Government Regulation of the Republic of Indonesia No. 70/2009 on Energy Conservation

Article 25 paragraph (5) of Law Number 30 Year in the form of heat, light, mechanical, chemical 2007 on Energy, it's necessary to stipulate a gov- and electromagnetic. ernment regulation concerning Energy COnserva- 3. Energy SOurce shall be something capable of tion; producing energy, directly or through conver- sion or transformation. Inviewof:. 4. Energy Resource shall be natural resource us- 1. Article 5 paragraph (2) of the Constitution of able as a source of energy or energy. 1945; 5. Business Entity shall be a company in the form 2. Law NUmber 30 Year 2007 (BN No. 7609 pages of legal entity, which conducts business perma- 7A-18A)on Energy (Statute Book of the Repub- nently, continuously and is established in accor- lic of Indonesia Year 2007 Number 96, Supple- dance with legislation as well as works and is ment to Statute Book of the Republic ofIndone- domidled in the telTitory of the Unitary State of sia Number4746); the Republic ofIndonesia. 6. Permanent Establishment shall be a business DECIDES: entity established as and having statutory body To stipulate: outside the territory of the Unitary State of the . THEGOVERNMENT REGUlAllONONENERGYCONSER- Republic of Indonesia, which conducts activities VAllON. and is domiciled in the territory of the Unitary State ofthe Republic of Indonesia and is obliged CHAPTERI to abide by legislation in force in the Republic of GENERAL Indonesia.

Article 1 7. EnlJepreneUrshall be individual, businessentity, Referred to in this government regulation permanent establishment that manages energy, as: induding producer ofequipment utilizing energy. Business News 7918/2-12-2010 8. Energy.......... 13A 8. Energy Utilization shall be an activity to utilize 16. Regional Government shall be governor, regent energy directly or indirectly from energy source. or mayor and regional authorities as compo- 9. Producer of Energy saver Equipment shall be nents of regional administrator. individual or business entity undertaking busi- 17. Minister shall be the Minister in charge of en- ness activity to produce and/or provide energy ergyaffairs. saver equipment. 10. Energy User shall be individual, business entity, CHAPTERU permanent establishment, government institu- RESPONSIBIUTYOFGOVERNMENT, REGIONAl. tion ,and non-government institution utilizing GOVERNMENT, ENTREPRENEURANOCOMMUNITY energy to produce products and/or services. Part One 11. User of Energy SOurce shall be individual, busi- General ness entity, permanent establishment, govern- Article 2 ment institution and non-government institution (1) National energy conservation shall become re- using energy source. sponsibility of the government, provincial gov- 12. Energy Saver Equipment shall be apparatus or ernments, regental/municipal governments, en- instrument or facility which in the operation trepreneurs and communities. thereof utilizes energy economically in accor- (2)The responsibility as referred to in para- dance with the stipulated energy saver bench- graph (1) shall be executed on the basis of rnilIk. the master plan of national energy conser- 13. Equipment utilizing Energy shall be apparatus or vation. instrument of facility which in the operation thereof utilizes energy source or energy. Article 3 14. Energy Audit shall be evaluation ofenergy utili- (1) The master plan of national energy conserva- zation and identification of energy saving pos- tion shall be formUlated and stipUlated by the sibilities as well as recommendation about the Minister. enhancement of efficiency in energy user and (2)The master plan at national energy conserva- user of energy source in the framework of en- tion shall contain at least target, principles of ergy conservation. policy, programs, energy conservation mea- 15. central Government, hereinafter called the Gov- sures. ernment shall be the President of the Republic (3) The master plan of national energy conserva- of Indonesia holding the executive power of the tion shall be formulated by: UnitalY State of the Republic of Indonesia as a. refening to the national energy general plan; referred to in theConstitution of 1945. and Business News 7918/2-12-2010 b.on .. 14A b. on inputs from related institutions, regional Part Three govemments, entrepreneurs and communi- Responsibility of Regional Govemment ties. Article 5 (4) The master plan of national energy conserva- The proVincial govemments as referred to tion shall be prepared for a period of 5 (five) in Article 2 shall be responsible by virtue of their years and may be reviewed every year in ac- authority in the said proVince for: cordance with the need. a. formulating and stipulating energy conservation policies, strategies and programs; Part Two b. developing qualified human resources in the en- Responsibility of Government ergy conservation field;

Article 4 c. socializing thoroughly and comprehensively the The government as referred to in Article 2 utilization ofteehnology applying energy conser- shall be responsible nationally for: vation; a. formUlating and stipulating energy conservation d. allocating funds in the framework of implement- policies, strategies and programs; ing energy conservation programs; b. developing qualified human resources in the e. facilitating and/or providing incentives in the energy conservation field; framework of implementing energy conservation Co socializing thoroughly and comprehensively the program; utilization of technology applying energy con- f. providing technical counseling related to energy servation; conservation for entrepreneurs, users of energy d. assessing,formulating and stipulating policies as sources and energy users; well as allocation of funds in the framework of g. implementing the stipulated energy conservation implementing energy conservation programs; programs and activities; and e. facilitating and lor providing incentives in the h. fostering and supervising the implementation of framework of implementing energy conservation energy conservation programs. program; f. providing technical counseling related to energy conservation for entrepreneurs, users of en- Article 6 ergy sources and energy users; The regental/municipal governments as re- g. implementing the stipUlated energy conServa- ferred to in Article 2 shall be responsible by virtue tion programs and activities; and of their authority in the said regency1city for: h. fostering and supervising the implementation of a. formulating and stipulating energy conservation Mergv con&ervatio/1 programs. policies, strategies and programs; Business News 7918/2-12-2010 b. developing......... l5A b. developing qualified human resources in the en- Part Five ergy conservation field; Responsibility of Community c. socializing thoroughly and comprehensively the Article 8 utilization oftechnology applying energy censer- The communities as referred to in Article 2 vation; shall be responsible for supporting and implement- d. allocating funds in the framework of implement- ing energy conservation programs. ing energy conservation programs; e. facilitating and!or providing incentives in the CHAPTERm framework of implementing energy <lOnservation REAl TZATIONOFENERGYCONSERVATION program; Part One f. providing technical counseling related to energy General conservation for entrepreneurs, users of energy Article9 sources and energy users; (l) The implementation of energy conservation shall g. implementing the stipulated energy conservation cover all phases of energy management. programs and activities; and (2) The management of energy as referred to in h. fostering and supervising the implementation of paragraph (1) shall cover the follOWing activi- energy conservation programs. ties: a. energy supply; b. energy exploitation; Part Four c. energy utilization; and Responsibility of Entrepreneur d. energy resource conservation.

Article 7 (l) The entrepreneurs as referred to in Article 2 Part Two shall be responsible for: Conservation in Energy Supply a. implementing energy <lOnservation in every Article 10 phase of business operation; and (1) Individuals, business entities and perma- b. using energy efficient technology; and!or nent establishments shall be ,obliged to c. producing energy saver products and!or ser- implement e,nergy conservation in the sup- vices. ply of energy. (2) Further provision on the energy efficient tech- (2) The implementation of energy conservation in nology as referred to in paragraph (l) letter b the supply of energy shall covers: shaU be governed by a regulation of the Minis- a. planning which orientates to the utilization ter. of energy efficient technology; Business News 791812-12-2010 b. selection......... 16A b. selection of infrastructure, facility, material (3) The energy management as referred to in para- and process using efficient energy directly graph (2) shall be done by: or indirectly; and a. appointing energy manager; c. operation of energy efficient system. b. formulating energy conservation program; c. conducting energy audit periodically; Part Three d. recom mending result of energy aUdit; and Conservation in Energy Exploitation e. reporting the implementation of energy con-

Article 11 servation every year to the Minister, gover- (1) Individuals, . business entities and. permanent nor or regent/ mayor by virtue of their au- establishments shall be obliged to implement en- thority. ergy conservation in the exploitation of energy. (2) The exploitation of energy as referred to in para- Article 13 graph (1) shall cover the exploitation of energy (1) The energy audit as referred to in Article 12 resources, energy sources and energy. paragraph (3) letter c shall be done by internal (3) The implementation of energy conservation in energy auditor and/or accredited institution. the exploitation of energy as referred to in para- (2) The energy management as referred to in Ar- graph (1) shall be done through the application ticle 12 paragraph (3) letter a and energy audi- of energy efficient technology complying with tor as referred to in paragraph (1) shall have the standards in accordance with the provisions competence certificate in accordance with the of legislation. provision of legislation. (3) The energy conservation program as referred Part Four to in Article 12 paragraph (3) letter b shall be Conservation in Energy utilization formulated by users of energy sources and en-

Article 12 ergy users and minimally contain information (1) Users of energy sources and energy users shall about: be obliged to utilize energy economically and a. plan which will be executed; efficiently. b. kind and consumption of energy; (2) Users of energy sources or energy users that c. utilization of energy saver equipment; use energy sources and/or energy bigger or d. energy conservation measures; and equal to 6,000 (six thousand) equivalent tons e. quantity of the produced products or pro- of oil per annum shall be obliged to undertake vided services. energy conservation through energy manage- (4) Report on the implementation of energy con- menl llervation all referred toin Article 12 paragraph Business News 7918/2-12-2010 {3l . t3lj letter e shall be formulated on the basis of Article 16 the energy conservation program as referred (1) The application of standard of energy perfor- "In paragraph (3). mance to the equipment utilizing energy as re- (!I¥lIUtther provision on procedures for formulat- ferred to in Article 15 paragraph (1) shall be ~rogram and reporting result of the imple- done by affiXing label of energy efficiency level. mefttation of energy conservation as referred (2) The affixing of label of energy efficiency level to in paragraph (3) and paragraph (4) shall be shall be done by producers and importers of glWemed by a regulation of the Minister. equipment utilizing energy in equipment utiliz- ing energy gradually in accordance with label- Part Five ing procedure. Conservation of Energy Resources (3) Further provision on the phasing, labeling pro-

Article 14 cedure and kinds of equipment utilizing energy (1) The Minister shall stipulate a policy on conser- as referred to in paragraph (2) shall be gov- ...a !illft"of energy resources. erned by a regUlation ofthe Minister. (2)3ft1e' p&licy on the conservation of energy re- sources as referred to in paragraph (1) shall CHAPTER V t:UVeriJut shall not be limited to: FAaLITY,INCENTIVEANDDISlNCENTIVE a. o!l1ergy resources haVing management and/ Part One or supply thereof prioritiZed; Fadliliy and InceJ1liv.e 11.. quantity of energy resources which"calT'be produced; and Adillle 17 Ihitation of energy resources whictl'&nnot The ~emment III1d~ regimullcgqvern- be managed in a specified period. meats shall grtIntfa:lilityto..QUswticel'l8lW¥'users and producersofenergysav~tun­ CHAPTl:RIV cIer'take lInet1IV o:nsenrati8n, t¥l Gbtl!llw. STANDARD ANDlABEL a. access tdlimwflta6eR'lIbeut'energy_tech- Article lS n~ and speclfIea'6on-thereot, and-energy (l)'ERef'gy efficient technology shall be "a!iplied s8Vihg'iIle'&i*fmeasures, aTrd through the stipulation and enforcement of b. consultation -service refated'to energ\, saving standard of energy performance in equipment methollstm-easures. utilizing energy. (2f"Rre--standard as referred to In paragraph'(l) Article 18 SI18rt:be stipulated in accordance witb:the pro- The government and/or regional govern- Vi5kln of legislation. ments shall grant incentives to: BusinesSNews 7918/2-12-2010 a.energy . a. energy users using energy bigger or equal to .efened to In ArtIde 18 letter a may be in the 6,000 (llix thousand) equivalent tDns of oil per format: annum as .ere,red to In Artk:Ie 12 paragraph a. taxationfadlltylorenegysavwequ ... (2); and b. the granting of regional tax ded!1Ction, ief b. producers of energy saver equipment In the and exemption to energy saver equipment; country, that are su« lui to undertake en- Co import duty facility lor energy saver equip- ergy conservation In a spedfted period. menI; cL low Intel est-rate funds for the need of in- Artide19 vestment in energy conservation In acc:or- (l)lbe energy users as lelerred to In Article 18 dance with the.~ofleglsl8tion;and/ letter a &hall be deemed mmpt(.liIg with the suc- or cess afti!ria fOr the Implen.entatlon of energy e. energy audit In the partnership SCheme fi- consentation In the case of In a specified pe- nanced by the government. riod, the following aspect decreasing: (2) The Incentives granted to the producers of en- a. consumption of spedflc energy; and/or ergy saver equipment as referred to In Article b. elastidty of energy consumption. 18 letter b may be in the form of: (2) The producers of energy saver equipment as a. taxation facility for components/spare parts I elened to In Artlde 18 letter b &han be dec!med and raw materials used for produdng energy complying with the SIN· 5 atterla lor the Imple- saver equipment; mentation of energy conservation if the pI1IlIuc- b. the granting of regional tax deduction, relief ers in a specified period can: and exemption to components/spare parts a. produce energy saver equipment having en- and raw materials used for produdng energy ergy effidency higher than the stipulated saver equipment; benchmaitc; and Co Import duty fadllty for components/spare b. affix label ofenergy eftic:iency level In acc:or- parts and raw materials to be used lor pro- dance with the effe..'tive standard. dudng energy saver equipment; and/or (3) Further provision on the Sl!O 55 aiteria for the cL low Interest-rate funds for the need of In- implementation of energy conservation as re- vestment In the frameworit ofprodudng en- ferred to In paragraph (1) and paragraph (2) ergy saver equipment In accordance with the shall be governed by a regulation of the Minis- provisions of legislation. ter. (3) Application lor Incentives may be submlttell by energy users In the event that the result of Artide20 evaluation of report on the Implementation of (1)The Incentives granted to theenergy users as energy conservation as refelTed to in Article Business News 7918/2-12-2010 12 ........ 1M 12 paragraph (3) letter e in accordance with (2) Fufther provision on the requirements and ai- the provision as referred to in Article 19 para- teria for the energy users as referred to in para- graph (I), shows the success of implementa- graph (I) shall be governed by a regulation of . tion. of energy conservation. the Minister. (4) Application for incentives may be submitted by domestic producers of energy saver equipment Part Two in the even that verification of the success ai- Disincentive teria as referred to I Article 19 paragraph (2) Article 22 shows the successful implementation of energy (I) The users of energy resources and energy us- conservation. ers as referred tD In Article 12 paragraph (2) (S) The taxation facilities as referred to in paragraph not executing energy conservation through en- (I) letter a and paragraph (2) letter a shall be ergy management shall be subject to disincen- granted in accordance with the provisions of tive by the Minister, governor or regent/mayor taxation legislation. by virtue of their authority. (6) The regional tax deduction, relief and exemp- (2) The disincentive as referred to in paragraph (I) tion as referred to in paragraph (I) letter band may be In the form of: paragraph (2) letter b shall be grantad in ae- a. written warning; c:onIance with the provisions of.regionaI tax Ieg- b. announcement In mass media; c. fine; and/or (7) 1be import duty facilities as referred tD in para- d. reduction of energy supply. graph (I) letter c and paragraph (2) letter c shall be granted in accordance with the provi- Article 23 sions of customs legislation. The written warning as referred to in Ar- tide 22 paragraph (2) letter a shall be granted 3 Artide21 (three) times maximally at a time interval of one (I) The incentive in the form of energy audit in the month respectively. partnership scheme as referred to in Article 20 paragraph (1) letter e may be granted to en- Artide24 ergy users using energy less than 6,000 (six In the event that users of energy sources thousand) equlvalenttDns of oil per annum that and energy users already reminded 3 (three) are succesSful to implement energy conserva- times as referred to in Article 23 do not imple- tion, besides the energy users as referred to in ment energy conservation, the Minister, gover- Artide 18 letter a. nor ofregent/mayor by virtue oftheir authority Business News 7918/2-12-2010 shall .. 20A shall announce names of the users of energy Article 27 sources and energy users in mass media. Further provision on procedures for impos- ing the disincentive as referred to In Article 22 up

Article 25 to Article 26 shall be governed by a regulation of (1) In the case of energy conservation not execut- the Minister. ing energy conservation on one month follow- ing the announcement of names of users of en- CHAPnRVI ergy sources and energy users in mass media RlSIERINGAN>SUPERVJSION as referred to in Article 24, the users of energy Article 28 resources and energy users shall be subject to (1) The government and regional government shall fine. foster and supervise the implementation of (2) The fine as referred to in paragraph (1) shall be energy conservation by virtue of their author- imposed as much as 2 (two) times the value of ity. energy squandering that arise from the users. (2) The fostering as referred to in paragraph (1) (3) The proceeds of the fine as referred to in para- shall be done through: graph (2) shall be remitted to state/regional a. education and training; cash in accordance with the provisions of legis- b. technical guidance; lation. Co CXlUI1Sl!lIng; d. dissemination of information through printed Artic:le26 media, electronic media, forums or exhibi- (1) In the case of users of users of energy sources and energy users not paying fine in one month tions;and following the imposition of the fine, the Minis- e. support and/or facilitation of research and tEr, govemoror regent/mayor by virtue of their development of energy conservation tech· authority shall stipUlate the reduction of energy nology. supply to the said users. (3) The supervision as referred to in paragraph (1) (2) In stipulating the reduction of energy supply as shall be directed to: referred to in paragraph (1), governor or re- a. the appointment of energy manager; gent/mayor shall secure approval from the Min- b. the formulation of energy conservation pro- ister•. gram; (3) The reduction of energy supply as referred to c. the implementation of energy audit perlodi- in paragraph (1) shall not abolish the obligation cally; and of users of energy sources and energy users to d. theirnplementation of recommendation about payfine. result of energy audit. BusinessNews 7918/2-12-2010 (41 The........... 21A (4) The funding needed for the fostering and su- Stipulated in Jakarta pervision carried out by the government as re- On November 16, 2009 ferred to in paragraph (1) shall be charged with THEPRfSlDENTOFTHEREPUBUCOFINDONESIA,. the State Budget of Revenue and Expenditure. sgd (5) The funding needed for the fostering and super- DR.H.SUSJ:LO BAMBANG YUDHOYONO vision carried out by regional governments as I efei1ed to in paragraph (1) shall be charged with Promulgated in Jakarta Regional Budget of Revenue and Expenditure. On November 16, 2009 lHE MINISTEROF LAWAND HUMAN RIGHTSOFlHE CHAPTERVD REPUBLICOFINDONE5IA, lRANSITIONALPROVISION sgd

Article 29 PATRIALIS AKBAR In the even that the national energy gen- eral plan as referred to in Article 3 paragraph (3) STATUreBOOKOFTHEREPUBUCOFINDONESIA letter a has not been stipulated, the master plan of YEAR2009 NUMBER171 national energy conservation may be formulated by on inputs from related institutions, regional gov- B IJClDAlION ernments, entrepreneurs and communities. m GOIIERNMENTREGULAnONOF CHAPTERVDI THEREPUBLICOFINDONESIA CXlNCUISlON NUMBER70 YEAR 2009 Artide30 01 With the enforcement of this government ENERGYCOHSER\fAllON regulation, Presidential Decree Number 43 Year 1991 on Energy Conservation shall be revoked and de- L GENERAl. dared null and void. Energy plays very important role and be- comes a basic need in sustainable national ec0- Artide31 nomic-development. In relation thereto, energy This government regulation shall come into must be used economically, rationally and wisely force as from the date of promulgation. so that the need of energy in the present time For public cognizance, thegovemment regu- and in the future could be fulfilled. In view of lation shall be promulgated by placing it in Statute the importance of economical, rational and wise Book oftheRepublic of Indonesia. utilization of energy, thegovernment needs to Business News 7918/2-12-2010 formulate........... 22A formulate a government regulation in the frame- . ergy efficient technology, starting from ulJstream work of ruling the utilization of energy resources, to downstream, namely: as from the process of pro- energy sources and energy through the appli- Vision, transmission, distribution to the utilization. cation ofenergy efficient technology, utilization of energy efficiently and rationally andapplica- Article 8 tion of energy saver culture to guarantee the The responsibility of communities in this pro- availability of environmentally sound national vision is intended to create energy saver culture. energy. This government regulation rules: Article 9 up to Article 11 1. responsibility of the government, regional self explanatory governments, entrepreneurs and communi- ties; Article 12 2. realization of energy conservation covering Paragraph (1) the whole phases of energy management, in- "Economical" in this provision is related to cluding energy supply, energy exploitation, effective and efficient energy-utilization behav- energy utilization and conservation of energy ior, resources; "Efficient" in this provision means the maxi- 3. standard and label; mal value resulting from the ratio of output and in- 4. facility, incentive and disincentive; and put of energy in energy user equipment. S. fostering and supervision. Paragraph (2) n AR11CLE BY AR11CLE The stipulation of the 6,000 (six thousand) limit is done on the basis of consideration that en-

Article 1 up to Article 6 ergy users with consumption bigger or equal to self explanatory 6,000 (six thousand) equivalent tons of oil per an- num are not too numerous but their total energy Artide7 consumption accounts for 60% (sixty percent) of Paragraph (1) the national energy consumption. self explanatory In the other word, in the case of energy conservation measures being applied successfully Paragraph (2) to the group, the impact of economization nation- The regulation of minister as referred to in ally would be significant. this provision rules, among others, the use ofen- I;quivillent to one ton Of Oil isthe same as: BusinessNews 7918/2-12-2010 - 41.9 giga.......... 23A - 41.9 giga joule (GJ); provision is applied to non-renewable energy re- - 1.15 kilo liters of petroleum (k1 petroleum); sources. - 39.68 million British Thennal Unit (MMBTU); or - 11.63 mega watt hour (MWh). Article 15 selfexplanatory Paragraph (3) The energy management means an inte- Article 16 grated activity to control energy consumption to Paragraph (1) ensure effective and efficient utilization of energy Label of efficiency level contains information so as to result in maximal output through struc- about the utilization rate of energy by energy user tured and economic;al actions to minimize the utili- equipment. zation of energy, induding energy used for produc- With the presence of the label, communities tion and minimize consumption of raw materials and obtain information about the energy utilization rate supporting materials. ofthe said energy user equipment.

Article 13 Paragraph (2) Paragraph (1) The energy user equipment is mainly equip- Internal energy auditor means auditor work- ment using electrical energy, such as refrigerator, ing with users of energy source and energy users. lamp, iron, air conditioner, rice cooker, electric mo- tor and other. Paragraph (2) up to Paragraph (5) Selfexplanatory Paragraph (3) self explanatory Artide14 Paragraph (1) Article 17 and Article 18 self explanatorY selfexplanatory Paragraph (2) Article 19 Letter a and Letter b Paragraph (1) Self explanatory Letter a "Specific energy consumption" means the Letter c quantity of energy used for producing one unit of Reitrittion of energy resources in thls prodUct or output. Business News 7918/2-12-2010 The .. 24A The decrease in specific energy consump- b. procedures for evaluating the success. tion must be compared in the same output rate, such as kWh/ton, kWh/m2, liter/kWh. Article 20 up to Article 23 Self explanatory Letter b "Elasticity of Energy Consumption" is the Article 24 ratio of growth of energy consumption to the The announcement in mass media as referred growth of product or output ( energy consumption to in this provision is done minimally in one printed versus product or output). or electronic media. Paragraph (2) Article 25 up to Article 31 Self explanatory Self explanatory Paragraph (3) SUPPLEMENTTOSTAlUTE BOOKOF The regulation ofthe successful implementa- THE REPUBUCOF INDONESIA NUMBER5083 tion of energy conservation covers, among others: a. success criteria (energy saving benchmark, pe r- centage of decrease in intensity, elasticity, pe- riod and downward trend); and -===( R )===- Business News 7918/2-12-2010 d.the..........