Safeguards and Climate Finance in Indonesia in the Context of REDD+

Notes of meeting, Washington DC, September 23, 2011

Sponsors:  Hienrich Boell Foundation, Ulu Foundation, 11.11.11

Panelists:  Pol Vandevoort (11.11.11, Belgium), Titi Soentoro (NGO Forum on the ADB, Indonesia), Stephanie Fried (Ulu Foundation, Hawaii), Risma Umar (Solidaritas Perempu, Indonesia), Benoit Bosquet (Lead Carbon Finance Specialist, WB)

Topic: Indonesia has the third largest tropical forest area on earth.  In 2009, Indonesia’s President, Susilo Bambang Yudhoyono, made an extraordinary commitment to play a significant role in global efforts to prevent climate change by announcing that Indonesia would cut greenhouse gas emissions 26% by 2020 and, if sufficient international support were available, would make emissions cuts of up to 41%. This has served to place Indonesia at the heart of a range of international climate finance efforts designed to provide support for a reduction in deforestation rates. As a result, a wide range of REDD+ “readiness” pilot projects and forest conservation efforts supported by the World Bank Group, other multilateral, bilateral and private funds have begun to operate in Indonesia.  The ultimate impact of potentially significant flows of international finance to Indonesia in support of reducing deforestation, however, is likely to depend upon whether sufficient attention is paid to the design, implementation, and enforcement of robust and stringent social, environmental, transparency and governance safeguards.  This panel will explore case studies of various existing and proposed World Bank Group, bilateral and privately-funded REDD+ and forest conservation efforts in Indonesia.

Risma Umar

After Suharto regime, nothing changed. There was no change of structural power – still under military control in effect. Structural violence – people shot when there are conflicts over natural resources. Human rights violations against activists and members of civil society organizations when people are trying to access and control their rights to natural resources.

Strong military involvement in conflicts between corporations and affected communities. Oil palm plantation supported by World Bank group where there was a conflict and 23 houses were destroyed in Jambi. Large amounts of dollars in name of climate finance pour into county that has not changed in militarisation profile. Can we ensure that this will not affect human rights and people’s ability to live their lives.

For those who live in resource rich areas, we are struggling to guarantee that the climate finance processes include a full consultation process, including women in these areas. Deeply concerned that there are safeguards that are not fully developed given the context of violence.

Pol Vandevoort

• worked in a transmigration program which involved the transporting of people from overpopulated areas to less populated islands.
• two and half million people were moved into an area and shifted out local populations.
• quite astonished that the poor practices engaged in by the World Bank have not changed.
• without robust safeguards the climate program in Indonesia is bound to fail.

Titi Soentoro

Indigenous people have been protesting Governors Climate Forum saying that forest is not for sale.
They have come up with a list of demands:

• Guarantee complete information – shows there is a problem with information access for the communities.
• Previous statements indicate problems with consultations and information provision (June 17 statement)
• FPIC completely ignored. No thorough consultations. Communities left out from decision-making related to land, forest, etc

NGOs have filed complaint on launching of FCPF (June 23, 2011) – focused on lack of consultation and involvement of local stakeholders. Not clear who set up consultations with communities. How people will be informed? Who chooses them?

CSO complaint for FIP (July, 2011) – Short notice invitation to CSOs for consultation. No clarity about criteria and process of selection of invitees, especially indigenous peoples and local communities. No clarity about the nature of consultations. For example, people only invited to consultation 1.5 days before. Not long enough notice.

Troubling patterns:

• Last minute invites.
• Avoid inviting groups that are critical.
• Preference for NGOs that seek contracts from or benefit from climate programmes.
• No provision of documents in advanced.

John Crutcher

Increased use of private sector- terminology, practices, partners/ intermediaries.

Good arguments for borrowing from private sector – but could get captured by a traditional private sector path. Misapplication of funds, or poor conduct on way to funds or once it investment has been made. All these techniques are aimed toward private sector goals – applying this to public sector will still lead you to a private sector set of goals/ returns and definitions of returns.

In private sector- trying to get more than what you have invested and how will you get there? How will people behave between now and then? This creates the typology of the deal. What does this look like in public sector investment?

Stephanie Fried

Climate finance in the context of forest violence- joint assessment by four NGOs. Assumptions that there will be no major problems, human rights violations during readiness or pilots

Data from research in Indonesia documents significant problems during readiness and pilots. Shows need for robust safeguards, maximum transparency including during readiness, pilot stages – has implications for P4R and safeguards review

In Indonesia – 60% is considered state forest land. 50-70m live on that land. $15bn revenue stream from logging concessions, palm oil and pulp wood. Climate finance money is small in comparison. People living on this land are defined as illegal squatters. 80% of Indonesian farmers don’t have land titles. Security forces employed against them. Huge amounts of different types of forces deployed.

Confusion about different types of official and unofficial forces – heavily armed. They round up the villagers and tell everyone they are illegal squatters. Tell people they have to vacate. Then they set houses and people’s crops on fire. Some of these people have been there for generations if they are indigenous people. Some are refugees from a World Bank funded transmigration programme.

Increasingly local people are associating violence with climate/ carbon programmes whereas before it was just logging concessions, palm oil etc. Logging concessions have been rediscovered in the context of carbon credits. People just informed that they are suddenly in a project area. Strong safeguards are not in place in lending institutions or others such as conservation organizations.

Seeing more and more structural links between climate finance and the money finding its way out to armed forces. It appears that part of what Indonesian government means by ‘readiness’ is linked to militarization and getting people off the land. Could create climate project refugees.

Benoit Bosquet

These issues are very complex and lots of people are trying these programmes. Even if you try and bring people to a consultation in a country as complex as Indonesia, it will never be good enough, but you have to try very hard.

It does seem that in some cases not enough time is put into consultations – reality is that people are always in a rush. We need to do better at putting in the time to do consultations. Time will be an issue in REDD.

Safeguards specialists have diverging views about how this should work. We can’t have cookie cutter approaches – will be different in different contexts. There are the Cancun safeguards that are there in the background but are very general. The guidance that goes with them may be about how not to apply them.

REDD won’t work if money is pumped into unjust systems and private sector money won’t come. Private sector don’t want unsure propositions that give it a bad reputation. Shareholders don’t like this. Would be a losing proposition. FCPF is a small donor, but they are trying to figure out how to get it right. But the smallest one can’t do it alone. Larger donors have to take lead. Safeguards are also responsibility of the country.

Discussion

Questioner from Indonesia.

• can’t escape the fact that everything is happening in a rush.
• Indonesia is a complex country with many problems.
• in the process of developing a national strategy to REDD.
• lots of problems with corruption.
• without dealing all the issues

Suzanne from Greenpeace

• Indonesia not isolated in bad practices.
• emerging pattern of poor governance.
• safeguards need to be implemented and consequences need to be enforced.
• Bank does not have a good record of enforcing safeguards.
• UNDPand Jeff developing safeguards.