Resources for policy making
APPLIED WORK EASYPol Module 085 EASYPol Module 084
Impulses for Water
Resource Planning and
Institutional Reform in
Indonesia
Towards an Effective Institutional
Framework
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Resources for policy making
Impulses for Water Resource Planning and Institutional Reform in Indonesia Towards an Effective Institutional Framework
by
Jacob James Burke, Senior Water Policy Officer, NRLW, Land and Water Division, FAO, Rome, Italy for the
Food and Agriculture Organization of the United Nations, FAO
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This presentation belongs to a set of modules which are part of the EASYPol Resource package: FAO POLICY LEARNING PROGRAMME – SPECIFIC POLICY ISSUES – NATURAL RESOURCE MANAGEMENT - WATER
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Impulses for Water Resource Planning and Institutional Reform in Indonesia Towards an Effective Institutional Framework
Table of contents
1. Summary ...... 1 2. Introduction ...... 1 3. Decentralisation and the water sector in indonesia ...... 1 3.1. Water sector reform ...... 2 3.2. The Status of the Draft Water Law ...... 5 4. Emerging issues ...... 8 4.1. Natural Resource Limits and Extreme Events: Calls for Improved Risk Management and ‘Integration’ ...... 8 4.2. Economic returns and economic / environmental performance ...... 9 4.3. The food security issue – the scope for agricultural growth and demand for improved irrigation services...... 10 4.4. Urbanisation and industrial growth ...... 13 4.5. The spatial planning dilemma ...... 14 5. Opportunities ...... 15 5.1. Economic ...... 15 5.2. Technical ...... 16 5.3. Institutional ...... 16 6. Strategies ...... 18 6.1. Raise public awareness ...... 18 6.2. Look at resource alternatives - promote the use of small scale hydrological ‘buffers’ ...... 18 6.3. Focus on non-structural/environmental measures for flood prevention and control ...... 19 6.4. Implement Programmes of Water Demand Management and match supply ...... 19 7. Recommendations: ...... 20 7.1. An Enhanced Institutional Framework ...... 20 7.2. District Level ...... 23 7.3. Provincial Regional Government ...... 24 7.4. Basin Level: The role of the Balai PSDAs ...... 25 7.5. The Role of the National Water Council ...... 27 7.5. Toward a rationalised framework ...... 28 7.6. Toward a streamlined arrangement ...... 30 8. Conclusions ...... 33 9. Readers’ notes ...... 34 9.1. Time requirements...... 34 10. References and further reading ...... 34 Annex 1: Coordination Team for Water Resources Management Working Group Products...... 37 Annex 2: Extract from Draft Water Law ...... 42
Impulses for Water Resource Planning and Institutional Reform in Indonesia 1 Towards an Effective Institutional Framework
1. SUMMARY This module is a condensed diagnostic of the Indonesian water sector reform process up to September 2004 provided under FAO support to the Indonesian planning ministry, BAPPENAS. The diagnostic was relevant at the time and may no longer apply, but it serves to illustrate the institutional pressures that can build up under a process of decentralization. This is significant for agriculture policy in Indonesia. While there is intense competition for raw water from municipal, industrial and hydropower users, the irrigated sub-sector in Indonesia remains significant in economic and political terms.
2. INTRODUCTION
Objectives To illustrate the impact of external ‘shocks’ on water policy, water regulation and the provision of water services.
Target audience Indonesia water sector professionals.
Required background An appreciation of water sector reform and decentralisation of rural service provision.
Readers can follow links included in the text to other EASYPol modules or references1. See also the list of EASYPol links included at the end of this module2.
3. DECENTRALISATION AND THE WATER SECTOR IN INDONESIA The result of Indonesia’s financial shock in 1997 and the advent of decentralisation in 1999 and the thrust it has given to sector reform and associated financing (internal and external) has been well established3. The implications of Law No. 22/1999 Law on Regional Administration and Law No. 25/1999 Law on the Fiscal Balance Between Central and Regional Governments, are far reaching and require intensive adjustment of sectoral legislation.
1 EASYPol hyperlinks are shown in blue, as follows: a) training paths are shown in Underlined bold font b) other EASYPol modules or complementary EASYPol materials are in Bold underlined italics; c) links to the glossary are in bold; and d) external links are in italics.
2 This module is part of the EASYPol Resource package: FAO POLICY LEARNING PROGRAMME – SPECIFIC POLICY ISSUES – NATURAL RESOURCE MANAGEMENT - WATER 3 World Bank, 2003.
2 EASYPol Module 085 Applied Work
The outcomes for specific sectors and the trends in economic structure and growth under these reform processes (e.g. WATSAL) will take time to discern. In the past few years a more erratic climate with prolonged drought and intense rainfall has resulted in emergency food distribution and calls for improved natural resource management to ensure that Indonesia’s river basins and subsequent water uses are more effectively buffered from extreme events (floods and droughts).With the National Water Policy in place4 and enabling legislation in the process of being enacted, the policy frame is well established. The key test will be the introduction of a new Water Law (and the consequent revoking of UU/74). However, with the exception of PP77/2001 (Government Regulation on Irrigation) and PP82/2001 (Government Regulation on Water Quality and Pollution Control) the anticipated suite of supporting Government Regulations in relation to water use rights, national hydrology management, river basin institutions, IMT and WUAs have yet to be processed5 . The genesis and outcomes of the WATSAL process in developing this legislative frame are comprehensively described elsewhere (Herman, 2002) and the outcomes summarised in Annex 1.
The purpose of this paper is to concentrate on how the proposed water institutions can work together effectively to address current development concerns and to avoid a review of the detailed, normative, policy analysis that has been carried out to date as a result of the WATSAL process (e.g. Kimpraswil, 2001a, 2001b, 2001c). It is accepted that development targets and opportunities will be moving in and out of focus and that recommended institutional arrangements need to be able to move with the times and avoid institutional rigidity. Some institutional adaptation will be necessary, but it is important that this is done for the right reasons – not for bureaucratic neatness but rather to promote equitable economic development. The institutional frame has to be responsive to the socio-economic drivers.
At this stage, on the assumption that the bureaucratic measures provided for in the Draft Water Law and accompanying regulations are implemented, questions remain as to how these provisions will play out with respect to actual water governance and economic returns to water management and water-related investment. What is crucially important to Indonesia, from a macro-perspective, is that social and economic opportunities that derive from the delivery of water services and management are not lost and that human and financial resources are applied at the appropriate administrative levels - with the appropriate intensity – i.e. strategically.
3.1. Water sector reform The national agenda for water sector reform is set out in Box 1. To date the process of reform has concentrated on the irrigated sub-sector (objective 4) in order to stabilise domestic food production and set up regional initiatives in the rural economies. To this end, the programme objectives of the WATSAL programme outgrowth (WISIMP) are given in Box 2. The only piece of supporting legislation to have been passed is the PP 77/2001 to enable the Irrigation Management Reform Policy (PKPI) and PP 82/2002 to facilitate the control of pollution, largely through end of pipe solutions/fines.
4 Kep – 14/M. Ekon/12/2001 On Direction of National Policy on Water Resources. 55 Herman, 2002 p.61
Impulses for Water Resource Planning and Institutional Reform in Indonesia 3 Towards an Effective Institutional Framework
Box 1: The national agenda for water sector reform
The agenda has four main objectives which may be summarised as follows:
. improve national institutional framework for water resource development and management . improve the organisational and financial framework for river basin management . improve the regulatory institutions and implementation framework for regional water quality management . improve national irrigation management policy, institutions and regulation
Box 2: The WISIMP programme objectives
“In line with the goals of the Water Resources Sector Reform and WATSAL, the Program seeks to: . shift from supply (investment?)-driven policies to demand-driven and locally responsive approaches; . enable the expanded sectoral authority of provincial and kabupaten (district) governments to be used with economy and efficiency, and in an accountable manner; . unbundle irrigation and basin management service provision by devolving some of the operations and maintenance (O&M) functions to self-financing river basin corporations in the largest and most developed river basins, and in the case of irrigation, to WAFs; and . separate operational and regulatory functions within sector agencies where feasible.”
Municipal and rural water supply and sanitation have not featured so prominently. While these uses may consume relatively small amounts of water in comparison with irrigation, they are nevertheless extremely important to get right in the short term for economic and political reasons. The lack of a specific water utility regulatory agency in sophisticated urban settings of Java, for instance, is a major gap in the institutional framework. When a mix of public and private service providers are involved in providing municipal services, some means of comparison and means for regulating competitive bidding, levels of service and environmental compliance is essential.
As water reform opens up an array of potentially bewildering opportunities for new forms of water service provider, new forms of subsidy and new institutions for local
4 EASYPol Module 085 Applied Work
water management –whether in rural or urban settings – four fundamental questions need to be asked.
i. Implementation: Is there a competent institutional instrument to drive the reform process? – does this need to be a promoter or a passive regulator – or a smart mixture of both? ii. Perception: Is there a clear delineation of responsibilities and liabilities between those of water agencies (public and private) and those of individual consumers and is this understood by the public? iii. Integration: Can the range of planned sectoral interventions and investments be integrated at the appropriate scales? iv. Operation: Can the institutions at the ‘sharp end’ (i.e. kabupaten) manage day- to-day operations effectively?
These questions have implications for the role and function of the proposed National Water Council – they also have implications for the rate of implementation and the degree of transition that can be achieved in any one planning period or budgetary cycle. The issues of institutional adjustment to promote more effective management are covered in the Recommendations section of this paper.
The land and water resources on Java has experienced the full range of impacts resulting from intensive development of agriculture, but the damaging impacts resulting from floods and droughts off-Java should not be forgotten. Equally, it is important to note that economic returns to water in agriculture are small compared with the returns to potable and industrial users. In the rapidly urbanising settings of Java, Indonesia is experiencing unprecedented rates of land and water conversion – from small-holder paddy to golf-courses and industrial estates. These rates of conversion can be expected to increase as economic recovery continues and it poses a crucial question for Indonesia’s food policy and the pricing of food staples6. For instance, should agricultural land around Jakarta be protected from conversion, and does it make economic sense to do so if the inflationary effects on domestically produced rice and housing costs, that Japan has experienced, are severe? Clearly reliance on domestic production of food staples has to be realistically balanced with water resource availability and the capacity to manage the resource base, particularly in terms of raising agricultural water productivity (i.e. the income per unit of water used in agriculture). In addition, the options to control the import of rice need to be carefully evaluated, particularly when borders are ‘permeable’.
Finally, against this background of rapid modernization and stretching of the national resource base, a major commitment to decentralization of powers and responsibilities to provincial governments has been initiated. But this immediately poses a dilemma for water resource planners and managers. Should surface water and groundwater (and its associated land) be planned and managed within administrative or natural resource boundaries? Do the bulk of Indonesia’s river basins fall within provincial boundaries or are there a sufficient number of cross-province river basins to warrant a separate layer
6 Firman, 2000.
Impulses for Water Resource Planning and Institutional Reform in Indonesia 5 Towards an Effective Institutional Framework
of water administration above province level? Or is the nature of the archipelago so diverse that one single system of water administration is unlikely to apply to all cases? In any event, the need to have clear, stable rights in water use in order to promote long term investment in water management, particularly agricultural water management, is not disputed. What is currently being debated is who is in the best position to adjudicate over the issue and protection of such rights in use? For intensively used basins, there is no doubt that this should be a neutral, competent body with a sound technical understanding of the basin as a whole. However, this does not necessarily mean that each river basin requires its own administration, particularly if there numerous small basins, as in Indonesia. But beyond straight allocation of water resources under conditions of competition, there is also a need to adjudicate over the provision of water services – municipal and rural. Demand for reliable water services will only intensify as the Indonesian economy grows and it is perhaps in this area of service regulation that Indonesia will have to concentrate efforts.
3.2. The status of the draft water law Given the recent (September 2003) failure of the Draft Water Law to pass through Parliament, it is appropriate to look at the current (14 October translation) of the Draft Water Law and assess the degree to which it responds to fundamental requirements of a water national law. For ease of reference, the October 2003 translation of the Draft Water Law is attached as Annex 2.
The form of the law is unclear and the content is repetitive with a mix of policy statements and legal provisions. Ideally, there should be a clear link between the basic definitions of rights in use and administrative powers, a set of implementing Acts to form public water service agencies (river basin authorities, water supply and sanitation authorities, hydropower authorities), and supporting regulations and standards.
While the fundamental definition of public and private rights in use (and under what circumstances a permit needs to be applied for) are covered under Articles 7-11, the definition of administrative powers in relation to these rights in use is not at all clear (Chapter II, Articles 13-19) other than to say that each administrative level is responsible for administering water rights within the respective jurisdictions, which may or may not include administration at river basin level (Article 14 f.). Such administrative powers need to be given to specific public entities who have no interest in water use and who are capable of adjudicating applications against known resource limits.
Making provision of water resource information and the preparation and adoption of water resource plans for defined water resource ‘areas’ is covered under Chapters VI and VIII respectively but without specifying (even through reference to a regulation) the type of information (surface and groundwater? private data?) and who will prepare the plans and whether ‘water resource managing institutions’ (Article 60) are again independent of water users. The degree to which the Law encourages ‘integration’ and ‘co-ordination’ is generally soft. References are made the National Water Council as an apex inter-ministerial body but without specifying in any detail the composition and function of such a body. Legislation can play a role in achieving effective co-ordination
6 EASYPol Module 085 Applied Work
between sectors but not by simply asking sector representatives to sit on an apex body. Better to prompt good sector planning through legislation that requires deference to regulatory bodies and compliance on day-to-day operational matters such as water quality targets or minimum flow requirements. The development of resource management plans (as part of the resource management function under Chapter VIII needs to be distinguished from the specific planning applications that will arise from bulk users – agriculture, industry and municipalities. It is hard to see how such applications can be granted under the licensing provisions of Chapter II (Authority and Responsibility) without involving a mess of overlaying and competing jurisdictional claims. In practice, there has to be one licensing authority per integral water resource unit. In the case of Indonesia, these will be river basins and associated aquifers which fall, for the most part in discrete provinces. Therefore, it could be argued that such resource planning and licensing functions are most sensibly carried out at provincial level with specific provisions for river basins that are shared between provinces (such as already exist for the Brantas). While the current Draft Law can accommodate this arrangement, the regulatory bodies required to implement the resource planning and licensing functions are not specified.
Given the intense use of water in rural areas of Indonesia, the issue of access over land to supply or drain water and the power of water agencies or local communities/water use associations to require access to land (subject to compensation) is not addressed in the Law. In addition, the power to qualify rights in use in times of shortage needs to be clearly articulated. This matter arose in relation to the self-supply from groundwater by industrial consumers in the vicinity of Jakarta7 where the state minerals agency sought to increase groundwater tariffs in order to control over-abstraction. It will also apply during periods of abnormal baseflow recession when priority uses may have to be protected and both intra and inter-provincial disputes on shared watercourses8.
Finally the question of the stability and transferability of water rights needs to be addressed squarely in order to build flexibility into the economic use of water. After primary uses have been satisfied, the stability and protection of water use rights (and customary rights) will be necessary to encourage term investment in water infrastructure but such rights also need to be amenable to transfer should the original use no longer apply and higher value uses can accrue elsewhere.
The operational responsibilities for water services need some overall guidance from the Law and while Chapter VII (Construction Implementation Maintenance and Operation) and Chapter X (Financing) would be expected to make provision for such service providers, the articles fail to concentrate on the primary generic issues that would apply to public or private service providers and might include, inter alia;
. Powers to acquire rights to water - bulk entitlements . Powers to construct and operate works . Recovery of capital costs of works
7 Jakarta Post 28/08/03. 8 Jakarta Post 19/08/03.
Impulses for Water Resource Planning and Institutional Reform in Indonesia 7 Towards an Effective Institutional Framework
. Provisions to transfer operation and maintenance liabilities . Compulsory connections/services (hospitals, schools etc.) . Metering . Trade waste/effluent agreements . Powers to impose restrictions . Powers to make and enforce regulations
Instead Chapter VII and X attempt to define where the role of the State stops and the responsibility of private parties begins, particularly in relation to irrigation schemes. This is a matter of water policy and irrigation sub-sector strategy, but hardly the function of a national water law.
Chapter V deals with flood control but is unspecific on key government functions and powers to provide key elements of a flood protection strategy including, preventative measures, land-use zoning, flood warning systems, contingency plans and insurance arrangements. By the same token Chapter III (Water Resources Conservation) is more akin to a policy statement than a law obliging water users to control the discharge of waste (be they point or non-point sources) or manage land in order to converse the quality and integrity of the water resource base.
Chapter IV (Water Resource Utilisation) is impenetrable and is arguably best dealt with under Chapter I (specifically Articles 7-11). However, the Chapter is silent on an important issue to do with customary and traditional rights in use and their recognition under the law. This may be less of an issue on Java, but in the more remote off-Java provinces, issues of customary use may be significant even if they are hard to define and determine.
The Draft Law makes repeated reference throughout to supplementary provisions that will be dealt with through “Government Regulation”. While there is a large body of regulatory code on file (Annex 1), these are not cross-referenced in the Draft, making their relevance questionable. Are they intended to support the Law or not? However any regulations cited under the Law need to be specifically authorised by that Law. To the extent that there must be an express mention of any power to:
. interfere with liberty . enter on land . acquire land compulsorily . impose taxes or charges . fix or impose fines . delegate the power to make laws
Also supporting regulations should only require essential things and it is always instructive to ask is the regulation really necessary and what would happen if the regulation were not observed? If necessary, then the administration of the regulation needs to be kept as simple as possible and compliance based only on features that can be observed and monitored
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with the available administrative resources. A key feature are "feed-back" loops to ensure data are actually used when they are collected.
On the issue of commercialisation and corporatisation of water services, the reasons for entering into commercial agreements or granting commercial autonomy to improve the delivery of water services should be apparent to the beneficiaries. When such public utility services (which are generally natural monopolies) are taken out of direct ‘public’ control, consumers need the assurance that the public interest in their activities is retained through a competent regulator. The experience of foreign investors (Thames and Lyonnaise) in Jakarta should be instructive in this respect. While claims that the Draft Water Law would allow private companies to benefit from the provision of public water services may be ill- founded, the perception is nevertheless strongly held. The fact that governments need to re- structure debts and shed the liability for renewal costs needs to be clearly understood, but it is disingenuous for governments to claim that out-sourcing to the private sector can result in lower costs and improved coverage and performance unless a strong regulatory handle is maintained by an independent regulator.
For all these reasons, it is perhaps understandable that the Draft Water Law has still not been passed. Even if it can be argued that the lack of clarity and ambiguity in the current draft poses no threat to day-to-day water administration, an opportunity to reassure the Indonesian public that their concerns for their water environment and water services have been recognised, appears to have been lost.
4. EMERGING ISSUES Once the normative aspects of water policy have been determined (i.e. what ought to be done), it may be possible to focus on what can be done. To do this at a national level does not necessarily involve the use of a master planning approach for which significant pre- investment resources and time are required. Under decentralised administration, each province has an opportunity to plan and implement local water management initiatives - and request central government support.
4.1. Natural resource limits and extreme events: Calls for improved risk management and ‘integration’ The current drought (in 2003) is impacting potable supply and calls to regulate groundwater use for self-supply in Jakarta, threatening power generation and is estimated to have impacted some 450,000 ha of agricultural land and 100,000 ha. have already suffered crop failure – these are the telegraphic signals in the national press. The drought has prompted emergency drought relief programmes and commitments to re-establish the absorptive and regulation capacity of de-forested catchments. But it should be remembered that this drought comes hard on the heels of the Sulawesi floods in 2000.
Irrespective of the gross water resource base, local hydrology and water control determine and the generally flashy nature of upstream catchments and variable lateral inflow into lowland plains and resultant inter-annual variability characterise Indonesia’s surface water catchments. Natural resource limits – surface and groundwater: the magnitude of baseflow
Impulses for Water Resource Planning and Institutional Reform in Indonesia 9 Towards an Effective Institutional Framework
recession (dry season flows) and recharge regimes in small (short) catchments of Java are naturally limited.
As more land comes under development – and rates of conversion of agricultural land in Java have intensified even if economic cycles have shown these rates to be variable9, calls to manage the hydrological risk will intensify. Some means of buffering the inherently ‘flashy’ hydrological systems are required to mitigate the impact of flood events and provide a ‘hedge’ against prolonged dry season recession. But should these be structural solutions – large dams and downstream flood control, or non-structural solution, catchment re-forestation and judicious land planning/flood zoning and drainage in lowland areas? Each style has their attendant political and economic implications – and their technical limits.
4.2. Economic returns and economic / environmental performance The need to plan and invest in hydraulic infrastructure and hydraulic management will not disappear. Indonesia’s economy is becoming more sophisticated in the process of reform. Public investment will still be necessary to buffer the economic impacts of extreme events and optimise the structure of investment to deal not only with the public interest in resource management (including protection from floods, droughts and the reconciliation of disputes over bulk allocation) but also to improve the service levels to private consumers – farmers, industrial and municipal consumers. There has to be concern about the macro returns to investment in water infrastructure and water management in general, but also about the relative economic and environmental performance of individual schemes – irrigation commands, bulk water transfers, municipal water supply and disposal utilities and river basin organisations, irrespective of whether they are public or private entities.
As water resource ownership shifts more and more into the public domain throughout the world, water resource planning, investment and management in the public interest is normally subject to ‘regulation’ by publicly appointed ‘regulator’. The range and degree of water regulation is vast and variable usually deploying a mix of incentives and penalties to encourage compliance. However, to be effective at the right scale, the notion of regulation in the public interest has to be broadly understood and accepted and the regulatory institution has to be strong and competent across administrative boundaries up to the scale of river basins and at national level.
Under a decentralised administration this last point is particularly important. If public investment at regional level is to be deployed to promote balanced development, there has to be some means of comparing the performance of regional authorities and river basin organisations to ensure that the public are receiving comparable levels of service (with which to enhance their own productivity) and that the state is getting value for money. This may entail a light touch or a heavy touch, but above all it must be a ‘smart’ touch. There is no sense in over-regulating when irrigation schemes or municipalities are in fact quite capable of self-regulation. Equally, it is up to the regulator to work with water sector players to ensure that they have up-to-date information and expertise on technical aspects
9 Firman, 2000.
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of water management – hydraulic design methods, leak-detection, sewage treatment - as much as the institutional expertise – how to design a demand management campaign or catchment conservation programme.
4.3. The food security issue – the scope for agricultural growth and demand for improved irrigation services The resilience and ‘elasticity’ of the rural population in Indonesia is remarkable, but the impact of the 97/98 drought necessitated a huge increase in imported rice in 1998/99, up from a 1995-7 average of 2 million tonnes to record 6 million tonnes (FAOSTAT data). While domestic consumption of milled rice is in the order of 37 million tonnes (and current stocks levels in the order of 4 million tonnes) domestic production appears to have stabilised in the order of 33 million tonnes, milled basis10. This leaves Indonesia vulnerable to disrupted rice production. Despite Indonesia’s ‘porous’ borders with significant volumes of smuggled rice entering the country, the volume of internationally traded rice is relatively small (the FAO forecast for internationally traded rice in 2003 is 26 million tonnes) and reliance upon imported rice to substitute shortfalls in domestic production in neither economically or politically palatable. Rice production will remain the basis of a large part of Indonesia’s rural economy, accounting for 30% of rural incomes in areas of Indonesia where it is grown a staple.
The reform is expected to hinge on acceptance of new forms of subsidy to farmers – aligning the cost-sharing provisions to institutions and levels of service. Improvements to infrastructure and not just productivity are important in the sense that this will defer high intensity investment in repair and rehab. Therefore good cost sharing criteria need to be established locally – role of local fora and irrigation commissions – chose the most receptive - those that will define criteria through the cost-sharing process.
To this extent, the irrigation reform process appears too standardised to be able to cope with the wide range of economic and environmental conditions experienced across the Indonesian archipelago. Without an emphasis on agricultural productivity rather than simply the improvement of irrigation water services, it is difficult to see how farmer incomes are going to be increased in order to pay for the improved services. Equally, it is not clear how this decentralisation anticipated under the WATSAL reform will tie in with the ongoing devolution of financial powers to the regions.
Research was carried out in a set of rice systems across Indonesia to examine profitability11. The study distinguished four systems of water control – good (technical irrigation – permanent canals and water control structures), moderate (semi-technical irrigation – permanent canals but few water control structures), poor (non-technical irrigation – non-permanent canals and few water control structures), and rainfed (no irrigation).The profitability of such rice systems appear to be highly sensitive to labour costs.
A summary paper of the food policy advisory team makes a set of conclusions (Box 3).
10 USDA, 2003. 11 Pearson et al, 2003.
Impulses for Water Resource Planning and Institutional Reform in Indonesia 11 Towards an Effective Institutional Framework
Box 3: Policy Implications
Three important empirical facts emerged from the collaborative analysis by FPSA and CASER1 (reference):
i) food prices in Indonesia are abnormally high both by historical standards (relative to pre-crisis levels) and by international standards; ii) rice farming in Indonesia remains profitable on a per unit basis and competitive with imported rice; and iii) rice accounts for a small portion of farm household income.
The abnormally high price of food, and of rice in particular, indicates that the government should avoid policies that put additional upward pressure on food prices, as this would only add to the already heavy burden on low income consumers who spend most of their income on food. Instruments other than price should be used to boost agricultural productivity and raise farm incomes. The fact that rice remains profitable on a per unit basis, and the fact that rice income accounts for only a small share of farm household income, indicates that higher paddy prices are both unnecessary and ineffective as a means to boost farm household income. The problem that rice farmers face is not that rice prices are too low, but that farm size is too small. With extremely small farms, raising rice prices will not reduce rural poverty. The most effective way to reduce rural poverty is to encourage small farmers to diversify their incomes, either into high Thevalue implications agricultural of activities food policy such on as irr horticultureigation investment and livestock, are manifold or into. nonThe- agriculturalsector-wide activity. Investing in rural infrastructure, in research and development for non-traditional analysiscrops or for livestock, Indonesia and carried in policies out for that FAO support’s Agricultural diversification, Trends will to boost 2015/50 farm arehousehold given in Annexincome 3 more to indicate effectively the than anticipated will further rates increases of agricultural in the already growth. high priceThe ofkey rice. points to appreciate here are that irrigated land under rice is expected to increase significantly (by someThe fact50%) that to ricefeed producing the anticipated households population already byearn 2030 33% (under of their UN income medium from population non-rice agriculture and 39% of their income from non-agricultural activities demonstrates that growthIndonesian assumptions). rice farmers Given are thatalready agricultural highly diversified. land on Java, Small which farmers remains – those the withmain less rice producingthan ½ hectar region,e of is sawahextremely -- understand limited, the that bulk their of futurethis growth does notcan lie be in anticipated rice farming. off - Java.Unfortunately, The impact the of governmentadditional investment has historically in irrigated focused agriculture on rice self therefore-sufficiency needs as tothe be consideredsingle overriding in terms goal of bothof agricultural intensification policy ofand existing has encouraged production farmers on Java to and specialize expansion in this crop. Government investment in agriculture has been disproportionately focused on offrice.-Java, A relaxation bearing in ofmind the theself experience-sufficiency with paradigm the swamp would development allow the projectsgovernment. A set to of notionaldevote alternativemore resources food policies to non- arerice illustrated agriculture. in Figure This is 1 theto indicate most effective the potential way roleto ofra waterise rural policy incomes on economic and tooutput bring in policythe case in of line an irrigationwith the ledneeds reform of process,Indonesian such asfarmers Indonesia..
1BAPPENAS/DEPARTMEN PERTANIAN/USAID/DAI FOOD POLICY ADVISORY TEAM MAY 2003. POLICY BRIEF NO. 34. The Food Policy Agenda Indonesian Food Policy Program. Website: WWW.MACROFOODPOLICY.COM
12 EASYPol Module 085 Applied Work
Figure 1: Notional alternative growth models
AGRICULTURE POLICY AND IRRIGATION
Planned output
Export-led model ?
Output Import substitution model?
Business as usual? WISIMP Increment Asset Base
Time
How do all these considerations shape up in a macro sense? Figure 2 attempts to pick out drivers and constraints that apply to the alternatives proposed in Figure 1. First, it is important to look at the macro-realities and realise that water may be only a small part of the economic equation that conditions the choice between the array of nominal development paths, subsistence, import substitution or export led. Second, attention has to be paid to the quality of investment as much as the quantity. Large scale ‘lumpy’ investments in major storage may have low transaction costs when compared to a multitude of highly distributed low intensity investments, but they may be risky and not result in an equitable (or politically desirable) distribution of benefits. Finally, having decided upon a development path at a macro level, the institutional alignment or ‘fit’ has to be thought through. This involves consideration of both institutional principles, and the level of transaction costs that are acceptable. But it is important to stress that good institutional design cannot be done without considering the external drivers for reform and the economic and social targets that the design is trying to hit.
Impulses for Water Resource Planning and Institutional Reform in Indonesia 13 Towards an Effective Institutional Framework
FIGURE 2: The drivers and constraints
AGRICULTURE POLICY AND IRRIGATION Macro- realities (pull and push factors) • commodity prices • market linkages • Import tariffs • subsidies (shadow price for rice) • cost of capital Institutional alignment • labourmobility and costs • clarity of roles and reporting lines? • land and water limits • suited to scale of intervention? Export-led • good information flow? model ? • effective integration across jurisdictions • physical and economic transfers possible? Output • how high transaction costs? Import substitution model?
Business as usual? WISIMP Increment Quality of Investment Asset Base • lumpy/high intensity? • distributed/low intensity? • public/private balance
Time
4.4. Urbanization and industrial growth Currently, the urban population accounts for 40 percent of Indonesia’s total population and is projected to surpass 45 percent by 2010, increasing 5 percent per annum. ADB (2001) estimate that eight metropolitan cities have a population of over 1 million and 74 with over 100,000. Over the last 15 years, basic service provision has increased from 29 to 40 percent for water supply and similarly for the proportion of adequate sanitation and solid waste services. This still leaves the majority of the urban population without these basic services. While the demand for bulk water to service urban water supply systems remains unsatisfied, the incidence of self-supply through groundwater will also grow. This is important for Indonesia’s large coastal cities whose water supply utilities are ‘tail-enders’, who have to internalise high variability in flow quality and quantity and rates of recharge, but who also have to deal with lowland flooding. The externalities produced by urban areas include generation of wastewater and leaching of solid waste to underlying aquifers in addition to local drawdown externalities produced by intensive groundwater pumping for commercial purposes – with the attendant problems of well interference, subsidence, saline intrusion. With supplies from the Jatiluhur dam limited by the current drought, the municipality of Jakarta is now proposing to tax industrial groundwater usage where a piped supply from the utility (PT PAM) exists12. The competition for access to groundwater in urban areas and the attendant environmental problems is clearly subject to local bye-laws, but the scale of the groundwater abstraction in terms of overall basin/catchment resources during dry season baseflow
12 Jakarta Post, 28/08/03.
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recession is significant and points to the need to incorporate groundwater in overall catchment abstraction management at provincial level. This has not stopped calls for improved service provision from consumers – PT Thames PAM Jaya and PT Lyonnaise PAM Jaya - and both being sued through a class action suit from 8,000 consumers13.
Related to the rapid pace of urbanisation and industrial growth is the demand for reliable power. Hydropower plants contribute some 2,536 MW to the Java-Bali network of PT PLN – some 14% of the total supply to the region. Under current drought conditions, PLN can only supply slightly above peak load of 13,250 MW from a total installed capacity of 18, 000 MW, leaving the system vulnerable and requiring the utility to plan a programme of load-shedding. The longer term issue of sedimentation and the reduction of live storage on hydropower dams, in particular, points to a need for a reinforced programme of upstream watershed conservation.
4.5. The spatial planning dilemma The spatial planning and natural resource management dilemma under decentralised administration will intensify. As the impact of decentralisation on water resource administration plays out the impact of investment decisions at kabupaten level will result in a mosaic of water use patterns that will result in cross-district and cross- province externalities. Herman (2002, p57-8 ) highlights the uncertainty over water resource management, planning and budgeting as the impact of decentralisation of administration at district level deepens. While the provisions of the Draft Water Law anticipate a nested hierarchy of ‘planning’ controls, the additional transaction costs may make such controls ineffective and slow economic development. A clearly understood planning, appraisal and budgeting process within each “water resource area” needs to be matched with a common understanding of water resource limits. The institutional provision to integrate demands and available resources at the appropriate level is difficult to determine under the current Draft Water Law.
The provisions for ‘strategic’ basins offer an instrument for overcoming stalled or blocked planning and investment procedures where the realities of water management at local, district, province level are most effectively dealt with from a basin level perspective. But this will not apply in all cases. While the Draft Water Law makes provision for institutional entities to engage at successively higher administrative levels (as water externalities transcend administrative boundaries), the practice of preparing basin water balances and issuing licences to use on the basis of socio-economic criteria does need some expert regulatory overview. The degree to which local concerns can be reconciled at basin level will involve a tension between the decentralised agencies and the basin resource planners over allocation of water and financial resources.
It is assumed that the proposed water resource plans to be drawn up at national and basin level are to be indicative structure plans – not detailed master plans. These indicative plans are there to guide overall planning decisions and local resource allocations.
13 Jakarta Post, 3/09/03.
Impulses for Water Resource Planning and Institutional Reform in Indonesia 15 Towards an Effective Institutional Framework
5. OPPORTUNITIES
5.1. ECONOMIC It is important to get the economic perspective on water right at the outset. Much investment in agricultural water management has often failed to be fully realised. Globally, irrigation schemes are operating well below their design capacities as a result of poor design, competition from other users, and habitually, low levels of operation and maintenance. This is as true for Nigeria as it is for China. Arguably, there has been over-investment in irrigation, while for the water supply and sanitation sector (the assets of which are generally ‘sweated’ to breaking point), the infrastructure remains woefully under-capitalised. Therefore it is important to realise the value of sunk costs and overcome the rigidity that has inhibited productive engagement with both natural and financial resources. For instance, the removal of production subsidies, the permission of water use rights to be transferred and an easier access to term credit are an obvious path for an agricultural sector seeking to diversify and realise comparative advantage in specific crop sectors. The rigid administration of water rights can easily dampen such initiatives by suppressing vital micro-finance decisions. But such ‘freeing up’ of economic opportunities for individual investors has to be accompanied by progressive regulation to ensure that negative externalities are absorbed by users (e.g. the adoption of the ‘polluter pays’ principle) and that in-situ environmental services of watercourses and aquifers are sustained. Of more specific concern to Indonesia, with a high dependence on irrigated rice production, the water sector needs to send a clear signal to agriculture and finance on the technical limits to food production. It is often the case that irrigation agencies are requested to irrigate staples and make up domestic production, when in fact the opportunity costs for water in other crops or other economic sectors may be very high.
As the agricultural sector in Indonesia attempts to stabilise and increase the domestic production of food staples, while seeking to diversify into non-traditional export crops, the precise added value of irrigation services should become more apparent to farmers and agri-business entrepreneurs. As this perception gathers pace, the demand for economic and physical transfers in water services can be expected to rise. Such a shift would need to be accompanied by a flexible and transferable system of water use rights and land tenure. Informal transactions over water at local level already occur and these ‘customary’ systems will need to be protected where they result in beneficial use.
By the same token, the allocation of bulk resource (in space and time) to the prime sectoral users (agriculture, municipalities, industry) needs careful economic and technical regulation in order to optimise the economic (and environmental) returns to water and water management across districts, provinces and basins. But such ‘optimisation’ needs to be supported by incentives to individual users within the overall planning frame. Such incentives can take the form of protected use rights and opportunities to negotiate transfers of such rights in use since compulsory appropriation in the interests of basin management is unlikely to win hearts and minds.
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5.2. Technical The technical opportunities that arise for water management are conditioned by current perceptions and lack of information. The impact of de-forestation on downstream flooding and basin water balances, for instance, is not always straightforward. The right scientific research needs to be made available and analysed to assess precise cause and effect. Equally, the public perception over the role of private companies in water supply provision needs to be informed by understanding the precise public liabilities and responsibilities of private operators. Plugging these gaps in formation is an essential role of a progressive water regulator. In addition the technical opportunities in water resource management need to be well understood, including the use of conjunctive management to balance increasingly volatile seasonal flows and the assessment of different styles of storage management.
Several technical opportunities appear to have been ‘missed’ in the rapid development of Indonesia’s water resources. Arguably, the prevalence of centralised hydraulic administration has crowded out local initiatives in some areas. The exploitation of shallow groundwater and the development of small scale on-farm storage as opposed to large scale storage is a case in point. The scope for improving the quality of investment in irrigation – given 40% redundancy of commands and unreliability of service, the incentives to grow high value cash crops is not there. It is therefore puzzling to know why groundwater did not prove an attractive alternative?
Increasing hydrological buffers and promoting conjunctive use across the small catchments in Java, for instance, may prove to be a sound environmental and economic solution when compared with alternative methods of storage or inter-basin transfer. The same logic applies to the promotion of non-structural methods of flood control.
5.3. Institutional Finally the institutional opportunity. It is our experience that without the commitment to ‘re-regulate’ water resource development and management in the public interest, attempts at water reform do not go far. The breakdown in trust between the consumers of water services and the service providers is an all too frequent feature of many attempts - and it applies as much to municipal services as it does to irrigation services. Therefore getting water regulation right is key. Here water regulation has to be understood as both the protection and conservation of the resource base and the assurance of good public water services – irrespective of whether the service provider is private or public. The public interest in water resources and water services has to be well identified in a reform process if regulation is to coax the best out of service providers for the benefit of all sectors of society.
An effective institutional framework to implement water sector reforms has to have:
. a stable, strong institutional framework – with clear responsibilities, no conflict in roles and with support at the highest levels. . a dependence on good information and knowledge – good data, systems and models.
Impulses for Water Resource Planning and Institutional Reform in Indonesia 17 Towards an Effective Institutional Framework
. the capacity to integrate information and planning across all aspects of natural resources and across administrative boundaries. . effective engagement with basin constituents
The current institutional frame (see Figure 3) while comprehensive, is fragmented with some of the key institutions operating as regulators and operators. While this may make for some efficiency in certain sub-sectors, the lack of an overall water ‘regulator’ to whom all bulk water users are answerable is a hindrance.
As the World Bank (2003) observes;
“Two years into decentralisation, the assignment of functions over levels of government is far from clear. The lack of clarity is in part due to weaknesses in the decentralisation laws themselves. Conflicting implementing regulations and sectoral laws that are out of line with Law 22/1999 play their part as well. Some laws passed after Law 22/1999, such as the forestry law and the civil service law, largely ignore decentralisation, or indeed conflict with the very concept. Even some of the implementing regulations for Law 22/1999 itself seem to contradict the Law.”
This points to the level of natural integration at which water resources are best managed. The push to promote river basin management make sense in the varied hydrological arrangement of the basins of the Indonesian archipelago. The degree to which local and provincial government are prepared to have key aspects of their water economy determined by basin agencies remains to be seen. In this respect the proposed Balai PSDAs have to prove themselves as astute basin managers with independent regulatory functions but capable of moulding a mosaic of local water demands into a coherent ‘plan’ that makes economic and hydro-environmental sense. The experience in the Brantas river basin in East Java appears to have been positive in this respect and remains commercially autonomous, while the experience of the Jatilahur has not been so positive. As the World Bank WISIMP PAD document observes;
“The sector experience with the broader water resources management suggests a persistent lack in capability to integrate the strategies and actions from different Ministries that impact upon the water system - such as those relating to water quality, or those where upper catchment management and river management interact. On the other hand, the country has launched two remarkable, pro-active initiatives that addressed part of these concerns. In 1976, the Jatiluhur Authority Corporation (POJ, since 1999 PJT II) was established, and in 1990 the Brantas Basin Corporation (PJT, since 1999 PJT I) were set up, to operate and maintain key infrastructure in the Citarum and Brantas river basins, respectively. These semi-autonomous public corporations would earn income from bulk water supply and some ancillary activities. The PJT I model has shown much better performance and will be replicated under WISMP as a reasonably successful model for river basin management. ” WISIMP PAD (p. 30)
The proposed institutional arrangement to take advantage of the opportunities offered by decentralisation are elaborated below, but apart from the two basins cited above (Citrum and Brantas), the bulk of Indonesia’s river basins fall within provinces. This
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begs the question as to the need for a whole tier of management at basin level. Would the bulk of Indonesia’s river basins (that are short in length and generally drain normally to the grain of the archipelago) be better served through provincial management?
6. STRATEGIES
6.4. Raise public awareness To overcome the current mis-apprehension and potential resistance to the implementation of the water sector reform, a comprehensive programme of public awareness is required to: . explain the precise boundaries between the responsibilities and liabilities of the State and those of the user; . illustrate the social and economic opportunities the reform offers; and . disseminate regular information on the state of local water resources.
In rural areas, a campaign might need to explain how improved water control is the basis for adding value to agricultural output through more effective post-harvest quality control and marketing. Incentives for improved on-farm storage of water or recharge or shallow aquifers may need to explained. In urban areas public health risks of self supply from groundwater and the impacts of non-sewered effluent disposal may need to be highlighted, but above all, water supply utilities need to improve their levels of service and publicise the fact.
The National Water Council is in the best position to advocate the implementation of Indonesia’s Draft Water Law through strong links with provincial and local governments. Establishing these links can only come through the provision of clear information and an assurance of technical support in setting up measures to implement the law. But it is extremely important that this push of information and technical resources is closely attuned to the practicalities of local management. Ultimately the dissemination of public information material will have to come through local media and will need to be adapted to focus on the immediate water concerns of each province. In designing such programmes, the National Water Council will have to prove that it is capable of servicing decentralised water agencies.
6.5. Look at resource alternatives - promote the use of small scale hydrological ‘buffers’ A set of incentives can be put in place to promote sets of local resource management opportunities which could include
. development of dispersed, low intensity investment in on-farm storage and groundwater recharge. . the uptake of conjunctive use and management on small farms and conjunctive surface and groundwater management in irrigation schemes?
Impulses for Water Resource Planning and Institutional Reform in Indonesia 19 Towards an Effective Institutional Framework
. research and development of aquifer storage recovery (ASR) by municipalities and industry . demonstration of the hydrological benefits of watershed conservation in enhancing baseflow recessions and flood attenuation.
The capacity to develop such buffers needs to be centred within the Dinas PUP but with high level support from the NWC secretariat to determine standards and technical and economic guidelines.
6.6. Focus on non-structural/environmental measures for flood prevention and control While the design and construction of flood protection infrastructure falls directly under water sector agencies, such initiatives – if necessary and economically viable – need to be allied with complementary non-structural measures. Here the water sector agencies can: . assist the promotion of re-forestation and watershed conservation by forestry agencies . work with land use planning/zoning authorities in flood prone areas . develop the technical tools to assess the impact of non-structural measures
The Balai PSDAs are in the best position to co-ordinate and mange these initiatives through the Dinas PUP, municipalities and district level agriculture extension services.
6.7. Implement programmes of water demand management and match supply Water-stressed irrigation schemes and public supply utilities may need to invest in demand management programmes to avert the heavy costs of new supply. For irrigation schemes, these initiatives can include options such as crop selection or the adoption of sprinkler and drip systems where appropriate. For urban utilities, concerted campaigns of public information on the state of surface and groundwater reserves can be combined with leak detection and repair.
In the rural economy, it is very easy to over-gear the irrigated sub-sector. The inherent redundancy (conservatively estimated at 40%?) of many irrigation commands is evidence of this tendency. Under decentralisation, it is envisaged that the flow of investment into further infrastructure improvement will be demand led as new investment packages such as KIIF come on-stream. This risk is that such investment becomes anarchic. Giving up central command and control of the planning process to overcome the rigidities of central planning does not mean to say that there is no need for supply management. The role of district and provincial level planning and appraisal of development proposals will be crucial. Large scale, lumpy investments in dam storage and water transfer may become necessary and the planning and regulatory provisions need to be in place
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The targets for such programmes are the WUAs and municipalities, again with technical and economic guidance provided National Water Council.
7. RECOMMENDATIONS
7.1. An enhanced institutional framework The legislation provisions for implementation of Indonesia’s water resource and irrigation reform are comprehensive enough and give sufficient scope for oversight and co-ordination at all administrative levels. The flexibility is there, but internally, the water sector institutions have to do some homework. In particular, there needs to be: . clarification of roles and responsibilities for water within existing institutions; . separation of policy makers, resource planners and service providers, and . make provision for a realistic rate of institutional transition - do not expect to do everything at once . ensure that planning at national level is responsive to local level demands in conformance with Law 22/1999.
The pragmatic approach taken here is to use existing capacities and competencies to effect a transition, de-concentrate them at provincial level (as has happened with the Dinas PUP) and deliver technical support services attuned to local demands
As has been indicated before, while the Draft Water Law makes provision for institutional entities to engage at successively higher administrative levels (as water externalities transcend administrative boundaries), but the practicalities of local water management may require a more direct and proportional approach at basin or sub-basin level from the outset without going through an incremental administrative procedure.
Figure 3 presents the proposed set of institutions indicated under the Draft Water Law and elaborated in such projects as WISMP. It plots (without indicating linkages) institutional entities by administrative level against functions, from ‘co-ordination’, to regulation, to planning and operation. Not all institutions fall into these categories. Key institutions such as the Dinas PUP (the public works/water resource department of local government) will have planning, operation and regulatory functions to perform. Such overlap is not ideal. A conflict of interest will emerge at some stage, even if a good argument can be made for efficient preparation of plans and projects. However, the plot does reveal a very skewed institutional distribution – dense in the top left (national co- ordination) and sparse in the bottom right (district operation) with an over-reliance on ‘co-ordination’ committees at all levels. It is difficult to see how such a large number of committees can be effective.
Impulses for Water Resource Planning and Institutional Reform in Indonesia 21 Towards an Effective Institutional Framework
Figure 3: Indonesia water sector institutions under WISMP assumptions
Coordination Planning Operation Regulation?
National NWC Line Ministries BAPPENAS Kimpraswil Level NSCWR + DGWR Secretariat
Dam Safety Commission Central Basin Planning Unit
Basin BWRC-PPTPA Balai PDSA River Basin Level Corporations (PJTs)
Provincial PWRC Dinas PUP Municipal Utilities Water Allocation Com. Balpeda Level Basin Planning Unit
District K. Dinas PUP WUAFs Level KIC 11
The immediate reaction to this scheme, from an institutional analysis is that there is possible duplication of functions and no clear regulatory mechanism. For example, from our reading of the current draft Water Law, national government, provincial government and district administration all have powers to issue licences to use water. While this provision may give flexibility (to the extent that a national convened basin agency issue licences for a cross-province river basin or that a district administration issues license on a set of small coastal catchments within their administrative district), the final accountability and adjudication over water resource allocation remains unclear. Another issue is the role of the National Water Council – should this just delimit water resource areas, as anticipated under the Law, or should it also be able to evaluate performance of water management across river basins and provinces to ensure that beneficiaries are being serviced equitably and that the government is getting value for public money? Does it need some regulatory teeth to do this? Here again it is important to stress the scope of water regulation. Modern water regulation has to govern the management and allocation of the resource base and the provision of water services. Public and private service providers need to be subject to regulation, to the adherence of norms and standards in particular. Irrigation water services, while they may be very different from municipal water supply services, are not immune!
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In practice, under decentralisation, there will be two principal development processes.
i. A water infrastructure planning, appraisal and budgeting process originating at district and municipal (regency) operational levels. This path needs to be coherently aligned with disbursement public funds (national and provincial) and with private cost sharing. ii. A regulatory process to confirm compliance of water operations (and planned operations) with national standards (particularly environmental/resource management standards/guidelines) and economic performance of water operations (i.e. is the public getting value for money from water service providers)
The management of the resource base is bound with the regulatory process. The environmental integrity of Indonesia’s river basins and aquifers constitute an economic asset. However, while the environmental regulation and resource management functions are often merged in environmental agencies, the economic performance of water service providers is usually carried out by an independent utility regulator (as for other public utilities – electricity, gas, telecommunications, etc). The point is not to make the argument for utility regulation per se, but rather to embed the notion of regulation in the conceptual frame.
While the Draft Water Law makes provision for conservation (Arts 19-24) utilization (Arts. 25-30) planning (Articles 59-62) Coordination (Arts 84-86), the establishment of authority and responsibility(Arts 12-18) is left (deliberately?) vague and only indicates a progressive aggregation of responsibility as river basins cross district and provincial boundaries. This nested arrangement, as prescribed in the Draft Water Law, allows for flexible arrangements to be made through provincial regulation, but is potentially confusing. The current set of proposed accompanying regulations and decrees are provided in Annex 1, and provide some guidance. In some cases it is possible to assign specific roles and functions to specific institutions, but there is no overall institutional ‘concept’ in which the regulation of water services is separated from operational functions.
It has to be assumed that the water resource management responsibilities lie with the technically mandated institutions – be they public works agencies, river basin managers, meteorology services, or geophysical investigation services.
All local water allocation decisions require downstream negotiation. Equally, existing allocations will be impacted by upstream land-use and agricultural practices. At what level are these water planning decisions and allocations best reconciled? In intensively developed basins – the ‘strategic basins’, the role of the Balai PSDAs will become critical. The 12 Balai PSDAs specified in the draft legislation (on and off-Java) are assumed to cover the clusters or river basins where river basin management functions are needed. However, these river basin management units (whether they convert to PJTs or not) will still need to be subject to regulation gamekeepers will become poacher’s and the regulatory function of the basin manager will be compromised. In this sense, the
Impulses for Water Resource Planning and Institutional Reform in Indonesia 23 Towards an Effective Institutional Framework
natural resource management function in the current framework outlined in Figure 3 is unclear.
To overcome this potential confusion, a set of recommendations are made below in an attempt to separate functions and avoid duplication of tasks with resource management functions being assigned to the most competent institutions. Even in the long term it may be difficult to devolve the expert management and regulatory functions across the administrative boundaries in the way that the Draft Water Law envisages. Not all provincial governments and district administrations will be able, or in the best position, to determine water “resource management patterns’” and formulate “water resource management plans”. These may be best carried out by Balai PSDAs in full consultation with the relevant regional governments and district administrations. If the water resource management functions are aggregated then the licensing of water use really needs to be aggregated at the river catchment/basin level, which would implicate the Balai PSDAs. It is not practical to have the three levels of water licensing envisaged in the Draft Water Law.
There are four levels of institutions (District, Province, Basin, National level) whose roles and responsibilities need clearer definition in order to address socio-economic priorities and the environmental externalities associated with water resource development. The institutional gaps and linkages recommended below are broadly in conformance with the “principles left for resolution during the WATSAL reform process”14.
Starting at the lowest administrative levels and working, this is an attempt to see if a clearer rationale for mandates (under the Draft Water Law) and functions can emerge. This is not an attempt to write functional statements for individual institutions but rather to give the institutional arrangement a conceptual frame.
7.2. District level The delivery of water services in municipal and rural areas hinges on maintaining a set of low intensity investments in basic operation and maintenance and existing irrigation management and rural water supply institutions will be competent enough. The preparation of investment plans to upgrade and rehabilitate water infrastructure is another thing altogether if users have been conditioned to expect government agencies to maintain and operation. The introduction of innovative financing packages such as the KIIF will therefore require some firm handholding by the Dinas PUP. Equally, the requirement to plug new schemes or updated water use regimes into the District and Provincial regulatory procedures in order to obtain water use licenses, for example, is not for the fainthearted. It is doubtful if district level institutions will be competent to prepare water policies and plans (i.e. strategies), as indicated in the Draft Water Law, although they will need to have an articulate voice in such preparation. In addition, the impact of local water management practices on long term resource conditions and socio- economic activity requires a relatively sophisticated assessment to be made. The same arguments apply to the issue of licences. So although the Draft Water Law makes
14 Identified by Herman, 2002.
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provision for these functions to be carried out at district level, there is very little prospect of this happening in practice In this respect, water issues are best dealt with at a Provincial level where the requisite capacities and economies of scale are likely to be found.
Task: . Provision of local government services Recommended functions . preparation of local investment plans for review by KIC . maintenance of irrigation schemes . maintenance and operation of municipal and rural water supply Institutional capacity . technical support to WUAs from K Dinas PUP . KIC
7.3. Provincial government The autonomy of provincial government and the scale of most provinces in Indonesia determines its comparative advantage in the delivery of the basic public services, notably health and education. Given that most of Indonesia’s river basins are contained within single provinces or consist of clusters of short coastal basins draining to the sea, the province offers the most logical level at which to organise water resource management. The regulation of water services (irrigation and water supply), river basin management and resource allocation might be sensibly grouped under a provincial water regulator reporting to a national regulator.
Appraising the applications for a water use licences under the Draft Water Law and the issue of such licences against social and economic criteria does need a regulatory overview. In many countries, a national water board or catchment board would normally be responsible for receiving applications to withdraw water and adjudicating on these applications against river basin or aquifer water balances.
The proposed arrangements under the Draft Water Law envisage that this regulation is decentralised as far as possible with the Dinas PUP playing a pivotal role in providing technical assistance to kabupaten agencies, including WUAs. But in practice, very few water planning decisions will not entail downstream externalities, i.e. will only impact (or be impacted) by district level effects. The linkage between local planning decisions and river basin regulators is fundamental and will intensify over time.
Under current assumptions, at kabupaten level, the demand for services will begin with the WUA and they will be assisted in the preparation of proposals by the K Dinas PUP and the Dinas PUP. If the planned development or water resource allocation impacts downstream kabupaten the allocation is referred to the Basin Planning Unit of the Dinas PUP to adjudicate at provincial level. If the allocation impacts two provinces within one
Impulses for Water Resource Planning and Institutional Reform in Indonesia 25 Towards an Effective Institutional Framework
river basin, then the Balai PSDAs or, in the case of the Jatiluhur and Brantas basins, the bulk water supply corporations (PJTs) are implicated.
It is therefore sensible to ask what can local government agencies do best? The hydraulic expertise invested in the Dinas PUP offers a strong technical support at provincial and district level. This expertise needs to be combined effectively with the agriculture and forestry extension services on a project by project basis to ensure that WUAs are supported in sound technical development. However, it is unlikely that the delivery of such technical services can be combined with the issue of licenses. An independent adjudication of this can only be made through a neutral party entrusted with local natural resource regulation and it is suggested that this has to be taken up at basin level within the provinces (see below).
Task: . Responsible for determination of provincial water resource management policy, plans and allocation. Recommended functions . Provincial oversight and develop overall provincial strategy address key water issues in the province. . Make a commitment to basin management through the use of Balai PSDAs Institutional capacity . Provide Provincial Water Resource Council with a small secretariat . Where possible, delegate Balai PSDAs to prepare provincial water strategies on the basis of provincial water plans , host public consultations and convene water allocation committees (in essence, catchment boards). . Use Dinas PUP to deliver technical services across the province in accordance with basin management stragegies
7.4. Basin level: The role of the Balai PSDAs The key regulatory tool is the issuing of abstraction licences. The provisions under the Draft Water Law are too ‘neat’ in this respect – allowing licences to be issued at provincial and district level. The licence issue really needs to be pulled back into one licensing authority across the functional hydrological units – the notion of a catchment licensing board. This function is probably best embedded in the Balai PSDA under the supervision of the national water regulator (under the NWC)
The Bali PSDAs will need to play a pivotal role as a regulator of the resource (not necessarily the economic/financial performance). They are best placed to adjudicate over natural resource allocations and check against existing and planned uses. In some cases this will need to extend to a near real time information management, particularly for extreme events – long periods of low flows and the incidence of flooding.
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The Balai PSDAs offer the best opportunity to regulate resource use by ensuring conformance with basin resources and long term basin planning. This may appear to give a lot of power to basin agencies but in fact the provisions under the Draft Water Law would make onerous application of water licensing difficult since customary uses have to be respected. However, the Balai PSDAs do need to be able to apply tests for beneficial use and undertake economic evaluation of proposed investments.
How the Balai PSDAs evolve in this respect is important. If they are to evolve into river basin development authorities at PJTs, these commercial functions need to be unbundled and for their regulatory/management functions to be maintained as a separate function. The basin regulator has to retain its regulatory integrity in order to maintain a clear public interest in water resource management. Clearly the same consideration would need to apply if the Balai PSDAs were to take on irrigation bulk supplier functions.
As the water sector reform matures, it is anticipated that the role of commercial entities at basin level will become more important. Such entities must have clear financial autonomy and be able to make commercial decisions – but as a regulated utility. This implies checks on competitive behaviour, cost of capital, financial gearing etc.
Their role in mitigating environmental externalities needs to be explicit. The Bapedaldas are only responsible for regulating effluent discharge. Arguably, there is no agency responsible for the overall aquatic health across the basin. Quantity and quality are inextricably bound and a basin regulator needs to have a handle on both.
The need to manage information for decision support is a key requirement at basin level and this is an area where basin regulator can prove their worth by compiling relevant data from users and operators and disseminating back to the users and the public at large.
Tasks . Basin institution (responsive to national level administration) responsible for the formulation of water resource management plans in both intra-province and inter-province basins. Recommended functions . preparation of river basin strategies . compilation of key water resource and planning data . servicing of Provincial water allocation committees (catchment board function) . cross-sectoral/cross administrative mandate . Institutional capacity . An expert office with capacity in
o hydrological data compilation (from provincial hydrological units) o socio-economic data compilation (from provincial sources)
Impulses for Water Resource Planning and Institutional Reform in Indonesia 27 Towards an Effective Institutional Framework
o land and water resource analysis o public consultation
7.5. The role of the National Water Council The functions of the NWC are specified in the Draft Water Law are principally to determine the ‘water resource areas’ and ‘strategic river basins’ in a way to be specified in succeeding regulations. This is the principal power given to the Council whose final decision will determine how local government agencies interact at kabupaten, provincial river basin level. The rest of the regulatory functions - standard setting and licensing, preparation of resource management plans are the responsibility of national government. But a national water regulator is not established and these regulatory functions are not explicitly assigned to the NWC in the current Draft Water Law (River Basin Councils?)
Assuming that a National Water Council is created with passage of the Water Law, key regulatory functions need to be assigned to an independent water regulator – or National Water Commission. These functions would need to go beyond the functions that have been allowed for (largely to do with information flows envisaged for servicing the proposed NSCWR, determination of water management areas and national water resource plans etc.).
The role of the NWC hinges upon its determination of water resource areas and on rather weak ‘coordination’ functions but clearly the Council does require regulatory teeth to ensure that decisions made at such an apex level feedback down to the operational units within local government.
Key national water management issues that can only sensibly be carried out by an national regulatory body include: . Oversight on the economic and environmental performance/comparison of water service providers is essential to determine value for central government funds . A water rights framework . Finance: Regulatory powers over resource costing and service pricing – local blend pricing of water services – also setting guidelines to deal with natural monopolies and criteria to ensure sustainability of service . Setting hydro-environmental standards and procedures to ensure health of aquatic ecosystems (not just end of pipe solutions) e.g. minimum or reserve flows.
Provision for a degree of civil society representation on the NWC will be critical given the very vocal and articulate NGO concern over water issues. This may be best addressed through an NGO forum with input to the Council on an advisory capacity in thematic areas – municipal water services, public health, environment etc., in the first instance with a view to more substantive decision making role at a later stage. The real forum for local water issues will be at the district level.
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Tasks . Apex institution (responsive to President) responsible for the formulation and promotion of national water policies in water resources, river basin management, water quality and irrigation management) Recommended functions . intersectoral consultation . public consultation . water policy co-ordination . preparation of national water policy and enabling legislation . monitoring and evaluation of policy implementation . recommends water resource area in consultation with provincial/district/town administration Institutional capacity . Full time Secretariat to o prepare and convene Council meetings o prepare policy documents through ad-hoc expert teams o prepare and convene public consultations . Steering Committee o to direct the work of the Secretariat o review and approve policy outputs prepared by Secretariat
BUT
. confusion over regulatory, planning and operational functions . accountability at the four levels unclear . what will a National Water Council actually do? . regulation has to encompass resource management and allocation as well as service provision . should private and public services providers be equally subject to regulation?
7.6. Toward a rationalised framework Let us now look at a ‘rationalised’ framework, use the WISMP assumptions but inject some more explicit regulation. This can only be a ‘sketch’ version of an optional institutional framework. The current uncertainty over the Draft Water Law does not allow us to offer definitive models. Be that as it may, the key features are the central role of a National Water Commission with specific regulatory powers to enforce national standards and norms in water management and water services. This does not mean that a National Water Council is not necessary, but a Commission would be a much stronger development of the somewhat ‘weak’ National Steering Committee for Water Resources ‘Secretariat’. Such a Commission would need a specific mandate, commensurate resources, and a degree of autonomy. In this sense the Commission can be the instrument of the National Water Council, but it must have specific powers to enforce compliance of nationally agreed standards and norms at provincial and basin level. At basin level, when the management of cross-province river basins needs to be addressed some explicit regulatory body is required. This could be an outgrowth of the National Water Commission – a basin regulator - or simply an office within the
Impulses for Water Resource Planning and Institutional Reform in Indonesia 29 Towards an Effective Institutional Framework
Commission. In any event, the specific planning and operational activities that impact river basins across provinces does need an appropriate level of regulation to ensure comparability. Are river basin agencies employing good practice or not with respect to the formulation of planning and license requests, operational rules, public information, pricing of bulk supplies etc. etc ? At provincial level, the nested hierarchical provision of the Draft Water Law would entail a replication of the national level arrangements – a provincial Water Resource Council supported by an explicit provincial water regulator to deal with allocation and service provision.
With this in mind, Figure 4 attempts to draw in a set of links between the various entities and agencies. Clear regulatory lines in solid white and ‘softer’ reporting lines in dashed white. These are indicative only and can be elaborated when a clear institutional mandates are evident in an enacted Law. In the same way a set of water planning lines is indicated in yellow. Here the solid yellow lines indicate would indicate the mandatory planning routes for water infrastructure investment which would involve application for a water use license. The dashed yellow lines indicate where there needs to be some economic planning oversight to ensure that planned water investments are consistent with national macro-economic policy and fiscal (budgetary) limits. It is important to stress here that the application of public and private sector finance to water infrastructure is well balanced and distributed, cost sharing mechanisms agreed and financial liability well understood, particularly by small scale investors such as water user associations. So this ‘rationalised’ institutional framework would have merit in a tighter definition of regulatory powers within the framework anticipated in the WISMP project, for instance. But how complicated do things have to be?
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Figure 4: Draft Water Law framework with regulation
Regulation Planning Operation
National National Water BAPPENAS Kimpraswil NWC Forum Level DGWR Line Ministries
National Water Commission
Dam Safety Commission
Basin Basin Regulator River Basin Corporations Level + Basin Forum Balai PDSA and Bulk Suppliers
Provincial PWRC Dinas PUP Municipal Utilities Level Provincial Water Regulator
Water Allocation Com. Bapelda
District KIC K. Dinas PUP WUAFs Level
planning line (yellow) macro economic planning line (yellow) regulatory command reporting line
The key features are:
• clear separation of regulation/planning/operation • leave NWC as an apex political body only if it is necessary • establish an autonomous National Water Commission to set national standards and guidelines where required • vest basin management functions with Balai PDSAs as part of regional government • support provincial level regulation to issue water licenses and regulate performance of service providers • co-ordinate with Balpeda to enforce environmental standards
7.7. Toward a streamlined arrangement Looking beyond a ‘rationalized’ approach, could Indonesia embrace a more streamlined concept of water reform? Is it possible to look at a more streamlined approach to minimise bureaucratic layers and transaction costs? What really needs to be done at each of the levels of government?
It could be argued that under a full decentralised administration, provincial government is key. Water, as with all other public goods (health, education, road transport) might be administered best at provincial level with good support from national government and high levels of participation from district administrations. Under this assumption a good provincial water regulator is required to administer license applications in co-ordination with local river catchment/aquifer limits and environmental health considerations.
Impulses for Water Resource Planning and Institutional Reform in Indonesia 31 Towards an Effective Institutional Framework
Equally, a provincial regulator could work effectively with local municipal water service providers in achieving compliance to national standards in full knowledge of local conditions and constraints. Regulatory incentives that are adapted to local conditions are often much more effective than attempting broad-brush application of national standards and norms – this is how regulation can be ‘smart’.
With good competent provincial water administration, national level intervention could then be limited to standard setting and regulation of a few key cross-provincial river or these basins could be co-regulated by the participating provinces. This is of course heresy to the ears of central ministries, and they may have a case. Perhaps certain capacities to implement water reform will never be realised at provincial level or possibly a long transition is required to set up the requisite provincial capacity? These concerns are all quite legitimate, but at the end of the decentralisation process, more money will circulate at provincial level and more provincial power and autonomy can be anticipated. Water administration in the federal settings of India and China have woken up to this reality and Australia has also had to embrace such decentralisation of water resource management. In an extended, fragmented and diverse island archipelago such as Indonesia, water management is always going to be local. If the water reform process is going to succeed by promoting more demand driven investment, it is at district level that local planning and financing needs to be effective. This will only happen if support from provincial administration is consistently backed-up by national expertise, when required, to resolve technical issues, such as flooding and erosion, within a generally permissive approach to development where there is scope for expansion, and issues such as pollution control and remediation in settings where water use is intense and firmer regulation is required. Figure 5 is an attempt to map this out, again with the regulatory and planning lines tentatively drawn in.
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Figure 5: Streamlined framework with regulation
Regulation Planning Operation
National National Water Commission BAPPENAS
Level National Water Regulator
Line Ministries KImpraswil DGWR Dam Safety Commission
National Water River Basin Corporations Forum and Bulk Suppliers
Provincial PWRC Balai PDSA Dinas PUP Level Provincial Water Regulator Licenses + Performance
Bapelda Municipal Utilities District Level
KIC WUAFs
K. Dinas PUP planning line (yellow) macro economic planning line (yellow) regulatory enforcement reporting line
The key features of this scheme are;
• At national level • the main requirement is for standard setting and regulatory guidelines – to ensure transparent comparison across provinces (and basins) • The few cross-provincial river basins could be regulated at national level (a function of a national water commission?) or co-regulated by the participating provinces • At provincial level • Water resource management and service provision, along with other public goods (health, education) is probably best dealt with at provincial level • water resource management (allocation) - licenses issued against known (basin) resource limits • service provision (pricing/performance of public and private operators) • At district level • The main requirement is for generation of water resource planning requests and the generation of financing
Obviously there are pros and cons to this option. But the key modification is the removal of an explicit basin level tier of administration and the empowerment of a provincial water regulator. It is assumed that regulation, as such, would not be require an additional institutional body at district level. District level planning applications would need to go directly to provincial authorities with the KIC, for instance, only
Impulses for Water Resource Planning and Institutional Reform in Indonesia 33 Towards an Effective Institutional Framework
having a planning function. Only a sample of the pros and cons are spelt out here, no doubt many more can be listed, but this we leave for discussion. The important point to remember is only regulate where you have to. Try not to over-administer and make sure that clear incentives for responsible investment are in place. It is not making an argument for a ‘liberal’ approach to water allocation, far from it. Regulation in the public interest is a must. However, in our experience, water users respond badly to top- down, unthinking application of laws and regulation. Generally, it is much more constructive to first try a softer approach through dissemination and advocacy of well prepared public information and give people the chance to modify water use through good persuasion. In doing this, public institutions often gain a great deal of respect and trust. In these matters, trust is all.
Box 5: Pros and cons of the streamlined option
• At national level • More strategic function for central planning and regulatory institutions • Less operational responsibility but • Oversight of provincial water planning and implementation process may be too weak
• At provincial level • Good alignment with decentralization policy • Water management is essentially local anyway • Better accountability between provincial government and water users but • Provincial governments need to be capable enough to enable productive engagement of both public and private water service providers
• At district level • Local planning needs in water better integrated with other local demand drivers - market linkages and transport infrastructure
8. CONCLUSIONS If Indonesia’s water sector reform is to be effective and respond to economic opportunities and hydro-environmental realities, there has to be a much clearer separation of the operational and regulatory functions of the water sector institutions. Given the range of economic and environmental conditions across the archipelago, provincial governments will be required to adapt water resource management institutions to suit local realities and find workable solutions within the frame of the Draft Water Law.
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National legislation and guidelines are one thing that an apex body can do well but a National Water Council needs to be backed by a dedicated regulatory commission – perhaps a National Water Commission rather than a steering committee. The rush by the Working Groups to draft generic legislation at provincial level is presumably to put in place the essential institutions – allocation committees, hydrology units, basin management units etc in order to quickly fill a vacuum (and obtain WATSAL effectiveness). However, would it have been preferable for the provincial governments to mould their provincial institutions to suit their specific social and environmental conditions to avoid a lot of costly retro-fitting.
Given the reliance of the rural economy on water control, licensing of water use has to be regulated at suitable catchment or basin scales. There has to be co-ordinated issue of licences in conformance with indicative river basin/water resource plans. The degree to which local government is competent to issue licenses without compromising economic and social objectives in natural resource management is questionable. While such licensing needs to be a provincial matter, a provincial water licensing board supported by the relevant technical agencies may offer the most sensible solution.
The planning process (planning/ budgeting) will need to originate at district level, but appraisal at provincial level needs to be subject to appropriate regulatory tests – e.g. is the planned use beneficial and is there economic viability? Again national regulatory guidelines are crucial but a competent body at basin level will be in the best position to ensure day-to-day compliance.
Finally, clearer arrangements for public involvement and public awareness are required at all levels. The NWC is best placed to co-ordinate such a public awareness campaign down to district level, but the explicit linkage of the NWC to a national water forum will become necessary. Equally, the provision for basin level forums to engage public interest have to be explicit.
Therefore, the recommendation is that the NWC look at the establishment of a national water regulator to fill the apparent institutional gap. Such a regulator would need terms of reference set by the NWC and will be fed by mandatory information returns from bulk water users, the basin authorities, municipal utilities etc.
9. READERS’ NOTES
9.1. Time requirements Time required to deliver this module is estimated at about 1 hour.
9.2. EASYPol links This module belongs to a set of modules which are part of the EASYPol Resource Package: FAO POLICY LEARNING PROGRAMME – SPECIFIC POLICY ISSUES – NATURAL RESOURCE MANAGEMENT - WATER
Impulses for Water Resource Planning and Institutional Reform in Indonesia 35 Towards an Effective Institutional Framework
10. REFERENCES AND FURTHER READING
ADB, 2001. Country Operational Strategy: Indonesia.
BAPPENAS, 2000. Workshop for Water Resources and Irrigation Sector Reform: Principles and Framework of Program Implementation.
FAO, 2003. June 2003 Rice Market Assessment. Commodities and Trade Division. Economic and Social Department.
FAO, 2003. June 2003 Food Outlook. FAO Rome.
FAO, 2003. WTO Agreement on Agriculture. The implementation experience. Developing Country case studies. Commodity Policy and Projections Service 644pp.
Firman, T. 2000. Rural to urban land conversion in Indonesia during boom and bust periods. Land Use Policy 17, pp. 13-20.
Goldblum, C. and T.C. Wong. 2000. Growth, crisis and spatial change: a study of haphazard urbanization in Jakarta, Indonesia. Land Use Policy 17, pp. 29-37.
Herman, 2002. Indonesia’s Water Sector Policy and Institutional Reform Process. Internal report to 67pp.
GOI, 2003. Water Resources Management: Towards enhancement of effective water governance In Indonesia. 3rd World Water Forum, Kyoto.
KIMPRASWIL, 2001a. Study on Policy Reform in Water Resources Sector (WATSAL). Volume A Executive Summary and Component PCMU. Final Report on Consulting Services Nippon Koei Co. Ltd.
KIMPRASWIL, 2001b. Study on Policy Reform in Water Resources Sector (WATSAL). Special Reports for PCMU. Nippon Koei Co. Ltd.
KIMPRASWIL, 2001c. The Study for Improvement of Irrigation Management and Empowerment of Water Users Association for Enhancement of Turnover Program in the Republic of Indonesia. Pacific Consultants International for JICA.
Pearson, S. Bahri B Gotsch C., 2003. Is Rice Production in Indonesia Still Profitable? The BAPPENAS/USAID/DAI Food Policy Support Activity and The Center for Agro-Socio Economic Research (CASER) Indonesian Food Policy Program Website: www.macrofoodpolicy.com
Shah T, Makin , 2003. Limits to Leapfrogging: Issues in Transposing Successful River Basin Management Institutions in the Developing World.
36 EASYPol Module 085 Applied Work
USDA, 2003. Indonesia Grain and Feed. Rice update-January 2003. USDA FAS. GAIN Report.
World Bank, 2003. Decentralising Indonesia. A Regional Public Expenditure Review Overview Report. Report No. 26191-IND.
World Bank, 2003. WISIMP Project Appraisal Document.
USAID/DAI Food Policy Support Activity (James Gingrich) 522 5048/9 http://www.macrofoodpolicy.com
Impulses for Water Resource Planning and Institutional Reform in Indonesia 37 Towards an Effective Institutional Framework
ANNEX 1: COORDINATION TEAM FOR WATER RESOURCES MANAGEMENT WORKING GROUP PRODUCTS.
S-CTWRM Working Groups Product
Working groups Products List List of Regulation or status Working Water Resources Law (WRL) To be issued on Group I October 2003 Government Regulation for Water Resources Management Pending until WRL Government Regulation for Ground Water Pending until WRL Government Regulation for Sanitary Water Pending until WRL DG Water Resources Decree on Establishment of Water Resources Decree Data and Information Unit No.90/KPTS/D/2001
Ministerial Decree on establishment of a national hydrology Decree No. management system responsible for upgrading of surface and 509/KPTS/M/2001 groundwater data collection networks. Ministerial Decree of Guideline (Pedoman) for Provincial Decree No. Government Regulation (Perda) for establishment/ upgrading of 427/KPTS/M/2001 fully funded and staffed Provincial Hydrologi Unit Issuance of Pedoman for Perda for establishment/upgrading of Various Number of fully funded and staffed Provincial Hydrological Units in 8 Decree in 11 provinces provinces; and PHUs established/upgraded in about 8 provinces.
Working Government Regulation for River Basin Water Resources Pending until WRL Group Corporation II Government Regulation for River Basin Water Resources Financing Pending until WRL Government Regulation for River Basin Pending until WRL Government Regulation for Revision of PJT I (Brantas) Pending until WRL Establishment Government Regulation for Revision of PJT II (Citarum) Pending until WRL Establishment Ministry of Settlement and Regional Infrastructure Decree for Pending until WRL Guidelines to Provinces for River Basin Corporations Establishment Ministry of Settlement and Regional Infrastructure Decree for Pending until WRL Guidelines to Water Resources Management Fee and Water Discharge Fee Ministry of Settlement and Regional Infrastructure Decree for Pending until WRL Guidelines of Water Rights Implementation Ministry of Settlement and Regional Infrastructure Decree for Pending until WRL Stakeholder Participation in Water Resources Management Ministry of Settlement and Regional Infrastructure Decrees for Pending until WRL Technical Guidelines of River Basin Water Resources Management (7 items; i.e.: Water Allocation, Water Quality Monitoring, Flood Management, Drought Management, Conjunctive Use of Basin Water and Ground Water, Comprehensive Water Basin Management and Liquid Waste Monitoring) Governor Decrees for Establishment of Water Allocation Committee Based on Ministry in West Java, Central Java, Jogjakarta, and East Java Decrees No. 67/1987 See Appendix Governor Decrees for Establishment of Water Allocation Committee See Appendix in Lampung, South Sumatera, West Sumatera, South Sulawesi, and NTT Regional Regulation for Balai PSDA Establishment at 7 Provinces See Appendix outside Java ; North Sumatera, West Sumatera, South Sumatera, Lampung, South Sulawesi, East, Nusa Tenggara,- North Sulawesi Regional Regulation for Balai PSDA Establishment at 5 Provinces in See Appendix Java :Banten , West Java, Central Java, Jogjakarta, East Java
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Working groups Products List List of Regulation or status Working Government Regulation on Water Quality and Pollution PP 82/2001 Group Control III Ministry of Environment Decree for Guidelines of PP 82/2001 Implementation
Decree for Water Quality Monitoring Network Still on Draft
Decree for Water Pollution Load Assessment Ministry of Environment Decree No. 110/2003.
Guidance of Domestic Waste Water Quality Ministry of Environment Decree No. 112/2003
Guidance of Water Quality Assessment and Ministry of Environment Decree Sampling No. 37/2002
Guidance of Waste Water Quality for Coal Mining Ministry of Environment Decree No. 113/2003
Guidance of Water Quality Status Assessment Ministry of Environment Decree No. 115/2003
Guidance of Incentive Policy Still on Draft.
Guidance of Waste Water Disposal Ministry of Environment Decree No. 111/2003
Guidance of Monitoring of Environment Ministry of Environment Decree Management No. 56/2002 Regional Regulation/ Governor Decrees for Water Quality Still on Draft Management and Water Pollution Control: South Sulawesi, West Java, Central Java, and East Java.
Working Government Regulation about Irrigation based on New Government No. 77 Year 2001 Group Policy IV Ministry of Finance, Ministry of Home Affairs, and Ministry of Finance Decree No. Ministry of Settlement and Regional Infrastructure 298/KMK.02/2003 tanggal Decree for Guidelines of Financing Irrigation Management Ministry of Home Affairs, Ministry of Agriculture, and Ministry of Home Affairs Decree Ministry of Settlement and Regional Infrastructure No. 22/2003 Decree for Guidelines of Redefinition Task and Authority of Irrigation Management Institution Establishment of WUA Federations Issuance of a Minister of Kimpraswil Decree on Minister of Minister Settlement Guidelines for Management Transfer of Irrigation and Regional Infrastructure Networks based on revised PP 23/82. Decree on Guidelines for Management Transfer of Irrigation Networks No. 529/KPTS/M/2001
Issuance of a Minister of Home Affairs Decree on Minister of Home Affairs Decree Guidelines for WUA Establishment and Empowerment on Guidelines for WUA based on revised PP 23/82. Establishment and Empowerment based
Impulses for Water Resource Planning and Institutional Reform in Indonesia 39 Towards an Effective Institutional Framework
List of Decrees related to Formation of Balai PSDA in outside Java
North Sumatra Perda No.3/2001 Tgl 31 Juli 2001 Official Organization of North Sumatera Government Draft of North Sumatra Governor Decree Detail of Job Description of balai PSDA. Govenor Decree no. 821.23/535/2002 Appointment of Chief UPTD Balai PSDA Belawan, Belumai Ular, Bah Bolon Asahan, Lau Renun-Lau Biang, Kulalah Batang Gadis
West Sumatra Regional Rules No.5 th 2001 Organization and Job Description of Governance in West Sumatra Governor Decree No.22 th 2001 1 Oktober 2001 Organizaton and Job Description of Water Resources Management Unit (Dinas Pengelolaan Sumber Daya Air) West Sumatera South Sumatra Perda Prop.SUMSEL No.11 th 2000 Organization and Governance of South Sumatra Province. SUMSEL
Peda Prop.SUMSEL No.50 th 200112 Desember Balai PSDA formation inside Dinas 2001 Pekerjaan Umum Pengairan South Sumatra Province Lampung Perda No.17 th 2000 23 Desember 2000 Organization and Job Description of Lampung Province
Kep.Gub.Lampung No.03 Organization and Technical Section th 2001 9 Februari 2001 Formation inside Lampung Provinces
South Sulawesi Perda Propinsi Sulawesi Selatan No.18 Organization and Job Description of Water Resources Management Unit th 2001 31-Jan-01 in South Sulawesi Provinces Governor Decree No.212 th 2001 Balai PSDA formation in South Sulawesi Provinces East Nusa Tenggara Perda Propinsi Nusa Tenggara Timur No.9 th 2000 Organization and Job Description in Desember 2000 East Nusa Tenggara Province
Governor Nusa Tenggara Timur Decree No.11 th Balai PSDA formation in East Nusa 2000 16 February 2002 Tenggara
North Sulawesi Perda Propinsi Sulawesi UtaraNo.10 th 2000 12 Organization and Job Description in Desember 2000 Government
Kep.GUB.Nusa TenggaraTimur No.11 th 2000 Organization and Job Description in 16 Februari 2002 Water Resources Units in North Sulawesi
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List of Perda for Balai PSDA Formation in Java
No. SK/Perda Notes Banten SK Gub. No.171 th 2001 21 Agustus Formation of Balai PSDA inside Public 2001 Works Office Banten.
SK Gub. No.02 th 2001 8 Januari 2001 Organization and Job Description in Banten
SK Gub. No.821.23/85-KEPEG/2002 15 Appointment of Chief for Balai PSDA Februari 2002 Banten
Perda No.23 th 2002 Organization and Job Description in Public Works Office, Banten. Perda No.3 th 1997 24 Maret 1997 Organization and Job Description of Balai PSDA under West Java Public Works Office. SK Gub.Dati I Jawa Job Description in Balai PSDA in West Barat No.35 th 1998 Java. 24 Juli 1998 West Java Governor Central Java Decree No. Job Description of Balai PSDA Staff in 17/2000 Central Java
Perda I/2002 Formation of Water Resources Section in Central Java Central Java Perda 11/1998 Formation of Balai PSDA in Sermo, Jogjakarta
Perda 12/1198 Job Description of Balai PSDA Sermo, Jogjakarta Perda 16/1998 Formation of Balai PSDA Progo Opak Oyo River, Jogjakarta Perda 17/1998 Job Description of Balai PSDA Progo Opak Oyo River, Jogjakarta Perda 23/2003 Formation of Public Works Office in East Di Jogjakarta Java Chief of Public Works Office No. Formation of Balai PSDA in East Java 706/144000/103/2000
East Java
Impulses for Water Resource Planning and Institutional Reform in Indonesia 41 Towards an Effective Institutional Framework
Water Allocation Committee Decree (PTPA)
No Decree Number Notes
1 18 th 1994 Governor of West Java
2 614.05/SK.2123-Perek/93 Governor of West Java
3 614.05/SK.834-Huk/94 Governor of West Java
4 72 th 1999 Governor of West Java
5 605.3/SK.59/PP/2000 Chief of PTPA
6 605.3/185 th 1994 Governor of Central Java
7 610.05/20/1994 Governor of Central Java
8 605.3.05/10/1998 Governor of West & Central Java
9 610.05/SK.1273.Huk/1998 Governor of West & Central Java
10 605.03/01/2000 Governor of West & Central Java
11 605.03/KEP.66-HUK/2000 Governor of West & Central Java
12 605.03.05/03/2000 Governor of Central Java
13 605.03.05/04/2000 Governor of Central Java
14 59 th 1994 Governor of East Java
15 131 th 1997 Governor of East Java
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ANNEX 2: EXTRACT FROM DRAFT WATER LAW
(14 OCTOBER 2003 TRANSLATION)
CHAPTER II AUTHORITY AND RESPONSIBILITY
1998 BASE YEAR RAINFED LAND IRRIGATED LAND TOTAL AREA YIELD PROD AREA YIELD PROD AREA YIELD PROD 1000 1000 1000 ha tonnes/ha ha ha tonnes/ha 1000 ha 1000 ha tonnes/ha 1000 ha WHEA 0 0 0 0 0 0 0 0 0 RICE 6102 3.504 21383 5505 5.165 28431 11607 4.292 49814 MAIZ 3207 2.325 7456 342 5.633 1926 3548 2.644 9381 BARL 0 0 0 0 0 0 0 0 0 MILL 0 0 0 0 0 0 0 0 0 SORG 0 0 0 0 0 0 0 0 0 OTHC 0 0 0 0 0 0 0 0 0 POTA 59 15.367 912 0 0 0 59 15.367 912 SPOT 191 9.441 1803 0 0 0 191 9.441 1803 CASS 1270 12.124 15392 0 0 0 1270 12.124 15392 OTHR 66 5.202 343 0 0 0 66 5.202 343 PLAN 0 0 0 0 0 0 0 0 0 BEET 0 0 0 0 0 0 0 0 0 CANE 8 42.631 322 361 71.584 25826 368 70.99 26148 PULS 523 1.545 807 33 2.51 84 556 1.603 891 VEGE 549 6.062 3328 245 10.829 2648 794 7.531 5976 BANA 264 12.136 3203 0 0 0 264 12.136 3203 CITR 108 6.03 651 0 0 0 108 6.03 651 FRUI 503 6.893 3470 0 0 0 503 6.893 3470 OILC 5 0.237 1 0 0 0 5 0.237 1 RAPE 0 0 0 0 0 0 0 0 0 PALM 1755 3.673 6445 0 0 0 1755 3.673 6445 SOYB 1028 1.176 1209 93 1.509 140 1120 1.204 1348 GROU 643 1.861 1196 0 0 0 643 1.861 1196 SUNF 0 0 0 0 0 0 0 0 0 SESA 0 0 0 0 0 0 0 0 0 COCN 2563 5.96 15278 0 0 0 2563 5.96 15278 COCO 383 0.877 336 0 0 0 383 0.877 336 COFF 859 0.515 442 0 0 0 859 0.515 442 TEAS 111 1.46 163 0 0 0 111 1.46 163 TOBA 221 0.563 125 0 0 0 221 0.563 125 COTT 21 1.27 27 0 0 0 21 1.27 27 FIBR 179 0.472 85 0 0 0 179 0.472 85 RUBB 2226 0.689 1534 0 0 0 2226 0.689 1534 TOTAL 22844 6579 29420
Impulses for Water Resource Planning and Institutional Reform in Indonesia 43 Towards an Effective Institutional Framework
2015 PROJECTION RAINFED LAND IRRIGATED LAND TOTAL AREA YIELD PROD AREA YIELD PROD AREA YIELD PROD 1000 ha tonnes/ha 1000 ha 1000 ha tonnes/ha 1000 ha 1000 ha tonnes/ha 1000 ha WHEA 0 0 0 0 0 0 0 0 0 RICE 4769 3.842 18319 7171 5.802 41600 11939 5.019 59919 MAIZ 3576 2.424 8667 656 5.913 3879 4232 2.965 12545 BARL 0 0 0 0 0 0 0 0 0 MILL 0 0 0 0 0 0 0 0 0 SORG 0 0 0 0 0 0 0 0 0 OTHC 0 0 0 0 0 0 0 0 0
POTA 113 18.808 2119 0 0 0 113 18.808 2119 SPOT 210 10.027 2111 0 0 0 210 10.027 2111 CASS 1258 12.799 16102 0 0 0 1258 12.799 16102 OTHR 55 6.139 338 0 0 0 55 6.139 338 PLAN 0 0 0 0 0 0 0 0 0 BEET 0 0 0 0 0 0 0 0 0 CANE 8 46.581 382 426 79.261 33769 434 78.644 34151 PULS 575 1.7 977 48 2.703 131 623 1.778 1108 VEGE 577 7.303 4211 266 12.734 3385 842 9.017 7596 BANA 264 15.577 4119 0 0 0 264 15.577 4119 CITR 112 7.47 840 0 0 0 112 7.47 840 FRUI 513 9.281 4766 0 0 0 513 9.281 4766 OILC 0 0.386 0 0 0 0 0 0.386 0 RAPE 0 0 0 0 0 0 0 0 0 PALM 2867 4.205 12058 0 0 0 2867 4.205 12058 SOYB 1221 1.87 2284 184 2.405 443 1406 1.94 2727 GROU 840 2.016 1694 0 0 0 840 2.016 1694 SUNF 0 0 0 0 0 0 0 0 0 SESA 0 0 0 0 0 0 0 0 0 COCN 3273 6.898 22577 0 0 0 3273 6.898 22577 COCO 575 0.94 541 0 0 0 575 0.94 541 COFF 841 0.568 478 0 0 0 841 0.568 478 TEAS 157 1.677 264 0 0 0 157 1.677 264 TOBA 267 0.638 170 0 0 0 267 0.638 170 COTT 26 1.339 35 0 0 0 26 1.339 35 FIBR 132 0.506 67 0 0 0 132 0.506 67 RUBB 2379 0.757 1800 0 0 0 2379 0.757 1800 TOTAL 24608 8751 33358
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