PROPER is a performance evaluation carried out on businesses and activities responsible for environmental management. The program is run annually by Indonesia’s Ministry of Environment and Forestry to assess how well companies are fulfilling their responsibility toward the environment in the areas where they operate.
The name PROPER stands for Public Disclosure Program for Environmental Compliance, reflecting its core function as a public disclosure tool that informs the public about a company’s environmental performance.
Table of Content:
Objectives of PROPER
The main goal of PROPER is to encourage companies to comply with environmental regulations while also pushing them to go beyond the minimum requirements set by law. The program aims to build an industrial ecosystem that is environmentally sound and sustainable through green economy principles such as energy efficiency, water conservation, emission reduction, and biodiversity protection.
PROPER further encourages companies to run community empowerment programs around their operational areas. Beyond that, PROPER serves as a tool for transparency and democratization in environmental governance in Indonesia.
Publicly released assessment results provide valuable information for business owners, shareholders, business partners, and the wider community to evaluate a company’s environmental performance. This information can shape a company’s public reputation and even affect how easily it can access financing.
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PROPER as a Supporting Instrument for Corporate Sustainability Reports
Legal Basis
PROPER is grounded in Law Number 32 of 2009 on Environmental Protection and Management, which establishes a framework of economic instruments, including incentives and disincentives, alongside compliance monitoring tools for businesses. Through Ministerial Regulation of the Ministry of Environment and Forestry/Environmental Control Agency Number 7 of 2025, the government has improved the performance of the PROPER mechanism to align it with sustainable development principles and national emission targets
Assessment Mechanism
The PROPER process begins with the selection of participating companies, generally focused on industries with significant potential environmental impact. The government gathers data through two channels, namely self monitoring reports submitted by companies and direct field inspections conducted by environmental supervisory officers.
This data is then compiled into a preliminary report covering company performance in water management, air quality, and hazardous waste handling, which is reviewed through a peer review mechanism by a technical team before a final rating is determined. Assessment is based on two categories of criteria, compliance criteria and beyond compliance criteria.
Compliance criteria measure how well a company adheres to applicable regulations, covering environmental permit completeness, water and air pollution control, hazardous waste management, and the potential for land degradation in the case of mining activities. Beyond compliance criteria evaluate efforts that exceed these obligations, such as environmental management system implementation, resource efficiency, technological innovation, and social responsibility programs.
Rating Categories
PROPER results are communicated through five color coded ratings designed to be easily understood by the public. A black rating is given to companies whose activities cause serious environmental harm and that have not carried out the required management efforts.
A red rating goes to companies that have made some management efforts but are not yet fully compliant with regulations. A blue rating is awarded to companies that have met all environmental management requirements set out in applicable laws.
A green rating is given to companies that manage their environmental impact beyond what is required, for instance through energy efficiency, water efficiency, and the application of reduce, reuse, recycle principles. The highest rating, gold, is reserved for companies that consistently demonstrate environmental excellence in their production or service processes, conduct business ethically and responsibly toward society, and serve as a model for other companies to follow.
Improve Your Company’s Environmental Performance with Validerra
Achieving a strong PROPER rating requires measurable environmental management, complete documentation, and an effective performance improvement strategy. Validerra supports companies in conducting evaluations, preparing data and documents, and developing strategies to achieve a better PROPER rating. Consult your company’s PROPER assistance needs with Validerra.
Author: Ainur
Editor: Lina
References
Regulation of the Minister of Environment and Forestry Number 1 of 2021 concerning the Company Performance Rating Program in Environmental Management.
Law Number 32 of 2009 on Environmental Protection and Management.
Ministry of Environment and Forestry. “Program Penilaian Peringkat Kinerja Perusahaan Dalam Pengelolaan Lingkungan.” menlhk.go.id.