MFP Phase 3: 2012-2015 Working title

“Consolidating good governance in support of legal trade: integrating technical interventions that improve forest management and reduce the impacts of climate change ”

MFP 3 Design Team for

UK Climate Change Unit

UK Support for improving forest governance in Indonesia

DFID has supported various programmes in forest governance in Indonesia for a long time. MFP 3 builds on this history though its focus on the implementation of the VPA.

MFP was created 12 years ago to respond to the opportunities for reform which arose at the end of the Soeharto regime. It has adapted over time as the core challenges have changed. MFP 1 built capacity in civil society to respond to the political and administrative changes of regional autonomy. MFP2 responded to illegal logging and supported the negotiations which led to the VPA.

The ambitious commitments that Indonesia has made to reduce emissions to mitigate climate change require interventions that will further reduce forest conversion and degradation . The MFP Partnership between the UK and the GOI believes that comprehensive implementation of the SVLK will not only meet responsibilities under the VPA but will significantly improve forest management on the ground.

The Forest Governance Markets and Climate Programme: Global programme - £60m: 4 years

IMPACT: Improved management of forests for poverty reduction, biodiversity conservation and climate protection

OUTCOME: Governance and market reforms that reduce the illegal use of forest and benefit the poor.

OUTPUTS:

1. Multi-stakeholder engagement increased and sustained in producer and processor countries

2. Public policies and private business standards tackle trade in timber and other commodities sourced from illegal forest practices

3. Increased knowledge and momentum for change

4. Coherence between FLEGT and REDD programmes on forests and deforestation at national and international levels

Implementing FGMC in Indonesia: MFP Phase 3

OUTCOME:

Reduced illegal logging (unplanned forest degradation) and unplanned deforestation has helped reduce poverty, protect forest ecosystems and the environment and mitigate climate change.

OUTPUTS:

1. Responsibilities under the VPA between Indonesia and Europe ratified and implemented through industry wide adoption of SVLK

2. Support for local government and community stakeholders has accelerated the effective implementation of community-centred forest management , as prioritised in MoFor policy and legislation, in recognition of the economic importance of community based SME’s throughout the supply chain.

3. Certainty of access to forest and land resources, markets and technology, has been guaranteed for HTR-HD-HKm-licenced community groups, ensuring legality of timber and NTFP supply

Implementing MFP 3: Activities

OUTPUT 1: Responsibilities under the VPA between Indonesia and Europe ratified and implemented through industry wide adoption of SVLK

ACTIVITIES:

1. Consolidation and extension of SVLK Compliance through support for implementation of VPA Joint Implementation Strategy to minimise impact on trade with Europe after March 2013 (JIS, MoFor and multi-stakeholder task force).

2. Maintain and enhance credibility and effectiveness of the SVLK and VPA through continuing systems review and improvement to support the work of the JIC

3. Support and provide technical assistance to the establishment of the Licensing Information Units (LIU). Activity includes promotion of V-legal in domestic markets and information exchange and learning with other VPA countries (MoFor –BUK )

4. Support for training of extension workers, forest manager- advisors, auditors, and other actors in the SVLK process such as KAN ,Customs, Police, through enhanced capacity in PUSDIKLAT and assistance in curriculum development and review

5. Support for the independent monitoring of the operations of SVLK; and the assessment of social and environmental impacts of the VPA, on stakeholders in government, industry and community.

Implementing MFP 3: Activities

OUTPUT 2: Support for local government and community stakeholders has accelerated the effective implementation of community-centred forest management , as prioritised in MoFor policy and legislation.

ACTIVITIES:

1. Enhance implementation of GOI policies and the regulatory basis for community-centred forestry through refinement, revisions and additions in response to domestic and international trading experiences (MoFor- BUK lead with whole of government input and multi-stakeholder participation) .

2. Support for training and extension of technical capacity to community-based SME to enhance quality and legality of products and sustainability of forests. (MoFor – PUSDIKLAT lead with outreach to all levels of government , community and business stakeholders

3. Market development and marketing partnerships (MoFor, DKN, Industry bodies, Min SME, NGO’s, private sector)

Implementing MFP 3: Activities

OUTPUT 3: Certainty of access to forest and land resources, markets and technology, has been guaranteed for HTR-HD-HKm-licenced community groups, ensuring legality of timber and NTFP supply

ACTIVITIES:

1. In target provinces review the locations of permitted community forests and identify gaps in knowledge related to potential areas of dispute between these activities, and other land uses, particularly HPH, HTI, estate crops and mining (BAPLAN, BKLH,BAPPEDA, DinHUT.

2. In selected kabupatan, support multi-stakeholder process introducing new technologies for establishing agreed boundaries for community based forestry activities and support implementation (MoFor: Training and Education Centre, Extension Centre, BKLH, DinHut (Kab), NGO, Licence Holders and private sector).

3. In target provinces apply multi-stakeholder approaches to review and recommend land use management which responds to emerging areas of boundary dispute or uncertainty . Management instruments would include Forest Management Units (KPH) with lessons learnt from the continuing national KPH pilot implementation programme (BAPLAN, BAPPEDA, DinHUT, community licence holders, NGO’s, private sector) .

Implementing MFP 3: Resourcing

MFP 3 is being established in order to assist Indonesia to deliver its commitments under the EU-GOI VPA .The principal donor is the British Government through the UK Climate Change Unit representing DFID, DoE and DCC. Funding of GBP 9 million (approx $ 14 million) is proposed over 3 years. MFP 3, like its predecessor will be established as a multi-donor facility

There is potential for an UE contribution of Euro 5 million (approx $ 6.5 million) which could be channelled through DFID in support of MFP3. Other countries (e.g. United States, Australia, New Zealand, Norway) are also considering implementation of timber legislation which align with the EU and there is therefore potential to negotiate a future broader collaboration

MFP 3 acknowledges that the GOI through theJakarta Commitment wishes to ensure international aid produces mutually accountable outcomes through partnerships that optimise effectiveness through working together professionally. The design of the MFP 3 seeks input into optimising partnership through shared resourcing, work planning and professional linkages between project and agency staff.

Implementing MFP 3 – Organisational arrangements

Basic principle is one of partnership between international and national stakeholders now operates under MFP 2. The Partnership would be overseen by a Project Steering Committee which would include Donors and GOI members representing participating ministries (as for JIS) Joint Project Directors (Facilitators) would be approved and appointed the Steering Committee as for MFP2. A Service Providor will be selected by the UK and Indonesia based on a restricted tender arrangement. The Service Providor will be responsible for managing contracts which will provide technical assistance for the implementation of the Outputs. These may be different from the Service Providor itself and will be selected from tenders which will meet TOR for each Output. It is expected that Consulting services to MFP 3 will include national consultants complemented by international consultants in focused areas where international benchmarking will be required.

Thank you