SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI)

Pre-Scoping Report

Sumatra Economic Corridor

Ministry Of Foreign Affairs Of Denmark Report

March 2014

This report has been prepared under the DHI Business Management System certified by DNV to comply with Occupational Health and Quality Management Environmental Management Safety Management ISO 9001 ISO 14001 OHSAS 18001

SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI)

Pre-Scoping Report (Final Draft)

Sumatra Economic Corridor

Prepared for Ministry Of Foreign Affairs Of Denmark

Represented by Mr Peter Oksen

Project manager Joshua Jon van Berkel

Project number 61800814 Approval date 01/2014 Revision 0 Classification Open/Restricted/Confidential

DHI Water & Environment (S) Pte Ltd• 1 Cleantech Loop • #03-05 CleanTech One • Singapore• 637141 Telephone: +65 67776330 • Telefax: +65 67773537 • [email protected]•

This page is intentionally left blank

SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

CONTENTS

1 Introduction ...... 1 1.1 Background on MP3EI Project ...... 1 1.2 SEA Process for Economic Corridors and Current Phase ...... 1 1.3 Pre-scoping Activities ...... 2 1.3.1 Early stakeholder discussions ...... 2 1.3.2 Review the MP3EI Planning for the Sumatra EC, provincial Spatial Plans Development plans ...... 3 1.3.3 Developing preliminary list of key potential issues in Sumatra EC ...... 3 1.3.4 Stakeholder mapping ...... 3 1.3.5 Organizing Pre-scoping and data collection workshop ...... 3 1.3.6 Finalizing and disseminating Pre-Scoping Report ...... 4 1.4 Further SEA steps ...... 4

2 Overview of MP3EI Planning in the Sumatra EC ...... 5 2.1 Delineation of the Sumatra EC ...... 5 2.2 MP3EI Planning for EC ...... 6 2.2.1 Main MP3EI Planned Economic Activities ...... 6 2.2.2 Main MP3EI Policies and Regulations ...... 7 2.2.3 Main Planned MP3EI Infrastructure ...... 7 2.3 Overview of Autonomous Provincial Planning ...... 8 2.4 Overview of Major On-going or ‘To-be-implemented’ Projects ...... 11

3 Overview of Baseline Features in the Sumatra EC ...... 13 3.1 Environmental Quality ...... 13 3.1.1 Water ...... 13 3.1.2 Air and Climate...... 14 3.1.3 Land and Soil ...... 15 3.2 Ecosystems ...... 16 3.2.1 Biodiversity ...... 16 3.2.2 Forests ...... 17 3.2.3 Coastal Areas ...... 17 3.3 Social and Economic Aspects ...... 18 3.3.1 Human Health ...... 18 3.3.2 Livelihood ...... 19 3.3.3 Industry and Mining ...... 19 3.3.4 Energy and Waste ...... 20

4 Preliminary Overview of the Potential Key Issues for Sumatra EC ...... 21 4.1 Deforestation / Degradation of Forests Functions ...... 21 4.2 Human Health Risks ...... 22 4.3 Livelihood Opportunities ...... 23 4.4 Land and Soil Degradation ...... 24 4.5 Water and Air Pollution ...... 24 4.6 Loss of Biodiversity ...... 26 4.7 Coastal Degradation ...... 27 4.8 Environmental Management ...... 27

i

5 Main Conclusions and Preliminary Recommendations Resulting from Pre- scoping ...... 29 5.1 Identified Risks and Opportunities ...... 29 5.2 Initial Policy Recommendations ...... 30

FIGURES

Figure 2.1 Main Planned Activities (Coordinating Ministry for Economic Affairs, 2013) ...... 5 Figure 2.2 Main Planned Infrastructure (Coordinating Ministry for Economic Affairs, 2013) ...... 8

TABLES

Table 3.1 Water quality in priority watershed in Sumatra ...... 13 Table 3.2 Health cases in Sumatra ...... 18 Table 3.3 Waste generation statistics in Sumatra ...... 20 Table 4.1 Potential forest issues ...... 21 Table 4.2 Potential human health issues ...... 22 Table 4.3 Potential livelihood issues ...... 23 Table 4.4 Potential land and soil issues ...... 24 Table 4.5 Potential water and air quality issues ...... 25 Table 4.6 Potential biodiversity issues ...... 26 Table 4.7 Potential coastal area issues ...... 27 Table 4.8 Potential environmental management issues ...... 28

APPENDICES

A MP3EI Planning Information in Sumatra Economic Corridor

B Supporting Information on Pre-scoping Activities

C List of References

ii SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Introduction

1 Introduction

1.1 Background on MP3EI Project

In 2011, the Government of Indonesia introduced the first version of the Master Plan for Acceleration and Expansion of Indonesia Economic Development 2011-2025 (MP3EI). The MP3EI represents a core of Indonesia’s long-term development strategy with its prime objective “to realize the Indonesia 2025 vision to create a self-sufficient, advanced, just, and prosperous Indonesia and to transform Indonesia into a developed country by 2025”. The MP3EI includes a strategic focus on 22 economic activities (i.e. the Policy) and the implementation of these activities in the defined Economic Corridors (ECs).

While executing the recently released updated version of the MP3EI, however, it was realised that the MP3EI and associated National Medium Term Development Plan (RPJMN) needed to deepen their consideration of social and environmental factors to assure the overall vision of sustainability in Indonesia. Thus, along with several other initiatives, the Strategic Environmental Assessment (SEA) was chosen as a method for realizing the required level of integrated policy and planning development. The SEA is required by Indonesian legislation for policy, planning and program development.

To accomplish the required SEA Greening, Bappenas, together with the Ministry of Economic Coordination a key MP3EI coordinating body of the Government of Indonesia (KP3EI), was charged with developing an appropriate SEA approach. This approach entails the execution of one MP3EI ‘Policy’ SEA and six Economic Corridor (EC) SEAs. Further, Bappenas approached the Royal Danish Embassy and DANIDA for assistance via the third instalment of the Environmental Support Program (ESP3).

The project MP3EI SEA was launched in June 2013 and shall last until July 2014. This document consists of the pre-scoping reporting of one of the six EC SEAs.

1.2 SEA Process for Economic Corridors and Current Phase

In accordance with general objectives of SEA i.e. addressing the strategic levels of decision- making to effectively minimise risks to environmental resources and human health likely resulting from policy, plan or program implementation, whilst providing opportunities for growth and sustainable development options, the MP3EI SEA intends to provide creditable strategic environmental analyses of the MP3EI Policy and Economic Corridor Planning and, where necessary, recommendations on how to minimize or avoid associated negative effects and the means to strengthen positive effects. Optimally, the SEAs shall foster the integrated evolution of a truly sustainable MP3EI, along with the associated planning procedures (e.g. RPJMN and provincial planning) as well as – to the extent possible – individual projects.

The SEA process for the Economic Corridor includes following analytical steps:

• Pre-scoping involves the initial analysis of the Economic Corridor (EC) Plans and related baseline features to focus the SEAs and provides likely feedback on the key issues – this step includes also first consultations with the relevant stakeholders through workshops in each EC.

• Scoping Analysis involves comprehensive identification of the key strategic issues via structured expert analyses and stakeholders´ consultations for each EC.

1

• Analysis of likely effects of proposed activities in ECs involves the verification if an identified issue is strategic through appropriately developed qualitative and (semi) quantitative analysis techniques.

• Formulation of Mitigation Measures is based on the characterisation of the strategic issues and likely impacts identified from the previous stage. This will allow for experts to, as far as possible, pinpoint feasible and implementable measures to avoid or mitigate likely adverse impacts as well as to enhance potential positive ones.

• Compilation of the SEA Report to summarize all findings including conclusions from consultations with relevant stakeholders and formulate final set of the recommendations.

This document, as provided above, presents the initial pre-scoping EC feedback and is the current stage of the SEA EC process. It has been conducted during September – October 2013 and involved initial preliminary analysis of the likely strategic issues for the Sumatra EC. It has been carried out by the MP3EI SEA Team experts, with support from consultation with the central authorities and national NGOs; as well as the information obtained from the Pre-scoping & Baseline Workshop MP3EI SEA for Sumatra EC (Medan, October 2nd, 2013 – see Appendix B.3 for detailed information). Besides analytical work and consultations, the data collection – especially provincial Spatial and Development Plans – has also been undertaken as part of pre- scoping tasks.

This report summarizes findings from the pre-scoping analyses and consultations i.e. it provides an overview of the preliminary scope of assessment, baseline data and relevant plans´ review. Findings from pre-scoping will provide a basis for further and detailed analysis of the key strategic issues in the scoping phase.

1.3 Pre-scoping Activities

The pre-scoping activities of Sumatra EC were performed to assist definition of the preliminary scope of the assessment of the EC (i.e. the list of the key strategic issues) in order to support subsequent scoping analysis and, as deemed necessary, provide data for further analytical work.

Activities to carry out the aforementioned are described in the following subsections.

1.3.1 Early stakeholder discussions A variety of pre-scoping issues were discussed with the KP3EI, Bappenas and particularly the leading ministry of Sumatra EC (Ministry of Forestry) as well as other stakeholders related to Sumatra EC. The focus of these discussions was:

• Obtaining a list of projects initiated or soon to be initiated, stages of completion for implemented projects; selection criteria for projects (if applied) in Sumatra

• Determining linkages between MP3EI EC and other plans at the national and provincial levels

• Uncovering opportunities for SEA input at the EC level (e.g. room for input or modification; integration of environmental criteria)

• Identifying what KP3EI/Bappenas/KLH considers the key environmental and social concerns and problems related to the implementation of the MP3EI within Sumatra EC.

• Discover the accessibility of provincial level data and information (both from the GOI and other stakeholders)

2 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Introduction

The summary of discussions is as follow:

• Ministry of Forestry have shown and share the recent information of projects a list of projects initiated or soon to be initiated, stages of completion for implemented projects; selection criteria for projects (if applied) in Sumatra and as a leading ministry for Sumatra EC, they will support the SEA process by share the recent information to SEA team.

• Ministry of Forestry will give access to forestry data and information in Sumatra and other Islands

• To determining the linkages between MP3EI and provincial plans, Bappenas will provides notes/letters to provincial government within Sumatra EC to provide the relevant documents

1.3.2 Review the MP3EI Planning for the Sumatra EC, provincial Spatial Plans Development plans A review of the MP3EI Economic Activities proposed for Sumatra EC and the provincial plans within the EC has also been undertaken during the pre-scoping phase in order to assist to the scoping process with a full understanding of the objectives of the relevant plans, proposed developments and constraints for each area. However, since the most planning documents are available in the provincial level, only the information regarding the status of the plans are presented at this stage.

1.3.3 Developing preliminary list of key potential issues in Sumatra EC Using the master list of key strategic issues identified for the MP3EI Policy SEA, a more specific overview has been developed for Sumatra EC using secondary literature (e.g. Environmental Yearbook, etc.). The information has been briefly summarised in line with the following principles:

• Highlighting existing environmental and social issues of importance in Sumatra EC • Specify detailed problems and concerns for each issue within Sumatra EC • Identified the needs for further data/information • Identification of key stakeholders relevant to specific issues in Sumatra EC

1.3.4 Stakeholder mapping With assistance from the project stakeholders, the SEA team have prepared an initial list of relevant stakeholders for Sumatra EC during the pre-scoping phase. The initial list of relevant stakeholders in Sumatra can be viewed in detail in Appendix C.

1.3.5 Organizing Pre-scoping and data collection workshop A workshop was organized in Medan on October 2nd, 2013, in order to:

• To get feedback on proposed issues, concerns and problems relevant to a given EC • To get information on ongoing and planned development • To obtain baseline data from provincial agencies

Conclusions from the discussions and main comments received are summarized in Appendix B.3 of this Report.

3

1.3.6 Finalizing and disseminating Pre-Scoping Report Considering findings from the activities above, the Pre-Scoping Report has been drafted and open for additional comments through the MP3EI SEA Project website.

1.4 Further SEA steps

The next immediate step after pre-scoping is to undertake scoping activities. This will include a number of activities, including: (a) collection of additional data and information needed as identified in the Pre-Scoping phase; (b) literature review of data and information collected for supporting the list of potential key issues in the Economic Corridor; (c) undertaking internal scoping among the SEA experts; (d) undertaking SEA Scoping Workshop with stakeholders; and (e) completing and submitting final Scoping Report.

Key steps in planning for the scoping phase include:

• Follow up with participants from the pre scoping workshops to collect baseline datasets identified during the workshops.

• For Sumatra EC target additional baseline data focusing on key economic sectors proposed by the MP3EI

4 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Overview of MP3EI Planning in the Sumatra EC

2 Overview of MP3EI Planning in the Sumatra EC

This section provides an overview of the development proposed by the MP3EI for Sumatra EC, and it also outlines the status and main features of the provincial plans (both spatial and development plans) based on MP3EI document on August 2013. The presented information will possibly deviate from the latest MP3EI since it will be continually edited and updated. However, currently available information is given to provide wider understanding of expected development within Sumatra EC.

2.1 Delineation of the Sumatra EC

Sumatra island is divided into ten (10) provinces: Aceh, North Sumatra, Riau, Riau Island, West Sumatra, Jambi, Bengkulu, South Sumatra, Bangka Belitung Island and Lampung. For the MP3EI, the Sumatra EC consists of 11 economic centres: Banda Aceh, Medan, Pekanbaru, Jambi, Palembang, Tanjung Pinang, Pangkal Pinang, Padang, Bandar Lampung, Bengkulu and Serang.

There are 6 Potential Investment Focus Area (Potential KPI) and 13 Priority Investment Focus Areas (Priority KPI), including KSN Selat Sunda and Iron-Steel Industry in Cilegon (Banten, Java). Potential KPI Anambas is proposed by local government as well as Potential KPI Danau Toba, a National Tourism Area, is proposed by Ministry/Agencies.

Figure 2.1 Main Planned Activities (Coordinating Ministry for Economic Affairs, 2013)

5

2.2 MP3EI Planning for EC

The development of economic corridors in Indonesia is based on the potentials and advantages inherent in each region throughout Indonesia. As a country consisting of thousands islands and located between two continents and two oceans, Indonesia archipelago has a unique combination of economic potentials. Specific major islands or regions having its own strategic future-role in achieving Indonesia’s 2025 vision.

Sumatra Economic Corridor has the theme Production and Processing Center of the Earth and the Nation's Energy. In general, the Sumatra Economic Corridor thrives in economic and social fields with the main economic activities such as oil palm, rubber and coal. Moreover, Sumatra is expected to be the "Gateway to the national economy markets of Europe, Africa, South Asia, East Asia, and Australia".

2.2.1 Main MP3EI Planned Economic Activities The location/node of economic activities is indicated in specific colours in Figure 2.1.

Main MP3EI planned economic activities that developed in 19 KPIs in the Sumatra EC are palm oil plantation, rubber, coal, shipyard, steel and Sunda Strait development.

The investment value for economic corridor will be IDR458.198 billion in real sector and IDR838.574 billion in infrastructure including Sunda Strait Bridge. At the ground-breaking stage (2013-2014), there will be IDR115.639 billion invested in this corridor. The biggest value in real sector will be invested in coal mining (IDR93.7 billion), tourism infrastructure (IDR75.9 billion), and iron-steel (IDR58.5 billion).

Palm Oil In Sumatra, the main economic activities of the Palm huge economic contribution, where 65 percent of the land in the Indonesian palm oil producer located in Sumatra. This activity is also wide open jobs. Approximately 38 percent of palm oil land owned by small farmers

Rubber Indonesia is the second largest producer for natural rubber in the world, supplied about 28 percent of world rubber production in 2011. Sumatra Economic Corridor contributes about 63 percent of the nation’s rubber production. Significant demand for natural and synthetic rubber in the future will likely happen due to fast growing of the automotive industry.

Coal Indonesia, a rich country for coal and thermal coal, provides 26% of the world coal exports. Approximately 52.4 billion tons of coal resources are in Sumatra, and about 90% are located in South Sumatra. Annual Indonesia coal production reaches 246.68 million tons/year.

Shipping Demand for shipbuilding, ship-making industry or ship repair, is determined by vessels demand and shipping traffic intensity in Indonesia. The number of shipyard with capacity above 10,000 DWT/180.000GT is approximately only 10% from the number of shipyards with capacity less than 500DWT/20,000GT. This condition indicates that Indonesian large capacity shipyards building industry needs more investment. Besides, second-hand ships become the preference for shipping companies due to ship’s large tonnage capacity and shipyard industries in Indonesia is not yet capable to handle offshore oil drilling equipments transportation.

6 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Overview of MP3EI Planning in the Sumatra EC

Iron – Steel Steel in Banten is also expected to be one of the main activities to support Sumatra Economic Corridor growth, especially after Sunda Strait bridge construction. In terms of market potential, steel industry has great economic opportunity considering Indonesia's per capita steel consumption is only 29 kg/kapita. These figures are relatively low compared to 170 kg/capita as world average consumption, although demand from the steel industry climbs quite good, mainly due to demand from automotive, electronic, and infrastructure.

National Strategic Area Sunda Strait / KSN Selat Sunda Sunda Strait as a national strategic area will be developed with the construction of a bridge connecting the island of Java and Sumatra. The bridge supports the development of the four clusters in the area of Banten province, includes the Cilegon, Bojonegara, Maja as residential area, and Tanjung Lesung as center for tourism. In addition, 3 regional clusters from Lampung will be also developed, including Bandar Lampung, Metro, and Pringsewu (Ministry of Public Works, 2012).

2.2.2 Main MP3EI Policies and Regulations A brief summary of proposed policies and regulations for main economic activities for Sumatra EC as stipulated by MP3EI. A number of planned regulations is aimed to enhance the implementation of MP3EI projects development while several others are dedicated to control and manage the economic activities, also to maintain and improve the supporting infrastructure for Economi Corridors plan implementation. The regulation policies and regulations in MP3EI are prepared based on the economic activities. The detail planned policy/regulation and infrastructure can be seen in Appendix A.

2.2.3 Main Planned MP3EI Infrastructure To support these main economic activities, the main infrastructure planned are Kualanamu Airport, Kualatanjung Port, high grade highway (toll roads), Sunda Strait suspension bridge, steam power plant (coal power) and telecommunication coverage. The biggest value in infrastructure will be invested for road (IDR274.96billion), energy (IDR158.16billion), and railway (IDR81,74billion). The main planned infrastructures are illustrated in figure below.

7

Figure 2.2 Main Planned Infrastructure (Coordinating Ministry for Economic Affairs, 2013)

2.3 Overview of Autonomous Provincial Planning

The MP3EI planned development projects for the Sumatra EC are to be implemented for all province in Sumatra but mostly it will focused in North Sumatra, Riau, South Sumatra and Lampung provinces and small part in Banten. Therefore, it also imperative to acquire comprehensive information regarding the autonomous provincial plans, including the RPJPD (Long-Term Regional Development Plans), RPJMD (Medium-Term Regional Development Plans) and RTRWP (Provincial Spatial Plans). Considering the key components and priorities of these provincial plans in the EC in further SEA analyses will help to identify potential conflict or disharmony between the MP3EI planning within the corridor. To understand profoundly about autonomous provincial planning status, the key information on the provincial planning relevant to the MP3EI planned development would be a consideration.

Provincial Planning of Aceh The RPJMD’s Aceh 2012-2017 is focused on following 10 programs: good governance, implementation sharia law, food security, poverty reduction, infrastructure, education, health, optimization of natural resources, peace sustainability, environmental and natural hazards.

The RTRWP of Aceh is in development process and waits for an approval from Ministry of Forestry regarding the forest cover changes. The RTRWP of Aceh consists of plan of development areas and plan of protected areas.

8 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Overview of MP3EI Planning in the Sumatra EC

Provincial Planning of North Sumatra (Sumut) The RPJPD’s North Sumatra 2005-2025 has been legalized through The Provincial Regulation No. 12/2008. The existing 2008-2013 RPJMD of North Sumatra will expire in 2013 and new RPJMD North Sumatra 2013-2017 is currently being prepared, since the new governor was elected at the beginning of 2013, the PRJMD shall be finalized by the end of 2013.

North Sumatra’s RTRWP 2013-2033 is also in preparation process and waits for an approval from the Ministry of Forestry regarding the forest cover changes. From the documents received from Bappeda it is obvious that the spatial plan of North Sumatra contains plan for development areas and plan for protected areas. Plans for development areas consist of infrastructure development, more specifically toll road as a part of the national policy in eastern part of the North Sumatra, new palm oil plantations also in the eastern part of the province and industrial estates around capitals of kabupaten/kotas. The protected areas´ plan consists of protected forest, mangroves, nature reserves, and wildlife conservation area.

Provincial Planning of Riau The RPJPD’s Riau 2005-2025 has been legalized through the Provincial Regulation No. 9/2009. The existing RPJMD of Riau 2009-2013 will expire in 2013. There will be a governor election at the end of October 2013 and thus the government will be obliged to develop a new RPJMD 2013-2017 afterward.

The RTRWP of Riau is in developing process and waits for an approval from Ministry of Forestry regarding the forest cover changes. The RTRWP of Riau consists of plan of development areas and plan of protected areas.

Provincial Planning of Riau Islands The RPJMD of Riau Islands is valid for the period 2010-2015. The RPJMD consists of 5 year development plan with budget allocation focused on economic equality, social welfare, basic education, health, reduce un-employment, gender mainstreaming, agriculture, marine and fisheries and infrastructure.

The RTRWP of Riau Islands is in developing process and waits for an approval from Ministry of Forestry regarding the forest cover changes. The RTRWP of Riau Islands will consist of plan of development areas and plan of protected areas.

Provincial Planning of Bengkulu The RPJPD’s Bengkulu 2005-2025 is legislated with Provincial Government Regulation No. 4/2008. The current RPJMD of Bengkulu applied for the timeframe of 2011-2015. The planning document consists of 5 years development plan with budget allocation for infrastructure, poverty reduction, social welfare, sustainable natural resources management and good governance.

The RTRWP (Provincial Spatial Plan) of Bengkulu was legislated with Provincial Government Regulation No. 2/2012. It covers the spatial planning objectives and programs for cultivation area and protected area. The spatial plan for cultivation area include the planned development of toll road, power plant (coal power, hydropower, geothermal), production forest, agriculture, fisheries, mining and industrial estate, while the protected area consists of protected forest, upstream protected area, nature conservation, geology protected area and disaster vulnerability area.

9

Provincial Planning of West Sumatra The current RPJMD of West Sumatra applied for the timeframe of 2010-2015 and was legislated with Provincial Government Regulation No. 5/2011. The prioritised programs of the planning document include education, health care, road and bridge infrastructure, housing, transportation, environment and natural hazard mitigation, food security, energy and mineral resources, and marine and fisheries.

The RTRWP of West Sumatra 2012-2032 was legislated with Provincial Government Regulation No. 13/2012. It covers the spatial planning objectives and programs for cultivation area and protected area. The spatial plan for cultivation area include the planned development of road and toll road infrastructure, rail road, inter island transportation, production forest, agriculture, fisheries, mining (coal, oil and gas) and tourism infrastructure. The spatial plan for protected area includes the planned development of protected forest, nature conservation, cultural sites and hazards vulnerability.

Provincial Planning of Jambi Jambi Long Term Development Plan applied for 20 years timeframe from 2005-2025, although this document provided in Jambi government’s website, the legal status information is currently unavailable. The current RPJMD of Jambi will be applied from 2010-2015 and was legislated with Provincial Government Regulation No. 1/2011. The priorities of Jambi’s 5 year development plan include public infrastructure, education, health, religion and culture, agriculture, sustainable natural resource management and Good Governance.

The Spatial Plan (RTRWP) of Jambi province is currently under preparation and waiting for technical approval from Ministry of Forestry regarding the forest cover changes. The RTRWP of Jambi will cover the planning objectives for cultivation area and protected area. In 2010, an SEA - facilitated by ESP2 and MoHA - was undertaken and applied for Jambi’s Provincial Spatial Plan as part of the spatial plan preparation

Provincial Planning of South Sumatra The Long Term Development Plan of South Sumatra Province (RPJPD 2005-2025) was legislated with Provincial Government Regulation No. 17/2007. The current Midterm Development Plan for 2008-2013 has just finished and the new proposed RPJMD for 2013-2017 is undergoing preparation process and estimated to be finalised by the end of 2013.

The RTRWP of South Sumatra is currently undergoing preparation process and waiting for technical approval from Ministry of Forestry regarding the forest cover changes. The RTRWP of South Sumatra will cover the planning objectives for cultivation area and protected area.

Provincial Planning of Bangka Belitung The Provincial Long Term Development Plan of Bangka Belitung (RPJPD 2005-2025) was legislated with Provincial Government Regulation No. 13/2007. The current RPJMD of Bangka Belitung will be applied for 5 years from 2012-2017. The prioritised sector of 5 year development plan in Bangka Belitung include peace, education, good governance, infrastructure, job creation, environment, legislation, and small and medium enterprise. An SEA for local development plans was applied as part of the preparation of the RPJMD with the assistance and facilitation from ESP2-DANIDA and MoHA.

The RTRWP of Bangka Belitung is currently undergoing finalisation process and still waiting for technical approval from Ministry of Forestry regarding the forest cover changes. The RTRWP of Bangka Belitung will cover the spatial planning objectives for cultivation area and protected area

Provincial Planning of Lampung The RPJPD of Lampung Province for 2005-2025 was legislated with Provincial Government Regulation No. 6/2007. The current RPJMD is to be applied for 5 years starting from 2010 to 2014. The priorities of 5 year development plan in Lampung include a strengthened regional

10 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Overview of MP3EI Planning in the Sumatra EC

economic, infrastructure, education, health, social welfare, sciences, religion and culture, natural resource management, law enforcement, and good governance.

The Provincial Spatial Plan of Lampung was legislated with Provincial Government Regulation No. 1/2010. The spatial plan for cultivation & industrial area include the planned development of road and Sumatra toll road network in east coast, rail road network, power plant (coal, hydro power, geothermal), agriculture, plantation, mining, industry and housing. The protected area spatial plan covers the protected forest, mangrove, nature conservation area and natural hazard vulnerability area.

Provincial Planning of Banten The Long Term Development Plan of Banten Province (RPJPD 2005-2025) was legislated with Provincial Government Regulation No. 1/2010. The current RPJMD of Banten Province is to be applied for 5 years starting from 2012-2017 and was legislated with Provincial Government Regulation No. 4/2012. The priorities of 5 year development plan in Banten include food security, poverty alleviation, reduce unemployment, improving people welfare, improving human resource capacity, economic equality and growth, infrastructure, environment and natural resource management, good governance and development of strategic zones.

The Provincial Spatial Plan of Banten province outlines the spatial planning for 20 years timeframe (RTRWP 2010-2030) was legislated with Provincial Government Regulation No. 2/2011. The spatial plan for cultivation and industrial area in the RTRWP consists of the planned development of road and Jawa toll road network, airport, sea port, rail road network, power plant (coal, nuclear, geothermal), agriculture, plantation, mining, industry and housing. Meanwhile, the spatial plan for protected area consists of planned development of protected forest, mangrove, nature conservation area, natural hazard vulnerability area, cultural heritage site,

2.4 Overview of Major On-going or ‘To-be-implemented’ Projects

Of the 10 provinces in Sumatra, only 6 provinces is included in Sumatra Economic Corridor. Within that 6 provinces, only West Sumatra and Lampung have the legalized spatial plan (RTRWP), while others needs an approval from Ministry of Forestry for forest covers changes.

Most of the projects which are on-going or were prioritised for development are found in the Sumatra EC. There is no data provided about which projects are already initiated.

From initial review of the Spatial Plans of Lampung and West Sumatra, the major to-be- implemented projects are only available in Lampung, while the West Sumatra the regional projects are limited. The major projects in Lampung are:

• Traffic reduction programme on Lintas Tengah (center highway) and Lintas Timur (east highway) by developing toll road network from Bakauheni – Babatan – Tegineneng Terbanggi Besar as part of Sumatra Toll Roads Network and develop toll road connection to Terbanggi besar – Menggala – Simpang Pematang;

• Development of road network connecting Lampung – Banten through Lampung-Banten Bridge

• Military Airfield Astra Ksetra in Kabupaten Tulang Bawang as fighter training homebase Indonesia Airforce

• Military Airfield Gatot Subroto in Kabupaten Way Kanan as fighter training homebase Indonesia Airforce

• Special Airport to support plantation activities in Kabupaten Lampung Tengah, Lampung, Timur dan, Tulang Bawang

11

• Special Airport Blimbing in Kabupaten Lampung Barat to support tourism sector

• Airport Pekon Seray in Kabupaten Lampung Barat for navigation purposes and natural disaster readiness infrastructure.

• Hydropower plant in Way Besai and Batu Tegi

• Steampower plant in Kabupaten Lampung Selatan, Kabupaten Tulang Bawang, Kabupaten Tanggamus, Kabupaten Lampung Tengah, dan Kabupaten Way Kanan;

• Geothermal power plant in Kabupaten Tanggamus, Kabupaten Lampung Tengah and Kabupaten Lampung Selatan

• Diesel power plant in Pulau Sebesi, Tarahan, Teluk Betung, Metro, Tegineneng, Teluk Padang, Bengkunat, Krui, Pugung Tampak, Simpang Pematang, and Wiralaga

• Strategic development area Bakaheuni as a gate of Selat Sunda Bridge in Sumatra

From the initial review of MP3EI in Sumatra EC, the major projects to be implemented as follow:

• Gold mining in South Tapanuli • Zinc and lead mining and processing plant in forest area in Dairi • Reclamation for fertilizer plant and port in Tanjung Carat • Coal mining in forest area in Banyuasin and Muara Enim • KSN Sunda Strait (suspension bridge and surrounding area) • Sumatra toll road from Bakaheuni – Medan

12 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Overview of Baseline Features in the Sumatra EC

3 Overview of Baseline Features in the Sumatra EC

This section outlines the strategic baseline features in Sumatra EC structured into the following categories: Environmental Quality (includes Water, Air and Climate, Land and Soil); Ecosystem (Biodiversity, Forests, Coastal degradation); Socio-Economic Aspects (Human health, Livelihood, Industry and mining, Energy and waste) and Environmental Management. This introductory analysis based on literature and elementary statistical data interpretation, focuses on the strategic baseline categories and is aimed to assist the process of identification of key issues relevant for the EC SEA. Further analytical activities, including GIS mapping, are currently being undertaken within the scoping stage.

3.1 Environmental Quality

3.1.1 Water The Sumatra EC is characterized by several major fresh water bodies, especially its rivers and lakes, and a significant groundwater basin.

Presidential Instruction No. 1 Year 2009 on Accelerating the Implementation of Priority National Development 2010, commissioned the Ministry of Environment to undertake the monitoring of water quality in 13 national watersheds. Four of these priority watersheds are located in the Sumatra EC.

Table 3.1 summarizes results of water quality monitoring from these priority watersheds, represented by some parameters such as BOD, COD, DO, and others. These results indicate that water quality in all four watersheds did not meet the targets established by the MoE for these watersheds.

Table 3.1 Water quality in priority watershed in Sumatra

Main Catchment River No Name of River Area Location Status Target Lenght (km2) (km) Jambi (80.93%) Lightly - Highly polluted Clean - Lightly polluted 1 Batanghari 44,492.50 775 West Sumatra Class II-IV Class I-III (19.7%) Riau (90.19%) Lightly - Highly polluted Clean - Lightly polluted 2 Kampar 25,708.70 450 West Sumatra Class II-IV Class I-III (9,81%) Bengkulu (4.27%) Lightly - Highly polluted Clean - Lightly polluted 3 Musi 55,029.80 750 South Sumatra Class II-IV Class I-III (95.73%)

Highly polluted Clean - Lightly polluted 4 Siak 12,180.80 345 Riau(100%) Class II-IV Class I-III

Source : PPE Sumatra, 2013

Water Pollution In 2012, the MoE monitored water quality in106 locations across Sumatra. Of these 106 locations, 85 (80%) were heavily polluted, 20 (18%) medium polluted and 1 (1%) regarded as slightly polluted. The heavily polluted samples were located in Sungai Krueng in Aceh, Sungai Deli in North Sumatra and Way Sekampung in Lampung.

13

The pressure on water quality in Sumatra is reportedly caused by industrial waste, domestic waste, agricultural waste, livestock waste, and mining activities. The main drivers of the water quality is dependent on location. For example, illegal mining has a serious impact on water quality in Bangka Belitung (SLHD Bangka Belitung, 2012) while agroindustry in Lampung (SLHD Lampung Province, 2012), oil palm processing industry in Riau (SLHD Riau Province, 2011), domestic waste in Aceh and Jambi (PPE Sumatra, 2013) are the main drivers in those provinces.

Coastal waters The quality of seawater is strongly influenced by the physical conditions (suspended substances and temperature) and toxic chemicals substance (Hg, Cd, Pb, Cu) in the sea water. Laboratory results for sea water quality based on Ministry of Environmental Decree No. 51/2004 indicates that the sea water mostly has not been contaminated (SLHD Riau Province, 2012). However, in terms of pollution level, the highest polluted parameters are turbidity and total ammonia (SLHD West Sumatra, 2012). Potential sea water pollution sources in Sumatra are domestic waste from coastal settlement as well as port industrial activities such as shipping or shipyard construction.

Groundwater The mutual support between surface water and groundwater for efficient and sustainable use is described in Ulitization Guidelines of Water Resources Regulation, 06/PRT/M/2011 by Ministry of Public Works. Although prioritizing surface water for activities is stated, groundwater is the main raw water resources to meet the water demand in Sumatra. Groundwater overexploitation is mentioned in several secondary literature, such as Lampung and Riau Islands Provincial Environment Status. Although there is no tabular data for whole province is provided, some regecies in West Sumatra have records for drinking water sources. In Sumatra, the projection of drinking water demand increasingly by 100% in 15 years, from 66.000 m3 in 2010 into 113000 m3 in 2025. While the need of water in agricultural sectors estimated 110.200 m3/year.

Based on the Sumatra water balance projection study by Ministry of Public Works Water Research Centre, PUSAIR, water crisis will not occur qualitatively noticing the island’s 16.125 m3/s surplus water availability in 2030. This huge potential number is not necessarily ensure the availability of actual water balance, in fact of land’s ability to store water from year to year continues to decrease due to forest loss. (PPE, 2013).

3.1.2 Air and Climate

Urban Air Pollution Air quality in Indonesian cities is influenced by population density, traffic, and economic activities (e.g. shipping and industries). Some Provincial Environmental Status in the Sumatra Economic Corridor stated that air quality in rural areas is generally above the standard, but densely populated Sumatran cities such as Medan, Palembang, and Pekanbaru are facing problems with decreasing air quality. World Health Organization (WHO) in 2011 metioned that Medan was ranked as the most polluted Indonesian city, with 111 mg/m3 PM10 compared to the global average particle pollution for Indonesian cities of approximately 71 mg/m3, and the recommended quality standard for this parameter is 20 mg/m3 (Daily Press 2011). Factors such as widespread use of low quality transportation fuels, rapid industrialisation, and power plants are cited as contributors to the poor air quality by the WHO.

GHG Emissions The main sources of GHG emissions are land sectors (plantation, agriculture and forestry), energy sector (energy, transportation and industry), and waste management. On the Business as Usual scenario (BaU), it was predicted 76% increase of GHG emission in 2020 equivalent to 33,6 million ton CO2eq (DNPI, 2011).

Forest fires are a large contributor to air emissions in local/regional and international contexts. It is estimated that 85% of all greenhouse gases from Indonesia are produced by land use

14 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Overview of Baseline Features in the Sumatra EC

changes, for purposes such as plantation or agriculture. (Partohardjono et. al. 2011). Land and forest fires are generally caused by human activities in land clearing to be used for plantations in Sumatra (SLHD Riau Province). The effects are worsened by the effects of dry El Nino conditions. El Niño events, which displace warm water into the eastern Pacific Ocean and produce cool waters near Indonesia, exert their effect by suppressing the monsoon rains (Jeff Tollefson, 2012).

Burning of forests, in particular peatlands, produces large quantities of air emissions such as particulate matter, carbon dioxide (peat forests are huge carbon sinks) (Heil et. al. 2006). Previous haze incidents have led to impacts at socio-economic receptors, e.g. transportation delays, closure of schools, and health issues in the Sumatra EC as well as in neighbouring countries. In the summer of 2013, forest fires in Sumatra led to hazardous levels of PM2.5 in peninsula Malaysia, and Singapore, with levels reaching over 700 PSI in Johor Bahru, Malaysia (Wee 2013). These fires were linked to fires in Sumatra, in particular the central and northern parts of the island. Other significant haze incidents leading to drastically reduced air quality in neighbouring nations occurred in 1997-1998, 2002, 2004 and 2006 in neighbouring countries which include Thailand, Philippines and Brunei (Field et al 2009; Ketterings 1999).

Rainfall Sumatra climate characterized by high rainfall evenly distributed throughout the year, there is almost no distinction between the months of wet and dry months. However, the rainfall varies by location. The western area of Sumatra is generally wetter, with up to 6,000 mm annual rainfall, while the driy area in the central fault valley will receive as much as 1,500 mm annual rainfall (PPE, 2013).

3.1.3 Land and Soil Sumatra is one of Indonesia's largest island with an area of 480,793.28 km2, length of 1,800 km and the widest span of 400 km (PPE Sumatra, 2013). According to 2011 Indonesia Land Cover map released by Ministry of Forestry, 42% of Sumatra covered by agriculture, mostly palm oil plantation, rubber and rice field. Dry forest covers 21% of island, followed by bush as the third largest land use.

Land use in the Sumatra EC is undergoing a rapid a rapid rate of change largely due to coversion of forest cover into agricultural and mining areas. Data from the Land and Agro- climate Research Center, Indonesian Agency for Agricultural Research and Development (2005) showed that the total area of degraded land in Sumatra reached 4.8 million hectares. Related to condition mentioned above, utilization of critical area which is quite extensive as less productive agricultural areas could be a potential scenario for adding value to MP3EI results (Koh , PL and Ghazoul, J: 2010).

Peatland The area of peatlands in Indonesia is estimated at 20.6 million ha, representing about 10.8 percent of Indonesia's land area. Approximately 7.2 million ha or 35% of peatland area in Indonesia is located within the Sumatra. Most peatlands are still covered by forest and a habitat for various species of fauna and flora . More importantly, peatlands store large amounts of carbon, as well as water. (Wetlands, 2009).

On the island of Sumatra, the spread of peatlands generally found in the lowlands along the eastern coast, which is in the province of Riau, South Sumatra, Jambi, North Sumatra and Lampung (Wahyunto, et.al, 2005).

Peatlands damage in Sumatra is generally caused by land conversion to plantations and forest fires. It was recorded that oil palm plantations have destroyed 70 percent peat in three districts namely West Tanjung Jabung, East Tanjung Jabung, and Muaro Jambi (PPE Sumatra, 2013).

15

Peatland conversion will disrupt all functions of the peatland ecosystem. Drainage of peatlands causes irreversible lowering of the surface (subsidence) as a consequence of peat shrinkage and biological oxidation (later leads to loss of carbon stock) (Hooijer et al, 2012).

The rate of conversion of peat tends to increase rapidly, while for non-peat the rate is relatively slower increase (WWF, 2008).

Karst Karts area in Sumatra stretching out from Aceh to Lampung. Sumatra plays one of the most essential role for karst science development, especially geology, biology, hydrology, and archeology (PPE Sumatra, 2013). Important karst in Sumatra is noted to be located in the following areas:

1. Padang consists of several karst areas, such as 50-60 km2 karst between Tanjungsawah and Desa Kasih and 10-15 km2 karst area in Padangpanjang as a continuation of Batur Karst.

2. Payakumbuh has 300-400 km2 karst area with height variations between 500-600 m .

3. Sinamar - Kvantan - Takung riverine has 200 km2 karst area.

The most common utilisation of karst in the area is as the raw material for cement industries such as in the province of South Sumatra, West Sumatra and Aceh.

3.2 Ecosystems

3.2.1 Biodiversity The Sumatra EC is part of Indonesia’s most bio-diverse regions containing the greatest number of known mammals (210 species), 582 species of birds (14 of which are endemic), and 300 amphibians and reptile species (23% which are endemic to Sumatra) (Critical Ecosystem Partnership Fund, 2001). Sumatra holds a biodiversity hotspot known as ‘Sundaland,’ connecting Asia and Australia (Critical Ecosystem Partnership Fund 2005).

Based on International Union for Conservation of Nature criteria, Sumatra has four critically endangered species, the Sumatran tiger (Panthera tigris Sumatrae), Sumatran elephant (Elephas maximus sumatrensis), Sumatran rhino (Dicerorhinus sumatrensis), and the Sumatran orangutan (Pongo abelii)(PPE Sumatra, 2013).

Species such as the Sumatran tigers, pygmy elephants, rhinos, sun bears and orangutans live in the remaining forest habitats of Sumatra. It is estimated that approximately 400 tigers remain in Sumatra and 210 elephants (Greenpeace 2013).

In terms of flora species, the Sumatra EC provides important habitat for orchids (Orchidaceae), semar bags (Nepenthes), Meranti (Dipterocarpaceae), carrion flower (Amorphophallus titanum), and patma giant (Rafflesia arnoldii) (PPE Sumatra, 2013).

The potential threats to Sumatran biodiversity are illegal logging, forest encroachment resulting from construction of new access roads, mining activities and land and forest fires which are mostly related to palm oil plantations (Critical Ecosystem Partnership Fund, 2001). Additional threats result from conflict between humans and wildlife. A study by WWF (2011), showed a rapid decline in the habitat of tigers elephant and orang-utan over the last 25 years animals resulting in a rapid decline in abundance. For example the elephant population in Sumatra declined by 87% in the 25 years to 2011.

16 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Overview of Baseline Features in the Sumatra EC

3.2.2 Forests Based on the Ministry of Environment’s Environmental Status report, approximately 37% of Sumatra was covered by forest in 2007 (MOE, 2008). Sumatran forests consist of 22 types of vegetation, some of them are mossy forests, mountain forests, ground limestone mountain forests, wet lowland forests, peat swamp forests, and others (Whitten, 1984). Ministry of Forestry classifies forests based on its function, such as production forests (permanent production forest and limited production), protected forests, and conservation forest (nature reserves and conservation areas).

Forest Cover Loss Sumatra has very rapid rate of deforestation, more than two-thirds of the forest, especially in the lowlands over the last 25 years. Analysis of natural forest cover 1985 -2008 indicates that deforestation in Sumatra reached a rate of 500,000 hectares per year (PPE Sumatra, 2013).

Initial removal of forestlands has occurred around coastal areas and around river areas (Partohardjono et al 2005). The provinces of North Sumatra, Aceh, West Sumatra, Bengkulu and Lampung were most affected by this initial removal.

Extensive untouched forest exists within Aceh, in part because of the area’s past conflicts, natural disasters, and in part because of the hilly topography, however, there have been discussions on converting protected areas to production forests for economic gain (Schonhardt 2013).

The amount of deforestation in the last three years occurs because of the expansion of mining area, oil palm plantations, infrastructure development, spatial change, and forest fires. Based on deforestation maps issued by the Ministry of Forestry, the rate of deforestation between 2006- 2009 period reached to 314,298 ha/year and amounted 154,254 ha/year between 2009-2011. These data shows that the rate of deforestation in Sumatra has decreased.

Deforestation is a threat that even occurs in protected forest areas, for example certain companies still have permits to operate mines in protected areas (MOE 2007; MOE 2008). Mining and other logging permits are offered by province, which may conflict with nationally designated protected areas.

For example, Sumatran tiger habitat in protected areas such as Tesso Nilo National Park has modified via encroachment for illegal palm oil or paper production (Greenpeace 2013). Despite the protection offered by the law, enforcement and upkeep of these conservation areas is poor (Greenpeace 2013). In 2011, it is estimated that 10% of all remaining forested tiger habitat in the Sumatra EC (approximately 1 million hectares) remained at risk of clearance in pulp and oil palm concessions (Greenpeace 2013).

3.2.3 Coastal Areas

Coastal Habitat Marine areas surrounding Sumatra are characterised by extensive areas of seagrass, mangrove, and coral reef habitats (Tony Whitten, 1997). Along the eastern coast of Sumatra, and the coasts along the plains in western Sumatra mangroves are the predominant habitat type as a result of the significant sediment loads coming out of Sumatra’s major river systems (Tony Whitten, 1997).

Fringing reefs and seagrass beds are found around Batam and within the Riau Archipelago as well as the southern Belitung Island. Corals in the north, around Aceh and surrounding islands are considered well-developed fringing reefs.

Mangrove forests in Sumatra have been extensively degraded in eastern Sumatra, converted into aquaculture and agricultural areas such as oil palm (Partohardjono et al 2011). Similarly,

17

seagrass ecosystems area also threatened by coastal exploitation using potassium cyanide and disposal of industrial and domestic waste. The seagrass ecosystem is highly dependent on human activities on land, that are usually influenced by the local culture (SLHD Riau Islands, 2012).

Significant problems in coastal areas in Sumatra exist as a result of coastal ecosystem degradation (PPE Sumatra, 2013).

3.3 Social and Economic Aspects

3.3.1 Human Health

Life Expectancy The average life expectancy in Sumatra is similar to the national average which is 70.76 years old, although some provinces indicate smaller number (CIA World Factbook, 2011). The provinces of Aceh, Bangka Belitung, and Jambi had life expectancy rates lower than the average.

Communicable Diseases The prevalence of Pulmonary TB in Sumatra is high especially in North Sumatra, while almost all of the remaining provinces had prevalence rates above the national average (Ministry of Health 2011).

The number of reported cases for other communicable diseases is detailed in Table 3.2.

Table 3.2 Health cases in Sumatra

Number of Cases, 2010

Province Dengue Leprosy Leprosy Tetanus HIV Malaria Filariasis Diphtheria Pertussis Fever PB MB Neonatorum

Aceh 1.573 31 31913 121 359 2.359 0 6 693 North Sumatra 4.697 1347 1258 37 163 141 0 0 476 West Sumatra 2.813 212 51840 13 65 274 0 1 964 Riau 1.563 337 9161 44 151 532 0 0 798 Jambi 254 86 40191 4 59 257 0 4 510 South Sumatra 1.854 226 114272 20 200 210 5 7 872 Bengkulu 260 55 59016 2 9 94 0 1 219 Lampung 1.862 93 27947 24 87 74 1 12 1.447 Bangka Belitung 349 85 63978 6 27 207 0 2 72 Riau Islands 1.828 743 17151 3 7 31 0 0 533 Source : Ministry of Health, 2011

Malaria in the Sumatra EC is widespread predominantly across the east coast area. The highest rates of malaria cases are in Bangka Belitung with rate of 99,1 per mil and Jambi with rate of 52,2 per mil, higher than national average of 22,9 per mil.

According to the data of HIV/AIDS cases in 2010 released by the Directorate General of Disease Control and Environmental Health - Ministry of Health, the greatest absolute number of HIV/AIDS patients in Sumatra are mostly in North Sumatra Province (507 cases), followed by Riau (477 cases) and West Sumatra (410 cases). However, based on the cases rate (per 100,000 population), the highest cases rate is in Riau Islands (24.96) and then Bangka Belitung (11.65). Both provinces are above the national cases rate (10.46) while other provinces below the national case rate.

18 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Overview of Baseline Features in the Sumatra EC

The national index of health service is 80,7%. The availability of health services in Sumatra province varies from 62% in Bengkulu to 90,5 % population in Riau Islands. From 10 provinces in Sumatra, the province with health services index higher than national index are Aceh, West Sumatra, Jambi and Riau Islands.

The national index of access to water is 67,5% of households, while in Sumatra access to water is vary from 46,1% to 73,9% of households. Riau Islands is the only province has exceeded the national index, while others are below the national index.1

3.3.2 Livelihood

Livelihood In general the major livelihoods in the Sumatra Economic Corridor include employment in the oil palm, rubber and coal industries. Agriculture and fisheries classification is the main source of livelihoods for local residents, followed by Community Services, then Tourism and Product Sales.

Significant income differences in the Sumatra EC exist, both between urban and rural areas and between provinces in the corridor. This regional disparity can be seen from the provincial distribution of GRDP which indicates an uneven distribution of poverty within Sumatra with the poorest areas found in the north and the south of the island, as well as along the south-east coast of Sumatra bordering Bengkulu. On the other hand, the percentage of the population living below the poverty line is less around urban areas such as Medan, Pandang, Pekanbaru, and Palembang (World Food Program 2013).

Natural Disaster Preparedness The Sumatra Fault which stretches 1650 kilometers from Aceh to Lampung along the Bukit Barisan, and continuous along 300 km south of Java is one of the most active fault in Indonesia (Rahmadi, E. et al. 2006). Sumatra fault and active volcanoes are inter-related, so Sumatra is not only prone to earthquake, but also the other disasters, such as volcanic eruptions and tsunamis. Other catastrophic disasters in Sumatra are landslide caused by mining activities and flooding due to aggresive illegal logging as well as disposal domestic waste in river.

The Tsunami disaster that occurred on 26 December 2004 in Aceh province, caused significant number of deaths and significantly impacted on livelihoods. The impact of the tsunami not only in coastal areas but also for all economic activities.

3.3.3 Industry and Mining A variety of industries are found in the Sumatra EC, such as paper processing, mining (e.g. bauxite and tin), oil extraction and production, and palm oil processing facilities. The forests of the EC are the main source of pulp for paper industries, for example, Asia-Pacific Resources International Ltd and Asia Pulp and Paper (APP). APP has been criticised by a wide range of NGOs including Greenpeace on rainforest exploitation (Greenpeace 2013).

Development of industral areas in the EC has reduced unemployment and poverty in the Sumatra EC, especially in Jambi which has the provincial highest year-on-year industrial growth rate in Sumatra. On the other hand, industrial growth also cause environment pressure due to the negative impact of the waste (liquid, solid, and hazardous materials).

In terms of mining, Sumatra is known as the "World's Tin Belt”, has land and sea areas containing abundant reserves of tin, especially Bangka Belitung islands which are the biggest tin

1 Riset Kesehatan Dasar 2010. Balitbang Kemenkes.

19

producer in the world. Other mining products are bauxite, iron ore, gold, oil and gas in northen and southern Sumatra, and coal in West Sumatra.

Mining sector contributes huge benefit in terms of economic aspect while at the same time polluting water and air and creating new costs for managing the surrounding environment. Rehabilitation and conservation of post-mining areas are rarely done by mining companies in Sumatra.

Comparatively other types of mining operations in Sumatra such as sand mining in Bengkulu, coal mining, and gold mining are smaller than the paper and palm oil and tin mining industries (Akbar 2006; Bland 2013). However tensions between the mining operator and the local communities arose after it was reported that the Martabe gold mining company would dispose of wastes into a river in Northern Sumatra (Bland 2013). In general a trend of disputes over handling of land, administration, resources and wastes are becoming more commonplace.

3.3.4 Energy and Waste Oil, natural gas, coal, geothermal, and biomass are the main source of energy in Southern Sumatra (KEDSAM 2010), but hydropower is the most common energy source in other provinces in the EC.

The overall waste generated in Sumatra in 2008 is provided in Table 3.3. Domestic waste is handled by dump truck to landfills in urban area and backfilled, whereas it is usually burnt and backfilled in rural area. Annual total waste for Sumatra is 8.7 Mton with approximately 0.48 kg domestic waste is generated by a person daily. According to PPE Sumatra, only 4.13 Mtons or less than half of the total waste is collected in 2008.

Table 3.3 Waste generation statistics in Sumatra

Total Waste Waste Gen Population Actual Non Population being waste collected Region Generation per person Million served Collection Waste Gen Mtons/yr kg/day Million Mtons/yr Mtons/yr

Sumatra 49,3 8,7 0,48 23,4 4,13 4,57

Source: PPE Sumatra, 2013

20 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Preliminary Overview of the Potential Key Issues for Sumatra EC

4 Preliminary Overview of the Potential Key Issues for Sumatra EC

The following section summarises the potential strategic issues related to the Sumatra EC. These issues are garnered via two different methods

• Examination of the baseline features / information at the pre-scoping stage described in Section 3

• Consultations with stakeholders through the pre-scoping workshop and follow-up meetings

It should be noted that over the course of the SEA process, other issues may become apparent, and vice versa some issues might be determined as irrelevant. Therefore further exploration and detailed analysis of the likely key strategic issues and topics will be undertaken throughout the SEA process.

Generally, it is apparent that all urban areas in Sumatra EC are especially sensitive to environmental quality issues due to improper disposal of wastes, rapid industrialisation and utilisation of cheap transportation fuels. The remaining habitats/conservation areas face land use pressures.

4.1 Deforestation / Degradation of Forests Functions

Uneven protection of the high and the lower elevation habitats is one such issue apparent from the baseline. Coupled with high rates of deforestation and regional/provincial permitting for conservation areas make it difficult to care for these remaining habitats and maintain them at a self-sufficient level. Deforestation in Sumatra mainly caused by expansion of mining area, oil palm plantation, infrastructure development, spatial change and forest fire. Illegal mining activities for oil, gold, tin and coal are present across the EC and there are further difficulties in reclamation of ex- mining sites.

Table 4.1 Potential forest issues

Specific topics, concerns and Information Needed for Locations Data Source problems Supporting the Issues

High rate of deforestation and Information regarding All provinces Forestry Agency forest degradation forest encroachment

Local forest use often authorised Information regarding inconsistently with national All provinces Forestry Agency forest encroachment forest law

Information regarding Conflict of forest delineation All provinces Forestry Agency forest delineation conflict

21

4.2 Human Health Risks

Strides have been made in terms of human health in Indonesia, especially in terms of maternal mortality rates. However, remaining issues related to human health are discussed below.

Table 4.2 Potential human health issues

Specific topics, Information Needed for Supporting concerns and Locations Data Source the Issues problems

TBC (North Number of TBC cases Sumatra)

Malaria in East Coast of Sumatra (Bangka Belitung, High incidence of Number of death/incidence of malaria Jambi, Riau Island, infectious and other major infectious diseases Health Service South Sumatra, diseases (TBC, prevalence and estimated geographic Agencies Lampung, Aceh) malaria, dengue) area Dengue in

metropolitan area: Medan, Padang, Number of dengue cases Palembang,

Bandar Lampung

Highest number of High incidence of cases reported in More recent HIV/AIDS data by Health Service emerging North Sumatra, province Agencies diseases (AIDS) Riau, and West Sumatra

Environmental conditions Air pollution regarding the In metropolitan negatively industry/transportation/bush/forest/peat Environmental area and east affecting human fire in plantation area in east coast of Agencies coast of Sumatra health – air Sumatra pollution, noise

Insufficient water supply In metropolitan Water resources and water infrastructure Public Works area in all province infrastructure (both in urban and rural areas)

Poor access to In all provinces in Health service index data, Availability Health Service health services in the mountainous of health services – no. of doctors, no. Agencies remote areas area of hospital beds / per capita

All province in west High number of coast (Aceh, North population living Sumatra, West Population living in disaster-prone BPBD, BPS in disaster-prone Sumatra, areas areas Bengkulu, Lampung)

22 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Preliminary Overview of the Potential Key Issues for Sumatra EC

Specific topics, Information Needed for Supporting concerns and Locations Data Source the Issues problems

High number of All provinces in population in a Estimated risks from sea level rise and coastal area, potential risk as a flooding risks from land subsidence in BPBD, BPS mountainous area result of climate the coastal areas and lowland area change

4.3 Livelihood opportunities

As noted in the baseline section, there are income discrepancies between urban and rural populations and conflicting interests between economic development (e.g. land use conversion) and conservation goals. The majority of Sumatran livelihoods are met through agriculture.

Table 4.3 Potential livelihood issues

Specific topics, concerns and Information Needed for Locations Data Source problems Supporting the Issues

Directorate Social conflict cases and General of High number of social conflicts All provinces, mining its spatial distribution due Kesatuan involving indigenous areas in North to industrial development Bangsa and communities – especially in Sumatra, West (mining, plantation)/land Politic – case of mining and palm oil Sumatra, Bangka acquisition of customary Ministry of plantations development Belitung territories/forests Home Affairs, HUMA

Aceh, North Sumatra, South High poverty rate Trend of poverty rate data BPS Sumatra, Bengkulu, Lampung

Lack of employment All provinces Job opportunity data BPS opportunities

Urbanisation data for all Rapid urbanisation Batam, Riau BPS provinces and urban area

23

4.4 Land and Soil Degradation

Land use conversion for large-scale plantations and mining operations are apparent in the review of the baseline data. Many of these developments have been focused on the lower-lying elevations. This land use conversion threatens a huge peatland area found in the lowlands along the eastern coast. Peatland conversion will disrupt all functions of the peatland ecosystem.

Table 4.4 Potential land and soil issues

Specific topics, Information Needed for concerns and Locations Data Source Supporting the Issues problems

All provinces, especially Increasing rate of North Sumatra, Riau, land conversion to Plantation area Agriculture Agency Jambi, South Sumatra, agriculture Lampung

High rate of land All provinces with mining Public Works, degradation by Mining concessions concession ESDM industry and mining

Increasing risk of Lowlands along the Agriculture/Plantation on land subsidence on Agriculture Agency eastern coast Peatlands area peatlands area

The potential damage to karst Environmental South Sumatra, West Cement industries ecosystems due to Agency, Industrial Sumatra, and Aceh location and production the activity of Agency limestone mining

4.5 Water and Air Pollution

The Sumatra EC has the most extensive groundwater basin in Indonesia. However these resources are threatened by industrial discharges, agricultural run-off, land-use conversion and mining activities, as well as improper disposal of household waste. Growing population and inadequate sewage system also introduces further stresses on potable water availability.

Conversion of lands e.g. mangrove habitats to shrimp ponds or slash-and burn fires and developments in proximity of protected catchments, also further threatens water resources in Sumatra.

Urban areas of Sumatra had some of the worst air quality in all of Indonesia and the world. Factors such as heavy use of poor quality transport fuels and industries are behind some of the poor urban air quality. In recent years, implementation of fuel standards (e.g. reduction in lead concentration) has slowly helped to reduce air pollutant levels, however.

Rural areas, however, are also not spared from these, as forest fires result in extremely poor air quality, especially during the dry seasons when farmers remove peatland for palm oil plantations via burning. As previously stated these forest fires are responsible for particulate matter and GHG emissions.

24 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Preliminary Overview of the Potential Key Issues for Sumatra EC

Table 4.5 Potential water and air quality issues

Specific topics, Information Needed for concerns and Locations Data Source Supporting the Issues problems

Heavy freshwater and Metropolitan area in all Water pollution status Environmental marine pollution provinces and distribution Agency

Insufficient waste Public Works, Water pollution, Waste water management In all provinces Environmental water plant systems Agency

The high Sedimentation rate in Environmental sedimentation in Eastern coast estuaries and port Agency estuaries and port

Air pollution Medan and all province threatening public Environmental with plantation and forest • Air quality data health and Agency changes ecosystems Strategy and Action Plan for National Urban Air Quality Improvement (NSAP) and Regional High GHG emissions All provinces with (LSAP) through Urban Environmental from plantation and plantation and forest Air Quality Improvement Agency deforestation changes Sector Development Program for five urban areas

Increasing GHG emissions from Metropolitan area in all Environmental energy, industry, provinces Agency transport and waste sector Energy demand Inefficient energy use Indonesia Power and growing energy Over demand of electricity (PLN) demand in all provinces.

In all capital city of Waste generation and Increasing production provinces faces this waste collection of municipal waste Environmental problem Agency

Waste treatment and Increasing production In industrial are around processing of industrial waste capital city in all provinces Environmental Agency

25

Specific topics, Information Needed for concerns and Locations Data Source Supporting the Issues problems

Controlled and uncontrolled landfill All provinces do not have Low capacities for sites, including Environmental sufficient waste waste management information on small Agency management. scale waste burning practices

4.6 Loss of Biodiversity

The high rate of deforestation and legal land conversion for agriculture, plantation and mining has increased the loss of biodiversity in the Sumatra EC. The remaining habitat is fragmented which leads to conflicts between humans and wild life.

Table 4.6 Potential biodiversity issues

Specific topics, concerns Information Needed for Data Locations and problems Supporting the Issues Source

Information regarding the invasive All provinces, species threats the existence of Forestry mostly in Riau, endemic species (location, causes) Agency, Habitat fragmentation Jambi and West BKSDA, Sumatra Distribution of protected species WWF (RIMBA) (endangered and critically endangered)

High number of threatened Cases of human-wildlife conflict Undefined BKSDA species (location, causes)

BKSDA, Forestry High vulnerability of Information on climate change research Undefined biodiversity to climate change effects on biodiversity and development agency

Ecosystems over-exploitation Poaching in Information regarding poaching, (including poaching, illegal other protected BKSDA, illegal trade of flora and fauna and trade of flora and fauna, areas of WWF human wildlife conflict human-wildlife conflict) Sumatra

26 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Preliminary Overview of the Potential Key Issues for Sumatra EC

4.7 Coastal Degradation

The last few years there has been a high damage of mangrove habitat along the coastline of eastern Sumatra that were gradually converted into fisheries and agricultural purposes. Coastal exploitation also thretens seagrass, coral reef, and causes coastal erosion that lead to the damage of coastal biodiversity.

Table 4.7 Potential coastal area issues

Information Needed Specific topics, concerns and Locations for Supporting the Data Source problems Issues High level of coastal habitat degradation Marine and Coast of Kep. Coral reefs and (including mangroves and coral reefs) Fishery Service Bangka mangrove condition resulting from coastal development, Agency, Belitung, South Degraded coastal water pollution (including sedimentation), Environmental Sumatra, Riau areas and mining (especially offshore) Agency Marine and West coast of Rate of coastal Fishery Service Sumatra and High level of coastal erosion abrasion and Agency, Bangka degradation Environmental Belitung Agency

4.8 Environmental Management

Environmental management is arranged by Law No. 32 Year 2009 about Environmental Protection and Management and Government Regulation No. 38 Year 2007 about Coordination between Government , Provincial Government and Regency Government. Badan Lingkungan Hidup Daerah (BLHD) is the only executor of coordinating the technical guidance for environmental management operational, functional, and technical implementation in Provincial level (South Sulawesi, 2011). In addition, Pusat Pengelolaan Ekoregion (PPE) also implement duties and functions of the Ministry of Environment. PPE Sumatra covers environmental management of Aceh, North Sumatra, West Sumatra, Riau, Riau Islands, Jambi, Bengkulu, South Sumatra, Bangka – Belitung Island, and Lampung.

Main programs stated from provincial environmental status by BLH are environmental rehabilitation, monitoring environmental documents, environmental law enforcement, increased public participation in environmental protection (members of communities, universities, companies and municipal authorities) (SLHD Riau, 2012).

Monitoring environmental quality in Sumatra, especially in water pollution control is executed according to Capacity Assessment and Environmental Carrying Capacity. Lakes zoning has been done in to maintain water quality. Primary Presidential Decree Number 10/2011 concerning two-year moratorium on conversion has become a logging concession of nearly half of the total forest cover in Indonesia is a strategic momentum in the context of a world movement for the carbon emissions and greenhouse gases reduction (REDD+, 2013). However in karst region, Government Regulation No. 28/2008 mentioned on the karst area as a geology protected area without further explotation limitation.

In term of preserving biodiversity, Intelligence and Law Enforcement Unit (ILEU) is one of the responsible team for illegal wildlife trading. WWF released 25 years data about rapid decreasing number of wildlife habitat caused extreme reduction of endemic species population. This causes local government also included communities living around the forest to press the high rate of forest. In coastal management, mangrove replanting is conducted for damaged coastal area due to interference of high abrasion as an implementation of the Presidential Law No. 27/ 2007.

27

Mining activities as one of the main livelihood in Sumatra is controlled by Law of Republic Indoneisa No. 4/2009 on Mineral and Coal Mining for supervise mining permit for environmental protection. Industry as another economic activity is controlled by Law of Republic Indoneisa No. 3/2010 about Water Quality Standard for Industrial Area. MP3EI Sumatra creates new opportunities in both aspects mentioned above, but also challenge in environmental management in Sumatra. Peta Jalan Menuju Penyelamatan Ekosistem Sumatra (Ecosystem Rescue Sumatra Road Map) is part of the environmental management efforts for this project.

Despite commitments to preserve remaining forests, the provincial and district level governments also have developed spatial plans which may conflict with the developments as outlined in the nation- and island-wide spatial plans (Barano et. al. 2010). Theoretically, these spatial plans should consider the ecosystem functions and services of the area, and how they support the well-being and livelihoods of the surrounding communities.

Sumatra Governor Forum in 2010 has declared the roadmap of ecosystem Sumatra as a policy guidance to protect the wildlife ecosystem sustainable. This included providing a corridor for wildlife migration in the Sumatra Island including elephant and tiger. This roadmap have been facing a challenges since the government planned to build a new infrastructure corridor which adjacent the wildlife corridor.

Poor environmental management practice, lack of environmental regulation and low enforcement of existing laws are the key structural nation-wide problems. In Sumatra there is still poor enforcement of Indonesian environmental legislation and poor or absent institutional and human resources management capacity.

Table 4.8 Potential environmental management issues

Specific topics, Information Needed concerns and Locations for Supporting the Data Source problems Issues Forestry Service High number of In mining concession all Agency, Mining environmental provinces mostly on gold Environmental conflicts Agency, conflicts and coal Environmental Agency Cross-sectoral Weak coordination of Planning Agency, coordination in all Planning document planning systems Environmental Agency provinces Previous or on-going EIAs (AMDAL) for Environmental Insufficient quality of In all provinces and important major Agency, Planning SEA and EIA districts/cities projects and Planning, Agency Policy and Activity SEA in province level Marine and Fishery Lack of proper coastal At all coastal area in all Coastal zone Service Agency, management provinces management plans Environmental Agency Forestry Service Master Plan and Difficulties in protected Agency, BKSDA, All provinces Action Plan of areas´ management National Park, conservation area Environmental Agency Low level of environmental In all provinces and Environmental Agency compliance districts/cities enforcement

28 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

Main Conclusions and Preliminary Recommendations Resulting from Pre-scoping

5 Main Conclusions and Preliminary Recommendations Resulting from Pre-scoping

Based on the preliminary overview of the baseline conditions and issues identified for further SEA analyses, this section highlights likely risks and opportunities to be considered within the planning process and formulates initial policy recommendations.

5.1 Identified Risks and Opportunities

Estimated Risks/Impacts

• Conflicts between industrial operation, especially plantation and mining, with local communities

• Illegal mining activities.

• Cross sectoral conflict (mining vs plantation vs forest)

• Conflict in land use between national and provinces.

• High protection of higher-elevation parks and low-level to no protection of remaining low- elevation habitats

• Decreased air and water quality due to rapid industrialisation and related items

• Significant air quality impacts and GHG emissions from burning of forests (illegal), and / or suitable cost-effective alternatives

• Resulting soil run off and erosion from land exposed after forest fires

• Increased land subsidence due to land conversion to plantation on peatland

• Fragmentation of remaining habitats due to illegal fires.

• Threats to biodiversity due to encroachment and reduced resources.

• Illegal poaching and hunting of Sumatran wildlife

• Improper disposal of wastes in both rural and urbanised communities and inadequate sewage systems

• Coastal zone vulnerability to natural disasters (e.g. earthquakes, tsunami and flooding)

• Rapid land conversion, especially in lower-elevations

Management Issues

• Illegal mining, logging and forest fires via lack of enforcement of environmental legislation

• Lack of waste water treatment plants and waste management systems

• Inconsistent permitting procedures (e.g. obtained at the provincial level) and issuance of production permits in a nationally-designated conservation area

29

5.2 Initial Policy Recommendations

• Improving financing (fiscal) policy for environmentally friendly infrastructure development, public services facilities and social protection for the poor/weak communities.

• Introduce systematic programme of compensations e.g. in form of investments to public infrastructure and services for communities affected by envisaged MP3EI investments

• Implement institutional measures to improve coordination between the central Government and provincial governments regarding land use and conservation areas (permitting procedures related to mining, palm oil and forestry sectors).

• Strengthening the legal framework and law enforcement to restore the function of conservation and protected areas

• Ensuring that new proposed development areas (production) are not harming the important ecosystem, biodiversity and local culture/heritages.

• Low use of innovative technologies and methods in industry (low emission/low waste technologies etc.

• Application of best available techniques in the various industrial sectors

• Construction and development in areas located along the seismic fault lines should be accompanied with complete and prepared hazard management and contingency plan, and proper communication of these plans to the public and decision-makers.

30 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

APPENDICES

This page is intentionally left blank

SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

APPENDIX A – MP3EI Planning Information in Sumatra Economic Corridor

This page is intentionally left blank

SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

A MP3EI Planning Information in Sumatra Economic Corridor

A.1 List of Economic Development Projects

Investment Starting End No Project Name Value (IDR Developers KPI Period Period Billion)

Main Economic Activities – Palm Oil

Industrial Area Development Project KPI Sei Mangkei, 1 51 SOE 2008 2010 Sei Mangkei (KISMK) North Sumatra

Industrial Development of Palm KPI Sei Mangkei, 2 70 SOE 2009 2011 Kernel Oil with capacity 400 ton/day North Sumatra

Development to increase Palm Kernel KPI Sei Mangkei, 3 109 SOE 2008 2010 Shell from 30 ton/ hour to 75 ton/hour North Sumatra

NPK (Nitrogen, Phosphorus and KPI Sei Mangkei, 4 537 Private 2012 2015 Potassium) Factory (100.000 ton) North Sumatra

KPI Sei Mangkei, 5 Oleochemical Plant Development 2045 Private 2011 2014 North Sumatra

Oleochemical Plant Development dan KPI Sei Mangkei, 6 3627 SOE 2013 2018 Pure Palm Oil (PPO) North Sumatra

7 Fame Fractionation Plant 1 234 Private 2011 2013 KPI Dumai, Riau 8 Biodiesel Plant 4 154 Private 2011 2013 KPI Dumai, Riau 9 Oleochemical Phase 2 378 Private 2011 2012 KPI Dumai, Riau 10 Palm Oil Storage Tanks 36 Private 2011 2012 KPI Dumai, Riau 11 Palm Kernel Plant Upgrade 27 Private 2011 2013 KPI Dumai, Riau

12 Refinery Plan 1 & 2 Upgrade 21 Private 2011 2013 KPI Dumai, Riau

13 Spenth Earth Extraction Plant 29 Private 2011 2013 KPI Dumai, Riau

14 HSD Oil Storage Tanks 41 Private 2011 2012 KPI Dumai, Riau 15 Rock Glinding Plant 31 Private 2011 2012 KPI Dumai, Riau

The Basic Organic Chemical Industry that is sourced from Agricultural (Glycerine, Palm Fatty Acid Destilate, 16 RBD Palm Oil, RBD Palm Olein, RBD 666 Private 2010 KPI Dumai, Riau Palm Stearin, Biodiesel) -> Basic Organic Chemical Industry that is sourced from Agricultural Products

A-1

Investment Starting End No Project Name Value (IDR Developers KPI Period Period Billion)

Palm oil manufacturers, edible oil, vegetable and animal fats, and other organic basic chemicals derived from 17 agricultural products and wholesale 2597 Private 2010 2013 KPI Dumai, Riau trade -> Palm Oil Manufacturers sourced from agricultural products and wholesale trade

KPI Tanjung Api- Oil Palm plantations and vegetable Api - Tanjung 18 crude oil industries (edible oil) at Kab. 137 Private Carat, South Musi Banyuasin Sumatra

KPI Tanjung Api- Oil Palm plantations and vegetable Api - Tanjung 19 crude oil industries (edible oil) at Kab. 137 Private Carat, South Musi Banyuasin Sumatra

Technopolitan development area at KPI Pelalawan, 20 46336 Mix 2012 2014 Pelalawan Riau

Main Economic Activities - Oil and Gas Open Access development level 1 1 380 SOE KPI Dumai, Riau RU II Dumai

Fluidized Chatalitic Cracking Unit at 2 Refinery Unit III Plaju to optimize 1280 SOE refinery

Revitalization and relocation of the oil pipeline Tempino-Plaju to improve the 3 reliability of transportation of crude oil -850 SOE (267 km) Validation Pertamina: 265 km

Construction of NGL Plant in South KPI Prabumulih, 4 1790 SOE Sumatra, Prabumulih South Sumatra

KPI Bandar Construction of Pressurized LPG Lampung - East 5 terminal 5,000 MT in Lampung Kap. 2 200 SOE Lampung, MTPA Lampung KPI Bandar Construction of FSRU in Lampung Lampung - East 6 929 SOE 2012 2014 (Labuhan Maringgai) Lampung, Lampung Main Economic Activities - Coal KPI Tanjung Api- Coal liquefaction of 1 million tons of Api - Tanjung 1 12600 Private 2011 2015 liquid product/year Carat, South Sumatra

A-2 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

Investment Starting End No Project Name Value (IDR Developers KPI Period Period Billion)

KPI Tanjung Api- Cluster development project of NPK Api - Tanjung 2 compound fertilizer (capacity of 1 2700 SOE 2012 2017 Carat, South million ton / yr) Sumatra KPI Muaraenim - 3 Coal mine (40 million tons per year) 6250 Private 2006 2039 Pendopo, South Sumatra KPI Muaraenim - Pendopo Coal Up Grading Capacity 5 4 9000 Private 2011 2019 Pendopo, South million tons per year Sumatra KPI Muaraenim - Pendopo Coal Gasification, Coal to 5 25000 Private 2012 2017 Pendopo, South SNG Sumatra KPI Muaraenim - Pendopo Coal Gasification, Coal to 6 22000 Private 2011 2016 Pendopo, South Propylene Sumatra

Coal Production Enhancement KPI Muaraenim - Project in Tanjung Enim in stages 7 5634 Private 2012 2019 Pendopo, South from 12 million tons/year to > 80 Sumatra Million tons/year

Proyek Pendopo Integrated Industrial KPI Muaraenim - 8 Park (PIIP) sebagai Special 4250 Private 2011 2017 Pendopo, South Economic Zones Sumatra

Revitalization of fertilizer plant (construction of Pusri 2B plant) with the capacity of 2000 MTPD of KPI Palembang, 9 ammonia and 2750 MTPD of urea -> 6247 SOE 2008 2015 South Sumatra Revitalization of fertilizer plant with capacity of 2000 MTPD of ammonia and 2750 MTPD of urea

Main Economic Activities - Steel SOE - KPI Steel Cilegon, 1 Steel Industry Development Project 50600 2011 2013 Private Banten KPI Steel Cilegon, 2 Revitalization Direct Reduction Plant 736 SOE 2008 2012 Banten KPI Steel Cilegon, 3 Construction of Blast Furnace Factory 5413 SOE 2010 2014 Banten Industry for prefabricated steel KPI Steel Cilegon, 4 materials for heavy construction 619 Private Banten buildings KPI Steel Cilegon, 5 Basic Iron and Steel Industry 1170 Private 2009 2011 Banten Main Economic Activities - Tourism

A-3

Investment Starting End No Project Name Value (IDR Developers KPI Period Period Billion)

Tambling Wildlife Nature Conservation (Forest Conservation, KPI Tanggamus, 1 2000 Private Wildlife, and Marine Nature Reserve; Lampung Ecotourism)

Tourism development at Tanjung KPI Tanjung 2 73877 Private Lesung Lesung, Banten Main Economic Activities - Timber KPI Muaraenim - Industrial forest concessions and 1 86 Private 2010 2016 Pendopo, South other wood panel industry Sumatra Main Economic Activities - Shipping

Industrial rubber crumb (crumb KPI Padang, West 1 252 Private 2008 2010 rubber) in West Sumatra Sumatra

Main Economic Activities - Gold

Mining and Processing of Gold, Silver KPI South 1 and others in South Tapanuli 7000 Private 2007 2021 Tapanuli, North (Martabe Project) Sumatra

Main Economic Activities - Rubber

Industrial rubber crumb (crumb KPI Padang, West 1 252 Private 2008 2010 rubber) in West Sumatra Sumatra

Main Economic Activities - Other sectors

Construction of concentrate plant and KPI Dairi, North 1 mining infrastructure of zinc and lead 4500 Private 2013 2019 Sumatra in Kabupaten Dairi

Construction of BWD (Bucket Wheel KPI Bangka Barat, 2 450 SOE 2011 2014 Degree) Capacity 2200 ton/unit/year Bangka Belitung

Development of Industrial Estate KPI Bangka Barat, 3 West Bangka - Industrial Anchors: 450 SOE 2011 2016 Bangka Belitung Chemical Tin

Technological improvements in the tin KPI Bangka Barat, 4 428 SOE 2011 2014 smelting process in Ummet Mentok Bangka Belitung

Renovation of Tin Ore Processing KPI Bangka Barat, 5 18 SOE 2012 Center in Timah Mentok Bangka Belitung

Modification of Ship Dredger Kundur KPI Batam, 6 225 SOE 2011 2014 1 to Bucket Wheel Dredger Kundur 1 Kepulauan Riau

*) SOE = State-Owned Enterprise (BUMN)

A-4 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

A.2 List of Main Planned Infrastructure Projects

No Main Planned Infrastructures Developers Description PT. Angkasa Pura II and International Hub Airport 1 Kuala Namu Airport Ministry of Transportation Operated in 2013 PT. Pelindo I and Ministry of 2 Kuala Tanjung Bridge International Hub Port Transportation 3 Steam Powerplant in Asahan PT. PLN Capacity 2 x 87 MW 4 Steam Powerplant in Dumai PT. PLN Capacity 2 x 150 MW PT. DSSP Power South 5 Steam Powerplant in South Sumatra 5 Capacity 2 x 150 MW Sumatra 6 Steam Powerplant in South Sumatra 6 PT. DH Energy Capacity 2 x 300 MW 7 Steam Powerplant in South Sumatra 8 PT. Bukit Asam Capacity 2 x 600 MW BPJT – Ministry of Public 8 High Grade Highway Length 1.670 km Works Ministry of Communication and Construction and 9 Palapa Ring Information Rehabilitation 10 Tanjung Enim – Lampung Railway PT. BATR Length 330 km 11 Selat Sunda Bridge Mix Plan for 2014

A-5

A.3 Planned Policy/Regulation and Infrastructure in Sumatra EC

Economic No Planned Regulation Planned Infrastructure/Connectivity Activities  Increase spatial certainty for the development of upstream  Improve the quality of roads from the plantations to palm oil activities for palm oil (plantations and mills/palm oil processing mills, the industrial estates and ports. CPO productivity level plants); is very dependent on the travel time from the plantations to  Improvement of regulations, incentives, and disincentives for the mills, the quality of FFB (Fresh Fruit Brunch) will decline the development of downstream palm oil industries. within 48 hours after picking; 1 Palm Oil  Increase the capacity and quality of railway at several locations to transport crude palm oil from the mills to the ports;  Increase the capacity and quality of port services to transport CPO production. At present, the traffic density in the ports is such that it causes excessive waiting times of 3-4 days.  Reviewing the Government policy concerning the types of  Improve the quality of roads from the plantations to palm oil materials and products that should not be exported to support mills, the industrial estates and ports. CPO productivity level local industries (arranged through the Minister of Trade Decree is very dependent on the travel time from the plantations to No. 1 Year 2007); the mills, the quality of FFB (Fresh Fruit Brunch) will decline  Improving efficiency of processing and marketing value chain by within 48 hours after picking; effectively implementing the Law No. 18 Year 2008 of the  Increase the capacity and quality of railway at several Plantation and its implementation rules (Regulation of the locations to transport crude palm oil from the mills to the Minister of Agriculture No. 38 Year 2008 of Guidelines for ports; Materials Processing and Marketing Sports Rubber, and 2 Rubber Regulation of the Minister of Trade No. 53 Year 2009 concerning the Control of Export Commodity Quality Sports Materials Standard Indonesian Rubber Traded);  Increasing the productivity in the upstream (small holder plantations) by replanting gradually on a larger scale, together with subsidy assistance from bank credit, providing a high quality seeds along with the incentives that support the replanting program, providing a sufficient post-harvest’s extension of cultivation and technology (such as: wiretapping, usage of

A-6 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

Economic No Planned Regulation Planned Infrastructure/Connectivity Activities tapping bowl, tapping knife, rain shield, clotting materials and clotting containers), and also a support from the National Land Agency (BPN) to collect the land ownership data and provision of land certificate data;  Providing an easier way for investors to invest in the downstream rubber industry with the provision of information along the process and procedures, which are clear and measurable investments.  Setting the coal usage as the primary fuel for electricity power in  Coal mining activities in Central South Sumatra requires rail Sumatra. It is estimated that 52 percent of fuel for power plants infrastructure that can be used to transport coal. Given the in Sumatra will use coal by 2020. This will increase interest for low CV of coal, transport by road is not economically investors for coal mining operations; efficient. By using the railway, transport costs will decrease  Review the tax policies for for converting process from coal to up to a profitable level for the low CV coal; electricity though the c steam power plant (or in general, coal  Construction of a railway that can carry coal from the inland processing industry in minemouth) to the port;  Issuance of regulations concerning the operational policies in  Increasing capacity of the port in Lampung and South Sumatra to utilizing low rank coal for the national electricity supply. Apply the improve the delivery of coal out of Sumatra. direct appointment method for coal companies capable of supplying coal for minemouth Power Plant for a minimum of 30 years, with interest to use for power generation; 3 Coal  Acceleration of the determination of Reference Price of Coal in order to determine the benchmark prices of coal on a regular basis based on location and amount of calories;  Standardization of methods of measuring and reporting the amount of production at the mine and the allocation of export and Domestic Market Obligation (DMO) to obtain coal Mining Permit (IUP) from the Ministry of Energy and Mineral Resources and local government;  Strengthen the regulatory and land policy to solve the issue of land compensation especially for mining concession and forest area.  Control of illegal mining without permit (PETI-Illegal Mining).

A-7

Economic No Planned Regulation Planned Infrastructure/Connectivity Activities  Increase the number and ability of the national shipbuilding  Provision of basic infrastructure supporting the shipping industry in the construction of ships up to a capacity of 50,000 industry in Lampung region, such as electrical energy, road DWT (Dead Weight Tonnage); network and water treatment;  Establish a national shipbuilding facility with production facilities  Provision of supporting infrastructure for industry products in the form of building berth, graving dock with capability of shipping, such as ports. building or repairing vessels up to 300,000 DWT;  Enforce the development and repairment for ships under 50,000 DWT;  Prioritize shipbuilding to support oil and gas activities, except for the vessel type C;  Remove Value Added Tax (VAT) from upstream to downstream in the shipping industry in order to cut  production costs by 10 percent;  Determine the level of interest rates and reasonable collateral for 4 Shipping loans from commercial banks and  granting soft loans from ODA (Official Development Assistance)/JBIC (Japan Bank for International Cooperation) with two step loan schemes through Public Ship Financing Program (PSFP);  Review the Minister of Finance Regulation No. 261/PMK.011/2010 with regard the implementation of Import Duty Covered by Government (BMDTP) policy for shipping industries only for shipping component that is not produced in Indonesia OR  Review the implementation of Import Duty Covered by Government (BMDTP) policy only for shipping component that is not produced in Indonesia or not fulfill the Minister of Finance Regulation No. 261/PMK.011/2010 based on QCD (Quality, Cost, dan Delivery).  Improve the national’s iron ore concentrate production through  Provision of supporting infrastructure (electricity, road policies that provide the requirements by building a manufacturing network, railways, ports); 5 Steel process of iron ore concentrate near the mining areas;  Improve basic infrastructure including inter locus related  Increase production capacity of the steel industry through the activities (roads, railways, waste managements).

A-8 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

Economic No Planned Regulation Planned Infrastructure/Connectivity Activities provision of raw materials, particularly iron ore through the Domestic Market Obligation (DMO), issued by the central government;  Improve the competitiveness of national steel products through development of new industries that have not been developed in Indonesia, increase production capacity, and build national upstream and downstream business partnerships;  Develop a business climate that is conducive for the steel industry through increased partnerships, fiscal incentives and disincentives, application of level of domestic content regulations (TKDN) on steel products, and improve facilities support production and marketing of national steel industries;  The Policy for cluster development of downstream steel industry prioritizes industrial estates for efficiency of operation and maintenance of supporting infrastructure or integration of steel smelting and stainless steel production (slab, Hot Roll Coil (HRC) and Cold Roll Coil (CRC)).

A-9

A.4 List of KPI and Its Allocation for Economic Activities

Investment Economic Supporting Total Investment No Investors Focus Area Activities infrastructure (IDR B)

Port, Railway, Road, 1 KPI Sei Mangkei Palm Oil SOE, Combined Energy, Natural 4,930 Resources

KPI Tapanuli 2 Other sector Private Energy 7,000 Selatan

3 KPI Dairi Other sector Private Port 4,500

Port, Road, Energy, 4 KPI Dumai Palm Oil, Oil & gas SOE, Private 4,620 Natural Resources

KPI Tanjung Api- Port, Road, Energy, 5 Coal, Palm Oil SOE, Private 15.574 api-Tanjung Carat Natural Resources

KPI Muara Enim- Railway, Road, 6 Coal, Palm Oil SOE, Private 72,134 Pendopo Energy

Airport, Port, Road, 7 KPI Palembang Coal, Oil & gas SOE Energy, Natural 8,089 Resources

8 KPI Bangka Barat Other sector SOE Port and road 1,346

9 KPI Batam Other sector SOE Port 225

KPI Lampung Port, Road, Energy, 10 Shipping, Palm Oil Private 4,929 Timur-Tanggamus Natural Resources

KPI Cilegon (Iron- SOE, Private, 11 Iron-Steel Port and road 58,538 steel) Combined

KPI Tanjung 12 Tourism Private Airport and road 73,877 Lesung

13 KPI Padang Rubber Private Port, Train, Energy 252

14 KPI Prabumulih Oil & Gas SOE Natural Resources 1,900

Airport, Road, KPI Bandar 15 Oil & Gas SOE Energy, Natural 818 Lampung Resources

16 KPI Pelalawan Palm Oil Combined 46,336

17 KSN Selat Sunda KSN Selat Sunda Combined Road 150,000

Airport, Port, Train, 18 National Combination Road, Energy, 0 Natural Resources

A-10 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

Investment Economic Supporting Total Investment No Investors Focus Area Activities infrastructure (IDR B)

Airport, Port, Train, 19 Others Private Private Energy, Natural 2,086 Resources

Source : Coordinating Ministry for Economic Affairs, 2014

A.5 Updated Number of KPI in Sumatra

Investment Value (billion IDR) No Priority Zone Investment Focus Real Sector Infrastructure Total 1 Sei Mangkei 6.4 17.921,45 24.4 2 Tapanuli Selatan 7.0 5.3 12.3 3 Dairi 4.5 250.0 4.8 4 Dumai 4.6 52.057,03 56.7 5 Tj. Api-Api – Tj. Carat 15.6 9.1 24.7 6 Muara Enim - Pendopo 72.2 91.400,9 163.6 7 Palembang 8.4 16.056,06 24.4 8 Bangka Barat 1.3 3.668,13 5.0 9 Batam 225.0 42.6 42.8 10 Tanggamus 6.0 2.4 8.4 11 Besi Baja Cilegon 58.5 2.1 60.6 12 Tanjung Lesung 73.9 11.815,5 85.7 13 KSN Selat Sunda - 150.3 150.3 TOTAL 258.7 405.0 663.7 Investment Value (billion IDR) No Potential Zone Investment Focus Real Sector Infrastructure Total 14 Padang 252 13.382,14 13.634 15 Prabumulih 1.79 - 1.79 16 Bandar Lampung – Lampung Timur 1.129 6.145,74 7.275 17 Pelalawan 46.336 - 46.336 18 Anambas* - - 0 19 Danau Toba** - - 0 TOTAL 49.507 19.527,88 69.034,88 Source: Sumatra EC Working Team, 2014

A-11

This page is intentionally left blank

A-12 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

APPENDIX B – Supporting Information on Pre-scoping Activities

This page is intentionally left blank

SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / NOA / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

B Supporting Information on Pre-scoping Activities

B.1 List of Relevant Stakeholders for Sumatra EC

No Institution Groups Issues/Sectoral Relevance 1 Bappeda, Aceh Government Regional planning 2 BLHD, Aceh Government Envrionmental management 3 Bappeda, North Sumatra Government Regional planning 4 BLHD, North Sumatra Government Envrionmental management 5 Bappeda, West Sumatra Government Regional planning 6 BLHD, West Sumatra Government Envrionmental management 7 Bappeda, Riau Government Regional planning 8 BLHD, Riau Government Envrionmental management 9 Bappeda, Jambi Government Regional planning 10 BLHD, Jambi Government Envrionmental management 11 Bappeda, South Sumatra Government Regional planning 12 BLHD, South Sumatra Government Environmental management 13 Bappeda, Bengkulu Government Regional planning 14 BLHD, Bengkulu Government Envrionmental management 15 Bappeda, Lampung Government Regional planning 16 BLHD, Lampung Government Envrionmental management 17 Bappeda, Bangka Belitung Government Regional planning 18 BLHD, Bangka Belitung Government Envrionmental management 19 Bappeda, Kepulauan Riau Government Regional planning 20 BLHD, Kepulauan Riau Government Envrionmental management 21 PIC EC Sumatra Government Envrionmental management Universitas Andalas – Center for 22 University Network Environmental issues Environmental Studies (PSL) Universitas Sam Ratulangi – Center for 23 University Network Environmental issues Environmental Studies (PSL) Universitas Riau – Center for 24 University Network Environmental issues Environmental Studies (PSL) Universitas Lampung – Center for 25 University Network Environmental issues Environmental Studies (PSL) Universitas Universitas Sriwijaya – Center 26 University Network Environmental issues for Environmental Studies (PSL) Universitas Sumatra Utara – Center for Environmental & Indigenous 27 Environmental and Population Studies University Network people issues (PSL) Universitas Syiah Kuala – Land Resources 28 University Network Environmental issues Conservation 29 PPLH Regional Sumatra Government Environmental management Planning and Rural Development, Planning 30 Government Regional planning Division KP3EI 31 National Spatial Planning Department, Government Regional planning

B-1

No Institution Groups Issues/Sectoral Relevance Ministry of Public Works Spatial Planning and Environment 32 Government Regional planning Department, Ministry of Home Affairs. 33 Environment Department, Bappenas Government Environmental management 34 Transportation Department, Bappenas Government Regional planning Water Resources and Irrigation 35 Government Regional planning Department, Bappenas Natural Resources and Environment 36 Government Environmental management Regional Policies, Ministry of Environment 37 WARSI NGO Environmental issues 38 WALHI NGO Environmental issues 39 AMAN NGO Indigenous people issues 40 JATAM NGO Mining issues 41 KIARA NGO Fisheries and Marine Issues 42 CIFOR Research Institution Forestry issues

B-2 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

B.2 Minutes of Consulative Meeting

MP3EI SEA

Minutes of Meeting

Meeting: Consultation for Baseline Mission with Ministry of Forestry (MoForest)/2013 Date: 12/09/2013 Attendees: Time: 10.00-11.30 1. MP3EI SEA Team (Budi Wiryawan, Asep Sukmara, Dwi Nurcahyadi) Venue: Gedung VII Lantai 2, Biro 2. MoForest, PIC for Sumatra EC (Pak Waspodo, Pak Joko Suwarno, Ibu Dwita Perencanaan Meeting Room Hidayati) Kementerian Kehutanan, Jakarta Absent : n/a

Issues Action/Remarks 1. Introduction and overview of the baseline workshop plan by . Baseline workshop would be held on team 2nd of October in Medan by inviting local govt institution, university . Introduction of the EC team members for Sumatra EC networks and local NGOs. . Overview of the baseline workshop plan and required Pak Waspodo suggest to invite BPKH in provincial dataset the team wish to collect from the MP3EI influenced, KSDA, TNC, workshop/missions Sriwijaya University, Unila, UNRI, USU, . Request on contacts with local/provincial stakeholders for Syah Kuala University, and Andalas further communication and coordination University, and WARSI (local NGO) . Clarification on the planning mechanism of the M3EI EC Plans in Kalimantan and their linkages to provincial planning . The MoForest is confirmed with the . Request for information of the updated projects (on going schedule and will attend the Workshop and to be implemented) in Sumatra EC a but Pak Waspodo ask what would be . Request for baseline study/previous study regarding the the role of the PIC in the WS?Do they forestry and water issues in Sumatra (if any) need to present or opening or just attending the meeting? The invitation should be submitted to Sekjen Ministry of Forestry as head of secretariat of working group of Sumatra EC.

. MoForest will give the contacts list of provincial governments and other relevant stakeholders

. MoForest confirmed that the latest MP3EI document will be ready on this September

. MoForest gave the recent updated list of projects to the team and confirmed that there are 19 KPI in Sumatra EC included KPI which have been proposed by local government

. MoA confirmed that baseline data on forestry will be found in Bappeda

. MP3EI SEA team should bring a formal letter indicating that they are assigned by Bappenas to carry the activities

. MP3EI should invite Sumatra EC contact person from Ministry of Industry

B-3

Issues Action/Remarks 2. MoForestry presented the latest MP3EI in Sumatra Corridor, and . To be considered in the baseline raised some issues: analysis and potential issues . Social conflict in Tapanuli Selatan related to tailing from identification. Gold mining . Overlap concession between coal mining and production forestry (HTI) . Infrastructure, mining and agriculture development in forest area

B-4 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

B.3 Minutes of Prescoping & Baseline Workshop

MP3EI SEA

Minutes of Meeting

Meeting: Prescoping MP3EI SEA – Sumatra EC/2013 Date: 2 October 2013 Attendees: As attached Time: 09.00-16.00 WIB Absent : - Venue: Grand Hotel Elite Medan

Issues Action/Remarks 1. Opening of the workshop by KP3EI Connectivity WG All to note (presentation) . Framework for activities . Greening MP3EI and SEA process . Expected output of the activities

3. Introduction from DHI-Integra All to note . Introduction of SEA Team . Overview of workshop agenda . Expected output of the workshop 4. Introduction of the participants Attached 5. Screening for SEA video Moved to coffee break session 6. Workshop 1st Session All to note a. Introduction on SEA . Overview of potentials and threats to environmental conditions from the proposed development. . Overview of the importance and principles of SEA . SEA development in Indonesia . Objective of baseline data workshop b. MP3EI SEA Project Implementation & Deliverables . Project Background, Team, Output and Scheduling . MP3EI SEA Approaches and Workplan (both for Policy and Economic Corridors) . Economic Analysis Input

- Coffee Break (Screening for SEA video)

c. Expected output of MP3EI SEA Prescoping . Importance of Baseline Data . MP3EI SEA Database/Information System Management . Hands on Baseline Data Collection - Overview of Potential National Strategic Issues - Assignment for group work activities - Overview of plenary discussion d. More on SEA . Usual SEA steps . SEA and Planning, SEA and EIA . Next stage: Scoping!

7. Questions/concerns/feedbacks: 6.a Bonie Dewantara – Conservation Indonesia Suggestion to link all SEA documents in spesific level avoid conflicts between stakeholders. 6.b Dedy Harlan – Bappeda North Sumatra

B-5

Analysis process for SEA is the most hard work to do for North Sumatra Province 6.c Slamet Budi Yuwono – Lampung University SEA should be done before the activities start

6.d Joko Suwarno – Ministry of Forestry More explanation about KLHS MP3EI isrequired. MP3EI programs, including the terminated and alternative projects should be revised for next meeting. The positive impacts for local communities should be the main purpose for the programs.

6.e M Yudi Agusrin - WWF Riau Sometimes, SEA has some conflicts with local government concept.

6.f Anisa Wisati – Badan Geology – Ministry of Energy and Mineral Lack of coordination, especially in data sharing, is a problem for KLHS team.

6.g Zainuddin – KKI Warsi Jambi KP3EI – Bappenas : MP3EI SEA is expected to not revise any provincial SEA that was already done. document based on green Revising existing SEA documents might create another conflicts. economy is already one.

6.h Zuchri Abdi – PPE Sumatra The members of Bappenas team who attend this workshop are relatively young and inexperience, the result of the SEA might be questionable. The existing policies should be the reference for MP3EI SEA preparation.

6.i Haruki Agustina – KLH Suggestion to conduct a special meeting only to discuss the perception of SEA to avoid conflicts between stakeholders. The required national dataset can be provided by Ministry of Enviroment if available.

6.j. Ardinis Arbain – Andalas University Nizhar Marizi – Bappenas The possibilities of revising MP3EI project and RTRW based on SEA There is no guarantee that reccomendation. SEA can be applied effectively. SEA will be the reference for evaluation and revision that - required for every project creating substantial negative impacts.

8. Group Assignments  Division into groups and debriefing on group assignments - Identification of issues relevant to Sumatra (based on list of nation-wide issues) regarding the available data and its spatial distribution - Groups divided into 2. Each group consisted of participant from central government, provincial government, NGO and universities.  Exercise on potential key issues identification and baseline data collection

9. Plenary discussion Discussion were guided by Mr. Dwi Nurcahyadi and Mr. Budi Wiryawan. The discussion led by the matrix and maps provided to figure the related locus. The participants actively delivered comments, inputs, correction and information regarding the related data needed to support those issues. Some of the participants illustrated geographical scope of their relevant issues on the maps given. The point of the discussion was mostly the data needed are available in the ministries that was not invited to this workshop. Then, Bappenas and KLHS team need to collect that data and information.

The participants from Sumatra Utara, Sumatra Barat, Kepulauan Riau and ministry of energy and minerals resources have shared their data to the team.

B-6 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

Most of data were non spatial data. At the end of discussion, each group presented their group discussion result and commented by others. More participants should be invited on the next workshop to gather wider issues. The attendances commited to actively support the SEA activities in the future. Since the workshop held in Medan, Capital of Sumatra Utara, the participants from Sumatra Utara asked the team to visit Bappeda office to collect more data/publication related to the economic development in Sumatra Utara.

The following points from the discussion: - Apply SEAs to integrating MP3EI - Invite more stakeholder relevant to the issues - Compose new letter from Bappenas to get spatial data from provincial government - Involve Jatam and Walhi into the process - Arrange upcoming workshop not in the end of the fiscal year (the provincial governments are hectic with workload) - Provide larger meeting room - Provide sufficient administration staff for workshop

Recommended Follow-up - The upcoming workshop should consider the fiscal year - One person for administration person should be stand by to confirm the attendances and handle the administration/ reimbursement process. - SEA team need to visit Jatam and Walhi to gathered their point of view regarding MP3EI - SEA team should strengthen the coordination with Bappenas and EC PIC regarding the data collection.

B-7

B.4 List of Attendance

Event : SEA Prescoping & Baseline Workshop for Sumatra EC Date : 02 October 2013 09.00-16.00 WIB Place : Grand Hotel Elite Medan

No Name Institution 1 Dwi Nurcahyadi DHI-Integra 2 Ardinis Arbain Universitas Andalas 3 Dikarama Kaula Bappedalda Sumatra Barat 4 Zainuddin KKI Warsi Jambi 5 Budy Wiryawa DHI-Integra 6 Dimitra Viantari MP3EI Bappenas 7 Elly Damayanty MP3EI Bappenas 8 Imelda S.Y. Sinaga MP3EI Bappenas 9 Mahmud WWF Indonesia 10 Zuchri Abdi PPE Sumatra KLH 11 Denny PPE Sumatra 12 Anton S. Hadiputro KESDM 13 M. Fazwa R. Daulan Bappeda Sumatra Utara 14 Mhd Irsyad S. Bappeda Sumatra Utara 15 Dwi Suranto USU Medan 16 Slamet Budi Yuwono Unila Lampung 17 Dedy Wahyudi Hamidy Bappeda Kepri 18 Ade Kumiadi Bappeda Kepri 19 Mubarak Universitas Riau 20 M. Yudi Agusrin WWF 21 Joko Suwarno Kemenhut 22 Annisa W. KESDM 23 Bonie Dewantara Conservation Indonesia 24 Nizhar Marizi Bappenas 25 Haruki Agustina KLH 26 Almar R. Bappeda Sumatra Utara 27 Dedi Harlan Bappeda Sumatra Utara 28 Irine Pratiwi C. Hutagaol KP3EI 29 Selly Galvani KP3EI 30 Hadi Nugroho KESDM 31 Aryaning Dyah W. Dinas Kelautan dan Perikanan 32 Kadir Dinas Kelautan dan Perikanan

B-8 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

B-9

B-10 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

MP3EI Planning Information in Sumatra Economic Corridor

B-11

APPENDIX C – LIST OF REFERENCES

This page is intentionally left blank

SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

List of References

C List of References

Akbar, Ali (2006). “Sepang sand mining threatens locals' livelihood in Bengkulu, Sumatra” Available: http://www.minesandcommunities.org/article.php?a=7274. Accessed: 10/11/2013.

Agus, Yenita and Shigeko Horiuch. (2012). “Factors influencing the use of antenatal care in rural West Sumatra, Indonesia.” BMC Pregnancy and Childbirth (12).

Anwar, Adelin, Liew Juneng, Mohamed Rozali Othman & Mohd Talib Latif (2010). “Correlation between Hotspots and Air Quality in Pekanbaru, Riau, Indonesia in 2006-2007.” Sains Malaysiana Volume 39. Pp: 169-174.

Barano, Ben, Emily McKenzie, Nirmal Bhagabati, Marc Conte, Driss Ennaanay, Oki Hadian, Nasser Olwero, Heather Tallis, Stacie Wolny, and Ginny Ng. (2010). “Integrating Ecosystem Services inot Spatial Planning in Sumatra, Indonesia. The Economics of Ecosystems and Biodiversity. Available: http://www.naturalcapitalproject.org/pubs/NatCap_Indonesia_Sumatra_TEEBcase_2010.pdf. Accessed: 8/11/2013.

Bland, Ben. (2013). “Environmental Protests Hit Gold Mine.” The Guardian. Available: http://www.ft.com/intl/cms/s/0/7bce1a92-37a7-11e2-a97e-00144feabdc0.html#axzz2j4fwwM9E. Accessed: 16/10/2013.

Daily Press (2011) “Surpasses, Medan so Polluted City in Indonesia” Daily Press: theme for the Daily Publishes, Online: http://www.ordudaa.com/health/surpasses-medan-so-polluted-city-in- indonesia.html Accessed 19 October 2013.

Ehrlich, P.R., 1994. Ecological economics and the carrying capacity of Earth. In: Jansson, A.M., Hammer, M., Folke, C., Costanza, R. (Eds.), Investing in Natural Capital: the Ecological Economics Approach to Sustainability. Island Press, Washington DC, pp. 42–56.

Field et al (2009). “Human amplification of drought-induced biomass burning in Indonesia since 1960” Nature Geoscience (2). Pp. 185-188.

Gaveau, David. (2012). “ARD Learning Exchange 2012: Forests, Trees and Landscapes- Synergy, Tradeoffs and Challenges.” CIFOR and The World Bank. Available: http://www.cifor.org/ard/documents/background/Day4.pdf. Accessed: 14/10/2013.

Geohive (2013). “Indonesia.” Available: http://www.geohive.com/cntry/indonesia.aspx. Acessed: 11/10/2013.

Greenpeace. (2013). “Licence to Kill: How deforestation for palm oil is driving Sumatran tigers toward extinction.” Available: http://www.greenpeace.org/international/Global/international/publications/forests/2013/LicenceT oKill_ENG_LOWRES.pdf. Accessed 10/10/2013.

Heil, A., B. Langmann, and E. Aldrian. (2006). “Indonesian peat and vegetation fire emissions: Study on factors influencing large-scale smoke haze pollution using a regional atmospheric chemistry model” Mitigation Adaptation and Strategy Global Change. Available: http://www.mpimet.mpg.de/fileadmin/atmosphaere/acc/Heiletal_2006_MitigAdaptStratGlobChan ge.pdf. Accessed: 10/10/2013

Hooijer, A; Page, S; Jauhiainen, J; Lee, W.A; Lu, X.X; Idris, A; Anshari, G. 2012. ’Subsidence and carbon loss in drained tropical peatlands‘. Biogeosciences, Vol. 9/1053/2012

C-1

Jb, Syofiardi Bachyul (2013). “West Sumatra, Riau, Jambi in power crisis.” The Jakarta Post. Available: http://www.thejakartapost.com/news/2013/09/02/west-sumatra-riau-jambi-power- crisis.html. Accessed: 10/11/2013.

Jeff Tollefson, 2012. International weekly journal of Science.

Jegathesan, Muuniandy. (2013). “Indonesia set to ratify haze treaty by early 2014” Available: http://phys.org/news/2013-07-indonesia-ratify-haze-treaty-early.html#inlRlv. Accessed 10/10/2013.

KEDSAM (2010). “Creating South Sumatra as the National Energy Source” Available: http://www.esdm.go.id/news-archives/general/49-general/3203-creating-south-sumatra-as-the- national-energy-source.html. Accessed: 10/11/2013.

MAC (2006). “Sepang sand mining threatens locals' livelihood in Bengkulu, Sumatra.” Mines and Communities. Available: http://www.minesandcommunities.org/article.php?a=7274. Accessed: 16/10/2013.

Ministry of the Environment (2007) Environmental Status of Indonesia.

Ministry of the Environment (2008) Environmental Status of Indonesia.

Miyazaki, Keishi. (2009). “Ex-post Evaluation of Japanese ODA Loan Project: ‘Sumatra East Coast Highways’” Available: http://www2.jica.go.jp/en/evaluation/pdf/2008_IP-487_4.pdf. Accessed: 01/11/2013.

Springate-Baginski, Oliver and Eva Wollenberg “REDD, forest governance and rural livelihoods: The emerging agenda.” http://www.cifor.org/publications/pdf_files/Books/BWollenberg0101.pdf. Accessed: 10/11/2013.

Partohardjono, S.; Pasaribu, D.; Fagi, A. (2011). “The Forest Margins of Sumatra, Indonesia.” Slash and Burn Alternatives. Columbia University Press. New York. Online: http://www.asb.cgiar.org/content/forest-margins-sumatra-indonesia.PPE Sumatra 2013 http://ppeSumatra.menlh.go.id accessed 24/10 Quest Petroleum NL 2013 http://www.questpetroleum.com/s/South_Sumatra.asp?ReportID=561192

Pusat Pengelolaan Ekoregion Sumatra (2013). Status Lingkungan Hidup Ekoregion Sumatra.

Quest Petroleum NL. (2013). “South Sumatra.” Available: http://www.questpetroleum.com/s/South_Sumatra.asp?ReportID=561192. Accessed: 10/11/2013.

Reef Check (2005) http://reefcheck.org/PDFs/reefcheck_aceh_jan2006_web.pdf. Accessed: 29/10/2013.

Reefbase (2013). “Indonesia.” http://www.reefbase.org/global_database/default.aspx?section=r2®ion=0&country=IDN. Accessed: 29/10/2013.

Schonhardt, Sarah. (2013) “In Indonesia, Environmentalists See a Disaster in the Making.” The New York Times Published: October 11, 2013 http://www.nytimes.com/2013/10/12/world/asia/in- indonesia-environmentalists-see-a-disaster-in-the-making.html?_r=0

Sidik, Jafar M. (2010). “Iron sand mining on Bengkulu`s west coast endangering environment” ANTARANews.com. Available: http://www.antaranews.com/en/news/1285957720/iron-sand- mining-on-bengkulus-west-coast-endangering-environment. Accessed: 10/10/2013

C-2 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03

List of References

Vidal, John. (2013). “Industry, Fires and Poachers Srink Sumatran Tigers’ Last Stronghold” The Guardian. 26 May 2013. Online: http://www.theguardian.com/environment/2013/may/26/tigers- stronghold-sumatra-poachers

Wahyunto, S. Ritung, Suparto, H. Subagjo. 2005. Sebaran Gambut dan Kandungan Karbon di Sumatra dan Kalimantan. Proyek Climate Change, Forests and Peatlands in Indonesia. Wetlands International – Indonesia Programme dan Wildlife Habitat Canada. Bogor.

Wee, Teo Cheng. (2013). “Malaysia’s worst haze in 16 years.” The Straits Times. Available: http://www.stasiareport.com/the-big-story/asia-report/malaysia/story/malaysias-worst-haze-16- years-20130624. Accessed: 10/22/2013.

Wetlands International – Indonesia Programme (2003). Maps of Area of Peatland Distribution and Carbon Content in Sumatra. 1990 - 2002

Whitten, Tony (1999). The Ecology of Sumatra. Tuttle Publishing. Vermont.

World Food Program (2013). “Chapter 3: Food and Livelihood Access.“ Indonesia. Available: http://www.foodsecurityatlas.org/idn/country/fsva-2009/chapter-3-food-and-livelihood-access. Accessed: 23/10/2013.

WWF “Quick Facts about Sumatra” WWF Indonesia. Available Online:http://www.savesumatra.org/app/webroot/upload/factsheet/web_english.pdf. Accessed 10/10/2013

WWF. 2011. Penyelamatan Ekosistem Sumatra dalam Penerapan MP3EI.

C-3

This page is intentionally left blank

C-4 SEA for Indonesian Master Plan for Accelerated Economic Development (MP3EI) Pre-Scoping Report / 2014-03