RECOMMENDATIONS FOR INTERACTION

Transcription

1 RECOMMENDATIONS FOR INTERACTION MANAGEMENT FOR FSC, TLAS AND REDD+ IN INDONESIA MSc Thesis Forest and Nature Conservation Rik Martens Supervisor: Prof. Dr. BJM (Bas) Arts

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3 RECOMMENDATIONS FOR INTERACTION MANAGEMENT FOR FSC, TLAS AND REDD+ IN INDONESIA MSc Thesis Forest and Nature Conservation Chair group: Forest and Nature Conservation Policy Wageningen University Author: Rik Martens Registration Number: MSc Forest and Nature Conservation Specialisation: Policy and Society Master Track: Sustainable Development Diplomacy Supervisor: Prof. Dr. BJM (Bas) Arts Publication date: 10 th of December, 2015 Title page: Gunung Gede Pangrango National Park, Indonesia. Picture by Rik Martens 3

4 TABLE OF CONTENT List of figures... 6 List of tables... 7 List of abbreviations... 8 Executive Summary... 9 Chapter 1: Background Chapter 2: Theoretical framework Multi-level governance Forest governance Interaction management Chapter 3: Methodology Chapter 4: Forest governance of FSC, TLAS and REDD Indonesia s forest governance Foundations Policies and roles Instruments Extension MRV FSC Background Forest governance TLAS Background Forest governance REDD Background Forest governance Conclusion Chapter 5: Interlinkages among forest governance schemes FSC & TLAS National level Project level FSC & REDD National level Project level

5 TLAS & REDD National level Project level Conclusion Chapter 6 Interaction management FSC & TLAS Current interaction Recommendations for interaction management FSC & REDD Current interaction Recommendations for interaction management TLAS & REDD Current interaction Recommendations for interaction Conclusion Conclusion Reflection Discussion Acknowledgements References Annex A: Original Pyramid of Good Forest Governance Annex B: List of interviewees Annex C: Interview format

6 LIST OF FIGURES Figure 1. Figure 2. Figure 3. Figure 4. Figure 5. Figure 6. Figure 7. Figure 8. Figure 9. Figure 10. Figure 11. Figure 12. Figure 13. Figure 14. Figure 15. Figure 16. Figure 17. Figure 18. Figure 19. Figure 20. Figure 21. Figure 22. The schematic geographical coverage of FSC, TLAS and REDD+ in Indonesia s forests...12 Pyramid of Good Forest Governance, adapted from Mayers et al. (2002) 16 Causal mechanisms and Levels of Effectiveness (Gehring & Oberthür, 2009)...18 Graphical representation describing the relation among the schemes for their focus, interlinkages and interaction...20 Sequence and interrelation of the research questions...22 Role of FSC in national forest governance in Indonesia...27 Role of FSC in project level forest governance in Indonesia...28 Role of TLAS in national level forest governance in Indonesia...31 Focus of TLAS in project level forest governance in Indonesia...34 Focus of REDD+ in national level forest governance in Indonesia...36 Most opportune option for JNR REDD+ approach...38 Focus of REDD+ in project level forest governance in Indonesia...39 Focus of FSC on the tiers of pyramid of GFG at a national and project level...40 Focus of TLAS on the tiers of the pyramid of GFG at a national and project level...40 Focus of REDD+ on the tiers of the pyramid of GFG at a national and project level...41 Focus of FSC and TLAS on GFG, and their interlinkages at a national level...42 Focus of FSC and TLAS on GFG, and their interlinkages at a project level...44 Focus of FSC and REDD+ on GFG, and their interlinkages at a national level...45 Focus of FSC and REDD+ on GFG, and their interlinkages at a project level...46 Focus of TLAS and REDD+ on GFG, and their interlinkages at a national level...48 Focus of FSC and REDD+ on GFG, and their interlinkages at a national level...49 Forest cover trend per island group

7 LIST OF TABLES Table 1: Table 2. Table 3. Table 4. Table 5. Table 6. Table 7. Table 8. Table 9. Information source for research questions...21 Interlinkages between FSC, TLAS and REDD+ in Indonesia at the national level...50 Interlinkages between FSC, TLAS and REDD+ in Indonesia at the project level...51 Interaction between FSC and TLAS...53 Recommended interaction between FSC and TLAS...55 Interaction between FSC and REDD Recommended interaction between FSC and TLAS...59 Interaction between TLAS and REDD Recommended interaction between TLAS and REDD

8 LIST OF ABBREVIATIONS CAB EU FLEGT FAO FSC GFG GoI IEI IFMN MLG MoEF MRV PEFC PHPL PROFOR REDD+ TLAS VPA Conformation Assessment Body European Union European Union s Forest Law Enforcement, Governance and Trade Food and Agriculture Organization of the United Nations Forest Stewardship Council Good Forest Governance Government of Indonesia Indonesia Ecolabel Institute Independent Forest Monitoring Network Multi-level governance Ministry of Environment and Forestry Monitoring, Reporting and Verification Programme for the Endorsement of Forest Certification Sustainability Standard of the Government of Indonesia World Bank s Program of Forests Reducing Emissions from Deforestation and Forest Degradation Timber Legality Assurance System Voluntary Partner Agreement 8

9 EXECUTIVE SUMMARY Indonesia s archipelago contains the third largest tropical rainforest, and faces the highest deforestation rates in the world. These high rates of deforestation are driven by palm oil plantations, (illegal) logging, fibre plantations, mining and agriculture. This study set out to provide recommendations for interaction management for the Forest Stewardship Council (FSC), Timber Legality Assurance System (TLAS), and Reducing Emissions from Deforestation and Forest Degradation (REDD+) to improve forest governance in Indonesia. These recommendations are based on the current interaction taking place among the schemes, combined with their interlinkages. The interlinkages are distilled from the respective foci of the schemes on Good Forest Governance (GFG). FSC focuses mostly on the project level, where it addresses many elements of GFG. TLAS has a more balanced approach, in which national actions focus on facilitating project level certification efforts. REDD+ has a stronger focus on the national level, at which it strengthens enabling conditions for implementation. Project level efforts focus on the implementation of pilot projects. Several interlinkages have been identified among the schemes. Since both FSC and TLAS are certification schemes, there are interlinkages in their standards and dependence on auditory bodies. FSC and REDD+ can contribute to each other s effectiveness via the interlinking FSC Principles and Criteria and REDD+ Safeguards. Moreover, FSC provides carbon benefits for REDD+ and the MRV of the schemes have mutual relevance. TLAS and REDD+ address the same foundational issues. Also, TLAS is pathway to REDD+ implying that its outputs can contribute to REDD+ effectiveness. Finally, the Independent Forest Monitoring Network set up for TLAS can be used for REDD+. The interaction analysis showed there is only disruptive and neutral interaction between FSC and TLAS. Recommendations are therefore provided to improve their interaction management. FSC could aim to include TLAS requirements in their standards. The certification schemes differ too much to conduct joint certification. Joint auditing on the other hand can be stimulated, which allows one auditory body to combine multiple audits during a single visit. Neutral and synergistic interaction has been found between FSC and REDD+ which could be further improved based on the interlinkages identified by this study. The first step would be that FSC and REDD+ acknowledge their functional interlinkages. This can lead to the prioritisation of areas with FSC concessions to become REDD+ projects, as FSC can ease compliance with REDD+ safeguards and provide carbon benefits. Also, NGOs can prioritise concessions within REDD+ projects to stimulate FSC certification because they will more easily comply with FSC Principles and Criteria. Interaction has taken place to integrate activities between TLAS and REDD+, but have ceased due to their different implementation phase. First, joint efforts could be made to address land tenure, corruption and law enforcement. Also, the policy, stakeholder clarification and monitoring outputs can be used by REDD+ to improve its effectiveness. Finally, the monitoring network set up for TLAS could be extended for REDD+ as well. This study concludes that current interaction is not realising the potential of the interlinkages among FSC, TLAS and REDD+ that have been identified in this study. These interlinkages create a strong basis to exploit synergies and minimise conflicts among the schemes. The recommendations for interaction management suggested by this study provides options to improve forest governance by seeking collaboration among FSC, TLAS and REDD+. 9

10 CHAPTER 1: BACKGROUND Indonesia s archipelago contains the third largest tropical rainforest in the world harbouring 3305 known species of mammals, birds, reptiles and amphibians, of which 31.1% are endemic (UNEP World Conservation Monitoring Centre, 2004). The forests are vital for local livelihoods, the national economy as well as the global environment due to its enormous carbon sequestration potential. Yet, it faces the highest deforestation rates in the world, exceeding even Brazil while having only a quarter of forest area. Primary forest loss has increased over the last ten years and is estimated to be as high as ha in 2012 (Margono et al., 2014). These high rates of deforestation are driven by palm oil plantations, (illegal) logging, fibre plantations, mining and agriculture (Abood et al., 2014). The magnitude of deforestation in Indonesia is so severe it was the fifth largest producer of greenhouse gases in 2011 (WRI, 2014). Indeed, the Indonesia Second National Communication Under The United Nations Framework Convention on Climate Change showed that for the period of , 40% of Indonesia s emissions stem from Land Use Change and Forestry, while another 21% are the result of peat fires, which are common in Sumatra and Kalimantan after peat land forests have been cleared (Ministry of Environment, 2010). The exploitation of Indonesia s forestland started as a result of the concession system wherein industries were given the right to harvest, provided they complied with the regulations set up by the government. The Basic Forestry Law of 1967 was one of the first laws passed under the New Order regime of Suharto and stated that all forest within the Republic of Indonesia is to be controlled by the state. This transition by some considered one of the largest land grabs in history converted common property forests into public property to subsequently allow selected private interests to exploit these (Fay & Sirait, 2002). This law focused on timber management rather than conservation and thus paved the way for extensive deforestation in Indonesia s forests. As a result, during the early-1970s, Indonesia emerged as the world s largest exporter of tropical logs, and the forestry sector became the country s second-largest source of GNP (Barr et. al, 2006). During , the islands of Sumatra, Kalimantan, and Sulawesi each lost between 25% and 30% of their forest cover (GFW/FWI, 2002). Even though the unsustainable forestry sector propelled Indonesia s economy, it was achieved at a huge environmental cost. The international community tried to counter these high deforestation rates, but since a global legally binding treaty could not be negotiated, a manifold of non-legally binding forest institutions arose, including the Non Legally Binding Instruments on All Types of Forests (2007) and the Forest Stewardship Council (FSC), which has been established in Moreover, Reducing Emissions from Deforestation and Forest Degradation (REDD+), and the European Union s Forest Law Enforcement, Governance and Trade (FLEGT) are two newly emerged institutions in the international forest regime (Ochieng et al., 2013). Next to FSC, several other certification schemes contribute to Indonesia s forest governance, such as the Programme for the Endorsement of Forest Certification (PEFC), and the Indonesian schemes Timber Legality Assurance System (TLAS) and Indonesia Ecolabel Institute (IEI), or Lembaga Ekolabel Indonesia, as it commonly referred to. Finally, there are numerous national and subnational projects from the Ministry of Environment and Forestry (MoEF), multilateral, bilateral and national organisations. This study limits its scope to three of these schemes, namely FSC, TLAS and REDD+. These have been selected because of their strong involvement in Indonesia s forestry sector: TLAS, Indonesia s cornerstone for FLEGT, and REDD+ are the major institutions through which the Government of Indonesia (GoI) and the international 10

11 community currently want to curb deforestation rates and illegal logging in the country. FSC sets high social and environmental standards for its concessionaires, substantially improving forest governance within the certified concessions. FSC certified forest coverage has more than doubled in recent years, resulting in the certification of over 2.1 million hectares of forests (FSC, 2015b), equalling 2.2% of Indonesia s forest cover. PEFC has a similar approach, but only two companies in Indonesia have been certified so far (PEFC, 2015). Moreover, their standards are less stringent than FSC, thereby making a smaller impact on Indonesia s forest governance. IEI used to be another large voluntary certification in the country, but has now been marginalized as it has a small elevated market acceptance outside Indonesia. PEFC and IEI have therefore been excluded from this study. Good forest governance (GFG) is a red thread for FSC, TLAS and REDD+, the three schemes assessed in this study. GFG involves many stakeholders, regulations, instruments and monitoring systems. Moreover, multiple enabling factors, fundamental to good forest governance are embedded in other sectors and are difficult to address for forestry stakeholders alone. Given the multidimensional conditions for GFG, none of these schemes can address all elements. They therefore developed different approaches in which they focus on different aspects of GFG. FSC is a global certification scheme promoting sustainable forest management and social safeguards in the forest industry, thereby providing timber products with a competitive advantage in the international timber market. They argue for environmentally appropriate, socially beneficial, and economically viable forest management (FSC, 2014b). The forest coverage of their voluntary scheme has rapidly increased in recent years, but still only covers 2.2% of Indonesia s forests. Hence, despite that their high standards significantly improve forest governance within the FSC certified concessionaires, FSC does not have an impact on the entire forest cover in Indonesia. Secondly, the Timber Legality Assurance System (TLAS) is the cornerstone of the Voluntary Partner Agreement (VPA) the GoI agreed in 2011 with the European Union (EU) under the Forest Law Enforcement, Governance and Trade (FLEGT) action plan. The EU Timber Regulation, created as part of FLEGT s action plan in 2013, implies that all timber imported into any of the European Union member states must be from legal sources, in order to put illegal logging to a halt (European Forest Institute, 2014). In the United States, the Lacey Act was amended in 2008 to prevent illegally produced timber from entering the country (Brack & Buckrell, 2010). The GoI is implementing TLAS to convincingly prove its timber has achieved legal status, making it mandatory for the entire Indonesian timber production chain (SILK, 2014). By ensuring the legality of timber products, TLAS forms a first step towards sustainable forest management, an essential element of GFG. The certification of the mandatory certification scheme is unrolling swiftly, and as a result most of Indonesia s forest cover has been certified. Thirdly, REDD+, aims to create a positive monetary incentive via the carbon market to reduce deforestation and forest degradation (UN-REDD, 2009). Currently, REDD+ is still fund based since it has not been fully implemented yet. Indonesia s former president announced ambitious greenhouse gas emissions reduction of 26% unilaterally, or even 41% with international assistance (Reddmonitor, 2011). As land use change and forestry are the major causes of Indonesia s emissions, contributing 40% of Indonesia s emissions (Ministry of Environment, 2010), it is essential to address deforestation in order to meet this reduction goal. It has a broad approach using the carbon market to catalyse investments into more sustainable pathways. Therefore, REDD+ addresses issues which are not directly related to good forest governance, but key for more sustainable governance of 11

12 Indonesia s natural resources in the short and long term. The scheme does not have a strong impact on the ground yet, as REDD+ is still in its transformation phase, before embarking on its full implementation phase starting in 2017 (BP REDD+, 2014). Pilot projects also include areas outside forests in an effort to address underlying drivers of emissions, such as peat land degradation. Hence, REDD+ is a broader initiative than TLAS and FSC, going beyond carbon and forests. Forest cover Indonesia (98 million ha) TLAS (±80%) FSC (2.2%) REDD+ (8.5%) Figure 1. The schematic geographical coverage of FSC, TLAS and REDD+ in Indonesia s forests. The schematic geographical coverage of the three schemes in Indonesia s forests is described in Figure 1. The mandatory scheme TLAS will soon cover the entire forest area, while FSC only covers a small percentage of these forests. REDD+ has pilots projects within forests, but also projects to improve peat land management outside the current forest cover. These projects are still located within forest designation areas as determined by the MoEF. The different geographical coverage of the schemes is due to their different approach to Indonesia s forest governance. FSC brings strong benefits for good forest governance within its certified concessions, clarifying stakeholder roles, drafting management plans for sustainable forest management and annual surveillance audits to verify compliance of FSC standards. However, its actions at a national level are more limited. REDD+, on the other hand, currently focuses on a national level, creating the enabling conditions to reduce emissions from deforestation and forest degradation. REDD+ thus addresses different, but equally important elements of GFG. The rising number of laws, policies and organisations involved in forest governance increases complexity, and calls for harmonization of aims and activities (Smouts, 2008). Given the multilevel nature of the different relations of the schemes to forest governance, conflict needs to be minimised and synergies exploited in order to achieve GFG (Oberthür & Stokke, 2011). For instance, barriers for achieving good forest governance for each of the institutions overlap considerably. These comprise amongst others corruption (Smith et al., 2003), illegal logging (Human Rights Watch, 2009), land tenure conflict (Resosudarmo et al., 2014), and forest fires (The REDD desk, 2013). It is therefore essential that the schemes are tackling these multi-faceted barriers jointly rather than making separate efforts of addressing them. Moreover, the weaknesses of one scheme can be addressed by the strengths of another. Given the absence of a legally binding international agreement, these schemes could create a perfect mix of public and private rules, allowing for governmental support and facilitation combined with expertise and commitment from the private sector (Arts & Buizer, 2009). It is thus important that interaction occurs in aspects of good forest governance where these 12

13 schemes interlink. After all, interaction in areas where the schemes have nothing to do with each other is inefficient for either party. It is indeed now widely acknowledged that the effectiveness of schemes often does not only depend on its own features, but also its interaction with others (Gehring & Oberthür, 2008). Despite the acknowledged importance of interaction management, explorative interviews and lack of background material show that interaction, through for instance meetings or joint programs, is limited. Despite the seemingly mutual benefits for interaction, there is no clear joint effort towards good forest governance. Nevertheless, no study has structurally assessed how FSC, TLAS and REDD+ interlink in their approach to good forest governance or how they interact. These assessments make it impossible to provide recommendations how these schemes can enforce each other in their forest governance objectives. As Indonesia is blessed with the third largest area of tropical rainforests in the world, while deforestation rates are the highest in the world, this study can contribute to establish a comprehensive approach towards a more sustainable forestry sector in Indonesia. Moreover, as FLEGT and REDD+ are being unrolled in many countries in the world, while FSC is active in many developing countries as well, this study can serve as an example for interaction management in their national context. Therefore the objective of this study is first, to understand the relation of REDD+, TLAS, and FSC to good forest governance in Indonesia. This is needed to identify how the schemes are functionally related via interlinkages. Subsequently, an interaction analysis combined with interlinkages assessment provides ground to give recommendations for interaction management to minimise conflict and exploit synergies among the schemes. The abovementioned objectives translates into the following four research questions: 1. How do FSC, TLAS and REDD+ address good forest governance in Indonesia? 2. What are the interlinkages among FSC, TLAS and REDD+ in forest governance? 3. What interactions takes place among FSC, TLAS and REDD+? 4. What are recommendations for interaction management among FSC, TLAS and REDD+ to promote better forest governance in Indonesia? REDD+ and FSC are international mechanisms, while TLAS is established as a result of international agreements. Therefore interaction among the schemes in the international arena is likely, but not taken into consideration in this study. The aim is to assess Indonesia s context for these schemes, not their global interlinkages and interaction. Therefore, this study will limit itself to the national and project level. 13

14 CHAPTER 2: THEORETICAL FRAMEWORK For the purpose of addressing the aforementioned research questions, I draw on multi-level governance, the pyramid of the good forest governance and institutional interaction theory. Using the strengths in one theory to address the weaknesses in another can provide a more nuanced and multi-faceted perspective in understanding collective organisational efforts (Wijen & Ansari, 2007). To analyse the schemes, FSC, TLAS and REDD+, central in this study, I adopt the definition in which scheme is an agreement, whether voluntary or legally binding, aimed at addressing a specific problem or issue. Applying a narrow definition is useful for analysing specific interactions among individual agreements, but does not allow to view these agreements in a more holistic approach (Visseren-Hamakers et al., 2011). Since this study aims to provide recommendations for interaction management, this definition suits the objectives of this thesis well. This chapter will first explain Multi-level Governance, and continue to describe the framework for assessing forest governance, interlinkages, interaction and interaction management. Multi-level governance The three schemes analysed in this study, FSC, TLAS, and REDD+ can act on multiple jurisdictional levels. Multi-level governance (MLG) refers to a range of state and non-state actors who attempt to coordinate activities around functional problems (Jessop, 2004). Multi-level governance originated from European studies, which studied the multi-level characteristics of EU policy making and their member states (Hooghe & Marks, 2001). Since then, MLG has also been applied for subnational, national and global policy analysis because the domestic and international interface became outdated. Currently, the government-centred approach of MLG also includes non-state actors since they can influence politics, and local stakeholders are directly affected by the higher-level outputs (Arts & Visseren-Hamakers, 2012). For the purpose of this study, two different levels of governance have been identified: national level and project level. At the national level, governance is more of a strategic nature, concerning long-term effects such as the impact on society, and the effects on more foundational aspects of forest governance. Particularly stakeholder theory connects well to the national aspects of project governance. This theory argues that a scheme should be managed in the interests of all its stakeholders, including local communities, employees and society at large (Blair, 1996). In doing so, conflicting interests of different stakeholders need to be balanced (Donaldson & Preston, 1995). Particularly for national level governance, stakeholder theory entails that projects should understand and respond to various stakeholder groups (Biesenthal & Wilden, 2014). At the project level, governance is closely related to project management, making sure that projects are implemented adequately, thereby delivering the expected results. However, project governance is a higher-level structure that sets the overarching frame and manages strategic objective, in which the project management takes place (Biesenthal & Wilden, 2014). 14

15 Forest governance Broadly speaking, forest governance refers to steering society towards sustainable forest management (SFM) by government as well non-government actors (Arts & Visseren-Hamakers, 2012). It encompasses many stakeholders, regulations and mechanisms. Moreover, the institutional design, financing mechanisms and approach to achieve good forest governance differ considerably. Indonesia s forest governance has been shaped by its history, culture, socio-economic and geographical characteristics. Multiple frameworks have been developed to manage the complexity of forest governance in a country, amongst others the Framework for Assessing and Monitoring Forest Governance (FAO, 2011), and the Pyramid of GFG (Mayers et al., 2002). The Framework for Assessing and Monitoring Forest Governance, jointly developed by the Food and Agricultural Organisation (FAO) and World Bank s Program of Forests (PROFOR), has been frequently cited (Elliot, 2013; Secco et al., 2014; Suwarno et al., 2015). This framework consists of six principles of GFG: 1) accountability, 2) effectiveness, 3) efficiency, 4) fairness/equity, 5) participation, and 6) transparency. These principles are essential for GFG across three pillars: policy, legal, institutional and regulatory frameworks; planning and decision-making; processes; and implementation, enforcement and compliance (FAO, 2011). This framework has shortcomings for this study because it is too prescriptive. It requires the description of a multitude of principles, pillars, components and subcomponents. The objective of this study is not to assess Indonesia s forest governance as a whole, but to analyse the focus on GFG, identify interlinkages and assess interaction between FSC, TLAS and REDD+. A framework to break down the forest governance of FSC, TLAS and REDD+ in simple categories is more suitable for this analysis. Therefore, I draw on the Pyramid of Good Forest Governance, developed by the World Bank and WWF Alliance. This framework has been developed to stimulate participatory assessment and target setting and target setting at a country level (Mayers et al., 2002). The pyramid of GFG, presented in Figure 2 suggests several criteria for good forest governance, thus essentially providing the issues the three schemes can address in order to achieve their objective to improve forest governance. Each tiers consists of identifiable elements common to a wide range of nations (Mayers et al., 2002). These elements of forest governance may not be good for all stakeholders since short term intensive or illegal exploitation may be favourable for some companies or local communities. For them, good forest governance will be described rather differently. Nevertheless, this study will use the elements of the pyramid to structure GFG, since these are key to achieving SFM in the long run. To assess how the schemes address GFG, I will analyse the focus of the schemes on each of tiers of the pyramid. The strength of the focus depends on the priority of a tier for a scheme and the how strongly the scheme addresses a tier of the pyramid. The bottom tiers of the pyramid are more constitutional and more difficult to change, while the top tiers are more related to the implementation of GFG. The Foundational tier includes elements such as tenure security and the market conditions of timber products. The Policies tier includes laws and regulation, while the Roles tier concerns the negotiation of stakeholder roles. The Instrumental tier describes the mechanisms of the schemes for improving forest governance, of which the Extension is discussed one tier above. Finally, the MRV tier addresses the MRV mechanisms that are in place. 15

16 The pyramid has been customized to better address the research objectives of this study. Its aim is to describe the focus of the schemes on the different tiers of GFG, instead of the state of forest governance of Indonesia. This implies that SFM has been removed from the pyramid. SFM is an essential element of GFG, and subsequently returns in multiple tiers of the original pyramid by Mayers et al. (2002), which is enclosed in Annex A. However, it is not of prime focus for all schemes considered in this study. For instance TLAS focuses on legality, rather than SFM. Even though extension of SFM is not addressed by TLAS, it strongly focuses on the extension of its scheme. Similarly, TLAS does conduct MRV on its activities which needs to be further analysed in the light of this study. However, if the focus of this tier would remain to include SFM, it would be excluded since the MRV concerns legality only. 5. MRV: National & project: MRV mechanisms in place 4. Extension National & project: facilitating and stimulating extension of the scheme 3. Instruments National & project: Providing 'carrots and sticks' for implementation of schemes 2. Roles: National & project: contribution of scheme to negotiating national/project stakeholder roles 1. Policies: National: Contribution scheme to national forest governance regulations Project: Designing project level goals, regulations and management plans Foundations: 1. Involved in national/project level tenure discussion 2. Engages with extra-sectoral drivers and stakeholders 3. Market and investment conditions 4. Recognition of lead forest institutions Figure 2. Pyramid of Good Forest Governance, adapted from Mayers et al. (2002). Secondly, the order of the policies and roles tiers have been switched, as the policies and laws are more constitutional than the roles of stakeholders. The policies and laws shaping the forest governance in the country determine the roles that the stakeholders have in forest governance. Lastly, the fifth and highest tier is too narrow for the purpose of this study. Verification is often part of the broader process of Monitoring, Reporting and Verification (MRV). Monitoring and reporting processes are important aspects of the information, additional to verification via audits, reviews and certification. Therefore, this tier will be changed to MRV. 16

17 The pyramid will be used to analyse the focus of each of the three schemes on different elements of GFG. Following Multi-level Governance, this study applies the pyramid of GFG at the national as well as project level. Different aspects of GFG are important to be addressed at the project or national level, and therefore the schemes can focus on different elements concerning the same tier. To acknowledge the differences between national and project level forest governance, the pyramid of GFG has been adjusted. This is presented in Figure 2, presenting the 5 tiers and their foundation, as well as the elements the schemes can address at the project and national level. The differences in the tiers between the national and project level particularly arise in the policies tier. The contribution of the scheme to improve forest governance regulations is assessed at the national level, while the project level encompasses the project level goals of the scheme, project level regulations and the establishment of management plans. Also, differences are likely to arise in the tier on MRV: monitoring and verification commonly takes place at the project level, which is then reported to the national level, where it is stored in databases and exchanged with relevant stakeholders. The assessment of the focus of each of the schemes will underpin the identification of interlinkages, the second objective of this study. The interlinkages are functional connections among the schemes, for instance through addressing the same issues of forest governance or similarities in the instruments they implement. These interlinkages can exist among the schemes either at the national level or project level. Multi-level governance describes the different aspects of governance the schemes address at the national and project level. This explains that the interlinkages cannot occur between the national and project level. Some interlinkages may already have been identified and recognised by the schemes, which leads to improved forest governance, while other interlinkages have not yet been identified or taken up by the schemes yet. Some authors express the concern the Pyramid is too all-encompassing, lacking perspectives for concrete action (van Bodegom et al., 2008). Assessing the focus and identifying interlinkages among the three schemes requires broad insight into their forest governance performance. The broad approach of the pyramid enables the mapping of all governance aspects these projects have to attain better forest governance, making it a suitable tool to meet the objectives of this study. Interaction management To manage interlinkages, at least one of the schemes needs to change its policies, behaviour, or goals. In order for this to happen, influence needs to be exerted from one scheme to another. Scheme interaction describes these different forms of influence that can travel from one scheme to another. Scheme interaction can take place via the provision of information, commitments established by a scheme, behaviour of project level stakeholders, or the functional interdependence of the schemes. Hence, it is a linear process via which the source scheme affects the target scheme (Gehring & Oberthür, 2009). However, it can occur that the same form of scheme interaction simultaneously takes place in both directions. Schemes can reinforce each other s rules and activities, but also duplication or contradiction can take place. Studies on interaction management aim to identify these factors and exploit potential from better management of the schemes interplay (Stokke, 2001). 17

18 Organisational change management literature has traditionally predominantly focused on the assessment of organisations in isolation rather than their interrelation (Todnem By, 2005). However, the ability of organisations to influence each other is increasingly recognised (Gehring & Oberthür, 2009). Organisations can reinforce each other s rules and activities, but also duplication or contradiction can take place. Studies on organisational interaction aim to identify these factors and exploit potential from better management of this organisational interplay (Stokke, 2001). While most research has focused on interaction among international institutions, particularly in the field of environmental governance (Galaz et al., 2012; Oberthür, 2009), few studies regarding interaction in forest governance institutions have been conducted at the national level (Ochieng et al., 2013; Broekhoven et al, 2014). Figure 3. Causal mechanisms and Levels of Effectiveness (Gehring & Oberthür, 2009). In order to comprehensively analyse the interaction among the schemes, multiple conceptual frameworks have been developed (Gehring & Oberthür, 2009; Oberth Raustalia & Victor, 2004; Young, 1996, 2002). The conceptual framework of Gehring and Oberthür (2009) presented in Figure 3 is very applicable for the purpose of this study. It allows for systematic assessment of the different forms of interaction that can occur between institutions, which facilitates the exploration of actions institutions can take to streamline efforts towards improved forest governance (Gehring & Oberthür, 2009). The interaction can have beneficial, adverse or indeterminate effects on the target institution as compared to the prime objective of the institution. When positive, synergies will be created between the institutions, while adverse effects will lead to disruption. The framework presents four different causal mechanisms through which interaction between institutions can occur, which can occur on three different levels of effectiveness: output level, outcome level and impact level. The effectiveness of the interaction will be influenced by the effectiveness cascade. While interaction on an output level changes collective knowledge or norms, outcome level interaction results in behavioural change. Impact level changes will influence the ultimate governance target. Since influence on an output and outcome level will trickle down the Levels of Effectiveness (vertical arrows), also output level interaction eventually influences the ultimate governance target (Gehring & Oberthür, 2009). 18

19 The first causal mechanism, Cognitive Interaction, occurs when information, knowledge, and institutional innovations from the source institutions affect the decision-making in the target institutions. Two ideal types of cognitive interaction are presented in the framework, for which the division in based on whether the learning process in the target institution is intentional or not. Policy model interaction occurs when the target institution voluntarily adopts developments of the source institution as a policy model. For example, the Montreal Protocol influenced the development of the Kyoto protocol because it provided an example how to supervise implementation and noncompliance. The Montreal Protocol was perceived to be useful inspiration for developing the Kyoto protocol, thereby influencing its design. Request for assistance, the second ideal type of cognitive interaction, occurs when the target institution is requested to implement changes already in place in the source institution. The second causal mechanism, Interaction through Commitment, is premised on the on commitments from the source regime that affect preference of the target regime regarding the issue at stake. This causal mechanism can occur based on three ideal types of interaction: jurisdictional delimitation, nested institutions, and additional means. Jurisdictional delimitation arises if two institutions with similar memberships, but different objectives address the same set of issues. Nested institutions occur when institutions are formally independent and have similar objectives, while their interaction is driven by their support for each other s objective. Additional means can occur when institutions have the same membership and similar objectives. Actors commitments already in place for the source institution need to transfer this commitment to another institution, thereby influencing the target institution. Thirdly, Behavioural Interaction is premised on the interdependence of behaviour across the domain of institutions. The products of the source institution (policies, reports, prescriptions etc.) can change the behaviour of actors relevant for the target institution, thereby influencing the institution. Prerequisite for behavioural interaction is that outputs of the source institution actually change the behaviour of actors relevant for the target institution in the domain that matters for both institutions. In doing so, Behavioural Interaction does not depend on a decision within the target institution but acts by influencing its actors, which is in contrast to Cognitive Interaction and Interaction through Commitment. Lastly, Impact-Level Interaction results from the interdependence in the ultimate governance targets. This occurs when the ultimate governance target of the source scheme directly influences the ultimate governance target of the target scheme. Hence, the interdependence does not rely on any action of the target scheme, but depends on the functional linkage (Gehring & Oberthür, 2009). This aligns with the assessment of interlinkages, which also rests on the functional connections among the schemes. However, the pyramid of GFG does not address the ultimate governance targets of the schemes. The recommendations for interaction management will explain how influence can be transferred to exploit synergies within the interlinkages. The impact-level interaction on the other hand will provide additional insight how functional dependencies among the schemes can directly cause the travel of influence. 19

20 Figure 4 summarises the multiple concepts and frameworks applied in this study. Multi-level Governance is included in the multiple levels within each of the steps. The pyramid of GFG is used to assess the focus of the schemes on the different elements of GFG, described in the first blue box. The focus on GFG of the schemes is analysed in isolation. This analysis underpins the identification of interlinkages among the schemes, which is indicated by the horizontal bold black lines between two schemes. These functional connections among the schemes can occur either at the national or the project level. Thirdly, interaction management is assessed using the framework of Gehring & Oberthür (2009). The transfer of influence can take place within the national or project level, but can also cross the multi-level boundary, as one scheme can effect another by influencing its project level member organisations. This framework will be used to assess current interaction and provide recommendations for interaction management. Scheme Scheme 1. Focus on GFG Project National National Project 2. Interlinkages Project National National Project 3. Interaction Management Project National National Project Figure 4. Graphical representation describing the relation among the schemes for their focus, interlinkages and interaction. 20

21 CHAPTER 3: METHODOLOGY The focus, interlinkages, interaction, and recommendations for interaction management for FSC, TLAS and REDD+ will be assessed via literature research and semi-structured interviews with key stakeholders. Background literature research on the three schemes provides the basis for assessing the focus and interlinkages. Furthermore, semi-structured interviews with a wide range of stakeholders are required to comprehensively assess the interlinkages and interaction among the schemes. The full list of fifteen interviewees has been enclosed in Annex B. These interviews will be literally transcribed and coded conform the coding methodology followed by Burnard (1991), who introduces fourteen stages for the coding process. The number of interviews is based on sufficient representation of organisations involved in the institutions assessed in this study, and the accessibility to the interviewees. Hence, the sample strategy is based on a combination of judgement and convenience sampling (Guest et al., 2006). Table 1: Primary and secondary information source for research questions. Primary information source Research question 1 Literature Interviews Research question 2 Literature Interviews Research question 3 Interviews Literature Research question 4 Framework analysis Interviews Secondary information source Table 1 presents the primary and secondary information source for each of the research questions. For the first research question how TLAS, FSC and REDD+ address good governance I draw on the Pyramid of Good Forest Governance (Mayers et al., 2002). Existing literature can largely provide this information, but interviewees closely involved in the schemes can provide additional input for this assessment. The strength of the focus of the schemes on the tiers of GFG will be scored from weak to strong. This is based on the number of elements a scheme addresses within a tier, in combination with the perceived importance of this tier for the scheme according to literature and interviewees. A weak focus implies that a scheme does not, or barely consider this tier in its performance. A medium focus indicates the scheme addresses most elements in a tier, but it is not the main priority of the scheme. A strong focus shows that the scheme prioritises this tier, while addressing most or all its elements. Regarding the second research question, I can use the threefold analysis of the relation of the schemes to good forest governance to assess what interlinkages exist among the schemes. Hence, this research question builds on the Pyramid of GFG as well. If the schemes focus on the same tier, there is potential for interlinkages. The stronger the focus of a scheme, the higher the potential for interlinkages. These interlinkages are identified via a closer analysis of the tiers with a common focus using existing literature and data from interviews. 21

22 1. Focus 2. Interlinkages 4. Recommendations for interaction management 3. Current interaction Figure 5. Sequence and interrelation of the research questions. As shown in Figure 5, the third research question what interactions take place among the schemes is a separate analysis from the focus and interlinkages assessments. For the interaction, I draw on the causal mechanisms presented by Gehring & Oberthür (2009), as these provide the means for systematic analysis of different forms of interaction that can occur among the schemes. Interviews are fundamental to assess the interaction among the schemes, since existing literature regarding interaction on these schemes is scarce and therefore incomplete. The fourth research question recommendations for interaction management will combine the analysis of the interlinkages and current interaction, which is also indicated in Figure 5. The current interaction analysis shows to what extent the interlinkages are exploited by the schemes. The interlinkages that are insufficiently or redundantly addressed by interaction among TLAS, FSC and REDD+ offer space for recommendations for interaction management. These recommendations will be based on literature, interviews, as well as the author s judgement. The recommendations are intended to provide ground for improving forest governance via limiting conflict and exploiting synergies. Since REDD+ and TLAS are still to be fully implemented, up to date information about their interaction is crucial in order for this study to be accurate. Developments within these schemes are fast, and have taken place regularly in recent years. Because the bulk of the interviews have been conducted in February 2015, the results are most applicable until that time period. 22

23 CHAPTER 4: FOREST GOVERNANCE OF FSC, TLAS AND REDD+ This chapter will analyse how the schemes address good forest governance (GFG). An adapted version from the pyramid of good forest governance, presented in Chapter 2 will aid this assessment as it identifies multiple elements of forest governance that are common to a wide range of nations. The analysis of the focus of the individual schemes in this chapter, will be used in the next chapters to determine the interlinkages among the schemes. The strength of the focus of a scheme on the different tiers of GFG will be visualized by the width and colour of the tiers of the pyramid for both the national and project level. The green colour implies the scheme has a strong priority on this tier, and strongly addresses most elements in it. Orange means the scheme does address this tier to some extent, explaining the medium focus. Red infers the scheme weakly addresses this tier, or does not take it into account at all. The width of the tiers will concomitantly indicate the strength of the focus on the different tiers. The wider the tiers are, the stronger the focus of the scheme on this tier if GFG. This chapter is structured as follows. First, a concise overview of the main issues and trends in forest governance in Indonesia will be provided using the pyramid of GFG. Subsequently, this chapter will discuss the background of FSC, TLAS and REDD+, and how they address forest governance in Indonesia. This assessment will be conducted for the national and project level. Finally, the conclusion will compile the main findings of the chapter. Indonesia s forest governance The pyramid has been scarcely applied in Indonesia s context so far, limited to a study identifying several weaknesses in Indonesia s forest governance (Yale, 2006). It did, however, not analyse the main laws, programs and instruments which could address these weaknesses. Therefore, this chapter will build further on their analysis and provide a concise overview of Indonesia s forest governance, structurally addressing each of the tiers of GFG. Roles and policies will be described jointly, since they are closely related. Foundations As the study conducted by Yale (2006) correctly argues, the foundation for good forest governance is not solid, which undermines the forestry sector in Indonesia. Land tenure insecurity and weak government control over resources in Indonesia have been widely discussed (Gamin et al., 2012; McCarthy et al., 2012; Moeliono & Limberg, 2012). However, Indonesia is making efforts to start reforming land tenure, underscored by the enactment of Law 23/2014 on regional governance, and Law 6/2014 on Village governance. Investment conditions are focused on short term wins rather than sustainable use, with many logging companies struggling to avoid bankruptcy 1. Meanwhile, extra-sectoral drivers of deforestation, such as palm oil, mining and agriculture are insufficiently integrated in forest management. In order to achieve good forest governance, integration of these sectors is pivotal. The involvement of local communities is often marginal in decision making and implementation of forest governance schemes. Of the three schemes considered in this study, particularly REDD+ has been criticized for this (Veierland, 2011). 1 Interview Andy Roby, FLEGT facilitator 23

24 Also corruption is a persistent barrier for GFG. The corruption hampers forest governance via illegal logging and land clearing, as well as the provision of illegal permits for exploitation. Law enforcement is a big challenge for the Indonesian government, as illegal logging is thriving in the country. In ministerial reports for 2011 and 2012, the source of 39% and 27% of total log production in the country was unknown (Ministry of Forestry, 2013, 2014), which implies it is from clear felling; an illegal source. 2 More critical reports even state more than 50% of Indonesia s forestry industry supply is from illegal sources (Human Rights Watch, 2009). Because of the poor investment conditions for SFM, incentives for short term extraction are stronger than incentives for long term sustainable use. Policies and roles Going one tier up in the pyramid, it becomes in the policy tier that policies and laws are not clear nor consistent in Indonesia. This rearises in the tier concerning stakeholder roles in good forest governance. After Suharto s highly centralized New Order Regime in 1998, a rapid decentralization process took place in Indonesia given shape by Law 22/1999 on regional governance. The transfer of power to local officials can bring substantial advantages, such as greater local participation and more equitable use of resources (Obidzinski & Barr, 2003). Law 41/1999 on Forestry however, was designed to reaffirm the dominant role of the central government to be the primary authority to govern Indonesia s forests (Barr, 2006). These competing claims on regional authority have raised political struggles as well as uncertainty and contradiction between local policies and high-level policies and laws (Indrarto et al., 2012). In areas with weak local governments, this led to nontransparent decision making and corruption practices (Moeliono & Limberg, 2012; UNORCID, 2015). Indeed, heads of district have been passing around 1500 illegal bylaws in the last years. 2 More recent developments in Indonesia s forest governance include the enactment of Law 23/2014 on Regional Governance, which restructures the authority of district governments in forest governance, and allocates it to provincial governments which represent the central government. Meanwhile, Law 6/2014 delegates substantial authority and resources to villages to manage their area according to local context and vision (UNORCID, 2015). Another prominent development in forest governance is the merge of the Ministry of Forestry with the Ministry of Environment, which can lead to more proactive environmental policy incentives (Nurfatriani et al., 2015). Moreover, the national REDD+ agency (BP REDD+), responsible for the implementation of REDD+, has been taken up by the new Ministry of Environment and Forestry (UNORCID, 2015). Forest Management Units are being unrolled as well, which are responsible for forest management, planning and oversight. It is a land use based management approach, since protection forest, production forest and palm oil plantations can all be located within one FMU. The boundaries are based on geographical characteristics such as rivers and mountain ranges, rather than administrative boundaries. The typology of the FMU depend on the dominant land designation within its administration. For instance, if the dominant land type is production forest, it will be a Production FMU. FMU s can be as small as a few thousand hectares, or as big as hectares. Some are already operational and working well, particularly in intensely managed areas on Java. Some of the FMU s already have established management plans and watershed management. 3 However, many interviewees are still sceptical about the establishment of FMU s. Even though they acknowledge the FMU s are the logical or right way forward, they highlight the limited human and financial resources 2 Interview Andy Roby, FLEGT facilitator 3 Interview Agu Setyarso, Executive Secretary, Development Secretariat Forest Management Units 24

25 available for FMU s to handle the manifold responsibilities the FMU s would have. 4 Moreover, as FMU s are essentially developed to become business units, the lack of business understanding of civil servants 5, and dependence of government finances causes risk averse behaviour. 4 The country has been divided in about 600 FMU s, but currently only about 120 have been established on paper, of which only an estimated are operational with staff on the ground. By the end of 2019, another 509 FMU s are planned to be unrolled (UNORCID, 2015). Instruments Instruments for good forest governance include incentives for stakeholders to manage forests sustainably. There are multiple certification instruments in the forestry sector. The instruments of FSC and TLAS will be discussed extensively further on in this chapter. Besides these two, PHPL, IEI and PEFC are present in Indonesia. PHPL, the sustainability standard of the GoI provides a sustainability score for large concessions within the country. It is mandatory for all concessions above 5000 hectares. PHPL only scores companies, and does not force companies towards more sustainable practices. 6 Companies assessed by PHPL therefore do not have to comply with sustainability and social standards that some other certification schemes require. Moreover, the Indonesian Ecolabel Institute (IEI) used to have a joint certification protocol with FSC. It is currently marginalized because of the lack of acknowledgement by the international community, thereby not generating the premium price for concessionaires that FSC creates. 4 Similar to FSC, Project for the Endorsement of Forest Certification (PEFC) is a voluntary certification scheme for forest concessionaires and chain of custody (CoC). PEFC has lower standards for their SFM and social wellbeing and is therefore easier to obtain. Therefore, some of the major pulp and paper industries have chosen PEFC certification instead of FSC. Also, the competitive advantage in the market and the boost for the image of the company is less strong than with FSC certification. All of these certification schemes have been developed or adapted at a national for the Indonesian context. However, their impact, extension and MRV is mostly visible at a project level. Besides the instruments described above, there is a wide variety of instruments aiming to better forest governance in Indonesia. Among others, this can include community projects, such as community-based forest management, as well as land use planning initiatives such as Indonesia s moratorium for the issuance of new forest concession licenses (Murdiyarso et al., 2011). The focus of this study will remain on FSC, TLAS and REDD+, yet the potential for synergies between other instruments would make a worthy research objective. The instruments tier also includes penalties for law violations. Penalties embedded in the forestry laws are rarely enforced in Indonesia due to monitoring difficulties for illegal activities. Unclear land tenure and corruption further contribute to the lack of penalties for law violations. Extension Extension of GFG activities is hampered by the decentralization of Indonesia. A wide range of national, regional and local stakeholders is involved in the forestry sector, many of which have contrasting interests. GFG is not in the interest of many of them, and therefore neglected or actively obstructed. 7 The aforementioned poor investment conditions are contributing to this. 4 Interview Ahmad Dermawan, Researcher, Forests and Governance Programme, CIFOR 5 Interview Andy Roby, FLEGT facilitator 6 Interview Hartono Prabowo, FSC National Representative 7 Interview Arief Perkasa, Senior manager, The Forest Trust 25

26 MRV The Monitoring, Reporting and Verification (MRV) mechanisms strongly depend on what information is needed. MRV is essential for measuring the progress towards established project goals, matching support to the project level with their needs, and comparing different projects. Monitoring and verification commonly occurs at the project level. For instance, certification schemes conduct audits during which monitoring of implementation and verification of compliance with certification standards takes place. This is subsequently reported to the level at which the project is governed, for instance the provincial, national or international level. FSC Background The Forest Stewardship Council (FSC) is a global certification scheme promoting SFM and social safeguards in the forest industry, thereby providing timber products with a competitive advantage in the international timber market (FSC, 2014a). FSC has a complex history concerning the certification of timber in Indonesia. In theory, certification encourages collaboration, facilitates conflict resolution, builds confidence among parties, and offers premium prices (Yale, 2006). However, theory and practice proved to be two different worlds. Certification is a much encompassing procedure involving a great variety of local, national and international stakeholders who are sometimes historically deeply divided such as the Ministry of Forestry and local communities because of the lack of acknowledgement of community rights in forest management. Therefore, certification was initially not welcomed by many of the parties involved in its process, but global pressure from growing environmental activism and boycotts on Indonesian wood products put it on the agenda of the Government of Indonesia (GoI). Participation of Indonesia in the ITTO and the Earth Summit of 1992 encouraged the interest in certification by putting sustainable management of tropical forests on the national as well as international agenda. However, the view that certification was the way forward towards SFM was contested. Resulting from these contesting views, the Certification Working Group of Indonesia Ecolabel Institute was established in the same year as the foundation of FSC in The Indonesian Ecolabel Institute (IEI) working group initially focused on the development of systems and standards, but became an independent accreditation body in 1998 as the IEI. Even though FSC standards were internationally widely acknowledged, it was insisted by Indonesian stakeholders that all certification schemes should use the IEI system, which stimulated the collaboration between FSC and IEI. As a result hereof, all initial certification activities in Indonesia have taken place using both systems under the Joint Certification Protocol (Yale, 2006). Despite these investments in FSC certification in Indonesia, it came to a stand-still. The five FSC certificates issued in 1998 and 2000 were all withdrawn, mostly because of the severe forest related social conflicts that were ignored (Forest Trends, 2004). In recent years, however, considerable growth in the area under FSC certification should be noted. In January 2011, the certified forest areas accumulated to 833,000 hectares, which more than doubled to 2,110,925 hectares in August Also, CoC certifications have risen to 206 by August 2015 (FSC, 2015b). Also, the first certification for Papua province has been approved as well 8, which was long thought unfeasible given its low quality 8 Interview Hartono Prabowo, FSC National Representative 26

27 of governance and control mechanisms. This means that FSC in Indonesia far exceeds the areas under certification by other South-East Asian countries (FSC, 2015b). As interviewees noted, this is largely thanks to the efforts of The Borneo Initiative, who assists concession holders to fulfil the certification requirements while at the same time aims to forge trade links, thereby stimulating the demand for certified timber. 9 Forest governance NATIONAL LEVEL On a national level the overlap with the pyramid is marginal as described in Figure 6. Most of the activities take place at the project level, where the implementation and governance of FSC certification takes place. Therefore, FSC s focus on the GFG tiers is either weak or medium. MRV Reports information to stakeholders Extension Instruments Roles Limited to lobbying and information sharing Sets national standards based on international principles & criteria N.A. Policies N.A. Foundations 1. Creates market for SFM products 2. Recognised by NGOs & certified concessionaires Weak Medium Strong Figure 6. Focus of FSC in national forest governance in Indonesia. Strength of focus of FSC indicated by width of tier and colour. Orange: Medium focus on forest governance tier. Red: weak focus on forest governance tier. The foundations described in the Pyramid include tenure rights, market conditions and extra-sectoral engagement. Even though clear tenure rights are a precondition for certification, FSC is not involved in the discussion on resolving tenure issues at a national level. FSC does create a national and international market for sustainable timber products. By ensuring the products comply with FSC standards, they generate a premium price for the entire supply chain. Therefore FSC plays an important role in creating the demand and supply for sustainable timber products, necessary for good forest governance. FSC does not maintain relations with extra-sectoral stakeholders such as farmers, plantations holders or ministries. Within the forestry sector though, FSC is strongly supported by NGOs, and the companies who are certified by them. The Ministry of Forestry and Environment does not support FSC or any of the other voluntary certification schemes such as PEFC or IEI. The stimulation of the market for sustainable timber products and recognition of NGOs and certified companies results in a medium focus of FSC on the foundations of GFG. 9 Interview Wim Ellenbroek, Program Director, The Borneo Initiative 27

28 FSC follows national regulations rather than being involved in creating or enforcing them. Moreover, it does not contribute to the clarification of roles of different stakeholders at a national level. Hence, FSC does not focus on the policies and roles tiers, which results in a weak focus on both of them. Regarding the tier discussing the instruments for GFG, FSC has a medium focus on this tier. FSC is mostly implemented and governed at the concession level. However, the international principles and criteria of FSC are adapted to the national context (Boyle & Murphy, 2012). FSC provides no incentive for good forest governance for concessions without FSC certification. Also, since the certification scheme is voluntary, no legal penalties are included in their instrument. However, if annual surveillance audits show violations of the FSC Principles and Criteria, the FSC certificate can be withdrawn, which has happened in the past. FSC s extension at a national level is limited to lobbying and information sharing of their activities with relevant stakeholders. 10 Given their efforts to stimulate extension of FSC, there is a medium focus on this tier. The certification reports are stored in an international database, which is publicly available online. FSC reports this information with relevant stakeholders at a national level, which underpins the medium focus. PROJECT LEVEL At the concession level, the project level of FSC in this study, FSC focuses on concessionaires that request certification. FSC envisions three pillars of forest management, namely that it should be environmentally appropriate, socially beneficial, and economically viable. Furthermore, 10 principles and 57 criteria have been developed to underpin their vision (FSC, 2015c). Elements of all the layers of the Pyramid are addressed in these principles of the FSC scheme. Hence, on a project level, FSC focuses on all the tiers of the Pyramid of Good Forest Governance, as highlighted in Figure 7. MRV Annual surveillance audits of compliance with standards Extension Instruments Roles Policies Mostly via NGOs, hampered by certification costs and 1994 rule Provides incentives for FSC via premium price and assists in improved management practices Stakeholder roles described in management plan Policies drafted based on social & environmental impact studies Foundations 1. clear tenure rights required 2. Creates SFM investment conditions 3. Recognition of forest actors Weak Medium Strong Figure 7. Focus of FSC in project level forest governance in Indonesia. Strength of focus of FSC indicated by width of tier and colour. Green: strong focus on forest governance tier. Orange: medium focus in forest governance tier. 10 Interview Hartono Prabowo, FSC national representative 28

29 Regarding the foundational tier, clear tenure rights are a precondition for certification, but FSC does not provide any land tenure conflict resolution system. It also addresses the local market conditions for sustainable timber products, and has the recognition of forestry actors, particularly downstream industries. Given the efforts of FSC towards improving the foundational issues, there is a medium focus on this tier. FSC s main priority at the project level is the compliance of concessionaires with FSC principles and criteria, thereby contributing to better forest governance. These requirements consist of elements in the policies, roles, instrument and MRV tiers, making this a strong focus of FSC. Therefore, these tiers will be discussed first, after which the focus on the extension of FSC certification will be described. Concession policies are based on a social and environmental impact studies, which have to be conducted before certification is granted. FSC improves the internal processes within concessions via management plans, can prioritize areas for conservation or reduced impact logging, and improves social standards for employees and communities. 11 The roles of stakeholders related to the concession, including local communities, have to be described in the mandatory management plan. Hence, the FSC certification process is a powerful instrument to improve forest governance at a concession level. As it is a voluntary certification scheme, no penalty system is in place. However, in case of violations of the principles and criteria, the FSC certificate can be withdrawn. MRV of the compliance of a concession or CoC certificate holder with the standards and criteria of FSC takes place regularly. Annual surveillance audits are conducted by the third party certification bodies (FSC, 2015a). These audits logically only take place within FSC certified concessions, which results that the overriding majority of forests in Indonesia are not subject to FSC s MRV. FSC can have considerable advantages for Indonesia s forestry sector. FSC certification makes forest management more sustainable and safeguards social wellbeing, while the premium price that FSC offers can generate additional income. However, despite the recent rapid increase in FSC certification, only 2.2% percentage of Indonesia s forests remains FSC certified. 12 The extension of FSC is limited due to two main barriers: the 1994 rule established by FSC, and the costs of certification. When the FSC was officially established in 1994, it made a clear statement by not allowing any conversion of natural forests to other land types, including tree plantations. Moreover, reforested areas cannot be considered for certification if they have been converted after It was a noble purpose to exclude all lands that have been converted after 1994 from FSC certification, since FSC does not want to approve of these deforestation activities (FSC General Assembly, 2014). However, vast areas in Indonesia have been deforested or converted to tree plantations since. Tree plantations are a crucial and increasing part of the timber supply; for the pulp and paper industry internationally, as well as domestic construction needs. If these plantations could be managed more sustainably, this would reduce pressure on logging in natural forests substantially. This leaves these forests more vulnerable to exploitation compared to forests subject to strict management plans under FSC certification. The 1994 rule implies that 80% of the timber production areas in Indonesia will never be FSC certified. 13 Therefore, most FSC certification efforts have taken place in Java, Indonesia s most developed island. As most deforestation on this island took place before 1994, many of its forests are eligible for certification. However, 80% of the deforestation in Indonesia in the 11 Interview Hartono Prabowo, FSC national representative 12 Calculated by author based on data from FSC facts and figures August 2015 & Ministry of Forestry: Buku Statistik Kehutanan Interview Andy Roby, FLEGT Facilitator 29

30 last decade has taken place on Sumatra and Kalimantan, followed by Sulawesi and Papua which contributed 9% and 6% respectively to Indonesia s deforestation (Indonesia National REL Stakeholder Meeting, 2014). However, more recently certification efforts have taken ground in Kalimantan, Sulawesi and Sulawesi as well. 14 After lengthy discussions within FSC about the applicability of the 1994 rule, it has been decided during the General Assembly of FSC in Spain it should be modified. Therefore, a working group has been set up to discuss the conditions under which post 1994 converted forests can become certified. FSC representatives in South-East Asia are positive about this change, as it would greatly increase the potential of FSC certification in Indonesia as well as other tropical countries. However, the modifications still need to be drafted and approved in the GA, it will likely take several years before the modification of the 1994 rule will have any effect. The other major barrier for FSC certification is the costs of the certification process. A preassessment needs to be conducted first, after which a social and environmental impact studies as well as management plan need to be established. Then the auditors need to come back to finally approve all efforts and arrange the certification, spending in total two to three days in the concession, regardless of its size. These fixed, one-time investments are marginal compared to annual revenue for large-scale logging companies or plantations. Small and medium scale concessions on the other hand will not be able, or not consider it profitable to invest in FSC certification. NGOs, particularly The Borneo Initiative have been stimulating the extension of FSC in Indonesia by supporting concessions for FSC certification. Most of the recent increase in certified forests is due to their efforts. They mostly assisted large concessions to comply with the certification standards of FSC, which boosted the area under FSC certification considerably. However, smallholders or medium sized concessions remain out of reach because of the financial investments needed to obtain certification. Also, they conducted some pilots to test group certifications, aiming to combine the audits of several smaller concessions to reduce costs, but these are still in a preliminary stage. The decision to start the certification procedure rests with the concessionaire, and is not strongly stimulated by FSC at the project level. Therefore, the extension of its scheme is only a medium focus of FSC, as it mostly relies on NGOs for the extension of FSC certification. 15 TLAS Background During the first Ministerial Conference on Forest Law Enforcement and Governance in September 2001, the Bali Declaration was adopted, in which participating countries committed themselves to address forest law violations both nationally and internationally. Forest Law Enforcement, Governance and Trade (FLEGT), established in 2003, which was a first step of the EU to tackle the issue of illegal logging (European Forest Institute, 2014). Consequently, considerable effort has been made to design and implement the EU Timber Regulation (EUTR), which came into effect in March 2013 (European Forest Institute, 2014). This regulation implies that all timber imported into any of the European Union member states must be from legal 14 Interview Hartono Prabowo, FSC national representative 15 Interview Wim Ellenbroek, Programme Director, The Borneo Initiative 30

31 sources in order to put illegal logging to a halt. Therefore, all timber imported to the EU has to pass a diligence assessment to prevent illegal timber from entering the its market. However, if a VPA has been signed between the exporting country and the EU, the timber is considered to be zero risk of illegality under the EUTR, meaning that the diligence assessment does not need to be applied. Indonesia is at the forefront of countries to implement a Voluntary Partnership Arrangement (VPA) with the EU to comply with legal requirements of the EUTR. It was the first Asian country the initiate negotiating a VPA with the EU, and one of the first globally (EU FLEGT Facility, 2014b), resulting in the signing of the VPA on the 30 th of September 2013 (SILK, 2014). Timber Legality Assurance System (TLAS), or Sistem Verifikasi Legalitas Kayu (SVLK) in Indonesian, is the timber legality verification system designed to meet the legal requirements of the EUTR for the Indonesian VPA with the EU. TLAS, launched in 2009, is the product of a multiannual stakeholder process and its application is mandatory for all forest management units, industries and exporting destinations. Hence, not only export to the EU is subject to the legality assurance system. All export products need to accompanied by a V-Legal Document issued by Conformation Assessment Bodies (CAB s) (SILK, 2014). By assuring the legality of timber, TLAS aims to raise the bottom line of the timber industry. Being conscious SFM is unlikely to be reached soon, TLAS is the first step towards a more sustainable sector. Forest governance NATIONAL LEVEL The national level aims to create the enabling conditions for TLAS certification to be implemented nation-wide, in order to commence FLEGT licensing. The efforts conducted at a national level are described in Figure 8. MRV Extension 1. Compiles data 2. Sets up monitoring networks Facilitates full legality extension Instruments Controls and enforces legality of timber Roles Clarifies roles by diminishing informal sector Policies Foundations Designs policies that contribute to national policy reform 1. Raises bottom line for timber products 2. Recognised by government, private sector and NGOs Weak Medium Strong Figure 8. Focus of TLAS in national level forest governance in Indonesia. Strength of focus of FSC indicated by width of tier and colour. Green: strong focus on forest governance tier Orange: medium focus in forest governance tier. 31

32 TLAS has a medium on the foundations of the pyramid of good forest governance at the national level. It has high recognition of many actors because it is mandatory, forcing compliance of the private sector. It is a priority of the GoI, since it wants to start the FLEGT licensing to ease export to eco-sensitive markets. NGOs and academics are involved as well by promoting the scheme to smallholders, and criticising the flaws in the system. By eradicating illegal logging in the market, TLAS creates a more transparent market inaccessible for informal agreements and corruption. Tenure has been discussed within the TLAS framework 16, but because it is a wider and highly complex issue, it is not addressed by TLAS at the moment. 17 TLAS designs policies to ensure that the entire timber industry complies with its legality requirements. These policies contribute to improving Indonesia s forestry regulations, even though TLAS does not contribute to broader policy reform in the forestry sector. Because of their marginal focus on this tier resulting in a medium focus. By diminishing the illegal timber sector, TLAS removes informal agreements and part of the corruption from the supply chain. This contributes to the clarification of roles which resulted from the power-struggles in the forestry sector after the decentralisation era. 18 However, it is not actively involved in raising the bar from legality policies towards sustainability or convening forestry stakeholders to clarify roles. 19 The roles tier is thus a medium focus of TLAS at a national level as well. TLAS consists of a certification instrument to ensure legal production and trade in timber for the national and international market. As TLAS is a mandatory scheme, it provides the legal backup to control and enforce the legality of timber. However, it does not provide an incentive or enforcement for SFM, as it focuses solely on legality. There are also multiple co-benefits to the certification, particularly for smallholders. It improves their timber stock management, and it will be easier and cheaper to obtain loans at banks, because they already have the needed documents. Moreover, it opens a window of opportunity for establishing networks of smallholders, creating more political power to smallholders. 20 TLAS was also criticised as certification obligations complicated community forestry, and farm lands were converted to cultivating salak instead of tree plantations. It was argued that farm forestry, mostly occurring on Java island, was all legal as it occurred on private lands, and TLAS should therefore not be implemented there. 21 The correct design of the certification instrument is crucial to start FLEGT licensing, making the instrumental tier a strong focus for TLAS. For concessions over 5000 hectares, TLAS is embedded within the sustainability standard from the Indonesian government (PHPL). This scheme, only mandatory for these large concessionaires, consist of a ranking to grade the sustainability of a concession. 22 Unlike other certification schemes, it does certify concessions that comply with established certification standards, but analyses the sustainability of the concession by ranking them. Regarding extension, the certification of large-scale companies is fairly straightforward. Already by December 2013, about 837 large-scale timber processing companies went through the TLAS certification process as well as 819 exporting companies that were registered in the Sistem Informasi 16 Interview Andy Roby, FLEGT facilitator 17 Interview Johan Kieft, Head of Green Economy Unit, UNORCID 18 Interview Ahmad Dermawan, Researcher, Forests and Governance Programme, CIFOR 19 Interview Mim Yudiarto, Manager, Forestry Program, The Forest Trust 20 Interview Herry Purnomo, Scientist, Forest Management, CIFOR 21 Interview Bramasto Nugroho, Forest Management Department, Bogor Agricultural University 22 Interview Hartono Prabowo, FSC National Representative 32

33 Legalitas Kayu (SILK), the Information System for the timber legality verification system (Obidzinski et al., 2014b). Since the timber exports volume of 2013 have exceeded the volumes of 2012 (BPS, 2014), the concerns that implementation of TLAS would hamper timber exports have been falsified. However, major challenges for extension have been encountered for some categories of concessions and CoC. Applying the TLAS standards to Small and Medium Enterprises (SME s) is a fundamental challenge. Next to the sheer size of the sector to apply the same standards to, which is estimated to be anywhere from 700,000 enterprises (Obidzinski et al., 2014a) to 14 million 23, many of these enterprises do not meet the basic business legality requirements. Small-scale timber producers and processors lack the capacity for official registration procedures, creating a high level of informality in the small-scale forestry sector. 24 For instance, community farmers in central Java grow trees which they harvest when they need the money for weddings or funerals. Hence, it is not a primary form of income, but it is an important part of the livelihoods of these communities. 23 In order to overcome this barrier, TLAS has developed self-declaration of legality. This implies that these small producers can declare their own production legal without the intervention of an auditory body, provided that the timber comes from private community based plantation. Determining whether the timber has been harvested from community plantations is facilitated by the fact that the overriding majority of the timber is only four main species: Teak, Jabon, Sengon and Mahogany. As these species are not harvested from natural forest, community forests are the predominant source. 25 As these community forests are legal, the necessity to implement TLAS in Java for the smallholder industry in Java has been contested. The forest cover of community forests has been increasing rapidly in recent years, but increased regulations could be a barrier for farmers to convert their farmland to plantation forests. 26 The other major challenge in implementing TLAS is the timber originating from IPK licenses, which are licenses for land clearing. An underlying issue for overcoming this is the insufficient data availability for identifying the size of the timber industry in this sector. There are about 1200 small saw mills in Indonesia, which accept timber from illegal sources, process it, and ship it off to Java. 25 The level of control over timber shipments to processing industries is marginal, so opportunities exist for misusing documents thereby mixing it with legal timber (Obidzinski et al., 2014b). When the actual FLEGT licensing will start largely depend on these two challenges. As soon as the certification of smallholders is up, and the illegal influx of land clearing timber into the processing industries reduced to a mutually acceptable percentage, the FLEGT licensing can commence. Part of this agreement will be to monitor the progress of the two aforementioned points. 25 Even though the implementation of the extension takes place at the project level, the regulations and criteria for the certification are developed at the national level. The TLAS regulations have been revised almost annually to facilitate TLAS extension, particularly due to these two main barriers. Large-scale extension of the legality certification scheme is necessary in order to commence FLEGT licensing, making facilitation of the extension a priority at the national level. 25 This prioritisation level makes extension a strong focus of TLAS. 23 Interview Ahmad Dermawan, Researcher, Forests and Governance Programme, CIFOR 24 Interview Wim Ellenbroek, Programme Director, The Borneo Initiative 25 Interview Andy Roby, FLEGT facilitator 26 Interview Bramasto Nugroho, Forest Management Department, Bogor Agricultural University 33

34 MRV for certification takes place at a project level, but is compiled at a national level. Particularly collecting data from land-clearing licenses, the largest source of illegal logging, has proved problematic. 27 Also, an Independent Forest Monitoring Network (IFMN) has been established to independently monitor TLAS (Meridian et al., 2014). It consists of more than 60 organisations and 300 individuals who have been given the authority to observe and challenge the TLAS scheme. The network provides input for the national as well as project level governance of TLAS (EU FLEGT Facility, 2014a). Given the substantial efforts for MRV at the national level, TLAS has a medium focus on this tier. PROJECT LEVEL TLAS aims to certify all concessions in the country and is well on track on achieving this. The concessions are the project level in the framework applied in this study. At this project level, the focus is on implementation, extension and MRV rather than more foundational issues. The full overview on which layers of GFG TLAS focuses on, is provided in Figure 9. MRV Extension 1. Collect data 2. Reporting of progress Implements full extension of TLAS certification Instruments Implements TLAS Roles Policies N.A. N.A. Foundations N.A. Weak Medium Strong Figure 9. Focus of TLAS in project level forest governance in Indonesia. Strength of focus of FSC indicated by width of tier and colour. Green: strong focus on forest governance tier. Red: weak focus on forest governance tier. Large concessionaires do need to have clear tenure rights, but these are not a condition for small private land owners to obtain TLAS certification. TLAS does not put effort in resolving local tenure issues either. 28 TLAS also does not coordinate its actions with stakeholders outside the forestry sector. It has therefore a weak focus on the foundational tier of GFG at a project level. At a project level, TLAS is not involved in the policy arena or clarification of the role of stakeholders, resulting in a weak focus. 27 Interview Andy Roby, FLEGT facilitator 28 Interview Herry Purnomo, Scientist, Forest Management, CIFOR 34

35 The instrumental tier is a strong focus for TLAS. The scheme is developed at a national level to meet the local context, but its implementation takes place at a project level. The certification is conducted by third-party CAB s, on which TLAS highly depends. The extension is a strong focus well, since TLAS wants to certify all concessionaires in the sector in order to start FLEGT licensing. Despite the barriers for extension described in the national section, full legality remains a priority. Monitoring and verification of compliance with the TLAS certification standards takes place at the project level and reported to a national level. This is part of the audit conducted by the CAB s. A complaint mechanism has been developed as part TLAS, but civil society makes little use of this. So far, almost all of the audits that have been executed have resulted in successful applications for the TLAS certificate, which was unexpected when the audits started. This raises concerns about the quality of the accreditation bodies, which may be unable to obtain an accurate representation of the organization being inspected. The limiting 3-day audit visits of accreditation bodies may not give an accurate reflection of what happens during the rest of the year. 29 For instance, in Berau, East Kalimantan, the small-scale timber industry is an important source of income. In some villages, 75% of the people depend on timber for their income. They try to minimize the risk of being caught by law enforcement agencies by logging intermittently if controls take place and regular payments to police officers, military personnel, and forestry officials, including CAB s (Obidzinski et al., 2014a). REDD+ Background Agreed upon at the 13 th Conference of the Parties of the United Nations Framework Convention on Climate Change, REDD+ is a mechanism developed to provide an incentive to reduce greenhouse gas emissions from deforestation and forest degradation (UN REDD, 2009). To underscore Indonesia s commitment to REDD+, President Susilo Bambang Yudhoyono made the commitment that Indonesia will unilaterally reduce greenhouse gas emissions 26%, or 41% with international assistance by 2020, from Business As Usual using 2005 as a baseline 30. Since then, Indonesia is one of the leading countries for REDD+ implementation, amongst others with the support of the Government of Norway by signing a letter of intent for 1 billion USD (Indrarto et al., 2012). The REDD Taskforce was established in 2010, which was succeeded by the National REDD+ Agency (BP REDD+), the first cabinet-level institution devoted entirely for REDD+. In January 2015 however, BP REDD+ has been merged with the new Ministry of Environment and Forestry (UNORCID, 2015). Indonesia s REDD+ implementation works along three phases. The readiness phase has been completed in 2013, and focused on enabling conditions for REDD+ to be implemented. REDD+ is Indonesia currently in the transformation phase, which will deepen institutional readiness, and conduct pilots for results based payments. Indeed, Indonesia has witnessed a strong increase in REDD+ pilot projects and other readiness activities in this phase, which depends on funds for its financing (The REDD Desk, 2015). Lastly, the full implementation phase refers to full implementation of REDD+, predominantly based on results-based payments. This phase is set to take place from REDD+ implementation does not only concern forests in Indonesia, as peat degradation and peat fires is the largest source of GHG emissions in the country. During the formulation of the National REDD+ Strategy, it became clear that REDD+ should be embedded in a 29 Interview Andy Roby, FLEGT facilitator 30 Susilo Bambang Yudhoyono, Intervention by H E DR Susilo Bambang Yudhoyono, President of the Republic of Indonesia on Climate Change, The G\20 Leaders Summit, 25 September 2009, Pittsburgh, PA. 35

36 low-emission development strategy (Agung et al., 2014). REDD+ even moves beyond carbon, as it addresses issues like biodiversity, education and inclusion of local communities (BP REDD+, 2014). Once fully operational, the REDD+ mechanism will be able to generate a projected USD 9-18 billion from international funds, depending on the carbon price of USD 5-10 per ton of carbon. This is not nearly enough to cover all the costs to reach the commitments of Indonesia, but REDD+ is supposed to function as a vehicle for a transition to a green economy 31. Therefore, the finances generated by the carbon market are meant to catalyse the mobilization of other sources of investments. As drivers for forest and land use change are often located outside of the forestry sector, these investments should be aimed at the underlying drivers of deforestation (UNORCID, 2015). Forest governance NATIONAL LEVEL Literature review and interviews show that Indonesia still needs to overcome several obstacles in formulating and implementing efficient, effective and equitable REDD+. Tenure uncertainty and ambiguity has been a barrier for GFG in Indonesia in the past, and poses a significant barrier for effective REDD+ payments to the people and organisations they are intended for. Moreover, the protection of rights of forest-dependent groups is at risk, since their customary rights may not be protected, while concomitantly double standards may be applied for forest exploitation by commercial extraction and local communities (Indrarto et al., 2012). Another challenge for REDD+ to overcome is the sectoral focus of ministries in Indonesia. While the Ministry of Forestry is essentially responsible for forest management, the drivers of deforestation are often located in other sectors under the jurisdiction of other ministries. Success in cross-sectoral coordination has been limited so far, yet it is of high importance for the implementation of REDD+. Also, there is a disconnect between policy makers for REDD+ and people working on the ground. 32 MRV Extension Instruments Roles Policies Foundations 1. Forest Reference Emission Level developed 2. Reporting to national level. Limited to pilot projects in priority provinces Provides incentives to reduce emissions from deforestation and forest degradation Brings stakeholders together to stimulate more sustainable development options Conducts policy reviews for options to harmonise policies 1. Involved in tenure discussion 2. Engages with extra-sectoral drivers and stakeholders Weak Medium Strong Figure 10. Focus of REDD+ in national level forest governance in Indonesia. Strength of focus of FSC indicated by width of tier and colour. Green: strong focus on forest governance tier. Orange: medium focus on forest governance tier. 31 Interview Nur Marispatin, Director-General, Climate Change Mitigation, Ministry of Environment and Forestry 32 Interview Mim Yudiarto, Manager, Forestry Program, The Forest Trust 36

37 Given these challenges, REDD+ actions focus on a broad range of elements within the pyramid in order to achieve GFG. As shown in Figure 10, the foundations of GFG are an important focal point of REDD+. It is involved in the discussion on land tenure, particularly with regards to conflict resolution for contested land claims in national parks (BP REDD+, 2014). The forest boundaries gazettement has been accelerated since 2011 as well. This clarifies land and tenure boundaries, easing conflict resolution (Agung et al., 2014). Land tenure reform is part of a wider, political and complex discussion. Therefore, more key parties need to discuss the tenure reform from a legal justice perspective rather than making REDD+ the primary driver. 33 For Java, a plan is being developed by the Ministry of National Development Planning to resolve tenure issues on the island. For the outer islands, no concrete efforts are being made to increase tenure security. 34 Many of the drivers for deforestation stem from activities outside the forestry sector, making it essential to engage with this influence. REDD+ can stimulate these sectors to invest in more sustainable options by facilitating policy reform and payments for reducing emissions. REDD+ activities do not encourage better market conditions for SFM products. Given the acknowledged importance and activities to address the foundational tier, it is a strong focus of REDD+. Concerning policies in Indonesia forest governance, there is uncertainty, contradiction and overlap between local policies and high-level policies and laws which hampers REDD+ implementation. REDD+ initiated legal and policy reviews to recommend options for harmonizing reform (BP REDD+, 2014), but it is not within the power of REDD+ alone to solve the policy issues relating to governance issues. This substantiates the medium focus of the project on policies and laws. REDD+ aims to catalyse investments in reducing emissions from deforestation and forest degradation. In order to do so, it brings together stakeholders to steer investments in a more sustainable direction, making the roles tier an important focal point of the REDD+ project. Involving stakeholders from outside the forestry sector is essential to address the underlying drivers of deforestation. The incentive to reduce greenhouse gas emissions from deforestation and forest degradation is the main instrument via which REDD+ aims to improve forest governance in Indonesia. The finances generated from the carbon market can be invested in many issues, creating a catalysing effect for better forest governance and reduced emissions. The design and ways of implementation of this instrument is of prime importance for REDD+. Given the broad objectives of REDD+, there are contested views on its efficacy. Forest managers, NGOs and researchers are critical on the success REDD+ can have, as it is unclear how benefits will be distributed. Another factor of concern for the implementation of REDD+ is the functionality of the carbon market, as the price of carbon can heavily fluctuate. This will make the rewards of REDD+ uncertain, and potentially a too large risk for forest managers to take. While REDD+ is becoming broader to address more elements of a transition towards a green economy 35, it loses focus according to NGOs and researchers. REDD+ needs to become clearer before it can be beneficial for the forestry sector Interview Johan Kieft, Head of Green Economy Unit, UNORCID 34 Interview Basah Hernowo, Director, Forestry and Conservation of Water Resources, BAPPENAS 35 Interview Nur Marispatin, Ministry of Environment and Forestry 36 Interview Ahmad Dermawan, Researcher, Forests and Governance Programme, CIFOR 37

38 REDD+ is currently still in the transition phase and full implementation will be initiated from 2017 onwards only. Its extension is therefore limited to pilot activities. There are eleven priority provinces in the country, jointly accounting for the majority of Indonesia s forests, where REDD+ will be operationalized first. Even though there has been an increase in pilot projects for REDD+, it remains a medium focus in the transformational phase. Monitoring and verification will place at a project level, after which it will be reported via provinces to a national database. The Indonesia Forest Reference Emission Level has been presented at UNFCCC s COP 20 in Lima, which will form the basis for monitoring carbon emission reductions from deforestation and forest degradation. Challenges that need to be overcome in order to successfully implement an MRV system include the policy design, data acquisition, technical capacities, and an institutional coordination mechanism (Agung et al., 2014). However, as the REDD+ scheme design is not yet settled, MRV is a medium focus at the national level. PROJECT LEVEL To effectively implement REDD+, local and national efforts need to be consolidated. To ensure this, a Jurisdictional and Nested REDD+ (JNR) approach is used in which local entities are nested within the broader provincial and national REDD+ agenda. Initially, districts were the designated project level for the basis for the JNR approach. The district level demonstration project in Berau district, East Kalimantan illustrates this. This project aims to put 800,000 under effective management, thereby preventing 10 million tons of CO 2 emissions, protect watersheds and high biodiversity value areas, while creating improved economic outcomes for local communities (The Nature Conservancy, 2010). However, recent changes seem to imply that FMU s, as opposed to districts, fit best to integrate local implementation efforts with the broader REDD+ agenda. According to Law 23/2014 on regional governance, districts now lack the authority to manage REDD+. Since FMU s become responsible for forest management, planning and oversight, it becomes the most effective level for the governance of REDD+. However, there is significant amount of forest and peat land outside the national forest estate, which would not be included in JNR approach based on FMU s. These areas would be under increased risk for conversion and degradation within a FMU based governance approach. According to a study conducted by the United Nations Office for REDD+ Coordination in Indonesia (UNORCID, 2015), the scenario described in Figure 11 is most opportune for JNR: MRV of REDD+ will be conducted at a FMU level, compiled at a provincial level and corrected for inter-provincial leakages at the national level. Payments are managed at a national level via the national registry. Implementation and supervision of REDD+ will take place at the FMU level, nesting individual projects within their Figure 11. Most opportune option for JNR REDD+ approach (UNORCID, 2015) 38

39 jurisdiction according to their typoligy. These different types of projects can be ecosystem licensing, village forest, community forests or protection forests (UNORCID, 2015). Given that this scenario is the most likely to be applied in Indonesia when this study was conducted, the FMU s will be regarded as the project level within this study. This differs from FSC and TLAS, as the project level of these schemes are the forest concessions. MRV Extension Depends on pilot project goals, some apply or test MRV mechanisms N.A. Instruments Roles All pilot projects design or test instruments for REDD+ Depends on pilot project level goals Policies Depends on pilot project goals Foundations Depends on pilot project goals Weak Medium Strong Figure 12. Focus of REDD+ in project level forest governance in Indonesia. Strength of focus of FSC indicated by width of tier and colour. Green: strong focus on forest governance tier. Orange: medium focus on forest governance tier. Red: weak focus on forest governance tier. The governance focus on the different tiers varies at a project level depending on the project considered. While in some projects there is a stronger focus on institutional capacity building and identification of stakeholders, other projects focus on optimising the design of the instrument and MRV (The REDD Desk, 2015). Depending on the local context and project typology, goals are set for pilot activities. Regarding the tiers in the pyramid provided in Figure 12, this diverse approach translates to a balanced pyramid, in which most tiers are addressed. Central to these projects is the instrumental design that is needed to reduce emissions from deforestation and forest degradation. The nature of incentives, benefit-sharing, and carbon trading mechanisms are identified in this tier. As the design of the REDD+ instrument is fundamental to create an effective REDD+ scheme, this is the one strong focus tier for REDD+ pilot projects. Extension of the REDD+ projects is not considered at a local level, as the emphasis is on finding the optimal instrumental design and institutional capacity building for stakeholders via policies and addressing foundational issues. MRV mechanisms are tested and applied in some of these pilot programs as well. This results in a limited focus on the bottom three tiers and top tier, no focus on the extension, and a strong emphasis on the instruments layer. 39

40 Conclusion This chapter assessed how each of the three forest governance schemes address GFG, using of the pyramid of GFG. This analysis was conducted at the national and project level, following multi-level governance. The project level for FSC and TLAS is at a concession level, and for REDD+ at the FMU level. The focus is determined by the priority and FSC National FSC Project FSC is a global, voluntary MRV certification scheme Extension promoting SFM and social Instruments safeguards in the forest industry, thereby providing Roles timber products with a Policies competitive advantage in the Foundations international timber market. Weak Medium Strong Weak Medium Strong At a national level, activities are limited to creating a Figure 13. Focus of FSC on the tiers of pyramid of GFG at a national and better market for sustainable project level. timber products, establishing national principles and criteria, and lobbying for extension and MRV. FSC has a stronger focus on the project level, at which it certifies concessions. At a project level, it addresses all tiers of the pyramid, even though the foundations and extension is only focused on to a limited extent. Policies are drafted, stakeholders clarified in a management plan and annual surveillance audits conduct monitoring and verification, which is reported to a public, international database. FSC sets high standards for project level governance, and due to the 1994 rule and certification costs, only 2.2% of Indonesia s forests have been certified. MRV Extension Instruments Roles Policies Foundations TLAS National Weak Medium Strong TLAS Project Weak Medium Strong Figure 14. Focus of TLAS on the tiers of the pyramid of GFG at a national and project level. TLAS is the timber legality verification system designed to meet the legality requirements of the EUTR for the Indonesian VPA with the EU. It is a national mandatory certification scheme ensuring the legality of timber products, thereby raising the bar for the timber industry. At a national level, it has a medium focus on the foundations and policy tiers. It reduces the informality in the timber industry, thereby contributing to the roles section. The regulations for the instrument have been regularly revised in recent years in order to respond to barriers encountered during the national extension of the scheme. At a project level, there is a strong focus on the implementation and extension of TLAS. MRV is conducted via the audits. The other tiers are not considered. 40

41 MRV Extension Instruments Roles Policies Foundations REDD+ National Weak Medium Strong REDD+ Project Weak Medium Strong Figure 15. Focus of REDD+ on the tiers of the pyramid of GFG at a national and project level. Lastly, REDD+ is a scheme developed to provide an incentive to reduce greenhouse gas emissions from deforestation and forest degradation. It acts as a vehicle, using the carbon market to catalyse investments into more sustainable pathways. Therefore, its current focus is stronger at the national level, concentrating on enabling factors and institutional strengthening. The foundations are strongly addressed, policy reviews conducted and stakeholders involved in forest governance brought together. At the project level, the design of the instrument is a prime concern for REDD+, while the MRV and extension is limited to pilot programs. The design of the REDD+ instruments is central to these programs, while the focus on the other tiers differs per project. Extension of the REDD+ scheme is not considered at a project level. In summary, FSC has a stronger focus on the project level, TLAS has a more balanced approach, while REDD+ has a stronger focus on the national level. The assessment of the focus of the schemes on GFG is used to analyse the interlinkages among them. Given the relatively weak focus of FSC on the national level, and REDD+ at the project level, few interlinkages are expected here. However, since the schemes do address most tiers in their approach to GFG, there is considerable potential for interlinkages to be identified. The following chapter will identify the interlinkages among the three forest governance schemes. 41

42 CHAPTER 5: INTERLINKAGES AMONG FOREST GOVERNANCE SCHEMES The pyramids generated in chapter 4 describe the focus of the schemes on different elements of GFG on a national and project level. These pyramids will be compared in this chapter to assess the interlinkages among them. If two schemes have either a medium or strong focus on the same tier of GFG, this generates potential for interlinkages. Tiers with a common focus will therefore be discussed in more detail to identify interlinkages. A common focus of does not ensure interlinkages among them though, as the schemes may address different aspects within a tier which are not directly related. For instance, the foundational layer includes multiple aspects, such a good market conditions and tenure security, which do not directly link. Hence, even if two schemes strongly focus on the foundational tier, there may be no interlinkages among them as they address different elements of the foundations. When one scheme has a weak focus on a tier of GFG in its activities, indicated by the red tiers, there is no potential for interlinkages. After all, if one scheme has no priority or activities within a tier, it cannot be functionally connected to another scheme. The interlinkages will be discussed using the pyramids for each scheme combination at a national as well as project level. FSC & TLAS The assessments of the focus of FSC and TLAS on the tiers of GFG described in the previous chapter will be combined in this chapter to identify interlinkages. Even though FSC addresses some elements of GFG at the national level, it has a stronger focus on the project level where concessions are certified. TLAS has a more balanced focus on both the national and project level. Nevertheless, several interlinkages have been identified for the two schemes. National level The focus of FSC and TLAS within the pyramid tiers of GFG at the national level is visualised in Figure 16. It also presents the interlinkages that have been identified at the national level. Both schemes have a medium focus on the foundations, which could imply there are interlinkages there. As FSC has a weak focus on both the policies and roles tier, there is no potential for interlinkages. Interlinkages could also exist within the instruments and extension tiers, since TLAS has a strong focus on this, while FSC has a medium focus. Also, interlinkages may be identified in the MRV. Each of the tiers which could contain interlinkages at the national level will be described in more detail in this section. Figure 16. Focus of FSC and TLAS on GFG, and their interlinkages at a national level. Colours and width of bars indicate strength of the focus. Green: strong focus on forest governance tier. Orange: medium focus on forest governance tier. Red: weak focus on forest governance tier. 42

43 In the foundational tier, FSC improves the supply and demand for sustainable forest products. At the same time, TLAS creates a more transparent market, diminishing the illegal sector. It also clarifies the informal sector, as a large share of Indonesia s timber production is produced undocumented within concessions. FSC has an impact on the timber market by creating the demand and supply for sustainable timber products. The premium price generated by FSC certification creates a niche market for its products. TLAS impacts the timber market in a different manner, as it raises the bar for the entire timber market by ensuring a legal timber supply chain. Given the different processes via which FSC and TLAS influence the market, there are no interlinkages in this tier. TLAS has a strong focus on the instruments, whereas FSC has a medium focus. As both schemes apply certification instruments for concessionaires to improve forest governance, there is a strong interlinkage between the schemes in this tier. Both FSC and TLAS establish their standards via principles and criteria for their certification instrument. There are also considerable differences to be noted though. TLAS addresses only legality, while FSC offers a more inclusive system looking at environmental, social and economic dimensions of good forest governance. The coverage of the certification schemes also differs vastly. Only areas with secure tenure rights and unaffected by the 1994 rule can be eligible for FSC certification, which significantly limits the potential of FSC in Indonesia. As it is voluntary, only concessionaires who want FSC certification for exploiting new markets or improving internal processes will apply for the auditory process. This is a sharp distinction from TLAS, which forces all concessionaires in Indonesia to comply with its legality standards. The legality standards described in the principles and criteria of TLAS do not ensure SFM, it merely increases the bottom line of forest management in Indonesia. 37 The other difference between the certification instruments is in the specificity of the principles and criteria. TLAS has been developed for the Indonesian context, containing very specific requirements for certification only applicable for Indonesia. FSC s principles and criteria have been developed at an international level, aiming to take regional variability in forest governance into account, resulting in more vague descriptions of standards for certification. 38 TLAS is part of the PHPL assessment for large concessions of over 5000 hectares. Since PHPL as well as FSC verify the sustainability of a concession, there is a strong interlinkage between the instruments of PHPL and FSC for these large concessions. The interlinkages in the instruments could be exploited via the convergence of the certification standards. TLAS could incorporate elements of the FSC standards in their standards or vice versa. Regarding extension, an interlinkage has been identified as well. Since both schemes need to certify concession for extending their scheme, joint extension can be facilitated. This can take form of a joint certification protocol, in which audits for both schemes are combined in a single certification process. Another option is to conduct joint audits, in which a single auditory team conducts multiple audits during a single visit. Both options would reduce the certification costs by making the audits more efficient and reduce travel costs. The implementation of the joint extension needs to be conducted at the project level, but this process can be facilitated at the national level. Facilitating joint extension can take place by converging the certification standards of both schemes or accrediting the same auditory bodies. If joint extension is facilitated, FSC becomes more appealing for concessionaires to apply for as compared to when FSC is a separate certification process. This fosters FSC extension, but 37 Interview Andy Roby, FLEGT facilitator 38 Interview Rizal Bukhari, Senior Manager, The Nature Conservancy 43

44 TLAS and PHPL extension remains unaffected by this interlinkage, as it is mandatory anyway. The Borneo Initiative is working towards training auditory bodies to be able to combine for different schemes in one visit. 39 However, a limited amount of auditory bodies is currently capable of conducting multiple certifications due to limited human resources. 40 MRV at the national level concerns reporting, since the monitoring and verification takes place at the project level. The reporting for FSC and TLAS takes place in different systems as information on FSC concessions is reported to an international database, while TLAS reports to a national level. Therefore, there are no interlinkages in the MRV tier at the national level. Project level FSC and TLAS both have a strong presence on the ground at the project level, certifying concessionaires with their schemes. The mandatory nature of TLAS provides it with a much larger presence in the country in comparison to FSC s voluntary scheme. TLAS strongly focuses the top three tiers of the pyramid at a project level, while FSC addresses all tiers of the pyramid, particularly policies, roles, instruments and MRV. As TLAS does not consider the foundational, policies and roles tier, no interlinkages have been identified there. The instruments, extension and MRV elements of both schemes will be addressed in more detail below. An overview of the focus of FSC and TLAS on the different tiers GFG at a project level, as well as their interlinkages, is presented in Figure 17. As explained before, the design of the certification instruments takes place at the national level, and therefore the instrumental tier focuses on the implementation of the scheme at a project level. For the implementation, both FSC and TLAS heavily rely on third party auditory bodies. However, FSC and TLAS have a different certification process. FSC certificates are valid for a period of five years, subject to annual surveillance audits (FSC, 2015a). TLAS certificates last for a period of three years, after which they need to be issued again (SCS, 2015). The interlinkage identified in this tier, is the crucial role auditing bodies have in both schemes. FSC and TLAS have accredited different auditory bodies, which results in separate audits for certification. Figure 17. Focus of FSC and TLAS on GFG, and their interlinkages at a project level. Colours and width of bars indicate strength of the focus. Green: strong focus on forest governance tier. Orange: medium focus on forest governance tier. Red: weak focus on forest governance tier. 39 Interview Wim Ellenbroek, Programme Director, The Borneo Initiative 40 Interview Rizal Bukhari, Senior Manager, The Nature Conservancy 44

45 Since both schemes conduct their certification via auditory bodies, joint extension could take place. Joint extension can be facilitated at the national level and implemented at the project level. As described at the national level, joint extension can take place via joint certification or joint auditing. The auditory bodies also conduct the monitoring and verification within a concession, after which they report their findings to the national or international level. The substance of the principles and criteria differs between FSC and TLAS, resulting in different indicators for monitoring and verification. Therefore, there is no interlinkage in the MRV tier. FSC & REDD+ This section will build further on the results found in Chapter 4. REDD+ has a stronger focus on the national level, and project activities are limited to pilot projects within FMU s. FSC certifies concessions at the project level, and facilitates the project level certification. Multiple interlinkages have been identified between the schemes, particularly at the project level, which will be described in more detail below. National level The focus of FSC and REDD+ on the different elements of GFG at the national level is presented in Figure 18. It also shows the interlinkages that have been identified between the schemes at the national level. FSC does not consider the policies and roles of stakeholders in its actions at the national level, and will therefore not be further discussed in this section. Both schemes do address the foundational tier, instruments, extension and MRV in their national efforts, so these will be further analysed to identify interlinkages. Regarding the foundational tier, no interlinkages have been found since FSC and REDD+ address different elements within this tier of the pyramid. FSC contributes to better market conditions for sustainable timber products, while REDD+ is involved in discussions on tenure rights and extrasectoral drivers for deforestation. The types of instruments are considerably different between the schemes. REDD+ aims to catalyse sustainable investments using the carbon market. FSC wants to reach better forest governance via voluntary certification. Even though FSC and REDD+ apply different instruments to achieve better forest governance an interlinkage Figure 18. Focus of FSC and REDD+ on GFG, and their interlinkages at a national level. Colours and width of bars indicate strength of the focus. Green: strong focus on forest governance tier. Orange: medium focus on forest governance tier. Red: weak focus on forest governance tier. 45

46 has been identified. FSC certification can contribute to REDD+ objectives by reducing emissions. FSC certified concessions sequester more carbon than their uncertified counterparts due to reduced logging intensity. The carbon emissions per hectare due to extraction of timber within the FSC concession was 1/3 of the carbon emissions in the other concessions that were researched. Emissions due to roads, skid trails, and logging decks for stock management were not less within the FSC concession as compared to the other concessions (Brown et al., 2012). Hence, the interlinkage that has been identified is the contribution of FSC to REDD+ goals. FSC also discussed the incorporation of carbon in its principles and criteria at the international level. However, due to the difficulties of measuring carbon emissions or sequestration, FSC did not include it. 41 Extension of FSC certification is currently not deliberately combined with the pilot activities of REDD+, even though there are REDD+ pilots in which FSC concessions are located. But given the contributions of FSC to REDD+ objectives, joint extension of project level activities is an interesting point of interlinkage. Pilot activities for REDD+ in areas in which FSC certified concessions are located could be prioritised at a national level (Dharmawan et al., 2012). The other way around, FSC certification can be stimulated within REDD+ projects. As explained in Chapter 4, FSC reports to an international level, while REDD+ monitoring is reported via provinces to the national level. Monitoring and verification takes place at the project level for both schemes. Given the different reporting mechanisms, there are no interlinkages in the MRV tier at the national level. Project level FSC has a strong focus on the project level, where it certifies concessions. However, REDD+ only has pilot activities in its transition phase. Given the current transition phase of REDD+, the interlinkages between REDD+ and FSC cannot be optimally utilised. From the full implementation phase from 2017 onwards, this can change as multiple interlinkages have been identified at the project level, as indicated in Figure 19. Since REDD+ does not consider the extension of pilot projects at the project level, the extension tier will not be considered in the analysis. Similar to the national level, both schemes address the foundational tier but address different elements of it. REDD+ does not improve market Figure 19. Focus of FSC and REDD+ on GFG, and their interlinkages at a project level. Colours and width of bars indicate strength of the focus. Green: strong focus on forest governance tier. Orange: medium focus on forest governance tier. Red: weak focus on forest governance tier. 41 Interview Rizal Bukhari, Senior Manager, The Nature Conservancy 46

47 conditions for timber products, to which FSC does contribute. FSC only sets clear tenure rights as a precondition for certification at the project level, but is not involved in conflict resolution regarding tenure issues. Because of the differential focus of the schemes within the foundational tier, no interlinkages have been identified. Within the policies tier, there is an interlinkage between FSC and REDD+. FSC applies principles and criteria to assess the compliance of concessions with FSC requirements, while REDD+ established Safeguards, which is a set of principles, rules and criteria adopted to achieve social and environmental goals (Roe et al., 2013). Project level governance of REDD+ uses these to guide their project goals and policies. Safeguard A, concerning consistency with existing national and international programs, conventions and agreements closely links with the Principle 1 of FSC regarding its compliance with laws. Secondly, safeguard E describes that actions of REDD+ must be consistent with the conservation of natural forests and biodiversity. This aligns well with the principles 4, 5, 6 and 9 which refer to multiple social, economic and environmental values. Therefore, FSC could support REDD+ in its implementation. Better forest management practices induced by FSC can assist in meeting REDD+ safeguards. Compliance of REDD+ projects with the safeguards may also ease the FSC certification of concessions, since many aspects of the certification requirements have already been addressed. Particularly the social and environmental aspects of the Principle and Criteria can aid efforts to meet the REDD+ safeguards (Boyle & Murphy, 2012). Within the roles tier, another interlinkage has been identified between the REDD+ safeguards and FSC principles. Safeguard C regarding respect for indigenous and local communities strongly interlinks with principle 3 on the indigenous peoples rights. If rights of indigenous communities and roles of stakeholders are clear in one of the schemes, this will foster its compliance with the other scheme. Both schemes have a strong focus on the instruments tier. However, the pilot projects of REDD+ are mostly located in national parks, in which there are no logging concessions. Once full implementation has commenced in areas with concessions, the payments for reducing deforestation and forest degradation depend on the volatile carbon market. The uncertainty of the benefits of reducing deforestation and forest degradation creates reluctance for investments in conservation within concessions. 42 APHI, the association for concessions, is critical about REDD+, as initially expectations were to be able to get direct benefits from less intensive logging instead of needing complicated procedures via multiple government agencies. 43 For REDD+ to contribute to FSC, its operational clarity must be increased. 42 Once it is fully operational, carbon benefits from project owners from REDD+ projects can be an additional source of revenue for FSC concessions located within the project. 44 This makes existing FSC concessions more profitable, encouraging concessionaires to strive for FSC certification. As already described for the national level, FSC also decreases carbon emissions from logging activities (Brown et al., 2012). This interlinkage is also valid at the project level since the FSC certification impacts the effectiveness of the REDD+ instrument at the project level. 42 Interview Ahmad Dermawan, Researcher, Forests and Governance Programme, CIFOR 43 Interview Rizal Bukhari, Senior Manager, The Nature Conservancy 44 Interview Johan Kieft, Head of Green Economy Unit, UNORCID 47

48 Also, MRV interlinkages have been identified. The reports and audits from FSC auditing and surveillance can be used in the MRV process of REDD+. 45 The social and environmental impact study conducted for REDD+ can be used to select stakeholders and draft project goals for REDD+ projects. Also, an HCV study must be conducted for FSC certification in order to establish priority areas for conservation. However, as these studies are only conducted within the concession, the HCV area can be fragmented because it is partly located outside the concession. REDD+ could use these studies to designate conservation areas at a FMU level via its JNR approach, thereby avoiding the fragmentation of conservation areas. 46 Outputs from REDD+ pilot projects can be used by FSC as input in their certification process as well, thereby obtaining better insight in the concession. TLAS & REDD+ This section will build further on the results found in Chapter 4 regarding TLAS and REDD+. TLAS certifies concessions at the project level, and facilitates certification and extension at the national level. REDD+ has a stronger focus on the national level, and project activities are limited to pilot projects within FMU s. Hence, the schemes are in different phases of implementation. This causes some interviewees to conclude there are no interlinkages between the projects. 47 This is contested in this study, since multiple interlinkages have been identified between the schemes, which will be described in more detail below. National level Both TLAS and REDD+ address all tiers of GFG at the national level, even though there are differences in the strength of the focus. Therefore, all tiers will be discussed below to explore the interlinkages between them. The overview of the focus of the schemes and the interlinkages is presented in Figure 20. TLAS as well REDD+ aim to address several fundamental challenges for Indonesia s forest governance. Land tenure, corruption and law enforcement can hamper the effectiveness of both schemes 48, so both schemes acknowledge these challenges and aim to address them, which creates an interlinkage between them. 49 Figure 20. Focus of TLAS and REDD+ on GFG, and their interlinkages at a national level. Colours and width of bars indicate strength of the focus. Green: strong focus on forest governance tier. Orange: medium focus on forest governance tier. 45 Interview Bramasto Nugroho, Bogor Agricultural University 46 Interview Hartono Prabowo, FSC National Representative 47 Interview Ahmad Dermawan, Researcher, Forests and Governance Programme, CIFOR 48 Interview Nur Masripatin, Director-General, Climate Change Mitigation, Ministry of Environment and Forestry 49 Interview Andy Roby, FLEGT Facilitator 48

49 In the policy tier, TLAS designs policies to improve forest governance, while REDD+ conducts regulation reviews and provides recommendations for reforming forestry regulations. Policies designed by TLAS can contribute to these reviews and recommendations, creating an interlinkage between the schemes. TLAS contributes to clarifying the roles of stakeholders by diminishing the illegal sector. REDD+ aims to bring relevant stakeholders together to stimulate sustainable forest governance. Therefore, the interlinkage identified in the roles tier is that TLAS may contribute to a better stakeholder identification process and more informed decision making. Also an interlinkage exists in the instruments tier between TLAS and REDD+. In order to catalyse change towards better forest governance, legality is a first step, 50 which makes TLAS a pathway towards REDD+. This interlinkage has its effect in two ways. First, TLAS can play a strong role in reducing forest degradation from state forests by reducing illegal logging. 51 Secondly, both aim to push the private sector towards more sustainable behaviour. 52 REDD+ aims to do so via incentivizing more sustainable behaviour through the carbon market, while TLAS raises the bottom line for the private sector by ensuring timber legality. Hence, even though TLAS and REDD+ apply vastly different approaches to reach better forest governance, there are still interlinkages in the instrumental tier. Extension interlinkages have not been found, since TLAS will already be extended nationwide by the time REDD+ reaches full implementation. Moreover, since TLAS and REDD+ have different reporting mechanisms focusing on different indicators, there is no interlinkage regarding MRV. Project level TLAS has a weak focus on the foundational, policies and roles tiers and REDD+ does not address extension at a project level. Therefore only two tiers, instruments and MRV, need to discussed for the project level. The overview of the focus of and interlinkages between FSC and REDD+ are provided in Figure 21. As explained at the national level, TLAS and REDD+ apply considerably different instruments to improve forest governance. Nevertheless, also at the project level TLAS is a pathway to the instruments of REDD+. Similar to the national level, TLAS contributes to better forest governance by tackling illegal logging and raising the bar for concessionaires. Figure 21. Focus of FSC and REDD+ on GFG, and their interlinkages at a national level. Colours and width of bars indicate strength of the focus. Green: strong focus on forest governance tier. Orange: medium focus on forest governance tier. Red: weak focus on forest governance tier. 50 Interview Bramasto Nugroho, Forest Management Department, Bogor Agricultural University 51 Interview Arief Perkasa, Senior manager, The Forest Trust 52 Interview Lala Kolopaking Director, Centre for Agriculture and Rural Development, Bogor Agricultural University 49