PAYMENTS FOR WATERSHED

PROTECTION SERVICES: The Case of the Segara Basin in Indonesia

Shobha ShettyRural Development and Natural Resources Department

East Asia and Pacific Region, The World BankWater Week 2004: Session: 16 - February 25, 2004

Background

n Water resources in Indonesia under increasing pressure – deterioration in water availability, quantity, and quality

n In general, no direct links between water charges paid by downstream users and investment in watersheds upstream

n Ongoing reform in the water sector (Bank’s WATSAL)

The Segara Basin – W. Lombok

n Lombok – east of Bali , with the island of Sumbawa makes up the province of NusaTenggara Barat (NTB)

n Population ~ 3 million; area 4738 sq. km of which paddy (rice) is about 120,000 ha (1200 sq. km)

n Irrigation – 2 dams, 114 weirs, 2154 small dams + 113 springs

n Segara basin – district of West Lombok in NTB area of 132 sq. km (RF – 2000 mm to 3800 mm)

Nusa Tenggara Barat

DKI Jakarta

KotaMataram

Nusa Tenggara Barat

DKI Jakarta

KotaMataram

Nusa Tenggara Barat

DKI Jakarta

Kota Mataram

Financing Watershed Protectionn Largely regarded as cost-centered in development

– this understanding influences how the stakeholders behave towards watershed resources

n Watershed degradation – critical problem for dnstream communities – soil erosion, flooding, unstable water supplies

n Key agencies – govt. depts engaged in forestry and forest-related programs at national and regional levels.

n No use made of linkages between land managers upstream and downstream water users thus far

Changes in the Segara Basin: (I) Water Resourcesn Decrease in water flow, qlty since 1997 –

worsened after drought of 2002n Forest degradation - major erosion in 1999 and

sedimentation destroyed ag areas, water pipesn Irrigation canal flows diminished – imposed

irrigation controlsn Since 1998, rafting (Nov-April when flows are

high enough)n Decreasing flows, diversified use-demand – need

for new policies for water distn and allocation

Changes in the Segara Basin: (II) Forest Resourcesn Part of Moyosari wshed – includes Rinjani N.P

and Monggal production forestn Before 1997 – Bentek community maintained as

reserve under collective regulation (“adat”)n PT Angkawijaya – forest extraction permit in

1997 (4000 ha clear-felled) – local communities started logging illegally in protest – induced destructive practices

n Post-Suharto reform era – base camp burnt, logging operation closed in 2000

n Local NGOs –community forestry pgms but no legal recognition yet

Changes in the Segara Basin: (III) Land Resourcesn Agriculture – 56%; avg. per capita income Rp

254,000/year ~ $32n Non-farm opportunities limited – drives farmers to

forests for high-value plantation crops (coconut, coffee, cacao) – encroachment issues

n Upland farmers – serious pest attack in 2001n Customary law – traditional rather than modern

Islamic – obliges community members to conserve forests

n Bentek – local law on NRM – clear formulation of rights and responsibilities of the community in forest mgmt - sustainable forest use

Existing arrangements

n Bentek village – financial arrangements independent of govt intervention

n Jong Planka spring (discharge of 70-100l/s) n Investments in basic social capital to promote

sustainable water use in the arean Major downstream buyers – PDAM and LIRCn Irrigation Service Fee/water tax – known and

accepted but concept of pymt for wshed protection new

Name of payment

Details/amt paid

Used for Received by Contributed by

Village devpt Bentek and Jenggala villages; Rp 600,000/yr

Meetings of Majlis Kerama Adat

Majlis Lombok Inter-Rafting Co. (LIRC)

Social Fund Ad hoc pymts depending on social activities

Tree-planting and other env. Activities

Upstream community groups

LIRC

Village devpt Rp 5 million Salaries of forest guards & local work on reviving and codifying traditional rules on env. protection

Upstream community groups

Drinking water company (PDAM)

Ngaji-Lawat Variable Berangkak ceremony – links forest protection to Koran

Upstream community groups

Downstream residents

Key Opportunities n Positive attitudes to environmental mgmt

(KMPPH, KMPL, Banjar) reflect the importance of NRM locally and commitment to socially-based rather than individually-basedmanagement mode

n Enabling new policy environment (esp. decentralization, water sector, less so forestry) pgm) facilitates local solutions to NRM problems

n Irrigation Service Fee/water tax – known and accepted but concept of pymt for wshed protection new and paradigm accepted by larger stakeholders

(PDAM, LIRC)

Key Constraints

n Lack of hydrological evidence – maybe less of a constraint in Indonesian context

n Some downstream water users are also poor (rice farmers)

n Uncertainty and resistance to change (upstream landholdings – avg. 0.3 ha; > 50% landless)

n Little or no management of health or environmental risks

Future Challenges

n PRA, Regional workshops have advocated and integrated approach – Govt (Forestry, Ag, Water) + upstream svce suppliers, water users, and third parties – wshed forum but will depend on district govt.

n Funding mechanisms – direct or indirect – need legislation to encourage environmental solidarity among water users to share in costs and benefits of watershed protection

n Licensing process for forest mgmt – land use integral. Legal backing required for sustainable use of former timber concession area

Future Challenges (contd.)

n Revitalization of local values for forest mgmt will be key – foresters from 5 sub-districts have established Perekat Ombara – a forum of traditional communities – will increase social capitalization

n Ultimately the formalization of any market-based or other pymt system for wshed protection will be primarily a tool for integrated river basin mgmtrather than an end in itself.

n Segara – test case – importance of bringing together stakeholders to negotiate rights and responsibilities over water