Environm ental Cost

c. Environm ental Cost

B e f o r e d i s c u s s i n g t h e e n v i r o n m e n t a l c o s t, t h i s p a p e r w o u l d lik e to firstly show the environmental accounting definition based on Glenn- Lange (2003) of her journal

“P o lic y A p p lic a tio n o f E n v iro n m e n ta l A c c o u n tin g ”, t h a t

e n v i r o n m e n t a l a c c o u n t i n g is u s e d a s a m e a n o r d e v i c e in p r o v i d i n g p o l i c y w ith

i n d i c a t o r s a n d d e s c r i p t i v e s t a t i s t i c s to m o n i t o r t h e i n t e r a c t i o n b e tw e e n environment and economy, and progress toward the meeting the environment goals. The underlined word above represents the environmental actions which in s o m e w a y b r i n g m a t t e r o f c o s t s w h i c h b e i n g t h e l o g i c a l a n a l o g y t o c o r r e l a t e

the environmental cost and environmental accounting. Further, environmental costs emerge among companies’ environmental actions, which directly or

i n d i r e c t l y a f f e c t e n v i r o n m e n t a l q u a l i t y in m o n e t a r y o r n o n - m o n e t a r y t e r m

e x p r e s s i o n . M o r e o v e r , e n v i r o n m e n t a l c o s t s a l s o d e a l w i t h d i r e c t o r le s s tangible, with short-term or long-term financial outcomes for companies, themselves. According to

Keputusan Menteri Negara Lingkungan Hidup

N o m o r 11 3 T a h u n 2 0 0 3 , m o s t l y a ll o f c l a u s e s w h i c h a r e i n c l u d e d a re

considered as actions contain of environmental cost matter. S e c ti o n 3 ( 2 ),

Section 5, Section 6, and Section 8(1), and (2) are clauses of environmental

a c t i o n s ’ g e n e r a l c o n t e x t w h e r e i n e a c h o f it e n c l o s e s c o s t s w i t h t h e i m p a c t o f

e f f i c a c y in c o m p a n i e s ’ o p e r a t i o n a n d m a n a g e m e n t p r o g r e s s a n d a l s o f in e u p s h o t of environmental preservation.

S e c t i o n 3 ( 2 ) , S e c t i o n 5 , S e c ti o n 6 , a n d S e c ti o n 8 ( 1 ) , ( 2 ) in s im p l e w o r d ; t h e y t a l k a b o u t a c t i o n in p r e v e n t i n g t h e q u a l i t y e x t e n t o f c o a l w a t e r w a s t e

a s in its n o r m a l r a t e f o r m a i n t a i n i n g t h e e n v i r o n m e n t a l l i f e ’s q u a l i t i e s - p r i n c i p l e by some detail points of the process and management coal waste-water. By

c o m p r e h e n d i n g t h e s i m p l e w o r d s a b o v e in to t h e p r a c t i c a l a c t i o n s in f a c tu a l w o r l d , t h e n t h o s e i t e m s c o u l d b e d e d u c e d in to t h e e n v i r o n m e n t a l a c t i o n s w ith costs carriage.

Vol. 13, No. 2 / Agustus 2005 © Center fo r Indonesian Accounting and M anagem ent Research Postgraduate Program, Brawijaya University

The International Journal o f Accounting and Business Society