Indonesia

Indonesia was the first country to introduce a domestic REDD+ legal framework in 2009 and has since then continued to develop its REDD+ regulatory and legal framework on a high political level coordinated through the National REDD+ Task Force. The Indonesian REDD+ legal framework has, however, been implemented at a ‘lower’ legislative level, primarily through Presidential Decrees or Ministerial Regulations from the Ministry of Forestry. The lack of a higher legislative REDD+ framework (in a law or an act) has raised concerns regarding the likely longevity of the existing legislation and has also created overlapping and at times, conflicting provisions (Daviet, 2012, and McDermott, 2010). The main REDD+ legal challenges faced by Indonesia lie in clarifying land and forest tenure, institutional coordination and instituting safeguards. The National REDD+ Strategy intends to address these issues, firstly by creating the REDD+ Agency through which all REDD+ activities will be coordinated.

Land and forest tenure in Indonesia is characterized by formal control of land and forest by the state, with weak tenure security for local communities and indigenous peoples. Although customary rights to forests are recognized in principle, in practice, these rights are passed over in favour of state interests (USAID, 2010). Rights to carbon and benefit-sharing arrangements have not been clarified, creating uncertainty in existing or currently developing REDD+ activities, and as to when a legal framework addressing these issues will be implemented. The National REDD+ Strategy has an ambitious timeline, but is already behind schedule due to a delay in the creation of the REDD+ Agency.

Background

The Republic of Indonesia is a decentralised democratic republic, consisting of 30 provinces, 2 special regions (Aceh and Yogyakarta) and 1 special capital city district (Jakarta Raya). In 2001 a process of decentralisation began and since then regencies and municipalities have become the main administrative units providing most governmental services. Decentralisation in the forestry sector has however, not been implemented clearly, through un-integrated and contradictory laws resulting in overlapping authorities and time-consuming permit procedures in forest and land tenure (Barr et al, 2006).

Indonesia was the first nation to introduce a domestic REDD+ legal framework, including three regulations issued by the Ministry of Forestry in the lead up to the Copenhagen Climate change conference (COP-15) in December 2009:

• P.68/Menhut-II/2008 on the Implementation of Demonstration Activities for REDD+;
• P.30/Menhut-II/2009 on procedures for REDD+ activities; and
• P.36/Menhut-II/2009 regarding procedures for licensing of commercial utilization of carbon sequestration and/or storage in production and protected forests.

These regulations cover a range of issues, such as mechanisms to reduce carbon emissions from degradation and deforestation; frameworks to issue licenses for carbon utilization in production and protection forests; coordination mechanisms for REDD+; and application and implementation procedures for REDD+ pilot projects. Since these initial regulations, further rules have included a Presidential Decree to establish the REDD+ Task Force (PP no. 25/2011), and regulations on changing the designated function of forest areas (PP no. 10/2010 replaced by PP no. 60/2012) and on usage of forest for non-forestry development activities, for example mining (PP no. 24/2010).

The most recent REDD+ regulation issued by the Ministry of Forestry, from April 2012, is Regulation P.20/Menhut-II/2012, on the ‘Implementation of Forest Carbon’. This regulation replaces the procedures for obtaining a license for REDD+ demonstration activities of the regulations from 2008 and 2009, as mentioned above.

Definitions relevant to REDD+ projects and programmes

There are quite a few REDD+ concepts that are defined in the REDD+ regulations released so far by the Ministry of Forestry. The main concepts that have been defined are: REDD+, deforestation, forest degradation, and REDD carbon trade (Regulation on Procedures for REDD+ activities (P.30/Menhut-II/2009), Article 1). Concepts that are yet to be defined and regulated include benefit-sharing arrangements and clarification on who holds the carbon rights. 

The definition of REDD+ included in the Regulation on Procedures for REDD+ activities (P.30/Menhut-II/2009) is: “… all efforts of forest management to prevent or reduce the decline of forest quality and/or quantity of forest covers and carbon stocks through various activities that supports sustainable national development.” This definition of REDD+ differs from that of the UNFCCC, in that the REDD+ activities should explicitly “support sustainable national development”. 

The more recent Regulation P.20/Menhut-II/2012 on the Implementation of Forest Carbon, does not have any reference to REDD+, but introduces a new concept: “forest carbon”, defined as carbon from forest management to implement storage activities (stock) of carbon, carbon sequestration, and forest carbon emissions reduction (article 1, para 1). This definition of forest carbon does not seem to define what forest carbon is, but instead it defines the activities through which carbon from forest is managed. The regulation also defines the “implementation of forest carbon activities”, which are activities performed to decrease forest carbon emissions, increase carbon storage (carbon stock), and increase forest carbon sequestration.” This definition of activities is much more focused on carbon than on forest quality or quantity as the previously defined REDD+ activities in the Regulation on procedures for REDD+ activities (P.30/Menhut-II/2009) is. It is not known why the Ministry of Forestry has made what seems to be a departure from REDD+ concepts in this Regulation on Implementation of Forest Carbon (P.20/Menhut-II/2012).

The Forestry Act (no. 41/1999) defines “forest” as a “unit of ecosystem in the form of lands comprising biological resources, dominated by trees in their natural forms and environment, which cannot be separated [from] each other” (article 1(2)). This definition seems to be applied uniformly throughout the existing REDD+ regulations. The definition prevents monoculture plantations through the inclusion of “trees in their natural forms and environment” and fragmented forest or small parcels, through the inclusion of “which cannot be separated [from] each other”, from being included under the definition of forest and therefore prevents them from benefiting from REDD+ schemes. The Indonesian government considered including palm oil plantations in the definition of forests in 2010, so as to gain financial benefits from REDD+ schemes (Jakarta Post, 2010). Fortunately, the Indonesian government abandoned this plan after pressure was put on them by civil society (Wetlands.org, 2010).

Land & Forest Resource Law & Tenure

Article 33(3) of the 1945 Constitution states that: “The land and waters, and the natural riches contained therein shall be controlled by the State and exploited to the greatest benefit of the people.” Therefore, in principle, all rights over land, water and natural resources (including forests) are under State control. Land tenure is governed by the Basic Agrarian Law, which vests control of all land in the State but also recognizes private ownership. This treatment is reiterated in Forestry Act no. 41 of 1999, the main forestry law in Indonesia. According to this Law, the State exercises full rights over forest land. The Ministry of Forestry therefore holds the authority to decide on forest tenure for the people, which include granting concessions or issuing permits and licences for forest exploitation and cultivation (Costenbader, 2011).

At the same time, the Indonesian Constitution recognizes customary law (hukam adat) to the extent that it is formally recognized by statutory legislation, and to the extent that traditional (adat) communities “… remain in existence and are in accordance with the societal development and the principles of [the State]…” Thus, statutory law prevails over customary law, and under the Forestry Act the Ministry of Forestry has consistently ruled that the interests of the State override the interests of adat communities to use the trees or land that are classified as state forest (USAID, 2010).

Forests in Indonesia are either classed as ‘state forest’ (kawasan hutan), which is forest located on land bearing no ownership rights, or as forests with ownership rights (hutan hak). The Forestry Act states that an area can be classified as ‘state forest’ through its designation by the Ministry of Forestry or through gazetting (publishing the status of an area as ‘state forest’ in the State Gazette of Indonesia). The Constitutional Court ruled in 2011 (Constitutional Court decision No. 45/PUU-IX/2011 (MK45) that the ‘designation’ of state forests is unconstitutional and that the Ministry of Forestry must gazette all state forest areas (Wells, 2012). Estimates are that only around 10% of state forest areas have been formally promulgated through the State Gazette (Indrarto, 2012). The consequences of this ruling have not yet been clearly addressed, but it could open up opportunities for increased participation of local communities and indigenous peoples as the gazetting procedure has to be introduced for the other 90% of state forests that have been ‘designated’ by the Ministry of Forestry.

In the period of 1999 to 2002, the Indonesian government underwent a rapid and comprehensive decentralization process, during which administrative and regulatory powers were transferred from the national government in Jakarta to the provincial, district and municipal governments. The decentralization of forest management has not been fully or clearly implemented – a series of regulations have given effect to both centralizing and decentralizing intentions, leading to confusion and conflicting practices (Barr et al, 2006 and McDermott et al, 2010). This has resulted in a patchwork of land tenure, concessions and permitting procedures. Therefore the REDD+ Task Force has proposed to take immediate action to address the uncertain situation. A common map for forest cover is being developed to be used by all government institutions in land use planning processes.

Carbon Rights & Benefit-Sharing

Although Indonesia has made progress regulating REDD+ activities through a series of legislative and executive acts, these often contain overlapping and/or conflicting provisions and do not clearly address who holds the carbon credits. However, if carbon is to be considered a natural resource held within the soil or the forest, a presumption exists that title to carbon follows from ownership of land and forest. In the case of Indonesia, this means that unless the State has given out any rights of usage of state forest (such as concessions, permits or authorizations) or the forest is privately or communally held, then carbon rights on state forests are to be deemed owned and controlled by the State. 

A provision for sharing benefits from REDD+ projects between different government levels, project developers and local communities was included in the Regulation regarding Procedures for Licensing of Commercial Utilization of Carbon Sequestration and/or Storage in Production and Protected Forests (P.36/Menhut-II/2009), which varies according to the forest type where a REDD+ pilot project is located. However, this was rejected by the Ministry of Finance and therefore ambiguity remains over arrangements for benefit sharing (Costenbader, 2011).

The Regulation on the Implementation of Forest Carbon (P.20/Menhut-II/2012) states that the holder of the forest carbon permit is allowed to trade the carbon rights (article 8). This would imply that the holder of the permit has the rights to the carbon although this is not made explicit. Interestingly, it is stated in the Regulation that the implementation of forest carbon activities is encouraged to empower people living inside and outside of the forest region. However, there is no mention of any benefit-sharing arrangements with local communities.

Other Relevant Laws and Processes

Spatial Planning

The REDD+ Task Force has identified revisions of current spatial planning policy and legislation as necessary to create a strong legal foundation for REDD+. Reform of spatial planning will include: strengthening the authority and function of the National Spatial Planning Coordination Board; creating a ‘master map’ for all types of permits covering forested areas; developing a transparent, accountable and integrated system for issuing land use permits; and increasing enforcement.  

Export of timber products

One of the main drivers of deforestation in Indonesia is illegal logging – one of the recent initiatives to prevent illegal logging is the Forest Law Enforcement, Governance and Trade Voluntary Partnership Agreement (FLEGT-VPA) between the EU and Indonesia. From 2013, Indonesia requires that a so-called V-Legal Document accompany the export of timber products, assuring the legality of the products from the point of harvest to transport, trade and processing. On the import side from the European Union, the EU Timber Regulation (EU No. 995/2010), which came into force in March 2013, lays down the obligations of the operators who place timber and timber products on the market.(Press Release, 2013)

Procedures

Obtaining a REDD+ activity permit

The Regulation on Implementation of Forest Carbon (No. P.20/Menhut-II/2012) replaces the procedures to apply for a permit or permission from the Ministry of Forestry for REDD+ activities that were found in Regulation on the Implementation of Demonstration Activities for REDD+ (No. P.68/Menhut-II/2008) and Regulation on Procedures for REDD+ Activities (No. P.30/Menhut-II/2009). According to the Regulation on Implementation of Forest Carbon (No. P.20/Menhut-II/2012), forest carbon projects can be implemented in state forests that have been designated as either production, protected, conservation or a private/community forest. The proponents of forest carbon activities can be the government, the state or private enterprises, cooperatives or a community. In order to obtain an ‘operating license for forest carbon,’ the project proponent submits a written request to the Minister of Forestry that includes a description of the project activities, the project map, its duration, the estimated value of the activities and risk management. It is interesting to note that legal title or right of use over the project area is not explicitly mentioned as a criterion to obtain an operating license.