What we can learn from CARBON TRADING AND ITs IMPLEMENTATION? (A CASE STUDY IN ULU MASEN ECOSYSTEM PROJECT, ACEH, INDONESIA)

A. Legal Certainty (Legal guarantee):

Approval letter from the Minister of Forestry;

Ø Should be referred to National Act number 11/2006 about Pemerintahan Aceh (the Aceh Administration System)

Ø Minister of Forestry ‘s degree on REDD

B. Due Diligence :

1. The ownership of the carbon stock;

Ø State forest/land?

Ø Private forest/land?

Ø There is no field clear-marker / boundary

Ø Overlapping between official map used by forestry agencies and map used by BPN (National agency managing land certificate for non-state forest)

Ø Phylosphical value of ecosystem concept. Ecosystem does not refer to administrative based, indeed of imaginary.

2. The boundary of the Ulu Masen Ecosystem (UME) or Physical boundary of the project.

Ø There is no a nationally legal degree issued for the UME

Ø A necessity for a Provincial degree stating the strategic value of Ulu Masen region based on UU 26/2007 (Spatial Planning) and UUPA.

Ø A necessity for aerial and terrestrial work to construct state forest land-used marker and non-state forest land (private land).

3. Profit sharing mechanism. Some conflicts might occur in;

Ø National vs Provincial

Ø Provincial vs district

Ø Government vs Local people organization

Ø Government vs Private company

Ø Recently, there is no any global profit sharing mechanism agreed by parties

4. Lack of understanding of local staff on due diligence detailed aspects;

Ø Involvement of Provincial/district public servant, particularly Dinas Kehutanan (Forestry Service)

5. Entitlement of land in the area of forest, rights to transfer of title, concension rights of central government, and right to sell carbon stock, right to enter into the contract with foreign parties.

Ø Legal agreement between the GoA and third parties should be socialized before further field implementation

Ø There is no provincial formal entity bodies to manage some part of proposed land in Ulu Masen region in accordance to the Ministry of Forestry decree number 30/2009. In fact, the UME is constituted by some difference forest management unit.

Ø There is no any global agreement on carbon prices

Ø The GoA needs to prepare research on;

a. BCA on sustainable timber management vs sustainable carbon stock management.

b. Verification method

c. Who will be the Verifier?

d. What Methodology will be employed on carbon accounting

6. No official governmental lawyer who has a good capacity to deal with carbon transaction;

Ø Not just governmental lawyer. All related governmental agencies should be incorporated and empowered, particularly member of staff of Dinas Kehutanan, Environmental Protection Agency, Estate Crop, Agriculture, Aceh Board for Infestation and Promotion,

Original Slide Presentation written by:
RASYID & NURDIN
Reviewed by KLA & IHD

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REDD and Aceh Green Commision: Challenges

Since the signing agreement/understanding on carbon trade with some parties, the Aceh Governor, of Indonesia, has become more popular in the world. The agreement bound a partnership with private companies such as Carbon Conservation Ltd (CC) and Merryl Lynch initiating restoring and funding scheme. The CC’s contract focuse in the Ulu Masen Conservation (UMC) region while the Sustainable Forest Management(SFM) ltd. Is applying for an investment right in the Leuser Ecosystem Region.

Something funny in the recent world scheme of carbon trading, more popular called as the Reduction Emission form Deforestation and Degradation (REDD). Though the legal implementation will be conducted after 2012, many financial private company, known as Trans National Corporations (TNCs), claim a particular forest region in some nations as their project location. For example, as shown in their website, the SFM claim the Leuser Ecosystem Region (LER), of Indonesia, as their project area while in fact their proposal is still being processed by the Aceh Investment and Promotion Board. Stating the LER as their project area may block other international parties to participate in.

Domestically, the legal status and mandatory indicators of some potentially forested area of Aceh, for instance, the LER, the UMC, and Tripa swamp, is not clear yet to be incorporated as global REDD scheme as shown in Progress REDD table for some potential REDD or CDM in Aceh, of Indonesia. The REDD Proposal for the Ulu Masen Conservation region have passed audit process by smartwood but the management board is not yet formed. A management board for The Leuser Ecosystem exists but other conditional indicators have not been established. The Tripa swamp has project plan proposal but it has no management board.

It is obvious that the REDD philosophy, its potential for caring Aceh forest and the challenges are not yet socialized among provincial environmental stakeholders. Some prospectors, NGOs and government’s departmental leaders simply saw provincial forest as source of money throughout the recently unclear global REDD scheme. Support the REDD idea with avoidance of other socio-economic function of forest land. Other parties are opposing the REDD regarding local people rights (carbon rights), being afraid for the weakening of their institutional power.

To be work well, the Aceh Government need to synchronies’ national Acts and other policy with provincial legislation. Unfortunately, no one provincial legislation have been enacted. Recently, a Governor’s degree is being processed and parallel with the formulating of the Commission of Aceh Green. In accordance with the Department of Forestry (DoF) of Indonesia’s REDD commission, the Aceh Green Commission should be more perfect and more effective as it will be implemented at more specific area.

Do you have any idea? Please read the DoF’s document and share your opinion.. We will discuss it later for our better global environment.

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