Environmental Governance Policy Brief 51753 Decentralized governance poses enormous opportunities and challenges Regional autonomy has diffused the authority and responsibility for environmental management to a large number of government entities in the regions. This offers an opportunity to tackle local problems in a more accountable manner. However, this also presents an immediate challenge. The plight of natural resources and environmental quality are now dependent on local leadership, local institutional capacity and willingness to conform to national standards and regulations. The current picture across Indonesia is mixed, with some regions demonstrating astuteness with regard to sustainability, while others are opting for exploitation with short-term gains. Continued weak capacity, political will and law enforcement are contributing to economic losses, increased `natural' disasters and delays in welfare improvements, including sanitation services and public health. As such, any growth spurts observed in the regions may prove unsustainable in the long-run. Prambanan Temple, Central Java Photo: Winarko Hadi Environmental governance at the local that proposed reforms contribute to and deepen level remains inconsistent and weak local level transparency and accountability. Environmental management at the local level remains In such a weak administrative setting, demand for inconsistent. It tends to be effective primarily if and sustainability should, ideally , come from constituents when the central government has created sufficient at the local level. Local governments should respond incentives to encourage conformity with national to public's aspirations for expanded environmental policies, or when local leadership is conscientious and services, a clean environment and well functioning forward-thinking. ecosystems. Yet, in this arena, participation and voice from the public are also lacking. The Indonesian Challenges of environmental governance that population shows concern for a number of existed prior to regional autonomy continue environmental issues (such as water, sanitation and to persist. These include weak institutions and forests) but lack awareness of emerging issues (such law enforcement, overlapping licenses, conflicts as climate change, coastal and marine, clean energy, between sectors, poorly maintained cadastral records, hazardous waste). Further, environmental values and environment's often weak position relative are not deeply embedded in the societal values to other political and economic interests. Since and attitudes, leading to undervaluation of natural decentralization, these issues are compounded by resources and environmental services. The institutions additional challenges pertaining to: the relationships that should serve to bridge communication between between the central, provincial and district/ the public and the government are, at best, in municipal levels of government; unclear authority transition. Civil society organizations are challenged and jurisdiction; limited availability of funds for to reformulate their position vis-à-vis the state and environment management; and weak representation other sectors in society, and improve their credibility of public demands or aspirations for environment and accountability. The legislature needs to develop a quality or services. The complexity of the situation is culture and effective mechanism to communicate with reflected in continued degradation of natural resources constituents regarding demand for environmental and environmental quality since regional autonomy. quality and services; religious institutions need to play Central to the issue is that district governments a role in heightening environmental awareness and have little motivation and incentive for sustainable behavior among their followers; the media should environmental management. With inadequate increase the attention it pays to environmental issues, enforcement from the center and inadequate including decisions on development activities that are financing to achieve environmental objectives at the likely to adversely impact the environment and public local level, many provinces and districts are making welfare. new interpretations of existing rules, or else inventing entirely new regulatory procedures. While some of Signs of promise are evident in some these innovations strengthen environmental controls, local governments many relax them or bypass national standards entirely. There are some promising developments in local Since the line of authority and accountability between environmental governance. Such initiatives should be central and local government has been disrupted, supported and replicated. Examples include: district governments wait for specific incentives in the form of budgetary support (such as the Special · Political will: Some governors, bupatis and Allocation Fund). There are no formal standards for mayors have demonstrated considerable local government performance in environmental responsibility, political will and vision to promote management. And local governments still lack good environmental practices. Examples are: a) capacity to administer new functions and ensure the "Green Vision" by the Governor of Aceh, which 2 initiates logging moratorium and forest sector · Green community empowerment program: restructuring; b) peatland rehabilitation and Grants for renewable energy and natural resource carbon emission reduction efforts of the Governor management for a community-driven development of Central Kalimantan; c) forest management program (PNPM) have proven successful in Sulawesi, for sustainable local benefits by the Governor and are now being expanded to Sumatra and of Papua; and d) the Jembrana (Western Bali) Papua. A similar program is under development for district head's strong commitment to environment urban neighborhoods through the part of PNPM through regular and active use of EIAs. managed by the Ministry of Public Works. · Inter-agency collaboration: Some regions have · Spatial Planning: Island-wide spatial planning and initiated inter-jurisdictional collaboration to address strategic environmental assessments are among transboundary environmental issues. Examples are new tools being developed and applied in various the Brantas River Basin Mananagement in East Java, locations. the Balikpapan Bay Management Authority, the Ciliwung River Basin Plan, and the Greater Jakarta Towards stronger environmental Coordination Board for solid waste management. governance · Reputational programs: Reputational programs Improved environmental governance in a act as a bridge between national government decentralized setting will depend on a number of and local governments, and serve as national breakthroughs. Major policy changes with regard to motivators. Adipura, Prokasih and PROPER are authority and fiscal regime may be needed to drive creative voluntary programs initiated by the good environmental governance. This includes: Ministry of Environment to encourage participation · Environmental management based on of local actors and reward compliance with national geography. Water resource management should standards and goals. follow watersheds, rather than administrative boundaries. Management of special ecosystems ACCESS TO INFORMATION AND DECISION- (such as within national parks) should also transcend MAKING IS PART OF GOOD GOVERNANCE provincial and district level administrations. Expected impact: joint responsibilities become Good environmental governance requires the clear, mechanisms for inter-agency and inter- application of principles of transparency, participation and accountability in environmental planning and regional cooperation are built-in and established. decision-making. Prerequisites include: · Environmental fiscal reform, which allows · Access to information ­ every person has the right income from taxes to be earmarked for specific to access full, accurate and up-to-date information environmental tasks and activities, provides about the environment; incentives to change behavior, accounts for · Access to participation in decision-making ­ this external environmental costs, enhances resource includes access to participation in making decisions conservation and improves revenue collection in the policy and programs, legislative process, and specific subject matters; and mechanisms, more appropriate environmental taxing policy, which is based on poor environmental · Access to justice ­ the existence of a mechanism performance of companies. Expected impact: by which members of the public can directly uphold environmental law should their rights (to real growth can be measured, environmental information, participation and/or enjoyment of a protection and rehabilitation can be financed healthy environment) be infringed. and businesses feel the financial effect of their environmental behavior. 3 For further information, please contact: World Bank Office Jakarta Indonesia Stock Exchange Building, Tower 2, 12th floor Jl. Jenderal Sudirman Kav. 52-53, Jakarta 12190 - Indonesia Ph. 62-21 5299 3000 fax. 62-21 5299 3111 To download the full report "Investing in a More Sustainable Indonesia", visit our website: www.worldbank.org/id · New incentives and other financial schemes · Strengthen the role of media, legislature, that push local governments towards a more religious institutions, NGOs in communicating sustainable development program , including with the public to raise awareness, but also to more flexible financing options, such as the understand the public's needs, demands and Special Allocation Fund and BLU, i.e. long-range aspirations. financing facilities that encourage and allow local · Expand public access to environmental governments to plan for medium-term and long- information, participation and justice, including term funding, rather than the current restrictive clarifying and improving enforceability with annual funding cycles. Expected impact: phased regard to the fulfillment and upholding of these development or expansion of environmental rights to information, participation and justice. services can be planned and financed, and conservation is not considered a financial burden Expected impact: Citizens take individual action to the local government budget. to address environmental issues, and can form constituencies for improved efforts at the political Good environmental governance also requires and local government level. Decision-makers, both each stakeholder to fully understand their in the executive and legislative branches, become respective roles and execute their contributions knowledgeable of and consider the needs, demands to environmental management. Further effort is and aspirations of the public; and feel the pressure needed to: from NGOs and media if they fail to address them. · Clarify the roles and responsibilities between central, provincial and local governments, with Background information on CEA Report requisite systems in place to ensure environmental policies and strategies are implemented. The Country Environmental Analysis (CEA) report highlights underlying challenges to Indonesia's environment and management of its natural resources. A MORE SUSTAINABLE INDONESIA is one The initial purpose in preparing the report was to guide World Bank support to Indonesian institutions for where: more sustainable development. However, the report · The costs of environmental degradation and climate also provides information that may contribute to the change are lowered so that less wealth is diverted Government's medium term development plans under from growth; the policies of the new administration. · Good environmental management contributes to poverty alleviation by reducing impacts on the poor and better sharing of benefits; · Renewable resources are used sustainably while non-renewable ones are wisely developed for investment in human and physical capital; and · Citizens are aware of and participating in environmental issues directly or through their representatives and other organizations. Printed on cyclus offset (recycled paper) 4