The EU REDD Facility worked with the Government of Indonesia to assess the feasibility of linking information on licences for mining, plantations and forestry with data on revenues in the Government of Indonesia licensing information system. The study led to recommendations for piloting the integration of data on revenue into the licensing system in two districts in Jambi.
The project supported the objectives of the National REDD+ Strategy – enhancing law enforcement, reducing corruption and improving transparency.
The Government of Indonesia is rolling out an information system for licensing mining, plantations and forestry (Sistem Informasi Perizinan). The overall objective of this project was to assess the feasibility of linking information on licences to data on revenues resulting from activities under licences in the licensing system. The study developed recommendations for piloting integration of revenue data into the licensing system.
Selective logging in East Kalimantan, Indonesia
Source: Andy Roby
Extractive industries that clear forests for timber production, mining and palm oil plantations contribute significantly to the Indonesian economy but their contributions to the economy seldom translate into stable, sustainable economic growth. Illegal logging and mismanagement of forests cost the state more than USD7 billion between 2007 and 2011 – USD2 billion in 2011 alone – according to estimates by Human Rights Watch.
The Indonesian Government is implementing a licensing information system to make licences more transparent and to make the licensing process clear and accountable. The licensing system will integrate information on evaluation, verification, issuance of licences and monitoring with spatial data. Once the licensing system is in place, there may also be scope to integrate data on revenues from licensed activities. Matching data on revenue received to licensed activities will improve transparency in value chains for timber, mining and palm oil production. Transparency in licensing will support the national REDD+ strategy by enhancing law enforcement and reducing corruption in issuing land-use licences. Matching revenues received to licences issued, supports the FLEGT Voluntary Partnership Agreement (VPA) annex on transparency of revenues from the forestry sector. The information on licences and the revenues generated from licences will link to the information system (Sistem Informasi Legalitas Kayu) for the Indonesian timber legality verification system (Sistem Verifikasi Legalitas Kayu).
The Indonesian Government is implementing a licensing information system to make licences more transparent and to make the licensing process clear and accountable.
The project approach was to:
- Map and review existing licensing and revenue systems for forestry, plantation and mining activities. Clarify the sources of data and assess gaps and limitations
- Assess current licensing processes and revenues from forestry, mining and plantation activities in two districts in Jambi
- Identify gaps in information and bottlenecks in collecting and matching information on licenses to information on revenues in the three sectors
- Assess the potential and limitations of the licensing system for linking information on licences to information on revenues and for integrating data from other initiatives
Results and impact
The project developed recommendations on the design of the licensing system, data collection, the roles of stakeholders and institutional arrangements for integrating information on revenues into the system
The feasibility study led to recommendations for piloting the integration of data on revenue into the licensing system in the two districts studied
Cabbage plantation areas on the slope of mount Gede Pangrango Sukabumi, West Java, Indonesia. Source: CIFOR