ADB backs Indonesia’s plastic risk effort

The direct financial and economic benefits of the ESG phenomenon may not always be clear to beleaguered corporate risk and insurance managers in Asia and worldwide who are struggling to cope with the ever-rising raft of rules, regulations and boxes to tick.

But the simple fact is that in South Asia in particular, efforts to tackle environmental challenges, such as the glut of plastic in our seas, is of the utmost economic as well as social importance.

The Asian Development Bank (ADB) thankfully gets this important point and continues to act upon it.

It has therefore just approved a $500m loan to strengthen Indonesia’s program to reduce plastic marine debris, which will have rapid and direct economic and financial benefits for the country’s citizens and companies alike.

While a Global Plastic Treaty – an international initiative designed to tackle plastic pollution through a legally binding agreement – is currently being negotiated, this program will focus on supporting the country’s National Action Plan for Handling Marine Debris, which aims to reduce plastic waste flow into the oceans by 70% by 2025, explained the ADB.

Indonesia’s coastal areas, home to 70% of the country’s population, are vital for marine tourism and fisheries, which contribute significantly to the economy.

However, rampant plastic pollution poses a serious threat to marine ecosystems, causing annual damage of $450m and endangering a staggering $3bn in tourism revenue, says the ADB.

“Plastic waste in waterways increases the risk of flooding and damages the fishing industry and community livelihood. Plastic pollution threatens human health by contaminating the food chain, particularly for low-income households,” it said.

In 2018, the government committed to reduce 70% of plastic marine debris by 2025, through better solid waste collection, processing, recycling, and reuse, which was enacted through the National Action Plan for Handling Marine Debris.

By the end of 2022, a 35% reduction from 2018 demonstrated “strong progress” but also the need for accelerated reforms to achieve the 70% target, said the regional development bank.

ADB said that it will support the action plan by improving plastic waste management, reducing problematic plastic production and consumption, and strengthening data and monitoring tools for policy making.

“ADB is pleased to partner with Indonesia to reduce marine debris while promoting the development of the blue economy,” said ADB country director for Indonesia Jiro Tominaga.

“The pervasive presence of plastic marine debris not only erodes coastal livelihoods but also diminishes overall climate resilience. ADB remains steadfast in its support of Indonesia’s National Action Plan on Marine Debris, targeting the holistic management of factors contributing to plastic discharge into the ocean,” Tominaga continued.

The Indonesian marine debris reduction program targets three main areas: addressing downstream waste management, implementing upstream interventions to reduce plastic waste production, and supporting critical elements necessary for overall reform success.

The program is being developed under ADB’s Blue Southeast Asia Finance Hub, the first marine debris program supported by ADB.