ReportNo. 7822-IN)D Indonesia Forest,Land and Water: Issuesin SustainableDevelopment Public Disclosure Authorized June 5, 1989 CountryDepartment V AsiaRegional Office FOR OFFICIALUSE ONLY Public Disclosure Authorized Public Disclosure Authorized Documentof theWorld Bank ThisPublic Disclosure Authorized document has a restricteadistribution and may be usedby recipients only in 'he performanceof their officialduties. Its contfotts may not otherwise bedisclosed without World Bankauthorization. CURRENCY ECUIVLENT US$1.00 - Rupiah (Rp) 1,650 Rp 1 million - US$606 GOEMEN OF INDtAIA FISCALYA April 1 - March 31 WEIGHTS AND MEASURES I kxilometer (km) - 0.62 miles (mi) I square kilometer (km2 ) - 100 ha - 0.39 mi2 1 hectare (1 ha) - 2.47 acres (ac) I kilogram (kg) - 2.2 pounds (lb) 1 metric ton (t) - 2.206 pounds ACRONYMSABBREVIATIONS AND LOCAL TERMS ADB - Asian Development Bank BAKOSURTANAL - The Coordinating Agency for National Surveys and Mappinj BAPPEDA - Regional Development Planning Boards BAPPENAS - The National Development Planning Agency BFL - Batic Forestry Law BKLH - Provincial Level Environment Office BKPM - Investment Coordinating Board CHR - Complete Harvest and Regeneration CIDA - Canadian International Development Agency DGCK DirectorateGeneral Housing and Human Settlements DGRRL - Directorate General for Reforestation and Land Rehabilitation (MOF) DGRWD - Directorate General of Water Resources Development (MPW) DR - Discount Rate ETA - Environmental Impact Assessment EMDI - Canadianfunded Project, Environment Management Development in Indonesia FAO - Food and Agriculture Organization GIS - Geographic Information System GOI - Government of Indonesia GRDP - Gross regional domestic product RYV - high yieldingvarieties IGGI Inter Governmental Group on Indonesia IHE - Institute of Hydraulic Engineering IIED - International Institute for Environment and Development IRR Internal rate of return IUCN International Union for Conservation of Nature and Natural Resources IUIDP - Integrated Urban Infrastructure Development Program KEPAS - The research group on agroecosystems KLM - Ministryof Populationand Environment(also MPE) LNG LiquidNatural Gas LRD - Land Resources Department of ODA K&I - Municipal and Industrial Water Supply MHA - Ministry of Home Affairs MOA Ministry of Agrieulture MOF - Ministry of Forestry MOH - Ministry of Health ROl Mit.istry of Industry MPE - Ministry cf Population and Environment (also MW) MW Ministry of Public Works N8S - Nucleus Estate and Smal11older NPV - Fat Present Value NGO - Non Governriwntal Organization ODA - British Overseas Development Authority PKK - Indonesian Women's Movement PMCA Pollution Monitoring and Control Agency PHU - Project Management Unit PRONA National Land Registration Program PBZ - River Basin Enterprises Repelita - Five-Year Development Plan RePPProt - Regional Physical Planning Program for Transmigration RRA Rapid Rural Appraisal SLS - Indoesian Selective 'ogging System SKEPHI - Indonesian Society for Forest Protection TGHR - Forest Classification System UNDP - United Nations Development Programme USAID - United States Agency for International Development WALHI - The Indonesian Environmental Forum WRI - World Resources Institute WF - World Wildlife Fund YIP - The Indonesian Green Foundation YPMD - The Foundation for Rural Village Development FOR OMCIAL USE ONLY INDONESIA FORESTS. LAND Ak!s' WATER: ISSUES IN SUSTAINABLEDEVELOPMENT Table of Contents Page No. PREFACE...... ................. v EXECUTIVESUMM ... ................. vii I. THE MANAGEMENTOF PRODUCTIONAND PROTECTIONFORESTS 1 A. Indonesia'sForest Resources. 1 B. Deforestationand Wood Raw Material Supply. 4 C. Issues in Forert Management.10 D. Policy and InstitutionalChanges Needed for ImprovedForest Management.15 E. Managing and ProtectingConservation Areas and Wildlife Reserves.21 II. ILN RESOURCE MANAGEMENT.27 A. Land Use Issues in the Outer slands.27 B. AlternativeApproaches to AgriculturalDevelopment 33 C. AlternativeApproaches to ShiftingCultivation .37 D. Land Allocation in the Outer Islands.40 E. SelectedLand Use Issues in Java.44 F. The Tools for Land Use Planning.48 III. JAVA UPLANDS AND WATERSHEDMANAGEMENT .54 A. Land and DemographicFactors in Jaa .54 B. EnvironmentalDegradation .58 C. Current Programsand Projects in Upper Watersheds 63 D. Upland Farming Systems.66 E. Scope for ImprovingOn-Farm Practices.72 F. Scope for ImprovingOther Soil ConservationMeasures 75 IV. WATER OUANTITY ISSUES ON JAVA. 79 A. Java's Water Resources.79 B. Water Supply and Demand Issues. 86 C. ImprovingWater Resource Management.92 V. WATER OUALITY ISSUES ON JAVA . .104 A. Sources and Extent of Water Pollution.104 B. Water Supply and Sanitation.109 C. Key Issues in Water Supply and Sanitation.113 D. IndustrialPollution .116 This document has a restricteddistribution and mnaybe used by recipientsonly in the performance of their officialduties. Its contents miaynot otherwise be disclosed without World Bank authorization. - ii - VI. INSTITUTIONAL AND POLICY CHANGESIN SUPPORT OF | ~~~~~SUSTAINABLE DEVELOPMS ..................................................125 A. Institutional Arrangements for Environmental MHnagement ......................................... 125 B. Strengthening the State Ministry for Population and Environment ...... ............................. 130 C. Policies for Sustainable Development.................. 135 ANNEXES A - Contributors to the Main Report ........................ 142 B - Definitions of Environmental Terms ..................... 144 C - List of References..................................... 147 Annex 1 - Forestrv Tables Table 1 - Land Within Forestry Department Boundaries........ 155 2 - Forested Area with Forestry Department Boundaries, Sumatra, Kalimantan and Irian Jaya (km2 ).......... 156 3 - Percent Area within Forestry Boundaries No Longer Forested ................................ 157 4 - Rates of Timber Extraction, Year 2000 ............. 158 5- Comparison of Forest Management Systems at Discount Rates of 6% and 10%...................... 159 6 - Priority Conservation Areas for Management and Protection.................................... 160 Annex 2 - Land Acguisition and Land Registratin .163 Annex 3 - Java Uplands 3A Table 1 - Maximum and Minimum Discharge Rate and Ratio for Selected Rivers on Jva .167 2 - Construction Costs, Capacity and Cost for Check Dams in Central Java .168 3B - Land and Water Management in Indonesia.169 3C - Foreign Assisted Projects in Java Watersheds .176 3D - KEPAS - A New Style of Agricultural Research and Development.178 3E - Credit for Uplands Development.182 Annex 4 - Water Ouantity Table 1 - Irrigation Efficiency of Waru-Jayeng Irrigation Scheme.184 Figure 1 - River Flows and Water Demands on Jaa .185 Figure 2 - Extent of Seawater Intrusion under Jakarta 186 Figure 3 - Water Deficits and Efficiency Improvements in Java .187 - iii - Annex 5 - Water OualitY Table 1 - Summary of ExistingSituation on Community Water Supply in Java........................... 188 2 - Illustrative Costs and Standards of KIP with SanitationEmphasis ................ 189 3 - RegionalDistribution of Medium and Large Scale Industries,1985 ......................... 190 IBRD 21290 - Forest Coverage and Forest Reserves in Indonesia IBRD 21082 - Jakarta: DevelopmentPotential and Water Flow Impact IBRD 21468 - Estimate of Erosion Risk - West Java IBRD 21469 - Estimate of Erosion Risk - Central Java IBRD 21470 - Estimate of Erosion Risk - East Java IBRD 21068 - Mean Annual Rainfall and Flood Prone Areas in Java IBRD 21069 - Supply Demand Balances in Java - With Dams/Without Dams IBRD 21264 - Average Dry Season ColiformNumber and BOD Concentrations in Java - v - INDONESIA FORESTS. LANDAND UATER: ISSUES IN SUSTAINABLEDEVELOPMENT Preface This document was prepared as an input into the Bank's Economic Report, presentedat the 31st meeting of the Inter-GovernmentalGroup on Indonesia (June 1988), and as a resource for the preparationof Indonesia's fiith five-yeurdevelopment plan (1989-1994). Although there were many topics which could have been considered,the report focusedprimarily on issues related to land and forest managementin the outer islands,and land and water resourcemanagement in Java. These topics were thought to be central to issues of sustainabledevelopment and to illustrateimportant policy and institutionalconcerns. The main audience for the report was Indonesian economic planners,and the main objectiveof the report was to demonstrate that increasedattention to the environmentwas necessary to achieve the Governmentdevelopment objectives. It is gratifyingto note that due to the broad efforts of the Ministry of Populationand Environmentand concerned officialsand public interest groups,many of the issues raised in this report are being addressedin the fifth five-yearplan. Background papers prepared by Bank staff and consultants are summarized in the main report.1,/ The report also borrows from a parallel effort by the United Nations Development Programme (UNDP) which focused on itititutional arrangements for environmentalmanagement, and from document prepared for Indonesiaby the InternationalDevelopment Agencies of Canada (CIDA) and the United States (USAID). Minister Emil Salim and the staff of the State Ministry for Populationand Environmentreviewed and facilitatedthe work. Many other Indonesianofficials and concernedindividuals also made importantcontributions to this report and the Bank is grateful for their assistance. 2/ This paper was preparedby Gloria Davis with assistancefrom