Indonesia’s lessons for REDD+

Over the coming years countries with large expanses of tropical forests could receive funding worth billions of US dollars for projects that reduce emissions from deforestation and degradation (REDD). But will they be used wisely? CIFOR research, funded by the World Bank and the Australian Agency for International Development, looked at the lessons learned from Indonesia’s experience with its Reforestation Fund.

Financed by a levy on harvested timber, the fund has provided Indonesia with a multibillion dollar pot of money to support reforestation. It was frequently misused during the Soeharto era. Since the fall of Soeharto in 1998, there have been significant reforms, and the fund is now subject to periodic audits. Yet problems remain, says Chris Barr, co-author of Financial Governance and Indonesia’s Reforestation Fund. ‘Although the government has taken some impressive steps to improve financial management, the administration of the fund still suffers from a lack of transparency and accountability,’ he says. 

The report suggests that the Ministry of Forestry needs to improve its financial management; there needs to be greater transparency and accountability among key institutions involved in administering REDD funds; financial monitoring, reporting and verification need to be strengthened; and efforts should be made to ensure that REDD funds are not used as a subsidy for big business, in the way the Reforestation Fund frequently has been. ‘We have accepted the report’s conclusions,’ said Tachrir Fathoni, director general of the Forestry Research and Development Agency at the Ministry of Forestry. ‘However, we have been in the process of developing and improving all aspects of financial governance. We can and will change.’