A demand-driven and market-based approach for RECP implementation will be developed and applied. This is based on segmentation of enterprise target groups, in terms of the nature and size of RECP potential (individually and collectively) and their management, technical and operational capacities and competencies for implementation. Different interventions and support services will be provided to these enterprise groups to cater to their needs and opportunities, and thereby make RECP service delivery both more effective as well as more efficient. This will simultaneously cut the costs of service delivery for enterprises as well as the likely benefits from implementation, and hence contribute to creating a self-sustaining market for RECP services into the future. Under the (SECO – UNIDO) national RECP Programme the following target groups will be considered:

Small Scale Industries (SSIs): these are national companies with medium to largeworkforces (up to several 100s or even 1000s of employees) that manufacture often a limited range of products with medium to large production volumes for national market (e.g. as suppliers to automotive sector) or for direct or indirect export, for example in the furniture and home ware, apparel, sports goods and toy sectors.

Co-Located Manufacturers (industrial parks): these are fully or partly integrated in international supply chains, operate at medium to large scale, are often part-owned by international investors or supplying exclusively for selected international chains or brands, and are predominantly located in industrial zones, producing in sectors as diverse as electronics, chemicals, automotive, etc.

Tourism Enterprises this includes the accommodation and associated tourism-related suppliers (resorts, restaurants, tour operators, etc.), dominated by large numbers of smaller enterprises and few large enterprises (often on franchise-basis to large national or international hotel chains), typically concentrated in close geographic proximity (or tourist regions).

Micro Scale Enterprises (MSE): typically operating in the crafts (e.g. batik, potteries, jewelry, wood crafts, silk spinning and weaving), primary processing (e.g. rice and saw mills, fish processing, tofu production) or service sectors (repair and service workshops and informal recycling), MSEs are in most cases run informally by family members on a cash flow basis with few employees (<10) and in most cases negligible fixed assets. A point of concern is that micro-enterprises form an integral part of residential areas, causing immediate community exposure to the effluents, fumes and wastes generated by microenterprises.

In addition to typical individual/enterprise level RECP opportunities, enterprises in industrial parks and/or tourist regions can also pursue collective RECP opportunities (or RECP synergies/industrial ecology) such as collective recycling facilities or energy facilities (e.g. cogeneration).

On the other hand, the sector-wise organization of small industries and microenterprises allows for identification of common RECP practices and technologies that can then be replicated on a large scale within the respective sectors. Tourism Enterprises and Micro-Enterprises generally have lower technological complexity and scale then the Small Scale Industries and Global Manufacturers. This is illustrated in Table 5. The categories do however not mutually exclude each other. Moreover, large, predominant transnational companies are not explicitly covered, as these are not considered as priority target group for donor-funded RECP interventions.

Within these four enterprise target groups a further preliminary proposal has been made to focus on priority sub-sectors. These subsectors are proposed on the basis on their relative importance for the Indonesian economy (MVA, jobs, export), size and nature of their environmental footprint and expected potential for waste/emission reduction and improved chemical management through RECP practices and technology.

The final selection of sub-sectors and sequencing during the five year implementation period of the RECP Programme will be reviewed through the Annual Work Plan, to be endorsed for implementation by the Project Management Committee. Specifically, it is now foreseen that the RECP Programme will target :

I. (Small) Industry Sectors: A sector-approach will be implemented for following preselected sectors:

1. Metal Products Industry:

combined metal fabrication, transport and automotive sectors generated in 2008 13 per cent of MVA. They cover diverse businesses with different combinations of a limited number of common unit operations, including welding, casting, plating/galvanizing, painting and machining. A wide variety of chemical products is commonly used (degreasers, acids, paints, machining fluids, etc.), whilst energy intensity and waste generation are high for selected operations (e.g. casting (high energy and waste), plating (high energy) and machining (high waste).

2. Chemical Products Industry:

The chemical and chemical products industry contributed in 2008 14 percent to MVA. Among these, the RECP Programme will focus on the producers/formulators of chemical products (paints, inks, detergents, dyestuffs, pharmaceuticals, pesticides, etc.) and small scale synthesis (mostly organic, i.e. production of active ingredients), as the UNIDO-GEF project focuses on the energyintensive large scale chemical sectors (including petrochemical, inorganic and fertilizer sectors). Among the chemical products’ manufacturers targeted in the RECP Programme there is generally an urgent need to improve occupational, community and consumer safety, with ample opportunity to do so through the application of RECP practices and technologies.

3. Food and Beverage Industry:

The food and beverage sector accounted in 2008 17 percent of MVA. Among food and beverage industry, the RECP Programme will particularly target sectors with relatively high water consumption and/or (organic) waste generation (and thereby complement the focus of the industrial energy efficiency project on energy intense sub-sectors of the food and beverage industry). Companies targeted could for example include cleaning, drying, preserving, canning and/or other processing of fruits, vegetables, fish and seafood, production of edible oil, rice and flour products, processing of coffee, coconuts and nuts, etc.

II. Industrial Parks:

Three industrial parks will be focused upon with the RECP Programme. These have been pre-selected with a view to include different regions and specifically target industrial parks which have a relatively larger participation of Indonesian owned companies (as compared to some of other large industrial parks that are dominated by transnational corporations and/or their subsidiaries). Respectively:

Based on Industrial Park Association (HKI – Himpunan Kawasan Industri) data as of June 2012, the total industrial park in Indonesia is 61 with 7211 companies as the tenants. There are 15 industrial parks in Sumatra island, 42 industrial parks in Java island, 2 industrial parks in Kalimantan and Sulawesi island.

These are three industrial parks that can be a model to represent condition in three areas in Indonesia, which are Batamindo to represent Riau Island area, SIER to represent East Java area, and KIMA to represent Makassar area.

1. Batamindo

Batamindo industrial park was built in 1990 and began operations in 1992. This area is managed by PT Batamindo Investment Cakrawala (PT BIC) and its shares are owned by PT Verizon Indonesia and Galant Venture. BIC region is located on the edge of main streets in Jl. Rasamala, Muka Kuning – Batam. Total area has reached 319 Ha and there are development plans up to 500 Ha of land. Industries in Batamindo are lightweight and low-pollution industries, such as pharmaceutical, food, plastic molding, mechanical, electronic, electrical, warehouse and packaging. A total of 51% of the industry in the region engaged in the ICT component, 22% is precision, 13% is supporting, 8% is plastic molding, and 6% is medical.

Facilities Batamindo has a Waste Water Treatment Plant (WWTP) with a capacity of 20,000 m3/day, which is equipped with a laboratory test. Processing system used is biological treatment. The industrial area has a water treatment plant (WTP) with a capacity of 6,720 m3/day and water distribution networks up to 90 km. Source of raw water used is surface water and also used water from Local Water Company to ensure adequate water supply. PT BIC only manages temporary storage of Hazardous Waste (Limbah B3 – Bahan Berbahaya dan Beracun) in particular that has received permission from the Ministry of Environment. Hazardous Waste treatment is carried out by PT Prasada Pamunah Limbah Industri (PPLI) in Cileungsi Bogor.

PT BIC has a central power plant independently with an installed capacity of 130 MW. The electricity comes from the 19 unit gas engine (@ 6MW) and 1 gas turbine with a capacity of 12 MW. The entire electrical substation and power system in the region was built and is owned by PT BIC. Gas source is derived from the industrial area of State Gas Company (PGN – Perusahaan Gas Negara) to guarantee the availability of 11,000 MMBTU/day up to 13,200 MMBTU/day.

Batamindo and its tenant have the purpose to be green industries. Beside that Government of Riau Island are interested and supports their activities to reach their goal to be green industry. Energy conservation efforts that have been made are electrical energy saving program in lighting system, applying backwash water recycling system, waste water recycling and rainwater harvesting through ground pool for watering plants. Overall, Batamindo has a good management system. Batamindo has implemented quality management, environmental, health, and safety, characterized by its certificate of ISO 9001 and ISO 14000. Although not yet obtained ISO 18000/OHSAS, Batamindo has implemented programs P2K3 (Organizing Committee for Occupational Safety and Health) as corporate responsibility in implementing an Occupational Health and Safety. There has also been achieved “blue” rating for PROPER issued by Ministry of Environment.


Surabaya Industrial Park Rungkut (SIER) is managed by PT SIER, which is a company that was found in 1974. PT SIER manages three Industrial areas, which are Surabaya Industrial Park Rungkut (SIER), Sidoarjo Indusrtrial Park Berbek (SIEB), and Pasuruan Industrial Park Rembang (PIER). However in this report only SIER will be explained as a target of industrial park in East Java area.

Rungkut industrial area has an area of 245 Ha to accommodate around 300 tenants. Total of 203 companies have been doing industrial land use agreement (PPTI – Perjanjian Penggunaan Tanah Industri), 52 companies have hired small industrial facilities (SUIK – Sarana Usaha Industri Kecil), 39 companies have hired the factory ready to use (BPSP – Bangunan Pabrik Siap Pakai), and 15 companies hire rent a warehouse. Overall there has been 309 tenants in SIER. The number of tenants is a maximum capacity of SIER. SIER’s tenants are dominated by plastic industries and workshops. Other tenants produce food, cooking oil, pharmaceutical, cosmetic, adhesive, soap, etc. Facilities

PT SIER has a waste water treatment plant and the tenants are compulsory to flow their waste water into it. PT SIER impose minimum requirements on the disposal of waste water each tenant. If there are tenants who do not meet these requirements, it will be given a letter of warning and time for three days to improve the quality of waste water. After three days finished and quality of the waste water is not eligible, then the tenant factory will be closed. Electricity in this area is supplied by the State Electricity Company (PLN – Perusahaan Listrik Negara). Gas source is derived from the industrial area of State Gas Company (PGN – Perusahaan Gas Negara). Industrial water is supplied by Local Water Company (PDAM – Perusahaan Daerah Air Minum) and ground water.

PT SIER only manages temporary storage of Hazardous Waste (Limbah B3 – Bahan Berbahaya dan Beracun) that has received permission from the Ministry of Environment. Hazardous Waste treatment is carried out by PT Prasada Pamunah Limbah Industri (PPLI) in Surabaya. Generally, Hazardous Waste and air pollution are responsible of each tenants.

PT SIER is currently trying to implement a system to recycle their wastewater. In later WWTP effluent will be channeled back to the tenant without have to throw it directly into the river. Of course this system will save water consumption in SIER but the system needs time to be success. Unilever as a tenant of SIER has implemented a water recycling system independently thus saving the cost of wastewater treatment in SIER and consumption of water from Local Water Company.

In addition, PT SIER uses paving block in some streets in SIER. It aims to increase the water catchment sources, thereby increasing soil water reserves and the flood prevention efforts. Similar program to the RECP, “linkage program” has been done in this area for three months. The program was in collaboration with Germany and aims to create a network of intertenant use of side products in SIER. But the program is not going well because each tenant already has a network of their respective businesses, including marketing side product.

Basically, PT SIER does not have the authority to control activities of each tenant. However PT SIER has regular meetings with the management part of each tenant. The meetings usually discuss aspects of human resources and recent issues, but never talk about technical things like the operation of the plant. Generally, these meetings were conducted one month one time, but the number of meetings is flexible enough. Therefore, UNIDO can take advantage of the meeting to explain the RECP project.


Kawasan Industri Makassar (KIMA)/Makassar Industrial Park is managed by a government towned company with the same name, i.e. PT Kawasan Industri Makassar (Persero). KIMA is located 15 km from Makassar, the capital city of South Sulawesi Province. KIMA has operated since 1988 and has an area of 327 ha with 224 tenants. KIMA’s tenants are dominated by food processing companies. Other tenants produce wood/furniture, building materials, metals, polymers/foam, etc.

Facilities PT KIMA provides a Waste Water Treatment Plant (WWTP) with capacity of 3000 m3, which is equipped with a testing laboratory. The processes are filtration (using sand filter and fine screen), equalizing, oxidation, and sedimentation. The output of WWTP, whose average amount is around 1200 m3/day, complies with South Sulawesi Governor Regulation no. 69/2010.

The WWTP sludge categorized as Hazardous Waste (Limbah B3 – Bahan Berbahaya dan Beracun), is currently sent to PT Semen Tonasa for co-processing. PT KIMA has been granted temporary permission from the Local Environmental Agency for temporary storage of hazardous waste in its facility.

PT KIMA currently does not have Water Treatment Plant, therefore the industrial water is supplied by Local Water Company (PDAM – Perusahaan Daerah Air Minum) and ground water. The water is collected in a clean water basin with capacity of 2300 m3. The overall water consumption in KIMA area is around 150,000m3/month or 6,000m3/day. There is a plan for WTP construction with capacity of 8,640m3/day.

Electricity is supplied by the State Electricity Company (PLN – Perusahaan Listrik Negara) with installed capacity of 20 MW. However, PT KIMA will install steam turbine and gas turbine generator. There is no installed natural gas pipe to the facilities; therefore the energy sources are most likely limited to solid and liquid fuels.

Currently PT KIMA has awarded a “Blue” rating for PROPER (Program Penilaian Kinerja Perusahaan dalam Pengelolaan Lingkungan – Company’s Environmental Performance Rating Program) in 2011 – 2012. PT KIMA has the intention to be a green industry. Beside that Government of Makassar are interested and supports their activities to reach their goal to be green industry. PT KIMA appeals to its tenant to do energy conservation measures, especially electricity saving in lighting system.

PT KIMA also tries to minimize the ground water use and optimize piped water utilization. However the waste water treatment system has to be considered since its performance is poor.

III. Tourism Regions:

The national RECP programme in Indonesia will target two pre-selected tourism regions with different profiles, namely:

1. Lombok (West Nusa Tanggara): is an emerging tourism region that mainly attracts visitors for its beaches and water-based tourism around the island. The RECP Programme targets waste and effluent reduction and energy conservation in accommodation sector and fosters development and implementation of low-impact coastal zone tourism.

2. Yogyakarta (Yogyakarta): home to many heritage sites and starting point for visits to the UNESCO world heritage listed Borburdur, Yogyakarta is the centre of culture based tourism for Indonesia. In addition to waste and effluent reduction and energy conservation, the RECP Programme targets in Yogyakarta also the supply sectors to tourists, in particular of handicrafts (and thereby provides a linkage to the project component on RECP in crafts sector).

IV. Micro-Enterprises

Micro-enterprises are included as these are important sectors from employment, food and chemical safety, environment and occupational and community health perspectives. Thousands of family-run shops operate amidst residential areas, discharging effluents in open sewers and fumes into living quarters. RECP can be operated through better operating practices, improved tools/implements and better design/set up of facilities. As demonstrated through the Clean Batik Initiative in Indonesia (and green crafts’ projects elsewhere in Asia, including in Vietnam), RECP can be effective promoted through the provision of model solutions through extension type of services and local craftsmen (welders, plumbers) that can retrofit existing shops. Two micro-enterprise sectors have been pre-selected for inclusion in the RECP Programme, namely:

1. Tofu Sector: fresh tofu is a beloved part of the diet of Indonesians. It is commonly produced on very small scale (several tens of kgs per day only, for local consumption) in kitchen-like facilities in residential areas causing significant effluent and air emission


2. Primary Recycling: more and more micro-entrepreneurs sprout up as primary recyclers, separating and basic processing (e.g. smelting of metals and glass), often with limited or no consideration for the (toxic) fumes, effluents and wastes that are generated.