The Hidden Agenda Behind Governance "Reform": The Urge for Waste Privatization la IBC
The opinion piece published by the Indonesian Business Council (IBC) in *The Jakarta Post*, which highlights the disparity in upstream-downstream waste management in Indonesia, actually wraps an old agenda in new packaging. Behind the rhetoric about the circular economy and governance, the article amplifies one main tendency: an advocacy to commercialize basic public services by demanding the state act as a profit guarantor for the private sector. If we dissect the anatomy of this argument, the narrative built is laden with corporate bias and a disregard for both the fiscal and sociological realities of Indonesia.
The first and most fundamental flaw in IBC's analysis is the absence of any discussion regarding producer responsibility. The article shrewdly blames the public for their reluctance to sort waste, while pointing fingers at local governments for poor service quality. This diagnosis serves as a perfect alibi to wash the hands of the corporate sector---especially the Fast-Moving Consumer Goods (FMCG) industry---of the sins of single-use plastic production. IBC deliberately turns a blind eye to the Ministry of Environment and Forestry Regulation No. 75 of 2019 concerning the Waste Reduction Roadmap, which explicitly mandates Extended Producer Responsibility (EPR). Without forcing producers to turn off the waste tap at the factory level upstream, privatizing governance at the downstream level is merely an illusion of a solution.
Furthermore, IBC's criticism of the low Regional State Budget (APBD) allocation for waste management---claimed to be only 0.7% and demanded to be raised to nearly 5%---reflects a failure to read the regional macro-fiscal posture. Under the regime of Law Number 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments (HKPD), the fiscal space of local governments is practically already choked by a lineup of mandatory spending. With the obligation to allocate 20% for education, 10% for health, 25% for infrastructure, coupled with swelling personnel expenditures, demanding a pure 5% portion for waste management without a new fiscal decentralization scheme is a technocratic utopia.
The core of the entire IBC narrative ultimately boils down to a single key phrase they refer to as "revenue certainty." Taking Morocco's success as an example, IBC urges the government to provide financial guarantees so that the private sector is willing to invest. In the lexicon of public policy in Indonesia, "revenue certainty" for private waste operators is a euphemism for Tipping Fees---the service cost the state must pay per ton of waste. The history of implementing Presidential Regulation No. 35 of 2018 on Waste-to-Energy Plants (PLTSa) has proven that tipping fees pegged at commercial rates actually become a parasitic burden that nearly bankrupts the APBD of major cities. The privatization model offered by IBC is essentially just a scheme to shift the risks of private business losses onto the shoulders of taxpayers.
The narrative is then sweetened with the romanticization that corporatization will elevate the status of informal workers (waste pickers) to the formal sector. Sociologically, this claim is ahistorical. Various political economy literature shows that when large corporations take over the recycling supply chain in pursuit of profit ratios (Return on Investment)---such as the 4.61 figure touted by IBC---informal actors are actually pushed out of accessing high-value materials. Instead of becoming economically independent, they are reduced to mere cheap labor within a giant industrial chain.
The separation of regulatory and operational functions, such as through the establishment of Regional Public Service Agencies (BLUD), is indeed an administrative necessity. However, peddling full privatization with the prerequisite of profit guarantees from the APBD is a dangerous maneuver. Waste management is part of the fulfillment of citizens' constitutional ecological rights, not a pure commodity that must bow to the dictates of private sector capital accumulation.
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