2018 – 2019
The European Forest Institute’s EU REDD Facility, in collaboration with Inovasi Bumi (INOBU) and Climate Focus, is carrying out a study to determine how clarified and implemented legal frameworks could contribute to reducing deforestation in Indonesia. This reduced deforestation would help the country achieve the forest-related targets in its nationally determined contribution (NDC) under the Paris Agreement on climate change. The study will also examine the supporting role that trade and supply chain-related measures can play to provide incentives for legal compliance.
The objective of the study is to provide insights into how legal frameworks could be clarified, strengthened and implemented to help Indonesia achieve its 2030 emissions reduction targets. To that end, it examines the legal framework in Indonesia and legal issues linked to forest conversion – the clearing of natural forests to meet other land needs, such as plantations, agriculture or mining. The study is based on an analysis of the regulatory framework and associated assessments of the prevalence of compliance and non-compliance in forest clearance across the country with detailed analysis in six target districts.
It will provide Indonesian and international policy makers an assessment of:
The study is also producing prototype district indicators of legal compliance regarding forest clearance. These indicators aim to inform forest and agricultural commodity supply chain actors in their commodity sourcing decisions and encourage Indonesian districts to shift to legal compliance and sustainability. The study will also provide information to inform EU-Indonesia dialogues on sustainability and trade. Clarity on legal issues that the study will bring will also benefit civil society organisations and smallholder networks that support sustainable livelihoods and environmental protection.
Nutmeg farmer, Fak Fak district, West Papua.
Indonesia is not only home to the third largest area of tropical forests in the world, it also ranked third in 2018 in terms of tropical primary forest loss by total area. However, primary forest loss was 40% lower in 2018 than the average annual rate of loss from 2002-2016, and protected forests saw an even more significant decline in forest loss. Although official numbers are not available, estimates suggest that a significant amount of deforestation is due to illegal conversion to industrial forestry and agriculture. Resolving legality issues is not only in the interest of the Indonesian Government and smallholders, it is also essential to the private sector actors that have committed to eliminating illegalities in their supply chains.
In its NDC, the Indonesian Government has committed to reduce its emissions by 29% below business-as-usual levels in 2030. Under the NDC, forestry and land use are intended to contribute around 60% of the targeted reduction. REDD+ is projected to play an important role in achieving the target.
Clear links exist between good governance and forest protection, especially in tropical forest countries. Knowledge of the extent of non-compliance in forest conversion and an understanding of contributing factors is essential to determining how reforms and strengthened law enforcement could contribute to reducing non-compliant forest clearance. In Indonesia, however, multiple overlapping legal frameworks and variable levels of law enforcement mean that the amount of non-compliance is unclear, although estimates indicate the figure is substantial. The extent to which eliminating illegality from supply chains and promoting legal commodity trade can contribute to NDC targets is therefore also unclear.
Furthermore, sustainability standards and corporate sustainability commitments have been instrumental in promoting progress towards social and environmental goals in agriculture and forestry in Indonesia. However, to achieve forest-related NDC targets, there is a critical need for including larger geographical areas and a wider range of public and private actors.
Newly established oil palm plantation, Fak Fak District, West Papua.
To address this challenge, the study seeks to respond to the following questions:
To do so, the study will determine what can be considered non-compliant forest clearance according to existing legal frameworks. It will thereby enable the assessment of the forest-related implications of applying incentives for legal commodity production and law enforcement.
Eliminating illegal deforestation from supply chains has been identified as a top priority in addressing tropical deforestation. In this context, Indonesia’s Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (FLEGT) with the EU sets a valuable precedent in eliminating illegal timber from supply chains to the EU. The study will therefore build on experience gained in implementing the EU Action Plan on FLEGT in Indonesia.
Working at the sub-national level to achieve sustainability in Indonesia is receiving increased attention. Since the fall of the New Order regime in 1998, a central part of Indonesia’s transition to democracy has been to decentralise authority to the subnational level. In this process, district governments have retained the authority for agriculture, one of the main sectors driving deforestation. Together with increased supply chain transparency and trade-related measures, the opportunity exists to create incentives for jurisdictions to halt deforestation and transition to sustainable systems of production.
The study will therefore develop indicators of jurisdictional legal forest conversion that, in combination with increased supply chain transparency, could inform sustainable sourcing. It maintains close links with the EU-funded study ‘Tracking Sustainable Palm Oil and Defining Jurisdictional Sustainability at Scale,’ known as ‘Terpercaya’. This project works with ‘Transparency for Sustainable Economies’ (Trase) to clarify palm oil supply chains and establish jurisdictional indicators to track progress towards sustainability.
In implementing the work, the study will seek guidance from key government stakeholders in forest legality and NDC implementation, including the Ministry of Environment and Forestry and the Ministry of Planning, as well as stakeholders engaged in the ‘Terpercaya’ study, including the Coordinating Ministry of Economic Affairs, the Ministry of Agriculture and the Ministry of Home Affairs.
The study started in July 2018 and runs until June 2019. It was officially launched at an inception workshop held in Jakarta on 23 November 2018.
The study’s results and impact will contribute to assess progress made by Indonesian districts under the first indicator of jurisdictional sustainability proposed in the ‘Terpercaya’ project, which addresses permanent forest protection.