lessons from indonesia’s reforestation fund
DESCRIPTION
Presentation by Ahmad Dermawan, Center for International Forestry Research, Lessons from Indonesia’s, The 14th International Anti-Corruption Conference, Thursday, 11 November 2010, Queen Sirikit National Convention Center, Bangkok, ThailandTRANSCRIPT
THINKING beyond the canopy
Lessons from Indonesia’s Reforestation Fund
Ahmad Dermawan14th International Anti Corruption Conference (IACC)
Bangkok, 11 November 2010
THINKING beyond the canopy
Climate change and REDD+
REDD+ offers an opportunity to create new revenue flows by protecting standing forests and rehabilitating degraded forests
However, many of the most likely recipients of REDD+ funds do not have a positive track record in the governance of public financial management
THINKING beyond the canopy
Countries Rank (of 178 countries) CPI 2010 Score
Panama 73 3.6Zambia 101 3.0Indonesia 110 2.8Bolivia 110 2.8Viet Nam 116 2.7Tanzania 116 2.7Paraguay 146 2.2Papua New Guinea 154 2.1DRC 164 2.0
Source: Transparency International
THINKING beyond the canopy
Financial management and revenue administration
Capital subsidies and accountability
Corruption and fraud
Transparency and accountability
Lessons from Indonesia’s Reforestation Fund
THINKING beyond the canopy
Financial management and revenue administration
Influx of REDD+ funds could place new pressures on institutions that have demonstrated limited capacity for financial management and governance
• Until 1998, the Fund was managed outside state budget, with limited reporting
• Transferred partially to regions since 2001, but regions have limited capacity to manage it
THINKING beyond the canopy
Capital subsidies and accountability
Since these companies may apply for REDD+ projects, tit is important to carefully consider implications if REDD+ participants fail to meet obligations
• During 1990-1999, approximately $1 billion of the Fund was used to support timber plantation development
• Most subsidy recipients did not fully plant their plantation sites, and have not fully repaid their loans
THINKING beyond the canopy
Corruption and fraud
Donors and investors will want assurances their money will be managed accountably. If not, they may shift investments to countries with better financial management and governance
• Some recipients of subsidies ‘marked up’ their investment costs or overstated their planted areas
• Since 2001, corruption related to the Fund has become decentralized
THINKING beyond the canopy
Conclusions
Strong management capacity is needed. If REDD+ funds are not managed effectively, the ability to achieve carbon reduction targets will be undermined, and REDD+ payments will not flow
Keeping track records of actors involved in REDD is necessary to avoid irresponsible actions
Strengthening and mainstreaming anti-corruption initiatives is key to making REDD+ work. REDD+ ‘readiness’ should strengthen Anti-corruption actions
MRV principles should also be applied to financial management and governance, not just carbon emission reductions
THINKING beyond the canopy
Sources
Barr, C., Dermawan, A., Purnomo, H. and Komarudin, H. 2009. Financial governance and Indonesia’s reforestation fund during the Soeharto and post-Soeharto periods, 1989–2009: A political economic analysis of lessons for REDD+. Occasional paper no. 52. CIFOR, Bogor, Indonesia.
Wertz-Kanounnikoff, S., and Angelsen, A. 2009. Global and national REDD+ architecture: Linking institutions and actions. In Angelsen, A. with Brockhaus, M., Kanninen, M., Sills, E., Sunderlin, W. D. and Wertz-Kanounnikoff, S. (eds) 2009 Realising REDD+: National strategy and policy options. CIFOR, Bogor, Indonesia.
Transparency International. 2010. Corruption Perception Index 2010 Results. http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results
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www.cifor.cgiar.org
www.forestclimatechange.org
www.cifor.cgiar.org
www.forestclimatechange.org