Indonesia - Promoting Sustainable Production Forest Management to Secure Globally Important Biodiversity Project : indigenous peoples plan

IPP508 DRAFT Access Restriction Process Framework (ARPF) for Ecosystem Restoration Concessions 5/27/2011 1. Introduction 1. In order to address the ongoing degradation and deforestation in Indonesia’s production forests, the MoFr created a new policy framework which allows licenses for ecological restoration to be granted for logged-over concessions. Known as an ‘Ecosystem Restoration‘ license (UUHHK-RE) the concession holder has a initial 60 year permit under which the concession holder must return the forests to its ‘natural equilibrium’. During the first 20 years of the license there is a moratorium on cutting, but concession holders are allowed to develop non-timber forest products (NTFPs) and Environmental Services such as ecotourism and carbon. 2. Burung Indonesia and the BirdLife International Consortium in collaboration with PT REKI pioneered the first ER site of 100,000 ha of Sumatran lowland rainforest known as “Harapan Rainforest” in 2007. Currently there are 30 applicants for ER licenses in various stages of the application process totaling 3.3 million ha. But so far, in addition to PT REKI, only the Borneo Orangutan Survival Foundation (BOSF)/ PT. Restorasi Habitat Orangutan Indonesia (RHOI) has received a license for 86,450 ha ER site in east Kalimantan. 3. The objective of the project is to support the implementation of the Government’s policy on Ecosystem Restoration Concessions whilst ensuring that biodiversity and community participation are mainstreamed into ER Concession management practices and business plans. Technical assistance to a select number of Ecosystem Restoration Concessions (ERCs) is expected to be channelled through the World Bank, which means the project and those select ERCs must adhere to the Bank’s Safeguard Policies. Expected global benefits will arise from promoting biodiversity conservation in Indonesia’s production forests. Project interventions are expected to lead to the generation, adoption, adaptation, and application of lessons for improved conservation outcomes in Indonesia’s production forests, relevant to both the World Bank’s and GEF’s biodiversity portfolios. 1.1 ARPF Objectives 4. According to World Bank guidelines, projects that may potentially impose restrictions of access of local communities to nature resources require a “Process Framework”, in accordance with Operational Policy OP 4.12 on Involuntary Resettlement, herein referred to as the Access Restriction Process Framework (ARPF). While no actual relocation of people is proposed for the project areas, OP 4.12 is relevant because the project provide TA to ERC license holders/applicants operating in areas where restrictions of access may adversely affect vulnerable individuals or groups by curtailing their legal or illegal incomes, at least on a temporary basis. For the most part, these restrictions will be voluntarily negotiated with the affected vulnerable groups through a consultative process described in this framework. 1 5. The ARPF describes the project components potentially associated with restrictions of access, the people likely to be affected, and the participatory processes by which the project was prepared and will be implemented. It provides guidelines on the criteria for determining “affected people”, the form of mitigation measures included in the project design for vulnerable people, the institutional arrangement implementing these mitigation measures, how conflicts will be resolved including grievance procedures, and monitoring and evaluation procedures. The process framework commits the ERC license holder/applicant and the GOI to this participatory process and guidelines. For the purpose of this framework, “vulnerable people” refer to poor or otherwise disadvantaged people who depend upon forest resources for subsistence or cash income, and who could not easily pursue other options that would fulfill their basic needs if access to those forest resources is curtailed. 6. The ultimate aim of the guidance in this ARPF will be the site specific ARPF to be prepared by the ERC license holder/applicant, as well as more detailed action plans related to livelihoods restoration and/or physical displacement, as the case may be. 1.2 Legal and Institutional Guidelines 7. At least 60 million people in Indonesia are dependent on forest resources for their daily needs. Forest resources such as fruit may be for household consumption or sold in the market place along with other products such as rattan and agarwood. A high level of forest dependency means the economies of communities living in and around forests are inextricably tied to access to forest resources. The loss of forests and access to forests may have an irreparable impact on community livelihoods. The protection of community rights is recognized in Indonesian law (Table 1). ER initiatives are bound by law to address community access issues. 2  Table 1. National laws relating to the protection of community rights Law No. 39/1999 on Article 36 Human Rights (1) Every person has the right to own property, both alone and in association with others, for the development of himself, his family, nation, and society through lawful means. (2) No person shall be subjected to arbitrary or unlawful seizure of his property. Law No. 26/2007 on Spatial Article 6 Planning (1) Spatial planning must be applied with attention to: a. physical conditions in disaster prone regions of the Republic of Indonesia; b. natural resources potential, human resources, and man-made resources; economic, social, cultural, political, legal conditions, security and defence, the environment, and also science and technology. Article 17 Paragraph 4: The allocation of protected areas and cultivation areas as stipulated in Article (3) include the allocation of space for environmental, social, cultural and economic activities and defence and security. Article 48 (1) Spatial planning in rural areas is directed towards: a. empowering rural people; b. maintaining the quality of the local environment and the areas it supports; c. conservation of natural resources; d. conservation of local cultural heritage; e. maintaining permanent food crop regions for food security; and f. maintaining a balance between rural and urban development. Government Regulation Article 83 6/2007 Preparation of (1) In order to ensure that the benefits of forest resources are optimal Forest and Forest and fair, local community empowerment through capacity building and Management Plan, and provision of access is necessary as a means to improving community Forest Utilization welfare. (2) Empowerment of local communities as referred to in paragraph (1) is an obligation of the Government, provincial districts whose implementation becomes the responsibility responsible head of KPH. Article 84 Local communities as referred to in Article 84 paragraph (1) can be done through: a. village forests; b. community forestry; or c. partnership. Article 99 (1) Community empowerment can be implemented through the partnership referred to in Article 84c, in terms of: a. the forest area has a permit for forest utilization; or b. forest area in question has given the right to forest management to a state-owned enterprise (SOE) in the forestry sector. (Source: Adapted from Steni, 2010, p.21) 3 1.2.1 Ecosystem Restoration Regulations and Access Restriction 8. ER in forest areas is a new initiative in Indonesia, being stipulated under (1) the Government Regulation (PP) No.6/2007 and PP No. 3/2008 concerning “Forest Arrangement and Forest Management Plan and Forest Utilization”, and (2) the Minister of Forestry decree No. 61/2008 concerning “Minister of Forestry Regulation on Provisions and Procedures for Issuing Ecosystem Restoration Forest Timber Utilisation Permits For Natural Forests in Production Forests Through Applications”. 9. PP 6/2007, Article 1 No. 14, states that IUPHHK- RE is a business permit awarded for developing natural forest areas inside production forests, particularly those areas with important ecosystems, for the purpose of area development. A priority is to maintain forest function and its representativeness through activities of maintenance, protection and forest ecosystem recovery. This includes activities such as planting, enrichment, pruning and wildlife breeding, as well as re-introduction to restore biotics (flora and fauna) and non- biotitics (soil, climate and topography). 10. According to the Minister of Forestry decree No. 61/2008 ER is defined as: “Ecosystem restoration shall mean efforts in restoring biotics (flora and fauna) and non-biotics components (soil and water) in certain area with its original species, therefore, a balance of biotics and its ecosystem will be accomplished”. As indicated in the decree, all activities that are beneficial for the purpose of ER are allowed, while activities that result in ecosystem damage are not allowed, within the ER area. Therefore, ER programs are expected to limit access with regard to utilizing forest area and its products. 11. In December 2010, the Ministry of Forestry issued “Regulation (MENHUT II/P 50/2010) : Procedures For Granting Permits and Expansion Area Work Permits, the Use of Wood Forest Products (IUPHHK) in Natural Forests, IUPHHK Ecosystem Restoration or IUPHHK in Forest Plantation Forest Industry in Production Forests” replacing P.61 MENHUT II-2008. PP50/2010 revised the approval process of ERCs requiring an additional layer of recommendations from the sub- national level, both from the Governor and District head (Bupati). 12. According to the World Bank safeguard policies, if a project potentially includes limiting access toward natural resources, a Process Framework should be developed, which is also relevant to Operational Policy (O.P) 4.12 concerning involuntary resettlement. 13. As Table 1 above makes clear, ER concession license holders are required by law to empower local communities and develop mechanisms to ensure that there are transparent mechanisms in place to address issues that may have a potential negative impact on local communities. The ARPF provides guidelines concerning procedures that should be followed by ER license holders. These procedures include: identifying community groups that are vulnerable to changes in access to the natural resources, determining which activities will have a negative impact on community groups, developing participatory approaches to reduce negative impacts and a conflict resolution strategy, as well as creating a monitoring and evaluation strategy. 4 2. Program Description 14. The project consists of 4 components to be implemented over 4 years: • Component 1: Business Development in Ecosystem Restoration Concessions • Component 2: Policy and Administration of Ecosystems Restoration • Component 3: Knowledge and Experience • Component 4: Project Management 15. Component 1 relates to development of management frameworks and standards for mainstreaming biodiversity considerations into 6 ERCs yet to be identified and component 2 to assisting GOI with ERC policy development. In providing technical assistance Burung Indonesia (the implementing agency on behalf of MoFr) and the ERC applicant/holder has to follow the guiding principles of this ARPF. Component 1: Business Development in Ecosystems Restoration Concessions 16. The focus of this component will be on promoting the development of multi-product sources of income that can be derived from the ecosystem whilst restoring natural balances, incorporating these into management plans of ERCs, and establishing working agreements between concession holders and local communities concerning the sharing of responsibilities and benefits in the use and management of ERCs. This component focuses on the private sector’s issues and responsibilities. This component will be implemented by Burung Indonesia. Component 2: Policy and Administration of Ecosystems Restoration 17. This component is aimed at strengthening the capacity of Government at all levels to achieve the visions and objectives of its ER policy. The project will support three areas: policy and regulation, understanding of ER concepts and technical aspects, and monitoring of ecosystems and biodiversity status. The component is planned to be implemented by the Ministry of Forestry. Component 3: Knowledge and Experience 18. This component aims to ensure that information on best practices, frameworks and standards, current policy and regulatory issues is shared and exchanged among key interested parties in ER. This will be achieved by supporting the ER Forum in its discussions and activities, and through a communication and outreach program to ensure that documented experience is available to audiences directly concerned with ER. This component will be implemented by Burung Indonesia. Component 4: Project Management 19. The project will require the establishment of an office at the Ministry of Forestry’s headquarters in Jakarta to handle project administration, monitoring and evaluation, and liaison with Government. This office will also support the technical staff required for the project’s activities. Project management will be implemented by Burung Indonesia. 5 2.1 Planned Locations for Interventions by the Project 20. For applying the frameworks and standards, the project will work with 6 ERC concession holders/applicants’ sites in Indonesian production forest, to be identified during project implementation. The sites will be determined when the government issues the ERC licenses that are expected in 2012, and the ERCs benefiting from the project’s support will be selected on the following basis: (1) the management plans as submitted to the Government in support of the application for the license fall short of the full integration of the multi-use restoration concept developed by the project; (2) the concession area contains globally important biodiversity; and (3) the concession company has expressed a commitment to proceed with the management approach of the project. (4) The concession company must agree to implement the safeguard policies in the ERC as described in the safeguard instruments for this project 21. In addition to the specific ERC holders/applicants’ sites chosen for technical assistance by the project, it is envisaged that the ESMF, IPPF and ARPF could be applied to ERCs more broadly in Indonesia through the development of biodiversity management frameworks and standards hopefully to be adopted and endorsed by the MoFr, ERC applicants and local communities alike. 2.2 Institutional Arrangements 22. The Minister of Forestry approves ERC licenses and is responsible for the implementation of P.50/2010. At the provincial level, the Governor provides a recommendation for the ERC license to the Ministry of Forestry based on technical advice from the Provincial Forestry Agency concerning the location of the site and flora and fauna. The letter of recommendation from the district head (Bupati) is limited to ensuring that there are no overlapping permits for the site. During the life of the project, ERC concession holders are expected required to coordinate and consult with the provincial and district forestry agencies on site level issues and provide periodic reports. 3. Access Restriction in Ecosystem Restoration Concessions 23. The target group is all communities especially vulnerable community groups, indigenous communities and indigenous peoples as stipulated in the IPPF, that use resources coming from within the ER concession. Vulnerable groups are considered to be poor people, who do not possess land, with their life being dependent on forest resources to obtain an income. 6 24. Forms of access limitation, or activities that are allowed and not allowed inside the ER area, are in accordance with the Government Regulation (PP) No. 6/2007 and PP No. 3/2008. Table 2 below presents the activities that are allowed and that are not allowed in an ER concessions. Table 2. Activities that are allowed and not allowed to be undertaken in the ER concession Activities Regulation Allowed Not allowed Remarks Ecosystem P.61/Menhut- Native species Non-native species Restoration II/2008 activities Utilization PP Cultivating medicinal No negative impacts Limitation of total of forest No.6/2007 plants towards biophysics and area for area Article 32 Cultivating ornamental socio-economy processing plants No use of mechanical Cultivating mushrooms or heavy equipment Breeding bees No development of Breeding wildlife any facilities that Breeding swallow bird change the landscape nests Non timber PP - Rattan, sagoo, nipah and Protected wildlife and For non timber products No.6/2007 bamboo, including flora stipulated under forest products utilization Article 43 planting, harvesting, the Act (UU) No. except protected and 49. enrichment, maintaining, 5/1990, concerning wildlife and flora, and product marketing conservation of natural a maximum of 20 activities resources and the ton per - Sap, bark, leaves, fruit or ecosystem household. seeds and eaglewood, including harvesting, enrichment, maintaining, and product marketing activities Ecosystem PP Water flow service and No changes to the services No.6/2007 water landscape utilization Aricle 33 Ecotourism No damage to Biodiversity protection environmental elements Saving and protecting And/or not reducing its the environment main function Absorbing and/or storing carbon Timber PP Timber products Timber collected is not utilization No.6/2007 harvested to support the to be used for any Article 31, development of public commercial purposes. and 45 facilities for the local community, at a maximum of 50 (fifty) cubic meters, or to fullfil individual requirements, at a maximum of 7  20 (twenty) cubic meters for every household. 25. The above limitations will have an impact on community groups that utilize the concession area and its products, both timber and non-timber, including water. There are communities that utilize the forests for agricultural purposes but this is not reflected in the ER regulations. Also, activities undertaken by communities that are using land inside the concession needs further clarification, along with the actual impact of these activities for the ecosystem and the accomplishment of equilibrium within the production forest. Guiding Principles 26. ER concession holders will need to ensure that affected communities, including IPs, are consulted and actively engaged in all decision-making processes, especially when project intervention poses potential adverse impacts to them as a community. During consultation, broad community support will be required. 27. Consensus of all affected communities must be determined in accordance with their respective laws and practices, free from any external manipulation, interference and coercion, and obtained after fully disclosing the intent and scope of the project activity, in a language and process understandable to the community. The conduct of field-based investigation and the process of Free and Prior Informed Consultations leading to broad community support, if so required, will take into consideration the primary and customary practices of consensus- building. 28. The ERC manager must ensure that none of the activities of ERCs will damage non- replicable cultural property. In cases where i.e. roads, irrigation, etc. will pass through sites considered as cultural properties, the ERC manager must exert its best effort to relocate or redesign the project, so these sites can be preserved and remain intact in situ. 29. The communities should be consulted to ensure that their rights will not be violated and that they are compensated for the use of any part of their domain, in a manner that is acceptable to them. 30. Where ERCs’ operations pose potential adverse impacts on the environment and the socioeconomic-cultural-political lives of these communities, communities must be informed of such impacts and their rights to compensation. In the event that communities must move, their livelihoods must not be worse off. 31. Should communities grant their approval for ERC operations with adverse impacts, the implementing unit must ensure that affected communities are included in the development of action plans so they may meaningfully participate in the implementation, monitoring and evaluation of the mitigation measures agreed upon. 32. Project implementers must adhere to the requirements for documentation of meetings conducted with communities, especially those related to the Free and Prior Informed Consultations leading to broad community support. 8 33. Dedicated meetings shall be conducted for purposes of monitoring and evaluation of mitigation measures. 3.1 Institutional Setting 34. The project implementer is Burung Indonesia. Burung Indonesia will provide technical assistance to 6 ERC license holders for them to better manage ERCs while taking into account access restriction and local livelihood aspects. As part of this project, Burung Indonesia will prepare MOUs, acceptable to the World Bank and MoFr, with participating ERCs which will be part of the requirement for ERC license applicants/holders before TA can be provided by the project, 35. MOU. The project will work under memoranda of understanding (MOU) between the project Steering Committee and the ERC license applicant/holder, on terms acceptable to the Bank. Commitments will be made under these MOUs for companies to incorporate biodiversity management and community benefit sharing into the management plans, and annual work plans for the concessions. Under these agreements, the project will provide TA to identify the opportunities for payments for ecosystems services and for small business in non-timber forest products, and will make recommendations for maximizing the returns from these sources of income to be incorporated into the technical operational plans for the concession area. Recommendations will also be made on community participation in protection and restoration activities, small business opportunities using concession resources, and benefit sharing of payments for environmental services. The ERC license holder/applicant will agree to adhere to the environmental and social safeguards, and prepare the site specific ESMP and IPP and/or site specific ARPF as required. 3.1.1 Procedures 3.1.1.1 Identifying community groups 36. Identifying the community groups and the extent of their dependence on the ERC area is required as per the ESMF. A profile of the community groups is necessary, including their origin, place of living, number within the community, socio-economic conditions, the relation and social structure among community members, and their interactions with the ERC site (including usage of land or forest products). The community groups are then categorized based on their needs, which is used to set priorities and approach strategies for developing agreements. In case Indigenous Peoples are found to be present in or around the ERC site, an IPP will need to be prepared in alignment with the IPPF. 37. When categorizing the community groups based on origin, it is necessary to distinguish between indigenous people and new migrants. Community groupings based on place of living are determined by the distance of their houses to the ERC location. For categorizing community groups based on socio-economic conditions important divisions include land ownership outside the ecosystem restoration area, level of household income and livelihood 9  sources. Community groupings based on the level of interaction with the ERC area are determined by the activities inside the ERC area, such as gardening or farming, collecting forest products and mining. 38. After categorization, the management of the ERC may determine which community groups will be prioritized for discussion concerning the possibility of limitations to access in the ERC area, including any possible impacts, and their solutions. 3.1.1.2 Study on forest zone usage and forest products and the impacts on ecosystem restoration 39. The study’s objective is to observe and analyze the impacts of any activities that may be undertaken by the local community within the ERC area, including impacts on the biodiversity and biophysical conditions (rivers, water sources, forest vegetation coverage, soil condition and micro climate). After analysis, the level or magnitude of impacts on the ERC area, including any short, medium or long term consequences will be determined. Such a study will determine the activities that can be undertaken without any impacts on the ERC site, and those activities that must be discontinued. 3.1.1.3 Study on the possibility of access limitation 40. This study aims to observe activities that are carried out by local communities, to compare them with the results of the study concerning forest area utilization, and to evaluate these results with current regulations concerning allowable activities within the ERC area. The purpose of this study is to review the options of access limitation and to determine the affects to the local community if access limitation within the ERC area is applied. 41. The study will be carried out collaboratively with the communities, in accordance with the categories previously described. Some examples of possible review results concerning limitation access are presented in Table 3 on the following page. Table 3. Review of the consequences of limitation access to the ecosystem restoration area Type of Impact toward Comformity Options to Community Possible Activity ecosystem with access group affected impacts for the restoration regulations limitation by access community area limitation Illegal gold River pollution Prohibited Mining is Miners (labor, A loss of mining Danger for gradually collectors, income. (PETI) wildlife that closed; security, drink river water Law investors) enforcement Plantation Degradation of Intensive All Farmers Closing or forest coverage agriculture and plantations plantations will agriculture Prevent the monoculture is are closed; affect the activities achievement of not allowed Plantations income of the 10 inside the equilibrium for are also farmers area the ER area closed in surrounding areas with critical ecosystems Utilization Non timber Less than 20 Harvesting Farmers Prohibiting of non forest products tons per of non timber collecting non farmers will timber will run out if household forest timber forest result in a loss forest over harvesting products are products of income products occurs not allowed; Prohibition on non timber forest products if they decline in number Timber Over-harvesting Prohibition on Law Illegal loggers Threatened harvesting of timber will illegal loggers enforcement Villagers for legal sanctions, prevent the No more than 50 towards developing loss of income achievement of m3 for public illegal public facilities equilibrium for facilities and 20 loggers Villagers for the ER area m3 for building houses individual purposes, and never for commercial reasons 3.1.1.4 Developing strategies for reducing negative impacts due to access limitation 42. The manager of the ERC area will facilitate discussions with communities concerning strategies to reduce any negative impacts due to the implementation of access limitation to the ERC area. Discussions should be participatory: a) Determine the consultation strategy inclusively so that everybody (including the traditional community, traditional organizations, and any other local community organizations) has an equal opportunity to voice their concerns. b) Using consultation methodologies that are appropriate to the social values and culture of the impacted community, as well as providing attention to traditional women’s groups and other vulnerable groups, such as children, senior citizens and those with physical or mental disabilities. c) Providing complete and relevant information, which includes concept and planning, as well as the review of the results concerning the potential impacts during and after the implementation of ER activities. This information must be in a language that is easily understood by the impacted community. 11 43. Topics for discussion include options to manage any negative impacts due to access limitation. It is also necessary to discuss the criteria of target groups that will need facilitation. 44. Table 4 on the following page presents an example of discussion results that may be used to formulate strategies for managing or reducing any negative impacts due to access limitation. Table 4. Strategies to manage or reduce any negative impacts due to access limitation Type of Forms of Community Possible Criteria of Options for Activity access groups affected impacts for target groups managing limitation by access communities to be negative impact limitation facilitated forms Illegal gold Prohibited Miners (labor, Losing income Labor and Raising mining (PETI) collector, sources investor awareness secutity, Developing investor) environmently friendly mining practices for villagers Plantation or All plantations Farmers Prohibited Farmers Developing agriculture are closed, farmers will possess no land partnerships in activities inside including lose their in their village agroforestry the area those in the income sources Farmers have Developing surrounding no other activities in the areas that have income sources village to critical provide ecosystems alternatives for income sources. 45. If the manager of the ERC area has differences or disagreements with any affected communities concerning the management of negative impacts due to access limitations, the manager of the ER area must conduct negotiations with the local community to resolve the differences or disagreements. 3.1.1.5 Developing the site specific ARPF and action plans 46. In cases where the preliminary social assessment carried out as part of the ESMP preparation indicates individuals or communities living in or around the proposed ERC, or making use or resources from the ERC area, the ERC license holder/applicant wishing to benefit from TA to be provided by the project will need to prepare the site specific ARPF to the satisfaction of the Bank before TA can be provided. The ARPF will define detailed implementation 12  arrangements. Prior to developing the ARPF, the ERC holder/applicant will need to develop a ToR, which will need a “no objection” from the Bank task team. The finalized ARPF will also need the Bank task teams “no objection”. In cases of economic displacement, a Livelihood Action Plan will also needs to be developed after the site specific ARPF by the ERC license holder/applicant. In case of physical displacement, a Resettlement Action Plan will need to be prepared by the ERC license holder/applicant. 3.1.1.6 Developing mechanisms to deal with complaints and conflict resolution 47. Action by the ERC license holder/applicant is required to design a complaint mechanism that will allow complaints from the affected community or communities to be heard and addressed in a fair, equitable and transparent fashion. The mechanism must also be easy to understand, in keeping with local traditions, be gender sensitive and be accessible to the entire impacted community, at no cost and with no service fees. The affected community will be provided with appropriate information concerning the mechanism. 3.1.1.7 Monitoring and reporting 48. The manager of the ERC area will monitor and measure the progress concerning the implementation of the resulting agreements regarding restricting access to the ERC site. The World Bank task team will provide implementation support and monitor adherence to the safeguards instruments prepared and approved. The monitoring and evaluation of limits on ERC access should be participatory so that there is agreement concerning indicators to be measured and mechanism to be undertaken. 49. If there are ER activities that do indeed generate significant negative impacts for the community, the ERC permit holder should seek out a neutral third party to mediate an acceptable outcome in order to ensure fairness in the process. 50. The ERC permit holder will also prepare regular progress reports concerning the agreement and its implementation progress. The report will be submitted to the implementing agency Burung Indonesia with CC to the World Bank task team , but it will also be provided to the local community in a format and language that is easily accessible. 13