the contribution of united states agency for international
TRANSCRIPT
The Contribution of United States Agency for International Development
(USAID) Foreign Assistance by Winrock International on Capacity for
Indonesian Reduction of Carbon in Land Use and Energy (CIRCLE)
Project: 2011 - 2016
By:
Gede Yoga Prabasetya
016201300061
A thesis presented to the
Faculty of International Relations, Communications and Law
President University
In partial fulfilment of the requirements for
Bachelor’s Degree in International Relations
Major in Diplomacy Studies
2017
ii
THESIS ADVISER
RECOMMENDATION LETTER
This thesis entitled “The Contribution of United States Agency for
International Development (USAID) Foreign Assistance by Winrock
International on Capacity for Indonesian Reduction of Carbon in Land
Use and Energy (CIRCLE) Project: 2011 - 2016” prepared and submitted
by Gede Yoga Prabasetya in partial fulfillment of the recruitments for the
degree of Bachelor in Faculty of International Relations, Communications and
Law has been reviewed and found to have satisfied the requirements for a
thesis fit to be examined. I therefore recommend this thesis for Oral Defense.
Cikarang, Indonesia, December 2017
Recommended and Acknowledged by,
Hendra Manurung, S.IP., MA.
iii
DECLARATION OF ORIGINALITY
I declare that this thesis entitled “The Contribution of United States Agency
for International Development (USAID) Foreign Assistance by Winrock
International on Capacity for Indonesian Reduction of Carbon in Land
Use and Energy (CIRCLE) Project: 2011 - 2016” is, to the best of my
knowledge and belief, an original piece of work that has not been submitted,
either in whole or in part, to another university to obtain a degree.
Cikarang, Indonesia, December 2017
Gede Yoga Prabasetya
iv
PANEL OF EXAMINER
APPROVAL SHEET
The Panel of Examiners declare that the thesis entitled ―The Contribution of United
States Agency for International Development (USAID) Foreign Assistance by
Winrock International on Capacity for Indonesian Reduction of Carbon in Land Use
and Energy (CIRCLE) Project: 2011 - 2016‖ that was submitted by Gede Yoga
Prabasetya majoring International Relations from the Faculty of International
Relations, Communications and Law was assessed and approved to have passed the
Oral Examinations on 21 December 2017.
Riski M. Baskoro, S.Sos., MA.
Chair – Panel of Examiner
Drs. Teuku Rezasyah, MA., Ph.D.
Examiner
Hendra Manurung, S.IP., MA.
Adviser
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ABSTRACT
Title : The Contribution of United States Agency for International Development
(USAID) Foreign Assistance by Winrock International on Capacity for Indonesian
Reduction of Carbon in Land Use and Energy (CIRCLE) Project: 2011 – 2016
Author : Gede Yoga Prabasetya
The CIRCLE project is the result of cooperation between Indonesia and the
United States through the United States national agency, USAID. CIRCLE project
focused on the development of palm oil liquid waste technology in the form of
POME to become bioenergy. In its implementation, USAID as a donor agent
appoints Winrock International, a non-governmental organization based in the United
States as the project's implementer. The purpose of this paper is particularly to
describe the results of this CIRCLE project in helping Indonesia achieve its
Millennium Development Goal goals to reduce greenhouse gas emissions and
increase renewable energy use. The background of this writing is because Indonesia
is one of the largest palm oil producers in the world. But with the increase of national
palm oil production, it is also accompanied by the increase of farmland and forest
degradation. Which is contrary to the objectives of President Susilo Bambang
Yudhoyono's declaration at the 15th Conference of Parties in Copenhagen, where he
pledge to reduce Indonesi‘s emissions by 26% or 41% with foreign assistance by
2020. The CIRCLE project in this respect has great potential to help Indonesia
achieve the goal of reducing emissions. However, in its practice, the CIRCLE project
has not been able to achieve its greatest potential due to some obstacles such as the
long duration of licensing from local governments, as well as the interests of the
United States to be maintained by USAID. But it does not mean CIRCLE Project
fails, because this project goal is to provide knowledge and guidance about POME
waste processing system which then hoped could be done independently by palm oil
companies in Indonesia with the help of Indonesia government.
Keywords: Palm Oil, Wastewater Management System, Emission Reduction.
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ABSTRAK
Judul : Kontribusi Badan Sumbangan Bantuan Luar Negeri Amerika Serikat untuk
Pembangunan Internasional (USAID) oleh Winrock International dalam Kapasitas
untuk Pengurangan Karbon di Proyek Pemanfaatan Lahan dan Energi (CIRCLE):
2011 - 2016
Penulis : Gede Yoga Prabasetya
CIRCLE project adalah hasil kerjasama Indonesia dan Amerika Serikat
melalui badan nasional Amerika serikat yaitu USAID. CIRCLE project berfokus
pada pengembangan teknologi penanganan limbah cair kelapa sawit dalam bentuk
POME untuk dijadikan bioenergy. Pada pelaksanaan nya, USAID selaku agen donor
menunjuk Winrock International, organisasi non pemerintah yang berbasis di
Amerika Serikat sebagai pelaksana proyek ini. Penulisan karya tulis ini bertujuan
untuk memaparkan hasil proyek CIRCLE ini dalam membantu Indonesia mencapai
tujuan Millenium Development Goalnya untuk mengurangi emisi gas rumah kaca
dan meningkatkan penggunaan energi baru terbarukan. Adapun latar belakang
penulisan ini karena Indonesia adalah salah satu produsen kelapa sawit terbesar di
dunia. Namun dengan meningkatnya produksi kelapa sawit nasional, juga diiringi
dengan meningkatnya lahan perkebunan dan meningkatnya degradasi hutan
Indonesia. Hal tersebut bertentangan dengan tujuan dari deklarasi Presiden Indonesia
Susilo Bambang Yudhoyono pada Conference Of Parties ke 15 di Copenhagen,
Indonesia menargetkan untuk mengurangi emisi sebesar 26% atau 41% dengan
bantuan asing pada 2020. CIRCLE project dalam hal ini memiliki potensi yang besar
untuk membantu Indonesia mencapai tujuannya dalam mengurangi emisi. Namun
pada pelaksanaannya, CIRCLE project belum dapat mencapai potensi terbesarnya
karena terhalang beberapa masalah seperti lamanya perizinan dari pemerintah daerah,
serta adanya kepentingan dari Amerika Serikat yang harus dijaga oleh USAID.
Namun bukan berarti CIRCLE Project gagal, karena pada dasarnya proyek ini
bertujuan untuk memberi pengetahuan dan bimbingan tentang system pengolahan
limbah POME untuk kemudian dapat diterapkan secara mandiri oleh perusahaan
kelapa sawit di Indonesia dengan bantuan dan dukungan dari pemerintah Indonesia.
Kata Kunci : Kelapa sawit, Sistem pengolahan limbah, Pengurangan emisi.
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ACKNOWLEDGMENT
Astungkara, finally I can finish my thesis. First, I would like to express my
greatest gratitude to Sang Hyang Widhi Wasa, there is no words that can explain how
grateful I am for His blessing all this time. This thesis writing process is one the most
challenging moments in my life and without Him who always there in my ups and
down, it is impossible for me to finish it.
I dedicate this thesis and degree to my beloved family, to my father I Gede
Eka Budiana, my mother Ni Nyoman Sugani and both of my sisters Kadek Eni
Setyari and Komang Tri Widyari. Thank you for the endless love, support, guidance,
and prayer that you gave me. I may not a perfect son or brother, but I love you and I
will try my best to make you happy and proud.
Hendra Manurung, S.IP., MA. my humble and helpful thesis advisor, thank
you so much for your suggestion, guidance, and patience. I am so fortunate to have
an advisor like you and I cannot expect better thesis advisor than you. Thank you
also for Mr. Haris Rahmat Pratama, who has helped me by sparing his time and
giving suggestion in this thesis writing and all of IR lecturers that I cannot mentioned
one by one, thank you for every valuable knowledge and learning experiences that
you have taught and gave me. Another special thanks to Mr. Michael Naleid as the
Manager of Winrock Indonesia, as well as Ms. Dhiah Karsiwulan as the Deputy
Chief of CIRCLE Project, thank you for provide me such a valuable sources for my
thesis and give me insight regarding the CIRCLE Project . Without data and
information from you, I have been not able to finish this thesis.
For Kadek Ayu Pradita Widyandari, thank you for becoming such a great
supporter and best friend to lean on and especially thank you for your companion,
sharing session, discussion, and suggestion during the thesis writing process and
thank you for Andika, Ardi, Fx Tolan, Sultan, Gladrin, Abdi, Indo, and all of my
friend that I cannot mentioned one by one for all laugh, joy, silliness, bad and good
day in this past 3,5 year of our study in IR. Last thank you for 4th
level family batch
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12 thank you for every journey we spend in ups and down, in the good and bad day.
You guys are beyond best friend, you are perfect in your imperfection. You guys
complete me in this incredible university life.
Cikarang, 27 May 2017
Gede Yoga Prabasetya
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Table of Contents
PANEL OF EXAMINER ...................................................................................................... iv
APPROVAL SHEET ............................................................................................................. iv
ABSTRACT ............................................................................................................................. v
ABSTRAK .............................................................................................................................. vi
CHAPTER I ............................................................................................................................ 1
1.1 Background of Study ................................................................................................ 1
1.2 Problem Identification .............................................................................................. 3
1.2.2 Indonesia Palm Oil Production and Forest Degradation ....................................... 3
1.2.2 Millennium Development Declaration.............................................................. 7
1.2.3 Roundtable on Sustainable Palm Oil ................................................................ 8
1.2.3 CIRCLE Project ................................................................................................ 9
1.2.4 Paris Agreement .............................................................................................. 10
1.3 Research Question .................................................................................................. 11
1.4 Research Objective ................................................................................................. 11
1.5 Significance of Study ............................................................................................... 11
1.6 Theoretical Framework ............................................................................................ 12
1.6.1 Liberalism ........................................................................................................... 13
1.6.2 Complex Interdependence ...................................................................................... 14
1.6.3 Strategic cooperation ............................................................................................... 17
1.7 Literature Review.................................................................................................... 18
1.8 Research Methodology ........................................................................................... 23
1.9 Research Instrument................................................................................................ 23
1.10 Scope and Limitation of Study ............................................................................... 24
1.11 Thesis Outline ......................................................................................................... 24
CHAPTER II ......................................................................................................................... 26
International Regime on Environment and Palm Oil .............................................................. 26
2.1 Background ............................................................................................................. 26
2.2 International Regime on Environment .................................................................... 26
2.2.1 Kyoto Protocol (COP 3) .................................................................................. 27
x
2.2.2 Marrakesh Accords (COP 7) ........................................................................... 31
2.2.4 Doha Amendment to the Kyoto Protocol (COP 18) ....................................... 35
2.2.5 Paris Agreement (COP 21) ............................................................................. 41
2.2.6 Millennium Development Goals (MDG‘s) ..................................................... 45
2.3 International Regime on Palm Oil .......................................................................... 49
2.3.1 Importance of Palm Oil in Indonesia .............................................................. 49
2.3.2 Roundtable on Sustainable Palm Oil (RSPO) ................................................. 51
CHAPTER III ....................................................................................................................... 59
Indonesia‘s Achievement on Reducing Carbon Emission and Increasing Renewable Energy
Before CIRCLE Project : 2000-2011 ...................................................................................... 59
3.1 Background ............................................................................................................. 59
3.2 Indonesia MDG timeline......................................................................................... 59
3.2 Before CIRCLE Project .......................................................................................... 60
3.2.1 Science and technology in the field of energy and minerals ........................... 62
3.2.2 Natural Resource Management Development and Environmental Function
Preservation .................................................................................................................... 73
3.3 Indonesia overall emission and energy consumption 2011 .................................... 74
3.3.1 Indonesia Greenhouse Gas emission 2011 ...................................................... 74
3.3.2 Indonesia final energy consumption 2011 ...................................................... 77
CHAPTER IV ....................................................................................................................... 84
Achievement of circle project in Sumatera Cities 2016 ......................................................... 84
4.1 Background ............................................................................................................. 84
4.2 CIRCLE Project ...................................................................................................... 84
4.2.1 USAID ............................................................................................................ 90
4.2.2 Ministry of Home Affairs of The Republic of Indonesia ................................ 91
4.2.3 Ministry of Energy and Mineral Resources .................................................... 92
4.2.4 PT PLN Bangka Belitung .................................................................................. 93
4.2.5 Palm Oil Company ........................................................................................... 94
4.2.6 Regional Plantation Agency ........................................................................... 94
4.2 CIRCLE Project Result ........................................................................................... 98
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4.3 Indonesia POME potential .................................................................................... 101
4.4 Economic interest on CIRCLE Project (2011 – 2016) ......................................... 103
CHAPTER V ....................................................................................................................... 111
CONCLUSION ................................................................................................................... 111
BIBLIOGRAPHY ............................................................................................................... 114
APPENDICES ..................................................................................................................... 118
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LIST OF ABBREVIATON
BOD Biochemical Oxygen Demand
CIRCLE Capacity for Indonesian Reduction of Carbon in Land Use and
Energy
COD Chemical Oxygen Demand
COP Conference of Parties
CSPO Certified Sustainable Palm Oil
EP Excess Power
GAPKI Gabungan Pengusaha Kelapa Sawit Indonesia
GHG Green House Gas
GW Giga Watt
ICED Indonesia Clean Energy Development
INDC Intended National Determined Contribution
IPP Independent Power Producer
ISPO Indonesia Sustainable Palm Oil
LULUCF Land Use, Land Use Change, and Forestry
MDG Millennium Development Goals
MSW Municipal Solid Waste
MTCO2e Metric Tons of Carbon Dioxide Equivalent
NDA Non-Disclosure Agreement
POME Palm Oil Mill Effluent
RSPO Roundtable on Sustainable Palm Oil
UNFCCC United Nations Framework Convention on Climate Change
USAID United States Agency for International Development
WWF World Wide Fund for Nature
1
CHAPTER I
Introduction
1.1 Background of Study
In1949, the United States establish it first diplomatic relations with
Indonesia. Over the years, Indonesia‘s democratization and reform process
since 1998 has increased its stability and security, and resulted in
strengthened U.S.-Indonesia relations.1 The United States and Indonesia
initiated in 2010 a Comprehensive Partnership to foster consistent high-level
engagement on democracy and civil society, education, security, climate,
maritime, energy, and trade issues, among others. Cooperation under the
Comprehensive Partnership is outlined in a Plan of Action consisting of three
pillars: political and security; economic and development; and socio-cultural,
education, science, and technology cooperation. Six working groups have
been tasked with coordinating strategies and highlighting policy initiatives
and priorities under the Plan of Action. These groups focus on energy,
security, trade and investment, democracy and civil society, education, and
climate and environment.2
Under the Energy Working Group, the United States and Indonesia
cooperate to promote clean energy technologies and policies to help meet
Indonesia‘s growing energy demands, improve energy access, and reduce the
1 U.S Department of State (January 17,2017). “U.S Relation with Indonesia “
https://www.state.gov/r/pa/ei/bgn/2748.htm. Data retrieved on May 19, 2017 2 The White House, Office of the Press Secretary (November 18, 2011). “ Fact Sheet United State-
Indonesia Comprehensive Partnership” https://obamawhitehouse.archives.gov/the-press-office/2011/11/18/fact-sheet-united-states-indonesia-comprehensive-partnership. Data Retrieved on May 19, 2017
2
growth in Indonesia‘s energy-sector greenhouse gas emissions. This
cooperation includes several projects regarding clean energy and one of it that
later on will be discussed is The United States Agency for International
Development (USAID)‘s Indonesia Clean Energy Development (ICED)
project, which is the base of Capacity for Indonesian Reduction of Carbon in
Land Use and Energy Project (CIRCLE Project) 2011-2016.3
The comprehensive partnership which took place in 2010 was
expected to help Indonesia in achieving its MDGs (Millennium Development
Goals), because that time was still considered as the middle years of
Indonesia MDG‘s timeline. In Indonesia MDGs report 2008, Indonesia
Minister of National Development Planning explained that Indonesia
government still having trouble regarding deforestation, the increase of
greenhouse emission and pollution included water, soil, and air pollution.4
Moreover, the statement of Indonesia President, Susilo Bambang Yudhoyono
in Bangkok Climate Conference 2009, regarding Indonesia voluntary
commitment to reduce emission for 26% by its own effort and up to 41% with
international aid has been carried by Indonesia until it is set in our Intended
National Determined Contribution (INDC) of Paris agreement. Based on
Indonesia 2008 MDGs report can be seen that Indonesia needs a better
strategy in handling with this environmental issue, especially the increase of
carbon emission. Indonesia needs for emission reduction project made
Capacity for Indonesian Reduction of Carbon in Land Use and Energy Project
(CIRCLE Project) seems to be able to help Indonesia. Later in this chapter,
will be explained deeper regarding CIRCLE Project and how it can help
Indonesia dealing with their environmental issues.
3 U.S. Department of State Fact Sheet. 2013. U.S.-Indonesia Comprehensive Partnership. Office of the
Spokesperson. Washington, DC 4 Stalker, Peter. 2008. Indonesia Millennium Development Goals. Indonesia Minister of National
Development Planning. Jakarta
3
1.2 Problem Identification
1.2.2 Indonesia Palm Oil Production and Forest Degradation
Indonesia is one of the biggest palm oil producers in the world. This is
further confirmed by the growing number of production and export of palm
oil every year. With the increasing growth of palm oil industry in Indonesia,
of course, Indonesia is benefited economically because palm oil industry
provides income for the State, and also helps improve the economy of the
people by providing employment. In addition, the location of palm oil
industry in Indonesia, mostly located in rural areas, they also help improve
the economy of the surrounding residents.5
Table 1.1 Palm Farm Area by Farming Category from year 2000 –
2015.6
Year Area (Ha)
Smallholder Government Private
2000 1.166.758 588.125 2.403.194
2001 1.561.031 609.947 2.542.457
2002 1.808.424 631.566 2.627.068
2003 1.854.394 662.803 2.766.360
2004 2.220.338 605.865 2.458.520
2005 2.356.895 529.854 2.567.068
2006 2.549.572 687.428 3.357.914
2007 2.752.172 606.248 3.408.416
2008 2.881.898 602.963 3.878.986
2009 3.061.413 630.512 4.181.369
2010 3.387.257 631.520 4.366.617
2011 3.752.480 678.378 4.561.966
5 Palm Oil Green Development Campaign. 2011. The Economic Benefit of Palm Oil to Indonesia.
World Growth. Virginia. Page 4-6 6 Ministry of Agriculture. 2014. Tree Corp Estate statistics of Indonesia. Directorate General of Estate
Corps. Jakarta. page 3
4
2012 4.137.620 683.227 4.751.868
2013 4.356.087 727.767 5.381.166
2014 4.422.365 729.022 5.603.414
2015 4.575.101 750.160 5.975.109
Based on the data above, the area of palm farm in Indonesia
experience increased over the years without showing sign of stopping.
The demand of palm oil globally has made palm oil industry to be one of
the most profitable industries in Indonesia for both the industry itself and
the government of Indonesia. The table above also shows that the biggest
palm oil industry in Indonesia is hold by private sector, then small holder,
and government come in the second and third place.
With the condition of palm oil industry in Indonesia which is
controlled by the private sector and industry community, it is very
influential on its ability to manage waste. The lack of knowledge about
the waste, as well as the lack of technology that supports the processing of
residual waste, makes this industry as one of the contributors to the
environmental damage around it.
Table 1.2 Palm Farm Area by Region 2013-2015.7
No Region Year Area (Ha)
Smallholder Government Private Total
1 Sumatera
2013 3.406.793 549.059 2.726.376 6.682.228
2014 3.559.898 564.529 2.861.297 6.985.723
2015 3.707.031 580.436 2.998.386 7.285.853
2 Java
2013 7.991 20.069 5.652 33.712
2014 8.350 20.635 5.950 34.935
2015 8.695 21.216 6.252 36.163
3
Bali &
Nusa
Tenggara
2013 - - - -
2014 - - - -
2015 - - - -
4 Borneo
2013 745.710 132.469 2.428.344 3.306.523
2014 779.223 136.201 2.556.419 3.471.843
2015 811.429 140.040 2.686.555 3.638.024
5 Sulawesi 2013 152.067 11.284 155.529 318.880
7 Ministry of Agriculture. 2014. Tree Corp Estate statistics of Indonesia. Directorate General of Estate
Corps. Jakarta. page 9 - 11
5
2014 158.901 11.602 163.732 334.235
2015 165.468 11.929 172.067 349.464
6 Maluku
& Papua
2013 43.526 14.886 65.265 123.677
2014 45.482 15.305 68.707 129.494
2015 47.362 15.736 72.205 135.303
From the table above can be seen that the palm farm in Indonesia is
focusing on two regions which are Sumatera and Borneo, where both of
them are considered as the biggest island in Indonesia, and also the one
that have the biggest tropical forest in Indonesia or even in the world.
Unfortunately our tropical forest situation is increasingly
threatened due to the widespread conversion of forest functions for
settlements and industry. Oil palm plantations are also one of the reasons
for the increased in conversion of forest functions. The fact that the
government has issued several policies concerning restrictions on the
amount of land ownership for plantations such as Regulation of the
Minister of Agriculture Number 26 of 2007, contained in Article 15 which
is about the restrictions on land ownership managed by companies or
groups of companies.8 The government has also defined the division of
Indonesia's forest area according to its functions such as protected forests,
production forests, and conversion able forests. However, many palm oil
industries use bribery to obtain permits for land tenure expansion. In the
statistical report of the Ministry of Environment and Forestry in 2014, in
the period 2012-2013 Indonesia has experienced deforestation of 41,191.1
Ha of protected forest.9 Forest fires and the many practices of forest
burning by companies to accelerate land clearing also cause undesirable
forest destruction. In other cases the lack of corporate responsibility in
8 Ministry of Agriculture. 2007. PERATURAN MENTERI PERTANIAN NOMOR:
26/Permentan/OT.140/2/2007. Jakarta. Page 8 9 Data and Information Centre. 2014. Ministry of Environment and Forestry Statistics 2014. Indonesia
Ministry of Environment and Forestry. Jakarta. Page 92
6
managing their waste of production by simply throwing them off causes
increased levels of soil and water pollution that affect the growth of
surrounding ecosystems.
Based on the statistics of the Ministry of Environment and
Forestry, the water quality of Indonesia from 2010 to 2014 has declining
trend. This is due to several factors such as increased erosion in the forest
area, human activities in the watershed, including waste disposal activities
by factories.
The process of palm oil production by itself will produce waste in
solid, liquid, and gas form. Solid wastes from the production are in form of
empty fruit bunch, palm kernel shells, trunk of the plant, fiber, leaves and
others. Many companies use this solid waste as a energy source of their
boiler's engine by burning, but without realizing the further implication, it
produces other waste in the form of gas, even though the scale of pollution
is still small. When palm oil is extracted and processed, it also produces
liquid waste in the form of effluents with high organic matter, suspended
matter and oil and grease. This waste is commonly called POME (Palm Oil
Mill Effluent) and is considered as waste that has the highest polluting
capability in this production based on BOD and COD indicators. 10 If
POME didn‘t handled correctly, the methane gas inside of it will
evaporate directly into the atmosphere. As a greenhouse gas (GHG),
methane has an effect 21 times greater than CO2.11
These wastes can cause
ecosystem degradation and affects the health of the communities if not
managed properly,
But even in the process of making palm oil produces a lot of waste,
the waste can actually be recycled as a source of energy if supported by
technology and knowledge of its processing, call it POME that can be used
10
Igwe, J.C.I; Onyegbado, C.O; Abia, A.A. 2010. Adsorption isotherm studies of BOD, TSS and colour reduction from palm oil mill effluent (POME) using boiler fly ash. Ecletica Quimica. Sao Paulo. 11
Winrock International. 2015. “Handbook POME to BIOGAS Project”. Pg 5
7
as a medium of cultivation of microorganisms that can produce biofuel in
the form of methane gas Which can be used for renewable energy, and
fuel.
1.2.2 Millennium Development Declaration
The United Nations Millennium Development Declaration is a
declaration as the results of the Millennium Summit on 8 September 2000.12
Where the State of the Participant commits their nations to a new global
partnership to reduce extreme poverty and setting out a series of time-bound
targets, with a deadline of 2015, that then become known as the Millennium
Development Goals.
The Millennium Development Goals (MDGs) consist of quantified
targets to addressing extreme poverty in its many dimensions-income
poverty, hunger, disease, lack of adequate shelter, and exclusion-while
promoting gender equality, education, and environmental sustainability.
They are also basic human rights on the planet to health, education, shelter,
and security.
Each country that has approved this declaration including Indonesia
will make their program plan to meet the goal of the MDGs in 2015. As it is
known, the MDGs covers many aspects ranging from poverty eradication to
promote global partnership for development, It is precisely, in the seventh
point of the frame work, explained about ensuring environmental
sustainability. In this point, contains some specific goals ranging from
carbon emission reduction, increased use of new renewable energy,
restoration of forest areas, and others. In this thesis, the authors will analyze
Indonesia MDGs report to find out the progress of Indonesia in its efforts to
12
United Nations Millennium Project. 2006. http://www.un.org/millenniumgoals/bkgd.shtml . Data Retrieved on May 19, 2017
8
reduce carbon emissions, which will be discussed more deeply in the next
chapter.
1.2.3 Roundtable on Sustainable Palm Oil
Roundtable on Sustainable Palm Oil (RSPO) is a nongovernmental
organization that unites stakeholders from the 7 sectors of the palm oil
industry including oil palm producers, processors or traders, consumer goods
manufacturers, retailers, banks/investors, and environmental and social non-
governmental organizations (NGOs), to develop and implement global
standards for sustainable palm oil.13
RSPO mission are : advance the production, procurement, finance and
use of sustainable palm oil products, develop, implement, verify, assure and
periodically review credible global standards for the entire supply chain of
sustainable palm oil, monitor and evaluate the economic, environmental and
social impacts of the uptake of sustainable palm oil in the market, and engage
and commit all stakeholders throughout the supply chain, including
governments and consumers, RSPO has developed a set of environmental and
social criteria which companies must comply with in order to produce
Certified Sustainable Palm Oil (CSPO). When they are properly applied,
these criteria can help to minimize the negative impact of palm oil cultivation
on the environment and communities in palm oil-producing regions. Further
about RSPO and its impact in Indonesia palm oil industry will be explained in
the next chapter.
13
Roundtable on Sustainable Palm Oil. 2017. ABOUT RSPO. http://www.rspo.org/about. Data retrieved on 2 June, 2017
9
1.2.3 CIRCLE Project
The USAID-funded Capacity for Indonesian Reduction of Carbon in
Land Use and Energy (CIRCLE) program helps the owners of palm oil mills
produce renewable energy and improve the overall sustainability of their
facilities.14
This project targeted the palm oil production in Indonesia because
Palm Oil industry in Indonesia is also responsible in creating the
environmental issues In Indonesia. The increase in demand of palm oil over
the years has pushed the industry to expand their plantation especially on
Sumatra and part of Borneo. This rapid growth is one of the reason for the
destruction of tropical forest, which also responsible for the reduction of
carbon-rich peat land, not only that, the practice of slash and burn clearance
that done by some company to faster the land clearing and save on their
expenses resulting on another problems which is major forest fire, which also
means the increase of greenhouse gas emission. Further in this chapter the
writer will provided data regarding the palm oil land growth and their
correlation with forest degradation.
Moreover, the dumping of excess from palm oil production by some
company in form of liquid which called POME (Palm Oil Mill Effluent ) also
directly responsible for water and soil pollution. Even though there are many
ways for palm oil production in contributing to environmental destruction,
there is also big possibility of palm oil industry in term of renewable energy.
Palm oil industry excess can produce two type of renewable energy if
managed and supported by proper technology, they can create biodiesel as
well as biogas, which then can be used to create electricity. Based on this
possibility, CIRCLE Project establishing a POME to biogas project which
will be run by Winrock International where they give technological and
technical support for Palm Oil Industry to further manage their waste into
14
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017
10
renewable energy which then can be used to help the company meet their
energy needs in producing their product. This project expected to be able to
reduce the number of pollution from Palm Oil Mill Effluent as well as
reducing the number of greenhouse emission by the use of renewable energy
in palm oil industry to reduce the amount of fossil-fuel electricity energy used
by the industry. The detail of the project will be explained further in the next
chapter.
1.2.4 Paris Agreement
Paris agreement is the latest legally binding agreement on climate
change. The agreement sets out a global action plan with the main goals to
keeping global average temperature from rising 2o Celsius. The agreement
provides framework for the country to be the base of their strategy in reducing
the greenhouse gas emission, this strategy by each country known as Intended
Nationally Determined Contributions (INDCs).
In this agreement, lies several key elements which are : The
government of the participant states agreed to create a long-term goal of
keeping the increase in global average temperature to well below 2°C above
pre-industrial levels, agreed to come together every 5 years to set more
ambitious targets as required by science and provide report to each other and
the public on how well they are doing to implement their targets as track
progress towards the long-term goal through a robust transparency and
accountability system, agreed to provide continued and enhanced
international support for adaptation to developing countries, and utilizing the
role of non-Party stakeholders in addressing climate change, including cities,
other subnational authorities, civil society, the private sector and others.15
15
European Union. 2016. The Road from Paris: assessing the implications of the Paris Agreement and accompanying the proposal for a Council decision on the signing, on behalf of the European Union, of
11
In accordance to this thesis, the writer will use Indonesia INDC as the
source of information to discover the latest progress of Indonesia in dealing
with their effort in reducing greenhouse gas emission, and also to analyze the
probability of strategic cooperation to be extended especially in this sector to
help Indonesia achieve its INDC goals.
1.3 Research Question
How did USAID foreign assistance through CIRCLE project by Winrock
International contribute to the achievement of Indonesia goal to reduce carbon
emission and development of new renewable energy ?
1.4 Research Objective
- To explain the impact of CIRCLE Project towards Indonesia palm oil
industry sustainability development
- To identify the advantage of Indonesia USA comprehensive partnership
especially the CIRCLE project towards Indonesia, and whether or not it be
extended.
1.5 Significance of Study
Here are the significance studies that will be provided by this thesis:
- To enhance knowledge about international cooperation in general and
Indonesia bilateral relation with U.S especially Indonesia –U.S
comprehensive partnership in specific.
- Provide knowledge on how international cooperation can be established
- Give information on how national interest of a state affecting the result of the
international cooperation
the Paris agreement adopted under the United Nations Framework Convention on Climate Change. European Commission. Brussels
12
- Enrich knowledge on the benefit of international cooperation for the actors
included within it.
1.6 Theoretical Framework
CIRCLE Project Chart
13
1.6.1 Liberalism
Liberalism is a theory in international relations which believe that peace is the
normal state of affairs in which the laws of nature dictated harmony and cooperation
between peoples. In liberal view, the actor in international relation is not only states
but also society. Society, as stated by Andrew Moravcsik, ―according to liberal, is
comprised of individual human agent with autonomous interests and identities, who
seek to form private groups, organizations and arrangements to advance their social
and political goal‖.16
This individuals that have their own interest and identities
which then can involve in various kind of cooperative and collaborative social
actions whether domestic or International. Liberal also believes in economic
interdependency between states that would avoid war for example free trade
agreement to growth cooperation and mutual benefit between each other.17
Scholars during the 1980s and 1990s also emphasized that so-called international
regimes, consisting of agreed-on international norms, rules, and decision- making
procedures, can help states effectively coordinate their policies and collaborate in the
production of international public goods, such as free trade, arms control, and
environmental protection. Where it has been anticipated before by the classical
liberal which stated that international institutions would reduce uncertainty and
improve mutual trust among states, thereby attenuating the security dilemma and
actively promoting international cooperation and world peace.18
As the technology develop, and globalization rising, the cooperation between
states not only based on interest over one or two issues, it has started to cover global
16
Moravcsik, Andrew. Liberalism and Internationals Relations Theory. Center for European Studies, Harvard University. Massachusetts. Page 7 17
Burchill, Scott; Paterson,Matthew; Reus-Smit,Christian.2005. Theories of International Relations Third Edition. Palgrave Macmillan. United Kingdom 18
Badie, Bertrand; Dirk-Berg, Schlosser; Leonardo Morlino. 2011. INTERNATIONAL ENCYCLOPEDIA OF POLITICAL SCIENCE. SAGE Publishing. Los Angeles. Page 1436-1437
14
issues. The existences of global governance also support the interstate cooperation in
term to achieve mutual goals in handling with global issues.
The United States and Indonesia Comprehensive Partnership is an example of a
deeper cooperation between state that not only based on equal partnership and
common interest, but also driven by the need to address global issues.19
As stated by
Indonesia‘s sixth president Susilo Bambang Yudhoyono ―A U.S. – Indonesia
strategic partnership would have to be based on: equal partnership and common
interests. It has to bring about mutual and real benefit for our peoples. It has to be for
the long-term, and have strong people-to-people content...‖.20
From those statement
can be seen that this partnership not only aimed to strengthen the relation between
the states in general but also to engage and strengthen the cooperation between non
state actors and civil society from both states.
1.6.2 Complex Interdependence
The term 'complex interdependence' was developed by Robert Keohane and
Joseph Nye and refers to the various, complex transnational connections
(interdependencies) between states and societies. Complex interdependence
according to Robert O Keohane and Joseph S. Nye in their book ‗Power and
Interdependence: World Politics in Transition‘ has three main characteristic which
are :
Multiple Channels
In international politics there are multiple channels connecting the
societies, including all the interstate, trans governmental, and
transnational transactions. In this complex world of interdependence not
only formal and informal interaction between governmental elites are a
19
The United States-Indonesia Society. 2009. The 2009 U.S.-Indonesia Comprehensive Partnership: Engaging the Non-Government Sector. USINDO. 20
I The United States-Indonesia Society. 2009. The 2009 U.S.-Indonesia Comprehensive Partnership: Engaging the Non-Government Sector. USINDO. Page 2
15
source of connecting societies but informal ties among non-governmental
elites and transnational organizations are gaining more and more
importance. Multinational firms and banks have a great impact on the
domestic as well as interstate relations. These actors, besides pursuing
their own interests, also ―act as transmission belts, making government
policies in various countries more sensitive to one another.‖21
Absence of Hierarchy among Issues
In the world of Complex interdependence, there is no hierarchy
among the issues. The dividing line between domestic and foreign policy
becomes blurred and there is no clear agenda in interstate relations. There
are multiple issues which are not arranged in a clear or consistent
hierarchy. In complex interdependence,‖ sets of issues relevant to foreign
policy with which government are concerned have become larger and
more diverse‖.22
The interstate relation in other sector such as education,
energy, economy, welfare, justice, and many other were increasing; while
the use of military force and power balancing were decreasing (but
remained important). This condition where the use of military power as
policy tool is decreasing, will increase the probability of cooperation
between states.
Minor Role of Military Force
Complex Interdependence assumes that in international relations force
is of low salience. When Complex Interdependence prevails, military
force could be irrelevant in resolving disagreements on economic issues
21
Robert O. Keohane; Joseph S. Nye. 1989. Power and Interdependence Second Edition. Harper Collins Publisher. United States of America. Page : 26 22
Robert O. Keohane; Joseph S. Nye. 1989. Power and Interdependence Second Edition. Harper Collins Publisher. United States of America. Page : 26
16
among members of an alliance, however simultaneously be very
important for the alliance‘s political and military relations with its rival
bloc. According to Keohane and Nye, intense relationships of mutual
influence may exist but force is no more considered an appropriate way of
achieving other goals such as economic and ecological welfare which are
becoming more important, because mostly the effects of military force are
very costly and uncertain. In fact due to modern nuclear, biological and
chemical weapons, all the actors are aware of the maximized costs of war.
Thus, the significance of military force as key policy tool for
resolving disputes has declined in the globalized world. However, its role
as bargaining tool is still important and may vary from issue to issue. Its
role cannot be completely ignored. In an asymmetric relationship, the less
dependent actor may use it as a bargaining tool. In fact the changing role
of force has made the situation more complex.23
Interdependence theorists noted that such relations, particularly economic ones,
were increasing; while the use of military force and power balancing were decreasing
(but remained important). Reflecting on these developments, they argued that the
decline of military force as a policy tool and the increase in economic and other
forms of interdependence should increase the probability of cooperation among
states. Furthermore, interdependence theorists introduced the concept of 'regimes' to
mitigate anarchy and facilitate cooperation.
From the complex interdependence perspective can be seen that strategic
cooperation between states that covers various issues is the result of the decrease of
military power use in the globalized world. Furthermore, the role of non-state actor,
as well as the existence of international regime also give a great impact towards the
cooperation, seeing from the strategic cooperation between Indonesia and USA can
be seen that both of the non-state actor and international regime are taking part in its
23
Robert O. Keohane; Joseph S. Nye. 1989. Power and Interdependence Second Edition. Harper Collins Publisher. United States of America. Page : 27-29
17
establishment. As been stated before, this strategic cooperation is based on the
interest of both country in dealing with global issues especially that based on
international regime in that time which is Millennium Development Declaration. The
role of non-governmental actor also taking part in the creation of this partnership.
The condition of palm oil industry in Indonesia which dominated by private sector
has become one of the consideration of Indonesia government in formulating policy
regarding palm oil industry such as the limitation of farm area can be owned, besides
to aimed to protect the environment, this policy also aimed to protect Indonesian
local farmers.
1.6.3 Strategic cooperation
―Strategic partnership, responding to the condition of the international scene
(forced by the globalization) is a tool of foreign policy of states, that combines both
durability and flexibility‖.24
According to Lucyna, ―To establish a strategic
cooperation, it is enough to find one priority, that is expressed by subjects in an equal
or similar way. no less important for the parties is not to have interests that are utterly
contradictory, especially such interest that are crucial from the partners‘
perspective‖.25
From brief explanation above can be seen that in term to create a strategic
cooperation between states, there need to be a specific priority that express the
interest of both states. Based on that view, if we look into US Indonesia Strategic
partnership, can be seen that both of the states agreed on several goals such as : 1.
expanding educational cooperation, 2. food security cooperation, 3. cooperation on
global climate change mitigation and adaptation, 4. security relationship, and
business cooperation.
24
Czechowska, Lucyna. 2013. The Concept of Strategic Partnership as an Input in The Modern Alliance Theory. Nicolaus Copernicus University. Poland. Page : 51 25
Czechowska, Lucyna. 2013. The Concept of Strategic Partnership as an Input in The Modern Alliance Theory. Nicolaus Copernicus University. Poland. Page : 50
18
In global climate change mitigation and adaptation, Indonesia and the U.S.
are considered two potential world leaders on climate change. Both could serve as
leaders among their respective developed and developing country groupings in the
negotiations toward the Copenhagen Agreement. The Obama Administration has
made it clear that climate change is on the national agenda, and that a cap-and-trade
system may be a primary means of funding a financial crisis stimulus package.
Indonesia has already adopted a National Action Plan to Address Climate Change.
Indonesia and the U.S. could work together to increase renewable and alternative
energy in their respective energy portfolios, advance energy efficiency as a means of
meeting growing energy demand without increasing emissions, support sustainable
forestry and address deforestation, protect ocean resources and define innovative
means for adaptation.26
1.7 Literature Review
In regards with this thesis, the author has read some books, articles and
reports to have a broad knowledge about the relation between environment and
sustainable industry development. Therefore, the author of this thesis came out with
sources from previous research to show the reader more about the importance of
environment aware industrial activity.
International Investment and Climate Change : Energy Technologies for
Development Country.27
A book by Timothy Forsyth which published in 2013 by
Earthscan that explain about the relation between international
investment and climate change, this book highlighted how the growth of
26
The United States-Indonesia Society. 2009. The 2009 U.S.-Indonesia Comprehensive Partnership: Engaging the Non-Government Sector. USINDO. 27
Forsyth, Timothy. 2013. “International Investment and Climate Change : Energy Technologies for Development Country”. Routledge
19
private sector or multinational company in developing country affecting
the energy consumption of the country itself. In this book, the writer also
stated about the importance of private sector contribution towards the
nation‘s public and environmental policy.28
The writer also explained the
importance of energy technologies investment. In this book, the writer
use Indonesia as their research object because Indonesia have formulate
many environmental policy especially regarding renewable energy as
their way to contribute in the reduction of greenhouse gas, besides it also
owns the big number of private company and Multi National Company.
Moreover, Indonesia had already run several projects for renewable
energy with the help from another country and organization, which in this
book the writer compare some of the project, which then end to a
conclusion where he stated that Indonesia is not ready enough to run a
large scale international investment in renewable energy.29
Through this book, the author gains different perspective
towards the correlations between private sector and Indonesia
government, and how dependent one to each other. I also found the
project comparison to be beneficial where as it gives factual data.
POME-to-Biogas Project Development in Indonesia.30
This handbook published by Winrock International which is about
the information bank on POME-to-energy technology and its benefits.
The handbook explained about several point which very important in
broadening the writer knowledge regarding the technology to convert
POME to renewable energy, which included, providing basic information
28
Forsyth, Timothy. 2013. “International Investment and Climate Change : Energy Technologies for Development Country”. Routledge 29
Ibid. 30
Winrock International. 2015. “POME-to-Biogas Project Development in Indonesia”. Winrock International. Jakarta
20
about palm oil mill effluent, biogas, biogas production technologies, and
the process of anaerobic digestion. Explain about the construction and
operation of the technology.31
Provides a step-by-step approach for
assessing biogas production potential and electrical system requirements.
Depending on location, capacity, operation, and wastewater quality, each
mill may have a different biogas potential. Provides examples of analysis
to complete for a feasibility study and the preparation work for biogas
plant operation. Covers the financial perspective, explaining different
ways to fund a project. Discusses sustainability practices and standards
associated with the palm oil industry, and also the environmental benefits
of POME-to-energy technology. Discusses the emission along palm oil
production supply chain, how to identify the sources and explains how to
calculate greenhouse gas emissions from plantation and palm oil, as well
as potential reductions from a methane capture project and biogas plant
installation.32
The author found this book to be useful whereas this book
giving the author broader knowledge towards the specific project
which is the study case of this thesis. This book also provide reliable
and detail information regarding how the project work.
Ministry of Environment and Forestry Statistics 2014.33
This report which published by Ministry of Environment and
Forestry Indonesia on December 2015 providing data and information
regarding Living Environment Quality Index which consist of water
31
Winrock International. 2015. “POME-to-Biogas Project Development in Indonesia”. Winrock International. Jakarta 32
Ibid. 33
Indonesia Ministry of Environment and Forestry. 2015. “Ministry of Environment and Forestry Statistics 2014”. Ministry of Environment and Forestry. Jakarta
21
quality index, air quality index, and land coverage quality index.34
This
report also provides the data of deforestation in Indonesia in 2004 which
I found really important in supporting this thesis. This report also
broadening the author knowledge in the differences of forest in Indonesia
based on the function as regulated in Indonesia law No.41 years 1999
about forestry.35
Moreover, this report provides specific data regarding
the progress of forest area release for Agriculture. This statistics is really
helpful in providing reliable source of data and information regarding the
condition of Indonesia forest and environment especially in 2004 and
several years after and before.
Tree Corp Estate Statistic of Indonesia (Palm Oil) 2013 – 2015.36
The report by Directorate General of Estate Corps, Indonesia‘s
Ministry of Agriculture in December 2014 which provide data regarding
Palm Oil production as well as the growth of palm oil plantation in
Indonesia. This report provide data that used by the author in regards to
support this thesis which are : palm oil farm area and production by
farming category from 1968 – 2015, palm oil farm area by province from
2013 – 2015, from the data provide by this report, the writer gain trusted
information regarding the growth of palm oil plantation in Indonesia
which is really helpful in giving general vision towards the growth of
Indonesia palm oil Industry itself.37
34
Indonesia Ministry of Environment and Forestry. 2015. “Ministry of Environment and Forestry Statistics 2014”. Ministry of Environment and Forestry. Jakarta 35
Ibid. 36
Directorate General of Estate Corps. 2014. “Tree Corp Estate Statistic of Indonesia (Palm Oil) 2013 – 2015”. Indonesia Ministry of Agriculture. Jakarta 37
Ibid.
22
The Economic Benefit of Palm Oil to Indonesia.38
A report by World Growth, an international non-governmental
organization with goals to bring balance to the debate over trade,
globalization, and sustainable development by doing research which
ranging from forestry research, palm oil research, development research,
free trade research, and climate change research. In this report entitled
The Economic Benefit of Palm Oil to Indonesia, World growth explained
about the role of palm oil industry in global economy as general and
towards Indonesia national economy in specific.39
What the writer found to be interesting in this report is the
perspective of World Growth in seeing the relation of palm oil industry
and poverty in Indonesia, as stated by the report, half of Indonesia‘s
population lives in rural areas, of which over 20 percent live below the
poverty line, in this case the palm oil industry provides an incomparable
means of poverty alleviation.40
This report also explained about their
perception in looking at other sustainable palm oil frame work which in
this case carried by The World Bank in 2010, where in those frame work,
there is a term of ―Non-Conversion‖ which refers to the restriction of
conversion on forest are. Conversion on forest area had been seen as a
bad practice in palm oil industry, but this report see the other side of it, as
in this report stated, Restriction on the conversion of forest area will
negatively impact economic growth and will directly impact those living
in poverty. Through this report, the writer gain broader knowledge and
new perspective in seeing the role of palm oil industry in Indonesia.
38
World Growth. 2011. “The Economic Benefit of Palm Oil to Indonesia”. World Growth. Arlington 39
Ibid. 40
Ibid.
23
1.8 Research Methodology
The thesis research will used Qualitative Research method which is
primarily an exploratory research. A qualitative research is an interpretative approach
concerned with understanding the meanings of certain phenomena or actions through
observation techniques by participants and interviewing. This method examines,
analyzes and interprets observations to discovering the meaning and patterns that
does not involve mathematical models but provides explanation of reasons and
associations between social variables.
Moreover, the author used Library research as a tool such as books,
journals, theories and researches to be examined. From this tool, the author finds
several books, article, and report regarding the importance of renewable energy
towards the future of sustainable industry development, as well as the advantages of
energy technologies investment for developing country.
In accordance to this thesis, the author also use Secondary data which come
from annual report which included Indonesia annual MDG‘s report, academic
journal, legal agreement such as agreement on the international regime of
environment and palm oil.
The author used Primary data as a tool which the author invites related
institutions to be asked some questions in order to give the writer a proof of the
Library research. Those institutions is Winrock International.
1.9 Research Instrument
Internet: The internes is a tool which the author used to find official websites,
documents, press release and speeches for collecting data and information that
are provided through cyberspace.
Book: There are several books that provided deep explanation about
environmental protection and international cooperation that helps the author to
better understand more about the case that is being discussed.
24
Journal, Article and Reports: There are many researches that have analyzed
about the international cooperation, international regime on environment, palm
oil industry in Indonesia and Indonesia effort in reducing GHG emission and
increasing the use of renewable energy. Therefore, those journals, articles and
reports are very helpful to the author to have a better understanding about the
case.
Interview: The author will use interview to gain a concrete source and more data
from related institutions and real actors of the case that is discussed.
1.10 Scope and Limitation of Study
The scope and limitation study of this thesis is based on the problems and the
purposed of the case that is being discussed which the research will focused on
showing the establishment of CIRCLE project from Indonesia – U.S comprehensive
partnership, and discuss the impact of CIRCLE project in Sumatera Cities in the year
where the project ended in 2016.
1.11 Thesis Outline
The thesis will consist of five chapters with understanding about the CIRCLE
project in Indonesia as one of the cooperation project under US-Indonesia
Comprehensive Partnership, and how this project affecting Indonesia clean energy
development through the utilization of sustainable palm oil industry practice :
Chapter I : Introduction
This chapter will introduce the reader about the topic of research that includes
background of study, problem identifications, statement of problems, theoretical
framework, research objectives, research methodology, literature review, significant
of study, scope and limitation of study, definition of terms and thesis outline.
Chapter II : International Regimes on Environment and Palm Oil
25
In this chapter the writer will discuss and provide deeper explanation
regarding the International regime on environment and Palm Oil Industry as well as
the dynamics within each international regimes, specifically about Kyoto Protocol,
Marrakesh Accord, Doha Amendment on Kyoto Protocol, Millennium Development
Goals under UN Millennium Declaration, Paris Agreement, and Roundtable on
Sustainable Palm Oil.
Chapter III : Indonesia MDG‘s timeline before CIRCLE Project
In chapter three, the writer will provide an overview of Indonesia MDG
timeline before the establishment of CIRCLE project. Further in this chapter, the
writer will provide the programs which created by Indonesia government alone in the
field of bio fuel production included the establishment of law to support the use of
bio fuel. In this chapter, the writer will also give the basic line of Indonesia GHG
emission in year 2011 and the total energy mix of Indonesia in 2011 which then
could be comparable with the condition after the establishment of CIRCLE Project.
Chapter IV : Achievement of CIRCLE project in Sumatera Cities 2016
This chapter is the main part of this thesis. The writer will examine, analyze and
interpret the data and document that the writer get to show the impact of CIRCLE
project towards Indonesia clean energy development. In this chapter, the writer will
also provide the in depth explanation about CIRCLE Project, the diagram of
cooperation in which will explain the actors included in the Project as well as the
national interest which lay within the project itself.
Chapter V : Conclusion
In this last chapter, the writer provides conclusions of the whole thesis that hopefully
can be benefit for the future.
26
CHAPTER II
International Regime on Environment and Palm Oil
2.1 Background
This chapter will give a deeper understanding of International regime
especially on environment and palm oil. This chapter will further explain the
establishment of Kyoto Protocol as well as another international treaty on
environment that marks the international effort in combating climate change. In this
chapter, also explain the statement from Indonesia‘s sixth President, Susilo Bambang
Yudhoyono regarding Indonesia initiatives in reducing the national emission by
2020. This statement that then underlined the further collaborative cooperation
between Indonesia and United States of America in climate change mitigation.
2.2 International Regime on Environment
International regime as stated by Stephen D. Krasner ―are defined as sets of
implicit or explicit Principles, norm, rules, and decision making procedures around
which actor expectations converge in a given issue area of international relations‖.41
Moreover, according to Krasner, ―principles are beliefs of fact, causation, and
rectitude, Norms are standards of behavior defined in terms of rights and obligations,
rules are specific prescriptions or proscriptions for actions, and Decision making
procedures are prevailing practices for making and implementing collective
choice‖.42
Regime is defined as something more than agreement which considered as
temporary arrangement that may change following the shifts in power and interest.
Regime aims to facilitate agreement by providing frameworks of rules, norms, and
negotiation procedure.
41
Krasner D., Stephen. 1982. Structural causes and regime consequences : regimes as intervening variables. Massachusetts Institute of Technology. USA. Pg. 185 42
Ibid Pg. 186
27
According to regime theory above, International regime on environment is
defined as sets of principles, norm, rules and decision making procedures among
actors related to environmental issues. Below will be explained several international
regimes on environment, namely:
2.2.1 Kyoto Protocol (COP 3)
Kyoto Protocol is the first legally binding international agreement on
climate protection, which was adopted in Kyoto, Japan, on 11 December 1997 at the
3rd
UNFCCC COP and entered into force on 16 February 2005.43
Kyoto protocol was
created based on the international concern in that time, 1997 regarding the increase
number of Carbon dioxide emission which turned out to be 4 times bigger than the
level of emission in 1950 which also still increasing at a rate of nearly 300 million
tons annually. The increased of fossil fuel usage in the early industrial era, as well as
the increased number of population known to be the reason of the increased
emission.44
Kyoto Protocol major feature is that it has mandatory targets on the amount of
emission that a party may emit, in term to meet the emission target set to that
particular states to be achieved during 2008-2012 which also known as first
commitment period. Kyoto Protocol requires industrial countries which listed in
Annex I to limit their greenhouse gas emission especially carbon dioxide.
Industrialized countries according to Kyoto Protocol, considered responsible in
increase of global greenhouse gas emission due to the increase of their economic
growth which in line with their used of fossil fuel. Annex I countries committed
themselves to reducing their GHG emissions by 5.2 % on average below aggregate
1990 emission levels during the commitment period 2008-2012 (UNFCCC 1997).
43
United Nations Framework Convention on Climate Change. “Kyoto Protocol”. http://unfccc.int/kyoto_protocol/items/2830.php. Data retrieved on July 16, 2017 44
United Nations Secretary General. 2001. Road map towards the implementation of the United Nations Millennium Declaration. United Nations
28
Table 2.1 BASELINE EMISSIONS AND EMISSION REDUCTION TARGETS
FOR ANNEX I COUNTRIES
However, the agreement will not enter into force, until two conditions which
known as double trigger are fulfilled, which are: First, at least 55 Parties to the
Convention must ratify the treaty by their national parliaments. Second,
industrialized countries among ratifying Parties must account for at least 55 % of the
total 1990 CO2 emissions from this group.45
Even though this agreement set a binding target for its parties, it also gave
flexibility on how the states may meet their target, for example states can compensate
their target through doing reforestation that may be accomplish either on their own
45
Bohringer, Christoph. Kyoto Protocol : A Review and Perspectives. Center of European Economic Research. Page 10
29
territories or in other countries, the protocol also allows their parties to pay for
foreign projects that can result on greenhouse gas emission cut.46
However, in 2001 United States under Bush regime, explicitly declined to
ratify this protocol due to their assessment on the economy impact that will be
brought by this agreement, since in that time USA economy is still growing, it needs
to be support by big amount of energy which occurred from fossil fuel. US refused to
sacrifice the growth of their economy to participate in reducing global greenhouse
gas emission.47
Another aspect of Kyoto protocol which also refused by USA is the
exemption of developing countries from binding emission targets. Even though USA
declined the ratification of Kyoto protocol, it turns out to show good results, based on
data from the European Environment Agency 2013 can be seen Greenhouse gas
emission trends and projections in Europe 2012 tend towards a positive direction,
which can be seen from the graphic below48
:
46
United Nations. 1998. Kyoto Protocol To The United Nations Framework Convention On Climate Change. Page 6-7. Article 6 47
BBC news. 2001. “Kyoto: Why did the US pull out?”. BBC News. Data retrieved from http://news.bbc.co.uk/2/hi/americas/1248757.stm. Data retrieved on July 16, 2017 48
European Environment Agency. 2013. “Annual European Union greenhouse gas inventory 1990–2011 and inventory report 2013”. EEA. Copenhagen
30
Can be seen through the graph above, some countries such as France,
Slovenia, Netherlands, Finland, Italy, Belgium, Denmark, Sweden, Czech Republic,
Slovakia, Estonia, Bulgaria, Ukraine, Lithuania, And Latvia showed a reduction in
their emission during the period 1990 to 2013. Indonesia itself however, showed poor
results in the change of emissions gap for the same period, based on data from WRI
CAIT 2.0 2017, Indonesia has increased the Green House Gas (GHG) emission by
43%.49
Indonesia itself just ratified the Kyoto protocol in December 2004, after a
long process of ratification initiated in August 2002 involving relevant agencies, the
Department of Foreign Affairs, the Ministry of Justice & Human Rights, the State
Secretariat, the Department of Energy and Mineral Resources, the Ministry of
49
USAID. 2017. “Greenhouse Gas Emissions in Indonesia”. USAID. Pg 1
31
Agriculture, the Meteorology and Geophysics Agency and other relevant agencies
until June 28, 2004 Through the Plenary Session of the House of Representatives
approved the Kyoto Protocol constitution plan by all the factions. Susilo Bambang
Yudhoyono as Indonesia president in that time then signed Law No. 17 of 2004,
dated July 28, 2004, State sheet of the Republic of Indonesia No.72 years 2004 ,50
Supplement to the State sheet of the Republic of Indonesia Number 4403. In Law
No.17 of 2004 itself contained Indonesia's consideration in the ratification of the
Kyoto Protocol, such as the importance of controlling the increase of greenhouse gas
concentrations in accordance with the principle of collective responsibility
differentiated by taking into account the social and economic conditions of each
country, the vulnerability of Indonesia as the country with the second longest
coastline in the world to the impacts of climate change, Sea level, the need for the
development of Indonesian industry with low emission clean technology, and the
important role of Indonesia as the tropical country with the second largest forest in
the world in influencing the earth's climate.51
The ratification of Kyoto is very crucial for Indonesia as well as the further
policy process of climate protection. Thus it has established a broad-based
international mechanism that provides a valuable starting point for efficient climate
policies in the future.52
2.2.2 Marrakesh Accords (COP 7)
Regardless the withdrawal of US from Kyoto Protocol, in November 10, 2001
the 7th
Conference Of the Parties (COP7) of The United Nation Framework
Convention on Climate Change (UNFCCC) took place in Marrakech, Morocco. The
main agenda in this convention was to announce the further detail rules for the
50
Undang Undang Republik Indonesia Nomor 17 Tahun 2004 Tentang : Pengesahan Kyoto Protocol To The United Nations Framework Convention On Climate Change 51
Undang Undang Republik Indonesia Nomor 17 Tahun 2004 Tentang : Pengesahan Kyoto Protocol To The United Nations Framework Convention On Climate Change 52
Bohringer, Christoph. Kyoto Protocol : A Review and Perspectives. Center of European Economic Research. Page 21
32
implementation of Kyoto Protocol under the name of Marrakech Accord. Through
this accord, the parties have completed the negotiation on the outstanding legal text
for the operating rules of Kyoto Protocol.
Through this accord, UNFCCC also adopted the Kyoto Protocol Land Use,
Land Use Change and Forestry (LULUCF) activities, by providing 4 LULUCF
activities that can be chosen by the parties to help them meet their emission target
which are Forest management; Cropland management; Grazing land management;
and Re-vegetation. Furthermore, the accord also set the rule on the extent to which
Parties can account for emissions and removals from specific LULUCF activities, for
the first commitment period, which is limited by the following four-tier capping
system:
Tier 1: If a Party‘s afforestation, reforestation and deforestation activities
result in more emissions than removals, then the Party may offset these emissions
through forest management activities, up to a total level of 9 megatons of carbon per
year for the five-year commitment period.53
Tier 2: The extent to which forest management activities can be accounted for
to help meet emission targets beyond 9 megatons of carbon per year is subject to an
individual cap for each Party, specified in an appendix to the decision on LULUCF.
This cap includes joint implementation projects involving forest management.54
Tier 3: Emissions and removals from cropland management, grazing land
management and re-vegetation can be accounted for to help meet emission targets on
a net basis (e.g. changes in carbon stocks during 1990, times five, will be subtracted
53
United Nations Framework Convention On Climate Change. “LULUCF- Developments at past COP and SB sessions”. http://unfccc.int/land_use_and_climate_change/lulucf/items/3063.php. Data retrieved on July 17, 2017 54
Ibid.
33
from the changes in carbon stocks during the first commitment period, in the lands
where these activities will take place).55
Tier 4: Only afforestation and reforestation projects are eligible under the
clean development mechanism. Greenhouse gas removals from such projects may
only be used to help meet emission targets up to 1% of a Party‘s base year emissions
for each year of the commitment period.56
Through this accord, UNFCCC was able to put Kyoto protocol to operation,
and set a strong international framework on environmental protection, moreover this
accord through its LULUCF activities provided more flexibility for the parties in
regards to plan their action to achieve their emission target.
Since the adoption of the Kyoto Protocol, the government and private entities
in Indonesia have hosted a number of Activities Implemented Jointly (AIJ) projects
and feasibility studies covering three sectors which are energy, forestry, and waste
with funding from various agencies. The ministries of Indonesia which involved
were the Ministry of Environment, Ministry of Energy and Mineral Resources,
Ministry of Industry and Commerce, and Ministry of Forestry, and also office of the
National Focal Point for the UNFCCC, with its supporting unit in the Ministry of
Environment. Several project that have been done are mostly small-scale energy
projects which at COP 7 in Marrakesh in 2001 have been agreed to be eligible for
fast-tracking, the list of the project can be seen in the table below57
:
55
55
United Nations Framework Convention On Climate Change. “LULUCF-Developments at past COP and SB sessions”. http://unfccc.int/land_use_and_climate_change/lulucf/items/3063.php. Data retrieved on July 17, 2017 56
United Nations Framework Convention On Climate Change. “LULUCF-Developments at past COP and SB sessions”. http://unfccc.int/land_use_and_climate_change/lulucf/items/3063.php. Data retrieved on July 17, 2017 57
Institute for Global Environmental Strategies. 2004. “International Review for Environmental Strategies Vol. 5, No. 1”. IGES. Pg. 147
34
Besides those project that have been carried out by Indonesia, There are also
potential project for Indonesia on Clean Development Mechanism which are58
:
58
Institute for Global Environmental Strategies. 2004. “International Review for Environmental Strategies Vol. 5, No. 1”. IGES. Pg. 147
35
From the table above, can be seen that Indonesia have done several project with
another country in regards as the effort to reduce greenhouse gas emission such as
solid waste management with Australia and Japan, Solar energy Project with
Australia, etc. Beside those projects which have been done, Indonesia Ministry of
Environment in 2002 also revealed Indonesia potential project on Clean
Development Mechanism. One of the potential projects is on Palm Oil Waste
management to generate electricity with total emission reduction probability of 153
Kilo tones CO2/year.59
2.2.4 Doha Amendment to the Kyoto Protocol (COP 18)
The 2012 UN Climate Change Conference took place in Doha, Qatar, from
28 November until 7 December. The meetings included the 18th session of the
Conference of the Parties to the UN Framework Convention on Climate Change
(COP 18) and the 8th session of the Conference of the Parties serving as the Meeting
of the Parties to the Kyoto Protocol (CMP 8). Five subsidiary bodies also convened:
the Subsidiary Body for Implementation (SBI), Subsidiary Body for Scientific and
Technological Advice (SBSTA), Ad Hoc Working Group on Annex I Parties‘
Further Commitments under the Kyoto Protocol (AWG-KP), Ad Hoc Working
Group on Long-term Cooperative Action under the Convention (AWG-LCA) and Ad
Hoc Working Group on the Durban Platform for Enhanced Action (ADP). The main
objectives of the negotiations in Doha were to adopt the second commitment period
of the Kyoto Protocol and complete the work of the AWG-KP; to complete the work
of the AWG-LCA; and to advance negotiations under ADP. Major concerns were
how to fill the gap between mitigation pledges and what is required to achieve the 2o
C target, given the low level of ambition expressed so far by developed countries,
and how to secure adequate financing – securing financial flows to 2020 following
up on the fast-track financing that expires in 2012 and long-term financing from
2020, commensurate with the target of mobilizing $100 billion per year from 2020 to
59
Institute for Global Environmental Strategies. 2004. “International Review for Environmental Strategies Vol. 5, No. 1”. IGES. Pg. 148
36
support developing countries. The outcome of two weeks of negotiations was the
―Doha Climate Gateway‖, the elements of which were as follows:
Adoption of amendments to the Kyoto Protocol and establishment of the
second commitment period for an 8 year term (2013-2020). The amendments
included new annex B to the Kyoto Protocol, and replace the list under the heading
―Greenhouse gases‖ in Annex A to the Protocol.
Agreement to terminate the AWG-LCA and to move outstanding issues to
permanent bodies of the Convention (SBI, SBSTA, COP, CMP). Among the issues
discussed by AWG-LCA and agreed was to consider loss and damage, such as an
institutional mechanism to address loss and damage in developing countries that are
particularly vulnerable to adverse effects of climate change.
Agreement on the ADP‘s plan of work until completion in 2015, including
under its work stream 1 (related to pre-2020 ambitions, including on mitigation) and
work stream 2 (related to the 2015 agreement concerning the post-2020
arrangement).60
Besides the Doha climate gateway, in this 18th
COP, parties also agreed on
amendment of Kyoto Protocol which can be seen in the table below
Table Doha Amendment on Kyoto Protocol61
NO Kyoto Protocol Doha Amendment
1 Annex B
table
Consist of list of parties and their
Quantified emission limitation or
reduction commitment (percentage of
base year or period)
- Added Quantified
emission limitation or
reduction commitment
(2013–2020)
60
Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol on its eighth session, held in Doha from 26 November to 8 December 2012 61
United Nation. Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol on its eighth session, held in Doha from 26 November to 8 December 2012. Pg 12
37
(percentage of base
year or period),
Reference Year,
Pledges for the
reduction of
greenhouse gas
emissions by 2020
(percentage of
reference year).
- Added Belarus,
Cyprus, Kazakhstan,
and Malta to the list.
Remove Canada62
,
Japan63
, New
Zealand64
, and
Russian Federation65
from party list.
2 Annex A Consist of Green House Gases type Added Nitrogen
62
On 15 December 2011, the Depositary received written notification of Canada’s withdrawal from the Kyoto Protocol. This action will become effective for Canada on 15 December 2012. 63
In a communication dated 10 December 2010, Japan indicated that it does not have any intention to be under obligation of the second commitment period of the Kyoto Protocol after 2012. 64
New Zealand remains a Party to the Kyoto Protocol. It will be taking a quantified economy-wide emission reduction target under the United Nations Framework Convention on Climate Change in the period 2013 to 2020. 65
In a communication dated 8 December 2010 that was received by the secretariat on 9 December 2010, the Russian Federation indicated that it does not intend to assume a quantitative emission limitation or reduction commitment for the second commitment period.
38
List which are Carbon dioxide (C02),
Methane (CH4), Nitrous
oxide(N20),Hydrofluorocarbons
(HFCs),Perfluorocarbons(PFCs),
Sulphur hexafluoride (SF6)
trifluoride (NF3)
3 Article 3,
paragraph 1
The Parties included in Annex I shall,
individually or jointly, ensure that
their aggregate
anthropogenic carbon dioxide
equivalent emissions of the
greenhouse gases listed in Annex A
do not exceed their assigned amounts,
calculated pursuant to their quantified
emission limitation
and reduction commitments inscribed
in Annex B and in accordance with the
provisions of this
Article, with a view to reducing their
overall emissions of such gases by at
least 5 per cent
below 1990 levels in the commitment
period 2008 to 2012.
- Inserted article 3,
paragraph 1 bis after
paragraph 1 of Article
3.
- Inserted Article 3,
paragraph 1 ter after
Article 3, Paragraph 1
bis.
- Inserted Article 3,
Paragraph 1 quater
after Article 3
Paragraph 1 ter.
4 Article 3,
paragraph 7
In the first quantified emission
limitation and reduction commitment
period, from 2008
to 2012, the assigned amount for each
Party included in Annex I shall be
equal to the percentage
inscribed for it in Annex B of its
- Inserted Article 3
Paragraph 7 bis after
Article 3 Paragraph 7
- Inserted Article 3
Paragraph 7 ter after
Article 3 Paragraph 7
bis
39
aggregate anthropogenic carbon
dioxide equivalent emissions
of the greenhouse gases listed in
Annex A in 1990, or the base year or
period determined in
accordance with paragraph 5 above,
multiplied by five. Those Parties
included in Annex I
for whom land-use change and
forestry constituted a net source of
greenhouse gas emissions
in 1990 shall include in their 1990
emissions base year or period the
aggregate anthropogenic
carbon dioxide equivalent emissions
by sources minus removals by sinks in
1990 from land-use
change for the purposes of calculating
their assigned amount.
5 Article 3,
Paragraph 8
In paragraph 8 of Article 3 of the
Protocol, the words:
calculation referred to in paragraph 7
above
substituted by:
calculations referred
to in paragraphs 7 and
7 bis above
Inserted Article 3,
Paragraph 8 bis after
Article 3 Paragraph 8
6 Article 3,
Paragraph
12
Any certified emission reductions
which a Party acquires from another
Party in accordance with the
- Inserted Article 3
Paragraph 12 bis after
Article 3 Paragraph 7
40
provisions of Article 12 shall be added
to the assigned amount for the
acquiring Party.
- Inserted Article 3
Paragraph 12 ter after
Article 3 Paragraph 7
bis
7 Article 4,
Paragraph 2
The Parties to any such agreement
shall notify the secretariat of the terms
of the
agreement on the date of deposit of
their instruments of ratification,
acceptance or approval of this
Protocol, or accession thereto. The
secretariat shall in turn inform the
Parties and signatories to the
Convention of the terms of the
agreement.
Added the following
words to the end of the
first sentence of
paragraph 2 of Article
4 of the Protocol:
, or on the date of
deposit of their
instruments of
acceptance of any
amendment to Annex
B pursuant to Article
3, paragraph 9
8 Article 4
Paragraph 3
Any such agreement shall remain in
operation for the duration of the
commitment period specified in
Article 3, paragraph 7.
The words:
, paragraph 7
shall be substituted by:
to which it relates
All parties show their acceptance to commit in this amendment by submitting
its instrument of acceptance to the Depositary. Indonesia as one of the developing
country that agreed upon this amendment had deposited its instrument of acceptance
on 30 September 2014, by deposited it, Indonesia joins another 17 countries that have
already submit it namely: Bangladesh, Barbados, China, Djibouti, the Federated
States of Micronesia (FSM), Honduras, Kenya, Mauritius, Mexico, Monaco,
41
Morocco, Norway, Peru, Singapore, Solomon Islands, Sudan, the United Arab
Emirates (UAE).66
Indonesia decision in ratifying the Doha amendment and joining the second
commitment period of Kyoto protocol will help Indonesia to stay on track to achieve
its voluntary pledged to reduce emission as been stated in 2009 by Indonesia
president Susilo Bambang Yudhoyono in Climate Change Talks Conference in
Bangkok, Thailand which is to reduce emission by 26% on its own efforts, and up to
41 % with international support.67
Moreover, the decision that taken in this
convention which is to make further progress towards establishing the financial and
technology support and new institutions to enable clean energy investments and
sustainable growth in developing countries, will surely help Indonesia in achieving
its target.
2.2.5 Paris Agreement (COP 21)
On 12 December 2015, 196 Parties to the UN Framework Convention on
Climate Change (UNFCCC) adopted the Paris Agreement, a new legally-binding
framework for an internationally coordinated effort to tackle climate change.68
The
Paris Agreement was adopted as part of a decision of the Conference of the Parties
(COP) to the UNFCCC. Together with the Paris Agreement, the COP also adopted a
decision that guides pre-2020 action and sets out implementation details for the Paris
Agreement before its entry into force (the Decision).69
The Paris Agreement
establishes the main framework for cooperative action on climate change beyond
2020 and will replace the Kyoto Protocol. The Agreement is a treaty as a matter of
66
International Institute for Sustainable Development. 2014.”Indonesia Accept Doha Amendment”. http://sdg.iisd.org/news/indonesia-accepts-doha-amendment/. Data retrieved on July, 16 2017 67
Kementrian Lingkungan Hidup Republik Indonesia. 2009. “Antara : Target Emisi Karbon Indonesia Disambut Positif Negara Lain”. http://www.menlh.go.id/antara-target-emisi-karbon-indonesia-disambut-positif-negara-lain/. Data retrieved on July 16, 2017. Indonesia National Action Plan on GHG emission reduction has been stipulated in President Regulation No 61/2011 and GHG inventory in President Regulation no 71/2011. 68
Ginzky, Harald. 2017. “International Yearbook of Soil Law and Policy 2016”. Springer International Publishing. Pg 108 69
Climate Focus. 2015. “The Paris Agreement Summary”. Climate Focus. Amsterdam. Pg. 2
42
international law, which means that ratifying countries will be bound to one another
by its terms when it comes into effect. Paris Agreement Is a fresh air for multilateral
climate change diplomacy after the failure of COP 15 in Copenhagen in 2009 in
agreeing on a global climate regime. Paris Agreement aimed at limiting global
temperature rise below 2 ° C and agreed by 195 countries.
The Paris Agreement aims to hold global temperatures ‗well below 2°C above
pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C‘
(Art. 2.1.(a)).70
Each Party shall prepare, communicate and maintain successive National
Determined Contributions (NDCs), with an NDC communicated at a minimum every
five years. Developed countries should adopt economy wide absolute emission
reduction targets immediately, and developing countries should aim for this over
time (Art. 4.4).71
Each sub section of NDC will have to represent the progress over
the party‘s last NDC. However, implementing NDCs is not a part of the Paris
Agreement. It is the Paris Agreement and COP Decision to provide binding,
procedural rules for the preparation and assessment of NDCs not their execution.72
The Paris Agreement that adopts the principle of applicable to all Parties
(applicable to all Parties), provides considerable homework for developing countries.
Developing countries, which are referred to as non-Annex countries, must take part
in global efforts to mitigate greenhouse gas (GHG) emissions and at the same time
have to adapt to the effects of climate change. Therefore, these countries must
transform rapidly, towards low-carbon development and resilient to the impacts of
climate change.73
70
Climate Focus. 2015. “The Paris Agreement Summary”. Climate Focus. Amsterdam. Pg. 2 71
Ibid. Pg. 3 72
Ibid 73
Ribera, Teresa. “How to finance low-carbon and climate-resilient development ?” working paper. IDDRI. Pg. 14
43
For non-Annex nations with emerging economy status like Indonesia, the
more serious challenge lies in the aspect of climate change funding support, given
that climate change priorities will be mostly allocated to countries in the Least
Developing Countries (LDCs) and Small Island Developing States (SIDS).74
Before the Treaty of Paris was adopted by all States Parties incorporated in
the UNFCCC, there was a consideration that it would take a considerable long
amount of time before the new Agreement enter into force. This is based on the
experience of the Kyoto Protocol adopted, adopted on December 11, 1997, but
entered into force in 2005. That is why, in the initial negotiations, the year 2020
became a mutually agreed deadline for enacting the Paris Agreement. However, in
Paris it was agreed that the Paris Agreement would be enforceable by at least 55
countries representing 55% of global greenhouse gas emissions ratifying this
agreement.75
In fact, the ratification goes fairly quickly. As of October 4, 2016, 62
countries have ratified the Paris Agreement, with total emissions of 51.89% of the
required 55%.76
Ratifying the Paris Agreement can actually help Indonesia to ensure
action on climate change mitigation and action adaptation to be truly planned and
planned into the national development plan.
The Paris agreement sets out a periodic review process. Thus NDCs
communicated to the UNFCCC will be reviewed together every five years. From this
process it is expected that the efforts or ambitions of each State Party will increase
over time. That is why it will be easier for Indonesia to develop NDCs with reference
to existing long and medium term planning. For example, energy sector mitigation
targets and actions in the NDC are developed by considering and referring to the
74
UNFCCC. 2006. “United Nations Framework Convention on Climate Change: Handbook”. Intergovernmental and Legal Affairs, Climate Change Secretariat. Pg. 25 75
United Nations. Reference: C.N.735.2016.TREATIES-XXVII.7.d (Depositary Notification). Paris Agreement : Entry Into Force 76
Paris Agreement. Stattus of Ratification. Data retrieved from : http://unfccc.int/paris_agreement/items/9444.php. Data retrieved on July 17, 2017
44
National Energy Policy and the General Plan for National Energy (Rencana Umum
Energi Nasional (RUEN)), the Long Term Development Plan (RPJP) and considering
the results of the implementation of the National Action Plan for Greenhouse Gas
Emission Reduction (Rencana Aksi Nasional untuk Pengurangan Emisi Gas Rumah
Kaca (RAN GRK)).
Indonesia Intended National Determined Contribution (INDC) itself is finally
published in 2016. According to Directorate General of Climate Change Control at
the Ministry of Environment and Forestry of Indonesia, Indonesia INDC consist of
important development components which consists of (1) poverty reduction, (2)
maritime development, (3) sustainability of food, water and energy, and (4) building
archipelagic Climate resilience.77
Based on the target in 2010 of the Government of
Indonesia pledged to reduce emissions by 26% (41% with international support)
against the business as usual scenario by 2020, but at INDC this target is increased to
29 % By 2030. At the first Indonesia INDC, Indonesia is also targeting emissions
reductions from different sectors that can be seen in the table below78
:
77
Directorate General of Climate Change Control at the Ministry of Environment and Forestry of Indonesia. 2016. “PERUBAHAN IKLIM, PERJANJIAN PARIS,DAN NATIONALLY DETERMINED CONTRIBUTION”. Jakarta. Pg. 33 78
Republic Of Indonesia. 2016. “FIRST NATIONALLY DETERMINED CONTRIBUTION REPUBLIC OF INDONESIA”. Pg. 9
45
Besides emission reduction target set by Indonesia, Indonesia President Joko
Widodo in COP 21 in Paris also stated its commitment in achieving 25 % renewable
electricity energy sources, which then formulated through our first INDC which can
be found in page 3 of our first INDC that stated ―new and renewable energy at least
23% in 2025 and at least 31% in 2050‖.79
2.2.6 Millennium Development Goals (MDG’s)
Millennium Development Goals (MDG‘s) is a global partnership adopted in
United Nation Millennium Declaration which contain set of time-bound target
regarding global issues ranging from addressing extreme poverty to environmental
sustainability.80
Over all MDG‘s consist of 8 goals and 18 targets which can be seen
in the table below:
Goal 1 : Eradicate extreme
poverty and hunger
Target 1 : Halve, between 1990 and 2015, the
proportion of people whose income is less than one
dollar a day
Target 2 : Halve, between 1990 and 2015, the
proportion of people who suffer from hunger
Goal 2: Achieve universal
primary education
Target 3 : Ensure that, by 2015, children
everywhere, boys and girls alike, will be able to
complete a full course of primary schooling
Goal 3: Promote gender
equality and empower women
Target 4 : Eliminate gender disparity in primary
and secondary education preferably by 2005 and to
all levels of education no later than 2015
Goal 4: Reduce child Target 5 : Reduce by two-thirds, between 1990 and
79
Republic Of Indonesia. 2016. “FIRST NATIONALLY DETERMINED CONTRIBUTION REPUBLIC OF INDONESIA”. Pg. 3 80
United Nations Millennium Project. 2006. http://www.unmillenniumproject.org/goals/. Data Retrieved on July,16 2017
46
mortality 2015, the under-five mortality rate
Goal 5: Improve maternal
health
Target 6 : Reduce by three-quarters, between 1990
and 2015, the maternal mortality ratio
Goal 6: Combat HIV/AIDS,
malaria and other diseases
Target 7 : Have halted by 2015 and begun to
reverse the spread of HIV/AIDS
Target 8 : Have halted by 2015 and begun to
reverse the incidence of malaria and other major
diseases
Goal 7: Ensure environmental
sustainability
Target 9 : Integrate the principles of sustainable
development into country policies and programs and
reverse the loss of environmental resources
Target 10 : Halve, by 2015, the proportion of people
without sustainable access to safe
drinking water
Target 11 : By 2020, to have achieved a significant
improvement in the lives of at least 100 million
slum dwellers
Goal 8: Develop a global
partnership for development
Target 12 : Develop further an open, rule-based,
predictable, non-discriminatory trading and financial
system Includes a commitment to good governance,
development, and poverty reduction – both
nationally and internationally
Target 13 : Address the special needs of the least
developed countries Includes: tariff and quota free
47
access for least developed countries' exports;
enhanced program of debt relief for HIPC and
cancellation of official bilateral debt; and more
generous ODA for countries committed to poverty
reduction
Target 14: Address the special needs of landlocked
countries and small island developing States
(through the Program of Action for the Sustainable
Development of Small Island Developing States and
the outcome of the twenty-second special session of
the General Assembly)
Target 15: Deal comprehensively with the debt
problems of developing countries through national
and international measures in order to make debt
sustainable in the long term
Target 16: In co-operation with developing
countries, develop and implement strategies for
decent and productive work for youth
Target 17: In co-operation with pharmaceutical
companies, provide access to affordable, essential
drugs in developing countries
Target 18: In co-operation with the private sector,
make available the benefits of new technologies,
especially information and communications
48
From the table above, can be seen at the 7th
goals about ensuring
environmental sustainability, specifically in its 9th
target, MDG‘s aimed to integrate
the principles of sustainable development into country policies and programs and
reverse the loss of environmental resources. Moreover, MDG provide indicators to
monitor the progress of the state which are proportion of land area covered by forest,
ratio of area protected to maintain biological diversity to surface area, energy use (kg
oil equivalent) per $1 GDP , Carbon dioxide emissions (per capita) and consumption
of ozone-depleting CFCs , and proportion of population using solid fuels.
Indonesia, as one of the states who owned large area of tropical forest, and
developing country that search for development growth surely aware of
environmental degradation. According to the Indonesia Ministry of Forestry, we have
127 million hectares of "forest area", which is about two thirds of our area. However,
during the period 1997 to 2000, Indonesia had lost 3.5 million hectares of forest per
year, or as large as the province of South Kalimantan. This is because development
in Indonesia has sacrificed the natural environment. The practices of tree cut down
resulting in damaging the land, flood the rivers and waterways and polluted the
atmosphere. We have many other natural resources with which the lower economic
people can survive, especially the oceans that serve as jobs for 3 million people. In
fact, marine resources in Indonesia have also been affected by deforestation.
The purpose of the seventh MDGs is to block all such damage. The
government of Indonesia expected to integrate the principles of sustainable
development into state policies and programs and end the destruction of natural
resources.81
In regards to assess the success in achieving this MDGs goal, there needs
to be indicators as measurement. In this 7th
point of MDGs, those indicators are : the
ratio of actual forest cover to total land area based on the review of satellite imagery
and serial photographic surveys, carbon dioxide emission, primary energy
consumption, energy intensity, energy elasticity, energy mix for renewable energy,
81
Sekretariat Nasional Forum Indonesia Untuk Transparansi Anggaran (SEKNASFITRA). 2009. Strategi Akselerasi Pencapaian Target MDGS 2015. SEKNASFITRA. Jakarta. Pg. 8-9
49
total consumption of ozone depleting substances, proportion of fish stock within safe
biological limit, the ratio of terrestrial areas protected to maintain biological diversity
to total terrestrial area, and the ratio of marine protected areas to total territorial
marine area.82
Furthermore, in the next chapter the writer will analyze Indonesia
MDG‘s timeline to better known Indonesia progress especially their specific action
through several project to analyze their achievement. In regards with this, the writer
focusing only on two indicators which are Carbon Dioxide emission and energy mix
for renewable energy.
2.3 International Regime on Palm Oil
2.3.1 Importance of Palm Oil in Indonesia
The palm oil industry has the potential to generate significant economic and
social development in Indonesia. Palm oil is Indonesia‘s second most successful
agricultural product, after rice paddy, and largest agricultural export. It provides a
means of income and economic development to a large number Indonesia‘s rural
poor. The palm oil industry is a significant contributor to rural income in Indonesia.
In 2008, over 41 percent of oil palm plantations were owned by small land holders,
producing 6.6 million tons of palm oil. With over half of Indonesia‘s population lives
in rural areas—of which over 20 percent live below the poverty line—the palm oil
industry provides an incomparable means of poverty alleviation. Limiting the
conversion of forest to agriculture or palm denies considerable prospective economic
benefits and improvements in living standards to the rural population, condemning
them to declining standards of subsistence.83
82
Bappenas. 2010. “Report On The Achievement Of The Millennium Development Goals In Indonesia 2010”.Bappenas. Jakarta. Pg. 97 83
World Growth. 2011. The Economic Benefit of Palm Oil to Indonesia. World Growth. Pg. 4
50
The growth of Indonesia palm oil industry can be seen from the graphic of
palm oil production below.84
From graphic above, can be seen Total world production of palm oil has
increased almost threefold over the past 3 decades to 20091. In 2009/10, total palm
oil production was estimated at 45.1 million tons with Indonesia and Malaysia
accounting for more than 85 percent of the world total. Indonesia and Malaysia each
produced over 18 million tons of palm oil. In 2008, Indonesia exported over $14.5
billion in palm oil related products.
The Indonesian palm oil industry has experienced significant growth in recent
years with approximately 1.3 million ha of new area dedicated to palm oil plantations
since 2005, reaching almost 5 million ha in 2007 (representing 10.3 percent of the
48.1 million ha of agricultural land).17 This substantial expansion is due to higher
returns driven by stronger demand. The majority of Indonesia‘s palm crop is located
in Sumatra, with over 75 percent of total mature palm area and 80 percent of total
palm oil production. In 2008, approximately 49 percent of palm oil plantations were
owned by private plantations, 41 percent by small shareholders and the remaining 10
84
World Growth. 2011. “The Economic Benefit of Palm Oil to Indonesia”. World Growth. Pg. 7
51
percent by Government plantations. Private plantations represent the largest
producers of palm oil in Indonesia, producing over 9.4 million tons of palm oil
valued in 2008. In the same year smallholder plantations produced 6.7 million tons of
palm oil and Government plantations produced 2.2 million tons of palm oil.85
Significant growth in the palm oil industry, has also led to palm oil becoming
component of economic activity in regional economies. In certain regions, palm oil is
the dominant estate crop and major contributor to economic development. In the past
decade, the palm oil plantation areas of Kalimantan and Sulawesi have experienced
strong development, averaging 13 percent and 8 percent annual growth rates,
respectively.23 The plantation and harvesting of oil palm is labor intensive, as such,
the industry contributes a significant portion of employment in many regional areas.
In 2006, it was found that around 1.7 to 2 million people worked in the palm oil
industry.86
2.3.2 Roundtable on Sustainable Palm Oil (RSPO)
Palm oil is the most consumed oil in the world due to its wide variety of use
ranging from food ingredient, beauty product, to cooking oil. According to European
Palm Oil Alliance (EPOA), in 2015 palm oil have been consumed for more than 60
million tons from total 204,3 million tons of world consumption of oil and fat.
Moreover, according to EPOA in 2016, major consumers of palm oil are India,
China, European Union, Indonesia, and Malaysia, which can be seen in the table
below87
:
85
World Growth. 2011. The Economic Benefit of Palm Oil to Indonesia. World Growth. Pg. 10 - 11 86
World Growth. 2011. The Economic Benefit of Palm Oil to Indonesia. World Growth. Pg. 13 87
European Palm Oil Alliance. “Palm Oil Consumption”. Data retrieved from : https://www.palmoilandfood.eu/en/palm-oil-consumption . Data retrieved on July 16, 2017
52
Table . Consumption major users of palm oil (oil world 2016)
The RSPO was established on April 8, 2004 in Zurich in accordance with
Article 60 of the Swiss Civil Code which made RSPO governed by Swiss Law, and
in June 2012 RSPO had almost 900 companies from 50 countries as their members.88
With the main purpose in promote the production and use of sustainable palm oil for
people, planet, and prosperity as well as to unite stakeholders from seven sectors of
the palm oil industry ranging from oil palm grower, palm oil processors and traders,
consumer goods manufacturers, Environmental NGOs, Social NGOs, Bank and
Investors, and Retailers to develop and implement global standards for sustainable
palm oil. This multi-stakeholder non-profit group was founded by Aarhus United UK
Ltd., Karlshamns AB (Sweden), Malaysian Palm Oil Association (MPOA), Migros
Genossenschafts Bund (Switzerland), Unilever NV (Netherlands), and Worldwide
Fund for Nature (WWF).89
RSPO is a global guideline for sustainable palm oil production. Based on the
environmental destruction that caused by the growth of palm oil plantation, RSPO
sets its target to ensure fundamental right of previous landowners, local communities,
plantation workers, smallholders and their families to be fully appreciated, that no
primary forest or high conservation value areas have been cleared for palm oil
production since November 2005, and that owners of barns and plantations reduce its
environmental footprint. This global standard is set down in the Principles and
88
RSPO. 2015. The Statutes of The Roundtable On Sustainable Palm Oil. RSPO General Assembly. Malaysia 89
RSPO. RSPO Factsheet. RSPO Indonesia Liaison Office (RILO).
53
Criteria on Sustainable Palm Oil Production (a list of requirements to help ensure that
palm oil production is economically viable, environmentally appropriate and socially
beneficial), which members are required to comply with.
The Roundtable on Sustainable Palm Oil has created two certification
systems based on P & C RSPO: one to ensure sustainable palm oil, and another one
to ensure the integrity of sustainable palm oil trade where palm oil sold as sustainable
oil is in line with palm oil produced on certified plantations. Both systems involve
third party certification bodies. Thanks to a rigorous certification system, palm oil
processors and consumers can be confident that their products support sustainable
palm oil.
Through this RSPO certification, its member can get several advantages
which are : They will be able to increase their product competitiveness, as well as
able to market their product in a bigger market in another country, besides giving
advantages towards the palm oil industry, RSPO also help saving the environment by
reducing emission of greenhouse gases, better waste management, reduced usage of
pesticides, improved compliance with regulatory requirements, reduction of work
place accidents, and enhanced productivity. Environmentally and socially responsible
buyers willing to pay a premium for responsibly produced products. Some of them
have even forsworn dealing in non-certified products and only sourcing through
traceable supply chains. In short, any benefit would be for the mill or facility to
accrue itself – as a responsible palm oil producer or supplier verified by the RSPO.
Key social and environmental NGOs lend their sighting to the processes for greater
transparency and credibility. As all the members are bound to accept RSPO
certification on each other, the value of the status is quite universal.
Indonesia through its representative Indonesia Palm Oil Association
(GAPKI), is one of the member of RSPO since before RSPO inaugurated as
International Organization in 2004. GAPKI was chosen as Indonesia representative
in RSPO due to the fact that GAPKI is the biggest palm oil association in Indonesia
54
which the member is not only from local and international privates sector but also
state owned enterprises. The first relation between Indonesia and RSPO can be seen
back in years 2000. In that time, the chairperson of GAPKI, Derom Bangun received
a letter from Angela Bowden under United Kingdom Oil Organization. The letter
was aim to questioned was the forest fire in Indonesia still happening. In this letter as
well, she claim that many parties in UK will not hesitate to boycott Indonesia palm
oil product, if the forest fire still happening. The forest fire in Indonesia in that time
indeed considerably big, and has happened since 1998. Many issues are emerging in
connection with the cause of the fire, and many parties cornered the organizers of oil
palm plantations because it is considered to have a big contribution in this forest
fire.90
Later in 2001, Derom Bangun, still as his capacity as chairperson of GAPKI
attend a workshop held by WWF together with some representatives from
stakeholder countries that are related to oil palm. In that workshop, the representation
of each party‘s country asked to sign a statement of intention to create cooperation in
sustainable palm oil development. Of course, there are many different interests which
carried by each parties in that time, some of the plantation parties suspected that this
was an attempt by the westerners side to regulate and control oil palm companies in
Malaysia and Indonesia for their own trade interests. Due to this different, the
workshop ended with no deal.91
In 2003, the workshop held again and re-discuss the initiatives of the previous
event. In this time, the workshop take places in Malaysia already under the name of
RSPO. The workshop discuss deeper about the goal, organization, and principle
which will be the guideline for the future development. In this workshop, put forward
the principle of 3P which are Planet, People, and Profit. People, refer to social aspect
needed to be done responsibly without demeaning human rights and dignity. Planet
means in doing plantation or palm oil industry needs to be accompanied by
90
Bangun, Derom. 2010. “Derom Bangun : Memoar Duta Besar Sawit Indonesia”. Kompas Media Nusantara. Jakarta. Pg. 41 - 42 91
Ibid. Pg. 42 - 43
55
sustainability and continuity of the environment. Profit means the company needs to
be economically reliable. The 2003 workshop that then resulted in an establishment
of international organization which is also a certification body of palm oil
certification called RSPO. In the same event, the parties then formulate executive
board which consists from representatives of each member party. Later in the general
assembly on the second roundtable conference which held in Indonesia, the
chairperson of GAPKI, Ir. Derom Bangun chosen as the second vice president of
RSPO.92
From brief explanation above, can be seen the factor that influence GAPKI to
become the member of RSPO which are: external push from European market that
can affect the export of Indonesia palm oil in that time, and internal push from the
willingness of GAPKI in protecting Indonesia palm oil industry, GAPKI also see
RSPO was created with the principle of good faith to solve environmental problems.
However in 2011, GAPKI decided to withdraw from RSPO due to several
reasons which are : GAPKI wanted to give full commitment in supporting Indonesia
palm oil certification namely Indonesia Sustainable Palm Oil (ISPO), that they see
will have better binding power due to its legal basis which is fourth amendment of
the 1945 Constitution Article 3 paragraph (4): "The national economy is organized
on economic democracy, with the principle of togetherness, efficiency, justice,
sustainable, environmental friendly, independence and by maintaining the balance of
national economic progress. ISPO is one of Indonesia program which aimed protect
Indonesia palm oil industry that was created by Indonesia Ministry of agriculture,
and already applied since March 2011.93
Moreover, according to experts of the
Director General of Agro Industry at the Ministry of Industry, Timbun Aritonang,
Tuesday, October 4, 2011 in an interview with Tempo stated that ―the existence of
92
Bangun, Derom. 2010. “Derom Bangun : Memoar Duta Besar Sawit Indonesia”. Kompas Media Nusantara. Jakarta. Pg. 43 - 44 93
RSPO. 2017. Members. http://www.rspo.org/members/page/12?keywords=&member_type=&member_category=&member_country=Indonesia. Data retrieved on July, 16 2017
56
ISPO could be a tool to increase foreign investment to invest in Indonesia‖.94
Up to
now, twenty companies have carried out ISPO certification trials. In March 2012 all
oil palm companies, large and small, are obliged to carry out an ISPO audit, with an
estimated completion of this process in 2014. In 2017, ISPO have covered 12% out
of 11.9 million hectares of oil palm plantations in the country, or about 1.428.000
hectares. Besides to support ISPO, another reason of GAPKI withdrawal are their
view that RSPO benefits consumers more than producers. It can be seen from
unfulfilled promise of RSPO to set premium prices for fresh fruit bunches and palm
oil that has RSPO certificate. This condition occurs due to the consumer
unwillingness to pay for premium price. Besides the cost to get RSPO certification is
too high, and make small enterprise unable to get the certification.
Moreover, a study conduct by Yusuf Basiron and Foong Khew Yew entitled
The Burden of RSPO Certification Cost on Malaysian Palm Oil and National
Economy proves that RSPO certification creating economic losses and also
increasing carbon emissions. The study found that the cost incurred to certify 5.9
million hectares of Malaysian oil palm plantations was RM 851 million. These costs
include RSPO membership fees, pre-certification, certification and corrective action
fees. While the incentives gained from the sale of certified CSPO / CSPKO certified
palm oil are only RM 93 million, thus creating economic losses due to RSPO
certification amounting to RM 758 million per year. In addition to the economic loss,
RSPO certification is also considered to increase carbon emissions which is very
contrary to its sustainable principle. In the process of RSPO certification involves
many activities and experts including from abroad who all use fossil energy. In fact,
environmental improvements or reductions in carbon emissions do not occur with the
certification because the certification process only compares what farmers have done
with what is the RSPO standard. By calculating the carbon footprint, carbon
94
Sedayu, Agung. 2011. “Indonesia Keluar Dari RSPO, Ekspor Tak Terpengaruh”. Tempo . Data retrieved from https://m.tempo.co/read/news/2011/10/04/090359864/indonesia-keluar-dari-rspo-ekspor-tak-terpengaruh. On July, 16 2017
57
emissions from fossil fuels spent in the implementation of RSPO certification
resulted in carbon dioxide emissions of 81.4 kg CO2 for each ton of CPO certified.95
If the same method is used to assess Indonesia's oil palm, the potential RSPO
certification economic loss for 10 million hectares of oil palm plantation is around
Rp 4.2 trillion per year. This economic loss is certainly not small. If the economic
losses are used to overcome poverty in Indonesia then about one million of the
population is free of poverty every year. The increase in carbon emissions resulting
from RSPO certification for Indonesia's 32 million tons of CPO reached 2.6 million
tons of CO2. The increase in carbon emissions due to RSPO certification is certainly
contrary to the intent and purpose of certification of sustainable palm oil, among
others, reducing carbon emissions. Contrary to international efforts to reduce carbon
emissions in every country. In addition, the increase in carbon emissions due to
RSPO certification is also counter to the Government of Indonesia efforts to reduce
carbon emissions with or without international assistance.96
However, GAPKI didn‘t obligate its members that already became member of
RSPO to withdraw as well because it is their own rights as member of RSPO.
Indonesia until 2017 has 114 member of RSPO. RSPO in the other hand also have
certified about 1,718,558 hectares of Indonesia palm oil plantation. Indonesia still see
RSPO as legal certification for companies and should be able to walk together with
ISPO, due to this view, government of Indonesia in 17 February 2016 launched a
joint-study between the Indonesian Sustainable Palm Oil Standard (ISPO) and the
Roundtable on Sustainable Palm Oil (RSPO) which marking a milestone for closer
and effective cooperation between Indonesian and global palm oil sustainability
standards.
95
GAPKI. 2016. Sertifikasi RSPO Rugikan Ekonomi dan Naikan Emisi Karbon Sawit ?. GAPKI. Data retrieved from https://gapki.id/sertifikasi-rspo-rugikan-ekonomi-dan-naikkan-emisi-karbon-sawit/ on July 26, 2017 96
GAPKI. 2016. Sertifikasi RSPO Rugikan Ekonomi dan Naikan Emisi Karbon Sawit ?. GAPKI. Data retrieved from https://gapki.id/sertifikasi-rspo-rugikan-ekonomi-dan-naikkan-emisi-karbon-sawit/ on July 26, 2017
58
Since the establishment of the Kyoto Protocol, the environmental issue,
especially the reduction of global warming, has become one of the global issues that
raised as main agenda of many countries in the world. This is more strengthen by the
establishment of international treaty by the Conference of Parties as the continuity
and development of Kyoto protocol. Indonesia and the United States are the two
countries that are very concerned about this environmental issue because: 1.
Indonesia is one of the countries with the largest forest area in the world but also
with a high rate of deforestation, 2 United States is one of the largest emitting
countries in the world. The similarity of interest in this environmental issue which
then helps the establishment of cooperative relations between the two parties which
will be the background of the creation of Indonesia USA comprehensive partnership
which is the umbrella of CIRCLE project.
59
CHAPTER III
Indonesia’s Achievement on Reducing Carbon Emission and
Increasing Renewable Energy Before CIRCLE Project : 2000-2011
3.1 Background
This chapter will explain about Indonesia effort and achievement in reducing
national emission and increasing the use of renewable energy by its own within years
2000 – 2011 which classified by the writer as ―before CIRCLE project timeline‖. The
writer separate Indonesia MDG‘s timeline into two parts which are before CIRCLE
project and after CIRCLE project to compare the achievement from each parts by
using Indonesia MDG‘s report from the relevant years as the benchmarks. In this
chapter will show Indonesia achievement in reducing emission and increasing use of
renewable energy seen from Indonesia 2010 MDG report.
3.2 Indonesia MDG timeline
Indonesia is one out of 189 countries that adopted the United Nations
Millennium Declaration, in September 2000, at the United Nation Summit in New
York. Indonesia, which in that time was under the presidential era of Abdurrahman
Wahid. In his speech at the UN Summit in New York, he stated the importance of
United Nations in addressing the world‘s problem, he also stated: ―the third
millennium is important because in this millennium we will be able to coordinate and
to work together for the benefit of mankind as a whole‖.97
From his speech can be
seen the support of Indonesia government towards global cooperation not only to
address global problems, but also to help Indonesia development.
97
United Nations. 2000, September 8. United Nations General Assembly Fifty Fifth session official record. Retrieved from http://www.un.org/ga/search/view_doc.asp?symbol=A/55/PV.7. Pg. 8. Retrieved on July, 17 2017
60
According to Sri Mulyani Indrawati, the then State Minister for National
Development Planning/Head of National Development Planning Agency (Bappenas)
in 2005, she stated that ―MDGs have become an important reference in the
development implementation in Indonesia, from the planning phase as it is stated in
the Medium term National Development Plan (RPJMN) to its implementation. In
spite the constraints, the Government of Indonesia has committed to achieve its
MDGs. Therefore, hard work and cooperation with all parties, including civil society,
private sectors and donor community, are needed‖.98
In this chapter, the writer will explain the programs of Indonesia government,
within the time line of Indonesia MDGs which can be seen in the figure below, in
term to see the impact given by certain program towards Indonesia MDGs
achievement.
3.2 Before CIRCLE Project
The time frame of ―before CIRCLE project‖ refers to years 2000-2011 which
is included the first half of MDG progress. In behalf as a signatory to the Millennium
Development Declaration, Indonesia produced its first Progress Report on The
Achievement of the Millennium Development Goals in February 2004. In this report,
Indonesia showed their current progress of its achievement towards the MDGs from
98
BAPPENAS. 2005. Summary – Indonesia Progress Report on the MDGs. BAPPENAS. Jakarta. Pg. 1.
2000 2001 2003 2002 2004 2005 2006 2007 2008 2008 2009 2010 2011 2012 2013 2014 2015 2016
MDGs
Before CIRCLE
CIRCLE
Project SDG
Indonesia MDGs Timeline
61
1990 to 2003. The report used 1990 or the closest data, wherever available, as a
baseline to establish consensus and reach agreement on Indonesia‘s progress with its
MDG targets and to set benchmarks for future work.99
From those report, especially the specific goal number 7, about ensuring
environmental sustainability, government of Indonesia have suffered several
challenge and problem such as the reduction of forest areas to land proportion which
reduced from 67.7 percent in 1993 to 63.0 percent in 2004, the increase in ratio of
energy usage per domestic product which can be seen in the graphic below.100
According to this first MDGs progress report of Indonesia, the act of illegal
cutting of trees in national parks, illegal logging and the violation of borders of
conservation areas has lead Indonesia to increase the deforestation rate from 1.6
million hectares per year during the period of 1985-1997 to 2.1 million hectares
during the 1997-2001 periods. This deforestation plus the increase of energy demand
from industry, as well as the lack of non-renewable energy that then leads to the
increase of Indonesia greenhouse gas emission. The forestry itself is expected to
contribute 11-13 % to the total emission.101
99
BAPPENAS. 2005. Summary – Indonesia Progress Report on the MDGs. BAPPENAS. Jakarta. Pg. 1. 100
Ibid. Pg. 27 101
BAPPENAS (Badan Perencanaan Pembangunan Nasional). 2005. Summary – Indonesia Progress Report on the MDGs. BAPPENAS. Jakarta. Pg. 28
Commercial energy use per million rupiah
GDP
62
In dealing with such issues as well as to support our effort in achieving
MDGs goal, Indonesia government formulates their National Long Term
Development Plan (RPJPN) for 2005 – 2025 periods. RPJPN then divided in four
separate Medium Term Development Plans (RPJMNs) which all have a life span of
five years, started from 2005 – 2009 as its first RPJMN. In this RPJPN, the
government of Indonesia point out 9 development goals to be achieved which are :
political, defense and security, law and state administration, social culture, human
resources, economy, regional, infrastructure, and natural resources and environment
development.102
In the time period of 2005 – 2009, especially in development related to
Indonesia effort in reducing emission and clean energy development, Indonesia has
done several program which are :
3.2.1 Science and technology in the field of energy and minerals
Science and technology development is very influential on the welfare of the
nation and also to advance the civilization of the nation. Technology and science is
one significant factor in improving the quality of life in a country. In this era of
globalization, the development of technology and science can also serve as an
indicator of the strength of the nation, because the development of science and
technology can foster an innovation climate that can encourage the growth of creative
and high quality human resources.103
In the field of development of science and technology itself, throughout 2005-
2009 Indonesia has conducted several programs one of them in the field of energy
and minerals, namely the development of biofuel design technology (biodiesel and
bioethanol). Some examples of the realization of this program are: bioethanol
processing technology research program from palm juice by Coconut and Other Palm
102
BAPPENAS. 2005. Visi dan Arah Pembangunan Jangka Panjang (PJP) Tahun 2005 – 2025. Kantor Menteri Negara Perencanaan Pembangunan Nasional. Jakarta. Pg. 1-16 103
Peraturan Presiden Republik Indonesia Nomor 7 Tahun 2005 tentang Rencana Pembangunan Jangka Menengah Nasional Tahun 2004 – 2009. Section IV.22-1. Pg. 178
63
Research Institute, Manado, and research on the strategy of developing coconut
based biodiesel industry in Maluku by Center for Assessment and Development of
Agricultural Technology
In the research of bioethanol processing technology engineering from palm
juice, the result is it has produced bioethanol processing machine which is practically
applied mainly by farmer group and medium scale industry. This machine can
produce bioethanol which later can be used as alternative fuel to replace fossil fuel.104
Utilization of bioethanol itself to be used as vehicle fuel can be done by mixing
bioethanol with fuel oil. By mixing bioethanol on vehicle fuel, in this case Premium
with a ratio of 50:50, emissions of carbon dioxide gas produced as residual burning
showed a reduction of 3.66%.105
In addition to reducing carbon emissions, the use of
biodiesel as an oil fuel mixer is also proven to save fuel usage, with a 90:10 mixed
ratio, fuel efficiency savings could reach 12.5% - 29%. This is because bioethanol
itself has a higher octane value than Indonesia's fuel oil products which is
premium.106
Meanwhile, the research on the development strategy of coconut based
biodiesel industry in Maluku examines the process of making coconut biodiesel,
biodiesel weakness and advantages, SWOT analysis on biodiesel development in
Maluku, biodiesel industry development strategy, and government policy support,
especially from Maluku Local Government.107
Biodiesel itself is one type of biofuel
which is a fuel engine made from renewable materials such as vegetable oils and
104
Lay, A. 2009. Jurnal Litbang Pertanian : Rekayasa Teknologi Alat Pengolahan Bioetanol dari Nira Aren. Balai Penelitian Tanaman Kelapa dan Palma Lain. Manado. Pg. 100-103 105
Fauzi Mukhamad. 2015. Pengaruh Bioetanol Terhadap Lambda Dan Emisi Gas Buang Pada Sepeda Motor Empat Tak Satu Silinder Berbahan Bakar Premium. Universitas Negeri Semarang. Semarang. Pg. 37 - 38 106
Lay, A. 2009. Jurnal Litbang Pertanian : Rekayasa Teknologi Alat Pengolahan Bioetanol dari Nira Aren. Balai Penelitian Tanaman Kelapa dan Palma Lain. Manado. Pg. 109 - 111 107
Bustaman, Sjahrul. 2009. Jurnal Litbang Pertanian : Strategi Pengembangan Industri Biodiesel Berbasis Kelapa Di Maluku.Balai Besar Pengkajian dan Pengembangan Teknologi Pertanian. Bogor. Pg. 46 - 52
64
animals that are devoted to use on diesel engines.108
Maluku was chosen as a place to
develop coconut based biodiesel based on the consideration of the availability of raw
materials and area. Based on data from the Central Bureau of Statistics of Maluku
2007, Maluku Province has a community coconut area of 90,310 ha with production
of 69,184 t / year.109
The coconut area is spread in almost all regions , namely Southeast Maluku
144.69 ha, Southeast Maluku 15,775 ha, Central Maluku 10,398 ha, Buru 13,449 ha,
Aru Islands, 4,825 ha, West Seram 12,823 ha, East Seram 16,399 ha, and Ambon
2,172 ha. Coconut plantation area of 90,310 ha has the potential to produce coconut
oil 242,80 million / year or equivalent 218.50 million / year biodiesel.110
Development of plantation commodities including coconuts is still widely open in
Maluku. According to Agroecology Zone map scale 1: 250.000 there are
1,263,575.40 ha of area that appropriate for coconut farm. The area is spread in West
Southeast Maluku regency (399,199,40 ha), Southeast Maluku (61,906,90 ha),
Central Maluku (165,847 ha), Buru (34,923.40 ha), West Seram (97,052,60 ha),
Seram East (332,328.50 ha), and Aru Islands (232,317.70 ha).111
The development of
the coconut of the people is directed at Aru Islands District, West Southeast Maluku
and Southeast Maluku because in that region, coconut has a higher comparative
advantage compared to other plantation commodities.112
However, although the biodiesel potential in Maluku is large, plus the
Ministry of Energy and Mineral Resources Regulation No. 20 of 2014 on mandatory
utilization of biodiesel as a mixture of fuel oil, which is 10% for transportation,
108
Haryanto, Bode. 2002. “Bahan bakar alternatif biodiesel”. Universitas Sumatera Utara Digital Library. Sumatera Pg. 1 109
Bustaman, Sjahrul. 2009. Jurnal Litbang Pertanian : Strategi Pengembangan Industri Biodiesel Berbasis Kelapa Di Maluku.Balai Besar Pengkajian dan Pengembangan Teknologi Pertanian. Bogor. Pg. 48 110
Ibid. 111
Ibid. 112
Bustaman, Sjahrul. 2009. Jurnal Litbang Pertanian : Strategi Pengembangan Industri Biodiesel Berbasis Kelapa Di Maluku.Balai Besar Pengkajian dan Pengembangan Teknologi Pertanian. Bogor. Pg. 48
65
industry and 20% for electricity in 2014.113
The absorption of biodiesel in Maluku
has not been able to show good results. Based on the statistics of New Renewable
Energy and Energy Conservation (EBTKE) until 2014, bioenergy utilization in
Maluku that shows good result comes from the development of bioenergy steam that
comes from the palm oil and sugar cane industry by generating a total of 22 MW of
electricity.114
Meanwhile, for the use of biodiesel as a mixture of fuel, cannot show
results. This is due to the lack of facilities for the fuel mixing process. Director of
Bioenergy at the Ministry of Energy and Mineral Resources Dadan Kusdiana in a
discussion of the National Energy Board at the Hotel Borobudur, Thursday
(21/8/2014) said, "We have not been able to distribute biodiesel in eastern Indonesia
to Maluku is 0%, so does Papua".115
Although in the eastern part of Indonesia, the use of biofuel is still not
effective, the development of biofuel in Indonesia as a whole, especially in the field
of electricity until 2011 showed a positive result. Some of the indications are :
Increased in installed Capacity on Grid : Biomass , Biogas, and Municipal Waste
Power Plant from 2001 to 2011.
On Grid's electrical system is a power distribution system whereby a power
plant other than Perusahaan Listrik Negara (PLN)'s power plant works together
with PLN's network to meet daily electricity needs. Another power plant is
usually a natural power plant built by the state with the help of private parties.
On Grid electrical system is considered more efficient than Off Grid system
because of its ability to determine the origin of electrical energy based on the
power needed at a certain time, for example: if installed On Grid Solar Power
113
Indonesia Ministry of Energy and Mineral Resources Regulation No. 20 of 2014 114
Directorate General of New,Renewable Energy and Energy Conservation. 2015. Statistik Energi Baru Terbarukan dan Konservasi Energi (EBTKE) 2015. Indonesia Ministry of Energy and Mineral Resources. Jakarta. Pg. 19 115
Yazid, Muhammad. 2014,August 21. Pemanfaatan biodiesel di Maluku dan Papua 0%. Data retrieved from http://industri.kontan.co.id/news/pemanfaatan-biodiesel-di-maluku-dan-papua-0. Retrieved on July 17, 2017
66
Plant (PLTS) connected to a house, then the need for electricity during the day of
the house can be filled only by the PLTS, it is because the average electrical load
during the day is lower than at night. While at night where the household
electrical load usually increases, then in select the flow of electricity that comes
from PLN power plant to meet the electrical load of the house.116
An increase in On Grid's installed capacity from renewable energy can
certainly help replace the electrical energy generated from environmentally
damaging coal-fired power plants, which means that they are more
environmentally friendly, thereby directly helping to reduce carbon emissions.
The increase in on grid capacity installed in 2001 to 2011 can be seen in the table
below. 117
116
Solar Surya Indonesia. 2012, November 21. “Sistem Off Grid, On Grid PLTS”. Data retrieved from http://solarsuryaindonesia.com/info/sistem-off-grid-on-grid-tie. Retrieved on July 18, 2017 117
Directorate General of New,Renewable Energy and Energy Conservation. 2015. Statistik Energi Baru Terbarukan dan Konservasi Energi (EBTKE) 2015. Indonesia Ministry of Energy and Mineral Resources. Jakarta. Pg. 17
No Company Name Year Contract
Type Location PLN Region
Biomass
Type
Contract
(MW)
1 PT Riau Prima Energy 2001 EP Riau PLN Wilayah
Riau
Palm
Waste 5
2 PT Growth Sumatera 1 2006 EP North
Sumatera
PLN Wilayah
Sumut
Palm
Waste 9
3 PT Listrindo Kencana 2006 IPP Bangka PLN Wilayah
Bangka
Palm
Waste 5
4 PT Indah Kiat Pulp &
Paper 2006 EP Riau
PLN Wilayah
Riau
Palm
Waste 2
5 PT Belitung Energy 2010 IPP Belitung PLN Wilayah
Babel
Palm
Waste 7
Installed Capacity on Grid : Biomass , Biogas, and Municipal Waste Power Plant
67
Based on the table above can be seen the use of palm waste as a source of
electrical energy dominate the development of electricity until 2011. Development
centered on the area of the largest palm grower area indicates the government's
efforts in exploiting the different potential of each region. The amount of electricity
generated from the biomass-based on grid system has significantly increased from
2006 to 2010 which can be seen in the graph below.118
118
Directorate General of New,Renewable Energy and Energy Conservation. 2015. Statistik Energi Baru Terbarukan dan Konservasi Energi (EBTKE) 2015. Indonesia Ministry of Energy and Mineral Resources. Jakarta. Pg. 19
6 Permata Hijau Sawit 2010 EP Riau PLN Wilayah
Riau
Palm
Waste 2
7 PT Pelita Agung 2010 EP Riau PLN Wilayah
Riau
Palm
Waste 5
8 PT Growth Sumatera 2 2010 EP North
Sumatera
PLN Wilayah
Sumut
Palm
Waste 10
9 PT Growth Asia 2011 EP North
Sumatera
PLN Wilayah
Sumut
Palm
Waste 10
10 PT Navigat Organic 2011 IPP Bekasi PLN Dist Jabar MSW 6
EP : Excess Power
IPP : Independent Power Producer
MSW : Municipal Solid Waste
68
Source : Directorate General of New,Renewable Energy and Energy Conservation. 2015. Statistik Energi
Baru Terbarukan dan Konservasi Energi (EBTKE) 2015. Indonesia Ministry of Energy and Mineral Resources.
Jakarta. Pg. 19
Based on the graph above, the amount of electricity that can be generated by the
biomass power plant listed in the table in 2011 is calculated as 61 Mega Watt, if the
calculation of electricity needs of 1 house average of 2,854 watts per day, then the
total power of electricity generated Above can meet the electricity needs for 21,374
houses.119
Increased production and distribution of biodiesel from 2009 to 2011.
The increasing of biomass power generation until 2011, was also accompanied by
increased production of biodiesel in Indonesia as a whole. An increase in Indonesia's
biodiesel production and distribution from 2009 to 2011 can be seen in the graph
below.120
119
Kho, Dickson. “Cara Menghitung Daya Listrik yang diperlukan Rumah”. Data retrieved from http://teknikelektronika.com/cara-menghitung-daya-listrik-yang-diperlukan-rumah/. Retrieved on July 18, 2017 120
Directorate General of New,Renewable Energy and Energy Conservation. 2015. Statistik Energi Baru Terbarukan dan Konservasi Energi (EBTKE) 2015. Indonesia Ministry of Energy and Mineral Resources. Jakarta. Pg. 20
0
10
20
30
40
50
60
70
2006 2010 2011
Installed Capacity (MW)
69
Source : Directorate General of New,Renewable Energy and Energy Conservation. 2015.
Statistik Energi Baru Terbarukan dan Konservasi Energi (EBTKE) 2015. Indonesia Ministry of
Energy and Mineral Resources. Jakarta. Pg. 20
Based on the graph above, it can be seen that significant improvement in the
development of biodiesel in Indonesia occurs in terms of production and export,
but the absorption of biodiesel at the domestic level has not shown a significant
increase. This is of course very regrettable especially when compared with the
amount of production and its exports that are considered very significant. In
2008, the government issued Regulation of the Minister of Human Resources
No. 32 of 2008 which regulates the provision, utilization and administration of
biofuel as other fuels. In the attachment the regulation has been regulated
phasing of minimum utilization of biodiesel which can be seen in table below.121
Sector Type Oct 2008 –
Dec 2008
January
2009
January
2010
January
2015
January
2020
January
2025
Informatio
n
Household - - - - - - Not yet
Specified
121
Peraturan Menteri SDM No 32 tahun 2008 tentang penyediaan, pemanfaatan dan tata niaga bahan bakar nabati (biofuel) sebagai bahan bakar lain. Lampiran 1
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2009 2010 2011
Indonesia Biodiesel Production and Distribution
Production
Export
Domestic
70
PSO
Transportation
1%
(existing) 1% 2,5% 5% 10% 20%
To total
needs
Non PSO
Transportation 1% 1% 3% 7% 10% 20%
To total
needs
Industry and
Commercial 2,5% 2,5% 5% 10% 15% 20%
To total
needs
Power Plant 0,1% 0,25% 1% 10% 15% 20% To total
needs
Source: Minister of Energy and Mineral Resources Regulation No. 32 of 2008 on the supply,
utilization and administration of biofuels as other fuels. Appendix 1
After seeing the sharply increasing production and export of biodiesel in
2011, the government took further steps in its effort to increase domestic
absorption of biodiesel by amending the Minister of Manpower no. 32 of 2008
through Ministerial Regulation No. 25 of 2013 on changes to regulations Minister
of energy and mineral resources number 32 of 2008 on the supply, utilization, and
marketing of biofuels as other fuels. In this regulation the government improves
the presentation of the minimum utilization of biodiesel utilization stages, which
can be seen in the table below.122
122
peraturan menteri esdm nomor 25 tahun 2013 tentang perubahan atas peraturan menteri energi dan sumber daya mineral nomor 32 tahun 2008 tentang penyediaan, pemanfaatan, dan tata niaga bahan bakar nabati (biofuel) sebagai bahan bakar lain. Lampiran 1
Sector Type September
2013
January
2014
January
2015
January
2016
January
2020
January
2025 Information
Household - - - - - - Not yet
Specified
PSO
Transportation 10% 10% 10% 20% 20% 25%
To total
needs
Non PSO
Transportation 3% 10% 10% 20% 20% 25%
To total
needs
71
Source : Source: Minister of Energy and Mineral Resources Regulation No. 32 of 2008 on the
supply, utilization and administration of biofuels as other fuels. Appendix 1
Based on the above table, the government's ambition is to increase domestic
biodiesel catch, by increasing the percentage of biodiesel use obligation for fuel
mixture in all sector type.
Increased installed capacity of biodiesel and bioethanol (in metric tons and kilo
liters) from 2006 to 2011.
Installed capacity is the total production capacity that can be produced by
production machines, which in this case are biodiesel and bioethanol producing
engines. Installed capacity does not determine the final amount of production,
because the installed capacity does not quantify production factors that can
reduce the number of final products. By knowing the amount of installed
capacity of biodiesel and bioethanol, can be seen the development of Indonesia
in infrastructure development that support this production. The development of
installed capacity of biodiesel and bioethanol from 2006 - 2011 can be seen in
the table below.123
123
Directorate General of New,Renewable Energy and Energy Conservation. 2015. Statistik Energi Baru Terbarukan dan Konservasi Energi (EBTKE) 2015. Indonesia Ministry of Energy and Mineral Resources. Jakarta. Pg. 21
Industry and
Commercial 5% 10% 10% 20% 20% 25%
To total
needs
Power Plant 7,5% 20% 25% 30% 30% 30% To total
needs
72
Source : Directorate General of New,Renewable Energy and Energy Conservation. 2015. Statistik Energi
Baru Terbarukan dan Konservasi Energi (EBTKE) 2015. Indonesia Ministry of Energy and Mineral
Resources. Jakarta. Pg. 21
From two tables above can be seen that from biodiesel development, the
total installed capacity experiencing stable increase from 2006 till 2011 which
shown the progress of its infrastructure building is continuing, meanwhile from
Years Total installed capacity
Metric Tons Kilo Liters
2006 7.000 8.046
2007 1.907.000 2.191.954
2008 2.701.010 3.104.609
2009 3.670.973 4.219.509
2010 4.432.973 5.095.371
2011 4.474.373 5.142.957
Years Total installed capacity
Metric Tons Kilo Liters
2006 0 0
2007 42.900 55.000
2008 233.300 299.103
2009 264.679 339.333
2010 264.679 339.333
2011 264.679 339.333
BIODIESEL
BIOETHANOL
73
bioethanol development, stagnancy occurs from 2009 to 2011 shows that there
are no new infrastructure build in that time.
3.2.2 Natural Resource Management Development and Environmental
Function Preservation
Indonesia's long-term development emphasizes on the principle of sustainable
development supported by the management of natural resources and a good
environment. Based on these principles, forestry, energy, mineral, and mining
resources are utilized as development capital coupled with its conservation
efforts.124
Indonesia's forest resources are one of the largest in the world. In 2004
Indonesia's forest area was 126.8 million hectares making it the third largest
tropical forest group in the world after Brazil and Zaire. In addition, in the same
year's assessment, Indonesia's biodiversity was also second only to Columbia.125
Based on these facts, Indonesia's forest area further strengthens itself not only as
a strategic development capital but also as one of the world's lungs that play a
direct role in maintaining global climate stability.
However, the forestry and peat lands sector in Indonesia itself is also a major
emission contributing sector. Based on data from Indonesian Ministry of
Republic Industry, in 2000 alone Forestry and peat lands accounted for 59.6% of
Indonesia's total gas emissions, followed by Energy 20.4%, Waste 11.42%,
Industrial Process 3.12%, Agriculture 5.47% with emissions generated from
forestry already added to emissions from deforestation and forest degradation
processes, and transported emissions generated together in energy. To overcome
the problems of the forestry sector itself, the Indonesian government has
implemented several programs such as Daily Hotspot monitoring in 20 provinces
124
Bappenas. 2009. “Pencapaian Sebuah Perubahan: Evaluasi 4 Tahun Pelaksanaan RPJMN 2004 – 2009”. Kementrian Negara PPN. Jakarta. Pg. 453. 125
Ibid.
74
to reduce the potential for forest fires, the implementation of the Green Indonesia
(MIH) Program through the Indonesian Simultaneous Plantation Action
Movement which reaches more than 79 million trees plantation, Women
Planting and Maintaining Trees that reach over 10 million trees, Solidarity of
Wives of United Indonesia Cabinet (SIKIB) through Indonesia Green and Clean
Program, Green Bali Movement and Green Bangka Belitung Movement. Based
on the implementation of the above program, the yield of vegetation cover levels
in 2006-2007 is 37 percent of Sumatera area, 8.2 percent in Java, 39 percent in
Kalimantan, 15-18 percent in Bali and Nusa Tenggara, 49 percent in Sulawesi,
83 percent in Maluku, and 73 percent in Papua.126
3.3 Indonesia overall emission and energy consumption 2011
As been stated in the previous chapter, the writer will use Indonesia MDGs
report especially goals indicator from the 7th
point of MDGs which are
greenhouse gas emission, and renewable energy mix as tools to assessing the
success of several program which stated before within period years 2000 – 2011
which considered as the time before CIRCLE Project established.
3.3.1 Indonesia Greenhouse Gas emission 2011
Green House Gas emission are a group of compounds that are able to trap
heat (long wave radiation) in the atmosphere, keeping the Earth's surface warmer
than it would be if they were not present.127
One of this gases which also the main
gases produces by the treatment of POME in open lagoon is what so called Methane
(CH4). In 2010, Indonesia ranked as the 6th highest methane emitter, behind China,
the U.S., Russia, India, and Brazil, with estimated total anthropogenic methane
emissions of 234.6 MTCO2e. From the total methane emission in Indonesia in that
years, waste water contribute for 10 % of the source. Meanwhile the methane
126
Bappenas. 2009. “Pencapaian Sebuah Perubahan: Evaluasi 4 Tahun Pelaksanaan RPJMN 2004 – 2009”. Kementrian Negara PPN. Jakarta. Pg. 462 - 463 127
Allison, Ian. The science of climate change: questions and answers. Canberra: Australian Academy of Science, 2010.
75
emission caused by POME treatment specifically in that year reach the number of
40.647.750 MTCO2e128
In Indonesia MDG report 2010, also show that Indonesia
current carbon emission based on data counted in 2008 are 1,711,626 Gg CO2e
which shows big increase from the baseline set in the MDG which are Indonesia‘s
emission in 2000 at 1.416.074 Gg CO2e.129
In 2010 the Government of Indonesia pledged to reduce emissions by 26%
(41% with international support) against the business as usual scenario by 2020.130
According to Indonesia‘s Second National Communication of 2010, national
greenhouse gas (GHG) emissions were estimated to be 1.8 GtCO2e in 2005.131
This
represents an increase of 0.4 GtCO2e compared to 2000. Most emissions (63%) are
the result of land use change and peat and forest fires, with combustion of fossil fuels
contributing approximately 19% of total emissions.132
Based on Indonesia‘s First
Biennial Update Report (BUR) submitted to UNFCCC in January 2016, national
greenhouse gas (GHG) emissions was 1.453 GtCO2e in 2012 which represent an
increase of 0,452 GtCO2e from year 2000. The main contributing sectors were
LUCF including peat fires (47.8%) and energy (34,9%).133
Since Indonesia voluntarily pledged to reduce emissions by 26% on its own
efforts, and up to 41% with international support, against the business as usual
scenario by 2020, Indonesia has promulgated relevant legal and policy instruments,
including the national action plan on GHG emissions reduction as stipulated in
128
Eastern Research Group, Winrock International. 2015. Resource Assessment for Livestock and Agro‐Industrial Wastes—Indonesia. Global Methane Initiatives. Pg. 32 129
BAPPENAS. 2010. REPORT ON THE ACHIEVEMENT OF MILLENNIUM DEVELOPMENT GOALS INDONESIA 2010. BAPPENAS. Jakarta. Pg. 97 130
Republic of Indonesia. 2016. First Nationally Determined Contribution Republic of Indonesia. Ministry of Environment and Forestry. Jakarta. Pg 1 131
Ibid. Pg 2 132
Ibid 133
Republic of Indonesia. 2016. First Nationally Determined Contribution Republic of Indonesia. Ministry of Environment and Forestry. Jakarta. Pg 2
76
Presidential Regulation (PERPRES) No. 61/2011 and GHG inventory through
Presidential Regulation (PERPRES) No. 71/2011.134
In Presidential Regulation No. 61/2011 about National Action Plan on Green
House Gas Emission Reduction, explained that national action plan on Green House
Gas Emission Reduction is working plan document for the implementation of various
activities that are directly or indirectly reducing Green House Gas Emission which in
line with national development target.135
The regulation also stated the activity of
greenhouse gas emission reduction including: agriculture, forestry and peat land,
energy and transportation, industry, waste management, and other supporting
activities.136
In the appendix of the regulation, there are several action plan regarding
the use of biogas and palm oil such as :
Development of plantation areas of palm oil tree, rubber, and cocoa in
non-forested land or degraded land with the specific goals of palm oil
tree plantation measuring at 860.000 ha within 2011 – 2014 time
period. Through this action, the Green House Gas emission reduction
will able to reach 74,53 million ton CO2e.137
Implementation of energy conservation partnership program, with
specific target to implement energy conservation partnership program
with private sector or with society towards 1003 objects included
building and industry in years 2010-2014. By this program, the
134
Republic of Indonesia. 2016. First Nationally Determined Contribution Republic of Indonesia. Ministry of Environment and Forestry. Jakarta. Pg 2 135
Republic of Indonesia. 2011. “Presidential Regulation No. 61/2011 about National Action Plan on Green House Gas Emission Reduction”. Article 1 Pg 4 136
Ibid. Article 2 Pg 6 137
Republic of Indonesia. 2011. “Presidential Regulation No. 61/2011 about National Action Plan on Green House Gas Emission Reduction”. Annex I Pg 14
77
estimated number of greenhouse gas emission reduction is 1,62
million ton CO2e.138
Provision and management of renewable energy and energy
conservation, with goals to build various power plants ranging from
micro hydro, mini hydro, solar energy, wind energy, to biomass. With
the specific goals of biomass based power plant building is 0,4 Mega
Watt within 2010 – 2014. The biomass power plant itself will reduce
about 0,00032 million ton of CO2e.139
Biogas utilization. The government of Indonesia within this regulation
wanted to utilize the use of biogas by targeting to build 10.000 unit of
biogas maker within 2010 – 2014. This utilization will reduce GHG
emission for 0,04 million ton of CO2e.140
3.3.2 Indonesia final energy consumption 2011
By seeing Indonesia final energy consumption in 2011 can be seen the
development of energy source in Indonesia. The growth of Indonesia total energy use
from its sources can be seen from the graph below.141
138
Republic of Indonesia. 2011. “Presidential Regulation No. 61/2011 about National Action Plan on Green House Gas Emission Reduction”. Annex 1. Pg 22 139
Ibid. Annex 1. Pg 23 140
Ibid. Annex 1. Pg 24 141
Center for Technology of Energy Resources and Chemical Industry. 2016. “INDONESIA ENERGY OUTLOOK 2016 : Energy Development in Supporting Green Industry”. Indonesia Agency for the Assessment and Application of Technology. Jakarta.Pg. 15
78
Source : Center for Technology of Energy Resources and Chemical Industry. 2016. “INDONESIA ENERGY
OUTLOOK 2016 : Energy Development in Supporting Green Industry”. Indonesia Agency for the Assessment and
Application of Technology. Jakarta.Pg. 15
From the table above can be seen the energy consumption of Indonesia over
the years experiencing growth especially from 2005 to 2011. The source of energy
use by Indonesia in 2011 can be stated still not showing significant improvement
from renewable energy sectors. However, the use of biofuel that started in 2006 have
shown potential growth over the years and shows increase over the years which
means it is expected to still increasing after 2011.
Moreover in Indonesia MDGs report 2010, stated that between 1990 – 2008,
the total energy used have increased 3 times the amount. Total energy usage in 1990
reached 247.975 million Barrels of Oil Equivalent (BOE), and by 2008, it reached
744.847 BOE which can be seen on the graphic below142
:
142
BAPPENAS. 2010. REPORT ON THE ACHIEVEMENT OF MILLENNIUM DEVELOPMENT GOALS INDONESIA 2010. BAPPENAS. Jakarta. Pg. 101-102
Biomass
Electricity
Liquefied Petroleum Gas (LPG) Gas
Coal
Biofuel
Oil fossil fuel
79
From the graphic above, can be seen that oil based fuel represent the most
used energy source. The increase in the use of non-renewable energy that reach
double the amount between years 1990 to 2008 need to be address by increasing the
developing of renewable energy resources.143
Indonesia‘s NDC reflects the targets of the National Energy Policy (NEP) to
increase renewable energy to 23% of total primary energy supply (TPES) by 2025,
from today‘s share of 4% (ADB, 2016). Indonesia also has one of the most
ambitious biofuel blending mandates in the world.144
However, the NEP faced by the
electricity shortage issues which then push Indonesia government to accelerate a
program designed to provide an additional 35 Giga Watt of power capacity by 2019.
As president of Indonesia, Joko Widodo stated in his remark at the groundbreaking
of Lontar Extention Steam-fuelled Power Plant (PLTU) in Lontar Village,
Tanggerang, Banten, on June 10, 2016 which says ―If we do not accelerate the
143
BAPPENAS. 2010. REPORT ON THE ACHIEVEMENT OF MILLENNIUM DEVELOPMENT GOALS INDONESIA 2010. BAPPENAS. Jakarta. Pg. 101-102 144
Kharina, Anastasia. Malins, Chris. Searle, Stephanie. 2016. “Biofuels Policy in Indonesia: Overview and Status Report”. The Inteernational Council on Clean Transportation (ICCT). Washington. Pg 7
Indonesia Total Energy Usage by Source
80
development, Java and Bali will experience electricity shortage in 2019 and the
provinces will be hit by electricity outages. Therefore, I persist the 35,000 MW
power plants development project all around Indonesia to be accelerated‖.145
This 35 GW program consist of PLN responsible for 17-GW, while another
18-GW will be given to the private parties where private parties will create a
consortium and operate as an independent power plant (IPP).146
However, for this
Program, the Government of Indonesia targets coal to be the main energy source at
more than 60% of the energy mix. It will make the National energy mix to be
dominated by coal in 2019.147
Source : Enrst & Young. 2015. ―Opportunities and challenges of the Indonesian Electrification Drive
March 2015‖. EY. London. Pg 5
By increasing the number of coal based power plant in the 3500 MW project
it also means that Indonesia will still rely on non-renewable energy. Coal is known as
one of the fossil fuel that cause greenhouse gas emission,148
which means that the
increase in coal use will affecting in the increase of greenhouse gas emission. Where 145
Asisten Deputy Bidang Naskah dan Terjemahan Sekretariat Kabinet Republik Indonesia. 2016. “Accelerate 35,000 MW Power Plant Development Project: President Jokowi”. Sekretariat Kabinet Republik Indonesia. Jakarta 146
Enrst & Young. 2015. “Opportunities and challenges of the Indonesian Electrification Drive March 2015”. EY. London. Pg 1 147
Ibid. Pg 6 148
United States Environmental Protection Agency. 2017. “Sources of Greenhouse Gas Emissions”. EPA. United States.
81
it is contradictive with Indonesia Millennium Development Goals in reducing
greenhouse gas emission, even though the amount of renewable energy also
increased in the 2019 energy mix projection.
The increase in the use of renewable energy especially biofuel doesn‘t mean
that it will certainly reduce the number of GHG emission even though the biodiesel
delivers higher emission reduction than petroleum.149
As been stated above,
Indonesia has an ambitious target in biofuel blending which was converted through
The National Energy Policy under Presidential Regulation No. 5/2006 initially
pronounced the aim of having a 5% share of biofuels (ethanol and biodiesel) in
national energy consumption by 2025.150
Also in 2008, Indonesia‘s Ministry of
Energy and Mineral Resources (MEMR) issued a regulation with a progressive target
for a biofuel blending mandate over the 2008–2025 time frame. The regulation
defines the minimum biofuel quantity used in transportation, in industrial and
commercial use, and for electricity generation by the target date set for the mandate.
Since then, the blending mandate regulation has been revised several times, most
recently through another MEMR Regulation released in March 2015. This regulation
increases mandatory biodiesel blending from 10% to 15% for transportation and
industrial uses, and it increases mandatory biodiesel blending to 25% for electricity
generation as of April 2015.151
In 2006, Timnas BBN envisioned enormous growth in biofuel production
over 10 years but the biofuel industry has actually developed at a moderate rate in the
intervening period. In 2016, it is expected that Indonesia will consume up to 3.8
149
Kharina, Anastasia. Malins, Chris. Searle, Stephanie. 2016. “Biofuels Policy in Indonesia: Overview and Status Report”. The Inteernational Council on Clean Transportation (ICCT). Washington. Pg 6 150
Ibid.Pg 8 151
Ibid.
82
billion liters of biodiesel from palm oil.152
This represents only about one-sixth of the
biodiesel consumption proposed for 2015 which can be seen at the table below
Indonesia biodiesel consumption proposed for 2015
and about one-tenth of total proposed biofuel consumption for that year.
Although it is likely that implementation will continue to lag behind the aspired
goals, Indonesia‘s ambitious targets for biofuels blending indicate a strong
government interest in expanding the domestic palm biodiesel industry.153
The demand for biofuels which lead to expand in biodiesel industry will have
impacts for the agricultural sector, as this demand may be met by expansion of the
domestic palm oil industries. While oil palm plantations in Indonesia are required to
be ISPO-certified (Indonesian Sustainable Palm Oil), plantations for biofuel
production are specifically exempt from this. As the total area of palm oil plantations
in Indonesia has risen more than tenfold in the period 1990–2015 (US Department of
152
Wright, Tom. Rahmanulloh, Arif. Indonesia Biofuel Annual Report 2015. USDA Foreign Agricultural Service. Pg 9 153
Kharina, Anastasia. Malins, Chris. Searle, Stephanie. 2016. “Biofuels Policy in Indonesia: Overview and Status Report”. The Inteernational Council on Clean Transportation (ICCT). Washington. Pg 11
Source : Kharina, Anastasia. Malins, Chris. Searle, Stephanie. 2016. “Biofuels Policy in Indonesia: Overview and Status Report”. The
International Council on Clean Transportation (ICCT). Washington. Pg 12
83
Agriculture, 2016), while forest cover declined by about 20% (World Bank, 2015),
production of biofuels from palm oil is ―predicated on a vision of biofuel expansion
that would require extensive deforestation,― according to the ICCT.154
Options to prevent this could be requiring incentivizing the creation of new
palm oil plantations only on degraded lands, or support biofuel production from oil
palm residues.155
By looking at the result referencing in Indonesia MDG report 2010, despite
the amount of effort and achievement that have been done within years 2000 – 2011,
the national emission of Indonesia is still rising. Thus making Indonesia‘s effort
within the years in reducing emission still cannot able to give a big change, but it is
surely contribute towards the increase in development of renewable energy resources.
The disability of Indonesia as developing country to fund a big project in increasing
the use of renewable energy also takes part in the minimal contribution that can be
given from the empowerment of renewable energy towards Indonesia goals in
reducing emission.
154
Kharina, Anastasia. Malins, Chris. Searle, Stephanie. 2016. “Biofuels Policy in Indonesia: Overview and Status Report”. The Inteernational Council on Clean Transportation (ICCT). Washington. Pg 6 155
Kharina, Anastasia. Malins, Chris. Searle, Stephanie. 2016. “Biofuels Policy in Indonesia: Overview and Status Report”. The Inteernational Council on Clean Transportation (ICCT). Washington. Pg 13
84
CHAPTER IV
Achievement of circle project in Sumatera Cities 2016
4.1 Background
This chapter will explain about the contribution as well as the result of
CIRCLE project towards Indonesia goals in reducing emission and increasing the use
of renewable energy. As been stated in the previous chapter, in this chapter the writer
will focusing in the second part of the research assessment which is the CIRCLE
project timeline from 2011 – 2016, in this chapter, the result of the project will be
explained, and to assess the contribution of this project, the writer will again
referencing to Indonesia MDG report in the relative years. .
4.2 CIRCLE Project
Capacity for Indonesian Reduction of Carbon in Land Use and Energy
(CIRCLE) Project is a USAID funded project which aims to help the owner of palm
oil mills in Indonesia to reduce their pollution as the result of production. Especially
in the form of Palm Oil Mill Effluent (POME), while also producing renewable
energy in form of biogas as well as to improve their overall facilities sustainability.156
CIRCLE project provided technical, financial and sustainability analyses for palm oil
mill owner in Indonesia related to POME to Biogas technology. The CIRCLE project
cooperated with Winrock International as the third-party developers to secure
financing and investment ($3-4 million per plant) for POME-to-energy projects with
its target by 2017, CIRCLE Project will offset 420,000 tons of CO2 annually.157
156
Winrock International. “Legacy Project : A CIRCLE of Opportunity: Improving Sustainability and Economic Opportunity in Indonesia’s Palm Oil Industry”. https://www.winrock.org/project/a-circle-of-opportunity-improving-sustainability-and-economic-opportunity-in-indonesias-palm-oil-i/. Data retrieved on August, 14 2017 157
Winrock International. 2016. “WINROCK’S WORK IN SUSTAINABLE PALM OIL”. Winrock International. Virginia
85
CIRCLE Project is one of USAID funded project in form of cooperative agreement,
USAID basically offers two kind of project funding which are contract and
cooperative agreement. The different between contract and cooperative agreement is
that in contract, USAID uses a tender system whereby NGOs and organizations
submit their proposals and then will be selected the winning tender for specific
project for example ICED project with Tetratech as the implementer.158
In the form
of contract, all activities must be approved by USAID and all funding fully come
from USAID. Meanwhile, the CIRCLE project is in the form of a cooperative
agreement in which USAID invites a company or organization to provide a proposal
related to the main theme provided by USAID, where it is about environment and
emission reduction, the form of its activity is unrestrained. The difference of the
cooperative agreement is that it funded by USAID and the organization ( Winrock),
even clients who receive benefits through this project also contribute financially.
Winrock International in 2011 submitted a proposal to USAID about the
emissions reduction and renewable energy project that focuses on one of Indonesia's
largest commodities which is palm oil under the name of CIRCLE Project. Winrock
International proposed this program because of the increase of Indonesia Crude Palm
Oil production over the years which can be seen in the table below.159
Indonesia CPO production 2009 – 2012 ( in Ton )
Year Small holder Government Private Total
2009 1.503.543 401.176 1.960.139 3.864.859
2010 1.691.742 378.101 2.321.781 4.391.624
2011 1.759.585 409.112 2.450.611 4.619.308
2012 1.839.546 426.601 2.936.957 5.203.104
158
Karsiwuln, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 159 Directirate General of Estate Crop, Indonesia Ministry of Agriculture. “Tree crop estate statistic of
Indonesia (Palm Oil) 2015”. Indonesia Ministry of Agriculture. Jakarta. Pg. 24
86
Based on the results of the study, Winrock International found that the
increase of the CPO production accompanied by the increase of new plantation land
in a large amount, and this is certainly can be a driver of Indonesia to increase
emissions due to land use change.160
Another concern of Winrock International is
also the lack of waste management technology in Indonesia especially for POME
which at that time only use open lagoon treatment. This happens due to the lack of
government regulations in regulating good POME processing procedures, the
Ministry of Environment only determines the raw standard of its waste but does not
regulate the proper process that must be done to achieve the standard which can be
seen on the Decree Of The Minister Of Environmental Number: Kep-51 / Menlh /
10/1995 on quality of liquid waste for industrial activities. The decree only regulates
the amount of Chemical Oxygen Demand (COD) and Biochemical Oxygen Demand
(BOD) that save to be discarded by the palm oil industry. COD and BOD itself are
two most component of POME which if do not treated well can cause methane
emission.161
If methane capture project is done as the POME treatment system, it can
reduce up to 60% of total emissions from palm oil mills. The emissions from palm
oil POME due to open lagoon alone amounted to 40,326,000 MTCO2e from
Indonesia's total GHG emissions that reach 380 million tons of CO2 in the same
years of 2008.162
The CIRCLE Project initial period was only 3 years from 2011 to 2014 but
ended up having two extensions. This project originally started in November 2011
and should be completed in 2014 but due to the many requests from the mill to join
the project, CIRCLE finally experienced the first extension until September 2015,
which then experienced a second extension in October 2015 until the end of 2016.
160
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 161
Winrock International. 2015. “Handbook POME to BIOGAS Project”. Pg 8 162
PUSAT DATA DAN TEKNOLOGI INFORMASI KEMENTERIAN ENERGI DAN SUMBER DAYA MINERAL. 2016. “Data Inventory Emisi GRK Sektor Energi”. Jakarta. Pg. 50
87
CIRCLE Project itself has a target that determined by USAID which are to complete
1 project in Bidding process stage, 2 Pre-construction stage project, and 2 projects in
under construction stage. Meanwhile Winrock International itself have their own
target that related to electricity production which is to make 30 methane capture
project, from those 30 projects, only 6-8 projects that will be develop to become a
productive PLTBG in term to generate 27 MW of electricity.
In implementing the CIRCLE project, Winrock International cooperates with
several government agencies such as PLN, provincial and national plantation offices
as well as Ministry of Energy and Mineral Resources, precisely with EBTKE (Energi
Baru Terbarukan dan Konservasi Energi) directorate, because EBTKE has a target to
actively promote and applies pome methane capture to generate electricity from
biogas. The chart of cooperation in the CIRCLE project can be seen in the picture
below.
88
CIRCLE Project Chart
Source : US Embassy and Consulate in Indonesia. Data retrieved from https://id.usembassy.gov/our-
relationship/policy-history/embassy-fact-sheets/fact-sheet-u-s-indonesia-energy-cooperation/
United States of
America
Indonesia
US-Indonesia
Working Group On Energy
USAID Government of
Indonesia
Winrock International Ministry of Home
Affairs
Ministry of Energy
and Mineral
Resources
Palm Oil Company
PT PLN
Regional Plantation
Agency
Comprehensive Partnership
CIRCLE
89
From the cooperation chart above, can be seen the bigger picture of CIRCLE
Project and all actors which involved in the project. At the highest level, Indonesia
and USA established Indonesia-US Comprehensive Partnership (CP) during
President Barack Obama‘s visit to Indonesia on 9-10 November 2010.163
Within the
Comprehensive Partnership, both of the states launched 6 working group to increase
the cooperation across wider range of issues.164
The six working group itself actually
have been implemented in the first Indonesia – US Joint Commission Meeting in
Washington, D.C. on 17 September 2010, where both of the states which moderated
by their respective foreign minister agreed to launch plan of action for Indonesia –
United States Comprehensive Partnership that then become the guideline of
cooperation between two country.165
However, the energy cooperation relationship
between US and Indonesia has started in May 2005 where Presidents George W.
Bush and Susilo Bambang Yudhoyono establish The U.S.-Indonesia Energy Policy
Dialogue, a dialogue of bilateral working groups on oil and gas, electricity, and coal.
These topics, along with energy efficiency and renewable energy, which then started
their first meeting in 2008.166
In the 3rd Indonesia - US Energy Policy Dialogue that
held on June 29, 2010, in Washington, then established Indonesia - US Energy
Investment Roundtable which is implemented as an effort to increase energy
investment in Indonesia in comprehensive partnership between Indonesia and the
United States.167
163
Embassy of The Republic of Indonesia. United States Page. https://www.kemlu.go.id/washington/lc/Pages/Amerika-Serikat.aspx. Data retrieved on December 2, 2017 164
U.S Department of State. “United States-Indonesia Comprehensive Partnership”. https://2009-2017.state.gov/r/pa/prs/ps/2013/10/215196.htm. Data retrieved on December 2, 2017 165
Embassy of The Republic of Indonesia. United States Page. https://www.kemlu.go.id/washington/lc/Pages/Amerika-Serikat.aspx. Data retrieved on December 2, 2017 166
U.S Department of State. 2007. Data retrieved from https://2001-2009.state.gov/g/oes/rls/fs/2007/96410.htm. Data retrieved on December 2, 2017 167
Indonesia Ministry of Energy and Mineral Resources. 2012. Data retrieved from http://mobile.migas.esdm.go.id/post/read/Pekan-Depan,-The-2nd-Indonesia---US-Energy-Investment-Roundtable-. Data retrieved on December 2, 2017
90
The energy working group of Indonesia-United States comprehensive
partnership work to promote clean energy technology and policies, improve energy
access, and reduce the growth in Indonesia‘s energy-sector greenhouse gas
emissions.168
In this working group, United States through its Agency for
International Development, USAID have provided nearly $18 million for Clean
Energy Development and to build Indonesian capacity to reduce carbon in land use
and energy through several project such as ICED, CIRCLE, and Indonesian
Geothermal Education Capacity Building.169
4.2.1 USAID
CIRCLE Project is one of USAID funded project which established through
cooperative agreement with Winrock International as the project runner. CIRCLE
Project was established on October 7th
2011 through USAID cooperative agreement
No. AID-497-A-12-00001 Capacity for Indonesia Reduction of Carbon in Land Use
and Energy (CIRCLE) which signed by Wanda M. Henry as Agreement Officer of
USAID.170
Under this agreement, listed several point regarding the project such as
the budgeting, purpose of the cooperative agreement, responsibilities of parties, to
program description.171
Under the reporting and evaluation point, Winrock International obligated to
submit financial reporting which included Quarterly Financial Reporting, and Final
Financial Report, as well as program performance reporting which included annual
work plan, monitoring and evaluation plan, quarterly progress report and final report
168
U.S Department of State. “United States-Indonesia Comprehensive Partnership”. https://2009-2017.state.gov/r/pa/prs/ps/2013/10/215196.htm. Data retrieved on December 2, 2017 169
U.S Embassy and Consulate in Indonesia. Fact Sheet : U.S Indonesia Energy Cooperation. https://id.usembassy.gov/our-relationship/policy-history/embassy-fact-sheets/fact-sheet-u-s-indonesia-energy-cooperation/ 170
Winrock International Institute for Agriculture Development. 2011. “Cooperative Agreement No. AID-497-A-12-00001 Capacity for Indonesia Reduction of Carbon in Land Use and Energy (CIRCLE)”. USAID. Indonesia 171
Winrock International Institute for Agriculture Development. 2011. “Cooperative Agreement No. AID-497-A-12-00001 Capacity for Indonesia Reduction of Carbon in Land Use and Energy (CIRCLE)”. USAID. Indonesia.
91
to Agreement Officer‘s Technical Representative (AOTR) and
USAID/Washington.172
In attachment B- Program description, under Organizational
Capability chapter, inside Partnership sub chapter, explained that in CIRCLE Project,
Winrock International partnering with Aksenta, Biotrix, and WWF Indonesia.
Aksenta is a consultancy firm based in Jakarta which provides environmental and
social management training they also expert in technical advisory services for
certification schemes, Including RSPO.173
In CIRCLE Project, Aksenta will perform
sustainability screening based on industry standard at three selected mills in term to
prepare them for accreditation process. Biotrix Asia Company, based in Thailand is
an environmental technology company focusing in biogas technology included bio
treatment solution, and biological treatments of industrial effluents.174
In CIRCLE
project, Biotrix Asia will provide guidance Winrock International technical field
team to evaluate and optimize anaerobic digester option. Meanwhile, WWF
Indonesia work with Winrock International in identifying and do the screening of
palm oil company‘s plantation to make sure they meet the standard such as not
having palm oil plantation in restricted area like protected forest.175
4.2.2 Ministry of Home Affairs of The Republic of Indonesia
As a non-governmental organization which has been doing their work in
Indonesia for over 10 years, any Winrock International activity was regulated under
their MoU with Indonesia Ministry of Home Affairs about sustainable development
program.176
In the Article 1 about the objective of the MoU, stated that the objective
of the Memorandum of Understanding is to establish a legal framework for
cooperation between Indonesia and Winrock International to support the Government
172
Winrock International Institute for Agriculture Development. 2011. “Cooperative Agreement No. AID-497-A-12-00001 Capacity for Indonesia Reduction of Carbon in Land Use and Energy (CIRCLE)”. USAID. Indonesia. Pg. 9 173
Ibid. Pg. 21-22 174
Ibid. 175
Ibid. Pg. 81 176
Naleid, Michael. Winrock International Indonesia Country Manager. Personal Communication. November 21, 2017.
92
of Indonesia in implement sustainable development program.177
In this MoU, at the
second articles contain the scope of cooperation which both parties agreed to
cooperate in which are: Socio-economic in under develop region and environmental
protection and management.178
The MoU also regulate the obligation of Winrock
International as the second party such as Winrock International shall: comply with all
applicable laws and regulations in Indonesia, Provide traiing and technical assistance
in implementing the program focused on community and building the capacity of
human resource as well as the welfare of beneficiaries, submit progress development
report every end of the year to the Ministry of Home Affairs annually, with copies
provided to the local government.179
4.2.3 Ministry of Energy and Mineral Resources
On the CIRCLE project diagram above, can also be seen that Winrock
International also working closely with other relevant Indonesian Stakeholders
including government institutions (Ministry of Environment, Ministry of Energy and
Mineral Resources, District Government, Provincial Plantation Agency, etc.), and
PT. PLN. In working together with those 3 agencies, Winrock International does not
have specific MoU or agreement as the legal basis of the cooperation.180
The
cooperation happened due to the same goals which wanted to be achieved by
CIRCLE Project and the governmental agencies, specifically Ministry of Energy and
Mineral Resources (MEMR) and PT PLN Bangka Belitung.181
MEMR especially the
Directorate of New Renewable Energy and Energy Conservation (Direktorat Energi
Baru Terbarukan dan Konservasi Energi/EBTKE) was implementing a bio-energy
program that provides grant funding for biogas power plant project development to
177
Indonesia Ministry of Home Affairs. 2017. Memorandum of Understanding between The Ministry of Home Affairs Of The Republic Of Indonesia and Winrock International on Sustainable Develeopment Program No. 193/43/FK/03. 178
Ibid. 179
Ibid. 180
Naleid, Michael. Winrock International Indonesia Country Manager. Personal Communication. November 21, 2017. 181
Ibid.
93
local governments. EBTKE requested CIRCLE to conduct a feasibility study and
provide technical inputs for tender document for their project in Jorong, Tanah Laut
District, South Kalimantan.182
EBTKE also has a budget from the APBN for
Regional Owned Enterprises that work with palm oil companies to provide electricity
for the community. Winrock is helping the EBTKE team as a team of experts and
winrock also provides training to EBTKE teams.183
In CIRCLE project proposal, one
of the capacity building activity which included within the project is to provide
training to local community, industry, and GOI stakeholders, one form of this activity
is through creating workshop with related parties included Ministry of Energy and
Mineral Resources especially EBTKE team.
In CIRCLE project final report can be seen several workshop and feasibility
study which have been done by Winrock International with EBTKE namely :
Workshop ―POME to Energy‖ for EBTKE in Bogor or May 24, 2013, and feasibility
field training for EBTKE and PTPN VI in Jambi, on September 24-25, 2013.184
4.2.4 PT PLN Bangka Belitung
Meanwhile, PT PLN Bangka Belitung has been facing a challenging situation
due to energy shortage which resulted in frequent blackouts happened in the area. In
addition, Government of Indonesia has targeted to reduce the use of fossil fuel in the
national energy mix. Therefore, PLN Bangka Belitung is considering POME - to -
energy to be a promising solution to the energy shortage.185
PLN Bangka Belitung
endorsed three mills whose the technical assistance was provided by CIRCLE.186
Another governmental agency which is the Regional Plantation Agency help
182
Winrock International. 2016. Capacity for Indonesian Reduction of Carbon in Land Use and Energy (CIRCLE) Final Report. Winrock International. Pg 14 183
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 184
Winrock International. 2016. Capacity for Indonesian Reduction of Carbon in Land Use and Energy (CIRCLE) Final Report. Winrock International. Annex D Pg.1 185
Winrock International. 2016. Capacity for Indonesian Reduction of Carbon in Land Use and Energy (CIRCLE) Final Report. Winrock International. Pg 14 186
Ibid.
94
CIRCLE in screening process since they have accurate data regarding the area owned
by each palm oil company within their area, and as the regional government, they
also help CIRCLE to obtain letter of support from local government.187
According to
the CIRCLE final project, Winrock International through CIRCLE learned valuable
lesson which is that supports from regional PLN and District Government are
essential for the project development since the support provides assurance to the
project developers and shorter process for obtaining permit and license.188
4.2.5 Palm Oil Company
Meanwhile while cooperating with palm oil company, Winrock International
use Confidentiality and Non-Disclosure Agreement (NDA) as the legal basis.189
Which underlined several important term and condition such as: both of the parties
desire to enter into discussions regarding a potential business relationship regarding
the CIRCLE Project, Both of the parties desire to exchange confidential information,
and other terms and condition.190
This NDA then will be signed by the
representatives of both parties, where from Winrock International it is signed by
Bernard Castermans as the Country Representatives Winrock International. Further
about the content of the NDA between Winrock International and palm oil company
can be seen in the appendices section of the thesis.
4.2.6 Regional Plantation Agency
In collaborating with regional plantation agency especially in Sumatera cities,
Winrock International do not have a legal basis for the cooperation in form of
agreement of MoU, the cooperation that occurred by both parties was caused by the
willingness of regional plantation agency to help because they see that the project
187
Naleid, Michael. Winrock International Indonesia Country Manager. Personal Communication. November 21, 2017. 188
Winrock International. 2016. Capacity for Indonesian Reduction of Carbon in Land Use and Energy (CIRCLE) Final Report. Winrock International. Pg 36 189
Naleid, Michael. Winrock International Indonesia Country Manager. Personal Communication. November 21, 2017. 190
Winrock International. Confidentiality and Non-Disclosure Agreement. Jakarta
95
may able to suppress the act of illegal burning done by palm oil company.191
In
helping Winrock International in CIRCLE project, regional plantation agency give
the data regarding the plantation area own by the palm oil company. Through this
data, Winrock International can check whether the palm oil company itself have
plantation farm in forbidden area such as in protected forest or land with high BOD
and COD number. Based on this assessment then Winrock International can choose
the proper palm oil company to be targeted to join the project.192
CIRCLE Project itself has 3 main activities in its POME Methane Capture
project :
Sustainability improvement
The goal of sustainability improvement is to apply the value of sustainable
development to palm oil mill, which in the future will provide long-term benefits for
the company. The first step in this process is to form a partnership with the mill in
the form of NDA. In this case Winrock International is not only looking for
companies that want to cooperate but they also looking for companies who want to
commit to run sustainable development practices in their business.193
In choosing
clients who will be invited to work together in this project, Winrock International has
several points of consideration such as: the company should not have land in forest
areas or other restricted areas, winrock also see whether the company has zero
burning policy or not and also assess the land clearing system from the company. It
does not mean that the company should be good to be able to join the project, they
may still be in development but they have a commitment because later there will be a
teams that help them to make improvements.194
This team will help the palm oil
company starting from the assessment then they will construct an action plan
191
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 192
Ibid. 193
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 194
Ibid.
96
workshops, until monitoring. The initial phase of this activity is the screening process
in which winrock International works with WWF to screen the land to ensure that the
companies participating in this project do not have land in the forest and in areas
where the HCV (High Conservation Value) and HCS (High Carbon Stock) is high,
because it is a no go area for palm plantation.195
POME to Biogas project
POME to biogas project which introduce by Winrock International is in the
form of For the POME to Biogas conversion project itself, Winrock International acts
as a provider of technical assistance and expertise to help palm oil mills conduct
feasibility studies.196
The next step after the result of feasibility study is approved
will be prefeasibility study. If the result of the prefeasibility study is good, it will be
continued to in-depth feasibility study. Not only providing depth feasibility study,
Winrock International also provides assistance for palm oil producer until the
preparation of tender document and assistance at tender. They also give assistance in
financing project either with co share or fund search for example from bank.
However, there are several project that will be assisted by Winrock International up
to monitoring because the mandate from USAID for this project is there are at least 3
projects running, running in the sense of being PLTBG.197
Capacity building
Capacity building is one part of the circle project where Winrock
International provides knowledge about POME conversion technology for staff or
mill personnel, for offices such as plantation agencies in the area including staff from
EBTKE (New and Renewable Energy and Energy Conservation department of
195
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 196
Ibid. 197
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017
97
Ministry of Energy and Mineral Resources), in technical and financial including
calculation emissions and also about methane capture technology itself, so the topic
given depended to the needs of each party.198
Source : Winrock International. Seminar Investasi Energi ‗Peluang Bisnis Energi dari
Biogas‘. October 16, 2014
In the course of the project, Winrock international often encounter several
obstacles, especially in the first 2 years of this project runs. One of them is the lack of
interest from palm oil mill managers to participate in this project mainly because of
their views on the funding sources of this project which come from USA.199
This
perception was built due to the intensity of black campaign done by western country
towards Indonesia palm oil Industry. According to Mrs. Dhiah Karsiwulan, the
Deputy Chief of Party – CIRCLE Project, many of the palm oil mill tell that they
198
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 199
Ibid.
CIRCLE Project Flow Chart
98
have ever received similar offer for feasibility study but the result of the study
conducted was used to against them to attack the Indonesian palm oil industry.200
To avoid this kind of view from palm oil mill producer, Winrock
International assured oil palm companies in Indonesia through a memorandum of
understanding which regulate that Winrock would not provide data given by palm oil
companies to other parties without the consent of the palm oil company, which then
reflected by the existence of some companies that are not even willing to provide
data to USAID to be a report.201
But on the one hand, the Project offers an attractive value for the oil palm
company itself. Because the palm oil industry is definitely pursuing profit, so the
most interesting thing for them is that if they follow this program, they can generate
electricity that they can use alone or to be sold to PLN in financial terms, of course
by producing electricity for its own needs will ease the company's production burden
so as to increase profits, so also if the electricity from waste treatment proceeds to be
sold to PLN, the palm oil company will benefited as well.202
4.2 CIRCLE Project Result
The result of the circle project that will be discussed in this chapter is the
number of mill assisted by Winrock international in applying methane capture
technology which then will be converted into biogas that will be used to generate
electricity.
During the period 2011 - 2014, CIRCLE Project has successfully assisted 12 mills in
Sumatera which can be seen in the table below:
200
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 201
Ibid. 202
Naleid, Michael. Winrock International Indonesia Country Manager. Personal Communication. November 21, 2017.
99
No Province Total Mills Capacity (Tons/Hour)
1 Medan 1 60
2 Jambi 5 210
3 Palembang 3 260
4 Bandar Lampung 1 45
5 Pangkal Pinang 2 90
Source : Winrock International. 2016. Capacity for Indonesian Reduction of Carbon in Land Use and
Energy (CIRCLE) Final Report. Winrock International. Annex C Pg 3
Based on the data above, it can be seen that the total POME generated per
hour is 1240 tons. If calculated the amount of electrical energy biased by the pome is
based on the Winrock study at the CIRCLE Handbook which found 1 ton / hour
pome can generate 52,380 watts of electricity, it will get the total electrical energy of
64.95 MW. From 2014 to 2016, there are 9 more mill added as the member of the
project, 4 in Bangka Belitung, one in Central Sulawesi and 4 in East Kalimantan.203
Upon the closing of CIRCLE project, Winrock has completed 2 projects
under commercial operation, one project is in commissioning stage, and 3 project
under construction. While from 6 - 8 projects that aimed to be really developed by
Winrock, there are 6 project achieved with estimated power capacity of 6 projects is
up to 11.5 MWe, generate about 100,740 MWh of gross electricity per year
(assumptions: 8,760 operating hours, 100% utilization), and reduce GHG emission
about 240,000 tCO2e annually from the methane capture and fossil-based power
displacement.204
Unfortunately, the project that has been completed within the CIRCLE
project period from 2011 to 2016 has not been biased in claiming to reduce emissions
203
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 204
Ibid.
100
because the completed project has not been able to generate electricity. According to
the data the writer obtained from the interview with CIRCLE Project's Deputy Chief
of Party, two projects that have entered the operational phase in 2016 are biased to
generate electricity by the end of 2016 so that the emission reduction and electricity
generated by the company cannot be input into the achievement of CIRCLE
Project.205
Moreover, as the CIRCLE Project is over, Winrock International no
longer has access to monitoring or calculation of the project already in operation, as
it is the full right of the palm oil company. However, there are several other
achievements achieved by CIRCLE Project including: 2 additional mills obtained
IPP (Independent Power Producer) appointment from Ministry of Energy and
Mineral Resources and able to sell the generated electricity to PLN grid, CIRCLE
also managed to conduct 26 events of workshops and seminars for multi
stakeholders, And CIRCLE Project will have another similar program but with
different donor agency which is Global Green Growth Initiatives.206
From the explanation above regarding the result of CIRCLE Project
especially in seeing its contribution towards emission reduction and biogas
production, can be seen that this project has not been able to contribute directly to
Indonesia's emission reductions and biogas production improvements since the
completed project within the CIRCLE project period cannot be claimed generating
electricity until the end of the CIRCLE project. According to the Winrock
International estimation, 3 projects developed to generate commercial power could
be claimed to generate electricity and reduce emissions by the end of 2016.207
Thus,
it can be said that CIRCLE Project did not give direct impact to help Indonesia
achieve its emission reduction target in MDG Indonesia. This can be seen from
Indonesia MDG‘s report 2014 which shows that the number of of Indonesia emission
is still increasing with the latest data from 2005 that shows our emission are at
205
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 206
Ibid. 207
Ibid.
101
1,791,372 Gg CO2e compare to the base year with 1.377.983 Gg CO2e in year
2000.208
Another accomplishment which have been achieved by CIRCLE Project are
several workshop which attended not only by governmental agencies but also open
for public such as : Workshop on sustainability for palm oil sector for practitioners,
POME potential for sustainable energy, Training ‗POME to Energy‘ for WWF
Indonesia, Workshop ‗POME to Energy‘ for EBTKE, Workshop ‗Sustainable Energy
for POME‘ with WWF, Feasibility Field Training for EBTKE and PTPN VI, POME
to Energy and Greenhouse Gas Calculation in Indonesia‘s Palm Oil Industry,
Training of POME (Palm Oil Mill Effluent) Utilization for Biogas Power Plant, and
several other workshop with palm oil company.209
Nevertheless, CIRCLE Project itself is one of the foundations for the
development of sustainable palm oil industry. This was further reinforced by Mrs
Dhiah Karsiwulan statement as the Deputy Chief of CIRCLE Project which saw this
project is more of a startup project that she hope would trigger another project in the
same field.
4.3 Indonesia POME potential
As one of the biggest commodity in Indonesia, Palm oil is not only become
the foreign exchange contributor to the State but also one of the biggest causes of
emissions. The largest emissions in the oil palm manufacturing process are in pome
waste treatment systems in open tubes. Palm oil mills mainly produce crude palm oil
and palm kernel oil. The process produces two types of waste: palm oil mill effluent
(POME), with waste effluent of 0.7 m3 per ton of FFB processed. and solid waste in
208
Direktorat Tata Ruang dan Pertanahan Bappenas. January 30, 2014. Pencapaian MDGs dan Tindak Lanjut Pasca 2015. Bappenas. Jakarta. Pg. 49 209
Winrock International. 2016. Capacity for Indonesian Reduction of Carbon in Land Use and Energy (CIRCLE) Final Report. Winrock International. Annex D Pg 1
102
the form of shell, fiber, decanter cake, and empty fruit bunches.210
10 Palm oil mills
generally cite an effluent rate of 65 percent, but the Capacity for Indonesian
Reduction of Carbon in Land Use and Energy (CIRCLE) project studies have found
that effluent rates in the Indonesian palm oil sector could exceed 80 percent.211
Most
of mills apply the final treated effluent from the last lagoon for fertilizer in their
plantation. Thus, with the amount of waste of palm oil and the lack of good waste
treatment system, the project methane capture will certainly provide a significant
effect.
The potential of methane capture projects and POME treatment in Indonesia
itself is considerably great. Based on data from Global Methane Initiatives, 3 sectors
with the largest potential of anaerobic digestion project (AD) in agricultural sector
are palm oil plantation, cassava plantation, and swine farm.212
Can be seen in the
table below, the reason why these three sectors have great potential for the
application of ad project is due to the amount of emission reduction that can be
occurred.213
210
Eastern Research Group Inc, Winrock International. 2015. Resource Assessment for Livestock and Agro‐Industrial Wastes—Indonesia. Global Methane Initiatives. Pg 2-3 211
Ibid. 212
Ibid. Pg. vii 213
Ibid. Pg. 3
103
Based on the data above can be seen that the potential emission reduction in
the oil palm sector alone can reach 92.8%. This will certainly help Indonesia in its
effort to reduce national total greenhouse gas emissions.214
Meanwhile, when viewed from the amount of electricity that can be generated
through this methane capture process, based on estimates from Winrock International
in 2013 with an estimated 608 palm oil mill registered in Indonesia using this
methane capture system and total CPO production of 35.6 million tons. The amount
of electricity that can be generated is 6.7 TWh / year.215
4.4 Economic interest on CIRCLE Project (2011 – 2016)
Self-interest, in liberalism view is considered as the nature of individual.
Whereas, liberalism, believe that humanity basically is good and individuals are
rational human beings which able to improve their moral and material condition.216
Based on this believe, liberalism view that humanity is capable of satisfying its
natural needs through rational ways thus by creating cooperation. Furthermore,
neoliberal scholar such as Robert Axelrod and Robert O Keohane strengthen the
view that liberal do cooperation but they also broaden the reason behind why
cooperation occur. Neoliberalism see that cooperation emerges because when actors
have continuous interactions with each other, it is in their self-interest to cooperate,
and as more cooperation they build, rational players understand that they can
maximize their expected benefit cooperating thus making cooperation become their
preferred strategy overtime .217
Based on the explanation above, USA and Indonesia comprehensive
partnership can be seen through the eyes of liberalism as cooperation that happens
214
Eastern Research Group Inc, Winrock International. 2015. Resource Assessment for Livestock and Agro‐Industrial Wastes—Indonesia. Global Methane Initiatives. Pg vii 215
Winrock International. Seminar Investasi Energi ‘Peluang Bisnis Energi dari Biogas’. October 16, 2014 216
International Relations Theories. Pg. 83 217
International Relations Theories. Pg. 87
104
through continuous interaction with each other. Indonesia and USA have done
numerous cooperations since its first diplomatic relation in 1949.218
With the
growing relationship between the two countries, the target to be achieved in forming
its cooperation is also spreading. In the establishment of Indonesia's US strategic
partnership, Indonesia president in that time, Susilo Bambang Yudhoyono said that
U.S. – Indonesia strategic partnership would have to be based on: equal partnership
and common interests. It has to bring about mutual and real benefit for our peoples. It
has to be for the long-term, and have strong people-to-people content because we are
entering an era where our relations will be more and more driven by the need to
address global issues, as much as by the imperative to develop bilateral relations219
In the USA – Indonesia comprehensive partnership, can be seen that both of
the country developing cooperation not only in one specific issues but cooperate in
many sectors such as : education, trade, food security, global climate change
mitigation, investment and business, and security.220
The increase of issues covered
in cooperation also explained by neoliberal institutionalist. They stated that
cooperation in one issue are may spill over into other areas, while Robert Keohane
also added that cooperation can deepen to the point where it may be said to have
inertia : whatever the original condition of its establishment, once established,
institutional cooperation can exist and even flourish even if those initial conditions
vanish. This argument reflected through the fact that in October 2015, Indonesia
under the new presidential era of Joko Widodo extended the USA – Indonesia
comprehensive partnership with other issues to be covered such as maritime
cooperation.221
218
U.S Department of State (January 17,2017). “U.S Relation with Indonesia “ https://www.state.gov/r/pa/ei/bgn/2748.htm. Data retrieved on May 19, 2017 219
The 2009 U.S.-Indonesia Comprehensive Partnership: Engaging the Non-Government Sector. Findings and Recommendations of USINDO Conference April 16-17, 2009 220
Ibid. 221
The White House. October 26, 2015. Joint Statement by the United States of America and the Republic of Indonesia. Office of the press and secretary.
105
CIRCLE Project is one of the project under the energy working group under
Indonesia USA comprehensive partnership. The main objective of this CIRCLE
project is to introduce methane capture technology in Indonesian palm oil industry
with the aim that this technology can generate energy by using POME. For Indonesia
alone, CIRCLE Project is one of the best investment projects to increase renewable
energy production. According to the Director General of EBTKE Rida Mulyana in
his speech during the inauguration of Biogas Power Plant (PLTBg) based on Waste
of Oil Palm (POME) capacity of 2 MW Asian Agri in Ukui, Pelalawan Regency,
Riau Province, the effort to utilize palm oil waste into energy is the optimization of
waste to energy which is one of Indonesia's contribution in reducing global GHG
emission by 29% by 2030.222 Increased renewable energy alone is one of the targets
in the MDGs Indonesia listed on point 7.2D on energy mix for renewable energy
with a baseline reference of 3.5% in 2000. In the 2014 MDGs Indonesia report the
latest data on energy mix for renewable energy comes from from the year 2010
which shows the increase from the baseline year for 1,5% which made it 5%.223
Thus, through the CIRCLE Project, which is a USAID funded project, USA
wants promote clean energy technologies and policies to help meet Indonesia‘s
growing energy demands, improve energy access, and reduce the growth in
Indonesia‘s energy-sector greenhouse gas emissions.224
This project is also acted to
support Indonesia and the United States second debt-for-nature swap in 2011, in
which the United States forgave $28.5 million in debt in exchange for Indonesian
commitments to protect forest areas and reduce greenhouse gas emissions from
deforestation, environmental impact assessments to advance sustainable land use and
222
Kementerian Energi Dan Sumber Daya Mineral Republik Indonesia. January 23, 2016. Siaran Pers Nomor: 05/SJI/2016. Data retrieved from http://ebtke.esdm.go.id/post/2016/01/25/1088/dirjen.ebtke.resmikan.plt.biogas.berbasis.limbah.cair.kelapa.sawit. Data retrieved on September 10, 2017 223
Direktorat Tata Ruang dan Pertanahan Bappenas. January 30, 2014. Pencapaian MDGs dan Tindak Lanjut Pasca 2015. Bappenas. Jakarta. Pg. 49 224
US Department of State. 2013. United States-Indonesia Comprehensive Partnership Fact Sheet. US Department of State. Data retrieved from https://2009-2017.state.gov/r/pa/prs/ps/2013/10/215196.htm. Data retrieved on September 10, 2017
106
forest management practices.225
In the US climate action plan described that one of
the strategies of us president at that time that is Barack Obama to combating climate
change is by working with another country that then specified more to : working with
another emitter country in reducing emission from deforestation and forest
degradation and also leading global sector public financing towards cleaner energy in
which US government mobilized billions of dollars or clean energy investments in
developing countries.226
CIRCLE Project itself provides those two strategy above
because the circle project is a USAID funded project for renewable clean energy
investment which in its application also aims to reduce deforestation caused by
clearing of land from palm oil industry.
With the CIRCLE project targeting the Indonesian oil palm industry, it should
be seen also that this industry is very vulnerable. Indonesia Palm oil industry has
become the subject of black campaign from developed country for several years even
though it is still not clear whether their action is to protect the earth from climate
change attack or just to protect their own interest.227
The use of crude palm oil that
vary from food product, cosmetics, and bioenergy have made palm oil to become one
of the most valuable oil in the world that compete with other plant sourced oil such
as corn oil, soybean oil, sunflower seed oil, and canola oil. Besides its various use,
the low production cost along high productivity, and low of cost of its maintenance
have pushing crude palm oil more to become the valuable commodity. Thus, black
campaign that happened towards crude palm oil is an indication of market
competition due to a shift in the use of vegetable oil sources: from corn oil, soybean
oil, sunflower seed oil, and canola oil to palm oil. Increased production and
225
US Department of State. 2013. United States-Indonesia Comprehensive Partnership Fact Sheet. US Department of State. Data retrieved from https://2009-2017.state.gov/r/pa/prs/ps/2013/10/215196.htm. Data retrieved on September 10, 2017 226
Executive Office of the President. June 2013. The President’s Climate Action Plan. The White House. Washington. Pg 18-20 227
Kementrian Perdagangan Republik Indonesia. 2011. Kampanya Negatif Kelapa Sawit Indonesia. Kementrian Perdagangan Republik Indonesia. Jakarta. Pg 7
107
consumption of palm oil worldwide has reduced the demand for conventional
vegetable oils that have been largely produced by western countries.228
Indonesia Palm Oil Industry have been accused by many parties especially
from western side as the main contributor for emission in Indonesia, many external
forces have come to Indonesia in term to make Indonesia regulate the increase of
palm oil plantation growth, even though the sources of emission in Indonesia are not
mainly come from opening new plantation land which considered as land use change,
the existence of forest fires that are not deliberate because of geographical factor of
Indonesia that mostly happened in Sumatera and Kalimantan area, which is the area
of oil palm plantation make many parties accuse that oil palm plantation is cause of
the fire.229 As when Indonesia joined the RSPO, it was then seen how other actors
from outside the State of Indonesia could also have the power to influence domestic
decisions. The force that then make Indonesia government planned to give
moratorium for new plantation of palm oil. Examples of black campaigns ever
undertaken by the EU and USA include the EU enacting the EU Directive on
greenhouse emission provisions, which regulate that the EU should not import CPO
for biofuels because these commodities are deemed not to comply with the
restrictions on emissions limiting CPOs European Union. Greenpeace (2007) has also
used the term "How The Palm Oil Industry Is Cooking The Climate" to refer to the
understanding of how Indonesia's peat land carbon stocks are being spent through the
development of palm oil. The main problem of oil palm development is not just
environmental issues. In the beginning Western countries (especially Europe and
America) made a negative campaign (black campaign) by stating that palm oil is not
good for health. For example, the Center for Science in the Public Interest (CSPI) in
the United States in 2005 argued that palm oil can cause heart attacks because it
228
Putri, Marsha Dewi. 2013. Analisis dampak black campaign minyak kelapa sawit (cpo) terhadap volume ekspor cpo indonesia. Departemen ilmu ekonomi fakultas ekonomi dan manajemen Institut Pertanian Bogor. Bogor. Pg. 8-9. 229
Bangun, Derom. 2010. “Derom Bangun : Memoar Duta Besar Sawit Indonesia”. Kompas Media Nusantara. Jakarta. Pg. 39
108
contains high saturated fats (Brown and Jacobson 2005). Similarly, the World Health
Organization has suggested to reduce consumption of palm oil because of the
potential to cause cardiovascular diseases.230
National interest is a thing that every actor have not only states in accordance
with liberalism. In circle project itself, according to Mrs Dhiah Karsiwulan, can be
seen the effort of USAID in protecting US interest which is the USAID action in
limiting the actions taken by Winrock International, one of which is to assist
Indonesian oil producers to obtain RSPO certification. USAID does not allow
winrocks to help oil palm producers obtain RSPO certification because it is
considered to helping US trade competitors. Moreover, because USAID assistance to
this project comes from the American people, USAID must also protect US interests
Basically, USA has their own oil commodities that become one of the palm
oil competitor which is soybean oil, thus making Indonesian oil palm companies
become more careful to America. Referring to the soybean oil projection issued by
the United State Department of Agriculture (USDA) in February 2016, the world's
soybean plantation area will increase from 118 million hectares in 2015 to about 130
million hectares in 2025, of which around 10 million hectares of soybean plant
expansion takes place in Brazil and Argentina using transgenic soybean seeds. So
that world soybean oil equivalent production will increase from 58 million tons
(2015) to about 70 million tons (2025). 231
In the same period, if Indonesia is subject to oil palm memorization, then in
2025 the world oil palm plantation will be only about 19 million hectares of which
about 16 million hectares of crops produce, so the world CPO production in 2025
will be only about 64 million tons. Thus before the year 2025, soybean oil production
230
Putri, Marsha Dewi. 2013. Analisis dampak black campaign minyak kelapa sawit (cpo) terhadap volume ekspor cpo indonesia. Departemen ilmu ekonomi fakultas ekonomi dan manajemen Institut Pertanian Bogor. Bogor. Pg. 8. 231
GAPKI. 2016. Jika Sawit Dimoratorium: Minyak Kedelai Kalahkan Minyak Sawit Sebelum 2025. Data retrieved from https://gapki.id/jika-sawit-dimoratorium-minyak-kedelai-kalahkan-minyak-sawit-sebelum-2025/. Data retrieved on September 10, 2017
109
will beat world palm oil. This is the target of the world's soybean oil producer
countries, especially South America and the United States (70 percent of the world's
soybeans).
With the existence of black campaign ever conducted by USA, as well as the
existence of trade competition between USA and Indonesia emerged speculation that
this circle project aims to restore the image of USA.232
Even though this project
contains national interest to be achieved by USA, the prior target that wanted to be
achieved by this project is based on mutual goals in emission reduction. This goal in
reducing emission was reflected from US President Climate Action Plan Page 18
regarding reducing emission from forest degradation and expanding clean energy use
to Asia-Pacific region.233
Besides, for Indonesia as developing country which
commonly deals with the lack of capability of the national government in financing
such huge project, international aid is one of the best option to help our funding.
Furthermore, this project can be really valuable for the future of Indonesia Palm Oil
Industry if it can be maintained by our local human resources since the basic of the
methane capture program have been well distribute by CIRCLE Project.
More over in Facing Sustainable Development Goals, Indonesia still have
much work to do. In Indonesia SDG plan, it is explained that one of Indonesia
strategy in engaging its SDGs is through the use of philanthropy which then can be
done in two different ways. First, by creating philanthropy trust fund where all the
member of the philanthropy give the whole implementation to certain organization,
Second one is through not creating pooling fund which then the member can select
the goal they wanted to support. The members then do their own project to realize
their support with transparency and accountability report.234
If the base of CIRCLE
232
Karsiwulan, Dhiah. Deputy Chief of Party – CIRCLE Project. Personal Communication. August 30, 2017 233
Executive Office of the President. June 2013. The President’s Climate Action Plan. The White House. Washington. Pg 18-20 234
Deputi Bidang Maritim dan SDA Bappenas. 2015. Sustainable Development Goal (SDGs). Bappenas. Jakarta. Pg 15.
110
Project which is Methane Capture program can be funded by this system, it can
accelerate the goal of Indonesia government in reducing emission as well as
increasing the use of renewable energy.
Through the explanation above, can be concluded that even though CIRCLE
project also unable give direct result towards the reduction of emission and
increasing the use of renewable energy within the time frame of the project in 2011
to 2016, can be stated that CIRCLE project can be seen as the project that may be
able to become the foundation towards the development of POME to biogas
technology in palm oil Industry in Indonesia. It cannot be denied that the help from
United States in funding the CIRCLE project has help Indonesia to increase the
number of POME to biogas technology installed by palm oil company.
111
CHAPTER V
CONCLUSION
Indonesia is one of the biggest contributors of green-house gas emission after
China and U.S due to the high number of deforestation that happened over the years.
Referring how vulnerable Indonesia to the effects of global warming such as the
increase of sea level due to Indonesia geological condition as archipelago country,
Indonesia president Susilo Bambang Yudhoyono at the 2009 G-20 in Pittsburgh
committed to reduce Indonesia GHG emission up to 40% by 2020. In 2010, U.S
President Barack Obama stated to support Indonesia- U.S shared goal on climate
change mitigation. The commitment from both of the states then further realized
through the establishment of Indonesia – U.S comprehensive partnership in
November 2010. In this partnership, both of the country agreed to create 6 working
group to cover a wide range of cooperation sectors which are : Democracy and civil
society working group, education, security, environment and climate, energy, and
trade and investment working group.
CIRCLE project established under energy working group. CIRCLE project is
the result of cooperation between Indonesia and America through its government
agency namely USAID. USAID then selected Winrock International which is a US
based non-governmental organization to run this project. The CIRCLE project
focuses on the construction of pome waste processing technology from palm oil mills
to make biogas which can then be used as a source of energy to generate electricity.
The selection of this project was because palm oil industry in Indonesia is one
of the complex issues that are closely related to other issues, especially
environmental issues. The expansion of oil palm plantations on the one hand
increases palm oil production but on the other hand also causes environmental
degradation. The existence of plantation areas that take up forest land that should not
112
be planted and the process of land clearing by burning that often occurs because it is
considered as an easy and effective way by palm oil companies has accelerate the
rate of forest degradation in Indonesia. In addition, the lack of community
knowledge, especially the palm oil mill company, to the high emissions from palm
oil waste in the form of POME if not properly treated can make Indonesia's efforts to
reduce emissions become more difficult. In addition, the existence of black campaign
on palm oil as the biggest cause of forest destruction in Indonesia is increasingly
cornering Indonesian palm oil and causing a bad image to the industry even though it
is not entirely true.
The CIRCLE project is expected to be the solution to the above problems,
because in its work program, CIRCLE project has several stages, firstly selecting the
mill to be invited to cooperate; in this election, the international winrock will screen
the related companies to ensure they have no land in where it is not supposed to
ensure that the company does not open the land by burning or the use of chemicals
that can damage the environment; secondly, providing capacity building usually in
the workshop's bench towards the company members about POME to biogas
processing system, then preparing the company for the adoption of sewage treatment
system, as well as helping companies to gain international certification which will
affecting the competitiveness of their product in global market.
The CIRCLE Project, which runs from 2011 to 2016, is still included in
current year range of MDGs from 2000 to 2015. In Indonesia's MDG at the 7th goal
on environmental conservation, Indonesia targets to reduce carbon emissions and
increase energy elasticity and use of new renewable energy in national energy mix as
a whole. With the CIRCLE Project's goal to reduce emissions from the waste
treatment sector and the utilization of waste processing products for energy sources,
it is hoped that the circle project can give impetus to Indonesia's efforts to achieve its
MDG goals. However, until the end of its CIRCLE project, it can be stated that this
project has not been biased to give a significant effect on the reduction of emissions
113
and increase the use of biogas as a power plant, because from 3 mill that goes to the
stage of becoming PLTBG, it cannot be claimed to generate electricity through pome
to biogas technology conversion until the end of 2016.
CIRCLE project also cannot reach its full potential due to the existence US
interest that must be maintained. In essence, described in the cooperative agreement
between USAID and Winrock International, one of CIRCLE Project's activities is to
ensure that mill that has passed the screening is ready to be registered to RSPO
certification, but in the course of its project, USAID limits Winrock not to help the
mill to get certification. Because helping palm oil companies get international
certification will help improve the competitiveness of Indonesian palm oil in Europe,
this will threaten the strength of American oil products is soy bean oil. With the
limitation of CIRCLE's capability, CIRCLE's partner AKSENTA, which moves as an
RSPO consultant, also withdrew from the CIRCLE project. The CIRCLE project in
its implementation also has some constraints such as the length of time it takes to get
permission from the local government, this is because Winrock International does not
have a special agreement with the local government agency.
However, even though the CIRCLE project has not been able to show its
maximum results, this project should be the foundation for the development of
POME-based waste processing technology in Indonesia. With the capacity building
that has been done by CIRCLE project, it is expected that the government can
support for this waste processing system can be run by all oil palm companies. One
way is to pass a law that regulates the better treatment of waste, by determining the
procedures for the treatment of waste not only set the waste quality standards for the
waste. Due to pome waste, the biggest emissions and pollution that occur is due to
the wrong waste treatment process. By developing this project, this future project
will help Indonesia reduce emissions from the plantation sector, help regulate oil
palm companies, and also help generate electricity especially for remote areas that
are difficult to reach by PLN‘s grid
114
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APPENDIX 1
Media Note
Office of the Spokesman
Washington, DC
September 17, 2010
Following is the text of the joint statement released at the conclusion of the first
meeting of the U.S.-Indonesia Joint Commission, held in Washington, D.C. on
September 17, 2010.
BEGIN TEXT:
U.S. Secretary of State Hillary Rodham Clinton and Indonesian Foreign Minister
Marty Natalegawa met in Washington on September 17, 2010, for the inaugural
meeting of the U.S.-Indonesia Joint Commission.
The Joint Commission is a key component of President Obama and President
Yudhoyono‘s long-term commitment to broadening, deepening, and elevating
bilateral relations between Indonesia and the United States to confront the challenges
of the 21st century. Chaired by Secretary Clinton and Foreign Minister Natalegawa,
this framework within the Comprehensive Partnership strengthens bilateral
collaboration on a broad range of issues in order to promote peace, stability, and
economic prosperity, not only for the United States and Indonesia, but also regionally
and globally. The Comprehensive Partnership allows our two countries to fully
explore and build upon our shared national interests, maximizes cooperation on our
mutual priorities, and strengthens the already rich relationship between the people of
Indonesia and the United States.
Secretary Clinton and Minister Natalegawa pledged to deepen relations between the
two countries by affirming a Plan of Action for the U.S.-Indonesia Comprehensive
Partnership covering political and security cooperation; economic and development
cooperation; and cooperation in socio-cultural, educational, science and technology
matters. The two ministers also reaffirmed that the U.S.-Indonesia relationship is an
enduring friendship based on our common values including democracy, tolerance,
respect for human rights and diversity, and our joint promotion of economic
development.
120
They pledged that the United States and Indonesia, as important partners, would
engage in close, frequent consultations on global and regional developments. Both
recognized the significance of enhanced cooperation between two of the largest
democracies in the world, the opportunities for economic and development
cooperation, and the value of fostering mutual understanding through people-to-
people exchanges.
The two ministers affirmed that the Joint Commission and its Working Groups are to
assist both countries in overcoming shared challenges using the Plan of Action for
the U.S.-Indonesia Comprehensive Partnership. They reconfirmed that the Working
Groups have been charged with coordinating strategies and highlighting policy
initiatives and priorities in the areas of Democracy and Civil Society; Education;
Climate and Environment; Trade and Investment; Security; and Energy. The two
ministers also agreed to explore the possibility of additional working groups, as
appropriate.
Working Group on Democracy and Civil Society
The co-chairs of the Working Group on Democracy and Civil Society shared with
Secretary Clinton and Foreign Minister Natalegawa their mutually agreed upon
mission statement of promoting good governance, enhancing democracy, and
strengthening human rights protection through dialogue and capacity building. The
two officials reported that under this mission statement, the thematic focus of
strategies and activities will be on elections and political participation, freedom of
information and expression, conflict resolution, promoting basic human rights, civil
society, freedom of association, transparency, anti-corruption efforts, and
strengthening the rule of law Through these efforts, they pledged to seize short- and
long-term opportunities to enhance U.S.-Indonesia cooperation on democracy at the
bilateral, regional and global level.
Working Group on Education
The co-chairs of the Working Group on Education reported to Secretary Clinton and
Minister Natalegawa on the shared vision underlying the announcement at the
Toronto G-20 of the U.S.-Indonesian Higher Education Partnership. They re-iterated
the goals of increasing the number of Indonesian students studying in the United
States and boosting the number of American students studying in Indonesia over the
next five years. They also recognized the value of increasing and strengthening
university-to-university partnerships, supporting increases in government-sponsored
educational exchange programs, and engaging the resources and expertise of the
private sector, foundations and the higher education community. They affirmed the
need to share best practices to enhance the provision of quality education and to
invite private-sector entities to leverage their knowledge and technology towards
shared goals.
Working Group on Climate and Environment
121
The co-chairs of the Working Group on Climate and Environment reaffirmed the
components of the U.S.-Indonesia Comprehensive Partnership on climate change
announced at the G-20 meeting in Toronto this year. They pledged to use the
Working Group as a forum to exchange best practices and information regarding
climate change and the environment. The officials agreed to focus attention on land
use change, peatlands, and forests; marine environments and oceans; and
environmental management and policy. They also identified the SOLUSI Partnership
and the Climate Change Center as vehicles to make progress on these fronts. They
acknowledged the need to incorporate education and public outreach in all their
endeavors.
Working Group on Trade and Investment
In advance of the Joint Commission meeting, Deputy USTR Ambassador Demetrios
Marantis and Vice Minister of Trade Mahendra Siregar met in Indonesia to assess
progress made by both governments in improving the bilateral trade and investment
relationship following the last Trade and Investment Council (TIC) meeting in
Washington, D.C., on May 13-15, 2009. They reaffirmed their commitment to
strengthen cooperation in the field of trade and investment and to resolve remaining
issues within the framework of the TIC/TIFA.
Working Group on Security
The co-chairs of the Working Group on Security reported to Secretary Clinton and
Minister Natalegawa on the result of the last meeting of Indonesia – United States
Security Dialogue (IUSSD) in Washington, D.C., on May 25-26, 2010. They
reaffirmed the strong security relationship the two countries share, and pledged to
continue close cooperation on programs related to maritime security, humanitarian
assistance and disaster relief, peacekeeping, and defense reform and
professionalization. The chairs also reported on the recent signing of the Framework
Arrangement on Cooperative Activities in the Field of Defense, and highlighted the
annual Indonesia-United States Security Dialogue as the pre-eminent forum for the
two countries to discuss security issues. The Indonesian delegation shared
information on TNI reform toward professionalization, modernization, and respect
for human rights.
Working Group on Energy
The co-chairs of the Working Group on Energy reported to Secretary Clinton and
Minister Natalegawa on the result and follow-up of the last meeting of Energy Policy
Dialogue (EPD) in Washington, D.C., on June 28-30, 2010. The EPD is the primary
mechanism for bilateral cooperation and policy discussions in the areas of mutual
energy security, energy trade and investment, and the deployment of clean and
efficient energy technologies. At the June EPD meeting, both sides agreed to identify
two to three new areas in which to expand cooperative bilateral activities. Indonesia
proposed focusing on an information exchange on policies to improve the investment
climate, build capacity and promote sustainable economic development; participation
122
in Methane to Markets; and encouraging public-private investment partnerships in
the energy sector. Both delegations pledged to increase communication at the
technical and working level and are developing a concrete work plan.
Secretary Clinton and Minister Natalegawa reaffirmed the importance of the Joint
Commission in strengthening the bilateral relationship and offering a strategic vision
for enhanced future cooperation. The two delegations look forward to future
discussions on issues raised at the Commission through official interactions, working
groups, and existing bilateral dialogues. Both countries pledged to intensify
discussions on how to further deepen and broaden cooperation.
123
APPENDIX 2
JOINT STATEMENT
THE 2ND INDONESIA-US
JOINT COMMISSION MEETING
BALI, 24 JULY 2011 1. Indonesian Foreign Minister Dr. R. M. Marty M. Natalegawa and U.S.
Secretary of State Hillary Rodham Clinton met in Bali on July 24, 2011
to co-chair the second meeting of the U.S.-Indonesia Joint Commission
under the bilateral Comprehensive Partnership. Both were accompanied
by senior officials from their respective governments.
2. The Joint Commission is the principal vehicle to implement the
Comprehensive Partnership launched by Presidents Yudhoyono and
Obama in November 2010 in Indonesia. The first Joint Commission
Meeting was held in Washington, D.C. in September 2010.
3. Foreign Minister Natalegawa and Secretary of State Clinton were
delighted to see the steady progress of the Joint Commission, whose
members had collaborated with enthusiasm and a constructive spirit
reflecting the elevated status of bilateral relations under the
Comprehensive Partnership.
4. Foreign Minister Natalegawa and Secretary Clinton engaged in an
extensive dialogue on bilateral, regional, and global issues. They
highlighted President Obama‘s November 2010 visit to Jakarta and his
upcoming trip to Bali in November 2011 and pledged to continue to
strengthen the U.S.-Indonesian high-level strategic dialogue on global
and regional developments. Given Indonesia‘s chairmanship in 2011 of
the Association of Southeast Asian Nations (ASEAN), the entry of the
United States into the East Asian Summit (EAS), and both countries
membership in the G-20, Secretary Clinton and Foreign Minister
Natalegawa acknowledged the great importance of this enhanced
consultation. They also expressed strong support for the intensive efforts
to conclude a Millennium Challenge Corporation compact, likely to total
$600 million over five years, which is in the final stages of development. 2
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5. The two ministers noted that the Joint Commission and its Working
Groups are, in the spirit of equal partnership, promoting close dialogue
and cooperation in overcoming shared challenges. Participants in today‘s
Joint Commission session welcomed substantial progress over the past
year under the three pillars of the Comprehensive Partnership Plan of
Action covering political and security cooperation; economic and
development cooperation; and cooperation in socio-cultural, educational,
science and technology affairs.
6. The two Ministers reviewed strategies and highlighted policy
initiatives and priorities developed by the six Joint Commission Working
Groups in the areas of Democracy and Civil Society, Education, Climate
and Environment, Trade and Investment, Security, and Energy.
7. Working Group on Democracy and Civil Society
The co-chairs of the Working Group on Democracy and Civil Society
shared with Foreign Minister Natalegawa and Secretary Clinton the
results of bilateral initiatives on cooperation with civil society
engagement, civic education, and the upcoming bilateral media dialogue.
They agreed to cooperate on democracy and human rights initiatives in
international fora including the UN Human Rights Council, and on
building democracy through bilateral programs. The United States
participated in the third Bali Democracy Forum (BDF) as an observer
and will take part in the upcoming Fourth BDF, while the National
Democratic Institute (NDI) supported the BDF implementing agency, the
Institute for Peace and Democracy. The co-chairs expressed a desire to
focus in the coming year on cooperation related to open government
partnership, human rights, interfaith initiatives, local elections and
women participation in politics. They will strive to increase youth
participation in all these areas.
8. Working Group on Education
The co-chairs of the Working Group on Education reported significant
progress and new initiatives under the five-year Higher Education
Partnership. They described the two countries‘ support for increased
exchange of students and scholars, including through the expanded
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binational Fulbright Program and with the Department of State‘s
community college initiative, as well as the development of new
university partnerships through the U.S. Agency for International 3
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Development to strengthen educational capacity, especially in the fields
of science and technology. They highlighted the growth of the Peace
Corps‘ English Teaching and Teacher Training program. They also
welcomed Indonesian support for 100 Darmasiswa scholarships for
Americans and Joint Fulbright-Dikti Scholarships for Master‘s and PhD
degree programs in the United States. They noted expanded support for
English and Indonesian language learning to further strengthen
collaboration and mutual understanding, and continued support for
improved basic education services to facilitate more Indonesian students‘
ability to continue onto higher education. The Working Group also
highlighted the Spring 2011 American-Indonesian Educational
Foundation EducationUSA and Access America Education Fairs, in
which over 100 U.S. colleges and universities participated, and
announced an Indonesia-U.S. Higher Education Summit to be held in
Washington, D.C. on October 31, 2011 to further engage the higher
education and private sector communities in both countries. In addition,
they acknowledged the existing academic recharging, ‖twinning‖ and
other post graduate program funded by the Government of Indonesia.
9. Working Group on Climate and Environment
The co-chairs of the Working Group on Climate and Environment
reported on accomplishments in priority areas, including intensified
consultations on global climate change action, tropical forests,
environmental management and governance, and biodiversity and
ecosystems conservation. Noting Indonesia‘s July 12, 2011 land tenure
speech as a major step forward for forest-dependent communities and
recognizing the importance of an accurate forest mapping system, the
Working Group identified key challenges and action plans to pilot
Reducing Emissions from Deforestation and Forest Degradation- Plus
(REDD+) programs; strengthen climate change measurement, reporting
and verification systems; advance the establishment of the climate
change center, protect biodiversity, including habitats that are critical to
the survival of orangutans and tigers; combat illegal logging; and
promote sustainable management of forest and marine ecosystems. The
Working Group also recognized an important new agreement between
the U.S. Environmental Protection Agency and the Ministry of
Environment to expand environmental cooperation and launch the
―Breathe Easy, Jakarta‖ partnership. The two sides also expressed strong
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support for collaborating in a new Tropical Forest Conservation Act
program expected to total approximately $20 million to manage tropical
forests. 4
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10. Working Group on Trade and Investment
The co-chairs noted preparation for upcoming meetings of the Trade and
Investment Council (TIC) and efforts to intensify engagement in the
coming year. Bilateral trade figures reached $23.4 billion in 2010
compared to $18.0 billion in 2009. Indonesia reported that the United
States has become the third largest source of investment in Indonesia,
with investment reaching $930.9 million in 2010. During the first half of
2011, U.S. investment to Indonesia surpassed $936.1 million. Working
Group co-chairs outlined recent commercial engagement successes such
as the Overseas Private Investment Corporation (OPIC) investment
conference and U.S. agriculture and education trade missions earlier this
year. As well, the co-chairs announced that the U.S. Department of
Agriculture and Indonesia‘s Ministry of Agriculture are leading a
temporary task force, to include participation from government,
universities, and the private sector, to explore opportunities for
cooperative engagement regarding the development of agriculture
research, education, market access and food security and use of
innovative technologies in agriculture. In addition, they recognized
growing cooperation on entrepreneurship including a recent U.S.
entrepreneurship delegation to Indonesia and Indonesia‘s hosting of the
ASEAN Regional Entrepreneurship Summit. They welcomed the
preliminary meeting of the Commercial Dialogue between the two
countries held in Washington, D.C. on July 14, 2011 as an initiative to
strengthen the existing Working Group on Trade and Investment under
the Joint Commission. These initiatives will create a foundation for
further increases in our bilateral trade.
11. Working Group on Security
The co-chairs of the Working Group on Security reported on the
improving military-to-military relationship, including a number of
cooperative activities on maritime security, transnational crime,
counterterrorism, humanitarian assistance/disaster relief, peacekeeping,
and defense reform/professionalization. The Working Group noted U.S.
support for the continued modernization of the Indonesian military forces
and for Indonesia‘s construction of a Peacekeeping Training Center. The
Working Group noted the U.S. and Indonesian co-chairmanship of the
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12. Working Group on Energy
The co-chairs of the Working Group on Energy reported on the
cooperative activities undertaken since the Energy Policy Dialogue
(EPD) in June 2010, including the U.S.-Indonesia Energy Investment
Roundtable in May 2011 in Jakarta. The highly successful event
identified the key policy issues for improving the investment climate in
Indonesia‘s energy sector and attracting the substantial investment
needed for Indonesia to meet its own ambitious production targets for
both fossil fuels and renewable energy. The Working Group has already
begun cooperating to implement key recommendations from the event,
including the July 10-20 Geothermal Power Reverse Trade Mission that
the U.S. Trade and Development Agency organized for thirteen
Indonesian delegates from the national and provincial government as
well as the corporate sector. Additionally, the Working Group is in the
preliminary stages of planning a second U.S.-Indonesia Energy
Investment Roundtable focused on conventional and unconventional gas
to be held this fall. Furthermore, Indonesia and the United States have
decided to cooperate on Indonesian efforts to slow the growth of
emissions from its energy sector through strategies outlined in
Indonesia‘s climate change sector roadmap, in particular through
cooperation on a $16.2 million Indonesia Clean Energy Development
Project that will install 120 MW of clean energy and increase access for
1.2 million Indonesians to clean energy.
13. Secretary Clinton and Foreign Minister Natalegawa reaffirmed the
importance of the Joint Commission in strengthening the bilateral
relationship and offering a strategic vision for enhanced future
cooperation. They noted that in addition to regular Joint Commission
plenary sessions, the United States and Indonesia are boosting overall
senior level dialogue, building relationships between our peoples, and
developing institutional relations, not only between governments, but
also among civil society, business, and academia. They also underscored
cooperation in health, which has made significant progress over the last
year, with steps taken to work closely on a variety of health and
infectious disease issues. They also highlighted important bilateral
science and technology cooperation initiatives.
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14. The two sides plan to hold the next meeting of the Joint Commission
in the United States in 2012.