Institutional Mechanisms for REDD+ - Case Studies Working Paper

provided by Yayasan Puter was not explicitly linked to REDD+ or to PT-RMU is very important to reducing
bias and managing community expectations. Once the ERC is granted and PT-RMU is ready to begin
negotiating with communities, they will be more empowered with an understanding of their rights and
options.
However, there remains an outstanding question about what ―consent‖ and ―prior‖ mean in this context,
given that the FPIC process will be carried out only after the ERC has been awarded. If a community chooses
not to consent to the project, they will not have any alternative options regarding the land use of the project
area. Lack of consent does not imply that the ERC will be revoked on the lands claimed by the community.
Nonetheless, given the uncertainties and financial risks associated with applying for an ERC, it is not
surprising that PT-RMU is unwilling to invest in a full-scale FPIC process before the license is secured.
5.5.4 EFFICIENCY OF BENEFIT SHARING SCHEMES
Neither project has established a formal payment or benefit distribution system. Thus, they remain difficult to
assess from an efficiency perspective. In Sumberjaya, the consolidation of farmers into HKm groups serves
to reduce transaction costs that would be borne by a project developer. However, transactions costs are
subsequently transferred to the farmers who must commit resources to organize, administrate, and monitor
their group. It is currently uncertain whether the Katingan REDD+ project will seek to establish an
intermediary for its benefit distribution scheme, or if it will work directly with the 30+ communities
surrounding the project area.
5.5.5 EFFECTIVENESS OF BENEFIT SHARING SCHEMES
The HKm model has effectively delivered benefits to the coffee farmers of Sumberjaya through secure, longterm
land tenure in return for conserving the ecosystem in the affected areas. However, there is currently little
evidence to suggest that this approach has improved environmental performance rather than formalizing the
status quo. The RiverCare pilot program demonstrated that communities will implement improved
environmental practices when an additional incentive is provided. However, there is currently no
environmental service ―buyer‖ who would be willing to provide these incentives across a larger scale and in
the long term. According to the PLTA representative, the company doesn‘t have the ability to implement
RiverCare across all seven sub-watersheds that feed its dam. Rather, it sees a role for the provincial
government to recognize the district‘s role in providing ecosystem services for the entire province, and to
allocate resources accordingly.
The conditionality of potential payments or benefits under the Katingan REDD+ project are also unclear at
this stage. Since communities are not currently a significant driver of deforestation or degradation in the
project area, REDD+ benefits are being seen as an opportunity to finance alternative livelihoods rather than
as an incentive to change behavior. Since benefits are not linked to a clear opportunity cost borne by
communities, it is difficult to estimate how much compensation communities should receive. If higher
opportunity costs manifest in the future due to emerging trade-offs between community development and
forest conservation, it is possible that originally negotiated benefit levels will become inadequate.
5.5.6 EQUITY OF BENEFIT SHARING SCHEMES
The primary equity concerns with respect to the HKm model concern the accessibility of the program.
Without intervention by an NGO, the program is more accessible to communities that are more socially
connected (i.e. have means to become aware of the program) and have the resources to invest in a lengthy
and complicated application process. Once a community receives an HKm permit, the primary benefit in
terms of secure land tenure is shared equally by the group members. However, engagement in additional
programs such as RiverCare raises new risks with respect to elite capture of benefits.
It is difficult to assess the equity aspects of the Katingan REDD+ project at this stage. It remains to be seen
what benefits communities will receive and how those benefits will be divided between and within
110 PRRGP INSTITUTIONAL MECHANISMS FOR REDD: CASE STUDIES – WORKING PAPER