Improving governance of land and forest based extractive sector in Indonesia

“Capable stakeholders, community monitoring, revenue stream and budget analysis, multi-stakeholder dialogues, and open data can pave the way for improvement in the governance of land and forest, especially those used by the extractive sector.” – Agung Budiono, Program Manager of Setapak-PWYP Indonesia.

Lack of governance in the extractives relating to forest and land management has created problems which caused loss of national revenue, deforestation and environmental degradation, and has had severe socio-economic impact across the region. Lack of capacity of responsible authorities, low levels of public participation, scarcity of medium for public involvement, and absence of adequate regulation that secure participation hinder efforts to solve these problems. In addition, low level of transparency and limited public access to information has led to lack of trust and coordination between stakeholder, overlapped use in forest and land, as well as abuse of regulation especially those related to licensing and good mining practices.

Publish What You Pay Indonesia has collaborated with SETAPAK-The Asia Foundation, to initiate efforts to improve governance of forest and land based extractive sector through three areas of focus: (1) strengthening the capacity of stakeholders, (2) building trust, participation and multi-stakeholders dialogues, (3) promoting use of open data. This program is conducted in 5 provinces: Nangroe Aceh Darussalam, South Sumatera, West Kalimantan, East Kalimantan, and Central Sulawesi. We collaborate with Setapak partners in the national and regional level.

In capacity building focus, revenue issues are not used much as tools for advocacy by civil society focusing on the extractive industries, particularly in mining (mineral and coal) and forestry. Advocacy is not related to state loss. That’s why capacity building about revenue issue is important, in order to enrich and strengthen the argument and bargaining position based on advocacy findings in the mining and forestry sectors.

PWYP Indonesia has facilitated a training related to land governance and forestry for the extractive industries. The main goals of the training are: understanding revenue streams, and the technical calculations in state and local revenue in the mining and forestry sectors. This training involve facilitators and experts who understand the issues. The participants consist of local civil society organization and impacted mining community.

At the start of the activity in five provinces; Aceh, South Sumatera, West Kalimantan, East Kalimantan, and Central Sulawesi, there were 75 enthusiastic participants learning about revenue stream mechanism in the extractive sector – from the upstream stage to the allocation of revenue within communities. Participants were also supported in doing innovations in their advocacy. The participants hoped to advocate in the mining sector based on those tools, so that the extractive industries will bring more advantage for the community.

In the multi-stakeholder dialogues and involvement, PWYP Indonesia and its local CSO partners conducted a series of dialogues in five areas; Aceh, South Sumatera, West Kalimantan, East Kalimantan and Central Sulawesi. This helped map the gaps and problems in the extractive sector, especially related to spatial management, land and forest use. Also explored in the dialogues were the topics of transparency of national and regional revenue, and the environmental aspect, including rehabilitation and post mining stages. This forum was attended by various participants from the government, members of parliament, academics, NGOs and community delegations.

Generally, a key achievement from this multi-stakeholder forum has been the growing awareness of participants in problem solving. This is good first step to build dialogues to jointly look for solutions. But this can also be challenging for civil society organisations, as not only do they have to understand the context of problem and provide constructive criticism, but also offer solution as recommendation.

Lastly, in the open data focus, PWYP Indonesia has facilitated the development of a portal that provides data and information in the open data format of mining licenses, spatial information, as well as economic aspect (i.e. potential revenue, post mining, etc.).

This program also became an important partner for the coordination and supervision of a program for the mineral and coal sector. This is an innovation program led by the Anti-Corruption Commission in collaboration with the Ministry of Energy and Mineral Resources, and Local Governments, that has focused on reviewing the mineral coal sector.

In the last two years, the Corruption Eradication Commission has aggressively taken action to prevent corruption in the natural resources sector, particularly in mining, forestry and plantation, by initiating the “Coordination and Supervision” initiative. So far, the initiative has been effective in improving the governance of the sector as well as protecting natural resources from the legitimate crime, excessive exploitation.

Looking at the advocacy opportunities, PWYP Indonesia has strengthened civil society organizations in Indonesia working on extractives and environmental issues to better monitor the implementation of the Corruption Eradication Commission’s initiative, and of the Coordination and Supervision program, in some regions in Indonesia. Civil society organizations composed and delivered a position paper regarding fundamental problems in mining, forestry and also plantation sector but the paper is still ignored by the government. A comprehensive advocacy strategy for civil society organizations to protect natural resources in Indonesia has also been formulated.

Since then, there have been numerous achievements. The most significant one was the huge increase in non-tax revenue from coal sector reaching IDR 10 trillion, though at the same time its price has decreased by 30% compared to the previous year and ore export has been banned. Around 1000 mining permits in 31 provinces have been revoked for a variety of reasons, including expired permits, over-lapses with other concessions, and other administrative issues.

PWYP Indonesia has also played a role in consolidating CSOs by aggregating data and information, developing CSOs policy papers which have been presented in regional coordination and supervision gatherings in 31 provinces, as well as in building public awareness.

PWYP Indonesia also initiated a project to map actors in the extractive sector. The project focuses on researching Political Exposed Persons (PEPs), those who have access to state accounts and budgets, as well as political exposure. PEPs have a higher risk of corruption and can be potential target for bribes. In this first phase, the focus will be on mapping the coal industry.

This blog was originally posted on the PWYP Indonesia website and has been reposted here with their permission. Read the original blog post by clicking here.