Laws Related to GHG Mitigation Efforts: Indonesian Experience Dr. Laode Syarif Dr. Andri G. Wibisana 2008 AECEN Forum -- Bali, Indonesia November 26, 2008

Outline 1.Law and Policies addressing GHGs Mitigation 2.Overview of GHGs Mitigation Policies in Indonesia 3.Overview of Law Enforcement in Indonesia 4.Challenges and opportunities 5.Recommendations 2

1. Laws and Policies addressing GHGs Mitigation A.Introduction: The Hierarchy of Indonesian Law - Constitution - Act - Government Regulation - President Decree/Regulation - Bylaw Lower laws cannot contravene with higher laws Laws at the same level have the same legal binding 3

B.Environmental Management Act 1997 The authority to deal with environmental issue is the Ministry of Environment – The ministry lacks executorial and monitoring power, which are still at the hand of sectoral departments or local authorities The act has provisions on Administrative sanctions, civil liability and procedures (fault- based and strict liability, NGO’s legal standing, class action), and criminal sanctions (including corporate criminal liability) 4

C.The 2007 National Action Plan on Climate Change provides guidance for various institutions in carrying out efforts to tackle climate change and sets out requirements for institutional coordination. Actions to be taken: 1.emissions reduction and the increase of carbon absorption capacity. – forestry sector: combating illegal logging rehabilitate million ha from 53.9 million ha of degraded forest by the year reduce deforestation and forest degradation up to million ha in the period of , 6.15 million ha in the period of , and 10 million ha in the period of forest fire prevention: the reduction of the number of hot spots by 50% in 2009, by 75% in 2012, and 95% in implementing environmentally sustainable logging practices, strengthening the management of conservation area, and formulating a Road Map to Implement the REDD. – agriculture sector: utilizing organic fertilizer and pesticide and efficient machinery. 5

2.The implementation of incentive mechanisms in the LULUCF sector. – promoting the continuation of the “Menuju Indonesia Hijau” (Towards a Green Indonesia) program to honor heads of districts that are able to maintain the protected forest and increase the percentage of vegetated land within their districts. 3.The development of supporting policies, including those related to national and regional spatial planning, law enforcement, poverty alleviation, research and development, and preparation and social engineering. 6

D.Energy Sector GR No. 5 of 2006 concerning energy policy: mixed energy consumption to be achieved in 2025, in which the use of coal will be increased and accelerated quite rapidly. Decree of the Minister of Energy and Mineral Resources No. 2 of 2004 concerning energy conservation and the utilization of green energy President Instruction No. 10 of 2005 and the Regulation of the Minister of Energy and Mineral Resources No. 31 of 2005 concerning the implementation of energy savings 7

E.Forestry Sector Act No. 41 of 1999 on Forestry Government Regulation No. 45 of 2004 on forest protection Government Regulation No. 4 of 2001 concerning control of environmental damage or pollution resulting from forest or land fires. Government Regulation No. 6 of 2007 (amended by the Government Regulation No. 3 of 2008) concerning forest planning and forest management plans, and the utilization of forest and forest area President Instruction No. 4 of 2005 concerning the eradication of illegal logging 8

– The Minister (and if necessary the regional government) has the authority to grant licenses related to forest concession, forest plantation, and collecting and harvesting timber and non- timber products from protected and production forest, and environmental services concession. – Obligations: pay the concession fee, reforestation fund, and assurance bond, and prevent forest fires – Prohibitions: creating damage to the forest and forest protection facilities, illegal logging, forest burning – Violations against these obligations and prohibitions lead to administrative sanctions and civil and/or criminal liability. 9

2. Overview of GHGs Mitigation Policies in Indonesia A.Ratification of the UNFCCC and Kyoto Protocol – Indonesia has ratified the UNFCCC through the Act No. 6 of 1994 – and the Kyoto Protocol through the Act No. 17 of Question: Is it enough? No –Unclear whether the Indonesian legal system follows the so-called “monism” or “dualism” No integrated regulation on CC 10

B.No Powerful institution to set up and implement an integrated climate change policy C.No obligation to reduce GHGs has caused Indonesian policies on CC to rely heavily on voluntary approach and economic instruments (in terms of subsidy or tax reduction) D.Different regulations sometimes provide different sanctions; sometimes no sanctions at all 11

3. Overview of Law Enforcement in Indonesia A.The Ineffectiveness of the 1997 EMA – Only few civil liability cases have been decided in favour of the victims of environmental pollution and degradation. – Similarly, criminal provisions have not been enforced effectively. – Law enforcers still require a high level of proof to hold someone liable: the defendant has committed an unlawful act, that the pollution has occurred, that this pollution results from the defendant’s unlawful act. – Some “breakthroughs” promised by the EMA turn out to be inapplicable partly because many judges lack the knowledge on how to implement strict liability, class action, or to ease the prosecutor’s/plaintiff’s burden of proof as guaranteed by the law. 12

B.Law Enforcement on Forest Fires Forest fires are charged with criminal provisions laid down in the EMA, which has higher level of proof but lower sanction compared to criminal provisions under the forestry act So far one company and its CEO has been successfully sentenced  the CEO of the company was sentenced 8 months and fined IDR 100 million (the court considers the company had no intention to burn the forest) Only two companies were found guilty under civil procedures. They were only ordered to improve their fire prevention systems. 13

C.Law Enforcement on Illegal Logging An official figure from the Department of Forestry shows that in only six years, Indonesian forest has decreased by more than 7 million hectares (from around 123 million ha in 1999 to less than 116 million ha in 2005), or more than 133 ha per hour. In March 2005, the Indonesian President issued a President Instruction No. 4 of 2005 concerning the eradication of illegal logging. 14

In just two months after the instruction, 70 suspected illegal loggers were captured, including some high ranking army and police officers and officials from the Department of Forestry who were involved in illegal logging. – Out of 70 suspects, 31 persons have been placed under police custody, and the rests are still under investigation. – By the year 2007, there were only 13 convictions that have been secured, with the longest jail term was only 2 years. Corrupt officials are the main obstacle for effective law enforcement – Fight against climate change has a great deal to do with the fight against corruption 15

4. Challenges and Opportunities Uncertainty with respect to post-Kyoto arrangements – We need to change our business-as-usual policy concerning climate change mitigation – Forest protection, aforestation, and reforestation offer a cost-effective opportunity for Indonesia to reduce its GHGs emissions The revision of Indonesian EMA is underway (enactment is expected in 2009) – Opportunity for the Government to create a more integrated policy on CC, in which the MoE should become more powerful 16

5. Recommendations There is an urgent need for the presence of an act or government regulation specifically directed at addressing climate change. – More powerful authority – Clearer goals (in terms of GHG emissions reduction) and compliance mechanisms Eliminate some conflicting regulations Shift the approach from unclear voluntary approach into, at least, market-based (economic) approach – Economic incentives for energy conservation and diversification should be defined more clearly and applicably – Policies related to GHGs mitigation, such the promotion of energy savings and cleaner production, should be linked to the polluter pays principle 17

Thank you 18