This document summarizes Indonesia's Water Resources Law of 2004 and discusses some key aspects of water rights and water markets. The 3-sentence summary is: The document outlines Indonesia's Water Resources Law which regulates surface water, groundwater, and other water resources. It discusses the country's agency-based water rights system and efforts to allow some market mechanisms for water allocation through pilot projects. The document also examines challenges around establishing water markets including how to account for water's public good attributes and externalities like environmental and social costs.