.
The first economic burden is tax/charge, it means additional cost for certain activities. Tax/
charge is can be called as a method in controlling price. The specific cases of tax/charge are
including emission charge, for quantities and qualities of environmental burdens such as pollutants;
user charge, charge for using facilities and services for waste disposal and pollution managements;
disposal tax/fee, charge for final disposal of waste; product charge, which is charge for production
involving environmental burden due to consumption is waste disposal; and other tax/charge for raw
material and road pricing for automobile use in polluted areas. Besides tax/charge, there is deposit
system that aimed to promoting collection and avoiding scattering in certain used product, by
collecting an additional price at the purchase and return the price when the product is returned.
There are specific cases of deposit system; drinking bottles and batteries. Furthermore, emission
trading is another economic burdens. Emission trading is setting of the right to discharge pollutants
and allow of buying and selling. There are two methods; first is cap and trade, the companies is
allow to discharge all pollutants by trading their credits, and second is baseline and credit, the
companies can buy and sell credits below the baselines.
Moreover, there is a method that known as informative approach. The aim of this method is
to lead consumers or stakeholders in selecting eco-friendly companies with information disclosure
or provisions. There are various methods of informative approach for eco-friendly activity; PRTR
(Japan, 1999) and TRI (USA, 1986), Environmental Report (Environmental Consideration Law,
2004), and CDP Report (NGO, 2002). While for eco-friendly product; Energy Label (EU), ECO
Label (Energy Labelling Directive, 1992) and Eco Navigation.
Pollutant Release and Transfer register (PRTR) is an information resource that provides the
information regarding toxic chemical that released from certain facilities in the neighborhood. This
method is consist of the name of chemicals, the sources, and how much chemicals that released
annually. Another method of informative approach is environmental report, this is voluntarily
prepared by companies or other organizations to expose their environmental activities or other
activities to the environment. This environmental report is published to the public annually. This
report is beneficially for external and internal function. The benefit of environmental report for
external function is Corporate Social Responsibility, that leads the companies have better
communication among stakeholders such as local residents, officers investors, or banks. For the
internal function, environmental report is use as environmental management tool in order to
reassessment their own environmental activities and increase awareness of the staffs. However,
there is some weakness of environmental report which called as “greenwash”. Environmental report
is a chance for company to convince people that they are doing the best in protecting the
environmental while they are not really doing it in reality. In order to prevent this such case
happened, there is CDP Report. It is carbon pricing systems that encourage innovation and help
ensure sustained economic competitiveness. Putting a price on carbon is an essential part of any
strategy to combat climate, mitigate risks, and capitalize on opportunities. Informative approach for
eco products divided into two types, EU energy label and eco navigation. EU energy label is
provide the information about the energy efficiency of a product. The products that covered with
EU energy label are mostly household products such as; washing machine, air conditioner, light
bulbs, televisions, etc. Furthermore, eco navigation is providing fuel efficient route.
Participatory Approach or Public Participation (PP), is aiming to prevent environmental
conflicts, assist parliamentary democracy such as political corruption, improve policies quality, and
promote “capacity development” for public in order to build “social capital”. PP is not only for local
residents but also for multi-stakeholders. PP is also used not only to collect opinions but also to
reflect on decision making. There are three types of participation; policy, plan, and project. First
step in policy is policy proposal, then necessity of the policy, then necessity decision. In plan/
program, the first step is plan/program proposal, site location, and site decision. While the steps for
project are include, project proposal, specification, and specification decision. There are three ways
in announcing plan/program; traditional way (official gazette), ordinary way (town meeting and
website), and advanced way (outreach activities). In participatory approach, to get better discussion
a meeting should be held. Conventional meetings is one of the types for project such as public
hearing or public consultant, this meeting is effective to share information about the overview of
project, therefore this meeting is not enough to discuss on issues. The popular way of meeting is
workshop style for plan and project, the scale of this meeting is community in a city, town, or
region. Furthermore, there are two types of traditional meetings; public consultation, where the
proponent explained the information, and there will be questions and answers session. Second type
of traditional meeting is public hearing, that consists of four parties; supporter who will discuss
opinion statements with the opponent, opponent who will deliver the opinion statements to the
public, proponent who will explain about the project, and public.

D. Case of Environmental Policy: Energy Shift in Northern Europe

After the oil crises in Arab in 1970s, the energy policy in Japan is changed. Energy policy is
aiming to reduce dependence of oil, increase energy self-sufficiency, and promote nuclear power
and renewable energies. Based on Trends in Japan’s primary energy supply, in 2007 the renewable
energies is increased from 5% become 6%, the energy self-sufficiency is also increased from 15%
become 18%, the supply of oil is decreased from 76% become 44%. In 2010, there is basic energy
plan that targeting for 2030. Energy self-sufficiency ratio that targeted to be decreased from 18% to
be 36%, and zero-emission power source ratio that should be increased from 34% become 70%. In
addition, at least there will be 14 new or additional reactors for nuclear power that should be
increased from 26% become 53%, moreover, in Tohoku area, there are 8 from 39 reactors that under
operation until May 2018. And same as renewable energies and wind power that should be
increased. The energy policy in 2012 decided to pursuing zero operation of nuclear power plants by
the 2030s, and reducing dependence on nuclear power, promoting energy saving and renewable
energy.
In Denmark, the energy policy is contained of; increase self-sufficient ratio and decrease oil
and nuclear. Denmark is planning in promotion of renewable energies, decrease energy
consumption, and improve energy efficiency. The projects that have been done are; wind power,
subsidy program, tax break and refund, community power by using participatory approach, energy
tax from 1980 by using economic approach, and energy label by using informative approach.
Current energy mix in Denmark for ratio of electric power generation are 41% of renewable energy,
59% of thermal, 0% of nuclear. While for ratio of total primary energy supply are 26% of renewable
energy, 34% of oil, 21% of gas, and 19% of coal. Denmark is planning to increase renewable energy
become 50% of total electric power generation in 2020, and in 2050 Denmark is planning to
realizing zero consumption of fossil fuels. However, there are advantages and disadvantages of
hydro power. The advantages are; renewable (no fuel is required), cheap source of energy, constant
energy, and no pollution. While the disadvantages are; expensive, big space needed, disrupts the
ecosystem (change water quality), and water access problem.
Environmental Issue:

THE MONTARA OIL SPILL IN 2009

In 2009, a big blowout happened at the Montara oil rig and causing oil spill into the ocean,
the drill rig is operated by Petroleum Authority of Thailand Exploration and Production (PTTEP)
Australiasia. This is Australian-based company, the Thai state-owned oil and gas company. The oil
rig was located in 250 ft of water between East Timor and Western Australia. The blowout causing
oil spill as much as 400 barrels of oil on each day until they plugged the leak and stopped at day
74th. The total oil spilled is estimated up to 19,000 tonnes. They closed the leak by pumped the mud
into a relief well. According to World Wildlife Fund, after the leak was plugged the polluted area
estimated have affected 9,000 square kilometres of ocean. The Environmental Minister of Australia
released reports regarding this disaster, that caused a large number of whales, dolphins, sea turtles,
and native wildlife fed in this polluted water. In addition, there were the presence of dying birds and
sea snakes.
The crude oil that had reached Indonesia water was causing health issue of Indonesian
fishermen, fishes had found perished, and damaged thousands of acres of valuable and seaweed that
ready to harvest. Seaweed is one of the valuable commodity for food as well as other uses such as
cosmetics, fertilizer, and biofuel. In addition, the Montara oil spill is affected offshore drilling,
which is not safe and can lead to ecosystem and local economies aspect issues. Thousands
Indonesian fishermen rendered into abject poverty without being advised of or understanding the
cause. Furthermore, the clean up process was no less dangerous, the Australian Maritime Safety
Authority (AMSA) was applying more than 184,000 litres of dispersants on the sea surface. They
used seven types of dispersants, and several of them are known to be harmful for the ecosystem.
In November 2010, the Report of the Montara Commission of Inquiry has been released.
And as stated that PTTEP Australiasia was operate the Montara oil field without any sensible oil
field practice. The blowout was not an unfortunate incident, it was an incident that waiting to
happen due to the deficiency of company’s system and processes, and their lack of basic
competence. PTTEP Australiasia was fined $510,000 by the Darwin Magistrates Court after
pleading guilty to four charges related to workplace health and safety, and failure to maintain good
oilfield practice. In addition, PTTEP is claimed by Indonesian Government and a representative of
the Timorese seaweed farmers with the total of $2.7 billion related to the polluted water that
affected them.
A. How to apply the principles on entities and methods for the issue
• Polluter Pays Principle (PPP)
According to polluters pays principle, those who produced pollution should pay the costs of
managing in order to prevent the damage, human health, or the environment. Hence, this principle
will be applied for the Montara oil spill. PTTEP, as the polluter, should pay the fines to Indonesian
government due to oil spill that contaminate the ocean. The crude oil that reached Indonesia water
was causing health issue of Indonesian fishermen. Not only health issue, but also hundreds of fishes
had found perished, in addition the crude oil also damaged thousands of acres of seaweed that ready
to harvest. Since seaweed is one of the valuable commodity for food, therefore seaweed farmers
suffered losses. The cost that should be paid by the company are including the pollution control
devices which is decided by public authorities, compensation and clean up measures after the oil
spill.

• Extended Producers Responsibility

Extended producers responsibility can not be applied to this case because the pollutant is
directly came from the polluter. Thus, no one should pay the cost of polluted ocean unless the
polluter or PTTEP Australiasia as the single polluter.

• Preventive Approach
To prevent this incident to happen in the future, PTTEP should apply preventive approach.
The company should held inspections, including inspect the oil rig, tanks, and containers visually,
the systems and equipment, and spill kits on a regular basis. The inspections must be performed by
the professionals that expert in the field, and conducted on a regular basis such as during routine
service or maintenance. In addition, the inspections should be documented and signed by the officer
that is responsible for the oil rig. Furthermore, documents of the inspections should be kept for at
least 3 years. Thus, if there is some incident happen in the future, they could find inspection report
of the systems or equipments to find the possible causes of failure. Furthermore, besides
inspections, the employees that perform outdoor work activities on the oil field should be trained
and ensure the employees understand how to maintain the equipment to prevent blowout and
leaking, spill response procedures, and visually inspect the system and equipment.
• Precautionary Approach
In precautionary approach, the first thing that PTTEP should do is identify the hazard.
Identify the hazard that includes anything that could cause harm or damage, which means any
possibilities of failure that causes blowout and oil spill. Furthermore, for the process safety, PTTEP
should physically remove the crude oil that was spreading widely on the ocean as soon as possible
before its getting wider. The removal of crude oil can be done by using dispersant that harmless for
the environmental and ecosystem. Moreover, people that work on the field should be isolated from
the blowout. It can be done by using machinery or other items that remotely controlled equipment.
For the personal safety of the workers, PTTEP should change the way people work with the
competence one. And held more any sensible oil field practice before the operation.

B. Approaches for the problem resolution

• Regulatory approach
The possible approaches to resolve the Montara oil spill are, regulation on activities and
regulation on performance. By using regulation on activities, the government and community can
order the regulation directly to PTTEP regarding what activities that should be done by the
company. By using regulation on activities there is no chance for the company to developed their
ideas on regulations. On the other hand, there is another regulatory approach to resolve the Montara
oil spill, which is regulation on performance. This approach is freeing the companies to choose the
methods for regulation. Therefore, PTTEP can developed their ideas in resolving and cleaning up
the oil spill but still keeping a certain level of environmental performance based on the impact of oil
spill. However, all-time monitoring by the government is necessary in controlling any violations.

• Informative Approach
Based on informative approach, PTTEP Australiasia should apply pollutant release and
transfer register (PRTR) method. Therefore, PTTEP Australiasia should provide the information
regarding the oil that spilled from the Montara oil field to fishermen, seaweed farmer, and other
residents. The information is contains of the type of crude oil, the sources, and how much oil that
released. Other than that, there is another method of informative approach which is environmental
report. This report is voluntarily prepared by PTTEP Australiasia to expose their environmental
activities or other activities that impact the environment. The report is published to the public,
therefore government, community, fishermen, seaweed farmers, and the residents know what
PTTEP Australiasia have done for the ocean in resolving the Montara oil spill.
• Participatory Approach
In preventing environmental conflicts, improving policies quality, and promoting capacity
development for public, participatory approach is needed. PTTEP could use ordinary way in
announcing their plan or program to resolve the Montara oil spill, through town meeting. Other than
that, PTTEP also could use traditional way, such as official gazette in announcing their plan or
program in cleaning up the ocean that contaminated by crude oil. For the meeting, PTTEP could use
two types of traditional meetings. The first one is public consultation, where the representative of
PTTEP will explain their plan or program in resolving the Montara oil spill to the public, then there
will be questions and answers session. The second one is public hearing, this type of traditional
meeting is involving four parties; government, community, PTTEP’s representatives, and public. In
public hearing the government will discuss opinion statements with the community and will deliver
to the public, while PTTEP Australiasia will explain their project to the public.

REFERENCES
• “Montara Oil Spill Eight Years On: Timorese Livelihoods Still at Risk.” Future Directions
International, 30 Aug. 2017, www.futuredirections.org.au/publication/montara-oil-spill-eight-
years-timorese-livelihoods-still-risk/.

• “The Montara Oil Spill - Australia's Shame Finally Gets to Court - The Northern
Myth.” Cinetology, 2 Aug. 2016, blogs.crikey.com.au/northern/2016/08/03/montana-disaster-
youve-never-heard-gets-court/.

• admin_2. “The Timor Sea Oil Spill of 2009.” Oceana USA, 3 Dec. 2014, usa.oceana.org/timor-
sea-oil-spill-2009.

• “Oil Spill Prevention, Control, and Countermeasures.” Biohazardous and Medical Waste
Overview, blink.ucsd.edu/safety/environment/outdoor/oil-spills.html#Best-management-
practices-(BMP).

• www.amsa.gov.au/file/2978/download?token=nIEPbUj8.