Law 6/2014 on Villages

Background, Content, Implications and Next Steps

PNPM Support Facility

May 2014

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Law 6/2014 on Villages• Villages have the constitutional right and authority to regulate and

manage government affairs, community interests, and customary and traditional rights (UUD para 18b.2) – MoHA supported a separate Village Las as part of the paradigm of villages as “self local-community”

• Compromise between village as self-governing community and lowest level of government

• Incorporates a number of key CDD/PNPM principles, including participatory village planning, community implementation of village-level projects, inter-village collaboration and improved accountability mechanisms

• Providing substantially larger direct allocations to villages (average $110,000 per village per year), a mix of APBN/APBD

• With the Village Law in place, communities will assume greater responsibility and control over village affairs, and be able to meet more of their development needs.

• The Village Law will become the new master framework for village development and community empowerment

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Governance

• “Village Government includes Village Head…who is assisted by Village Apparatuses” (Para 25). Separation of powers

• “A Village Head shall have the task to run the Village Administration, execute Village Development, provide Village guidance, and empower the Village community” (Para 26). Similar to in the past.

• “The Village Consultative Council shall have the following functions:

– discuss and agree Draft Village Regulation together with the Village Head;

– accommodate and channel Village community aspirations; and

– conduct oversight of the Village Head’s performance)” (para 55)

• “Members of the Village Consultative Council shall be representatives of Village residents based on territorial representation, the filling of which shall be done democratically” (para 56). Legislative powers, and elected.

• “The Village Assembly is a consultative forum attended by Village Consultative Council, Village Government, and Village community elements to deliberate on strategic matters in Village Governance (para 54): including Village regulation; Village planning; Village cooperation; Village investment plans; formation of Village-Owned Enterprises; addition and release of Village Assets; and extraordinary events” (para 55). Adopted from PNPM.

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Desain Kelembagaan Dasar Tata Kelola Desa

Musyawarah Desa

Kepala Desa BPD

Warga/Masyarakat

Perangkat

Desa

Panitia (ad-hoc)

BUMDes

Klp. Special Interest

Perwakilan Bagian

Wilayah Desa

• RPJM-Desa dan

RKP-Desa

• APB-Desa

• Peraturan Desa

• Kinerja Pemerintah

• Kerja Sama

• RPJM-Desa

• Asset Desa

• Hal-hal

Strategis

Prinsip Tata Kelola Desa

• Check and balances

antara Kepala Desa

dengan Badan

Permusyawaratan desa.

• Demokrasi perwakilan +

permusyawaran.

• Proses demokrasi

partisipatoris melalui

Musdes

Dipilih

langsung Dipilih secara

Demokratis

Lembaga

Kemasyarakatan/

Adat

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Financing• “The budget allocation designated directly to the Village [from APBN] is

determined to be 10% of and outside the Regional Transfer (Transfer Daerah] (on top), in stages” (para 72.2, elucidation)

• “Village fund allocations [from APBD] is at least 10% from the Balance Funds received by the District/Municipality in the APBD after subtracting Special Allocation Funds” (para 72.3)

• In 2014, 10 percent of national budget transfers to local governments will equal Rp59 trillion and 10 percent of Balance Funds minus DAK equals Rp45 trillion.

• If divided equally between Indonesia’s 73,000 villages, this would add up to the equivalent of Rp1.4 billion per village per year. Equals 5.7% of APBN

• In addition, own-source revenues and 10 % of regional taxes

• Consolidated into the village budget, the APB-Desa

• No major additional functions; just funds for development purposes

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Provinsi

Dana

Perimbangan

Program/Hibah

RPJMDes & APBDes

Kabupaten/

Kota

Indeks

Indikator

Alokasi

&

Pemanfa

-atan

SKEMA SUMBER-

SUMBER PENDAPATAN

DESA DARI PUSAT

1. DAD: 10% dari DAU + DBH

2. 10% dari bagian dari Pajak

& Retribusi

3. HIbah

Program K/L

APBN

Dana Transfe ke Daerah KL

KEUANGAN DESA

Pendapatan

Asli Sumber Lain

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Planning• “Village Expenditures shall be prioritized to fulfill the development needs

as agreed in Village Assembly and in line with priorities of the District, Provincial and Central Government. Development needs shall include, but are not limited to, primary needs, basic services, environment, and Village community empowerment activities” (Para 74)

• Consolidated into a single RPJM-Desa and RKP-Desa.

• “Village Development planning shall be organized by involving the Village community. The Village Government shall be obligated to hold Village Development Planning Consultations.” (para 80)

• “Local Village-scale development shall be implemented by the Village itself. Implementation of sectoral programs that enter the Village shall be informed to the Village Government in order to be integrated with Village Development” (para 81)

• “Desa Membangun” and “Membangun Desa”

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Accountability

• Upwards accountability– Annual Governance Implementation Report to Bupati

– But still very weak upwards accountability - no mention of audits

• Sideways accountability– Separation of powers – BPD not part of government

– Annual Governance Implementation Information Report to BPD

– BPD can oversee (but not xx), but some way to go make it effective

• Downwards Accountability– “Village community shall have the right to conduct monitoring of the

implementation of Village Development… including the right to obtain information regarding the plan and implementation of Village Development.” (para 82:1-2)

– “The Village community shall participate in Village Assembly to respond to the Village Development implementation report” (para 82:5)

• “Village community empowerment shall be conducted with facilitation in planning, implementation, and supervision of Village and Rural Area Development” – Importance of facilitators/pendamping

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Other Major Issues• Rural development and inter-village projects to be funded by

district and provinces, through coordination with villages

• Improved rules for establishing new villages, including (varying) minimum size of villages

• Customary villages recognized (Desa Adat), with their own governance arrangements. Mapping done by Pemda; regulated by Perda.

• Salary to all village officials. Village secretary no longer civil servant,. 3*6 years period for village head and BPD members

• Responsible Ministry is “Ministry in charge of Villages”, not necessarily MoHA

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Transformational Potential

1. An evolution of PNPM in rural areas to a village development

platform that addresses key GoI and community priorities, such as

basic education and health targets, social inclusion, DRM,

infrastructure, climate change, and rural livelihoods

2. Strengthen links between community and LG planning

3. Advancing a process of local government reform by allowing

villages to be responsible for planning, implementation, monitoring,

and outcomes of village-scale infrastructure and basic services

4. Improved PFM through performance grants to villages

5. Mainstreaming a model where facilitation and technical assistance

from private sector and communities work in partnership with

government for village development and delivery of public services

Risks and Challenges in

Implementation

1. The PPs are not in-line with the UU

2. Corruption and poor quality of outputs

3. Elite capture, social exclusions and community conflicts

4. Huge variation in capacity and size of villages in

Indonesia

5. Sectors and SKPD are crowded out and withdraw from

village development

6. Changing the role of 15,000 facilitators from project staff

to pendamping desa

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What’s Happening Now:

Implementation• Government regulations (PP) by May 2014

– PP on general village governance (by PMD)

– PP on village financing (by DJPK)

• Implementing guidelines (Permen) by Dec 2014

• Limited roll-out in 2015, full implementation in 2016

• Design of a national strategy for village capacity development and support system (incl. facilitators)

• Draft presidential regulation on Community Empowerment-based Poverty Alleviation Programs (PKPM, future PNPM?)

• New implementing arrangements for the Village Law and PKPM

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Implications for the Donor

Community• Possible substantial consequences for sectoral

projects– Realignment of support – must coordinate with village

government

– Support key line ministries in village-level interventions

– Coordinating with TNP2K to incorporate poverty lens

• Opportunities– Existing tools in sectoral and governance incorporated into

the PP

– Links to primary health care and education – performance-based village grants?

– Rural to urban linkages and agricultural livelihoods

– Climate change responses, NRM & Environmental mainstreaming

– CDD-based post disaster reconstruction

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National Village Forum

Magelang, 8 February 201414