ANALISA LAW AND ECONOMICS ATAS KOMPENSASI DAN ASURANSI LINGKUNGAN DI INDONESIA: SEBUAH KRITIK ATAS KOMPENSASI TANPA SISTEM

Abstract

Abstract
Compensation mechanisms and liability are an important part in environmental management. Compensation, through liability or other mechanisms, provides not only protection for the victims of environmental damage, but also incentives for the potential polluters 10 lake an ex ante
optimal level of care. ideally, compensation should be first provided through liability (combined with liability insurance). If this system does not work properly, alternatives to liability insurance, i.e. risk-sharing agreement,first-party insurance, and environmental damage insurance, should be developed. Finally, the system of compensation funds should also be promoted whenever
liability system, liability insurance, and alternatives to liability insurance are likely to fail to provide enough protection for the victims and incentives to take care for the potential polluters. Unfortunately, compensation in Indonesian is ill-structured, leaving the victims with tort law as the only way to get compensated. The Sidoarjo mudjlow case clearly illustrates the impacts of such an ill-structured compensation system. Theoretically, this situation will be improved, as the new environmental act has acknowledged several alternatives for compensation mechanism.