The environmental services debate in Indonesia gained more attention after the RUPES project organized a national seminar in February 2004. Conducted at the office of the National Development and Planning Agency (Badan Pembangunan dan Perencanaan Nasional/Bappenas), the seminar was attended by environmental services’ practitioners from many parts of the country. At the end of the seminar, the participants agreed to form a national-level network (named COMMITTEES) to encourage design and application of environmental rewards’ schemes to protect the environment and improve the welfare of poor farmers in upstream areas. The COMMITTEES members have been working with a number of parties to pass a regulation on environmental services in Indonesia. At the national level, COMMITTEES members have been active in organizing regular meetings with several key government agencies, such as the Presidential Advisory Council, Ministry of Environment, Ministry of Forestry, Coordinating Ministry for Economic Affairs, Bappenas and other government agencies at district and province levels. COMMITTEES also consistently supported the Ministry of Environment in drafting an environmental services law and its regulations that can be used as an umbrella regulation for all such initiatives, through several seminars and a workshop.

At the field level, a number of new partners and collaborators from non-governmental organizations have been carrying out pilot environmental services rewards’ projects, such as the Institute for Research, Education and Economic and Social Affairs (Lembaga Penelitian, Pendidikan dan Penerangan Ekonomi dan Sosial/LP3ES) (in West Java province), Kanopi (in Kuningan district) and Rekonvasi Bhumi (in Banten province), together with existing RUPES Indonesia partners since phase 1: Forum Komunikasi Kelompok Tani Hutan Kemasyarakat Lampung Barat (West Lampung Community Forestry Farmers’ Groups’ Communications Forum/FKKT HKm) (in West Lampung), Yayasan Danau Singkarak (in West Sumatra) and the World Agroforestry Centre’s  Bungo, Sumatra, office. They helped local water users and upstream farmers at each site reach agreement to protect the watershed.

During 2003–2012, RUPES Indonesia conducted six action-research projects at a number of sites.

  1. Bungo (Jambi province): examined the possibility of eco-certification of rubber from agroforestry systems managed by smallholders.
  2. Singkarak (West Sumatra province): established better management of Lake Singkarak and its watershed, a voluntary carbon scheme, an environmental education centre and revitalized the coffee ‘ulu’ plantation.
  3. Sumberjaya (Lampung province): community forestry schemes and a ‘river care’ program.
  4. Cidanau (Banten province): cash transactions for reforestation schemes on farmers’ private land.
  5. Lembang (West Java province): established payments for environmental services’ transactions between intensive-agriculture farmers and the state-owned drinking water company to change their commodity crop to coffee agroforestry as well as facilitating the establishment of a provincial environmental services’ working group for Citarum watershed.
  6. Kuningan (West Java province): developed multi-stakeholders’ forum for Mt Ciremai National Park as the intermediary for the water services’ transaction between the drinking water company and the national park as well as piloted cash transactions for water services between upstream and downstream parties at village level. 

The Cidanau team successfully renegotiated another five-year contract with PT Krakatau Tirta Industri, a drinking water company. The Sumberjaya team also successfully renegotiated the contract with PT PLN, a state-owned hydropower company, to continue and increase the ‘Rivercare’ program. The Sumberjaya team also established an agreement with ‘Strengthening Community-based Forest and Watershed Management’, a project funded by the United Nations Development Program and the Global Environment Facility, to develop a community action plan for watershed management which was in line with the RUPES project. And the second phase of contracts for a voluntary carbon market in Singkarak are, at the time of writing, still under negotiation and awaiting the monitoring, reporting and validating phase.

In Citarum, two mechanisms for innovative watershed management were identified: 1) encouraging the private sector to undertake ‘green’ businesses; and 2) reallocating some of the existing budget of the Integrated Citarum Water Resources Management and Investment project for rehabilitation of the catchments using environmental services’ scheme principles, with a pilot site selected. These mechanisms were triggered by meetings, a seminar and a workshop about Citarum watershed that were conducted by LP3ES with representatives from many different sectors to seek support to save Citarum.

Other activities included establishing a working group on payments for environmental services for Citarum and West Java as an alternative vehicle to promote and maintain availability of environmental services. At site level, another village was identified as a model for payments for environmental services’ replication in Citarum.

The Cidanau team conducted a survey for potential environmental services’ providers within the Cidanau watershed to anticipate the expansion of the environmental services’ scheme.

The Kuningan team identified three villages as pilots for implementation and conducted a series of meetings and facilitation events with them. The team also conducted preliminary research on rapid hydrological appraisal as well as research on the economic valuation of water and the socio-economics of land use. Documentary films were also produced.

The RUPES partner, FKKt HKm Lampung Barat, facilitated a series of meetings to strengthen the institutional capacity of other community forestry groups. They also sought ways of collaborating with other potential partners on Way Besai watershed management. The voluntary carbon market program in Singkarak received a lot of appreciation and support from both national and local governments.

Today, environmental services in Indonesia play an increasingly significant role in national discourse, as witnessed by the increasing number of collaborative programs—both pilots and full implementation—involving various stakeholders, including the government (especially the Ministry of Forestry), local NGOs, and national and international research and development agencies.

Key findings

Case studies of rewards for environmental services’ schemes (RES) in many places in Indonesia demonstrated us that it is can support to the development of RES regulations at the higher level,  such as national or provincial regulations. PES scheme have to be in harmony with regulatory approaches to better manage the environment and alleviate poverty. In Cidanau, with support from their local government through Governor Decree, the current RES initiatives have possibilities to be expanding to the wider coverage of area and participants. It is also help to ensuring the other potential ES buyer to have willingness to join with the scheme in the particular area. In many cases, some substantial amounts of public funds are currently allocated to reforestation in Indonesia. These programs mostly do not generally meet their objectives since it mostly derived from the top-down mechanism. Therefore, such funds could be more effectively deployed in flexible RES schemes in order to ensure its effectiveness and efficiency by integrating the local knowledge into rehabilitation/conservation program. This will increases the chances of contract accomplishment. Governments should set the optimal level of acceptable environmental services’ protection as a baseline within their regulations that allow voluntary actions to improve environmental qualities. Strong political will from them is important to ensure expansion of schemes.

Beyond that, establishing an intermediary‘s role as an ‘honest and trusted intermediary’ is one of the key factors for an established scheme. The involvement of the community in participatory environmental services’ monitoring also needed to increase the accountability of the results and reduces potential conflicts in the future.

Policy influenced

RUPES in Indonesia and its partners at national level initiated a national network called Community of Interest to Empower Environmental Services for Sustainable Development and Better Quality of Life in Indonesia (COMMITTEES), which consisted of voluntary members from government, universities, practitioners and non-governmental organizations who had an interest in rewards for environmental services’ schemes. COMMITTEES aim to mainstream and institutionalize rewards for environmental services in Indonesia through several programs, such as:

  • improving the commitment and capacity building of activists in environmental services;
  • strengthening understanding of environmental services from different points of view and scientific disciplines;
  • building the capacity of stakeholders in developing rewards’ mechanisms for environmental services; and
  • implementing dissemination and advocating strategies at local, national and global levels to develop sensible transactions for environmental services. 

To contribute to the development and improvement of policy frameworks for rewards’ schemes at local and national levels, the RUPES team and partners in Indonesia were actively involved in developing national and local regulations. At the national level, RUPES actively participated in the drafting the government regulation on environmental services, Law No. 32/2009. This regulation had three broad categories for economic instruments in environmental conservation: a) planning for environmentally friendly development and economic activities; b) funding for environmental management; and c) incentives and/or disincentives for conservation. At local levels, the RUPES team facilitated the development of the Province of Banten Governor’s Regulation on integrated watershed management based on the rewards’ scheme implemented in Cidanau watershed. At the time of writing, the draft is waiting for final approval before it can be implemented. 

The team also disseminated information about environmental services and rewards’ schemes at local, national and international events and made recommendations to government policy makers on developing regulations for, and implementing, such schemes.