Drinking Water Business Governance Resolution
A. M. Hasan Ali
WATER is the source of life. Without water there would be no life. So it is not wrong to place water as part of basic needs (dharuriyat).
Water is a basic need for society, especially residents who live in urban areas. One of the acute problems of urban communities is the availability of clear fresh water. Moreover, clear fresh water that is ready to drink straight away is now more popular with the term bottled drinking water (AMDK).
Almost all urban communities are currently dependent on drinking water products sold commercially. The problem is that access to clean drinking water directly from the ground is no longer easy.
On the other hand, it appears that the government has neglected to carry out its obligation to provide drinking water that is suitable for public consumption. In several developed countries, such as Japan and Germany, the state exists to meet people's needs for drinking water. Even in public areas, people can freely access drinking water very easily.
The Central Statistics Agency (BPS) simulated the estimate that 56% of Indonesia's population would live in urban areas in 2020. This percentage is expected to continue to increase to 66% in 2035
This means that in 2020, with a total population of Indonesia of 271 million, there will be 151 million people living in urban areas who are indicated to be dependent on drinking water consumption. If calculated according to recommendations from the Indonesian Ministry of Health, the need for drinking water consumption per person per day is 2 liters.
Meanwhile, a well-known company in the AMDK business which is also positioned as a market leader, sets the price per liter of drinking water at IDR 1,000. This means that there are costs that must be borne a day as expenses of IDR 2 thousand per person in the household unit to meet drinking water consumption needs.
If the average household unit is inhabited by 5 people, this means that there is a cost of meeting drinking water consumption needs of IDR 10 thousand per day. In one month, a spending figure of IDR 300 thousand was obtained to buy drinking water.
Not to mention that if the calculation is based on the retail price sold by hawkers or street vendors (PKL), the price is no longer IDR 1,000 per liter. However, the price has changed to IDR 5 thousand per 600ml bottle.
Even in certain places, such as airports, hotels or restaurants, the price can double to IDR 10 thousand. When compared with the price of Pertalite set at public fuel stations (SPBU), IDR 10 thousand per liter, it will not seem much different from the price of 600ml bottled AMDK products.
In conditions like this, sometimes we don't quickly realize that the 600ml bottled AMDK product purchased from a hawker has almost the same price as 1 liter of pertalite. This means that our awareness has disappeared that the value of the water we consume is almost in the same position as the price of 1 liter of pertalite.
Often people are more sensitive to increases in fuel oil (BBM) prices. However, there is no sense of turmoil if we currently enjoy drinking water at a price almost equivalent to the price of 1 liter of pertalite.
Moreover, if calculated by taking into account the number of people living in urban areas using BPS predictions of 151 million people, there is the potential for a very large turnaround in economic power. If the 151 million people who live in urban areas are multiplied by the daily consumption requirement of 2 liters of drinking water worth IDR 2 thousand, we will get a result of IDR 302 billion per day.
Large economic capitalization and fantastic economic value. It seems that this condition has been deliberately ignored by the government by handing over the AMDK business entirely to private corporations. The proof is that there is not a single national-scale BUMN that is engaged in the drinking water business.
Indeed, there are many regional drinking water companies (PDAMs) owned by local governments that supply drinking water, but the quality of the drinking water is not suitable for direct consumption by the public, it can only be used for washing cars, household utensils and bathing.
If we look back, the founders of the Indonesian state were already in the position of shirathal mustaqim, the right and straight path, by making basic provisions in the management of natural resources through the 1945 Constitution, that the earth, water and the wealth contained therein are controlled by the state and utilized as much as possible. great for the prosperity of the people.
In line with the provisions in UUD 45, in article 5 of Law no. 17 of 2019 concerning Water Resources also states that water resources are controlled by the state and used for the greatest prosperity of the people. Apart from that, article 6 states that the state guarantees the people's right to water to fulfill minimum daily basic needs for a healthy and clean life in sufficient quantity, good quality, safe, sustainable and affordable.
However, in current practice, meeting the community's need for adequate drinking water must go through a commercial purchasing process controlled by private companies. The Food and Drug Supervisory Agency (BPOM) released data on 7,780 registered AMDK products produced by 1,032 companies throughout Indonesia.
There are at least dozens of giant private companies running the AMDK business with products that are familiar to those around us every day. Not to mention small private companies that are also enlivening the AMDK business in Indonesia.
Fulfilling the community's drinking water needs through commercial purchases of AMDK products offered by private companies will of course provide large profits for private companies. There is a big question that has not been answered until now, why no state-owned companies have invested in the AMDK business.
Is the AMDK business considered an unprofitable business model? Of course the logical answer is no. Due to initial predictions, the AMDK business model's target market is still wide open and the trend tends to provide very large returns. The potential economic value is IDR 302 billion per day.
If players in the AMDK business are only handed over to and controlled by private companies, the spirit of Article 19 of Law No. 17 of 2019 which mandates the existence of BUMN has not been fulfilled. Apart from that, if the conditions of control of private companies in this business model continue to be maintained, the state will only benefit in tax revenues from AMDK business actors, there will be no added value.
Need BUMN
Looking at the phenomenon of the AMDK business so far, the business is only carried out by private companies, without the participation of the state through state-owned state-owned companies, it feels like the state does not care enough about protecting the interests of the community to meet drinking water needs as mandated by the 1945 Constitution and Law No. 17 of 2019.
This means that the direction of drinking water business governance has departed from the state constitution. Sovereignty over drinking water is no longer in the hands of the people. People are forced to access drinking water commercially through purchasing from private corporations, because there is not a single state-owned company that carries out the AMDK business.
It is time for the state to return to protect the interests of the Indonesian people in ensuring the fulfillment of drinking water needs. The state can force the Ministry of BUMN to run the AMDK business as a form of implementation of Article 19 paragraph 2 of Law No. 17 of 2019.
There are several benefits to be gained if a state-owned company carries out the AMDK business. First, as part of the implementation of Law No. 17 of 2019.
With a state-owned company running the AMDK business, it means that the mandate in the law has been fulfilled. Don't continue to give the impression that the state is neglecting to protect the interests of the people in meeting their need for drinking water that is fit for consumption.
Second, the presence of state-owned companies in the AMDK business can have two goals, namely commercial goals and social goals. Commercial purposes can be carried out by state-owned companies as well as business activities carried out by private corporations. Apart from that, this state-owned company also carries a social mission to protect the interests of the people in meeting their drinking water needs.
Third, there is a prediction of the profit contribution that will be given by state-owned companies that run the AMDK business. This profit contribution can later help generate income in the APBN structure.
The model that can be offered to create a state-owned company that carries out AMDK business can be through two things, namely the establishment of a new state-owned company or through the acquisition of an existing AMDK company.
There is nothing difficult for the state if it wishes to establish a new state-owned company running the AMDK business, or to acquire an existing AMDK company. Of these two options, if viewed from a business risk management perspective, the option that is rather light in mitigating AMDK business risks is by choosing an acquisition model for existing AMDK companies.
Apart from the fact that the business model has already been formed, the advantage of the acquisition process is that you can continue or develop an existing business model.
The author is the Founder of Sharia Business Intelligence (SBI) and a doctoral candidate in sharia economic law at the UIN Syarif Hidayatullah Postgraduate School, Jakarta. The article was published in Media Indonesia, Thursday 7 December 2023 edition, and can be accessed at https://mediaindonesia.com/opini/635652/resolusi-tata-kelola-bisnis-air-minum