Better Regulation - Which Level Should It be?

Last week I joined a discussion about micro hydro quality standard. We were discussing mainly the content of the draft. Manufacturers and developers were attending the meeting. Regulators, standardization expert and also micro hydro financiers (i.e. the government) also attended the meeting.

The meeting was good. People were active in giving inputs and the draft it self is actually in the right direction. During one of the breaks, we were talking about the legal setting for the standard. In Indonesia we have SNI (Standard Nasional Indonesia - Indonesian National Standard) that mainly regulates industry and in electricity sector we also have PLN standard (the standard that is issued by national utility). In our mind standard of PLN is obligatory for any PLN projects but not obligatory to electricity projects initiated by other institution. This might be true and anyway we have to find out.

The draft micro hydro standard is not yet ready to be SNI. SNI standardization process usually takes approximately 2 years and the draft has just been drafted in the last 3 months. It is already half baked or cooked actually therefore it is ready to be implemented. The problem is which legal setting should be used? Should it use Ministerial Decree or should it use higher legal setting (e.g. joint ministerial decree).

Ministerial Decree will only valid for internal only and this will just make the overall impact of the draft standard lower. So far, it is not only Ministry of Energy that implement micro hydro projects. There are also Ministry of Cooperative and Ministry of Underprivileged Areas (MUA) that also implement micro hydro projects. As far as my observation, projects implemented by MUA are not of high quality. If the standard can also cover those two other ministries, I expect better project from MUA also.

If the standard is becoming SNI then it will be obligatory for all. However because it is not yet ready a joint ministerial decree. I believe there is still a long way to go for the standard to become an SNI. Joint Ministerial Decree will be a proper setting for now. Hope DGEEU can bring this issue to higher level, if sustainability of micro hydro is the overall goal. Let's hope.