The World Bank says rapid economic growth in Indonesia is causing an increase in industrial pollutants which is having a detrimental effect on the nation's health.
The report says air pollution is getting worse, particularly in Jakarta, due to large-scale urbanisation and reliance on vehicles, many of which still use leaded petrol.
It is estimated that one third of all Indonesian children are at risk of brain and intestinal damage because of the amount of lead in the environment.
The World Bank says polluted drinking water is another major problem, with a vast amount of industrial and household waste being discarded in uncontrolled areas, leading to rubbish and faecal waste blocking rivers and canals.
From the newsroom of the BBC World Service