Harry Alexander Research Center for Climate Change (RCCC)

University of Indonesia

Sharing of benefits over the utilization of tropical rainforests:

Alternative financing for IP and the environment

Background

REDD in National & International Fora Indonesia is a mega-diversity, mega-rainforest and also rich in mega-cultural

diversity country

There is now scientific consensus that global warming is taking place and COP recognized the crucial role of reducing emission from deforestation and forest degradation (REDD) Plus.

Law and legal institutions in Indonesia changed in response to economic policies & global trends

At present, there are no agreed rules on REDD at the international level and the structure of a REDD mechanism is unclear

In line to obligations under the UNFCCC & the Kyoto Protocol, both the United States and Indonesia have undertaken independent programs to address climate change

The America Clean Energy and Security Act (ACES) sets progressively legally binding caps on GHG emmision of large of US emmiter. EPA, Secretary of State and USAID collaborate with countries on reducing emmissions from deforestation with target 720 million metric tons in 2020 and 6 billion metric tons in 2050

Challenges More- over, a majority of submissions for REDD+ readiness

funding from the World Bank did not adequately address

governance challenges, such as tenure, benefit sharing, and local

engagement (World Resources Institute, Washington, DC, 2009)

After feedback from donors, some proposals adopted the language

of local participation and benefit sharing (Forest Carbon

Partnership Facility, www.forestcarbon-partnership.org/fcp/ )

The UNFCCC does not currently mandate safeguards, benefit

sharing, or local involvement (World Agroforestry Center,

Nairobi, 2010)

Carbon markets seeking cheap verifiable credits will have little

incentive to create local partnerships

REDD+

....policy approaches and positive incentives on issue reating

to reduce emmissions from deforestation and forest

degradation in developing countries; and the role of

conservation, sustainable management of forests and

enhancement of forest carbon stock in developing countries

(UNFCCC Decision 2/CP.13-11)

Co-benefit

Forest Conservation

REDD+ action (political change & better

governance)

REDD+ action & forest governance

(forests & humans to adapt to CC)

REDD+ action (financial flow & socio-

economic benefit)

Manual MRF in an urban area

Semi-automated MRF in operation

ITTO Indonesia Program

Co-benefit

Benefit in addition ro reduce climate change:

1. Forest Conservation

2. REDD+ action (financial flow, socio-economic benefit:

reducing proverty, supporting livelihoods, stimulating

economic development)

3. REDD+ action (political change: better governance, less

corruption, more respect to right of vulnerable groups)

4. REDD+ action and forest governance could boost the

capacity of both forests and humans to adapt to climate

change

People & Forest

People & Forest

Perkembangan Terkini

Pemetaan partisipatif wilayah adat: 3,4 juta Ha 425 wilayah adat: rata-rata 10.100 Ha/wilayah adat

Tumpang tindih peta wilayah adat dengan kawasan hutan:

2,6 juta Ha (76,5%)

Overlap antara peta wilayah adat dengan PIPIB: 1,68 juta Ha

(49%)

Regitrasi peta indikatif wilayah adat anggota AMAN

di BRWA: 3,29 juta Ha

Total peta wilayah adat: 6,69 juta Ha

Pengintegrasian peta wilayah adat dalam One Map

Indonesia: 2,4 juta HA sudah masuk di Badan

Informasi Geospasial (BIG)

RAKERNAS 2013: percepatan pemetaan wilayah

adat sampai 2022 40 juta HA Abdon Nababan, AMAN, 2013

Indonesian Regulatory Landscape on REDD+

Law & Regulation on Climate Change

Law & Regulation on

Climate Change

Climate change law at the

area of intersection

between these three fields

toward development that

can last.

Environmental Law

(Forest, Water, Biodiversity)

Economic Law

(Trade, Investment, Competition)

Social Law

(Human Rights, Social

Development, Health Law)

REDD+ related regulations

UUD 1945

MPR Decree

Law/Parliament Act

Government Regulation

Minister

Regulation

Constitutions

Guidance

REDD+ related regulations

Local Regulations

Policies

6/07 38/07

46/08

DNPI

61/01

RAN GRK

71/11

Inv GRK

P. 68 P. 30 P. 36

Perda P2 P3

Implementing Regulations

General Law

Imp regulations

Technicall regulation

Regional

Regulation

President

Regulation

Law

3/08 28/11

61/01 K 25/11

Satgas REDD

P. 20

5/60 6/94 41/99 32/09

Carbon Right

Carbon Ownership - Indonesian Constitution

Carbon Right

Regulate HMN

Carbon Control by State

legal relations between persons and legal acts

concerning carbon

Implementation REDD+

legal relations between persons and carbon

Bundled

BAA 5/60

Unbundles

Sectoral Laws

The Indonesian 1945 Constitution, Article 33.3, placed land, water and airspace

including the natural resources, within the control of the state, to be used for

the peoples prosperity.

Carbon Rights

License

IUPHHK and IUPHHBK license

IUPJL license

IUPK license

timber and non-timber forest products (IPHHK and IPHHBK

license)

Land Title

State Forest Land

Customary Forest Land

(Hutan Adat)

Other Collective/Community Forest Land

Private Forest Land

Other type of land

Land status

Forest Area:

MoF responsibility:

Conservation Forest

Production Forest

Protection Forest

additional coordination with

Ministry of Agriculture,

Public Works etc. Required:

Conversion Forect

Non-Forest Area (district government)

TRSs Legal Foundation

No Requirements

1 Identify legal, traditional, or customary rights of all Project Participants to use,

control, or transfer any rights in or appurtenant to the lands in the Project

Area.

2 Demonstrate that all necessary agreements have been reached with all Project

Participants affirming the legal right of the Project Proponent

3 Demonstrate that the proposed activity or Project does not conflict with any

national or subnational REDD or similar programs or activities in the relevant jurisdiction.

4 Demonstrate that the award of The RFS Credit is not itself a violation of

applicable law

TRS is the worlds first fully integrated forest carbon credit standard, that can assure purchasers of

RFS Credits that sellers have the right to transfer carbon emission reductions for value under the

law in which the Project Area is located.

REDD Legal Framework

TRS

Legal Basis

Contract

REDD+ project

Legal Due Dilligences

Legal Opinion

Rightsholders Engagement

REDD+ stakeholders

REDD+ stakeholders are defined as "...those groups that

have a stake/interest/right in the forest and those that will

be affected either negatively or positively by REDD+

activities. They include relevant government agencies and

elected officials at various levels, formal and informal forest

users, private sector entities, Indigenous Peoples and other

forest-dependent communities (FCPF & UN-REDD, 2011).

The Project Participant

The Project

Participant

Project Proponent

Project Developer

Rights holders

Governmental Authorities

Rightholders

De Jure

Rightsholders

Holders of legal title to any land or any rights

Concessions Holders

Easements

Occupancy

De Facto

Rightsholders

Forest Users or Forest Dwellers

Indigenous Peoples

Local Communities with traditional or

customary rights

TRSs Benefit Sharing

Regulated Laws & Regulations

Negotiated

Contract

Benefit-Sharing

Benefit-Sharing

Management Considerations

Option 1 Regulatory

Centralized

Itemized

Now

Option 2 Negotiated

Localized

Packaged

Later

Regulated Benefit-Sharing

Three regulations dealing with REDD+ including dealing

with benefit sharing was constested by variety of stakeholders

REDD+ as Natural Resources?

REDD+ is compared to natural resources such as oil, gas and

minerals? Government should manage fund and ensure equitable and sustainable use of these funds to the benefit of

whole community

1. Traded internationally

2. NR are legally regulated

3. Commodity vs. Carbon credits, emmision rights, and

allowance and tradeable REDD+ benefits

The Way Forward

Communities should have control over local REDD+ design

and implementation. Governments may propose REDD+

sites, support low-emissions rural-development strategies,

and deliver payments and/or services as incentives

Local users should be given authority, information, and

support to determine whether they engage with REDD+, to

align

Donor should support REDD+ implementation the require

stakeholder involvement and benefit sharing provisions

Transparent and enforceable benefitsharing plans

Identifying and respecting de facto rightsholders

Beneficiries Identified

Detailed informed, prior, written consent protocols

Written Consent Contract Signed

Negotiation

TRSs Minimum Element of

Benefit Plan of Rights holder

direct or indirect monetary payments

inkind payments

cash, credit, inkind supplies or equipment, vouchers for health or education

the share of net benefits

the allowable expenses that may be deducted

Other incentives

Benefit Sharing

Government

Tax

Non Tax

De Jure

Rightsholder

Payment

Contract

De Facto

Rightsholder

Indonesian Customary

Law

Contract

SOCIAL DEVELOPMENT DEPARTMENT

Monetary Development Benefits

Examples:

Taxation

Royalties

Preferential rates

Revenue sharing

Development funds

SOCIAL DEVELOPMENT DEPARTMENT

Non-Monetary Development Benefits

Examples:

Allocation of fishing rights in reservoir

Priority hiring of local community members during construction

Upstart support of local companies

Capacity-Building

Training

Multi-Purpose Infrastructure

Rural electrification

Access to improved infrastructure

Legislative Model

Brazil Provisional Act No 2,186-16, 2001 (Title 7 -Articles 24 to 29)

Implementing Agency: The Genetic Heritage Governing Council, under the Ministry of Environment (aka The Management Council) Applicable to :Brazilian or Foreign institution who make economic use of product/ process from resource/ associated TK (Art 24) Ownership: To be specified in Contract for Use of Genetic Heritage and Benefit sharing Benefit Sharing provisions : Sharing of profits, payment of royalties, Access and transfer of technologies, licensing without cost, of products and processes Capacity building of human resources Punitive Action: Offender to pay compensation @ 20% of gross income of receipts from product/ royalties irrespective of IP rights

India Biological Diversity Act, 2002 and Biological Diversity Rules,

2004 Implementing Agency : National Biodiversity Authority Applicable to : Primarily for Foreigners Benefit Sharing : Access fee, Monetary benefits- upfront, milestones, royalty, Joint ventures, Product development; 5% of

assessed benefits to be given to NBA Ownership: Joint ownership wherever relevant Punitive Action: Varying from criminal prosecution to imposition of fines

Philippines Implementing Rules and Regulations on the Prospecting of Biological

and Genetic Resources (Department Administrative Order No.96-20), 1996- Articles 8.1(8, 9, 13), 8.2(2, 3, 4) Implementing Agency: Inter-Agency Committee on Biological and Genetic Resources (under Dept of Environment and Natural Resources) Applicable to : Both domestic and foreign bioprospectors, except traditional use Benefit Sharing : Equity remittances, submit performance, compensation, ecological rehabilitation bond on MAT, Regular reports, all discoveries of commercial product/s derived from Philippine GR to be made available to government and local communities, collaborative research with domestic institutions, royalty free access to technology, donate equipments Punitive Action: Varying from criminal prosecution (without required Agreements or PIC), cancellation or revocation of agreement (non-compliance measures) and duly reported to international forums.

Thank you

Harry Alexander (Legal Advisor at RCCC UI)