Citarum, West Java

The site

Citarum watershed covers 11 600 km2 and plays an important role not only in the surrounding areas but also for many regions in West Java and Jakarta provinces. The 350-km-long Citarum River distributes water for various purposes, including agriculture, fishery, urban commerce and industry. The river is also a source for three reservoirs—Saguling, Cirata and Jatiluhur in West Java—which supply water for electricity, agriculture, and domestic and industrial consumption for most parts of West Java and Jakarta provinces.

The river (and its watersheds in general) was facing serious problems related to quality degradation, uncontrolled flood patterns, landslides, water shortages, and pollution. Despite the existence of two conservation areas— Tangkuban Perahu National Park and Juanda Grand Forest Park—which cover almost 30% of the total watershed, the number of settlements and rapid development of industries has been increasing, which, coupled with poor agricultural practices, were believed to aggravate environmental degradation. In addition, it was reported that sedimentation in the river, irrigation canals and reservoirs had doubled in volume from 1.18 million ton in 1993 to 2.15 million ton in 2003.

Research at the RUPES project sites in Lembang, North Bandung (Cikole and Sunten Jaya villages), showed that land in the catchment had been occupied by outsiders (mostly from urban areas), with almost 80% uncultivated. In contrast, many local people still remained landless without any certain livelihood or source of income. They were living in poverty, focusing only on crops without considering conservation, and the majority had low education and income levels (below IDR 15 000 per day), poor quality housing, and inadequate public infrastructure, including for water, sanitation and health.

Along with the increase of population, it was not surprising that the pressure on land also increased. Poor agricultural practices in the form of seasonal crop systems had increased soil erosion and enlarged marginal lands, with an accompanying use of chemical fertilizers and pesticides that was counterproductive to soil fertility. Another problem was the large amount of dairy farming that increased the number of cattle grazing areas. Since hardly any land was available, the improved dairy production was accompanied by the loss of forested areas. In Cikole village, for example, 70% of Perhutani’s (state-owned forestry company) forest area was grazing land. This reduced water availability in the area as many springs were hard to find. Moreover, dairy waste decreased the river’s water quality.

An integrated approach was required to solve the problems in Citarum watershed. A single, physical approach such as infrastructure development, for example, would most likely only contribute to already-inefficient watershed management. Provision of assistance to local communities to help them conserve the environment, however, as had occurred in many developments aid programs, would create dependency on outside sources. Therefore, any conservation program should require a high level of active participation from local people, encouraged by well-crafted, innovative programs.

The issues

For years, the district and provincial governments had collected taxes for water, including a water charge that had been collected by Jasa Tirta II Public Corporation (PJT II/Citarum river basin corporation). However, the allocation of funds was not sufficient to pay for the needed conservation activities in the watershed.

LP3ES and RUPES designed a program called the compensation for Watershed Protection Services (WPS), an innovative mechanism to overcome the complex problems in Citarum and provide better watershed management. The approach taken was to establish pilot demonstration activities in two villages in the upstream of Citarum watershed.

Service scarcity drives competition amongst users and creates opportunities for a compensation scheme market. Any such scheme should, in principle, at least consist of 1) a beneficiary who benefits from watershed services and who will compensate the provider; 2) a provider who is compensated for the service provided; and 3) conditionality or the requirements of providing environmental services.

In summary, the successful implementation of the scheme depends on three integrated factors, that is, 1) human resources and organizational development; 2) legal and policy support; and 3) an umbrella institution to manage the environmental services mechanism.

The pilot demonstration activities are still at the initial stage, thus, an initiative from the government is required to guide the adoption and institutionalization process of the WPS scheme in Citarum. Moreover, a better understanding by stakeholders of the compensation mechanisms is another pre-requisite along with encouraging the beneficiaries to commit to providing compensation.

Environmental services and the people involved

Environmental services

Land rehabilitation and spring protection at Cikapundung sub-watershed, total area 55 ha

People who provide the services

Syurga Air farmers’ group at Sunten Jaya and Giri Putri farmers’ group at Cikole

People who benefit from the services

PT Aetra Air Jakarta, Pusat Standardisasi Lingkungan, PT Indonesia Power, Perusahaan Negara Pengelola Air (Perum Jasa Tirta/PJT-II), industries and governments

People who act as intermediaries between the providers and the beneficiaries

Direct transactions in Sunten Jaya and transactions through Yayasan Peduli Citarum as the intermediary

There are two model of transaction in payments for environmental services’ mechanisms in Citarum.

First, ‘direct transactions’, where the beneficiaries directly compensate the providers; and, second,  ‘intermediary transactions’, where the beneficiaries use an intermediary for compensating the providers.

These two mechanisms were adopted at each site: Syurga Air farmers’ group in Sunten Jaya had an agreement to use direct transactions with their buyer, PT Aetra Air Jakarta; Giri Putri farmers’ group chose to use an intermediary to receive payments from their buyer, Pusat Standardisasi Lingkungan (Environmental Standards Centre) in Jakarta.

The rewards

Transactions between Syurga Air farmers’ group and PT Aetra Air Jakarta

Syurga Air farmers’ group and PT Aetra Air Jakarta agreed to conserve an area of ​​22 hectare under an agroforestry system model. PT Aetra was to provide compensation to the farmers’ group of USD 5000, with three stages of payment, each with the following conditions: first stage paid at 50% of the agreed value, after the agreement is signed and all tillage has been completed by the farmers’ group; stage two paid at 25% of the agreed value three months after the signing of the agreement and farmers’ group had established land for conservation and cultivation of crops on private land (crops planted had grown well); third stage paid at 25% of the agreed value six months after the signing of the agreement. Farmers could harvest the timber after at least seven years but had to replant with the same type of tree and the same amount or more. Besides planting timber, the farmers also planted coffee and intercropped vegetables.

Transaction between Giri Putri farmers’ group and Environmental Standards Centre of the Ministry of Forestry

The agreement between Giri Putri farmers’ group in Cikole and the Environmental Standards Centre was for an amount of USD 4050 to conserve approximately 33 hectare, paid through Citarum Care Foundation (YPC) as the local intermediary. 

There were several reasons why the Centre chose to distribute the payments through an intermediary: 1) the farmers’ group did not have a legal authority, so it would have been difficult, if not impossible, for it to open a bank account; 2) YPC could assist the farmers’ group to prepare the required reports of activities for both parties.


The process is still continuing and has provided many important lessons, both to improve the future mechanism and to be replicated in other places. Below are some follow-up actions for after RUPES. 

  1. A social engagement process and building awareness of the concept of compensation schemes needs to be carried out at the beginning of any scheme.
  2. Better facilitation and lobbying of stakeholders, in particular, the leading government line agency, would improve participation.
  3. A community-driven approach is strongly advised for the implementation of environment conservation programs that link to local people’s livelihoods.
  4. Strong partnerships are needed with a strong local authority that is able to influence other stakeholders to support the initiative. In this case, the West Java Environmental Management Agency (Badan Pengelolaan Lingkungan Hidup Daerah Jawa Barat/BPLHD) played an important role in regular public meetings.
  5. Adoption of a compensation mechanism for watershed protection services is important for community empowerment. A successful conservation program also depends on the social and economic aspects of the local community. 

Site partners

  • Lembaga Penelitian, Pendidikan dan Penerangan Ekonomi dan Sosial (LP3ES)

LP3ES is one of the oldest NGOs in Indonesia, with experience and competence in producing activities, publications, research and education in the fields of socio-economics and politics. LP3ES is involved in policy studies and action research, especially in relation to grassroots communities. LP3ES conducts various activities, such as research into the informal sector, the environment, cooperatives, small industry and handicrafts, traditional educational institutions, non-formal education, participation of farmers, maternal and child health, and public relations and the state (

  • Yayasan Peduli Citarum (YPC)

YPC is a non-governmental organization that is active in facilitating the process of developing a payments for environmental services’ mechanism for upstream and downstream communities in Citarum watershed in West Bandung district. Some of the activities include building the upland community’s knowledge and skills for developing environmentally friendly farming systems through applying agricultural models for mixed gardens  to ensure the economic sustainability of farmers and also water conservation.

Contacts for more information