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Industrialization, population growth, and the launch of innovative electronic products have posed various challenges in both developed and developing countries.
BYCUT MEDIKA ZELLATIFANNY
JUNE 7, 2024
Industrialization, population growth, and the launch of innovative electronic products have posed various challenges in both developed and developing countries, including Indonesia. One of the main issues is the surge in the number of electrical and electronic equipment that potentially become electronic waste or e-waste. According to the Global E-Waste Monitor 2020 report, electronic waste is the fastest-growing waste stream globally. The primary causes of this are the increasing demand for electrical and electronic equipment, short life cycles, and limited repair options. Indonesia is currently facing significant challenges in managing the growing volume of e-waste, driven by rapid technological advancements and the national consumption of electronic devices.
The Indonesian Telecommunication Statistics report by Central Agency of Statistics (BPS) revealed that household internet usage reached 86.54 percent in 2022, while the percentage of the population owning mobile phones reached 67.88 percent. Admitad, a global network partner company, also reported a 5% increase in electronic product sales in Indonesia in 2023. Another interesting fact is that consumer spending on electronic products increased by 4% (Yunianto, 2023). Consequently, Indonesia has become one of the world’s largest e-waste producers. According to data released by the Global E-Waste Monitor 2024, Indonesia generated approximately 1.9 million tons of e-waste in 2022. However, data from the Indonesian Ministry of Environment and Forestry indicates that only 17.4 percent of electronic waste is properly managed. If not addressed promptly, research by Aulia Qisthi, a PhD Candidate specializing in Recycling Electronic Waste, predicts that e-waste generation in Indonesia will reach 3,200 kilotons by 2040 (Puspa, 2022).
Electronic waste or e-waste refers to discarded electronic devices that have reached the end of their useful life and are disposed of by owners without intending for reuse, donation, or recycling (US EPA, 2014). These electronic and electrical equipment waste is categorized into 6 types based on their waste management characteristics, including equipment related to temperature control, equipment related to screens and monitors, lamps, large appliances such as refrigerators and washing machines, small appliances such as microwaves and toasters, and IT equipment and telecommunication devices (The Global E-waste Monitor, 2024).waste contains hazardous and toxic heavy metals (B3) such as lead, mercury, cadmium, beryllium, and chromium that contaminate the air, water, and soil (Gaur, 2023). When electronic waste is burned, toxic fumes are emitted, and the pollution caused by electronic waste is highly hazardous. These fumes can cause acute and chronic illnesses, such as respiratory diseases, skin cancer, allergies, and even death (Awasthi et al., 2016a; Cook et al., 2020; Hicks et al., 2005). As cited on the Universal Eco website, e-waste management in Indonesia still faces several challenges, including low public awareness to reduce the use of electronic goods, lack of infrastructure for e-waste management, and a shortage of skilled labor to manage e-waste. In addressing these challenges, the synergy between Environment, Social, and Governance (ESG) principles and the implementation of circular economy (CE) is believed to offer potential sustainable solutions to be implemented in Indonesia.
Circular Economy: An Approach for Sustainable Future
Ellen MacArthur (2015) defines the circular economy as a model of economic system aimed at achieving economic growth while preserving the value of products, materials, and resources for as long as possible. The circular economy is now understood as an economic system that seeks to eliminate waste and continuous resource consumption through production cycles, reuse, and recycling. In the context of e-waste, this approach means extending the lifespan of electronic products, facilitating repairs and upgrades, and recycling components that can no longer be used. This approach can reduce the environmental impact of e-waste disposal and improve resource efficiency.
Based on the Circular Economy Economic, Social, and Environmental Benefits Report in Indonesia launched by Bappenas with support from UNDP and the Government of Denmark, the electronics sector is one of the priority sectors for circular economy implementation. As reported by Media Indonesia (2022), the report also reveals that the implementation of the circular economy in the electronics industry has the potential to increase GDP by Rp12.2 trillion by 2030. Meanwhile, in terms of the environment, the implementation of the circular economy in the electronics industry is predicted to help Indonesia avoid nearly 0.4 million tons of CO2 emissions and save 0.6 billion cubic meters of water by 2030. With the advancement of technology and science, the 3R concept is deemed insufficient to address the e-waste problem, leading to the emergence of a widely discussed circular economy implementation strategy known as the 9R concept (Greeneration Foundation, 2023). Implementing the principles of the circular economy 9R can be the initial step towards transitioning to a circular economy, allowing Indonesia to improve resource efficiency and create comprehensive e-waste management.
In Indonesia, the circular economy system has actually begun to be implemented, one example being the E-Waste RJ community, which has successfully reduced the volume of e-waste by collecting and recycling electronic devices. EWasteRJ is known to have 17 electronic waste collection points in nine cities, with more than 7 tons of electronic waste already collected and over 6.8 tons of electronic waste recycled (Arifa, 2022). By recycling precious metals such as gold, silver, and copper from unused devices, they not only reduce waste but also create new economic value from materials previously considered useless. One opportunity in managing e-waste in Indonesia is the limited number of companies licensed to manage and utilize specific waste management, such as electronic waste, as reported by waste4change. Only four companies have obtained permits from the Ministry of Environment and Forestry (KLHK), namely BGR Access, Patron, Retron, and Mall Sampah. Therefore, the government, as the policy instrument administrator, is expected to foster new business activities that have the potential to expand employment opportunities, ultimately contributing to the country’s economy.
ESG: A Framework for Social and Environmental Responsibility
ESG is a framework used to measure and manage the environmental, social, and governance performance of companies. ESG serves as a standard for companies to make long-term investments, integrating and implementing policies related to the environment, social, and governance aspects (Kartika & Hudaya, 2023). In the management of e-waste, the application of ESG can encourage companies to operate responsibly and sustainably. The integration of ESG in e-waste management encompasses various aspects:
Environment: This aspect demands that companies minimize the environmental impact of their operations by implementing effective e-waste management practices such as electronic component recycling, the adoption of environmentally friendly technologies in production processes, and the implementation of take-back concepts.
Social: The social aspect emphasizes the importance of involving communities in e-waste management. Education and campaigns about the importance of e-waste recycling are needed to increase public awareness and participation. For example, CSR (Corporate Social Responsibility) programs can be directed towards building recycling facilities and supporting community initiatives focused on e-waste management.
Governance: Good governance is required to ensure that companies comply with applicable regulations and standards. In this regard, the Indonesian government plays a crucial role in strengthening regulations related to e-waste and providing incentives for companies that implement ESG practices.
Indonesian government initiatives
As part of efforts to address the issue of e-waste, the Indonesian government has issued various regulations. These regulations encompass the management of e-waste as a whole, covering reduction of generation, recycling, and final processing, including the following:Law Number 18 of 2008 concerning Waste Management
Government Regulation Number 101 of 2014 concerning Management of Hazardous and Toxic Waste Materials
Government Regulation Number 27 of 2020 concerning Specific Waste Management
Government Regulation Number 22 of 2021 concerning the Implementation of Environmental Protection and Management
The Indonesian government has developed the National Action Plan for Electronic Waste Management in 2019, aiming to establish a sustainable electronic waste management system in Indonesia by implementing various initiatives, such as developing regulations, building recycling facilities, increasing public awareness, and supporting research and innovation. This includes creating jobs in the electronic waste management sector and enhancing the country’s capacity to manage electronic waste. The plan was launched in February 2020 and covers the period from 2020 to 2025. One of the achievements of developing the roadmap for electronic waste management in Indonesia is the initiative of the Electronic Waste Management System formed by the Ministry of Environment and Forestry. This system aims to provide a comprehensive database on collectors, recyclers, and disposal sites for electronic waste from electronic device manufacturers, which is slated to be implemented in 2024.
The synergy between ESG and the circular economy in e-waste management offers a sustainable solution for Indonesia. By integrating the circular economy approach and ESG principles, Indonesia can reduce the environmental impact of e-waste, improve resource efficiency, and ensure social welfare. Moreover, the implementation of appropriate regulations, collaboration between the government, private sector, and society, as well as a series of initiatives, socialization, and education, are also key to achieving responsible and sustainable e-waste management. If all these elements are perfectly synergized, the younger generation of Indonesia will be able to experience a greener and more sustainable environmental governance in the future.
Cut Medika Zellatifanny
Master's Student of International Relations majoring in Digital Transformation and Competitiveness at Gadjah Mada University in Yogyakarta, Indonesia.
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