Amid ongoing civil society protests against the process and substance of the Forest Investment Program (FIP) led by three International Financial Institutions (World Bank, ADB, and IFC), the Indonesian Forest Investment Plan document was approved by the FIP Sub-Committee Team on November 5, 2012, in Istanbul, Turkey. The approval of this Forest Investment Plan gives the green light for the development of various MDBs projects outlined in the document. The approved funds for Indonesia are 70 million dollars: 37.5 million dollars in the form of grants and 32.5 million dollars in concessional loans.

This meeting also approved the disbursement of preparation funds amounting to 1.3 million dollars for the following three projects:

1) Community-Focused Investments to Address Deforestation and Forest Degradation (CFI-ADD+), (ADB): US$ 500,000

2) Strengthening of Forest Enterprises to Mitigate Carbon Emissions, (IFC): US$ 300,000

3) Promoting Sustainable Community-Based Natural Resource Management and Institutional Development, (World Bank): US$ 500,000

The Indonesian government and MDBs are requested to consider the comments made during the meeting for the program and project development stage, as well as to review and respond to comments from civil society, indigenous communities, and local community groups. However, the timeline and mechanism for this have not been mentioned or announced by the Indonesian FIP Team and MDB representatives.

Various concerns about the process and substance of this forest investment program and plan have prompted civil society to continue monitoring these MDB projects, considering that historically, MDB projects have often caused issues for communities located in project areas, including various human rights violations.

Civil society’s critical notes on FIP highlight fundamental issues where FIP still relies entirely on problematic legal foundations, namely Forestry Law No. 41/1999, which does not fully recognize the rights of indigenous peoples and local communities living in forest areas. The FIP document also does not genuinely push for changes in forestry policies and review of other problematic natural resource policies mandated by TAP MPR IX/MPR/2001. This TAP MPR is merely superficially included in the FIP Investment Plan document.

Another fundamental issue is that FIP does not recognize and address the problem of the highly unequal distribution of forest control, leading to very high levels of control injustice. To date, the area of forestry schemes for communities is still below one million hectares, while the distribution of forest resources for the private sector exceeds 30 million hectares.

Other general notes include the weakness of the FIP document in addressing gender injustice issues in natural resource control; the lack of focus on illegal logging; the disregard for the historical role of international financial institutions themselves in driving deforestation in Indonesia; ignoring the economic-political drivers resulting from decentralization; a strong focus on markets that could potentially lead to market traps and new debt accumulation, and the unclear status of public comments and inputs in the final FIP document.

Specifically, civil society highlights differences in safeguard policy standards between each international financial institution and their separation from national safeguards (PRISAI) being developed; the ongoing problematic nature of units focused on intervention in the investment plan, especially Forest Management Units related to licensing issues; the imprisonment of indigenous peoples’ and local communities’ rights, including FPIC rights, by including various reservations such as ‘legitimate rights and valid community claims’ referring to formal-legal BAU requirements that do not provide justice to communities; the unclear ownership, responsibility, and accountability of programs; the disregard for ecosystem restoration issues; community-based forest management and debt risks; marketization through an imbalanced focus on community forests and community plantation forests; the unclear criteria for selecting pilot areas; and the continued vagueness of the definitions of various terms used.

Civil society’s submission of this FIP document is supported by HuMa, BIC, debtWatch Indonesia, ELAW Indonesia, AMAN, Solidaritas Perempuan, KPSHK, Forest Peoples Programme, IESR, Greenpeace, Walhi, AKSI, Ulu Foundation, Pusaka, Sawit Watch, with specific notes from Walhi regarding the feasibility of implementing FIP in Indonesia.

The full document of comments can be downloaded at the following link:

Civil Society Comments and Recommendations for FIP September 21, 2012

English Version

FIP Commentary and Recommendation Sept 2012- English