1. REDD and Governance Challenges in Indonesia Iman Santoso Center for Socio-economic and Policy Forest Research and Development

2. Indonesia’s Commitment September 2007: the President of Indonesia initiated a declaration of the world’s major tropical rainforest nations which undertakes to slow, stop and reverse forest loss IFCA: a group of national/international experts on forest management, carbon and governance funded by the World Bank, the British, Australian & German Governments.

3. Key elements examined by the IFCA A baseline Strategies to reduce emissions & to ensure their permanence; Means of monitoring & verifying emissions reductions, and preventing leakage; REDD markets/financing; Mechanisms to manage and distribute payments All element need better governance

4. Governance Challenges Minimize deforestation and degradation Spatial plan : implementation and leakages Poverty, illegal activities & Law enforcement FEWS and the role of forest: rational forest land allocation vs. optimal forest land uses Infrastructures Get better Price & Market of Carbon Opportunity cost : could it be compensated ? Related costs : transaction costs Price, Equality and Fair Benefits

5. Spatial Plan Act 1992 development oriented 2007 Act 2008 gives first emphasis to environment safety Macro plan at provincial and district level Indicative land allocation (incl. forest areas) Misperception: Review vs. Revision : state capture

6. Spatial Plan Planned and governed forest conversion (around 70% of oil palm plantations have replaced forest and resulted in above ground emission. Unplanned and illegal conversion

7. Poverty, Illegal Activities & Law Enforcement No sufficient job opportunity: subsistence agriculture Different perception on legality of timber Insecure Forest Land Tenure : conflict over land uses Administrative corruption Ineffective law enforcement

8. Food, Energy and Water Scarcity Forest areas covering 59% of total land Some are indicated as suitable for food production and protect soil and water system Micro and detailed soil assessment is needed Forest management units have not been established

9. Others Technical capacity Data availability Independent assessor

10. Compensate opportunity cost ? The existing land uses are seen to be promising (Oil palm, pulp & paper ….. ) High transaction and implementation costs of REDD Time lag before payments are made Long term perspectives

11. Thank you Ministry of Forestry