Kompas national daily reports that 1,196 business or around 60 percent of 1,996 companies operating in Bali are using sub-terrain water sources or surface water without holding required permits and licenses. The majority of the offending companies, according to the report, are in the hotel and restaurant sector.

The immediate result of the illegal use of water resources is the loss of an estimated Rp. 5 billion (US$413,000) in water taxes. The less obvious consequence of these acts is the deleterious impact on Bali’s natural environment caused by over-exploitation of bottom and surface water resources.

The head of the tax revenue office for Bali, Putu Ardhana, told the press that his office will soon begin surveying water use and take steps to ensure compliance with current water-use rules. Ardhana said, “We are working together with other parties, such as hotel and restaurant associations, to register who’s taking sub-surface water.” Arhana also lamented the lack of awareness among local businesses who fail to pay their tax obligations, considering only their own narrow interests with little regard for the local environment.

Through the end of October 2008 taxes collected from sub-terrain water usage amounts to Rp. 7 billion (US$630,600). Official estimates are that this amount would be 30% higher, coming to Rp. 10 billion (US$826,500) if illegal water users were brought into line.

The Secretary-General of Bali Chapter of the Indonesian Hotel and Restaurant Association (PHRI), Perry Markus, admitted that many hotels in Bali are using sub-terrain water without the required permits, agreeing to try to act as an intermediary to improve compliance with the law.

Sudirman, who heads the Bali office for the Minister of the Environment, told the press that the use of sub-terrain water has exceeded acceptable limits, causing a shortage of water resources. Local environment officers now estimate that use of sub-terrain water in the Sanur area of Bali has caused the harmful intrusion of sea water into the water table. Officials predict a complete loss of arable sub-terrain water in Sanur within ten years if the situation is not soon brought under control.