PATHWAYS TO SUCCESS: A COMMUNAL BUSINESS APPROACH TO SUSTAINABLE DEVELOPMENT PRESENTED BY: PLANET INDONESIA INTERNATIONAL

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1 PATHWAYS TO SUCCESS: A COMMUNAL BUSINESS APPROACH TO SUSTAINABLE DEVELOPMENT PRESENTED BY: PLANET INDONESIA INTERNATIONAL

2 1.0 The Problem: Poverty Traps at the Socio-Ecological Interface We believe almost all developmental and environmental problems stem from the inability of marginalized communities to diversify their livelihoods and access different markets. Environmental degradation is directly linked with the stability of local communities. In West Borneo, communities often turn to activities with negative impacts (e.g. illegal logging, animal trafficking, unsustainable fishing) when they need fast cash to cover basic living costs or additional funds to develop local livelihoods. In addition, communities stuck in poverty traps often lose management of their natural resources to large oil palm, mining and logging corporations. This creates a cycle where communities negatively impact the world around them, decrease their local capital, and are preyed upon by large corporations that offer little local economic income. This larger problem contains three sub-problems that keep low-income communities in poverty traps that produce negative externalities. Firstly, communities feel unable to diversify while trapped in economic activities that yield little benefit. It is nearly impossible to develop an entrepreneurial spirit while dealing with the limiting hardships of poverty. Secondly, even with a promising commercial scheme, securing the initial funding for take-off becomes a colossal obstacle. Thirdly, there is a severe need for financial management skills to guarantee long-term operations success. These three sub-problems keep low-income communities in poverty traps that produce negative social and environmental externalities. The model Planet Indonesia has established targets men and women in low-income communities (<$5.00/day) in West Borneo, Indonesia that suffer from these problems. Our area of focus in West Borneo has an average household income of less than $35.00 per month and has exhibited one of the fastest increases in oil palm development in the world in the last 10 years. 2.0 Our Approach: Green Communal Business Models Planet Indonesia is dedicated to the conservation of earth's ecosystems by facilitating productive economic activities that preserve natural habitats and cultural traditions in poor communities. Our approach is unique in that we partner with communities to identify profit-making opportunities and support the creation of their own business models tailored to the local needs and environment. We embrace a bottom-up approach, helping communities own every step of the planning, implementation, and managing of initiatives, as we understand this to be essential for long-lasting, sustainable change. Each of our programs mobilizes communities by integrating sustainable local business models into our conservation and cultural preservation initiatives.

3 Communal Business Groups is an organizational structure that unites community members to solve problems and achieve common goals. As a first step, Planet Indonesia facilitates a participatory process to design and establish a small business group. These directly address the community's needs and will operate based on local values, traditions, and customs. Planet Indonesia provides skill trainings, mentoring, services, and motivation for communities to realize the sustainable profitmaking possibilities within their environment. Planet Indonesia believes that communities must have ownership of their development process in order to achieve long-lasting and sustainable change. For this reason, the Planet Indonesia model begins with a commitment to the community, to ensure they are actively involved in the decision-making and strategic planning of all projects. Helping communities run successful operations exponentially increases community empowerment and maximizes capacity building. Communal groups will be established not only as a business entity, but also as a platform where future problems can be addressed. Through this model, the community will have the capacity to be critical thinkers and choose projects and programs that will address local needs. This model increases sustainable management and governance of natural resources through sustainable profitmaking strategies. The empowerment of communities to sustainably, and profitably, manage their natural resources results in communities that no longer choose to lease their land to oil palm or mining companies, and decreases the availability of timber products to large-scale concessions. How does Planet Indonesia establish Communal Business Groups? There are several stages to communal business group establishment. The facilitator team will begin by conducting an assessment to identify the potential for a group within a community. Potential groups are identified based on the overlap between their needs and our organization s capacity to facilitate an initiative that meets those needs. If potential is identified, initial meetings will be conducted with the community to ensure local support. Once prospects are agreed upon by community members, Planet Indonesia and the community will enter into a partnership equal stake in program implementation among both entities. They will be equal associates in a horizontal relationship. We have found other organizations are interested in hiring our staff as consultants because of the high-impact nature of this model.

4 Savings and Loans: We work with every community group to manage a revolving fund. This money is built by each member returning a small amount of their profit (1-5%) to a central credit stock. This money is then used to (i) cover damages to the group, (ii) allow for improved market access for non-member villagers, and (iii) cover operational costs. For more established business groups the fund can then be opened to provide limitless benefits to their members. For example, if a member has a sick child, or perhaps needs to purchase a new means of transportation or school supplies, small loans could be taken from this fund. This method puts the community back in control, and directly prevents instances of villagers negatively impacting the environment out of financial desperation. A Conservation Entry Point: Another important use of our model is promoting environmentally friendly activities and building social capital with communities to support local conservation efforts. We work with villagers to promote business, but also to engage them in conservation activities such as converting degraded land to forest, decreasing bycatch of endangered marine mammals, creating community-based marine protected areas, and decreasing trapping and hunting of threatened species. Therefore, our model not only has cost-effective benefits for development, but acts as an entry point for our organization to work with communities to better conserve and manage local resources. The expansion funds will allow us to further test our model in the buffer zones surrounding national parks in West Borneo with aims to increase the conservation output of our model by protecting some of the world s most diverse and valued primary Bornean rainforests. Great Ape Conservation and Illegal Logging: In Borneo nearly all primary forests outside of protected areas have been heavily if not completely liquidated. Human poverty levels in national park buffer zones threatens forest integrity and has direct impacts on biodiversity. Planet Indonesia believes our model for development has potential to conserve national parks and directly impact Bornean Orangutan Conservation. We are currently interested in expanding our impact to Gunung Niut National Park. This protected area has only recently received national park status and has the tallest peak in West Borneo. Its close proximity to the Malaysian border has made it at high risk for illegal logging and animal trafficking. Our organization is seeking expansion funding to begin working in the buffer zone of this national park to conserve primary rainforest and great ape populations. Our green communal business approach improves resource governance and management by improving local livelihoods through development, business training, and our savings/loans systems. We believe our model will directly decrease illegal logging, as the need for fast cash and new livelihoods is directly provided through our approach.

5 3.0 Implementation Phase: An Evidence-based Approach Although our organization is new, our model has been proven effective. Our Managing Director and President of our Indonesian Board used this method to revitalize traditional artwork for indigenous women in Borneo. What started as a communal business group of 35 women has grown to over 1500 producers. They have opened up savings and loans programs to increase health care and education. The group is now a fully independent cooperative and has built their own museum with funding from the European Union. We have solid evidence to support our model, which allows us to apply for the Test and Transition stage of funding. We are in the process of applying this model to agricultural business groups, sustainable fisheries, climate change mitigation, and wildlife trafficking. In nearly all of these arenas Planet Indonesia is paving the way in Western Borneo as, to our knowledge, we are the only organization to use a cost-effective development model that can address a variety of issues for low-income communities. 4.0 Sustainability of Model Our model is unique in that constituents own the results and processes of our program. Each of our business groups can self-fund and sustain through the revolving fund. Therefore, after the initial design, training, and implementation phase our programs have a low-reliance on international donors lending to the costeffective nature of our model. Each of our programs, at most, requires 2-3 years of funding before they can completely selfsustain. This makes our model flexible, replicable, and scalable as other organizations and entities can adopt it as a cost-effective way to address issues at the socio-ecological interface. 5.0 Potential to Scale Our organization is currently in the process of testing our model against other issues. We have proven it as a model to preserve culture, promote indigenous women s rights, and bring sustainable economic development to low-income communities. Our new programs will test its ability to create solutions in new sectors of work. We have already begun to show its flexibility, and because of this, our organization is proving this methods replicability. Other organizations can apply our communal green business model to issues that stem from human poverty. After the replicability of our model is proven we plan to scale-up, and apply our model to other areas of Southeast Asia. 6.0 Long-term Planning Our goal is to create communal businesses that target over 4000 villagers by 2018 (1500 weavers, 1600 agribusiness, 500 fishermen, 400 animal trappers). In the year 2020 we plan to finish a capital

6 campaign to build a large training center in the capital of West Borneo that acts as our offices, agricultural plot demonstrations, a weaving school, business management school, financial training center, environmental education center, as well as a training program for other NGOs interested in learning about our method. After 2020 our U.S. branch will begin site visits in other areas of Southeast Asia to replicate our model, and our international branch will transition from Planet Indonesia to Planet Initiatives. We are targeting large potential donors (e.g. Ford Foundation, MacArthur) to secure funding to test our model in low-income communities throughout the area. Because our programs can self-sustain we rely on funding for each program for a maximum of 3 years. 7.0 Challenges and Risks Our model hinges on community participation and knowledge development. Although our model is extremely flexible and replicable, tailoring it to fit the needs of each community will be a challenge. Some areas simply may not be open to the idea of a communal business as an organizational structure. Moreover, the risk of setting a 3 year funding goal for each program is that a community may not be ready to become self-reliant at that time. These issues can be managed from our team s high level of experience as well as the flexibility of our model. Planet Indonesia s staff members pioneered this model in Indonesia and have nearly 20 years and a number of published works to support our experience. By drawing on this diverse background of experiences we can address these issues as they come up. Moreover, we place a heavy emphasis on evaluation and hold regular meetings throughout the formation process to assess understanding, interest, and knowledge-gain by community members. This commitment to evaluation and data collection allows us to retain a transparent relationship with all community members. It is also important to note that although the long-term goal is for each business group to reach the cooperative level (cooperatives in Indonesia have a legal status and reporting mandate), our model creates solutions even in the absence of this legal status. The Planet Indonesia approach is also a way to organize community members around a common goal. Even if cooperative status is not reached communities learn how to solve-issues together, increase sustainable management of natural resources, and take the decision-making process into their own hands. 8.0 Our Team Our team comes from a diverse set of backgrounds that are portrayed through the diverse nature of our approach. As noted, the President of our Indonesian-based NGO and the Managing Director pioneered this method by pairing indigenous cultural preservation with women s economic empowerment. They are well-known across the archipelago for their work in the heart of the Borneo. A recent addition to our team has written 4 different books and guides on how to use communal business as a tool for local empowerment. Other members of our staff have used cropinsurance funds (e.g. similar to our revolving fund) to sustain agriculture processes in the face of stochastic environmental events (e.g. floods, droughts) for many years. Planet Indonesia was created when the Executive Director of our U.S. Based branch saw the potential of this model to address other issues. Our organization is unique in that we bring decades of experience with this model and working with communities despite the young legal age of our not-for-profit. The Executive Director brought the team together to test and transition the model to address new issues in the hopes that later the U.S. based branch would scale this model up to create solutions

7 on an international level, not only in Indonesia. Besides years of experience the staff has secured fellowships and awards with some of the world s most prestigious organizations (Ford Foundation, Fulbright, Coady International Institute, Alumni Engagement Innovation Fund), in the first 6 months of existence raised over $100,000 to support our efforts. 9.0 Expansion Funds The expansion funds will allow us to support the continued growth and marketability of our model. The funds will allow us to continue to make operational refinements and test the social impact of our projects across multiple sectors. We believe that by investing in our organization you are choosing to support socio-ecological outcomes grounded in sustainable economic development. The funds will expand three overarching areas: (i) the development of our staff and international outreach, (ii) expansion of our model to more sub-districts in our focus region, (iii) expansion of our model in the buffer zone of protected areas in West Borneo. A large investment will financially enable our organization to reach these goals.

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