An Assessment in Supporting Green Jobs in Indonesia

by Paskal Kleden and Philipp Kauppert

I. INTRODUCTION Indonesia’s environmental law is considered as solid by activists. Law no. 32 / 2009 on the 1.1. Context protection and management of natural re- Indonesia is currently facing a twin challenge sources was a DPR initiative (instead of the regarding the sustainability of its economy. It is government’s as is most often the case), and the third largest contributor to greenhouse gas was drafted with the assistance of a number of emissions in the world1 and a country with an civil society organizations. The law clearly unemployment rate of 7.4 percent in 2010.2 states that the government is responsible for Should Indonesia’s economic growth improve preventing pollution and environmental degra- in the future, it is likely that it is going to be dation, and that polluters should be punished.4 conducted at the cost of environmental sus- However, as will be explained later, the law is tainability. Because of the circumstances, sup- often contradicted by other laws that fuel envi- porting the development of green jobs, even ronmental deprivation. though not a silver bullet, can be one possible option for job creation. If not hampered by vested interest and conflicting policies, Indonesia has huge potentials to Considering Indonesia’s vast natural re- utilize its renewable energy sectors. The table sources, Indonesia should have the potential to below shows the difference between the ener- develop its renewable energy sector. President gy potentials and the installed capacities of Yudhoyono has also made commitments at a renewable energies: number of international forums. For instance, at his speech at the United Nations Framework Renewable Potentials Installed Convention on Climate Change (UNFCCC) in Sources Capacity Copenhagen in 2009 he elucidates on the re- Hydro 75, 67 GW 4200 MW sponsibilities that developing countries must Geothermal 27 GW 807 MW make in low carbon development so that they Biomass 49, 81 GW 445 MW Solar 1,200 GW (4,8 8 MW “do not repeat the historical mistakes of devel- 2 kWH/m / day) oped countries.” He further commits that Indo- Wind 9,29 GW (3 - 6 m/s) 0,6 MW nesia will reduce its emissions by 26 percent Source: World Bank, Executive Summary, In- (41 percent with external support) in 2020.3 donesia and Climate Change, Working Paper on Current Status and Policies, (Jakarta: World 1 World Bank, Executive Summary, Indonesia and Cli- Bank & DFID, 2007) & US Commercial Ser- mate Change, Working Paper on Current Status and vice.5 Policies, (Jakarta: World Bank & DFID, 2007), p. 2. Indo- nesia with 3,014 MtCO2e is behind the United States (6,005) and China (5,017) 2 World Bank, Indonesia Economic Quarterly 2010, (Ja- the Ministry of Foreign Affairs Republic of Indonesia, karta: The World Bank 2010), p. 13, retrieved from http://www.deplu.go.id/Pages/SpeechTranscriptionDispla http://www-wds.worldbank.org/external/default/ WDSCon- y.aspx?Name1=Pidato&Name2=Presiden&IDP=496&l=e tentServer/WDSP/IB/2010/09/28/000333038_20100928 n , 12 October 2010. 015604/Rendered/PDF/567900WP0IEQ1S132B01PUBLI 4 UU 32 / 2009, p. 8. C10ENGLISH.pdf , 10 October 2010. 5 Anasia Silviati, “Indonesia Renewable Energy Market”, 3 President Susilo Bambang Yudhoyono, Speech at the retrieved from http://www.climatelaw.org/laws/indonesia/ UNFCCC Copenhagen, retrieved from the web - site of indonesiaenergy

1.2. Objective 1.4. The Green Job Definition & Its Relation The objective of the paper is to identify actors to Politics and policies related to green jobs. The paper The United Nations Environmental Program looks into government policies and civil society (UNEP) explains that green jobs are “those initiatives in reducing Indonesia’s carbon foot- that contribute appreciably to maintaining or print. Moreover, the paper looks at efforts that restoring environmental quality and avoiding have been conducted by international organi- future damage to the ecosystem.”10 Green jobs zations, and how FES can fill in the gap by can include highly sophisticated tasks such as using its network, resources and expertise. Out researching the second generation biofuels as of this analysis, FES Indonesia is expecting to well as lower skilled jobs that includes the in- receive a number of clear recommendations stallation of micro - hydro turbines or solar about its future and potential partner organiza- panels. tions role in promoting Green Jobs in Indone- sia.6 Another definition asserts that green jobs (1)”involve some tasks associated with improv- 1.3. Methodology & Framework ing the environment, (2)“provide a sustainable The research combines literature review with family wage, health and retirement benefits, interviews with various stakeholders of the and decent working conditions” (3)“should be green jobs sector that includes government available to diverse workers across the spec- agencies, CSOs, universities, and international trum of race, gender and ethnicity”.11 organizations.7 The study also looks at the projects of other FES offices in the world. The Sometimes, greening the economy would re- paper was also presented to a group of experts quire investments in technologies, equipment who provided peer review and new ideas. The and infrastructure. Supporting green jobs can paper emphasizes on three areas relevant for therefore be very financially demanding and green jobs: the economy, politics, and interna- very technical. tional relations; and the policy developments and constraints in the three areas. Nevertheless, the political aspect cannot be underestimated, as greening the economy is The recommendations of this paper are taking closely related with improving laws and regula- into considerations, FES’ overall work as a tions, as well as implementing existing regula- political foundation, its affinity with the social tions properly. democratic ideology, its existing network, and its financial capacity. The green jobs initiative Contrary to popular belief, a green economy will be conducted under the overall objective does not contradict growth. Countries like “promoting a sustainable and socially inclusive Germany and Denmark have successfully economy to contribute to higher standards of combined economic growth with a greening of social equality”8 and shares the overall budget the industrial sectors. From 1990 to 2006 with the traditional trade union work of FES.9 Denmark has successfully reduced its emissions by 5 percent while growing at 2.3 percent The challenge for the green jobs activities is which is above the EU average of 2 percent.12 that it is closely related to environmental preservation, and FES needs to find the niche In Indonesia, it seems that climate change has that distinguishes it from Greenpeace, Conser- become an important issue for the youth. A vation International, CIFOR or other organiza- survey13 that was conducted by the PI (Perge- tions which main concern is the environment. rakan Indonesia) in August 2010 shows that FES needs to work in this new field while main- there is an intermediate literacy among young taining its identity as a political foundation.

10 UNEP, Green Jobs: Towards decent work in a sustainable, low-carbon world, (Nairobi: UNEP, 2008), p.35 11 Middle Class Task Force, “Green Jobs: A Pathway to a Strong Middle Class.” March 13, 2009, p. 5, retrieved 6 Philipp Kauppert, Green Jobs, a Fruitful Area of En- from http://www.whitehouse.gov/assets/documents/mctf_ gagement of FES Indonesia? (Terms of Reference for a one_staff_report_final.pdf, 10 November 2010. Concept Paper), FES internal document 2010. 12 World Bank, World Development Report 2010, Devel- 7 Ibid. opment and Climate Change, (World Bank: Washington 8 Kubo 2010. DC, 2010), p. 217. 9 Until October 2010, there is no indication that activities 13 The survey covers 300 young people in Jakarta, Jogja- for green jobs will be supported from external funding. karta and Solo.

2 people in big cities on the issue. A majority of derstood its responsibility to integrate sustain- respondents in Solo (70 percent) and in Jogja- ability into the formulation of economic policies, karta (58 percent) believes that human activi- and are therefore emphasizing on the im- ties are the biggest causes of climate change. portance of green industrial models. In addition over 90 percent of the respondents have experienced the effects of climate Within current academic and political discus- change. sions about development models, there gener- ally seem to be two competing orientation The above results are much better than the frameworks. The one model is the western perception of people in the United States. The liberal blueprint, represented by the Washing- survey of the Pew Research Center & the ton Consensus, which has created global frus- Press shows that only 59 percent of the re- tration and objections after the introduction of spondents agreed that there is solid evidence neo-liberal and pro-privatization policies within about the warming of the earth.14 Even though the last two decades. In direct opposition to the research of PI might not reflect the overall that stands the authoritarian model of the Bei- understanding of Indonesians, because of the jing consensus, mainly focusing on a strong small sample size, geographical and age limi- central state and its rigid control of the national tations, it shows that among young people in society and the economy. Social Democrats big cities, climate change has become a priori- have to learn out of the serious deficiencies of ty. those two models and consequently come up with alternative development frameworks and paths, where the primacy of democratic policy II. FES APPROACH AND EXISTING NET- prevails and the subordination of political to WORK economic interest is rejected. While in a structural and electoral crisis in its region of histori- 2.1. The Social Democratic Framework cal origin (Europe), the dynamics within the Social Democracy is based on the values of different Asian societies could show if such an Freedom, Justice and Solidarity. Social demo- alternative model will have a chance in the cratic economic policies recognize the im- near future. In Indonesia, after more than a portance of private ownership and the market decade of democratic transition, a model con- economy, but also demand for a responsible taining the objectives of social justice and envi- and democratic state which is able to guide the ronmental sustainability seems to have wide economy through measures of regulation and general acceptance within the society. But until redistribution. Out of a social democratic per- now, no political actors have presented them- spective, the different global experiences histo- selves capable to promote and defend social ry has shown that “a market itself is blind in democratic values in a coherent and credible social and ecological terms.”15 In the current way. international context of growing social inequali- ties on the one hand and threatening ecologi- From some international experiences, we can cal pressure on the other hand, new economic see that there are also some potential contra- models are needed which are able to reconcile dictions between traditional social democratic those ends which sometimes might be per- values and actors and the structural changes ceived as contradictions. At a closer look at the needed for sustainable industrial policies. The major challenges of the 21st century, it be- process of industrial restructuring contains comes clear that all environmental conflicts risks and can lead to social problems and un- also have an important socio-economic dimen- employment. Trade unions have to be actively sion. Nature itself cannot be disconnected from involved in reconciling social and environmen- its relations with human beings and the multi- tal interests within the society. Social democ- ple dynamics of our national and transnational racy is committed to economic democracy and societies. Social Democratic actors have un- fair social partnership, which will both play an equally important role in the creation of green jobs. In an academic perspective the shift from 14 The Pew Research Center for the People and the the ‘Keynesian welfare state’ to the ‘Schum- Press, Little Change in Opinions about Global Warming, Increasing Partisan Divide on Energy Policies, retrieved peterian welfare state’, will put the future focus from http://people-press.org/report/669/,28 October 2010. of social and economic policies will lie on the 15 Hamburg Programme, Principal Guidelines of the So- promotion of meaningful social and environ- cial Democratic Party of Germany, Federal Party Confer- ence, October 2007.

3 mental innovations.16 The wise coordination of 2.2. FES Existing Partners innovation, technology and education policies The FES has experience in providing alterna- plays are key factors in creating good living tive draft laws or regulations, dissemination of and working conditions for future societies, ideas / awareness rising through conferences especially for an emerging economy like Indo- and trainings, as well as in supporting pressure nesia. groups to lobby the government. All in all, these activities are also relevant for supporting the Out of a Social Democratic perspective, the development of green jobs. following points are the most relevant factors in the promotion of green jobs: A small number of partner organizations have  Environmental concerns cannot be discon- already been working on issues related to nected from its broader social and economic green jobs18. However, if FES plans to effec- dimensions. tively support the development of green jobs,  The democratic state has to set the general FES needs to cooperate with additional institu- framework for the reconciliation of the envi- tions that include government agencies, ronment with the economy. NGOs, academia, and MPs. The table below  New economic and industrial models are explains about a number of FES partners that needed, especially for developing and have been involved in activities related to emerging economies in Asia. green jobs.  Economic democracy and fair social partnership remain core social democratic con- Organization Activities cerns within the promotion of a green econ- Sawit Watch 1) Supporting indigenous peo- omy. ple’s struggle against palm plantations companies.  Trade unions and other civil society organi- 2) Campaigning against the zations play crucial roles in defining and liberalization of the oil palm guaranteeing the protection of human rights sector. and public goods. 3) Awareness raising on the social and environmental im- The projects on green jobs are one of the tools pacts of palm oil plantations. to achieve the following economic condition17: AJI Indonesia Co - managing a website that contains articles, laws, and Growth regulations related to environmental issues. The website can be found under http://www.mediakonservasi.org/ KAHUTINDO 1) Training for workers on REDD +. Social Sustaina 2) Training workers on planned balance -bility logging. CSDS 1) Advocating farmers on land issues. 2) Training farmers on the use Theoretically speaking, in the long term, green of organic fertilizers. jobs will not only contribute to environmental sustainability but also to economic growth and Moreover, through its regional program, FES additional jobs creation. The investments de- has been supporting discussions on issues rived from energy savings can be invested related to reducing the carbon footprint: elsewhere and could create additional jobs.  In Latin America which is also one of the most affected regions by climate change, FES is working on topics related to energy, sustainable development, and climate. The 16 Brendan Haley and Ernst Hollander, Social Democracy core strength of FES in comparison to tech- and Green Industrial Policy: Labour and Environmental nical agencies lies in its network with politi- Innovation, paper presented at University of Massachu- cal parties and CSOs which are crucial in setts, October 2005, retrieved from: http://www.uml.edu/ com/CITA/05paperhollanderhaley.pdf providing political weight into the discussion. 17 Objectives of Social Democratic Economic Policy as explained by Sebastian Thomasius, during the Asia So- cial Democracy Network Conference, Jakarta 20 October 18 Various interviews with FES program officers during 2010. the research period.

4 The demand for the topic also comes from  Energy conservation: In this sector FES has trade unions and social democratic political the potential to work workers from compa- parties which are confronted with the issue nies such as Daimler (member of FSPMI) and are looking for political advice and ar- and Osram (member of SPSI) which have guments.19 made environmental sustainability a priority.  FES Office for Regional Cooperation in Asia Their knowledge can be transferred to has been working on the debate on the sus- others. tainability of the use of biofuels. On one  Renewable energy: As other countries have hand biofuels have been considered as re- shown, this sector has the largest potential ducing greenhouse gas emissions, and in- for job creation. From the laws and regula- creasing the standard of living of farmers; tions (see section 3.2) it is feasible that the on the other hand palm oil plantations, a government will make this a priority for the significant contributor to biofuel in Southeast future. However, until now Indonesia is still Asia, have been a driver for local conflicts subsidizing fossil fuels which will create a and the cutting down of forests.20 challenge for the renewable energy sector  In Germany topics on climate and energy to develop. Moreover, FES will also have to politics is taken up by the Working Group on find new partners if it decides to work in this Global Questions (Arbeitsgruppe Globale sector. Fragen). The working group consists of 11  Waste reduction / recycling: A sector that FES offices and is considering bringing in could also contribute to job creation. Similar Indonesia in the future. The discussion in to renewable energy, this is also a new area Germany influences changes in the country for FES to work at, and no traditional FES offices of the working group members in re- partner is currently occupied with the issue. gards to capacity and partners.21  Forestry / plantation: A crucial sector, especially because Indonesia is the largest These developments show that climate change greenhouse gas contributor in the world and green economy is a new topic that will from deforestation. FES has been working gain more prominence in the future. on the issue of biofuels in the region and has developed a network of organizations. 2.3. The Green Jobs Sector FES has also long term partners in this sec- Simply put, the green jobs sector can be seen tor like CSDS which focuses on land issues, as follows: and provides training for farmers, as well as KAHUTINDO which train workers on sustainable forest management. Energy Conservation III. GREEN JOBS AND THEIR CONTRIBU- Renewable TION TO THE ECONOMY Green Jobs Energy Sir Nicholas Stern, author of the widely quoted Waste reduction Stern Review on the Economics of Climate / recycling Change argues that climate change is one of the greatest market failures ever seen.22 One

Forestry / of the options of reducing the damaging effects

plantation of climate change is by creating a greener economy. Nevertheless, in general, working towards green economics is always a chal- The difficult question would be: where should lenge because environmental considerations FES invests its limited resources? To answer are usually not part of our economic thinking. this question, a short analysis of each sector is The GDP for instance which is commonly used necessary: as benchmark of economic success takes into account produced goods, services and capital 19 E-mail Judith Illerhues, 26 August 2010. 20 “Biofuels in Southeast Asia: Challenge to Social Sus- tainability - Chances for Green Jobs?” retrieved from 22 Stern Review, the Economics of Climate Change, Ex- http://www.fes-asia.org/, 16 November 2010. ecutive Summary retrieved from http://siteresources. 21 Klausurtagung Arbeitsgruppe Globale Fragen, 12 - 14 worldbank.org/INTINDONESIA/Resources/226271-11709 October 2010. 11056314/3428109-1174614780539/SternReviewEng.pdf

5 goods, yet neglects environmental considerations. Moreover, environmentally friendly tech- 70 nologies need expensive research and there- 60 fore create a disincentive for the market to strongly invest. It is usually governments that 50 are financing the initial research of green technology. In a developing country like Indonesia, 40 Production the challenge is multifold because of the lim- Domestic ited investments of the government in this sec- 30 tor. Import 20

The next section explains why investments in 10 the green jobs sector can be more beneficial than investments in the fossil fuel sector. In 0 addition, this section also tries to understand 2000 2002 2004 2006 2008 how much of a priority green jobs are for the Indonesian government. This is done by com- Source: ESDM, 2009 paring what is stated in laws and regulations, with the obstacles felt by civil society organiza- Second, green jobs are believed to create tions. more jobs than jobs in the fossil fuel sector. The green jobs sector is more labor intensive 3.1. Investment in Green Jobs VS Invest- than the oil sector, and will employ almost four 25 ment in the Fossil Fuel Sector times more labor than the oil sector. Green As stated previously there are obvious reasons jobs also rely on a lot of domestic resources 26 why Indonesia should invest in the green jobs rather than imports (such as oil). In addition, sector. It is currently the third largest green- the trends in other countries also show that house gas contributor in the world and the pol- extractive industries continue to fall because of 27 lution in many major cities, especially Jakarta the use of newer technologies. See table is unbearable. According to the environmental below from UNEP. quality index issued by the Ministry of Envi- ronment, water and air quality have been de- Employment Trends in Extractive Industries clining due to the implementation of poor regu- 1996 – 2006 lations.23 Country 1996 2006 Change China 9,020 5,580 -38 There are also economic reasons which are as Romania 241 120 -50 important. First, Indonesia is currently import- Ukraine 4,390 4,037 -7 ing fuel to meet is domestic demands. In 2009, Slovakia 34 16 -52 domestic consumptions reached almost 50 South Africa 603 398 -34 United 569 687 +21 million kilo liters, while domestic production 24 States was slightly below 40 million kilo liters. This United 107 103 -4 makes Indonesia prone to volatile oil prices. It Kingdom also makes Indonesia dependent on conflict Malaysia 35 27 -22 areas such as the Middle East, and puts Indo- Source: Green Jobs, Towards Decent Work in nesia in direct competition with China. a Sustainable Low – Carbon World, p. 91

Lastly, green jobs will contribute to renewable energies which will become cheaper in the

23 Adianto P. Simamora, Jakarta, Kalimantan the most 25 Leigh Hendrix, Nitzan Goldberger, Sarah Ladislaw, Polluted Areas, The Jakarta Post, retrieved from, “Understanding ‘Green Jobs’”, CSIS Energy and National http://www.thejakartapost.com/news/2010/05/26/jakarta- Security Program, March 2010, retrieved from kalimantan-most-polluted-areas-govt-index.html, 7 No- http://csis.org/files/publication/100217_GreenJobs.pdf , 2 vember 2010. October 2010. 24 Ministry of Energy and Natural Resources, Indonesia 26 Robert Pollin, Heidi Garrett – Peltier, James Heintz, Energy Statistics 2009, retrieved from http://www.esdm. Helen Scharber, Green Recovery, A Program to Create go.id/publikasi/indonesia-energy-outlook/edisi-lengkap/ Good Jobs and Start Building a Low Carbon Economy, cat_view/58-publikasi/333-indonesia-energy-statistics- (Center of American Progress, 2008), p.11 leaflet.html, 10 October 2010. 27 Op.cit, UNEP, p. 91.

6 future28 because once the infrastructure is further stipulates that the national and local there, the fuel for renewable energies which governments focus on the provision of ener- comes from wind, geothermal or hydro power gies especially to remote and poor areas by are provided for free. The sector is also grow- maximizing renewable energy sources.31The ing and it is likely that efficiency will be im- Law on Energy further stipulates that the provi- proved in the future. In addition, should renew- sion of renewable energies by companies and able energies be massively produced prices individuals will receive the required incentives will be lower. from the government.32

3.2. A Short Analysis of Policies for Green Looking at some of the laws, it seems that In- Jobs donesia is committed to the development of Indonesia’s policies in supporting green jobs green jobs. Currently the renewable energy are rather mixed. As can be seen from the ex- sector only contributes to 5 percent of total planation below, targets to reduce emissions energy consumption. This figure should be have been put in place, laws to support a increased to over 15 percent (biofuel over 5%, greener economy has been promulgated, and geothermal over 5%, biomass, nuclear, micro government institutions have started to under- hydro, solar and wind over 5 percent) in stand and to put measures on supporting the 202533, or in other words an increase of 200 development of green jobs. However, some percent in 15 years. Whether this is a realistic major constraints are still in place. target remains to be seen.

For the government, the hardest challenge in Yet, the progresses in some laws are contra- regards to green jobs is to find a balance be- dicted by too liberal approaches in some oth- tween the three targets of the government, ers. Laws related to natural resources are of- namely the target for reducing greenhouse ten driven by market incentives and therefore gases by 26 percent (or 41 percent with inter- lack perspectives on human rights and envi- national assistance) by 2020, to meet econom- ronmental sustainability. The extractions of ic growth of 7.7 percent by 2014, and to create natural resources are often related to human 11.7 million jobs between 2010 and 2014.29 Dr. rights violations and environmental destruc- Lukita Tuwo Dinarsyah, Vice Minister at the tions. National Development Planning Agency argues that Indonesia has developed national For instance, according to Law no. 4 / 2009, all strategies in reducing climate change, and also efforts “to prevent” legal extraction can be pun- has come up with sector policies (see further ished with 1 year of prison or a fine of IDR 100 on section 4.1 on government institutions) in million.34 The problem lies in the fact that ex- reducing emissions. But it still lacks a detailed traction sites are sometimes located under skill development strategy for developing green people’s residence, and the law completely jobs. It also lacks data about how the green neglects their rights, often leading to forced issue could affect the labor market (transition relocations. In addition the term “to prevent” is of some workers to the green sector). open for interpretation and can be used flexibly by the government. Demonstrations against a Indonesia has clearly stated in Law no. 17 / polluting company, for instance, can be inter- 2007 on the National Long Term Development preted as such, and could lead to restrictions Plan 2005 – 2025 that it will focus on the de- of democratic action. velopments of renewable energies especially from geothermal, micro hydro power and solar The development of renewable energies is energy.30 The Law no. 30 / 2007 on Energy also stipulated in Indonesia’s Long Term De- velopment Plan (RPJP) of the Department of Transportation. The document further stipu- 28 Al Gore, Our Choice, A Plan to Solve the Climate Cri- sis, (New York: Melcher Media, 2009), p. 58. 29Dr. Lukita Tuwo Dinarsyah, “Developing a New Skill for Green Employment”, presented at the ILO National 31 Undang-Undang Republik Indonesia nomor. 30 / 2007 Green Jobs Conference: The Way Forward, in Jakarta 16 tentang Energi, p. 13. December 2010. 32 Ibid. 30 Lampiran Undang-Undang Republik Indonesia Nomor 33 Peraturan Presiden Republik Indonesia nomor 5 tahun 17 / 2007 tentang Rencana Pembangunan Jangka Pan- 2006 tentang Kebijakan Energi Nasional p.5, retrieved jang Nasional Tahun 2005 – 2025, retrieved from from http://www.batan.go.id/prod_hukum/extern/Perpres5 http://www.budpar.go.id/filedata/3784_1223-UUno17th _2006.pdf, 27 September 2010. 2007lampiranRPJPN.pdf , 10 November 2010. 34 Law 4 / 2009, article 162.

7 lates the development of environmentally +) Stipulating on the pre- friendly transportation and alternative energies vention of pollutions. in various cities until 2025.35 The same devel- Law no. 25 / 2007 -) 95 years of land lease for opment occurs in other sectors. The Depart- on Investments investors, creating the pos- ment of Industry has banned the production of sibility of depletion of natu- ozone depleting substances, and the Depart- ral resources. ment of Manpower and Transmigration36 is *) The table only provides a small illustration of cooperating with other ministries such as the what has been conducted by the Indonesian Ministry of Environment and the Ministry of government, and does not explain about all the Energy and Minerals in improving trainings that policies in place. will support the development of green jobs in Indonesia. 3.3. Economic Challenges for Green Jobs Civil society actors feel that there is a gap be- All in all, a number of laws, planning instru- tween government priorities stated in the laws ments and regulations to support the develop- and the reality on the ground. A number of ment of green jobs already exist. Some still organizations are of the opinion that the gov- need to be improved in its implementation. The ernment programs intended to curb green- table below summarizes the policies that are house gases are implemented due to interna- currently in place in supporting the green jobs tional pressure or incentives. In general, the initiative or are hindering its developments. SBY government is perceived to be more adaptive to international messages compared Policies Remarks to previous presidents. Nevertheless, there are +) National and local gov- several obstacles that Indonesia is facing. ernments provides energies to remote areas by focusing First, despite some of the progressive laws in on renewable energy. the green jobs sector what is really missing is Law no. 30 / 2007 +) The provision of renew- an incentive. Germany for instance has imple- on Energy able energies by compa- mented the feed - in - tariff law which requires nies and individuals will mandatory purchases of renewable energy at a receive the required incen- fixed rate, while in Denmark, energy friendly tives from the government. technologies are stimulated through a high Presidential Regu- +) Increasing renewable energy tax.37 In Indonesia, there is no such law lation no. 5 / 2006 energy contribution up to on National Energy 15 percent by 2025. in place. The government has reduced fuel Policy subsidies, especially during the hike of the fuel Long Term +) Focusing on the devel- price in 2005, but this proves to be insufficient Development opments of micro hydro as a driver for the development of green jobs. Planning 2005 – power, geothermal and 2025 solar energy. Second, there is a lack of discourse in the so- Regulation of the +) Banning the use of ciety. In the US for instance, the importance of Ministry of Industry ozone depleting substanc- green jobs and renewable energies is linked no. 33 / 2007 es. closely to the debate on climate change. There Long Term Devel- +) Stipulates the develop- are advocates for its policies, and there are opment Planning of ment of environmentally adversaries who criticize the validity of climate the Ministry of friendly transportation until Transportation 2025. science. This debate drives forward policies Law no. 32 / 2009 +) Stipulating that the gov- and discourse about climate change and green on Environment ernment is punishing pol- jobs. In Indonesia, everyone seems to agree luters. on reducing the carbon footprint. Yet, policies lack implementation.

35 Rencana Pembangunan Jangka Panjang Departemen Third, information on the tendering processes Perhubungan 2005 – 2025, p.136, retrieved from in the renewable energy sector is very limited http://www.dephub.go.id/files/media/file/rpjp2005-2025. pdf, 10 November 2010. and often inaccessible for the common people. 36 Maruli A. Hasoloan, “Pelaksanaan Green Jobs di Indo- Indonesia which should have the potential to nesia”, presented presented on 16 December 2010, at improve its work in hydro power is lagging be- the ILO National Green Jobs Conference: The Way For- hind precisely because of this reason. ward in Jakarta, 16 December 2010, retrieved from http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-ban gkok/---ilo-jakarta/documents/presentation/wcms_150054 .pdf , 17 December 2010. 37 Op.cit, World Bank (2010), p. 217.

8 Fourth, access to resources from banks is plementing its international commitments in usually very limited. Indonesia’s banking sector preventing climate change. is not familiar with micro hydro projects, and what kinds of risk assessments apply for credits in this sector. A few banks such as Bank IV. GREEN JOBS POLITICS 38 Mandiri are starting to have special programs about renewable energy, but most banks still This section tries to identify the main govern- argue that they lack information on the renew- ment institutions, CSOs and political parties able energy sector. which could become potential partners for developing the green jobs sector. Moreover, the Fifth, with 9.4 million hectares of palm oil plan- section also explains about the role of women tations, Indonesia is one of the leading coun- in creating a greener economy. tries in the production of palm oil products. The world demand for palm oil products is rising 4.1. Government Institutions driven by demands for edible oils, cosmetics  The National Energy Council (DEN): The and biofuels. Indonesia currently has 9.4 mil- Council was established based on the Law lion hectares of palm oil plantations. Indonesia 30 / 2007 on Energy. The Council has the currently leads the world’s palm oil production authority to coordinate cross sector energy with 22,090,000 metric tons, followed by Ma- needs, and calculates our energy reserves. 39 laysia with 18,200,000 metric tons. Never- For instance the DEN coordinates energy theless, the production of palm oil is closely use related to traffic. In addition it also pre- associated with conflicts, and greenhouse gas pares the National Energy Policy. The emissions from forest clearance. Therefore, Council is chaired by the President. the challenge for determining the mitigation  The National Development Agency (BAP- value of palm oil needs to be conducted PENAS): is in charge of preparing the me- through the whole of its lifecycle, comparing dium and long term development plan. The emissions before and after palm oil plantations. Agency assesses how the planning of other

40 government institution meets the national Sixth, with 90 million hectares of forests, In- blue print. donesia has huge potentials to make profit  The Ministry of Energy and Minerals: is from the carbon market. According to some mainly in charge about the supply side of estimates, Indonesia could earn up to USD10 41 energy. It also oversees the national energy billion / year from selling carbon credits in the demand and supply (Indonesia Energy Out- global market. However, in order to participate, look). Its main focus are oil and gas, elec- the measurement, verification, and reporting tricity, minerals, coals and geothermal. tools need to be in place, because buyers want  The Ministry of Forestry: is regulating the to be ensured that reductions are taking place. use and protection of forests. It also regu- lates the profit sharing mechanism between Countering these economic barriers will be a the central government and the provinces in challenge for Indonesia if it is serious in im- regards to forestry and plantation products.  The Ministry of Environment: Preventing

38 environmental degradation, implementing Bank Mandiri received a USD100 million loans from Agence Francaise de Developement to finance climate the principles of good governance in man- change related projects and / or projects related to ener- aging the environment. Currently, the minis- gy efficiency, “Bank Mandiri dapat Pinjaman 100 Juta try is also having a routine FGD for identify- Dollar”, Republika Online, 17 Juni 2010, http://www. re- ing bottlenecks of green jobs initiatives in publika.co.id/berita/breaking-news/ekonomi/10/06/17/12 0352-bank-mandiri-dapat-pinjaman-100-juta-dolar-as other government departments. 39 “Palm Oil”, retrieved from http://siteresources.  The Ministry of Agriculture: In charge of worldbank.org/INTGLBPROSPECTS/64218944-110658 conducting efficient and sustainable farm- 4665677/22478814/palmoil_EN.pdf , 24 November 2010. ing, and improve the production and selling 40 Christopher Barr, Ahmad Dermawan, Herry Purnomo and Heru Komarudin, “Readiness for REDD, Financial of farming products, as well as assisting governance and lessons from Indonesia’s Reforestation farmers with new technologies. Fund (RF)”, Info Brief, no.20, (Bogor: CIFOR, 2009), p. 1.  The Ministry of Industry42: Has conducted 41 Gabriel Thoumi and Rhett Butler, “Carbon credits could training for industries in energy conserva- be a big earner for Indonesia”, The Jakarta Post, 28 July 2007, retrieved from http://www.thejakartapost.com/news/ 2007/07/28/carbon-credits-could-be-big-earner-indonesia. 42 “Pengembangan SDM Sektor Industri Nasional dalam html Mendukung Mitigasi Perubahan Iklim”, presented on 16

9 tion, developed a roadmap on reducing criticize a specific legislations, or are con- greenhouse gases, trainings for energy au- cerned about the welfare of their workers. A ditors and energy managers. Moreover, the few of the most prominent organizations can government through the ministry has be seen below. obliged energy users of 6000 ton oil equiva- lent. The Ministry of Industry also provides  The Indonesian Environmental Forum the Green Industry Award to stimulate a (Walhi): is one of the largest local environ- green economy. mental NGO. It was established in 1980 and is represented in 26 provinces. Its main ac- It can be argued that Indonesia has all the rel- tivities are: (1) Providing civic education evant institutions in place to manage energy about people’s rights in managing the envi- use and environmental preservation. A com- ronment. (2) Media campaign (3) Policy ad- parison with governmental institutions in other vocacy at the local, national and interna- countries however would reveal the reason tional level. Walhi’s former directors have about why a greening of the Indonesian econ- become prominent persons in the govern- omy is only progressing very slowly. ment. Erna Witoelar, its first executive director became Minister of Human Settlements First, the Ministry of Environment lacks the and Regional Developments in the Gus Dur necessary authority to protect the environment. administration. She is now the UN Special It is not able to punish polluters. In the United Ambassador for MDGs for the Asia Pacific States, the Environmental Protection Agency Region. Agus Purnomo46, Walhi’s executive (EPA) is able to enforce the Clean Air Act43 to director from 1986 - 1989 is now the Presi- federal, state, local governments as well as the dent’s special staff for climate change. private industry.44  Sawit Watch: initially a division within Walhi, Sawit Watch became independent in 1998. Second, energy conservation is still weakly Its main goals are: (1) To support local and stipulated in existing regulations. The Law no. indigenous people against large - scale oil 30 / 2007 on Energy stipulates about energy palm plantations companies. (2) To cam- conservation. According to the law, the gov- paign against the IMF / World Bank’s sec- ernment provides incentives for those conserv- toral adjustment loan for liberalizing palm oil ing energy and disincentives for those who do plantations. (3) To raise public awareness at not. However, until today there is no govern- the local, national and international levels ment audit of energy efficiency. on the social and environmental impacts of palm oil plantations. Third, from a civil society perspective, some of  KAHUTINDO: The Forestry and Timber the above mentioned ministries (especially the Workers was established in 1983 under the Ministry of Energies and Minerals) are against name Wood Labor Union (SBP). Today it is this law because it is not friendly to invest- organizing over 100,000 workers in several ments. Now they are trying to influence the sectors including wood workers, forestry, 45 draft government regulations (Rancangan plantation, and pulp and paper. It has been Peraturan Pemerintah) to their favor. conducting training of its workers in the fields sustainable forest management, and 4.2. Civil Society Reducing Emissions from Deforestation and Indonesia has a broad civil society that is con- Forest Degradation (REDD). The trainings cerned about reducing the carbon footprint. are important because the future work of This ranges from NGOs to trade unions. Civil KAHUTINDO’s members depends on for- society organizations appear to be active at ests. KAHUTINDO is affiliated to the Indo- different levels of issues. Some are concerned nesian Workers Unions Confederation about a specific sector such as palm oil, others (KSPI). Another trade union in the forestry sector is the HUKATAN. Unfortunately, de- December 2010, at the ILO National Green Jobs Confer- tailed information on the organization was ence: The Way Forward in Jakarta, 16 December 2010. not available during the research. 43 The Clean Air Act was enacted by Congress in 1990 and serves to improve the US’ air quality. 44 The Environmental Protection Agency, retrieved from http://usgovinfo.about.com/od/technologyandresearch/a/a boutepa.htm , 6 December 2010. 45 Laws are stipulated in more details through Govern- 46 “Sejarah Walhi”, retrieved from http://www.walhi.or.id/ ment Regulations. in/tentang-kami/sejarah, 6 December 2010.

10 The civil society has access to decision mak- Commission IX (workers & transmigration, ers and have been influencing bills. The cur- population, health). rent Law on Environment was a DPR initiative and was written with the assistance of several 4.4. Gender and the Green Economy NGOs. For trade unions, accept for KA- Though having a rather indirect correlation, HUTINDO and HUKATAN, the green jobs sec- gender plays an important role in the creation tor is only a very new issue. The ILO has been of a green economy. Energy consumption is approaching trade unions via their confedera- closely associated with the population. In 1900 tions.47 But wide trade unions’ participations in the world had approximately 1.6 billion people. green jobs still have to be developed. Currently Nowadays, it has reached 6.8 billion. Since the most crucial issues for trade unions revolve energy consumption is closely associated with around welfare and minimum wage. the number of people in the world, there is need to stabilize population growth, and here 4.3. Political Parties / DPR women play a crucial role. Four factors49 that  The National Awakening Party (PKB): has could stabilize population are: (1) The educa- been claiming itself to be a green party tion of girls. (2) The social empowerment of since 2007. Unlike, the German green party women to participate in decision making in which comes from a social movement about their families, communities, and country. (3) green issues, however, the PKB comes Improving child’s survival rates, and thus from a moderate Moslem group, known as boosting confidence that children will survive the Nahdatul Ulama. The green position of until their adulthoods. (4) Enabling women to PKB is however debated among activists48, determine the number of spacing between especially because PKB’s party group in the children. DPR recommended to the government that the Lapindo mud case was a national disaster, having implications that the Supreme V. GREEN JOBS AND AID Court declared the company, and its main shareholder, Aburizal Bakrie not guilty to the Among development agencies, the term green natural disaster. jobs is used since the ILO, UNEP and ITUC started a partnership in 2007. However, many  Plans for a green party: the Indonesian En- other organizations have been working on the vironmental Forum (Walhi) has been trying issue despite not directly using the term as it to form a green party since 2005, but the is. The list of examples of the efforts of organi- organization has yet to make an internal de- zations in supporting a green economy can be cision on whether it wants to contribute as a seen in Appendix VIII. CSO as it has been doing until now, or whether it wants to enter politics. In 2007, it It can be seen that International NGOs as well established the SHI through a congress at- as government organizations On 26 May 2010, tended by around 2000 people. It is hoped the Indonesian government signed a Letter of that there will be a green party in 2011. SHI Intent (LoI) with the Norwegian government on will remain a mass organization. The rela- a USD1 billion deal for putting the conversion tionship with the party will be similar to of natural forests and peat lands under a mora- those between NU and PKB or the Mu- torium until 2013. Norway is committed to dis- hammadiyah with the PAN. burse USD200 million until 2013. The rest will be provided based on emission reductions.  The parliament: Green jobs is a cross sec- Currently the Indonesian government is setting toral issue. But the most important commis- up the measuring, reporting and verification sions in the DPR are: Commission IV (farm- instruments in place.50 Critics however argue ing, plantation, forestry, naval, fisheries, that the compensation is too little. Palm oil food), Commission VII (energy & minerals, research & technology, environment),

47 Email to Muce Mochtar, Program Officer ILO, 26 No- 49 Op.cit, Gore, pp. 228 – 229. vember 2010. 50 Theresia Sufa, “Govt yet to name region to host REDD 48 “Sebut Lapindo Bencana Nasional, PKB tak Layak jadi project”, The Jakarta Post, 5 November 2010, retrieved Green Party”, retrieved from http://arsip.net/id/link.php? from http://www.thejakartapost.com/news/2010/11/05/ lh=CFNQVwUBAAVU govt-yet-name-regions-host-redd-pilot-projects.html

11 products alone have brought USD3.88 billion VII. Appendix II: Additional Experts Con- between January and April 2010.51 sulted in Panel Discussion

Climate change projects from which green jobs No. Names Institution / Position is a part of seem to be the largest domain 1. Laksmi Assistant Deputy Minis- where foreign aid will be flowing in Indonesia in Dhewanthi ter for Environmental the future. However, to really benefit from it, Economic, Ministry of the government needs to ensure that appropri- Environment Republic of ate policies are in place, and conflicting inter- Indonesia ests are solved. 2. Bobby Adhityo Member of Parliament in Rizaldi the Commission on Energy, Golkar

3. Dede Rus Member, Pergerakan VI. Appendix I: List of Respondents Muchammad Indonesia (PI) 4. Saiful DP President Union for No. Names Institution / Position Chemicals, Energy, 1. Berry Nahdian Executive Director, the Mining, Natural Gas, Forqan Indonesian Forum for KEP the Environment (Walhi) 5. Mahawira Staff, Center for Agricul- 2. Dr. Hanan Energy Economist, the Singh Dillon tural Policy Studies Nugroho National Development 6. Gustami Staff, Ministry of Agency (BAPPENAS) Environment 3. Dr. Asclepias Executive Director, the 7. Sulistianingsih Staff, Ministry of R.S. Indriyanto Indonesian Institute for Environment Energy Economy (IIEE) 8. Aristin TA Staff, Ministry of 4. Muhammad President of ASPEK Environment Hakim Indonesia 9. Amir Effendi Chief editor, Jurnal 5. Muhammad Secretary General of Siregar Sosdem Rusdi ASPEK Indonesia 10. Erwin Former Friedrich-Ebert- 6. Poempida Member of Golkar & Schweisshelm Stiftung (FES) Indonesia Hidayatullah Owner of Viron Energy Resident Director (wind energy) 7. Khoirul Annam President of the All – Indonesian Wood and Forestry Workers Union (KAHUTINDO) 8. Rulita International Secretary the All – Indonesian Wood and Forestry Workers Union (KA- HUTINDO) 9. Muce Mochtar Program Officer Green Jobs the International Labor Organization (ILO) 10. Vincent Green jobs advisor ILO Jugault regional program

51 Dradjat Wibowo in “Kompensasi Moratorium Hutan Indonesia Dinilai Terlalu Kecil”, http://assets.wwfid.panda. org/downloads/kompensasi_moratorium_hutan_indonesi a_dinilai_terlalu_kecil.pdf

VIII. Appendix III: efforts of organizations in supporting a green economy No. International Focus Description organizations

Assistance to five 1) Develop country studies on environment – employment link- Asian countries in ages and assessment of the potential for green jobs and de- shifting to low – cent work. carbon, environ- 2) Develop tools to review challenges and opportunities for green mentally friendly jobs. and climate resili- 3) Develop training courses for constituents national partners for ILO ent economies that the creation of green jobs and the greening the economy, 1. http://www.ilo. helps accelerate employment and enterprises at a larger scale. org/jakarta job recovery, re- 4) Convene national green jobs conferences in each country. duce social gaps, 5) Setting – up a tripartite task force on green jobs, policy briefs support develop- and training to support policy development. ment goals and 6) Demonstration of project support of programs in key sectors realize decent such as natural resources management, recycling, energy ef- work. ficiency and the greening of traditional sectors.

Their research on “improving livelihoods through smallholder and community forestry” program includes topics such as identifying Research on “im- management practices that are appropriate for smallholder and proving livelihoods community forestry, defining effective local institutional arrange- CIFOR through smallholder ments for enhancing outcomes from smallholder and community Web – site: 2. and community forestry, defining policies and institutions to enhance profitability http://www.cifo forestry”, “Global- for small scale enterprises. Their research on “Globalized trade r.cgiar.org ized trade and in- and investment” includes areas such as understanding trade and vestment” investments trends (for instance China’s demand for wood products), assessing tools for managing the national and local impacts of trade and investments trends.

1) Rural development with renewable energy (capacity building and technical trainings as well as business plan development UNDP for micro hydro developers). Web – site: 2) Switch to biogas (laying the foundation for sustainable use of http://www.un Environment and 3. biogas to dairy farmers, and training dairy farmers in adapting dp.or.id/progra energy with climate change). mme/environ 3) Sustainable energy (facilitate a transfer of wind turbine tech- ment nology to medium scale industries in Indonesia, lowering initial investment costs for the use of turbines).

USAID http://indonesi Increase access to Coordinate with investors and businesses to increase renewable 4. a.usaid.gov/en clean energy and more efficient energy use. /programs/env ironment

CARE Indo- 1) Demonstrate the economic and environmental suitability of nesia peat land swamp conservation through innovative financing http://www.car schemes related to climate carbon and biodiversity conserva- Central Kalimantan 5. eindone- tion issues. Peatlands Project sia.or.id/index. 2) Sustain and restore the peat swamp forests by conservation asp?lg=en&sb of peat land areas, poverty reduction and biodiversity conser- =5&dt=7&id=4 vation.

IX. About the Authors

Paskal Kleden is the Assistant to the Resident Director at the Friedrich-Ebert-Stiftung Indonesia. He has been working for the organization since 2004. In 2007, Paskal received the Fulbright scholarship to study at the Master of Science in Foreign Service program at Georgetown University in Washington DC.

Philipp Kauppert was the Deputy Resident Director of FES Indonesia until the beginning of 2011, is currently working at the Department for Asia and the Pacific at Friedrich-Ebert-Stiftung, Berlin. Before working for FES, he participated in a post-graduate program at the German Development Institute and had a focus on social and economic developments in Latin America.

Contact person: Mr. Daniel Reichart, Resident Director

Friedrich Ebert Stiftung Jl. Kemang Selatan II No. 2A, Jakarta Selatan 12730, Indonesia Phone: +62-21-719 3711, Facsimile: +62-21-7179 1358 E-mail: [email protected]

To find more about FES publications and field of work in Indonesia, please access www.fes.or.id.