Questioning the Environmental Commitment in Indonesia’s Move to a New Capital

Despite the Smart City concept being central to Indonesia’s new capital, numerous environmental issues have yet to be addressed. Credit: REUTERS


The Government of Indonesia (GoI) seemingly prioritize sustainability when moving the capital from Jakarta to Kalimantan. This is seen from incorporating the Smart City concept for its development of the new capital. A principle of this concept is balancing environmental and industrial considerations during development. Interestingly, an initial assessment by the Ministry of Environment and Forestry (KLHK) highlighted the risks of environmental damage in two regencies from this development which potentially spans 656,000 hectares. These regencies are namely, Kutai Kartanegara and North Penajam Paser, East Kalimantan. Therefore, the intended balance between environment and industry may be at odds with current realities.

Environmental Risks to Kalimantan yet to be Addressed

KLHK’s Strategic Environmental Assessment (KLHS) highlighted several environmental risks to East Kalimantan from moving Indonesia’s capital. First, water is sparse in East Kalimantan which will impact the development of the new capital. Second, there are flora and fauna issues as East Kalimantan is a habitat for orangutans, particular monkey species, dolphins, and crocodiles. Third, forests, mangroves, coastal and aquatic ecosystems are integral to East Kalimantan. Unfortunately, these risks have yet to be addressed. Instead, there are currently two objectives for the development of the new capital. These two objectives amalgamate the concepts of Metropolitan city and Smart City.  First, the new capital will be developed to boost investments in the strategic services sector. Second, the new capital will be expanded to include Special Economic Zones (SEZ) and Industrial Estates (IE) as regional growth centres.  These seem at odds with GoI’s prioritization on sustainability. This is particularly concerning due to Indonesia’s commitment to the United Nations Framework on Climate Change (UNFCCC). This commitment entails the integration of low carbon footprint developments and a green economy into the National Mid-Term Development Plan 2020-2024.

“Greedy” not “Greeny”

Indonesia has a long history of industrial developments without any consideration for the environment. In 2018, prior to the new capital development plan, there were at least 220 cases of environmental issues dispersed in 13 provinces. These cases included the  conversion to oil palm plantations, industrial forest plantations, pollution, mining, ponds, infrastructure, reclamation, tourism, property, urban and water. Interestingly, this indicated the urgency to develop regions that were not only already industrialized but also those that have been untouched by man. In other words, sustainability was never a consideration in developments.

Yogyakarta should have served as precedence and warning to the GoI for the new capital development. Though labelled as a Smart City, Yogyakarta is a highly populated region due to urbanization. Such urbanization led to the issue of limited green open spaces that are below regulated levels. While it is regulated that at least 20% of land area be allocated for green open spaces, Yogyakarta has only allocated 16% across 45 districts.

These complex structural and non-structural issues were also confounded by stakeholders continued reliance on natural resources for business. Such reliance has led to severe environmental issues such as slash-and-burn agriculture. Currently, tens of thousands of hectares of land have been reported to be cleared by burning.

This demonstrates that environmental problems in developments in Indonesia are vast, ranging from structural problems such as the lack of commitment from bureaucracy, the issue of how the “Smart City” label does not prioritize environmental development planning, to investment behaviours that are unsupportive of such planning. Therefore, Indonesia’s problem for developments is greed. Though there had been several pushes for environmental sustainability, there have yet to be any real, significant actions.

These past experiences should concern GoI in developing a Smart City in its new capital. Should urbanization be included in the new capital? How should environmental risks be mitigated? Can behaviours and bureaucracy in the new capital assist in mitigating these risks?

Responding via an Island of Green

One possible solution is for GoI to consider conducting reclamations based on green programs rather than greed or business. This is important because, thus far, reclamation has been shown to focus solely on economic gains and not intended to preserve the environment. For example, reclamation in Jakarta is prioritized for building constructions without evaluating environmental impacts. Building constructions around Jakarta’s bay will result in severe environmental impacts. Reclamation was also envisaged to eliminate fishing grounds, resulting in a decrease in fish production. The potential decline in fish production was estimated to be around 82.2 tons/year.

Bali, Indonesia has also encountered similar problems. The reclamation plan at Benoa Bay will harm 700 hectares of a mangrove conservation area, perfect marine ecosystems, and the oceanfront. This reclamation is intended to boost tourism via hotels, golf courses, luxury shopping opportunities, a theme park and a racetrack. Locals and environmental activists have staged  protests and demonstrations due to the potential loss in livelihoods and damage to the marine ecosystem. For example, the coral reefs in Benoa Bay, which are essential in Benoa’s marine ecosystem,  are very vulnerable to small particles of sediment. Reclamation will expose corals to small sediment particles, causing them to die. GoI has responded bypassing Presidential Regulation Number 45 the Year 2011 on Urban Regional Spatial Plan For Denpasar, Badung, Gianyar, and Tabanan. This regulation will see revitalization activities including reclamation of 700 hectares of Benoa Bay. This is, of course, not supported by the local government of Bali in its bid to preserve its environment; resulting in tensions between central and local governments.

Developments in Jakarta and Bali should initiate a different view of Smart City development in the new capital; one which bridges both green and greed. Such bridging can be seen in Songdo, South Korea. Its green intention is evident from the widespread implementation of the U.S. Green Building Council’s LEED™ standard that required 40% of the city to be provided by green public space. By doing so, Songdo offers residents, visitors, and businesses an idyllic and sustainable place to live, work, and play. This green intention is also complemented by a growth plan where there are over 20,000 residential units, 1,000 retail and hospitality businesses, and 1,600 domestic and global companies.

As in the case of Songdo, GoI should carefully consider numerous potential investments in the new capital. Latest data indicated that there are 30 big international companies from United Arab Emirates, United States of America, United Kingdom, Germany, China, Singapore, Italy, and Denmark which should be assessed, especially their commitments to environmental impacts as a result of their activities. One possibility is for GoI to ensure that these companies see through their commitment of helping Indonesia replace deforestation as a result of developing the new capital. This commitment should be in the form of a Memorandum of Understanding (MoU) with each investment partner in addition to GoI refocusing on sustainability in its  development plan.

These two measures, implementing green programmes and assessment of investors, can be combined due to the bureaucracy in the new capital. As an autonomous region, the local bureaucracy can easily monitor the development due to its proximity to the development area as well as investors. Local bureaucracy should itself have a green mindset, not a mindset centred on greed. If the mindset is focused only on greed, the bureaucracy could enable bribery by stakeholders, investors, or brokers. Any attempts by these three should be responded with sanctions. For example, sanctions can be meted out if the 20% requirement of green open spaces and the requirements of Smart City development are violated.


The development of the new capital with the spirit of sustainability and Smart City concept have to be well understood by GoI. Smart does not simply mean technological advancement which disregards the environment. Though there have been many violations in the past, it does not mean that such practices should continue. This can change by incorporating green programmes in development plans, signing of MoU to replace deforested areas, and having local bureaucracy that prioritizes the environment. Additionally, sanctions should be imposed on all violators of environmental requirements.

Collectively, these will have two impacts. First, it will change the mindset and behaviour towards Smart City development in the new capital.   Smart City development is truly not about greed, it is about green values to balance nature and development. Second, this will convey an important message to the world that Indonesia will join South Korea in developing a Smart City Capital, as envisioned by President Joko Widodo.

The views expressed are those of the authors and do not necessarily reflect those of STRAT.O.SPHERE CONSULTING PTE LTD.

This article is published under a Creative Commons Licence. Republications minimally require 1) credit authors and their institutions, and 2) credit to STRAT.O.SPHERE CONSULTING PTE LTD  and include a link back to either our home page or the article URL.


  • Satria Aji Imawan currently holds a Master degree in Public Administration with various experience working with various organizations. His research interest is on Behaviour Public Policy, Sustainable Policy, and Public Management. Satria Aji Imawan can be contacted by Facebook, Linkedin, and/or email.

Leave a Comment

Your email address will not be published. Required fields are marked *