Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Lessons from Indonesia’s Reforestation Fund


Published on

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, Thailand

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

Lessons from Indonesia’s Reforestation Fund

  1. 1. Lessons from Indonesia’s Reforestation Fund<br />Ahmad Dermawan<br />14th International Anti Corruption Conference (IACC)<br />Bangkok, 11 November 2010<br />
  2. 2. Climate change and REDD+<br />REDD+ offers an opportunity to create new revenue flows by protecting standing forests and rehabilitating degraded forests<br />However, many of the most likely recipients of REDD+ funds do not have a positive track record in the governance of public financial management<br />
  3. 3. Source: Transparency International<br />
  4. 4. Lessons from Indonesia’s Reforestation Fund<br />Financial management and revenue administration<br />Capital subsidies and accountability<br />Corruption and fraud<br />Transparency and accountability<br />
  5. 5. Financial management and revenue administration<br /><ul><li>Until 1998, the Fund was managed outside state budget, with limited reporting
  6. 6. Transferred partially to regions since 2001, but regions have limited capacity to manage it</li></ul>Influx of REDD+ funds could place new pressures on institutions that have demonstrated limited capacity for financial management and governance<br />
  7. 7. Capital subsidies and accountability<br /><ul><li>During 1990-1999, approximately $1 billion of the Fund was used to support timber plantation development
  8. 8. Most subsidy recipients did not fully plant their plantation sites, and have not fully repaid their loans</li></ul>Since these companies may apply for REDD+ projects, tit is important to carefully consider implications if REDD+ participants fail to meet obligations<br />
  9. 9. Corruption and fraud<br /><ul><li>Some recipients of subsidies ‘marked up’ their investment costs or overstated their planted areas
  10. 10. Since 2001, corruption related to the Fund has become decentralized</li></ul>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<br />
  11. 11. Conclusions<br />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<br />Keeping track records of actors involved in REDD is necessary to avoid irresponsible actions<br />Strengthening and mainstreaming anti-corruption initiatives is key to making REDD+ work. REDD+ ‘readiness’ should strengthen Anti-corruption actions<br />MRV principles should also be applied to financial management and governance, not just carbon emission reductions<br />
  12. 12. Sources<br />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.<br />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.<br />Transparency International. 2010. Corruption Perception Index 2010 Results.<br />
  13. 13.<br /><br />