The “Partnership for Sustainable Development” Program in Indonesia: Linking MDGs & the Global...
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The “Partnership for Sustainable Development” Program in Indonesia: Linking MDGs & the Global Compact “Extreme poverty and a lack of sustainable development for the world’s poor will constitute the greatest challenge to maintaining peace this century. “ Millennium Declaration "We must work to underpin the marketplace with solid and stable foundations and open the door to full participation by all people, including and especially the world's poor.“ Secretary-General Remarks, 1st Global Compact Advisory Council, 2002
The “Partnership for Sustainable Development” Program in Indonesia: Linking MDGs & the Global Compact “Extreme poverty and a lack of sustainable development
The Partnership for Sustainable Development Program in
Indonesia: Linking MDGs & the Global Compact Extreme poverty
and a lack of sustainable development for the worlds poor will
constitute the greatest challenge to maintaining peace this
century. Millennium Declaration "We must work to underpin the
marketplace with solid and stable foundations and open the door to
full participation by all people, including and especially the
world's poor. Secretary-General Remarks, 1st Global Compact
Advisory Council, 2002
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1) Background
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Indonesia y yFor countries like Indonesia, there is good
progress towards achieving the MDGs at the national level, but the
challenge remains to effectively address pockets of poverty at the
sub-national level. Partnership with business will be critical,
since business serves as a driver of growth and revenues needed to
achieve development goals. y yAchieving future development gains in
Indonesia will depend on its ability to renew and sustain an
adequate level of economic growth. While renewed private investment
and a return to growth will be a significant achievement for
achieving development goals, the context in for this growth has
changed. y yNot only must growth translate into development gains
for the pockets of poverty, it must also address greater demands
for local autonomy and inclusion of civil society in
decision-making. Indonesias challenge is to manage globalization
and renewed business investments in a way that adapts to this new
development context growth with equity and sustainability.
Slide 4
Targeting Pockets of Poverty The Challenge in Papua Province y
yIndonesias largest province, Papua (formerly Irian Jaya) holds the
highest levels of poverty - with about 60% of its population in
extreme poverty. It also hosts 60% of Indonesias biodiversity and
has the nations highest rates of HIV/AIDS. Thus, it stands as a
priority for MDGs under several Goals. y yA watershed in achieving
development goals in Papua will be the Tangguh Liquefied Natural
Gas (LNG) operation. With a US$3 billion investment by British
Petroleum (BP) and a consortium of foreign investors, Tangguh
stands as Indonesias largest Foreign Direct Investment (FDI) since
the economic crisis began in 1998. Tangguh is planned to commence
exports around 2010, and after several years of cost recovery, is
expected to generate approximately $1 billion revenue per year
starting in 2015, to be shared between national, provincial and
district governments. y yUnder a Special Autonomy Act for Papua
passed in 2001, the province will retain 70% of LNG revenues and
major decision-making powers, a major shift from times when the
majority of revenues and decision were controlled by the central
government. The challenge for local government and partners will be
to manage the change associated with Tangguh and autonomy in way
that can meet human development goals equitably and sustainably
towards 2015 and beyond.
Slide 5
The capacity to change y yIn July 2004, UNDP is commencing the
Partnerships for Sustainable Development programme with national
and local government, civil society and BP to engage the challenge
of building local capacities to manage this process. This is done
by finding synergy among the approaches of the MDGs and the Global
Compact towards common development objectives among government,
business and civil society. y yThe goal of the programme is to
develop new poverty reduction strategies and new models of local
development that distinguish themselves from past failures and
translates growth into poverty reduction. y yThe unprecedented
levels of local revenues that will flow from Tangguh can be a major
boost to local poverty reduction efforts. However, Papua has failed
in the past to benefit from commodity export-led growth to improve
its rate of progress on development indicators. (Papua hosts the
Freeport Copper and Gold Mine the largest in the world).
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The capacity to change y yThe 2003 UNDP Human Development
Report (HDR), shows that economies with a heavy dependence on a
commodity exports face hurdles in sustaining growth, many suffering
a decline in MDG indicators in recent years. This contrasts with
economies that used trade as an engine for growth of a diversified
local economy, and enacted measures for preventing distributional
conflicts. y yEconomies that depend solely on commodity-exports
have the highest poverty - 80% of people in mineral exporting
countries lived on less than $1/day at the end of the 1990s,
compared with 43% in service exporters and 25% in manufactured
goods exporters. y yThe HDR also highlights the fact that conflicts
are increasingly located within countries rather than between
countries, often taking place in regions where commodity exports
take centre stage in the local economy and where poverty has become
entrenched as a result of distributional inequities. Twenty two of
the 34 countries that were furthest away from achieving the MGDs in
2000 were affected by conflict, mostly internal.
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2) The BP Natural Gas Investment
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Tangguh Project Site Regional Growth Centers Babo Airfield
Timika Facility Fak Sorong Manokwari Bintuni Tangguh Babo Timika
Birds Head Region of Papua Province
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KM2486 BINTUNI BAY GAS FIELDS ROABIBA LOCATION OF GAS FIELDS
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OFF-SHORE GAS PRODUCTION FACILITIES AND PIPELINES Vorwata
Wiriagar LNG Facility 20.6 Km 31.2 Km
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Example of a production facility
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Gambar Skematik Rencana Pabrik LNG dan Fasilitas
Pendukungnya
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BP Management Vision for Tangguh yA World Class Model of
Responsible Industrial Development yA Catalyst for Sustainable,
Long-Term Expansion and Diversification of the Indonesian Economy
with a focus on Papua Province yA Partnership between BP, Civil
Society, and the Donor community yDevelopment of Clean Energy for
the future
Slide 14
BP Management Principles yEnhancement of human resources and
governmental capacities to sustain the economic and social benefits
derived from the project yProtection of the Environment yEquitable
treatment of local communities yStimulus for Regional Economic and
Social Development yEfficient production of natural gas resources
yCreation of Exports and Foreign Exchange
Slide 15
BP Tangguh Performance Standards yThe BP Tangguh Gas Operations
will set an example for others to follow and will build confidence
in investing in Papua Province yAll Government of Indonesia Social
and Environmental Impacts Assessment procedures, rules and
regulations are being scrupulously adhered to yWorld Bank
development planning and management standards will be rigorously
implemented yInternational and National NGO sustainable development
standards will be applied
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Tanah Merah Village
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Worlds Largest Mangrove Forest
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Peat Swamp Forest
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Nipah and Sago Palm Forest
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Lowland Forest
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Savannah
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Mountains and Uplands
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Artisanal Fishing
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i
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Commercial Trawling
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Sago Production
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Timber Production
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Mangrove Wood Chip Mill
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Oil Palm Estate
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Transmigration
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AN INTEGRATED SOCIAL STRATEGY .delivery on the ground through
facilitation and direct action Consultation
EmpowermentPartnershipParticipationSustainability Diversified
Growth Strategy help create diversified and sustainable economic
development in existing urban areas to prevent uncontrolled
migration to the plant site Revenue Management help accelerate
timing of funds flow to Papua, promote transparency over Tangguh
funds to government and build capacity for wise decision making
Community Based Security bring about a clear environment and role
for the community to provide front line protection of the plant,
and for the Indonesian military to provide a second line of
protection DAV recognition programme provide compensation to
Directly Affected Villagers by the project, using international
best practice to consult and develop community action programmes
Training and workforce management ensure Papuans are able to take
part in opportunities provided by the Tangguh project, seeding
overall economic development in the region Forum and Foundation
establish vehicles for dialogue and development in the broader
Bintuni Bay area Biodiversity achieve best practices for
integrating sustainable biological conservation with sustainable
and practical development AMDAL an EIA to meet national and
international standards, implementing environmental best practice
Village resettlement in accordance with World Bank standards
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Conventional Oil and Gas Development: LNG Centralised Growth
Model Fertilizer Plant Petrochemical Plant New Town Uncontrolled
Development Issues to manage: Uncontrolled in-migration;
environmental degradation; disenfranchised local communities.
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DIVERSIFIED GROWTH STRATEGY y The DGS manages change by
expanding economic opportunities for local villages but emphasizes
the importance of strengthening sustainable economic and social
development in the broader region, and in other resource sectors
such as forestry, fisheries, agriculture and manufacturing y The
DGS thus discourages in-migration to the Project site a major
management issue for similar projects elsewhere. y The disbursement
of revenues to the Province and to Local Government creates the
first opportunity in the outer islands of Indonesia for a
diversified rather than a concentrated growth strategy.
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DGS LOCAL SCALE: PARTNERSHIP WITH VILLAGE COMMUNITIES y Purpose
is to ensure that local people benefit from the exploitation of
their natural resource; but are not overwhelmed by rates of
technological, environmental, social and economic change. y
Activities include support for service providers to improve
education, health and infrastructure and to promote economic
opportunities; establishment of systems for community based
security and third party support for development. y Outcomes
include: needs of directly affected villages met; community-based
security successful, and mechanisms allowing donor sources and
investments to fund economic and social development in place;
capacity for local involvement in LNG workforce
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DGS REGIONAL SCALE CONSTRUCTION PHASE: PARTNERSHIPS WITH THE
PRIVATE SECTOR y Purpose: To protect environment and the authority
of local adat land owners through the promotion of sustainable
development of industry in existing urban centres. y Activities:
assistance through contracts in District cities and the
sub-district towns, for the provision of goods and services. (e.g.
ITB) y Outcomes: Enhanced capacity of urban centers to provide
goods, support services and training resulting in greater
employment and social and economic opportunities; and Minimization
of in-migration by non-local people to the Project site during
critical early years Minimization of in-migration by non-local
people to the Project site during critical early years
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DGS REGIONAL SCALE CONSTRUCTION AND OPERATIONAL PHASES:
PARTNERSHIP WITH THE PUBLIC SECTOR y Purpose: to enhance the
capacity of local and provincial government to provide essential
social services and environmental and resource management as
implementation of the Tangguh Project drives economic change. y
Mechanisms: strategic partnerships with Provincial, Local and
National government and other stakeholders for collaborative work
improving planning and revenue management capacity. y Outcomes:
Strategic Growth Plan for western Papua prioritising economic,
social and infrastructure development across a range of sectors;
improved HR capacity in local governments, including career
continuity for newly trained staff; Identification of potential
donor-supported projects for further capacity building.
Slide 38
IMPLEMENTING THE DGS BP will not fill a role of de facto
government, despite a long term commitment to Papua and Indonesia.
BP believes that sustainable development can only be produced by
the people and their social institutions Development of social
institutions is appropriately the role of public sector agencies
such as the government supported by organisations such as the UN,
the development banks and bilaterals BP does accept that its role
is to implement partnership agreements which facilitate the
engagement of these institutions
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MILESTONES TOWARDS PARTNERSHIP May 2001 socialization and
debate of planning concepts in BP and the State Oil Regulating Body
(Pertamina) July 2001 introductory meetings of ideas with the
Papuan Provincial and districts governments identification of key
Papuan personalities. August 2001 initial discussion with UNDP
concerning potential partnership opportunities November 2001
National Workshop in Papua to endorse DGS with financial support
from BP, UNDP and Papuan Government May 2002 initial discussions
towards an agreement between the national provincial and local
governments, BP and UNDP concerning the implementation of the DGS
June 2002 concept discussed between UNDP Indonesia and UNDP
Administrator at WSSD Final Preparatory Committee meeting in
Indonesia September 2002 National Workshop in Papua to draft an MOU
October 2002 Papua indigenous people (adat) workshop endorse MOU
November 2002 MOU signed between Provincial Government of Papua and
district governments, UNDP, BP witnessed by National Government.
June 2004 final approvals by Indonesian Government to proceed with
3 vear UNDP-BP Partnership Programme
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2) The Partnership for Sustainable Development Programme
Slide 41
The Partnership Programme y yThe program reflects a partnership
between the local, provincial and national governments; civil
society, UNDP and BP. y yThe goal of the programme is to ensure
that the growth resulting from the Natural Gas investment is
sustainable, equitable and can help achieve the Millennium
Development Goals. It engages BPs commitment to corporate
responsibility and development, as a lead member of the Global
Compact. y yThrough cooperation between BP, UNDP, civil society and
the Government, the Diversified Growth Strategy (DGS) has been
adopted as Papuas new policy framework. The partnership project
sets out to implement the policy through the production of a
strategic development plan, enactment of new regulatory frameworks,
and capacity building. The construction of the plan is an exercise
in capacity building learning by doing
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y yAn initial three-year Phase I (2004-2006; US$1million) is
commencing in July 2004 to reach four specific outputs. This will
end with support to design of Phase II (2007-2015) to move towards
achievement of MDGs by 2015. The four Outputs of Phase I are: y
yOutput 1: Enhanced partnerships among government, civil society
and business: y yDialogues, consultations, research and advice on
means to improve role of civil society and indigenous peoples
groups, and local business development to serve as a basis for all
other outputs. y yNational Advisory Council with 15 agencies to
support roll-out of capacities to local government y yProvincial
Steering Committee with government, business and civil society to
guide programme activities and monitor progress y yDistrict
Committees to lead execution of programme outputs Programme outputs
and activities
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Output 2: A long-term Regional Development Plan (2005-2015) for
achieving MDGs through equitable and sustainable growth. Developing
a basic strategy for development a Diversified Growth Strategy
(DGS) focusing on diversification of local economy, equitable
revenue sharing, local business development, and manage risks
associated with Tangguh such as migration, etc. Identify critical
development priorities towards 2015 based on a human development
perspective and outline a development plan whereby government
revenues from the Gas operations go to achieve development
objectives. Identifying critical ecosystems and conservation areas,
Papua holds 60% of Indonesias biodiversity) and review land and
water use policies to adapt systems to new drivers of change from
Tangguh.
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y yOutput 3: Develop regulatory systems to manage the social,
environmental and economic impacts of Tangguh and compliance with
the Social and Environmental Impact Assessment (AMDAL) : y yIn the
context of the new Special Autonomy Regime for Papua, this includes
a rights-based approach, focusing on three pillars - Access to
Participation: inclusive administrative decision- making processes
related to local development, land and water use management and
delivery of public services (including synergies between state and
traditional governance systems), Access to Information: public
information required to understand the risks and benefits from
development activities and public programmes, and capacities needed
to meaningfully contribute to decision-making processes, and take
part in monitoring impacts of Tangguh, Access to Justice: improved
dispute resolution mechanisms among government, civil society and
business that address issues of compliance with Social and
Environmental Impact Assessment (AMDAL), and local customary norms
of indigenous peoples.
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y yOutput 4: Design of Phase II (2007-2015) capacity building
programme to implement the Development Plan: y yBased on the issues
outlined in the Development Plan, a long-term programme will be
designed and launched in 2007 as Phase II to build capacities
needed to ensure achievement of MDGs. yThis includes integrated
approach also covering governance reform, conflict prevention, and
environmental protection activities. yIncludes establishment of
Trust Fund with Government revenues from Tangguh, and support for
mobilizing any supplemental resources needed from the donor
community.
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Thank you Comments during local consultations, Papua And issues
for Break-out Groups? BP is being very careful with the community.
We know the eyes of the world are on it...so perhaps because of
that BP is working very closely with us. (villager) I dont know yet
if the idea of mutual benefit is possible. All thats clear now is
that BP will benefit.Our visions differ from BP, as does our
understanding of the issues, so how can we have a constructive
relationship? (NGO) There are two very different legal systems at
work the traditional system and the national system. Which one does
BP say it is respecting? (NGO) If promises are made, its taken as
legally binding according to our traditional system. (villager) In
ten years time, Papuans should be running the project from the
engineering side of things to the social and environmental. Thats
enough time to have developed local capacity, and will provide an
indicator of success for BPs approach. (government official) Work
of Hugh Attwater, Researcher with BP. 2000