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

1. Lessons from Indonesia’s Reforestation Fund Ahmad Dermawan 14th International Anti Corruption Conference (IACC) Bangkok, 11 November 2010

2. 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

3. Source: Transparency International

4. Lessons from Indonesia’s Reforestation Fund Financial management and revenue administration Capital subsidies and accountability Corruption and fraud Transparency and accountability

6. Transferred partially to regions since 2001, but regions have limited capacity to manage itInflux of REDD+ funds could place new pressures on institutions that have demonstrated limited capacity for financial management and governance

8. Most subsidy recipients did not fully plant their plantation sites, and have not fully repaid their loansSince these companies may apply for REDD+ projects, tit is important to carefully consider implications if REDD+ participants fail to meet obligations

10. Since 2001, corruption related to the Fund has become decentralizedDonors 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

11. 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

12. 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

13. www.cifor.cgiar.org www.forestclimatechange.org