117088 INDONESIA: TOURISM DEVELOPMENT PROGRAM Program-for-Results (PforR) P157599 Environmental and Social Systems Assessment DRAFT June 21, 2017 DRAFT, June 21, 2017 The Environmental and Social Systems Assessment (ESSA) of the Indonesia Tourism Development Program-for-Results was prepared by a Bank team composed of Thomas E. Walton (Lead Environmental Specialist), Virza Sasmitawidjaja (Environmental Specialist), Amy Chua Fang Lim (Environmental Specialist), Jeffry Anwar (Social Safeguards Specialist), and Indira Dharmapatni (Senior Social Safeguards Specialist). ii DRAFT, June 21, 2017 ACRONYMS AND ABBREVIATIONS AMDAL - Analisis Mengenai Dampak Lingkungan (the Indonesian environmental impacts assessment process) APBD-I - Anggaran Pendapatan dan Belanja Daerah Tingkat I (Regional Expenditure Budget for Provincial level) APBD-II - Anggaran Pendapatan dan Belanja Daerah Tingkat II (Regional Expenditure Budget for District level) APBN - Anggaran Pendapatan dan Belanja Negara (State Expenditure Budget) BAL - Basic Agrarian Law BAPPENAS - Badan Perancanaan Pembangunan Nasional (National Planning Agency) BHCI - Borobudur Heritage Conservation Institution BKPM Badan - Koordinasi Penanaman Modal (Indonesia’s Investment Coordinating Board) BLH/BPLHD - Badan Lingkungan Hidup/ Badan Pengelola Lingkungan Hidup Daerah (provincial/district Environment Agency) BPIW - Badan Pengembangan Infrastruktur Wilayah (Regional Infrastructure Development Agency - RIDA) BPN - Badan Pertanahan Nasional (National Land Agency) CBT - Competency-based training DAK - Dana Alokasi Khusus (special allocation fund) DED - Detailed engineering design DLI - Disbursement-linked Indicators ESIA - Environmental and Social Impact Assessment ESMP - Environmental and Social Management Plan ESSA - Environmental and Social Systems Assessment FPIC - Free, prior, and informed consultation GOI - Government of Indonesia IBRD - International Bank for Reconstruction and Development IP - Indigenous People IPF - Investment Project Financing ITDC - Indonesia Tourism Development Corporation KEK - Kawasan ekonomi khusus (special economic zone) KEPRES - Keputusan Presiden (President Decree) KPPN - Kantor Pelayanan Perbendaharaan Negara (State Treasury Services Office) KSN - Kawasan Strategis Nasional (National Strategic Areas) KSPN - Kawasan Strategis Pariwisata National (National Tourism Strategic Areas) LARAP - Land Acquisition and Resettlement Action Plan MA/MHA - Masyarakat Adat/Masyarakat Hukum Adat/ Masyarakat Traditional (Indigenous People) MEC - Ministry of Education and Culture MOEF - Ministry of Environment and Forestry MOM - Ministry of Manpower MOT - Ministry of Tourism MoSA - Ministry of Social Affairs MPWH - Ministry of Public Works and Housing NGO - Non-governmental organization OP - Operational Policy PDDP - Power Distribution Development Program PDO  Program Development Objective iii DRAFT, June 21, 2017 PERMEN - Peraturan Menteri (Ministry Regulations) PERPRES - Peraturan Presiden (Presidential Regulations) PforR - Program-for-Results PIU - Program/Project Implementation Unit PP - Peraturan Pemerintah (government regulations) PPE - Personal Protective Equipment PPNPPI - Program Prioritas Nasional Pembangunan Pariwisata Indonesia (Indonesia Tourism Development National Priority Program) PTSP Pelayanan Terpadu Satu Pintu (One-Stop Integrated Service) RKL-RPL - Environmental Management Plan-Environmental Monitoring Plan RKP - Rencana Kerja Pemerintah (government work plan) RPJMN - National Medium-Term Development Plan SEZ - Special economic zone SME - Small and medium enterprises SPPL - Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup (Commitment Letter for Environmental Management and Monitoring) STO - Sustainable Tourism Observatory TA - Technical Assistance TDP - Tourism Development Program TVE - Technical and vocational education TVET - Technical and vocational education and training UKL-UPL - Upaya Pengelolaan Lingkungan Hidup- Upaya Pemantauan Lingkungan Hidup (Environmental Management Plan-Environmental Monitoring Plan) UNESCO - United Nations Educational, Scientific and Cultural Organization UNWTO - UN World Tourism Organization iv DRAFT, June 21, 2017 TABLE OF CONTENTS ACRONYMS AND ABBREVIATIONS .................................................................................... iii EXECUTIVE SUMMARY ......................................................................................................... vii INTRODUCTION ......................................................................................................................... 1 1 PROGRAM DESCRIPTION............................................................................................... 4 1.1 Program Scope ............................................................................................................................... 4 1.2 Typology of Expenditures ........................................................................................................... 13 2 SCOPE AND METHODOLOGY ..................................................................................... 20 3 PROGRAM CONTEXT AND POTENTIAL ENVIRONMENTAL AND SOCIAL EFFECTS..................................................................................................................................... 22 3.1 Environmental and Social Context............................................................................................. 22 3.2 Potential Environmental Benefits, Impacts, and Mitigation Measures .................................. 26 3.3 Potential Social Benefits, Impacts, and Mitigation Measures .................................................. 30 4 NATIONAL ENVIRONMENTAL AND SOCIAL MANAGEMENT SYSTEM ......... 32 4.1 Policy, Legislative, and Regulatory Framework ....................................................................... 32 4.2 Institutional Framework ............................................................................................................ 40 5 ASSESSMENT OF PROGRAM SYSTEM ......................................................................... 45 5.1 Summary of Assessment Findings .............................................................................................. 45 5.2 Details of Assessment ................................................................................................................... 46 6 INPUTS TO THE PROGRAM’S DESIGN AND ACTION PLAN .................................. 79 7 ENVIRONMENTAL AND SOCIAL RISKS ...................................................................... 84 7.1 Potential environmental and social risks ................................................................................... 84 7.2 Risk Mitigation ............................................................................................................................ 84 7.3 Evaluation of the Environmental and Social Risks.................................................................. 88 8 INPUTS TO THE PROGRAM IMPLEMENTATION SUPPORT PLAN ....................... 92 9 INFORMATION DISCLOSURE, CONSULTATION AND PARTICIPATION ............ 93 ANNEX 1: RESULTS OF PUBLIC CONSULTATION ........................................................ 95 ANNEX 2: FIELD MISSIONS AND LIST OF MEETINGS................................................. 96 v DRAFT, June 21, 2017 LIST OF TABLES Measures to Strengthen System Performance for Environmental and Social Management ....... xiv Table 1. Alignment of the PforR (TDP) with the government’s program (PPNPPI) ..................... 4 Table 2. Results indicators and Disbursement-Linked Indicators by Results Area ...................... 10 Table 3. Investment and Expenditure Menu the Program will support at priority destinations under RA1 ...................................................................................................................... 14 Table 4. Typology of activities the Program will support at priority destinations under RA2..... 17 Table 5. Typology of activities the Program will support at priority destinations under RA3..... 18 Table 6. Typology of activities the Program will support at priority destinations under RA4..... 18 Table 7. Program location and physical and demographic characteristics of the Program area include the description of natural habitats and populations. .......................................... 22 Table 8. Main laws and regulations applicable to the operation of the Program.......................... 35 Table 9. Evaluation of the GoI Environmental and Social Systems in Relation to the PforR Policy of the World Bank. ............................................................................................. 47 Table 10. Institutional capacity to address risks and impacts and areas that can be improved through the Program. ..................................................................................................... 66 Table 11. Environmental and Social Measures for the Program Design and Action Plan. .......... 79 Table 12. Environmental and Social Risk Screening.................................................................... 88 Table 13. Global risk assessment of the Program. ........................................................................ 91 Table 14. Environmental and Social Support Plan for the Implementation of the Program ........ 92 vi DRAFT, June 21, 2017 EXECUTIVE SUMMARY The proposed Operation—Indonesia Tourism Development Program—is designed to support the Government of Indonesia’s national program to fulfill the country’s tourism potential that is afforded by its rich natural and cultural resources, thereby expanding the contribution of the tourism sector to the national economy. The Operation is a “hybrid� of two instruments—the Program-for-Results (PforR) instrument will bring the needed results orientation, while the Investment Project Financing (IPF) instrument will finance a component of critical Consultants ’ Services for (i) integrated tourism master plans; (ii) downstream planning documents; (iii) program management capabilities, including capacity building to strengthen natural, cultural, and social asset monitoring and preservation capabilities; and (iv) additional studies and capacity building related to, amongst others, business and skill development and business and investment environment improvements, following the Bank’s fiduciary rules and guidelines. This Environmental and Social Systems Assessment (ESSA) is prepared for the PforR (the “Program�). The government’s program (the “program�) will support development of sustainable tourism in priority tourist destinations. The Program will focus on three of the government’s priority destinations—Lombok, Borobudur-Yogyakarta-Prambanan, and Lake Toba. The government’s program includes a wider range of expenditures related to tourism development, including for international and national marketing, immigration and visas, and safety and security in the destinations. Instead, the Tourism Development Program (TDP) will focus on a critical subset of expenditures that: improve the sustainability and tourism carrying capacity of selected destinations, focusing on addressing existing gaps and reversing environmental degradation; promote local participation in tourism economy; enhance the enabling environment for private investment and business entry in tourism; and increase institutional capacity to facilitate integrated and sustainable tourism development. The PforR approach innovatively links the disbursement of funds directly to the delivery of defined results and builds on borrower safeguard and oversight systems. The Program Development Objective of the Operation is to promote private investment and jobs in the tourism sector in selected tourist destinations in Indonesia. The Program focuses on three of the government’s priority destinations—Lombok, Borobudur-Yogyakarta-Prambanan and Lake Toba—but the ESSA was prepared under the assumption that any of the priority tourism destinations might be included. The Program will be implemented by the Ministry of Public Works and Housing (MPWH), the Ministry of Tourism, the Investment Coordinating Board (Badan Koordinasi Penanaman Modal, BKPM), and possibly several other Ministries/Agencies (e.g. Manpower and Transmigration), including at the subnational level (e.g. provincial/local Public Works Agencies, Environmental Boards, technical and vocational education and training (TVET) tertiary institutions, local one-stop integrated services (Pelayanan Terpadu Satu Pintu, PTSP-local)). Specifically, the Program will support activities in the following results areas: Results Area 1: Improve sustainability and tourism carrying capacity of selected destinations. The scope of activities under this results area aims to enhance the motorized and non-motorized physical accessibility of the three priority destinations and their tourism attractions, as well as the availability and quality of services essential for a satisfactory tourist experience and for preserving natural and cultural assets. To this end, and considering the needs identified in the three destinations, sub-Program 1 will support: vii DRAFT, June 21, 2017 (i) Road connectivity expenditures to improve the quality and maintenance of the existing road network in the destinations. This will include improving the quality and maintenance of the tourism-relevant network of national, provincial and Kabupaten 1 roads in the destinations in accordance with national standards and targets for stable maintenance condition (i.e. International Roughness Index (IRI) < 6). (ii) Basic services and infrastructure expenditures, which include water supply, drainage, and flood control, sanitation, waste water and solid waste management and cleanliness, and traffic management and parking. (iii) Tourism services and infrastructure expenditures, including pedestrian and non- motorized traffic facilities, visitor centers, and signage. Results Area 2: Promote local participation in tourism economy. This results area aims to facilitate the participation of local firms and individuals in the economic opportunities arising from the growth of tourism. The key outcomes under this results area relate to developing the relevant workforce skills for jobs in the tourism economy, and supporting domestic firms to capture opportunities in the increasingly digitalized tourism economy. To achieve increased numbers of trainees and professionals completing competency-based certification, the sub- Program aims to (i) improve competency-based standards and related training packages; (ii) enhance the capacity of TVET providers to deliver tourism CBT in line with the needs of the tourism industry; (iii) enhance the capacity of tourism assessors to certify trainees and professional in these competencies. It will also build on the partnership between the Ministry of Tourism and a travel website company2 and provide support to firms to increase their online presence and deliver targeted capacity building to firms on service and quality standard areas identified as needing improvement. Furthermore, this sub-Program will equip the Ministry of Tourism with the necessary structures and mechanisms for collection and management of big data sources from digital tourism. Results Area 3: Enhance the enabling environment for private investment and business entry in tourism. To achieve this result, sub-Program 3 will support the simplification of business entry and licensing requirements for the tourism sector and strengthen systems to monitor and facilitate private investments. Despite recent improvements in Indonesia’s ease of doing business, further improvements in the business and investment environment will be needed to enable business entry and private investment in the tourism sector and—specifically—in the three destinations. Sub-Program 3 will support expenditures for licensing mapping, simplification, automation, inventories, and related coordination capabilities to sustain a 1 In Indonesia, subnational governance includes four levels: (1) province/ Provinci, (2) city/kota and regency/kabupaten, (3) sub-district/kecamatan or district/distrik, and (4) urban community/kelurahan or village/desa. 2 TripAdvisor viii DRAFT, June 21, 2017 licensing simplification effort at the national and subnational level.3 Sub-Program 3 will also support the development of destination-specific investment promotion strategies and the institutional capabilities to attract, facilitate, retain, and expand investment proactively. Results Area 4: Increase institutional capacity to facilitate integrated and sustainable tourism development. This results area will support the strengthening of institutional capacities at the national and subnational level to facilitate integrated and sustainable tourism development. Key outcomes under this results area include the improvement of coordination and implementation mechanisms of the tourism development agenda, reduced degradation of natural and cultural assets, and increased stakeholder engagement in, and local community satisfaction with, tourism development. Program activities towards this result include the operationalization of national- level inter-Ministry/Agency coordination4 under the Ministerial-level tourism coordination team, chaired by Indonesia’s Vice President, as well as the establishment and operationalization of destination-specific coordination and delivery mechanisms; the establishment or strengthening of institutions (such as Sustainable Tourism Observatories (STOs) as part of UNWTO International Network of Sustainable Tourism Observatories (INSTO)) for the monitoring of cultural and natural assets in key tourism areas; enhanced stakeholder involvement and community awareness of tourism development; and annual community satisfaction surveys. Sub-Program 4 will ensure that the new or improved institutional arrangements are backed with clear roles and responsibilities, sufficient budget, and are adequately staffed. To this end, the Program will support expenditures for institutional development of and capabilities for integrated destination planning; natural, cultural, and social asset monitoring and preservation; local community awareness and engagement in tourism development; and community satisfaction surveys.5 In terms of environmental and social management, PforR employs a risk management approach in which process requirements are adapted to the Program context. For each proposed PforR, the Bank assesses—at the Program level—the borrower’s authority and organizational capacity to achieve environmental and social objectives against the range of environmental and social impacts that may be associated with the Program. This ESSA examines Indonesia’s existing legal, regulatory, and institutional framework for environmental and social management systems and their implementation, defines measures to strengthen the system, and integrates those 3 The licensing simplification efforts are not seeking substantive changes in the environmental requirements and review process. The World Bank Group has a longstanding engagement with the Investment Coordinating Board (BKPM), and ongoing support will help BKPM prepare the methods for conducting this effort. Past experience shows that significant licensing simplification opportunities are possible simply by reducing/making more efficient the administrative processing (e.g. parallel processing, online submission), and without the removal of any of the requirements that safeguard environmental and social risks. BKPM has no authority over the Ministry of Environment and Forestry to make substantive changes in the environmental requirements and review process. 4 Including the proposed Echelon 1 Steering Committee, the proposed Echelon 2 Technical Committee, and the proposed increased Program management support through additional staff in the Regional Infrastructure Development Agency (RIDA) of the Ministry of Public Works and Housing (MPWH, the Program’s Executing Agency), or the Program Management Support Consultants’ Services (financed under the IPF). 5 Some of the Consultants’ Services required for achieving these results will be financed through the IPF. ix DRAFT, June 21, 2017 measures into the overall Program. The ESSA has been undertaken to ensure consistency with Bank Policy: Program-for-Results Financing. This report presents the findings of the ESSA exercise and its recommendations. The ESSA process includes extensive stakeholder consultations and disclosure of the draft ESSA report following the guidelines of the World Bank’s Access to Information Policy. The ESSA consultation process and content are embedded in the Program’s consultation process. The ESSA assessed the risks of the Program and concludes that the overall environmental risks are moderate. In accordance with the PforR policy, no activities likely to have significant adverse impacts on the natural or human environment that are sensitive, diverse, or unprecedented will be supported. The greatest environmental risk is that infrastructure necessary both to address existing adverse trends in the condition of the natural and human environment and to support future tourism development—such as wastewater treatment, solid waste management, water supply, access roads and parking—will not be provided in tandem with the development of tourist facilities. If these are not provided, the result would be continuing or even accelerating degradation of the natural and cultural resources that are the main attractions for visitors and are important to the host communities. A related risk is that investments will not be planned and sited with sensitivity to the environmental opportunities and constraints of the destinations and their surrounding areas. The integrated tourism master planning process and the establishment of natural and cultural resource monitoring and protection arrangements that are key parts of Results Area 4 are the measures to address these risks (the integrated tourism master plans are financed through the IPF component of the Operation). As for the individual physical investments themselves, sound siting and design, routine mitigation measures, application of good practice, and supervision and enforcement of workplace health and safety rules (a responsibility of the Program proponent) will be sufficient to manage environmental impacts. Moreover, the expenditures to be financed under Results Area 1 focus on addressing existing gaps, aimed at reversing ongoing environmental and cultural degradation. Potential adverse social impacts and risks related to the infrastructure investment activities in Results Area 1 and construction of the downstream activities that might be generated by the other three results areas of the Program (such as new tourism-related businesses) are expected to be moderate. Potential social risks impacts would occur mainly due to land acquisition and/or resettlement, including access restriction to public goods and natural resources, and disturbance (e.g., livelihoods, health, convenience) during construction. According to Bank Policy: Program- for-Results Financing “activities that are judged to be likely to have significant adverse impacts that are sensitive, diverse, or unprecedented on the environment and/or affected people [are] not eligible for Financing and excluded from the Program�—consequently, no investments involving large-scale relocation would be included in the Program. Tourism development is perceived differently by different actors and stakeholders along with its development stage. In the case of Lombok, over time, local people have slowly accepted the positive effects that tourism can have in terms of job opportunities and income for local people. Over the last two decades, the opportunity for women to work in hotels has slowly opened. Today, local communities are more open to female labor participation in the tourism industry. “Halal,� “green,� and “sustainable� tourism is being promoted in Lombok to expand the benefits and reduce the risks of tourism development for local communities. In the case of the Borobudur-Yogyakarta-Prambanan destination, tourism development has a long history in x DRAFT, June 21, 2017 expanding the opportunity to scale up local amenities and to benefit locals. One of the promoted activities in this destination is homestay village (desa wisata). The homestay villages are part of a collaboration effort with state-owned enterprises (SOEs, or Badan Usaha Milik Negara, BUMNs). The initiative reportedly changed the mindset of local people towards attracting visitors to stay in their villages by keeping the village environment sustainable. More broadly, tourism is recognized for its large employment and income multipliers, local economic benefits, and employment of a high proportion of women (worldwide, 49% of formal hospitality and restaurant industry employees). 6 Data from Indonesia’s input-output tables 7 suggests that the majority of visitor spending stays in the Indonesian economy; around 20 percent of the spending goes towards imported goods and services. The share that stays in the economy (i.e. for local goods and services) has strong subsequent multiplier impacts as a result of indirect effects (the resulting increase in output and employment for other sectors supplying inputs to support the rise in tourism spending), and induced effects (i.e. the additional spending by those deriving income from growing tourism activity). Some studies suggest that the total impact of tourism spending can be 1.7 to 3 times its direct impact.8 However, there are also more complex potential adverse social impacts of tourism development and the tourism industry. In general, these include: greater economic and social disparity and limited access or access restrictions for the community to public natural resources (such as beaches) in case of “enclave tourist resort� development; internal conflict within communities due to inequality of opportunity to derive benefits, especially for vulnerable groups; loss of jobs due to conversion of agricultural land into tourism-related build-up areas; disturbance and commercialization of local cultures, practices and values; loss of livelihoods and assets due to land acquisition; community health and safety related to transmitted diseases, busier traffic, and sex tourism; and induced uncontrolled growth of settlements and/or small businesses surrounding the tourist attractions. Local governments in the tourist destinations are challenged to control land use and building development, protect traditional markets, and promote the inclusion of the local community in tourism-related activities. Traditional or informal tourism- related businesses, such as local boat operators, drivers, dive and snorkeling shops, may feel threatened by large-scale, capital-intensive players in these activities due to limited capacity to compete. Some local stakeholders expressed their concern, in consultations during ESSA preparation, that existing local culture, values, and practices may be degraded and replaced by a modern and “imported� model for tourism development. 6 World Travel and Tourism Council (WTTC). 2015. “Indonesia: How does Travel and Tourism compare to other sectors?,� Benchmark report; World Tourism Organization and UN Women. 2011. Global Report on Women in Tourism 2010; WTTC. 2014. Gender equality and youth employment; and WTTC. 2015. Indonesia: How does Travel and Tourism compare to other sectors? 7 Drawn from the tourism satellite account produced by Statistics Indonesia ( Badan Pusat Statistik, BPS) and the Ministry of Tourism, which are available at the national level and for certain provinces. 8 Recent WTTC studies of Indonesia’s tourism sector suggest sp ending multiplier values ranging from 1.7 to 3. xi DRAFT, June 21, 2017 As mentioned above, potential adverse social impacts and risks related to the infrastructure investment activities in Results Area 1 and construction of the downstream activities that might be generated by the other three results areas of the Program (such as new tourism-related businesses) are expected to be moderate. The potential adverse social risks discussed above can be mitigated through provision to the public of advance information related to tourism destination development activities; inclusive and meaningful consultation and participation of all stakeholders in the preparation, implementation, and monitoring and evaluation of the integrated tourism master plans; improving consistency in application of the current laws and regulations pertaining to land acquisition and Indigenous Peoples (IPs); strengthening local government and village planning processes through development of practical guidelines; and capacity building and support for coordination of the involved agencies. More importantly, the integrated tourism master plans and their implementation, as well as capacity strengthening for the local governments and communities, should be sensitive to and built on local cultures, values, and practices to ensure sustainable tourism development. The key findings of the ESSA with respect to environmental and social impact assessment and management are that Indonesia has the legislative and regulatory basis and the institutions to ensure consistency with the six elements9 outlined in the Bank Policy. Implementation is not consistently effective in the areas of environmental and social impact assessment (ESIA) preparation, review, and approval; enforcement of compliance with environmental, health, and safety requirements; and field supervision, monitoring, and enforcement. The ESSA includes measures to mitigate these risks. The most significant social findings are, first, that Indonesia has land laws and land acquisition procedures that, if judiciously followed, would result in outcomes generally in line with Policy Element 4, provided additional attention is given to squatters, livelihood restoration, the consultation process, and documentation. The Program Management Support (through Program Management Support Consultants’ Services financed under the IPF, and/or additional qualified MPWH staff) will provide training and assistance for the agencies implementing the investment to prepare and implement the Land Acquisition and Resettlement Plans (LARAP, as required by Law No. 2 Year 2012) that includes assistance and/or a livelihood restoration program, especially for squatters and the vulnerable, with the procedures, requirements and format of an 9 The six policy elements are: a) promote environmental and social sustainability in the Program design; avoid, minimize, or mitigate adverse impacts, and promote informed decision-making relating to the Program’s environmental and social impacts; b) avoid, minimize, or mitigate adverse impacts on natural habitats and physical cultural resources resulting from the Program; c) protect public and worker safety against the potential risks associated with: (i) construction and/or operations of facilities or other operational practices under the Program; (ii) exposure to toxic chemicals, hazardous wastes, and other dangerous materials under the Program; and (iii) reconstruction or rehabilitation of infrastructure located in areas prone to natural hazards; d) manage land acquisition and loss of access to natural resources in a way that avoids or minimizes displacement, and assist the affected people in improving, or at the minimum restoring, their livelihoods and living standards; e) give due consideration to the cultural appropriateness of, and equitable access to, Program benefits, giving special attention to the rights and interests of Indigenous Peoples and to the needs or concerns of vulnerable groups; f) avoid exacerbating social conflict, especially in fragile states, post-conflict areas, or areas subject to territorial disputes. xii DRAFT, June 21, 2017 abbreviated LARAP. 10 In addition, the Program Management Support Consultants’ Services includes a Social Development Specialist. This specialist will help provide training and assistance to the involved agencies implementing the investment, and review and monitor the implementation of the assistance and/or livelihood restoration program as specified in the abbreviated LARAP. This will help in ensuring that the involved agencies have sufficient and qualified staff and budget to prepare and consistently implement the abbreviated LARAP. The specialist will also facilitate the collaborative work among involved agencies to effectively prepare and implement the abbreviated LARAP. Second, the ESSA also found that Indonesia has sectoral laws and regulations specifically aimed at protecting the rights of indigenous peoples (Masyarakat Hukum Adat, or MHA). Existing regulations for land rights to MHA are difficult to implement in some circumstances due to overly bureaucratic arrangements, and guidelines for consultation are lacking, both resulting in differing levels of opportunity to benefit from resources and to participate in planning activities. In addition, understanding of regulations around the rights of MHA varies among government stakeholders, leading to diverse perceptions and political buy-in. The measures identified in the ESSA will fill these gaps within the Program. 11 Free, prior, informed consultations will be carried out that lead to broad community support during the preparation of the Integrated Tourism Master Plans (ITMPs)—under the IPF—and downstream plans ensuring the cultural appropriateness of, and equitable access to, Program benefits. Further, the Program Management Support (through Program Management Support Consultants’ Services financed under the IPF, and/or additional qualified MPWH staff) will provide training and assistance to involved agencies implementing the investments in areas where there is IPs presence, in carrying out free, prior, informed consultations that lead to broad community support to the Program during the social assessment and to empower the affected IPs in benefitting from the Program and address potential adverse impacts through the development of the Indigenous Peoples Plan. As part of the awareness and capacity building activities under Results Area 4, the Program will support the development of a practical tool/guidance to implement free, prior, informed consultations that lead to broad community support and to empower IPs so that they will benefit from the Program as operationalization of the relevant sectoral laws and regulations. The ESSA identifies the key measures to be taken for improved environmental and social due diligence in the Program. These measures are an integral part of the Program and its results chain and linked closely with the Disbursement-linked Indicators (DLIs) and the Program Action Plan (PAP) for the PforR. The key measures are defined in the table below: 10 For details, see Table 9, Policy Element 4 on Actions and Opportunities 11 For detail, see Table 9, Policy Element 5 on Actions and Opportunities xiii DRAFT, June 21, 2017 Measures to Strengthen System Performance for Environmental and Social Management Environmental and Social Objective Implementation via Timing Responsible Actions Prepare Integrated Tourism Master Plans (ITMPs) for each destination. Undertake free, prior, Ensure integrated informed consultations that development of lead to broad community tourism facilities and support during the supporting preparation of the ITMPs infrastructure and downstream plans ensuring the cultural appropriateness of, and equitable access to, IPF (technical Program benefits. assistance) component of the Operation, ITMP by August Ensure that the Provide training and especially ITMP 2018, with destination’s assistance to involved Consultants’ Services, interim environmental, social, agencies implementing the and downstream deliverable to and cultural investments in areas where plans. inform the 2018 opportunities and there is IPs presence in expenditure MPWH constraints are carrying out a free, prior, Program Management program. considered in informed consultations that Support13 to provide development planning lead to broad community training, review IPPs, During the Avoid locating support for the Program monitor their implementation infrastructure in during the social implementation, of the PforR. disaster-prone areas assessment and to empower and facilitate the affected IPs in collaboration among benefitting from the involved agencies. Program and address Provide opportunities potential impacts through for stakeholders, the development of the including indigenous Indigenous Peoples Plan peoples (IPs) and (IPP).12 vulnerable groups, to participate in the Assist and facilitate the planning process collaborative efforts of various agencies responsible for IPs empowerment. 12 This includes support for the development of a practical tool/guidance tailored for the Program to implement free, prior, informed consultations that lead to broad community support and that empower IPs so that they will benefit from the Program as operationalization of the relevant sectoral laws and regulations. 13 Through Program Management Support Consultants’ Services fi nanced under the IPF, and/or additional qualified MPWH staff. xiv DRAFT, June 21, 2017 ITMP to recommend the arrangement through stakeholder mapping. Mitigate risk that Establish actions of tourism Establish arrangements or arrangements as part development itself will strengthen emerging of Program Action not degrade the natural arrangements, such as MPWH, Plan and and cultural resources Sustainable Tourism Ministry of implementation Arrangements that attract the visitors. Observatories (STOs), as Tourism, throughout Program established end part of UNWTO Universities, period is incentivized 2017; Mitigate risk that International Network of Environmental in Results Area 4, Ongoing natural and cultural Sustainable Tourism Management where its regular implementation resources that IPs Observatories (INSTO), for Agency reporting is a DLI. depend on for their monitoring and protection (BLH) living and customary of natural and cultural Program Management practices become more assets at each destination. Support14 to provide limited or restricted. training to protection agencies. Community satisfaction surveys. 15 Anticipate potential for social conflict and provide for conflict management in Integrated Tourism Master Plans. Integrated Tourism Include harmony with local Master Plans (IPF); Avoid social conflict social values and culture in RA4 financing and During the MPWH, that could occur as a development plans. results indicators for implementation Ministry of result of tourism Leverage uniqueness of the community awareness of the PforR Tourism development destination by being raising programs and sensitive to local culture. community feedback Enhance local tourism surveys. awareness raising programs (“Sadar Wisata�) and strengthen community feedback through annual surveys. 14 Through Program Management Support Consultants’ Service s financed under the IPF and/or additional qualified MPWH staff. 15 In order to monitor their satisfaction, sufficient IPs will be included in the local community satisfaction surveys (under RA4, where increased satisfaction is aimed for over the Program period) on satisfaction with participation in destination planning and budgeting processes, as well as access to Program activities. xv DRAFT, June 21, 2017 Include assistance and livelihood restoration, especially to squatters and the vulnerable groups, in the Abbreviated LARAPs.16 Provide Program Management budgets to support Support17 to provide Ensure livelihoods are assistance and livelihood training, review restored when people restoration activities. Abbreviated LARAPs (including IPs and Assess capacity to and a Plan of Action MPWH During the other vulnerable implement Abbreviated (as applicable), Central and implementation groups) affected by LARAPs and provide monitor their local of the PforR investments lose land, training to agencies implementation, government other assets, or access implementing the provide training and to assets. Abbreviated LARAPs as facilitate collaboration needed. Provide assistance among involved and facilitation on the agencies. collaborative work among involved agencies to effectively prepare and implement the abbreviated LARAP. Program Management Support. Include health and safety in all environmental Implementing Minimize risk of MPWH management plans. /contracting agencies accidents to workers Ongoing local to supervise and local residents government Supervise adherence to contractors for safety rules. compliance (RA1). Adoption of the Investment Ensure that funds from and Expenditure Menu of the PforR Program are the Program; the not used to support mechanism for reviewing investments that are the proposed annual work MPWH in ineligible because of plan against the Menu and Before loan Program Action Plan consultation significant adverse, the Integrated Tourism effectiveness with the Bank environmental or social Master Plans; and the impacts that are screening mechanism for sensitive, diverse, or year 1 investments and unprecedented. proposed additions to the Menu. 16 As applicable this should include a Plan of Action in the case that an investment leads to access restriction to natural resources in designated parks and protected areas. 17 Through Program Management Support Consultants’ Services financed under the IPF, and/or ad ditional qualified MPWH staff. xvi DRAFT, June 21, 2017 Improve quality of Develop and implement a UKL-UPLs and tourism-specific training AMDALs that often program for consultants Developed end MPWH lack analytical rigor; that prepare UKL-UPL 2017 (Program are weak in the areas of Program Management and, as applicable, Action Plan) and Ministry of cumulative impacts, Support and/or RA4 AMDALs and for the ongoing Environment associated facilities, agencies that review, implementation and Forestry analysis of alternatives, approve, and enforce (MOEF) and social impacts; and them.18 are not always well implemented. 18 Most of the investments in Results Area 1 of the Program (Table 3) will require UKL-UPL, but an SPPL will suffice for some. Few, if any, are likely to need AMDAL. xvii DRAFT, June 21, 2017 0 DRAFT, June 21, 2017 INTRODUCTION 1. The Government of Indonesia’s Tourism Development Priority program (the “program�) is being proposed for financing through a World Bank Operation, with two complementary components—the Program-for-Results (PforR) financing instrument and a technical assistance component using the Investment Project Financing (IPF) instrument, guided by the same Program Development Objective and results framework. Through the PforR (the “Program�), the Operation—entitled Republic of Indonesia: Tourism Development Program (TDP)— innovatively links the disbursement of funds directly to the delivery of defined results. The PforR instrument builds on increased reliance on borrower safeguard and oversight systems. 2. The Program Development Objective (PDO) is to promote private investments and jobs in the tourism sector in selected tourism destinations in Indonesia. This PDO is fully aligned with the Government’s objective to increase the role of tourism in the Indonesian economy as articulated in the National Medium-Term Development Plan (Rencana Pembangunan Jangka Menengah Nasional, RPJMN) 2014-2019. The requested PforR aims to support achievement of the Government’s objective in selected priority tourism destinations scattered throughout the country. Progress towards achieving the PDO will be measured through three key results indicators for the selected tourism destinations: daily average expenditure per tourist, net direct tourism-linked jobs created, and private investment in tourism generated. 3. To inform the preparation of the PforR, the World Bank has conducted an Environmental and Social Systems Assessment (ESSA) of Indonesia’s existing environmental and social management system reflected in the national legal, regulatory, and institutional framework that will be used to address environmental and social effects of the activities financed by the PforR. The ESSA defines measures to strengthen the system, and proposes to integrate those measures into the overall PforR. This report presents the findings of the ESSA exercise. The ESSA was undertaken to ensure the consistency of Program systems with the six policy elements outlined in Bank Policy: Program-for-Results Financing, issued on July 10, 2015 (hereinafter the PforR Policy). 4. The six elements of the policy are: i. Promote environmental and social sustainability in the Program design; avoid, minimize, or mitigate adverse impacts, and promote informed decision-making relating to the Program’s environmental and social impacts; ii. Avoid, minimize, and mitigate against adverse effects on natural habitats and physical cultural resources resulting from the Program; iii. Protect public and worker safety against the potential risks associated with (i) construction and/or operations of facilities or other operational practices under the Program; (ii) exposure to toxic chemicals, hazardous wastes, and other dangerous materials under the Program; and (iii) reconstruction or rehabilitation of infrastructure located in areas prone to natural hazards; 1 DRAFT, June 21, 2017 iv. Manage land acquisition and loss of access to natural resources in a way that avoids or minimizes displacement, and assist the affected people in improving, or at the minimum restoring, their livelihoods and living standards; v. Give due consideration to cultural appropriateness of, and equitable access to, Program benefits, giving special attention to the rights and interests of the Indigenous Peoples and to the needs or concerns of vulnerable groups; and vi. Avoid exacerbating social conflict, especially in fragile states, post-conflict areas, or areas subject to territorial disputes. 5. The ESSA analyzed the environmental and social management system for the Program to assess applicability for each of the policy elements and ensure consistency with those that apply. The actions recommended to fill the gaps identified in the ESSA are expected to directly contribute to the Program’s anticipated results in the tourism sector. This report presents an analysis of the existing system vis-à-vis the relevant policy elements for environmental and social management, and an Action Plan that will be incorporated into the overall Program Action Plan. 6. The Operation will include a component of technical assistance supported by Investment Project Financing (IPF). The IPF component will finance critical consultants’ services for the technical assistance (program planning, management, and capacity building) component of the Operation. The specialized consultants’ services are to be procured under Bank rules. Some of the gap-filling recommendations recommended in the ESSA will be implemented through the IPF component. However, because the IPF component will be subject to Bank safeguards policies, it is not considered in the ESSA. An environmental and social management framework (ESMF) is being prepared for it. 7. The ESSA was prepared by World Bank environmental and social specialists in consultation with government officials and staff at central, provincial, and district levels and with other relevant stakeholders including non-governmental organizations and private sector representatives. It is based on: (i) interviews with representatives of relevant ministries; (ii) site visits to five of the priority tourism destinations, including interviews with provincial, local, and destination management authority officials, community members, and private investors; (iii) review of Indonesia’s environmental, social, cultural, and land acquisition regulations; and (iv) desk review of relevant documentation including instruments for supervision and monitoring and evaluation. 8. The assessment has nine sections. Section 1 describes the scope of the Program and its institutional context, and Section 2 explains the ESSA scope and methodology. Section 3 describes the Program’s environmental and social context, benefits, and risks. Section 4 describes the Program environmental and social management systems respectively, as defined in laws, regulations, internal procedures, etc., as well as the institutional framework for implementing the systems. Section 5 is an assessment of the extent to which the environmental and social management systems are consistent in definition and implementation with the elements specified in the PforR Policy as amplified in Bank Directive: Program-for-Results 2 DRAFT, June 21, 2017 Financing, issued July 10, 2015. Section 6 specifies key measures to improve the performance of the environmental and social management systems (Inputs to Results Area 4, to the Program Action Plan, and to the IPF component). Section 7 provides an environmental and social risk rating and proposes risk mitigation measures. Section 8 describes the support that the Bank will provide in environmental and social areas (Inputs to the Implementation Support Plan). Finally, Section 9 summarizes the stakeholder consultations undertaken during the preparation of this assessment. 3 DRAFT, June 21, 2017 1 PROGRAM DESCRIPTION 1.1 Program Scope 9. The Tourism Development Program (TDP) is aligned with the objectives of the Indonesia Tourism Development Priority program (Program Prioritas Nasional Pembangunan Pariwisata Indonesia, PPNPPI), which is guided by GoI’s RPJMN 2015-2019. However, the Program is more limited in geographic scope and finances only part of the PPNPPI activities (Table 1). The Program will support the wider government program, focusing on three of the priority destinations—Lombok, Borobudur-Yogyakarta-Prambanan, and Lake Toba. The objectives of the PPNPPI are to increase foreign and domestic visitors and related foreign exchange earnings, employment, and contribution to GDP as well as tourism competitiveness. It includes six program areas: (i) international marketing and promotion; (ii) destination development; (iii) human resource and institutional development; (iv) international openness and access; (v) local economy linkages; (vi) safety and security and health and hygiene. The PPNPPI includes a wider range of expenditures related to tourism development, including for international and national marketing, immigration and visas, and safety and security in the destinations. Instead, the TDP will focus on a critical subset of expenditures that: improve the sustainability and tourism carrying capacity of selected destinations, focusing on addressing existing gaps and reversing environmental degradation; promote local participation in tourism economy; enhance the enabling environment for private investment and business entry in tourism; and increase institutional capacity to facilitate integrated and sustainable tourism development. Based on a review of its Investment and Expenditures Menu, the TDP will not finance high value activities or those which would likely have significant adverse impacts that are sensitive, diverse, and unprecedented on the environment and/or affected people (Table 3). The TDP and the wider PPNPPI are complemented by separate Regional Infrastructure Development programs, which include large new infrastructure investments (airports, toll roads, ports), for which the economic rationale includes regional connectivity, trade, and industrial development, and which cannot be justified by tourism development. With the government’s prioritization of tourism development, some of the government’s Regional Infrastructure Development program activities which could also benefit tourism development are being prioritized within the Regional Infrastructure Development programs. As these programs are not part of the TDP (or wider PPNPPI), they are not part of this Assessment. The TDP will target four results areas that will help address the four main challenges in order to unlock tourism potential in Indonesia. Table 1. Alignment of the PforR (TDP) with the government’s program (PPNPPI) 19 PforR GoI Program (PPNPPI) Alignment* 19 Program Prioritas Nasional Pembangunan Parawisata Indonesia, as per Presidential Decree No. 45 Year 2016 on the Government Work Plan (RKP) 2017, pp. III-70-III-80 4 DRAFT, June 21, 2017 Objective 1: Promoting Wonderful Indonesia through international and domestic marketing of N tourism products, destinations and the Indonesian tourism brand, including through social media.  Promotion of tourism destinations N  Promotion of National Tourism Brand N  Marketing through online, electronic, printed, and social media N Objective 2: Destination development of priority tourism destinations Y  Development of transportation infrastructure and facilities Y  Basic infrastructure and services Y  Electricity and fuel supply N  Preparation of tourism attractions Y  Institutional development Y  Tourism development coordination Y Objective 3: Human resource and institutional development Y  Preparation of human resource and institutional NSPK (norm, standard, procedure, criteria) N  Quality Improvement of Tourism Tertiary Education Y  Quality Improvement of Tourism Vocational School Y  Quality Improvement of other tourism school N  Training and Certification Y  Tourism Institutional Development Y Objective 4: Entry facilities for Foreign Tourist N  Ease of entry at Airport: Visa-free facility, visa upon arrival, flight diplomatic clearance N  Ease of entry at Port: visa upon arrival, CAIT (Clearance and Approval for Indonesian N Territory)  Ease of entry at land-border station N Objective 5: local economy linkages and community awareness Y  Community involvement and awareness of tourism development Y  Tourism industry and small business development Y  Skill development (hospitality) of tourism sector workers Y  School involvement and awareness of tourism development Y Objective 6: safety and security and health and hygiene Y/N  Safety and security N  Health and hygiene and sustainability Y  Disaster-risk management Y * Y=yes; N=no. 10. Results Area 1: Improve sustainability and tourism carrying capacity of selected destinations. The scope of activities under this results area aims to enhance the motorized and non-motorized physical accessibility of the three priority destinations and their tourism attractions, as well as the availability and quality of services essential for a satisfactory visitor experience and for preserving natural and cultural assets. To this end, and considering the needs identified in the three destinations, TDP sub-Program 1 will support: (i) Road connectivity expenditures to improve the quality and maintenance of the existing road network in the destinations. This will include improving the quality and maintenance of the tourism-related network of national, provincial, and Kabupaten roads in the destinations in accordance with national standards and targets for stable maintenance condition (i.e. International Roughness Index (IRI) < 6). 5 DRAFT, June 21, 2017 (ii) Basic services and infrastructure expenditures, which include water supply, drainage and flood control, sanitation, waste water and solid waste management and cleanliness, and traffic management and parking. (iii)Tourism services and infrastructure expenditures, including pedestrian and non- motorized traffic facilities, visitor centers, and signage. 11. The upgrading of basic services will increasingly be devised through a demand-driven and integrated planning approach. The TDP, also through the IFP component, will support the systems leading to integrated planning to help avoid mass tourism growth that exceeds the capacity of local infrastructure and natural and cultural resource management institutions. Finalizing the integrated tourism master plans, however, is not a pre-requisite for starting sub- Program 1 in year 1 (2018); the Demand Assessments20 and initial integrated tourism master planning findings can guide year 1 expenditures, especially those proposed to be financed under the TDP, which focuses on addressing existing gaps and reversing environmental degradation. The first year would encompass investments that would be advisable no matter what the final outputs of the master plans would be. For the first-year investments that will be implemented before the ITMPs are completed, the Program will rely on the two-level screening system described in Annex 3. The government has gained experience with such screening, when an initial screening tool in 2016 was developed and applied to the 2017 government work plan. It is gradual and cautious to minimize risks focusing on the upgrading of basic services. The 5-year TDP will not include all infrastructure investments identified in the 25-year ITMPs. First, based on the Demand Assessment and through results indicators 2-7, the TDP focuses on addressing existing gaps and reversing environmental degradation. Second, new and larger investments are expected to be needed only in later phases of development, as visitor demand increases. Third, the TDP will focus on the “key tourism areas� within the wider “tourism destination� (Table 7). The ITMPs will improve comprehensive long-term planning and phasing and provide a solid base for gradual and concerted improvement of the tourism carrying capacity of each destination. The Program’s Investment and Expenditure Menu, together with the ITMPs, for the 5-year Program, provide the recommended policies and practices required for the upgrade of basic infrastructure and services in local communities to improve key indicators affecting tourism competitiveness (especially health and hygiene and environmental sustainability), as is discussed further in the section 1.2 on Typology of Expenditures. 12. Results Area 2: Promote local participation in tourism economy. This results area aims to facilitate the participation of local firms and individuals in the economic opportunities arising 20 As part of Program preparation, upon the government’s request, a report (the “Demand Assessment�) was prepared that covered for each of the destinations: (i) baseline supply and demand of tourism services; (ii) investment analysis; future market demand analysis (future visitors and investors); and (iv) investment needs (destination infrastructure, tourism infrastructure, skills, firm capabilities, and legal and regulatory environment). The final reports are available at www.bpiw.go.id 6 DRAFT, June 21, 2017 from the growth of tourism. The key outcomes under this results area relate to developing the relevant workforce skills for jobs in the tourism economy, and supporting domestic firms to capture opportunities in the increasingly digitalized tourism economy. To achieve increased trainees and professionals completing competency-based certification, the sub-Program aims to (i) improve competency-based standards and related training packages, (ii) enhance the capacity of TVET providers to deliver tourism CBT in line with the needs of the tourism industry; (iii) enhance the capacity of tourism assessors to certify trainees and professional in these competencies. It will also build on the partnership between the Ministry of Tourism and a travel website company21 and provide support to firms to increase their online presence and deliver targeted capacity building to firms on service and quality standard areas identified as needing improvement. Furthermore, this sub-Program will equip the Ministry of Tourism with the necessary structures and mechanisms for collection and management of big data sources from digital tourism. 13. The development of relevant workforce skills will include financing for the provision of relevant and good-quality competency-based training and the strengthening of the accreditation and certification system of the tourism sector in the three selected destinations. The support will align CBT with the demands of the private sector. To enable this, sub-Program 2 will include expenditures for: (i) the revision of existing and development of new occupational standards and related CBT packages; (ii) TVET institutes to become accredited CBT providers by provision of training of TVET trainers, acquisition of equipment and supplies/materials, and adaptation of existing physical spaces in the TVET institutions to better operate the acquired equipment; (iii) capacity building of accreditation bodies of CBT providers; (iv) capacity building of assessors to certify graduates of CBT programs and existing tourism professionals based on recognition of prior learning; (v) the certification costs for a targeted number of candidates; (vi) a simple monitoring system to track the employment performance of graduates. Expenditures will only be provided to TVET providers which have memorandum of understandings (MoUs), or similar arrangements, with the Ministry of Tourism for use of its curriculum and agreed partnerships with potential employers which are based on an agreed results framework (with defined occupational requirements and employment targets). While Program support will focus on strengthening TVET institutions relevant to the three destinations, several of the Program activities will directly improve the overall system for tourism-related workforce skill development. 14. The Ministry of Tourism will be equipped with the means to better prioritize and more effectively deliver capacity building to local firms as well as manage and analyze tourism data. Through a deepened partnership with a travel website company, the Ministry will be able to develop a series of digital workshops that will improve tourism firms’ online presence and 21 TripAdvisor 7 DRAFT, June 21, 2017 engagement—critical for any tourism firm to remain competitive and to maximize their access to market. Furthermore, through this partnership, the Ministry will monitor and evaluate service and quality standards of tourism firms, identify areas needing improvement in each destination, and tailor practical and competency based training to enable tourism firms to increase their overall standards. The sub-Program will also include expenditures for identifying and implementing the most appropriate organizational set up and data management system for the Ministry to take advantage of the rapid digitalization of the tourism sector, and use this data effectively for destination planning, marketing, and investment promotion. 15. Results Area 3: Enhance enabling environment for private investment and business entry in tourism. To achieve this result, sub-Program 3 will support the simplification of business entry and licensing requirements for the tourism sector and strengthen systems to monitor and facilitate private investments. Despite recent improvements in Indonesia’s ease of doing business, further improvements in the business and investment environment will be needed to enable business entry and private investment in the tourism sector and—specifically—in the three destinations. Support for licensing simplification in select local governments in the three destinations will be provided by a parallel IFC Advisory Services (AS) project,22 with the wider roll-out supported under the TDP. Sub-Program 3 will support expenditures for licensing mapping, simplification, automation, inventories, and related coordination capabilities to sustain a licensing simplification effort at the national and subnational level. Sub-Program 3 will also support the development of destination-specific investment promotion strategies and the institutional capabilities to proactively attract, facilitate, retain, and expand investment. 16. Results Area 4: Increase institutional capacity to facilitate integrated and sustainable tourism development. This results area will support the strengthening of institutional capacities at the national, provincial, and local level to facilitate integrated and sustainable tourism development. Key outcomes under this results area include the improvement of coordination and implementation mechanisms of the tourism development agenda, reduced degradation of natural and cultural assets, and increased stakeholder engagement in, and local community satisfaction with, tourism development. Program activities towards this results include the operationalization of national-level technical inter-Ministry/Agency coordination under the Ministerial-level 22 Indonesia: Investment Climate, Competitive Sectors and Competition project (602128). The licensing simplification efforts are not seeking substantive changes in the environmental requirements and review process. The World Bank Group has a longstanding engagement with the Investment Coordinating Board (BKPM), and ongoing support will help BKPM prepare the methods for conducting this effort. Past experience shows that significant licensing simplification opportunities are possible simply by reducing/making more efficient the administrative processing (e.g. parallel processing, online submission), and without the removal of any of the requirements that safeguard environmental and social risks. BKPM has no authority over the Ministry of Environment and Forestry to make substantive changes in the environmental requirements and review process. 8 DRAFT, June 21, 2017 tourism coordination team, chaired by Indonesia’s Vice President,23 as well as the establishment and operationalization of destination-specific coordination and delivery mechanisms; the establishment or strengthening of institutions, such as Sustainable Tourism Observatories (STOs) as part of UNWTO International Network of Sustainable Tourism Observatories (INSTO), for the monitoring of cultural and natural assets in key tourism areas; enhanced stakeholder involvement and community awareness of tourism development; and annual community satisfaction surveys. Sub-Program 4 will ensure that the new or improved institutional arrangements are backed with clear roles and responsibilities, a sufficient budget and are adequately staffed. To this end, the Program will support expenditures for institutional development of and capabilities for integrated destination planning; natural, cultural and social asset monitoring and preservation; local community awareness and engagement in tourism development; and community satisfaction surveys.24 17. Environmental and social aspects are integral elements of the TDP and the broader PPNPPI. Cultural and natural resources are the main attraction for tourists in Indonesia, but unless well planned and executed, tourism development can degrade those same resources and ultimately be self-defeating and unsustainable. The proposed emphasis in the Program on monitoring and preservation of natural and cultural assets will be operationalized by: (i) ensuring sufficient financing for such monitoring and protection efforts is included in the expenditure framework; (ii) providing the destination with additional tools to strengthen local initiatives, for example, protection of lakes, mangroves, or community forests; (iii) providing capacity building to local authorities through the preparation of the integrated tourism master plans on risk management to minimize the impacts on the human and natural environment; and (iv) improving capacity to conduct UKLs-UPLs and, if applicable, AMDALs, and prepare Site Management Plans, and to monitor their implementation. The Program Management Support (through Program Management Support Consultants’ Services financed under the IPF, and/or additional qualified MPWH staff) will also support capacity strengthening of the involved agencies in preparing and implementing assistance and livelihood restoration programs for the affected peoples including the vulnerable, squatters and IPs, in identifying affected IPs as well as in preparing and implementing guidelines for conducting a free, prior, informed consultations with the affected IPs that lead to broad community support to the program ensuring the cultural appropriateness of, and equitable access to Program benefits. Sub-Program 4 will also aim to increase the local community awareness and engagement in tourism development through (improved) “sadar wisata� tourism awareness-raising activities and annual community 23 Including the proposed Echelon 1 Steering Committee, the proposed Echelon 2 Technical Committee, and the proposed increased Program management support through additional qualified staff in the Regional Infrastructure Development Agency (RIDA) of the Ministry of Public Works and Housing (MPWH, the Program’s Executing Agency), or Program Management Support Consultants’ Services (the latter financed under the IPF). For more details, see Section II.c. on ‘Institutional Arrangements’. 24 Some of the Consultants’ Services required for achieving these results will be financed through the IPF. 9 DRAFT, June 21, 2017 satisfaction surveys. Increased community satisfaction is one of the Program results indicators, and includes perceived benefits received from tourism (individual or community benefits, economic or social benefits, conservation of traditions, etc.), changes in socio-economic conditions (e.g. prices, access to resources, traditional values), changes in environmental conditions (improvement or degradation), interaction with tourists, etc. 18. Integrated tourism master plans (ITMPs) will be prepared for each destination, with the Consultants’ Services for the plans funded by the IPF. Each integrated tourism master plan consists of an overall development plan for the entire tourism destination area (with a planning horizon of 25 years) and detailed development plans (with a planning horizon of 5 years) for existing and selected future key tourism areas within the tourism destination area. The plans will be based on the Demand Assessment and an economic analysis of each destination and will be prepared in close consultation with all stakeholders, including local communities and the private sector. They will provide the basis for development of tourism facilities and supporting infrastructure that (a) is consistent with the environmental, social, and cultural opportunities and constraints of the destinations and (b) avoids degradation of the natural and cultural resources that are the assets that attract tourists. The ITMP will identify the priority programs needed to strengthen tourism activities at the local level and will provide detailed recommendations for the preparation and revision of local and provincial spatial plans and sectoral master plans (if necessary), 25 but is not in itself a spatial planning document with statutory effect under the Indonesian Urban Planning Framework. 19. Nineteen preliminary results indicators, including nine preliminary Disbursement-linked Indicators (DLIs) have been identified across the four results areas (Table 2). The DLIs have been selected to ensure even representation of each results area, and to achieve a balance of process, output, and outcome indicators that reflect different phases of Program implementation and will enable a smooth profile of disbursements throughout the life of the PforR. The results indicators and the DLIs will be updated and refined on the basis of subsequent discussions with the GoI and ongoing assessments of measurement capacity and verification protocols. Table 2. Results indicators and Disbursement-Linked Indicators by Results Area No. DLI Result Area 1 – Improve sustainability and tourism carrying capacity of selected destinations 1 New hotel rooms added in tourism destination areas. 2 √ Percentage of the road network maintained in accordance to national standards and targets for stable maintenance conditions, defined as IRI ≤ 6 25 Such as Rencana Tata Ruang Wilayah (RTRWP) Provinsi, RTRW Kawasan Strategis Pariwisata, RTRW Kota/Kabupaten, RDTR Kawasan Strategis Pariwisata, and sectoral master plans, including those for water supply, and wastewater management. 10 DRAFT, June 21, 2017 3 New dedicated space created for non-motorized traffic in m2 4 √ Percentage of households (including hotels and restaurants) in the core tourism destination areas provided with access to sustainable piped water supply 5 Number of Areas in which shared distribution network (JDB) have been built to serve House Connection (SR) 6 √ Percentage of access to sustainable sanitation services in the key tourism destination areas 7 √ Percentage of access to sustainable solid waste collection services in the key tourism destination areas Result Area 2: Promote local participation in tourism economy 8 √ Trainees and tourism professional receiving competency-based certification 9 √ Number of tourism businesses with an online presence 10 Number of tourism businesses with an increase in service and quality ratings26 Result Area 3: Enhance enabling environment for private investment and business entry in tourism 11 Reduction in average time (days) to obtain all licenses for establishing a new tourism- related business. 12 Value of new private investment realization in tourism-related businesses 13 √ Number of new private investment licenses in tourism-related businesses issued 14 Adoption of destination-specific investment promotion plans Result Area 4: Increase institutional capacity to facilitate integrated and sustainable tourism development 15 √ Number of spatial plans or sectoral master plans adopted or revised with the integrated tourism master plans 16 √ Number of periodic STO (Sustainable Tourism Observatory), or equivalent, monitoring reports published based on pre-agreed geographic scope of key tourism areas and list of critical indicators 1727 Increased performance on the indicators monitored based on pre-agreed geographic scope of key tourism areas and list of critical indicators. 18 Number of participants in “Sadar Wisata� tourism awareness-raising programs. 19 Local community (including IPs, if any) satisfaction with participation in destination planning and budgeting processes. 20. A Ministerial-level tourism coordination team, chaired by Indonesia’s Vice President, provides overall guidance to the Program and has appointed the Minister of Tourism for overall coordination and entrusted the Ministry of Public Works and Housing (MPWH) with the management of the Program. For central government coordination, the MPWH has proposed to establish an Echelon 1 Steering Committee, 28 an Echelon 2 Technical Committee, 29 and 26 on TripAdvisor. 27 The World Bank team is discussing opportunities with the government to use this indicator as an DLI instead of #16. 28 The Steering Committee is proposed to consist of Echelon 1 officers from each involved Ministry or Agency and a Technical Committee team. It is co-chaired by the Deputy Infrastructure in the Ministry of National Development 11 DRAFT, June 21, 2017 increased Program Management Support through additional qualified staff in the Regional Infrastructure Development Agency (RIDA) of the MPWH and the Program Management Support Consultants’ Services (financed under the IPF). 21. The Program will be implemented by the MPWH, the Ministry of Tourism, the Investment Coordinating Board (Badan Koordinasi Penanaman Modal, BKPM), and possibly several other Ministries/Agencies (e.g. Manpower and Transmigration), including at the subnational level (e.g. provincial/local Public Works Agencies, Environmental Boards, technical and vocational education and training (TVET) tertiary institutions, local one-stop integrated services (Pelayanan Terpadu Satu Pintu, PTSP-local)). Planning (Bappenas) and the Deputy Destination Development and Tourism Industry in the Ministry of Tourism. The Head of RIDA will be secretary of the Steering Committee. The Steering Committee members include (indicative list): 1. Deputy Economy, Bappenas; 2. Deputy Multilateral Funding, Bappenas; 3. Deputy Infrastructure, Coordinating Ministry for Maritime Affairs; 4. Deputy Regional Development, Coordinating for Economy; 5. Financing and Risk Management Director, Ministry of Finance 6. Plt. (pelaksana tugas or temporary tasks implementer) Director General Regional Development, Minister of Home Affairs 7. Director General of Pollution Control and Environmental Degradation, MOEF 8. The Secretary General, Ministry of Transportation 9. Director General of Renewable Energy, Ministry of Energy and Mineral Resources 10. The Secretary General, Micro, Small and Medium Scale Enterprises 11. Investment Climate Development Deputy, The Investment Coordinating Board 12. The Director General of Spatial Space, Ministry of Agrarian Affairs and Spatial Planning. 29 The proposed Technical Committee consists of tourism development Echelon II officials of each involved ministry or agency. It is co-chaired by the Director of Industry, Tourism and Creative Economy in the Ministry of Planning / Bappenas and the Deputy Assistant Infrastructure Development and Impacts of Tourism in the Ministry of Tourism. Head Strategic Area Development Center, RIDA will be secretary with the composition the team as follows (indicative): 1. The Director of Multilateral Foreign Funding, Bappenas; 2. The Director of Transportation, National Development Planning Agency; 3. The Director of Water and Irrigation, National Development Planning Agency; 4. Deputy Infrastructure, Coordinating Minister for Maritime Affairs; 5. Director of Environmental Pollution, Ministry of Environment and Forestry; 6. Head Planning Bureau, Ministry of Transportation; 7. The Secretary of the Board of Special Economic Zone; 8. Director of Investment Promotion, The Investment Coordinating Board; 9. Deputy Assistant Business Sectors Energy, Logistics, Metro, and Tourism, the Ministry of State Owned Enterprises; 10. The Ministry of Cooperatives and Small-scale Enterprises (MSME). 12 DRAFT, June 21, 2017 22. Destination-level coordination mechanisms are yet to be established, except for Lake Toba, where the Lake Toba Tourism Area Management Authority Board was established. 30 Presidential Regulation No. 49, issued on June 13, 2016, creates a specific organizational structure for the planning, management, development, construction, and control of a site of approximately 500 Ha in Lake Toba (the so-called ‘authority zone’). The specific geographic boundary of the broader so-called ‘coordination zone’, for which the Management Authority has a coordinating role, is according to Presidential Regulation No. 81 Year 2014. The Regulation created two bodies: an Advisory Board, chaired by the Coordinating Minister for Maritime Affairs, which will establish the general policy, provide overall direction and supervision of the Lake Toba intervention; and an Executive Board, a working unit under the Ministry of Tourism, which will coordinate, synchronize, and facilitate the planning, development, and construction of this tourism destination. Different ministries, agencies, and the Governor of North Sumatra are also members of the Advisory Board. The Executive Board will be responsible for the preparation of a Master Plan for the Development and Construction of Lake Toba Tourism Area (the approximately 500 Ha site) for a period of 25 years, as well as a 5-year detailed plan. The tourism coordination team agreed to keep the responsibility for the integrated tourism master plan for the tourism destination area with the Ministry of Public Works and Housing. Additionally, the Executive Board will also have authority to plan the allocation and use of land, and the right to manage the Lake Toba Tourism Area and organize licensing and non-licensing services. Destination-level coordination mechanisms for the other destinations are expected to be established as well. The Presidential Regulation for the Borobudur destination authority has been issued recently. 1.2 Typology of Expenditures 23. The Investment and Expenditure Menu of the Program is designed to achieve the Program results. It is based on the Demand Assessments, which also included transport and basic services baselines and future investment needs. 31 On an annual basis, as part of the regular government work plan cycle, all proposed Program infrastructure investments and expenditures will be reviewed against the Investment and Expenditure Menu of the Program. They will also be screened to ensure they are in line with the ITMPs. In case the Program’s Steering Committee wants to add new types of investments to the Menu, they need to be screened according to the significance of their potential environmental and social impacts using the adopted screening mechanism (see Annex 3). The same applies to the year 1 work plan, when the ITMPs are not yet finalized. Adoption of the Investment and Expenditure Menu of the Program, the mechanism for 30 Presidential Regulation No. 49 concerning “The Lake Toba Tourism Area Management Authority Board� 31 As part of Program preparation, upon the government’s request, a report (the “Demand Assessment�) wa s prepared that covered for each of the destinations: (i) baseline supply and demand of tourism services; (ii) investment analysis; future market demand analysis (future visitors and investors); and (iv) investment needs (destination infrastructure, tourism infrastructure, skills, firm capabilities and legal and regulatory environment). The final reports are available at: www.bpiw.go.id 13 DRAFT, June 21, 2017 reviewing the proposed annual work plan against the Menu and the ITMPs, and the screening mechanism for year 1 investments and proposed additions to the Menu is part of the Program Action Plan and is required prior to loan effectiveness. The screening mechanism will be prepared by the Program manager (MPWH) based on Annex 3. Similarly, for investments proposed by subnational agencies, BAPPEDAs (the provincial and kabupaten/kota level system integrators) will perform such a review role, supported by the MPWH, which will deploy in- destination Program management capacities to strengthen Program preparation at the subnational level. 24. Table 3 summarizes the Investment and Expenditure Menu related to Result Area 1— improve sustainability and tourism carrying capacity of selected destinations—to be implemented through the Program. The typology of activities is based on the Demand Assessment findings which provides guidance on the expenditure planning for the three first- priority destinations—Lombok, Borobudur-Yogyakarta-Prambanan, and Lake Toba. Table 3. Investment and Expenditure Menu the Program will support at priority destinations under RA132 Expenditure Type of expenditures proposed to be financed EA category Category  Routine maintenance: roadside verge clearing and grass cutting, cleaning of silted C Roads and ditches and culverts, patching, pothole repair, etc. other transport  Periodic maintenance: resealing, resurfacing, overlay, pavement reconstruction, C etc.  Road safety improvements: geometric design improvement, instalment of C pedestrian crossing facilities (pedestrian bridge, traffic light), etc.  Traffic management improvement: marking, intersection design improvement, C etc.  Feasibility studies (FSs) and detailed engineering designs (DEDs) for physical B investments to be financed under the Program.33  Construction or improvement of facilities for public transport, such as bus stops B/C and terminals and ferry terminals, taxi and truck stands.  Replacement or improvement of small bridges. B 32 As explained above, in the absence of ITMPs, subject to screening to eliminate activities likely to have significant adverse impacts that are sensitive, diverse, or unprecedented on the environment and/or affected people, as per Annex 3. Once, ITMPs have been finalized, subject to alignment with ITMPs. 33 First five bullets are based on the Demand Assessment as part of Program preparation. The last five bullets could possibly also be needed to achieve results. 14 DRAFT, June 21, 2017  Other road-related infrastructure (signage, street furniture, etc.). C  Construction of new road sections, bridges, fords and culverts. B  Rehabilitation and reconstruction of roads, including small widening, paving, B/C changes of alignment and geometry, drainage improvements, etc.  Construction and improvement of infrastructure for pedestrians, bicycles, and B/C Non- non-motorized transport, such as sidewalks, walkways, bicycle paths, road motorized crossings, pedestrian bridges, etc. traffic  Urban parks and greenery development projects for beautification. B  FSs and DEDs for physical investments to be financed under the Program. B  Expansion of existing and construction of new water supply network. B Access to sustainable  Expansion of existing or construction of new municipal water treatment facilities. B piped water  Repair or replace existing (or damaged) water storage facilities. B supply  FSs and DEDs for physical investments to be financed under the Program. B  Small solid waste processing facilities B Solid waste management  Garbage collection trucks and other collection equipment C  Collection bins, transfer stations, collection points B  Small-scale biogas and composting facilities B  Covering small canals, ponds and ditches. C  Temporary Disposal Sites B  Expansion/ rehabilitation/upgrading of existing Final Disposal Site (to adopt B sanitary landfill method)  FSs and DEDs for physical investments to be financed under the Program B  Establishment of 3R organizations or community services (e.g. waste banks B program)  Urban drainage systems and the like B Wastewater Management  Construction and upgrading of treatment plants, pump stations, and sewage B & Sanitation connections to buildings  Sewer reticulation systems B  Wastewater treatment ponds B  Public toilet and sanitation facilities (e.g. community toilet facilities (MCK) in the B local community areas/parks)  FSs and DEDs for physical investments to be financed under the Program B  Local wastewater collection and treatment systems B  Septic tank pump out trucks and small-scale septage treatment facilities B The negative list of investment that contains items that the Program cannot finance Negative list include:34  No new landfills  Roads – construction or rehabilitation of roads that require significant resettlement of people (more than 200 people).  No large regional solid waste facilities 34 Based on the Demand Assessment, none of these types of investment have been identified as required to achieve the Program’s results. They are mentioned here as a precaution. 15 DRAFT, June 21, 2017  No large regional waste water facilities/ system  No new toll roads 25. Because water, wastewater, and solid waste management facilities can have significant impacts such that they would be ineligible for PforR, some explanation of those that appear in Table 3 is in order. The key infrastructure for wastewater and sanitation recommended in the Demand Assessment (short term planning for the first 5 years) for Lake Toba consists of communal (MCK) toilets connected to a septic tank, installation of sufficient numbers of septic tanks in residential areas in key tourism kecamatans, small scale wastewater treatment plants, and public toilet and sanitation facilities at tourism sites. For Lombok destination, the immediate actions needed to support the overall solid waste management system are improving the solid waste collection system and its coverage in the key tourism kecamatans.35 The recommendations for the short term (first 5 years) are: allocation of sufficient numbers of Temporary Disposal Sites (i.e., transfer stations, or TPS), improvement of the solid waste collection system at all settlements along the coastline (within the key tourism kecamatans), and expansion of the existing Final Disposal Site. In Borobudur-Yogyakarta-Prambanan, the Demand Assessment recommends that water loss in the water supply system be addressed immediately by implementing sustainable piped water supply. This is defined as having house connections and 24-hour access to water supply. This expansion of the existing water supply network will serve residents of six cultural villages (around Borobudur, in the key tourism kecamatans) and improve the comfort of the visitors. Reducing water losses to 20 percent will also address water scarcity and protect water resources from depletion. The Demand Assessment recommendations for short-term infrastructure have been an important reference for the GOI and will be included as the key reference in the terms of reference of the ITMPs.36 26. The environmental assessment category that would apply if the Program were financed by a Bank IPF is shown in Table 3 to make clear that no Category A-type investments will be financed under the Program.37 It is of course possible that an investment that would normally 35 No new landfill is needed in the short term planning. Possible expansion of an existing Final Disposal Site is already in planning stage by the local government. 36 Large and medium-scale solid waste facilities are currently in the identification and project preparation stage under a potential World Bank investment loan for cities identified as Tier 1 and Tier 2 cities for potential construction regional solid waste facilities. Some of the Tier 1 and Tier 2 cities that are possible participants are near key tourism destinations, including Magelang in Central Java Province; Padang in West Sumatera and Palembang in South Sumatera. 37 The assessment is guided in part by the IEG’s observation that PforR projects have been too risk -averse in excluding waste and wastewater infrastructure, thereby missing opportunities to make substantial environmental improvements. As far as roads are concerned, most rehabilitation and reconstruction activities do not entail significant risks and are normally in Category B when under IPF loans. Widening can sometimes (but not always) 16 DRAFT, June 21, 2017 have only moderate impacts could have significant impacts if placed in a location with sensitive environmental, social, or cultural features. One of the objectives of the ITMPs is to prevent this through systematic, sound siting of infrastructure. In the first year of the Program, before ITMPs are finalized, a screening process based on the Indonesian system will be applied. It is described in Annex 3 of the ESSA. 27. The Indonesian Ministry of Environment Regulation No. 5 Year 2012 states the requirements for activities to be required to have AMDAL (full environmental and social impact assessment). It is in itself a two-level screening process. Annex 1, which is an integral part of this regulation, is an extensive list of types of activities organized by sector. A few of them require AMDAL regardless of size, but for most, the size threshold at or above which AMDAL is required is defined. Below the threshold, the less intensive “environmental management effort� (UKL) and “environmental monitoring effort� (UPL) must be prepared, except in cases of negligible impact. UKL-UPL is comparable to the ESMP that is often used for Category B projects being implemented under Bank safeguards. When impacts are negligible, in projects that would be in Category C under Bank safeguards, the Indonesian system provides for a third instrument, a Statement of Environmental Management and Monitoring Undertaking (SPPL) to be executed by the proponent. Most of the investments in Results Area 1 of the Program (Table 3) will require UKL-UPL, but an SPPL will suffice for some. Few, if any, are likely to need AMDAL. 28. Table 4 summarizes the types of activities in the Program to promote local participation in the tourism economy. Table 4. Typology of activities the Program will support at priority destinations under RA2 No. Indicative Activities under Program’s Expenditures 1. Consultants’ services, training, operating costs, non-consulting services, and possibly small grants for the alignment of competency-based training (CBT) to the demand of private sector employers in the priority destinations, including for developing: (a) guidance on work plans and results frameworks for TVET institutions; (b) CBT curricular training packages and material; (c) training of trainers for TVET and LSP (assessor and certifiers); (d) SOPs for LSP to assess competency standards; and (e) a graduate tracking mechanism for TVET institutes. Works, goods, and services for the upgrading of physical facilities and training equipment of TVET institutions. 2. Expand the travel website company-Ministry of Tourism partnership to improve its benefits to local tourism businesses. result in substantial resettlement, but the negative list would eliminate such projects from the Program. A $350million Category B roads project active in Indonesia today includes minor roads widening. 17 DRAFT, June 21, 2017 4. Training and capacity building of businesses on how to respond to consumer feedback and improve their travel website rankings. 5. Improving basic tourism data collection and data base management and utilization through digital method. 6. Establishment (operating costs) and capacity building of a new data management team. 29. Table 5 summarizes the typology of supporting tourism services, marketing and investment promotion activities to be implemented through the Program. Table 5. Typology of activities the Program will support at priority destinations under RA3 No. Indicative Activities under Program Expenditures 1. Consultants’ services, training, operating costs, non-consulting services, and possibly small grants for the simplification of investment procedures and licensing requirements in the tourism sector through: (a) development of comprehensive mapping of licensing procedures in specific parts of the tourism sector; (b) strengthening of coordination mechanism for implementing the simplification program at the national and sub-national level; and (c) Capacity building for key agencies to undertake ongoing simplification for other business fields in the tourism sector in line with the agreed agency. 2. Consultants’ services, training, operating costs, non-consulting services, and possibly small grants for the strengthening of systems mechanism to monitor, promote and facilitate private investments through (a) the development and execution of destination-specific investment promotion plans; (b) actions to improve coordination amongst key agencies to promote investment in tourism; and (c) strengthening the targeted outreach strategies, including building investor databases and tracking processes using examples from other countries, participation in tourism investment events, booth costs, advertising and promotional materials; and (d) capacity building for key agencies, including training/workshops on effective investment promotion, investor outreach, facilitation and aftercare, and the strengthening of shared investor tracking systems for BKPM and partners. 3. Consultants’ services, training, operating costs, and non-consulting services to improve the effectiveness of investment policies and incentives to attract investments in the tourism sector, such as revision of the Negative List (DNI) and in the SEZ arrangements. 30. Table 6 summarizes the typology of institutions and mechanisms for sustainable tourism development activities to be implemented through the Program for the three first-priority destinations—Lake Toba, Borobudur, and Lombok. Table 6. Typology of activities the Program will support at priority destinations under RA4 No. Indicative Activities under Program Expenditures38 1. Consultants’ services, training, operating costs, and non-consulting services to support and strengthen the tourism coordination team, the technical level coordination team (Steering 38 Some of these Consultants’ Services will be financed under the IPF compone nt. 18 DRAFT, June 21, 2017 Committee and Technical Committee), the Executing Agency, and destination-level coordinating bodies.39 3. Awareness and capacity building on environmental and social safeguards for the staff of MPWH, Ministry of Tourism, and other central agencies involved in the Program. 4. Awareness and capacity building on environmental and social safeguards for the local government staff and other stakeholders involved in the Program. 5. Establish or strengthen existing local institutions (e.g. STOs) to monitor natural and cultural assets at the tourism areas in the destination. 6. Establish or strengthen community awareness raising programs; surveys for community feedback. 39 Issuance of Presidential Regulation for Destination Level coordination and implementation arrangements will be part of Program Action Plan. 19 DRAFT, June 21, 2017 2 SCOPE AND METHODOLOGY 31. To prepare the ESSA, the following activities were undertaken:  Review of the relevant laws, regulatory frameworks, and guidelines and identification of inconsistencies with the social and environmental elements of the PforR Policy  Assessment of the potential environmental and social risks of the Program  Review and assessment of the institutional roles, responsibilities, and coordination of relevant agencies, and analysis of current capacity and performance to carry out those roles and responsibilities  Public participation that included a stakeholder’s consultation workshop, social inclusion, and grievance redress mechanisms. 32. The process included: (i) analysis of the national system for environmental and social management for planning and implementing programs in the sector for consistency with the standards outlined in the Bank’s PforR Policy and PforR Directive, and identification of gaps; (ii) determining where there were procedural and policy gaps as well as performance constraints in carrying out environmental and social management processes; and (iii) developing a set of viable actions to strengthen the system and improve performance. The ESSA team worked closely with the Ministry of Public Works (MPWH) and Ministry of Tourism to develop the ESSA, and prepare the Program Action Plan as a guide to identify and mitigate impacts and strengthen the environmental and social management system. 33. The ESSA has drawn on various inputs, including:  legal and regulatory analysis;  field visits to five tourism destinations proposed for possible support under the Program, including the three identified as first priority, and discussions with residents and businesses in communities at each location;  meetings with government agencies, development partners, NGOs, businesses, tourist industry representatives, and other stakeholders;  assessments of performance and carrying capacity of the government agencies in previous or current World Bank projects in Indonesia;  the Demand Assessment for the three priority destinations; and  Stakeholders’ consultations on the draft ESSA [to be conducted in July 2017]. 34. The system gaps with respect to the PforR Policy are considered on three levels: (i) the system as written in laws, regulations, and procedures; (ii) the system as applied in practice; and (iii) the capacity of Program institutions to effectively implement the system. The analysis focuses on the strengths, gaps, potential actions, and risks associated with the systems currently in use in the tourism sector to address the environmental and social effects commensurate with 20 DRAFT, June 21, 2017 the nature, scale and scope of operations. This is structured to examine arrangements for managing the environmental and social effects (i.e., benefits, impacts and risks) of the Program. 21 DRAFT, June 21, 2017 3 PROGRAM CONTEXT AND POTENTIAL ENVIRONMENTAL AND SOCIAL EFFECTS 3.1 Environmental and Social Context 35. Program location and physical characteristic of the Program area include the description of natural habitats and populations. The Government’s program covers priority destinations listed below. The PforR Program will focus on the first three in the list, especially in terms of Results Area 1 and will focus on specific key tourism areas within these destinations. For the other Results Areas, the Program location is less specifically defined. For instance, the proposed Program could support TVET training in Medan (to benefit Lake Toba tourism destination specifically, but also the tourism sector in general) and enhanced capabilities for investment promotion will benefit all tourism destinations. Table 7 describes those three destinations in more detail, including the areas included in the Program and their environmental, social, and cultural characteristics.  Lake Toba  Lombok  Borobodur/Yogyakarta/Prambanan  Tanjung Kelayang  Tanjung Lesung  Mount Bromo  Labuan Bajo  Wakatobi National Park  Pulau Seribu  Morotai Table 7. Program location and physical and demographic characteristics of the Program area include the description of natural habitats and populations. Program Lake Toba tourism Lombok tourism Borobudur-Yogyakarta- location/Description destination destination Prambanan tourism destination a. Size of Program The Program will focus on The Program will focus on The Program will focus on area the key tourism areas: the key tourism areas: the key tourism areas: -Parapat in Kecamatan -Gili Islands-Senggigi -The Borobudur Cluster Girsang Sipangan Bolon in covering: Kecamatan Batu covering two Kecamatan: Kabupaten Simalungun and Layar in Kabupaten West Borobudur and Mungkid. Kecamatan Simanindo and Lombok; Kecamatan -The Prambanan-Boko Kecamatan Pangururan in Pemenang and Kecamatan Cluster covering Kabupaten Samosir. Tanjung in Kabupaten North Kecamatan Prambanan in 22 DRAFT, June 21, 2017 -Kecamatan Balige in Lombok. Kabupaten Sleman and Kabupaten Toba Samosir. -The southern coastal area Kecamatan Prambanan in The Program will focus on covering: Kecamatan Pujut Kabupaten Klaten. these areas for basic and Kecamatan Praya Barat -The Yogyakarta Cluster services. For transport, the in Kabupaten Central including the Kraton, focus is on the key tourism Lombok; Kecamatan Taman Sari and areas and Samosir Island. Sekotong in Kabupaten Malioboro Street covering For sanitation and solid West Lombok; and the following kecamatan: waste, 31 Kecamatan have Kecamatan Jerowaru in Kraton, Gedongtengen, been identified around the Kabupaten East Lombok. Danurejan, Ngampilan, lake.40 For the other Results The Program does not Kotagede, and Areas, the Program location include Mandalika SEZ Gondomanan. is less specifically defined. managed by the Indonesia For instance, the proposed Tourism Development The Program will focus on Program could support Corporation (ITDC). these areas for basic TVET training in Medan (to The Program will focus on services. For transport, the benefit Lake Toba tourism these areas for basic focus is on key connecting destination specifically, but services. For transport, the roads to the key tourism also the tourism sector in focus is on key connecting areas (to the extend they general) and enhanced roads to the key tourism are predominantly serving capabilities for investment areas and the areas tourism) and the areas promotion will benefit all themselves. For the other themselves. For the other tourism destinations. Results Areas, the Program Results Areas, the location is less specifically Program location is less defined. For instance, the specifically defined. proposed Program could support TVET training in Mataram (to benefit Lombok tourism destination specifically, but also the tourism sector in general) and enhanced capabilities for investment promotion will benefit all tourism destinations. b. Population/main The total number of The total population of The total population of economy activities population living in the Lombok island is estimated Magelang Regency Lake Toba area is estimated to be 3.3 million people. (Borobudur) and the to be around 656,872 The key tourism areas are Special Region of people. Main economic concentrated in the southern Yogyakarta is estimated to activities are fisheries, coastal areas and in the Gili be 4.93 million people in agriculture (rice fields), islands off the coast of 2015.*** Main economic 40 Silahisabungan, Merek, Muara, Baktiraja, Lintongnihuta, Paranginan, Pematang Silimahuta, Silimakuta, Purba, Haranggaol Horison, Dolok Pardamean, Pematang Sidamanik, Girsang Sipangan Bolon, Ajibata, Lumban Julu, Uluan, Porsea, Siantar Narumonda, Sigumpar, Laguboti, Balige, Tampahan, Sianjur Mulamula, Harian, Sitiotio, Balige, Simanindo, Pangururan, Nainggolan, Onan Runggu, Palipi, and Ronggur Nihuta. 23 DRAFT, June 21, 2017 paper pulp industries, and North Lombok, where activities are agriculture, tourism.* population density is low. tourism and service Main economic activities industries. are local tourism, fishing, and agriculture.** c. General The lake provides abundant The North Lombok Regency The site of Borobudur description of freshwater and is includes the Gili Islands Temple is surrounded by natural habitats surrounded by mountainous (Gili Trawangan, Gili Air, mountains, lakes, fertile of the Program countryside. The lake basin and Gili Meno), which soils, with abundant water area and areas are surrounded by support marine life and resources. Agriculture is boundary (within steep cliffs.* There are two coral reefs. On the southern one of the main economic the Program) islands inside the lake— side of the Lombok Island, activities around the Samosir Island (647 km2) Kecamatan Pujut in temple complex. and Pardapur Island (7km2). Kabupaten South Lombok is Borobudur temple and its known for the beautiful surrounding are also beaches such as Kuta situated in an earthquake Beach.**** Kecamatan zone due to the geological Jerowaru is also located in setting. Kabupaten South Lombok and known for its beautiful beaches and coastal fishing. Sepotong is located in Kabupaten West Lombok and is a coastal area. d. Additional Protected forest areas are In Gili Islands and some The Borobudur Temple information on not located in the key parts of Lombok Island, compound was named as sensitive areas tourism areas of the there are turtle conservation UNESCO World Heritage Program.* The lake area activities carried out mostly Site in 1991. It has surrounding the tourism by privately owned turtle significant historical, destination is part of a sanctuaries. cultural and religious geological formation value. There are no forest because of mega-volcanic habitats or natural habitats activity and it is the largest that will be degraded by freshwater lake in the Program activities.*** Indonesia. e. Current state of The lake provides abundant Gili Trawangan’s popularity Traffic congestion due to environment freshwater and is as a tourist destination limited access roads and condition surrounded by mountainous means it produces 20 tons of over-crowding of tourists countryside. The lake basin waste per day (peak season) during peak season have areas are surrounded by or 5–8 tons per day (low been two of the concerns steep cliffs.* There are two season). The island that have led the islands inside the lake— currently has no proper management of the Samosir Island (647 km2) waste management. Lack of UNESCO site to find and Pardapur Island clean water supply and suitable alternatives for (7km2). Water pollution is water storage facilities in the current tourist an issue. – Threats are from Gili Islands. In most management plan. untreated waste water from attraction areas, there is lack human settlements, of public toilet and aquaculture farming, spilled sanitation facilities oil from boats and vessels (especially septic tanks) to around the lake, and prevent untreated waste deposition of sediments due water from polluting the to soil erosion from environment especially 24 DRAFT, June 21, 2017 surrounding steep hills. sensitive ecosystems such as There are also no proper corals and fishes. sanitation facilities to Inadequate solid waste handle solid waste. collection disposal system at Lombok also poses long term environmental threat to the marine ecosystems such as turtle conservation efforts. Gili Trawangan produces 20 tons of waste per day (peak season) or 5–- 8 tons per day (low season). f. Type and key Nature – Lake scenery, Nature – Long stretch of Culture/Heritage - tourism attraction mountainous countryside white sandy beaches and The Borobudur cluster areas. view, hot spring, waterfalls smaller nearby islands for includes the temples of and mountain trekking. For snorkeling and dive sites. Borobudur, Pawon and example: Parbaba, a beach Pink Beach in Kecamatan Mendut; the sunrise by the fresh water lake Jerowaru is known for its spot of Punthuk (Lake Toba); and the hot unspoiled scenery and Setumbu; Bukit springs at Gunung Pusuk isolated long stretch of pink Rhema, an abandoned Buhit Mountain. sandy beach. prayer site; and Culture – The history and Culture –Sasak villages that surrounding cultural the cultural heritage of the house traditional Sasak villages. The Batak ethnic community are farmer families are also key Prambanan-Ratu Boko located within the key attractions. A Hindu temple cluster’s main tourism tourism area. Other (e.g. Pura Meru Temple) is attractions include the attractions such as the Stone the largest and second most Prambanan Temple Chair of King Siallagan and important temple in and Ratu Boko, a 16- King Sidabutar’s Tomb; and Lombok. ha site with Buddhist Ambarita, a traditional and Hindu structures. village that provides The Yogyakarta glimpses of Batak culture. cluster includes the Keraton, the sultan’s residence and a living museum; the Water Palace; and Malioboro Shopping Street. g. Indigenous people Batak people meet the Sasak people meet the Javanese is the dominant (if any) definition of indigenous definition of indigenous ethnic group in the area. people and the Batak is the people. There are some There are no indigenous dominant ethnic groups in tourism attractions found in people being identified in the key tourism area. They in the Sade Customary surrounding Borobudur, mostly lived in the Village (not included in Magelang, and highlands. However, detailed in development Yogyakarta. customary hamlets plan), Bek Customary (kampung-kampung adat) Village, Belek Customary can be found in the Village, and Bayan surroundings of Lake Customary Village. Those Toba, particularly in customary have been Kecamatan Porsea (only a revived and share similar focus for the Program for movement agenda toward sanitation and solid customary land territory waste). There is a Tano recognition. Batak indigenous people In other parts of Lombok, 25 DRAFT, June 21, 2017 alliance network in the area. there are traditional The organization is settlements intertwine with currently working towards modern settlements. This recognition on customary can be found in Khayangan land territory. District and Bayan District, North Lombok (not part of the detailed development plans). There is also indigenous people in Ende Village in Pujut district in middle of Lombok (also not part of the detailed development plans). Table sources and notes: * KSPN Lake Toba Chapter 3 on the profile of the planned district. ** Lombok Baseline Supply & Demand Assessment – Horwath HTL and Surbana Jurong. *** Borobudur (Joglosemar) Baseline & Demand Assessment – Horwath HTL and Surbana Jurong. **** Every year in February, there is an annual tourist event which is known as “Bau Nyale�. 3.2 Potential Environmental Benefits, Impacts, and Mitigation Measures 36. The Program’s potential environmental benefits are substantial and long-term. They can be summarized as follows. a) Benefits from integrated tourism master plans, downstream planning documents and studies, and Program management capabilities, supported by the IPF technical assistance component of the Operation that recognize environmental and social constraints and opportunities:  Coordination of infrastructure development to keep pace with growth in tourism, thereby avoiding environmental degradation caused by volumes of solid and liquid waste and vehicle and pedestrian traffic that exceed the capacities of collection and treatment system, roads, parking lots, bus depots, and walkways  Environmentally-sensitive siting of tourism facilities and infrastructure  Visitor management plans for natural and cultural attractions sensitive to volume of tourists  Increased probability tourism experience that is mutually satisfying, for the visitors and the host communities b) Benefits from upgraded and expanded systems to provide clean water, wastewater treatment systems, greening, and solid waste management:  Promotion of good health among local residents and visitors  Prevention of pollution of natural resources (e.g. rivers, soil, groundwater) generated from poorly managed human waste and solid waste  Promotion of clean environment that lead to an increased comfort for local people and visitors 26 DRAFT, June 21, 2017 c) Benefits from improved and better-managed roads, parking, walkways, signalization, etc.:  Reduced traffic congestion with potential reduction in air emissions.  Reduced vehicle and pedestrian accident hazards d) Benefits from arrangements for monitoring and protection of natural and cultural resources at the destinations:  Increased public awareness of the importance of preserving the resources that attract tourists  Early warning of deterioration  Vehicle for coordinated response to negative trends by all relevant actors  Source of information (when monitoring results are positive) that can be used in advertising for the destinations 37. The environmental risks associated with activities that could be supported under the Program are summarized below. a) Risks common to most construction activities, e.g., roads, walkways, information centers, pipelines, water and wastewater treatment works:  Loss of vegetation and topsoil from land clearing  Soil erosion and stream sedimentation  Dust  Noise and air emissions from heavy equipment  Improper disposal of construction waste  Spills of fuel and lubricants  Damage to other infrastructure or physical cultural resources  Accident hazard for vehicles and pedestrians from open trenches, traffic detours  Visual intrusion of infrastructure into natural and cultural landscapes b) Additional risks from construction and operation of water supply weirs and stream channel stabilization  Water quality and aquatic habitat degradation caused mainly by suspended solids  Obstruction of fish movements upstream and downstream  Impacts on downstream water uses and users c) Risks from operation of public toilets  Groundwater pollution from septic tanks because of location on unsuitable soils, malfunction, or poor maintenance  Odors and health hazards caused by inadequate housekeeping 27 DRAFT, June 21, 2017 d) Additional risks from construction or expansion/upgrading and operation of waste water treatment plants  Eutrophication from nutrients in effluent  Mortality of aquatic organisms caused by low dissolved oxygen, or toxic substances introduced into the collection system  Odors caused by plant upsets e) Additional risks from operation of water treatment systems  Improper disposal of sludge and backwash water  Exposure of workers and community members to water treatment chemicals during delivery and use f) Additional risks from construction and operation of solid waste collection and disposal facilities  Groundwater contamination by leachate because of location on unsuitable soils or ineffective lining and leachate collection  Surface water pollution from contaminated runoff or uncollected or inadequately treated leachate  Smoke and fire  Vermin and disease vectors g) Conversion of productive agricultural land to non-agricultural use h) Workplace and health and safety risks  Injuries and falls from not using proper personal protective equipment (PPE) protection while carrying out construction activities.  Risk to surrounding communities for not providing enough barricades or hazards signage to inform the boundary project area risks during on-going construction activities.  Improper disposal of construction wastes and waste from worker’s camp as some contractors do not provide proper portable toilets and good housekeeping practices. 38. Most of these risks can be mitigated by inclusion of good construction practices and basic environmental, health and safety management measures in environmental management plans (RKL and UKL), construction contracts incorporating ESHS performance standards and by supervision and enforcement of their implementation by supervision ESHS personnel, including attention to provision and use of PPE and use of signage and barricades at locations of hazards. The exception is visual intrusion; this needs to be taken into account in siting and design of infrastructure in the Integrated Tourism Master Plans. Liaison with affected communities during 28 DRAFT, June 21, 2017 construction is essential. Mitigation measures for risks beyond those associated with general construction activities include the following:  For weirs and small dams, and for stream channel stabilization, impact assessment based on study of aquatic ecology and downstream water uses, plus study of stream flow for weirs and small dams; development of mitigation and monitoring measures including environmental flow for weirs and small dams.  For public toilets, soil tests to determine suitability for septic tanks; clear agreement on management responsibilities and procedures.  For wastewater treatment plants, determination of receiving water’s assimilative capacity for nutrients and organic matter; consider land disposal or reuse of effluents as alternative to discharge to surface water; develop operations manual and train operators; monitor plant performance.  For water treatment systems, provide safe chemical storage, develop safe delivery and handling procedures, require use of PPE.  For solid waste management facilities, conduct siting study including analysis of alternatives, considering soil and groundwater characteristics, proximity to surface water and communities; include leachate collection and treatment, runoff management, and buffer zones in designs; develop operations manual and train operators; provide for odor and vector control; maximize 3Rs approach (i.e., reduce, reuse, recycle).  Consider land-use trade-offs between tourism development and loss of agricultural production as part of integrated tourism master planning.  For workplace health and safety, enforce use of appropriate PPE in all situations; assess hazards and develop work procedures accordingly; hold regular safety training for PMU supervision personnel and contractor’s ESHE personnel. 39. Potential induced and cumulative impacts. Overall, the Program is aimed towards protection of natural and cultural resources and the environment. Cumulative impacts are possible when construction and operation of multiple types of infrastructure and facilities occur within a common area of influence. Development of hotels and restaurants to serve visitors can lead to cumulative increases in traffic, solid and liquid waste, and incremental obstruction of community access to beaches and other areas important for recreation and cultural practices. The integrated tourism master planning process is intended to identify the potential for such impacts and provide the means to avoid them. Of more concern are potential induced impacts, because they are more difficult to predict and manage. Examples of induced impacts include:  In-migration of job-seekers, leading to proliferation of unplanned, substandard housing not served by sanitation infrastructure;  Disorganized development of businesses along roads, beaches, and tourist attractions;  Petty street crime;  Undesirable activities including drug dealing, prostitution, sex tourism;  Disturbance of natural habitats, such as coral and mangrove areas, from tourism activities. 29 DRAFT, June 21, 2017 40. In Indonesia, the legal and institutional framework for environmental impact assessment including the aspect related to management of direct, induced and cumulative impacts is well developed and comprehensive in the legislation. Nevertheless, there is gap in capacity and intensity of enforcement in different regions of the country, in functions such as administration of land development and enforcement that hinders the proper management of induced impacts. 3.3 Potential Social Benefits, Impacts, and Mitigation Measures 41. Overall, activities to achieve the four results areas in the Program should generate positive social impacts. The Tourism Development Program (TDP) and the broader PPNPPI government program are expected to contribute to higher-level impacts on foreign and domestic visitors and related foreign exchange earnings, employment, and contribution to GDP, as well as to tourism competitiveness. The Program is expected to increase jobs, promote local participation in the tourism economy, and maintain and/or improve the natural resources, local culture, traditions, and assets that constitute the attractions of the destinations. Construction activities in Results Area 1 are expected to improve and expand infrastructure and services that will ultimately improve the sustainability and carrying capacity of tourism destinations. Local communities will benefit from the development of improved infrastructure and services, as they will have opportunities to establish or expand their current economic activities or tourism-related businesses, and to create new jobs. Potential adverse social impacts and risks related to construction activities (such as maintenance, rehabilitation or reconstruction of roads and sidewalks; water supply; waste management, sanitation facilities, tourist facilities and amenities) in Results Area 1 and construction of the downstream activities that might be generated by the other three results areas of the Program (such as new tourism-related businesses) are expected to be moderate. Potential social risks impacts would occur mainly due to land acquisition and/or resettlement, including access restriction to public goods and natural resources, and disturbance (e.g. livelihoods, health, convenience etc.) during the construction. Because of the PforR Policy prohibition on “activities that are judged to be likely to have significant adverse impacts that are sensitive, diverse, or unprecedented on the environment and/or affected people,� the scale of land acquisition for each activity will be small to medium in size, and there will not be large-scale relocation of households or businesses. Activities involving large-scale and/or significant social impacts, including induced social impacts, will not be financed under this Program. 42. Other typical potential adverse social impacts of tourism development (beyond the impacts of land acquisition and/or resettlement) may include: greater economic and social disparity and limited access for the community to public natural resources (such as beaches) due to “enclave tourist resort� development; internal conflict within communities due to inequality of capacity to harness new opportunities, especially for the less-educated, poorest, elderly, and disabled; loss of jobs due to conversion of agricultural activities into tourism-related build-up areas; disturbance and unsustainable commercialization of local cultures, practices, and values; loss of livelihoods and assets due to land acquisition. Community health and safety may also be issues, particularly transmitted diseases and the dangers of busier traffic. Also, if not managed properly, there may be induced uncontrolled growth of settlements and/or small businesses surrounding the tourist attractions. 30 DRAFT, June 21, 2017 43. Local governments in the tourist destinations (such as Kabupaten Magelang and Kabupaten Lombok Tengah) are being challenged to: control land use and building development, including the encroachment or conversion of irrigated rice fields to tourist-related activities; protect traditional markets; and promote the inclusion of local community to the tourism-related activities. Further, current traditional or informal tourism-related businesses that have been in operation for some time such as local boat and car renting and their operators, snorkeling and divers, local guides, etc., might also feel threatened by large-scale, capital-intensive players in these activities due to limited capacity to compete. There is also a concern expressed by local stakeholders at some destinations that existing local culture, values, and practices which have potential for tourist development will be degraded and replaced by modern and “imported� models for tourism development. These stakeholders advocate tourism development that is sensitive to and within current social values, traditions, and community practices so that the region can develop as a unique tourism destination without extensive (adverse) social costs and large investments, in a way that is sustainable in the long-term. 44. According to the Kabupaten Lombok Barat Land Agency (BPN), there is potential for social conflict related to land issues: decades ago, several investors acquired significant amounts of land for the purpose of building tourism-related investments and then left the land undeveloped for a number of years. During that interval, some of the land has been encroached upon, occupied, and utilized by local people. This situation created land conflicts at the time the owners planned to develop the land. 45. The Program may benefit and/or generate adverse impacts on Indigenous Peoples (IPs). In many cases, the sites, cultural life, assets, and natural resources that local IP communities depend on are also the main tourist attractions. IP communities would benefit from tourism development through job creation and quality product expansion, getting revenue from the services provided by their assets’ uniqueness and values, while also obtaining support from the government to protect their physical and cultural assets. However, if the process of harnessing tourism services from these attractions is not well-managed, the Program may lead to unsustainable commercialization of the IP communities’ physical and natural resources and cultural assets, in which their quality will be degraded and no longer attractive for tourists, and in the end leaving both the IP communities and their assets negatively impacted. 46. The potential social issues and risks discussed above could be mitigated through greater inclusion of stakeholders, including local communities and IPs; provision of information related to tourism development activities in advance to the public; inclusive and meaningful consultation and participation in preparation, implementation, and monitoring and evaluation of the Integrated Tourism Master Plans; improving consistency in implementation of the current laws and regulations pertaining to land acquisition, IPs, and local government and village planning processes through development of practical guidelines; and the provision of capacity building and awareness-raising programs and community satisfaction surveys in Results Area 4. More importantly, the Integrated Tourism Master Plans and their implementation, as well as capacity strengthening for local government and communities should be sensitive to and built upon local cultures, values, and practices to ensure sustainable tourism development. 31 DRAFT, June 21, 2017 4 NATIONAL ENVIRONMENTAL AND SOCIAL MANAGEMENT SYSTEM 4.1 Policy, Legislative, and Regulatory Framework 47. Environmental and Social Assessment. Environmental Impact Analysis (EIA) became a legal requirement in Indonesia with the passage of Law No. 4 Year 1982 Concerning the Principles on Environmental Protection. Since then environmental legislation has evolved, and nowadays, there are more than 50 laws and regulations applicable to the environmental management of the Program, and, together, they define an environmental management system that generally conforms to international standards. For instance, the country has legislation that requires: environmental impact assessment, protection of forest and endangered species, control of water pollution, protection of health and safety at work sites, and management of hazardous wastes. EIA in Indonesia is known as AMDAL (Analisis Mengenai Dampak Lingkungan). Law No. 32 Year 2009 Regarding Environmental Protection and Management is the current “umbrella� legislation that, among other things, mandates EIA. Government Regulation (PP) No. 27 Year 2012 on Environmental Permits outlines the environmental assessment process (and instruments) required for activities having potential negative environmental and social impact. Ministry of Environment (MOE) Regulations (PermenLH) No. 05 Year 2012 on Type of Activities Requiring AMDAL, Permen No.16 Year 2012 on Guidelines for Preparation of Environmental Documents, and PermenLH No. 17 Year 2012 on Guidelines for Public Participation in the AMDAL Process and Environmental Permits are important regulations. The laws and regulations most relevant to the Program are summarized in Table 8. The environmental impact assessment which includes social assessment is prepared by the project proponent and must obtain clearance from the office of the cognizant environmental agency (BLH/BPHD) at the district or in some cases the provincial or ministerial level. 48. Land Acquisition and Resettlement. The Government of Indonesia has Law No. 2 Year 2012 on Land Acquisition for the Public Purpose Development. Implementing regulations for this Law include the Presidential Regulations (Perpres) No. 71 Year 2012 on Implementation of Land Acquisition for the Public Purpose Development and its four amendments (Perpres No. 40 Year 2014, Perpres No. 99 Year 2014, Perpres No. 30 Year 2015, and Perpres No. 148 Year 2015) and the Regulation of the Head of Land Agency (BPN) No. 5 Year 2012 on Technical Guidelines on the Implementation of Land Acquisition. Law No. 2 Year 2012 specifies principles for land acquisition, types of public purpose development, implementation stages and arrangements for land acquisition, requirements, process and institutional arrangements during the planning, preparation, implementation and handover of the results of land acquisition, eligible affected persons, affected assets, land/asset valuation, compensation options, consultation, disclosure, complaints, financing, and release of the compensated land/assets. Details of the Presidential Regulation No. 71 Year 2012 and its amendments are presented in Table 8. 49. Indigenous Peoples. Provisions related to Indigenous Peoples (IPs) or “Masyarakat Hukum Adat� (MHA) are available in various GoI laws and regulations, which all to some extent provide recognition to and respect the IPs presence, and delegate to them rights to participate in, to be empowered by, and to have access to development and natural resources management. 32 DRAFT, June 21, 2017 However, implementation of these intentions remains to be strengthened including those of the agencies involved (as specified in the laws and regulations) and the establishment of operational regulations and guidelines, as well as coordination between sectorial ministries and local governments where IPs are located. To name a few, the following are some important laws (further details in Table 8) that provides provisions on IPs: - Law No. 41 Year 1999 on Forestry, which has been amended by Law No. 19 Year 2004. The Constitutional Court has reviewed the Law No. 41 Year 1999 on the forest rights of MHA through the Constitutional Court Decree No. 35 Year 2012 which confirms that adat forests are no longer state forests. - Basic Agrarian Law of 1960 determines the applicability of adat law over land and customary rights (hak ulayat). This is the first law that introduced the concept of conditionality in the recognition of Indigenous Peoples which was further adapted through various laws governing land and natural resources. - Village Law No. 6 Year 2014: acknowledges the existence and rights of MHA, provided that they are recognized and MHA could opt to established adat villages with their own institutional structures and authority. However, this law suffers from a lack of guiding regulations and institutional mandates to make such provisions operational. The Law grants a desa adat an authority to conduct adat-based public administration. Compared to other laws, the law adopts optional, non-cumulative criteria for recognition of MHAs with the existence of adat territory being mandatory. - Law No. 27 Year 2007 on Coastal Zone and Small Island Management acknowledges the existence of MHA provided they are recognized and requires consultations with MHA for any development in coastal areas. This is the only Indonesian law that explicitly requires free, prior, and informed consultations for affected MHAs - Law No. 23 Year 2014 on Local Government recognizes the existence of adat institutions (lembaga adat) by giving them rights to “empowerment�. Secondly, the Law determines that adat law is an additional rule for use in particular purposes, such as village elections. Thirdly, the Law places adat or adat law as the basis upon which to conduct local development, or as a parameter to measure social cohesiveness. - Law No. 11 Year 2010 on Cultural Heritage recognizes MHA as the owners of their cultural heritage and grants them authority to manage it. 50. Due to the sectoral nature of institutional arrangements governing recognition and development of MHA, each ministry and agency has their own agendas with regards to MHA. As such, historically there has been lack of synchronized efforts amongst related ministries with regards to resolution of on-going conflicts which mainly arise from unclear tenure rights and lack 33 DRAFT, June 21, 2017 of recognition and protection of the rights of MHA. After the Constitutional Court Ruling MK 35 Year 2012, efforts to improve inter-ministerial coordination, spearheaded by the Office of Presidential Staff and civil society groups, notably the Indigenous Peoples Alliance of the Archipelago (AMAN), have been mobilized. This has resulted in the issuance of a joint- regulation of four ministries (Home Affairs, Environment and Forestry, Public Works, and the Agrarian and Land Agency) No. 79 Year 2014 on land conflict resolution in forest areas. It proposes to establish a dedicated working group (Satgas or satuan tugas or task force) on MHA under the President, based on a national inquiry led by National Human Rights Commission (KOMNAS HAM) concerning violations of the human rights against MHA. However, enforcement remains an issue due to the bureaucratic and political nature of MHA recognition; thus, there has been a delay in the establishment of the MHA working group. Consequently, conflicts involving MHAs are still handled in an ad-hoc manner and recognition of MHA’s existence and land rights is contingent upon the political will of each district/province in which MHA reside. 51. Grievance Mechanisms. Provisions on GoI’s complaints handling system are specified in:  Presidential Regulation No. 76 Year 2013 on the Complaint Handling Management for Public Services, which specifies the complaint handling management for public services including: the rights of the complainants and responsibility of the complaint handling unit/agency; methods/venues for filing complaints; status and responsibility of the complaint handling unit/agency; mechanisms for complaint handling management; monitoring, evaluation, and reporting of complaints; complaint resolution; protection for complainants; performance assessment for complaint handling; national complaint handling system; and supervision and controlling of the implementation of the complaint handling system. Implementation of this Presidential Regulation is specified in the following two regulations: o Regulation of the Ministry of Empowerment of State Apparatus and Bureaucracy Reform No. 24 Year 2014 on the Guideline for the Implementation of the National Complaint Handling System for Public Services, which outlines the requirements of all agencies providing public services to establish and implement complaint handling system including institutional arrangement; infrastructure, methods/venues for filing complaints; complaint handling mechanisms and procedures; complaint handling monitoring, evaluation and reporting; accountability, transparency, and participation in complaint handling management; supervision and control on the implementation of complaint handling; and integrate the complaint handling system into the national complaint handling system. In addition, this regulation also requires the unit/agency responsible for complaint handling assign competent staff to implement the complaint handling system and technical guidelines for implementing the national complaint handling system should be developed by the supervisor of each responsible unit/agency in accordance with the needs. 34 DRAFT, June 21, 2017 o Regulation of the Ministry of Empowerment of State Apparatus and Bureaucracy Reform No. 3 Year 2015 on the Road Map for the National Complaint Handling System for Public Services (SP4N – Sistem Pengelolaan Pengaduan Pelayanan Publik Nasional), specifies the road map for the establishment of the national complaint handling system at all government levels and requires that each ministry and local government should develop an action plan for complaint handling system that is integrated to the SP4N in 2017. 52. Disclosures. Provisions on the disclosures of information are covered in the said laws and regulations pertaining environmental management and (refer to Table 8), in addition, specific regulations governing transparency and information disclosure are Law No. 14 Year 2008 on Public Information Disclosure and Government Regulation No. 61 Year 2010 on implementation of Law No. 14 Year 2008. Law No. 14 Year 2008 articulates the stipulations that citizens have the right to access public information; the principles of public information disclosures; management of public information and disclosures; procedures and mechanisms to access public information; institutional arrangements of public information management; accountability for public information disclosure; and objection and disputes management. Government Regulation No. 61 Year 2010 details the implementation arrangements of the Law No. 14 Year 2008, among others: categorization of information, tasks and responsibility of person in charge for managing information and documentation (PPID), process and procedures of defining compensation and legal consequences due to material loss as a result of improper public disclosure. Table 8. Main laws and regulations applicable to the operation of the Program Law/Regulation Description Environmental Law No. 32 Year 2009 on Main Indonesia legislation aiming to protect the environment from Environmental Protection and development activities. Management Government Regulation No. 27 Year This regulation requires any activity/business potentially generating 2012 on Environmental Permit negative environmental and social impacts to obtain an environmental permit. The regulation also outlines the environmental assessment process and instruments (i.e. AMDAL or UKL-UPL) required for proposed activity/business. Government Regulation No. 101 Year Government Regulation No. 101 Year 2014 on Management of Toxic 2014 on Management of Toxic and and Hazardous Waste regulates the proper management of hazardous Hazardous Waste waste covering: (i) methods of identifying, reducing, storing, collecting, transporting, utilizing, processing, and disposing of hazardous wastes; and (ii) risk mitigation and emergency responses to address environmental pollution caused by hazardous waste. The country management of hazardous waste is based on the principle of “cradle to grave�. Government Regulation No. 50 Year This regulation ensures the right of every worker to health and safety 2012 on Practice of Health and Safety protection to achieve optimal work productivity, and requires Management implementation of a health and safety system. 35 DRAFT, June 21, 2017 Presidential Decree No. 32 Year 1990 This decree declares the need to establish protected areas in order to on Management of Protected Area ensure sustainable development and protect bio-diversity. It provides basic definitions of protected areas, and a process to establish and to manage protected areas. Under this Program, any activity within or adjacent to the protected areas will be excluded. Ministry of Environment (MOE) This regulation prescribes a list of activities that may potentially regulation (PermenLH) No. 05 Year generate adverse impacts, and which therefore require full 2012 on Types of Activities Requiring environmental assessments prior to implementation. The AMDAL distribution line extension is not covered as the activities are considered to have low environmental and social impacts. Ministry of Environment (MOE) This guideline provides the scope and level of detail of environmental regulation (PermenLH) No.16 Year assessment. It also requires community involvement, public 2012 on Guidelines consultations (socialization), and a grievance redress mechanism, as for Preparation of Environmental well as the implementation and monitoring of appropriate mitigation Documents measures to address potential adverse environmental and social impacts. Ministry of Environment (MOE) The regulation stipulates the requirement to carry out public regulation (PermenLH) No. 17 Year consultations as part of the process for preparation of AMDAL (full EA 2012 on Guidelines for Public – twice) and UKL-UPL (Partial EA – once) Participation in AMDAL Process and Environmental Permit Law No. 5 Year 1992 on Cultural The law defines a cultural property as being of "important value for Property (Benda Cagar Budaya) history, science, and culture,� including: a man-made object or group of objects; movable (bergerak) or immovable (tidak bergerak); aged at least fifty years which have high historical value; or natural objects with high historical value. Law No. 11 Year 2010 on National The focus of the law is especially on the provision for observation and Heritage (Undang-undang Cagar data collection on cultural heritage that may be affected by project Budaya) activities. Regulation of the Ministry of Public The regulation defines the types and thresholds of the projects for Work No. 10/PRT/M/2008 which it is mandatory to prepare the UKL-UPL documents. concerning the Type of Business and/or Project Activity under Public Works which Require Environmental Management Plan (UKL) and Environmental Monitoring Plan (UPL) Documents Guidelines for Environmental Ministry of Public Works provides guidance for project proponents to Management No. 08, 09, 10 and 11 prepare the necessary environmental management plans and related of Year 2009 issued by DG of documents. Highways, Ministry of Public Works Law No. 41 Year 1999 on Forestry Forest areas by law should be maintained as such and the uses it is put to should reflect that. However, there are certain development activities allowed with these areas so long as the forest is protected and restored upon completion. Law No. 5 Year 1990 on Development activities that are related to the designated conservation Conservation of Natural Resources areas will have to implement this regulation, in particular where the and Ecosystems locations are within or in the proximity of protected and/or conservation areas. 36 DRAFT, June 21, 2017 Law No. 18 Year 2008 on Solid This law regulates the management of domestic solid waste and alike, Waste Management and specific solid waste (hazardous, created from disaster, building debris, technological related, and aperiodic). Government Regulation No. 101 This regulation stipulates the proper management and disposal Year 2014 on Management of Toxic procedures for toxic and hazardous waste substances covering; (i) and Hazardous Waste method of identifying, reducing, storing, collecting, transporting, utilizing, processing, and disposing of hazardous wastes; (ii) risk mitigation and emergency responses to address environmental pollution caused by hazardous waste. Social Law No. 02 Year 2012 on Land This law applies to development initiatives in the context of national Acquisition for Public Purpose development or the development of public facilities. The agencies or Development institutions that are eligible to acquire land through this law are any state institution, ministerial and non-ministerial government institution, provincial government, district/city government, and State- Owned Legal Entity/State-Owned Entity which is specially assigned by the Government. The government can also acquire land through establishing cooperation with state-owned enterprises, regional government-owned enterprises, and private enterprises (public private partnership). Land acquisition must be carried out through planning that involves all stakeholders and must be implemented by providing feasible and just compensation or indemnification. The acquisition of land in the public interest shall be performed in accordance with: a. the Regional Spatial Planning; b. the National/Regional Development Plan; c. the Strategic Plan; and d. the Working Plan of each Agency needing land Law No. 13 Year 2003 on Manpower This law discusses the protection of workers, safeguarding the fundamental rights of workers to secure the implementation of equal opportunity and equal treatment without discrimination for workers/laborers. Presidential Regulation No. 71 Year Presidential Decree No. 71 Year 2012 has been amended four-times. 2012 on the Implementation of Land The key changes are highlighted: No. 40 Year 2014 “…Land Acquisition for Development of Public acquisition up to 5 hectare can be directly conducted by agency needing Use land with land right holders through a business transaction or other way agreed by both parties… � ; No. 99 Year 2014 “…Head of Land Acquisition Implementation issues compensation value resulting from appraiser or public appraiser…� ; No. 30 Year 2015 “…Finance for land acquisition can be sourced from a company (Badan Usaha) as Agency needing land which has been given the right to act on behalf of state agency, ministerial, non-ministerial government agency, provincial government, and / or district government / city…� ; and the most updated one No. 148 Year 2015 “…Land acquisition for public interest development purpose up to 5 hectares does not need location 37 DRAFT, June 21, 2017 determination letter. Agency needing land to use appraiser for land valuation….� Head of National Land Agency Peraturan Kepala BPN 5 Year 2012 is intended to provide a legal Regulation No. 5 Year 2012 on framework for land acquisition for public use with the National Land Technical Guidelines of Land Agency. The first part of the regulation outlines the arrangement of a Acquisition for Development of Public land acquisition committee that can be delegated from head of Use Provincial land office to regency/city land office. This regulation has been amended by No. 6 Year 2015, which highlighted a bailout scheme to accelerate infrastructure development. The government revised the Regulation of the Ministerial of Agrarian and Spatial Planning (ATR) No. 6 Year 2015 for the Amendment Regulation of the National Land Agency (BPN) No. 5 Year 2012 on Technical Guidelines for the Implementation of Land Acquisition. This revision opens up an opportunity for private entrepreneurs to bailout land acquisition funds for public interest infrastructure projects. The bailout is replaced using state budget funds through the relevant ministries/agencies. Ministry of Finance Regulation No. This regulation is about the financial arrangement of land acquisition 13/PMK.02/2013 on Operational and for public use projects funded by the National Government Budget Supporting Cost of Land Acquisition (APBN). The regulation covers important provisions regarding land for Development of Public Use acquisition cost, salary of the land acquisition committee members, and Provided by National Budget (APBN). other expenses that must be arranged and disbursed through the Central Government budget. This regulation has been also amended by No. 10/PMK.02 Year 2016, which indicates a threshold budget allocation for operational and supporting land acquisition implementation for public interest development sourced from the state budget. Minister of Home Affairs Regulation No. 72 Year 2012 indicates operational and supporting land acquisition implementation for public interest development source from a regional budget. Ministry of Home Affairs Regulation This regulation is another important rule governing the implementation (Permendagri) No. 72 Year 2012 on of land acquisition for public use at the regional level Operational and Supporting Cost in (province/regency/city). Because of decentralization policy, regional Implementation of Land Acquisition for governments have to provide their own budget to build public use Development of Public Use Provided by projects in their regions. The regulation is designed to provide financial Regional Budget (APBD) arrangements for any land acquisition for public use project. It consists of provisions pertaining to financing the operational expenses and other costs needed by the land acquisition committee when they are organizing the land acquisition process. State Minister of National Development This regulation stipulates the criteria for development activities or Planning/Head of National projects that can be financed by foreign loan or grant. Article 29 says Development and Planning Agency that the State Minister of National Development Planning evaluates Regulation No. 005/M.PPN/06/2006 on whether proposed projects are ready to be implemented. There are Planning Mechanism and Proposal seven criteria of readiness that must be fulfilled by a project, one of Submission and Project Appraisal which is the requirement to prepare a resettlement plan (RP) if a project Financed by Foreign Loan and/or Grant. requires land acquisition. 38 DRAFT, June 21, 2017 Government Regulation No. 42 Year Article 15 paragraph 2 (c) of the Government Regulation regulates that 2008 on Management of Water any plan on water resources management must refer to data and/or Resources information regarding many aspects of plan including existence of customary law community. More than that, Article 21 requires the Government to hold public consultation with technical offices and affected communities. In the context of building construction facilities of water resources and operating and maintaining of those facilities that may harm or disadvantage people, the initiator of the project is responsible to provide compensation. Another approach is stated in Article 66 that says that usage of water source is conducted by considering socio cultural background and customary right that is related with water resources. Minister of Forestry Regulation This regulation sets forth the guideline of lending and using forest area (Permenhut) No. P.18/Menhut-II/2011 to Ministry of Forestry (Permohonan Izin Pinjam Pakai Kawasan on Guideline for Lend and Use of Hutan). It regulates non-forest use of forest area by parties. Only two Forest Area (replaces Permenhut No. types of forest can be used for non-forest activities namely production P.43/Menhut-II/2008 on the same forest (hutan produksi) and protection forest (hutan lindung). issues) Law No. 14 Year 2008 Concerning Article 2 and 3 of Law No. 14 Year 2008 is intended to guarantee Disclosure of Public Information, andcitizens the right to access public decision-making plans, the processes Government Regulation No. 61 Year of public decision making, and the reasons why a public decision is 2010 on the Implementation of Law No.made. Consequently, the process supports participatory action from 14 Year 2008 civil society in public decision-making. Public information is to be open for public and to be accessible by any user in the right time, at low cost and in a simple manner. The law provides a basis for government to disclose any public information including environmental and social safeguards documents. Law No. 41 Year 1999 on Forestry, Article 1 point 6 of Law No. 41 Year 1999 on Forestry has been which has been amended through Law changed by the Constitutional Court Decision No. 35/PUU-X/2012 and No. 19 Year 2004. has now become “customary forest is a forest located within the area of an indigenous community.� Before, the word “state� was in the article. With the elimination of the word “state� from the definition, now it is understood that customary or adat forests are now no longer a state forest. Village Law No. 6 Year 2014 This Law acknowledges the existence and rights of Masyarakat Hukum Adat (MHA), provided that they are recognized and MHA could opt to established adat villages with their own institutional structures and authority although this law suffers from the lack of guiding regulations and institutional mandates to make such provisions operational. The Law grants a desa adat the authority to conduct adat-based public administration. Compared to other laws, the law adopts optional, non- cumulative criteria for recognition of MHAs with the existence of territory being mandatory. Law No. 27 Year 2007 on Coastal Zone This Law acknowledges the existence of MHA provided they are and Small Island Management recognized and requires consultations with MHA for any development in coastal areas. This is the only Indonesian law that explicitly requires free, prior, and informed consultations for affected MHAs 39 DRAFT, June 21, 2017 Law No. 23 Year 2014 on Local This Law recognizes the existence of adat institution (lembaga adat) Government by giving it rights to “empowerment�. Second, the Law determines that adat law is an additional rule for particular purposes such as village elections. Third, the Law makes adat or adat law the basis upon which to conduct local development, or as a parameter to measure social cohesiveness. Law No. 11 Year 2010 on Cultural This Law recognizes MHA as the owners of their cultural heritage and Heritage grants them the authority to manage it. The law requires observation and data collection on cultural heritage that may be affected by project activities. Spatial Planning Law No. 26 Year 2007 on Spatial Spatial Planning Management. In the context of decentralization, Planning (amends Law No. 24 Year urbanization, and other factors, this law grants authority over spatial 1992) planning to provincial and local (district) governments ( pemerintah kabupaten and pemerintah kota). Provision of this authority is not stipulated within previous spatial planning laws. It also provides some new ways for enhancing development control, including zoning; planning permits; and implementation of incentives and disincentives, including administrative and criminal sanction. This law also acknowledges the importance of public participation in spatial planning. Tourism Ministry of Tourism Regulation No. 14 This regulation sets the guidelines for the national government, local Year 2016 concerning Guidelines for government, and other stakeholders in the development of sustainable Sustainable Tourism Destination (STO). tourism destinations. The scope of the guidelines includes the management of STO, the local community’s economic use, cultural preservation for the community and visitors, and environmental conservation. 4.2 Institutional Framework 53. The institutions described below consist of governmental and special purpose bodies that are either: (a) responsible for protecting Indonesia’s natural and human environments and enforcing related Indonesian laws and regulations; or (b) in the course of carrying out their functions with respect to the Program, will have responsibility for implementing environmental and social management instruments including RKL-RPL and UKL-UPL. 54. National Agencies  National Planning Agency (Badan Perancanaan Pembangunan Nasional, or BAPPENAS). Providing regulations and strategies for tourism development and integrating tourism development into national development planning  Ministry of Public Works and Housing (MPWH). Formulating policies and strategies for infrastructure and housing development. Spatial planning and control of utilization of space of KSN (National Strategic Areas), and infrastructure. MPWH’s RIDA is the main executing agency for the PforR Program. As such, it will be 40 DRAFT, June 21, 2017 responsible for preparation of safeguards instruments for major projects and management oversight of all aspects of compliance with the national safeguards system. Within BPIW’s Strategic Area Development Center (Pusat Pengembangan Wilayah Strategis) is the Land Acquisition Facilitation Division (Bidang Fasilitasi Pengadaan Tanah) that works on coordination and preparation of technical policy, as well as plan and program implementation of land acquisition and land reserves in the context of the integration of development strategic areas. The Directorate General of Cipta Karya (Bidang Permukiman), Directorate General of Water Resources (Bidang Sumber Air) and the Directorate General of Highways are responsible for preparing and implementing environmental and social safeguards instruments for any projects under their mandates, i.e. human settlements, water resource development, and national roads, respectively.  Ministry of Land and Spatial Planning. This Ministry is responsible, among others, for managing land and spatial development, including in developing policies and strategies in spatial development, land management, and land acquisition; in controlling spatial development and land tenure; and in managing land issues, use of spatial development, and land. This Ministry has an important role in defining the spatial development in tourism activities/destinations and in acquiring land for tourism activities.  Ministry of Tourism. Establishing policies and strategies as well as promoting the development of tourism destinations and tourism industry, marketing outbound and inbound tourism, and developing tourism institutional capacity. Providing the development concept (“Vision�) for tourism development. Implementing the UNWTO Sustainable Tourism Observatory Program, responsible for the tourism schools, and various tourism industry-related programs.  Ministry of Environment and Forestry (MOEF). Designated by law as the agency responsible for managing Indonesia’s environment and forest estate. It issues policies, strategies, regulations, guidelines, procedures, and standards on environmental and forest management and works to ensure the consistent implementation of them. Responsible for management of Indonesia’s forest estate, including production, protection, and conservation forests and for management of national parks, biodiversity conservation areas, refuges, etc. This Ministry also responsible for ensuring Indigenous Peoples living and/or using the forests are part of the overall forest management.  Ministry of Social Affairs (MoSA). This ministry formulates and determines implementation of policies of social rehabilitation, social security, social empowerment, and social protection. In addition, it issues regulations to prevent women and children from being exploited (trafficking, sexual, drugs, forced labor) to reduce downsides of mass tourism. MoSA is also responsible for improving the life quality of Indigenous Peoples and other disadvantaged peoples.  Ministry of Education and Culture (MoEC). This ministry is responsible for supporting formal and vocational training. In supporting the latter, the MoEC coordinates with other relevant ministries. For instance, for vocational training related to tourism, the MoEC coordinates with the Ministry of Tourism. Balai Konservasi 41 DRAFT, June 21, 2017 Borobudur (Borobudur Heritage Conservation Institution-BHCI) is one of the technical implementation units under the Directorate General of Culture of the MoEC. The main task of BHCI is to conserve and preserve Borobudur temple.  Ministry of Manpower. The ministry establishes policy and regulations on promoting competitiveness and productivity of labor; on strengthening placement of labor and expansion of job opportunities; improving industrial networks and social security for labor; and developing controls for labor as well as promoting health and safety at the workplace.  Ministry of Marine Affairs and Fisheries (MoMA&F). This Ministry is mainly responsible for managing the maritime and fishery in the country. It establishes and implements policies and regulations to manage maritime and fishery activities. In addition, it provides technical supports, advice and control for implementation of maritime and fishery management at the local government level. The Directorate General of Maritime, Coastal Areas, and Small Islands under this Ministry is responsible for managing these areas and ensuring that local people and Indigenous Peoples will have access to natural resources. 55. Sub-National Agencies  Agency for Regional Development (Badan Perencanaan Pembangunan Daerah, or BAPPEDA). BAPPEDAs exist at the provincial and district levels of government and are responsible for development planning.  AMDAL Commission (Komisi AMDAL) is established at the provincial and district levels to review AMDAL terms of reference and review and approve the reports of AMDALs, prior to issuance of environmental licenses by the governor or regent/mayor. For projects affecting more than one district, the provincial AMDAL Commission conducts the review; otherwise, the responsibility is at the district level. (Note: there is also a national AMDAL Commission established by MOEF for activities affecting more than one province.)  Environmental Management Agency (Badan Lingkungan Hidup/Badan Pengelola Lingkungan Hidup Daerah or BLH/BPLHD). Each province and district has an environmental agency, the responsibilities of which include support to AMDAL Commissions in their review and approval functions, review and approval of UKL- UPLs, monitoring and enforcement of compliance with environmental management, and monitoring plans, and environmental quality monitoring.  Public Works Department (Dinas Pekerjaan Umum). Providing strategy and development plans for infrastructure at provincial and district levels, including the tourism program. Incorporating connectivity for tourism locations in infrastructure plans. Preparing AMDAL or UKL-UPL for and overseeing execution of infrastructure projects, including impact management.  Sanitation Department (Dinas Kebersihan). Responsible for solid waste management at the district level.  Agency for Wastewater (UPTD Laboratorium Lingkungan) is under UPT Dinas Lingkungan Hidup Provinsi, and it is established at each province level to conduct 42 DRAFT, June 21, 2017 technical operation in executing testing parameters for measuring the quality of environment. This includes sampling and testing of water quality of rivers or lakes to ensure constant monitoring of the environment.  Agency for Solid Waste Management (UPTD Pengelolaan Sampah) under local government with the coordination from MOEF. Responsible for conducting operational or/and technical activities in handling solid waste problems on a regional scale. Their functions include planning, monitoring and evaluation for carrying capacity for infrastructure relating main facilities, environmental protection, and support for regional solid waste management.  District Department of Manpower. Inspects workplaces for compliance with health and safety regulations, sometimes in collaboration with Department or Industry and BLH.  Province/District Social Agencies. Provide and expand social welfare services to exploited children (sexual, drugs, trafficking, child worker); provide vocational training services; to integrating a strategic program of social empowerment; and to optimize social corporate responsibility in poverty alleviation. 56. Special Purpose Agencies  Authority Board of Toba Area. Presidential Regulation No. 49, issued on June 13, 2016, creates a specific organizational structure for the planning, management, development, construction and control of a site of approximately 500 Ha in Lake Toba (the so-called ‘authority zone’). The specific geographic boundary of the broader so-called ‘coordination zone’, for which the Management Authority has a coordinating role, is according to Presidential Regulation No. 81 of 2014. The Regulation created two bodies: An Advisory Board, chaired by the Coordinating Minister for Maritime Affairs, which will establish the general policy, provide overall direction and supervision of the Lake Toba intervention; and an Executive Board, a working unit under the Ministry of Tourism, which will coordinate, synchronize, and facilitate the planning, development and construction of this tourism destination. Different ministries, agencies and the Governor of North Sumatra are also members of the Advisory Board. The Executive Board will be responsible for the preparation of a Masterplan for the Development and Construction of Lake Toba Tourism Area (the approximately 500 Ha site) for a period of 25 years, as well as a 5-year detailed plan. The tourism coordination team agreed to keep the responsibility for the integrated tourism masterplan for the tourism destination area with the Ministry of Public Works and Housing. Additionally, the Executive Board will also have authority to plan the allocation and use of land, the right to manage the Lake Toba Tourism Area and organize licensing and non-licensing services.  PT. Taman Wisata Candi Borobudur, Prambanan, and Ratu Boko (under the Ministry of State-owned Enterprises and under the supervision of Ministry of Tourism and Creative Economy). State-owned enterprise with the mandate to manage Zone II, i.e. the Borobudur Temple Recreation Park, as an archaeological park zone. This company also has a corporate social responsibility to ensure that the management of Borobudur Park benefits local communities. 43 DRAFT, June 21, 2017  Borobudur Heritage Conservation Institution (BHCI). Manager of Zone 1, i.e. the core conservation area/sanctuary zone. The unit is responsible for conducting research, conservation, documentation, and publications related to the Borobudur Temple.  Sustainable Tourism Observatory (STO) (Ministry of Tourism Regulation No. 14/2016). STOs are being established by the Ministry of Tourism at major tourism destinations under a sustainable tourism program of the UN World Tourism Organization (UNWTO). The establishment of STOs for three pilot chosen destination (Sesaot, Lombok; Sleman, Yogyakarta and Pangandaran, West Java) was formalized through an MOU signed between UNWTO and the Ministry of Tourism in Jakarta on September, 2016. In total, 41 indicators had been identified as part of the standards to be met in order to achieve the sustainable tourism certification. It is divided into four major components: A) Effective sustainable management; B) Economic benefits to local community; C) Benefits to communities, visitors and culture and D) Benefits to the environment and minimization on negative impacts. This collaboration of STO organization consists of local universities, district-level governments, the Ministry of Tourism, and UNWTO. 44 DRAFT, June 21, 2017 5 ASSESSMENT OF PROGRAM SYSTEM 5.1 Summary of Assessment Findings 57. In general, the Indonesian environmental and social safeguards system conforms to the policy elements as defined in the Bank’s Program for Results Policy, when the system is effectively implemented. There are a few gaps in the laws and regulations; the main ones are: lack of guidelines and regulations for consultation with Indigenous Peoples, unclear pathways for groups that seek to be identified as indigenous, insufficient attention to livelihood restoration in resettlement laws and regulations, and a screening process for environmental assessment that relies mostly on quantitative thresholds rather than risks. The integrated tourism development planning process defined in Results Area 4 and supported by the IPF offers entry points through which the indigenous peoples’ issues will be addressed, as it will include social assessment and extensive consultation with all stakeholders. The Program will include increased attention to livelihood restoration (including adequate budgets). The adoption of the Investment and Expenditure Menu of the Program, the mechanism for reviewing the proposed annual work plan against the Menu and the ITMPs, and the screening mechanism for year 1 investments and proposed additions to the Menu, which is part of the Program Action Plan and is required prior to loan effectiveness, will ensure that sensitive areas are excluded from development (through the identification of “no development zones� and zones suitable only for certain types of development in the ITMPs). Examples include sites with unique visual amenity, uses for traditional cultural events, and essential sources of livelihoods. Similarly, areas with land legacy issues that have not been addressed properly, agreed by the involved parties, in accordance to the prevailing Indonesian laws and regulations, will be highlighted in the ITMPs, and the Program, as part of the adopted work plan review process will avoid the inclusion of Program investments in these areas. 58. The other gaps are in implementation of the Indonesian system. Table 10 shows an assessment of the institutional capacity to address risks and impacts. This will also show the areas of strengthening that can be improved through the Program. The quality of environmental assessments is uneven, and the Program Action Plan calls for training for consultants and staff in review and approval agencies such as the Environmental Management Agency (BLH). Implementation of impact management measures is not consistently enforced, but the establishment of arrangements or strengthening of existing arrangements for monitoring and protection of natural and cultural assets arrangements at each destination is part of the Program Action Plan and implementation throughout the Program period is incentivized in RA4, where its regular reporting is a DLI. Moreover, the Program Management Support Consultants’ Services (and/or additional qualified MPWH staff) will develop and implement a tourism-specific training program for consultants that prepare AMDALs and UKL-UPL and for the agencies that review, approve, and enforce them. Under the Program, budget allocations to environmental departments will be incentivized and/or enforced (as part of Program Action Plan). Workplace health and safety rules are not well enforced, and attention to this area is included in the Program. With effective implementation of the monitoring and reporting DLI and the measures in Results Area 4 and the Program Action Plan, the system will deliver safeguards results consistent with the Program for Results Policy. 45 DRAFT, June 21, 2017 5.2 Details of Assessment 59. The details of the assessment are presented in Table 9 below. 46 DRAFT, June 21, 2017 Table 9. Evaluation of the GoI Environmental and Social Systems in Relation to the PforR Policy of the World Bank. Policy Element 1: Program systems promote environmental and social sustainability in the Program design; avoid, minimize, or mitigate adverse impacts; and promote informed decision-making relating to the Program’s environmental and social impacts. Key Attributes Program System Gaps (a) Operate within an adequate The requirement for environmental impact assessment (AMDAL) was initiated in No significant gaps. legal and regulatory framework 1982 (Law No. 4 Year 1982 on Environmental Management and Protection, which to guide environmental and social was then superseded by the Law No. 32 Year 2009). Derivative of the Law No. 32 impact assessments at the Year 2009 is Government Regulation (PP) No. 27 Year 2012 on Environmental program level. Permits that further emphasizes the need to prepare environmental assessment documents—AMDAL or UKL-UPL (essentially environmental management and monitoring plans, respectively)—for activities that potentially result in adverse environmental and social impact. The PP describes the requirements of AMDAL, UKL-UPL or SPPL, the permitting process, outline of environmental documents’ preparation, community involvement and public consultations, grievance redress mechanisms, implementation and monitoring of management and mitigation measures to address significant negative impacts. (UKL-UPL pertains to the management and monitoring efforts of business/activities that have no significant impacts on the environment, and must be prepared for the process of the decision making regarding the implementation of the business/activities. SPPL is a statement regarding efforts to monitor and manage the environmental impact of business/activities which are exempted from the requirement to complete an AMDAL or UKL-UPL.) (b) Incorporate recognized elements of environmental and social assessment good practice, including: 47 DRAFT, June 21, 2017 (i) early screening of Ministry of Environment (MOE) regulation (PermenLH) No. 05 Year 2012 covers Besides the protected area potential impacts; the activities or businesses that require AMDAL (full environmental assessment). requirement which override The environmental screening as per Permen No. 05 Year 2012 applies a prescriptive thresholds, the system only takes list with quantitative thresholds (e.g., capacity, area, length, etc.) of proposed environmental and social setting activities and potential adverse impacts included. AMDAL is mandatory for any into account to a limited extent, e.g., business/activity that is located in or directly adjacent to protected areas (i.e. different area thresholds for housing protected forest, national park, critical habitats), regardless of scale. developments in small and large cities. It does not otherwise consider Ministry of Environment Regulation No. 13 Year 2010 on UKL-UPL and SPPL the environmental or social regulates the projects and/or development activities that are not AMDAL-mandatory sensitivity of the activity’s setting. but which require UKL-UPL. Ministry of Public Works and Housing (MPWH) regulation (PermenPU) No. 10/PRT/M/2008 on Businesses and Activities in the Field of Public Works that Require UKL-UPL provides an additional level of screening that determines whether or not a proposed infrastructure project that is below the threshold for an AMDAL requires UKL-UPL. (ii) consideration of Ministry of Environment (MOE) regulation (PermenLH) No. 16 Year 2012 on A regulation with guidelines for strategic, technical, Guidelines of Environmental Assessment Documents requires the assessment to SEA has been drafted but not and site alternatives consider alternatives such as technology, project siting or alignment, equipment issued. Otherwise, there are no (including the “no used, technical specification etc. Law No. 32 Year 2009 requires Strategic significant gaps in regulations, but action� alternative); Environmental Assessment (SEA) for development plans involving natural resource the quality of assessments is often weak in this area. Uneven capacity use. in the consulting industry and in reviewing and approving agencies is the cause. (iii) explicit assessment Ministry of Environment (MOE) regulation (PermenLH) No.16 Year 2012 No significant gaps in regulations, of: potential stipulates scope and aspects to be assessed in AMDAL, among them geo- but the quality of assessments is induced, physical/chemical, biological, and social-economic-cultural impacts, including often weak in this area. Uneven cumulative, and direct, indirect, cumulative, and induced impacts and risks. capacity in the consulting industry transboundary and in reviewing and approving agencies is the cause. impacts 48 DRAFT, June 21, 2017 (iv) identification of The identification of environmental impacts and preparation of the environmental No significant gaps in regulations, measures to management plan, EMP (RKL-RPL)41 to address adverse impacts is provided in but the quality of assessments is mitigate adverse Ministry of Environment (MOE) regulation (PermenLH) No. 16 Year 2012. The often weak in this area. Uneven environmental or EMP is part of AMDAL documents and contains plans to prevent, control, and capacity in the consulting industry, social impacts that manage significant negative impacts to environment, as well as to enhance the particularly in assessing socio- economic impacts and in applying cannot be otherwise positive impact of the business/activities. quantitative analytical techniques avoided or such as water quality modeling is minimized; part of the cause. Uneven capacity in reviewing and approving agencies is another part. (v) clear articulation of Government Regulation (PP) No. 27 Year 2012 on Environmental Permit clearly No significant gaps in regulations, institutional mentions that the process of AMDAL and the responsibilities of each institution (e.g. but the capacity in some of the responsibilities the proponent responsibility for preparing AMDAL, BLH/BPLHD for clearances decentralized regulatory authorities and resources to following the recommendation from AMDAL Committee, etc.). to monitor and enforce support implementation of permit conditions Ministry of Environment (MOE) regulation (PermenLH) No. 16 Year 2012 requires and environmental management implementation of that the responsibilities for the implementation of mitigation and monitoring activities measures is constrained by lack of plans; be specified in RKL-RPL and UKL-UPL. resources. (vi) responsiveness Under Law No. 14 Year 2008 on Public Information, everyone has the right to obtain No significant gaps. and accountability public information, attend public meetings, request copies of public information through through an application, and/or disseminate public information. stakeholder Ministry of Environment (MOE) regulations (PermenLH) No. 16 Year 2012 and consultation, PermenLH No. 17 Year 2012 on Guidelines for Public Participation in AMDAL timely Process and Environmental Permit prescribe the requirements for community dissemination of involvement and public consultation (socialization). For projects requiring AMDAL, Program public consultation from the AMDAL TOR preparation stage is mandatory. The information, and community involvement during the process of AMDAL and the environmental responsive permit should be based on these principles: (i) the provision of transparent and 41 RKL: Rencana Pengelolaan Lingkungan (Environmental Management Plan) and RPL: Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) 49 DRAFT, June 21, 2017 grievance redress complete information; (ii) position of equality among the parties involved; (iii) fair measures. and prudent dispute settlement; and (iv) coordination, communication and cooperation among the concerned parties. Government Regulation No. 17 Year 2012 requires the disclosure of environmental documents (both draft and final versions) to stakeholders including affected people. Before preparing environmental documents, a project proponent shall provide a general project concept note (e.g. name of proponent, project title, type, scale, and location of business/activities potential impacts and proposed impact mitigation measures). Once agreed upon, the project proponent shall publish the information via publicly accessible media. When the environmental agency issues an environmental license, within 5 days after the issuance it shall disclose the documents and announce the issuance via publicly accessible media. Ministry of Environment (MOE) regulation (PermenLH) No. 17 Year 2012 also describes the grievance redress procedure for community complaints against a project. The procedure also outlines the methods and timeline for resolving complaints. Actions and Opportunities Risks 1. Program support for preparation of Integrated Tourism Master Plans (IPF • Individual infrastructure investments will proceed in a non-integrated component) will take environmental and socio-cultural opportunities and fashion, without consideration of environmental and socio-economic constraints at the destination level, or of interactions and cumulative constraints into consideration and consider alternatives at a strategic level, and impacts. feasibility studies and environmental instruments will do the same at the investment level, the latter with oversight from Program Management Support • Assessments will lack analytical rigor and will not have sufficient depth on social impacts. (through the Program Management Consultants’ Services and/or additional qualified staff at the MPWH). • Environmental management and monitoring plans will not be implemented or enforced. 2. Establish or strengthen existing institutional arrangement for monitoring and protection of cultural and natural assets for tourism at each destination. • Natural and cultural assets that are the attraction for visitors will continue to be degraded. 3. Program Management Support Consultants Services (and/or additional staff at MPWH) will have environmental and social staff to assist monitoring and approving agencies in their functions and to provide the training in items 4 and 5 below. 4. Training for EA consultants 5. Training for monitoring, reviewing/approving, and enforcement agencies 6. Adoption of the Investment and Expenditure Menu of the Program, the mechanism for reviewing the proposed annual work plan against the Menu and the Integrated Tourism Master Plans, and the screening mechanism for year 1 investments and proposed additions to the Menu, to ensure that the Program 50 DRAFT, June 21, 2017 does not finance projects proscribed in the Program for Results Policy. Policy Element 2: Program systems avoid, minimize, and mitigate against adverse effects on natural habitats and physical cultural resources resulting from the Program. Key Attributes Program System Gaps (a) Include appropriate Ministry of Environment (MOE) regulation (PermenLH) No. 05 Year 2012 requires The screening process may not measures for the early AMDAL for any business/activities in or directly adjacent to protected areas, including be responsive to the presence of identification and screening watersheds, protected forests, cultural preservation areas, ground water recharge areas, natural habitats or cultural of potentially important national parks, etc. resources that do not have biodiversity and cultural official protected status. resource areas. b) Support and promote the Presidential Decree No. 32 Year 1990 stipulates that; (i) in protected areas, cultivation, No significant gaps in laws and conservation, maintenance, which interferes with the environmental function of the protected area, is prohibited; and regulations. and rehabilitation of (ii) in nature reserves and areas of cultural heritage, cultivation which alters the natural habitats; avoid the landscape, land use conditions, natural ecosystem, or environmental function of the significant conversion or nature reserves or cultural heritage, is prohibited. There have been instances of degradation of critical development activities and The GoI has ratified international conventions on biodiversity through Law No. 05 Year natural habitats; and, if 1994: United Nation Convention on Biodiversity. The Law requires the environmental encroachment in protected areas. avoiding the significant assessment of proposed projects likely to have significant impacts on biological diversity Indonesia’s rate of deforestation conversion of natural with a view of avoiding or minimizing such effects. Law No. 11 Year 2010 on National indicates lack of enforcement. habitats is not technically Heritage (Undang-undang Cagar Budaya) focuses on the requirements for observation feasible, include measures and data collection on and proper management of cultural heritage that may be affected to mitigate or offset the by project activities. The chance finds procedures based on the law specify that finds are adverse impacts of the to be given immediate protection and reported to the local Institute of Archaeology, if Program activities. one exists, or to the Department of Culture of the province or district. Construction work is not to recommence until permission is granted by one of those authorities. Actions and Opportunities Risks 51 DRAFT, June 21, 2017 1. Program support for the preparation of Integrated Tourism Master Plans • Tourism development results in degradation of the natural and cultural assets (IPF component) will take environmental and socio-cultural that attract the tourists. opportunities and constraints into consideration and consider alternatives • Natural and cultural assets important for tourism continue to be degraded by at a strategic level, and feasibility studies and environmental instruments other activities not related to the Program. will do the same at the investment level, the latter with oversight from Program Management Support (through the Program Management Consultants’ Services and/or additional qualified staff at the MPWH). 2. Adoption of the Investment and Expenditure Menu of the Program, the mechanism for reviewing the proposed annual work plan against the Menu and the Integrated Tourism Master Plans, and the screening mechanism for year 1 investments and proposed additions to the Menu, to ensure that the Program does not finance projects proscribed in the Program for Results Policy. 3. Establish or strengthen existing institutional arrangement for monitoring and protection of cultural and natural assets for tourism at each destination (e.g. STOs). Policy Element 3: Program systems protect public and worker safety against the potential risks associated with (i) construction and/or operations of facilities or other operational practices under the Program; (ii) exposure to toxic chemicals, hazardous wastes, and other dangerous materials under the Program; and (iii) reconstruction or rehabilitation of infrastructure located in areas prone to natural hazards. Key Attributes Program System Gaps (a) Promote adequate On labor and occupational health and safety, Law No. 13 Year 2003 on No significant gaps in laws and regulations. community, individual, and Manpower warrants the right of worker for protection, health and safety to However, with the exceptions of certain worker safety through the achieve optimal work productivity, stipulates the obligation of all company industries (e.g., oil and gas, power) the safe design, construction, to practice health and safety management and to integrate the aspect into Indonesian workforce lacks a safety culture, operation, and maintenance the company management system, and requires implementation of health making enforcement of use of PPE and of physical infrastructure; or and safety system. For the implementation of the health and safety system, adherence to safety procedures a continuing in carrying out activities that the Government Regulation No. 50 Year 2012 on Practice of Health and Safety Management System has been issued. challenge. may be dependent on such infrastructure, incorporate Ministry Department of Manpower and safety measures, inspections, Department of Health at the district level are or remedial works as 52 DRAFT, June 21, 2017 appropriate. tasked with inspecting facilities but lacks resources to do so on a routine basis, instead often responding to complaints and requests for inspections. (b) Promote the use of recognized The country has ratified the Basel Convention and passed its first regulation No significant gaps good practice in the production, on hazardous waste management in 1994. In Law No. 32 Year 2009 on management, storage, transport, Environmental Protection and Management, Article 3 mentions that EMPs and disposal of hazardous shall aim to protect Indonesia’s territory from environmental pollution materials generated under the and/or damages, control the natural resources usage, and establish Program; promote the use of sustainable development. integrated pest management Government Regulation No. 101 Year 2014 on Management of Toxic and practices to manage or reduce Hazardous Waste details the procedures for proper management of pests or disease vectors; and hazardous waste. It adopts the principle of “cradle to grave� starting from provide training for workers identifying, reducing, storing, collecting, transporting, utilizing, processing, involved in the production, to final disposal of hazardous wastes. procurement, storage, transport, use, and disposal of hazardous In addition to hazardous waste management, Ministry of Environment chemicals in accordance with (MOE) regulation (PermenLH) No.16 Year 2012 stipulates that the the relevant international principle of prevention of pollution and prevention of damage to the guidelines and conventions. environment needs to be considered through environmental assessment and applied in the context of environmental management. (c) Include adequate measures to Ministry of Environment (MOE) regulation (PermenLH) No. 16 Year 2012 avoid, minimize, or mitigate also requires that areas prone to natural disasters be identified in AMDALs. community, individual, and worker risks when the Program activities are located in areas prone to natural hazards such as floods, hurricanes, earthquakes, or other severe weather or climate events. 53 DRAFT, June 21, 2017 Actions and Opportunities Risks 1. Oversight of infrastructure construction by contracting agency • Disregard of workplace health and safety rules will lead to accidents. will emphasize workplace and community health and safety. • Activities such as movement of heavy equipment will cause personal injury or property 2. Program Management Support Consultants Services (and/or damage in communities near work sites or transport corridors. additional qualified staff at MPWH) will provide support to contracting agencies. 3. Integrated Tourism Master Plans will avoid locating infrastructure in disaster-prone areas. Policy Element 4: Program systems manage land acquisition and loss of access to natural resources in a way that avoids or minimizes displacement, and assists the affected people in improving, or at the minimum restoring, their livelihood and living standard. Key Attributes Program System Gaps (a) Operate within an adequate Indonesia has enacted Law No. 2 Year 2012 concerning land acquisition for public No significant gap. legal and regulatory interest development purposes and its implementing regulations. 42 The law and framework to guide land regulations replaced previous, long-used legislation. The Law No. 2 Year 2012 is acquisition and loss of perceived as lex specialis 43 and has higher legitimation for government to ensure access to natural resources availability of land for public interest development purposes by seizing land, but also at the Program level by acquiring land use or limited access to land short of land eviction.44 The authority to use the law as stated is for government to undertake the public interest development that in cooperation with state owned enterprises or private enterprises. In regard to the 42 Presidential Regulation No. 71/2012 Concerning Implementing Regulation of Law No. 2 Year 2012 on Land Acquisition for Development of Public Use; Head of National Land Agency Regulation No. 5 Year 2012 Concerning Implementing Regulation on Land Acquisition for Development of Public Use; Ministry of Finance Regulation No. 13/PMK.02 Year 2013 Concerning Operational and Supporting Cost of Land Acquisition for Development of Public Use provided by National Budget (APBN); Ministry of Home Affairs Regulation (Permendagri) No. 72 Year 2012 Concerning Operational and Supporting Cost in Implementation of Land Acquisition for Development of Public Use provided by Regional Budget (APBD). 43 Lex specialis is a legal doctrine regarding the interpretation of laws, which says that a law which governs a specific matter overrides a more general law governing the same matters more broadly. 44 Law No. 51 Year 1960 Concerning Prohibition of Land Utilization Without Permission from Owner or Representative 54 DRAFT, June 21, 2017 scope of application, the Law No. 2 Year 2012 applies to forestland acquired for public use projects without releasing forestland from forest area to other land use purposes by Ministry of Forestry and also to other government owned/controlled land. Concerning loss of access to natural resources when the loss affects customary rights/land (Hak Ulayat/Adat), Law No. 2 Year 2012 accommodates the customary issues in a provision that says compensation for indigenous land shall be given in the form of substitute land, resettlements, or other forms as agreed upon by the relevant Indigenous Peoples. In principle, if land acquisition goes through areas claimed by customary people, they must be respected and Government has to come and ask for permission if customary land involved in any of land acquisition project. The customary land claimed, however, must be recognized as such by the government prior to acquisition. Joint Regulation No. 79 Year 2014 on Protocols on Conflict Resolution in Forest Areas, Agrarian Ministerial Regulation No. 9 Year 2015 on Protocols on Communal Land Rights for Customary Law Communities and Local Communities in Forest Areas, and Ministerial Regulation No. 32 Year 2015 on Property Forests provides the procedure for the recognition process. Loss of access to idle land being previously occupied by illegal settlers or land grabber when the right-to-use (HPL) holder is going to develop the land and requiring a clean land. This situation is normally found in prospective tourism areas. The HPL holder faces a reality where the land area has been preoccupied and used by returning settlers or land grabbers, which leads to a land dispute over land use and ownership. Government Regulation No. 11 Year 2010 on Idle Land Management has been used to cope with this situation. In addition, Head of Land Agency Regulation No. 4 Year 2010 has been used for administering idle land. (b) Avoid or minimize land The Law No. 2 Year 2012 ensures that land acquisition is undertaken through No significant gap acquisition and related planning by involving all concerned stakeholders and taking into account the interests adverse impacts. of development and community. Screening or initial data inventory of objects and subjects of land acquisition, socialization, and public consultation are required to involve the affected community. Furthermore, project-affected people have a better opportunity to challenge the decision on the project location. Agreement from project- affected people is very important for determining whether the project will be continued to the next step of acquisition or be stopped. Prior to issuance of a project location determination letter from the Governor, the preparation team led by the Governor will carry out a public consultation. If there are affected parties who still oppose the location, Governor shall respond to it by forming the independent review team to study the location and concern. Even if Governor has issued a location determination letter, up to 14 days after 55 DRAFT, June 21, 2017 issuance the affected people who still disagree with the location could challenge it through the Administrative Court, with an opportunity to file a petition to the decision of the Administrative Court at the Supreme Court as the last opportunity.45 Presidential Regulation No. 71 Year 2012 emphasizes screening in spatial planning designation to ensure conformity and development priority. At a project level, these planning and assessment documents will be prepared (Land Acquisition Plan based on Feasibility Study, Environmental and Social Impact Assessment, and other studies). (c) Identify and address The Law No. 2 Year 2012 provides broader scope in terms of subjects and objects of No significant gap. Attention economic and social land acquisition for public use. Objects of compensation include land, objects on land, should be given to squatters and impacts caused by land plants, subsurface, space above land/over ground, loss of access, negative impact of vulnerable groups for assistance acquisition or loss of access the acquisition towards people’s property, other appraisable loss , etc. .46 and livelihood restoration. to natural resources, Regarding social and economic impacts due to loss or limited access to land/natural including those affecting resources, for example, Ministry Energy and Mineral Resources Regulation No. 38 people lacking full legal Year 2013 has regulated compensation for restriction of access to land use and other rights resources they use or assets located under transmission lines, and set a threshold for the compensation. occupy. In terms of people lacking full legal rights to resources, the Law No. 2 Year 2012 addresses informal users by acknowledging their rights over private property (private belonging/ownership/possession) of such as buildings, plants, or other objects related to land. Taking any private property (private belonging/ownership/possession) for public use must be compensated. However, the Law also differentiates between types of illegal occupants (good faith47 and non-good faith). Therefore, the Law No. 2 Year 2012 does not apply to land eviction situations in which non-good faith illegal occupants/squatters have resided/occupied on land owned by government. Land eviction is regulated under the 30 See provisions regarding preparation phase of land acquisition project of Law No. 2 Year 2012. 46 Elucidation of Article 33 on “Other appraisable loss� means nonphysical loss equivalent to money value, for example, loss due to loss of business or job, cost of change of location, cost of change of profession, and loss of value of the remaining property. 47 Based on discussion with Head of BPN, “Good faith� means illegal occupants who during their occupation do not conduct activit ies which are different from its land use. For instance, if the occupant builds a house on the government land (idle) assigned for agriculture uses, the illegal occupant is categorized as non- good faith and is not entitled to compensation. 56 DRAFT, June 21, 2017 Law No. 51 Year 1960. Article 6 of Law 51 stipulates that illegal occupants (non-good faith) could be charged with "criminal offense." As such, all "illegal occupants" are not entitled any assistance, transitional support, and other assistance. In the case of social and economic impacts resulting from land acquisition or loss of access to natural resources, the responsibility for the mitigation is delegated to local government as indicated in the government regulation (PP) No. 38 Year 2007 and Presidential Decree (Keppres) No. 34 Year 2003. Presidential Regulation No. 2 Year 2015 on National Mid-Term Development Plan (RPJMN) 2015-2019 contains gender mainstreaming issues in Book II sub-chapter 1.1.3 of the regulation’s appendix that states “gender perspectives must be integrated in every policy, program, and development activity.� (d) provide compensation Law No. 2 Year 2012 states that Acquisition of Land in the Public Interest should be No gaps sufficient to purchase implemented under the principles of justice, benefit, and welfare. Compensation at full replacement assets of replacement cost ensures displaced peoples will not be worse off. Types of losses equivalent value and to should be specified to be valued by an appointed appraiser. The compensation can be meet any necessary given in the form of money, substitute land, resettlement, shareholding, or other forms transitional expenses, paid as agreed upon by both parties. before taking land or Appraisal of the amount of compensation by appraiser shall be made on a parcel-by- restricting access. parcel basis, including land, above-ground and underground space, buildings, plants, objects related to land, and/or other appraisable loss. Presidential Regulation No. 71 Year 2012 ensures prompt compensation in article 70 section (3): Distribution of compensation must be carried out at the same time as the Entitled Party relinquishes its rights. (e) Provide supplemental Law No. 2 Year 2012 focuses on physical displacement rather than other displacements No significant gap; although non- livelihood improvement or such as economic displacement. This is clearly indicated in the Article 1: “‘Acquisition physical loss (including loss of restoration measures if of Land’ means any activity to make land available by giving reasonable and fair business or job, cost of change of taking of land causes loss of compensation to the Land Rights Holders.� Land Rights Holders means any party by location, cost of change of income-generating whom objects of the acquired land are possessed (controlled) or owned. ‘Object of the profession and loss of value of the opportunity (e.g., loss of Acquired Land’ means land, above the surface and below the surface of the land, remaining property) are included crop production or buildings, plants, objects related to land, or others appraisable objects. in the appraisal for compensation, employment) facilitation for livelihood In terms of supplemental livelihood improvement or restoration measures, the Law No. restoration might be needed, such 2 Year 2012 does not specify any. However, Perpres No. 71 Year 2012 Article 36 as training, assistance to access indicates the task of appraiser to carry out the appraisal of the amount of compensation credit, etc. parcel by parcel, which includes: a. Land; b. Space above and below the surface of the land; c. Buildings; d. Plants; e. Objects related to the land; and/or f. Other losses that 57 DRAFT, June 21, 2017 can be appraised. The elucidation of Article 36 then indicates: “‘Other appraisable loss’ means nonphysical loss equivalent to money value, for example, loss due to loss of business or job, cost of change of location, cost of change of profession, and loss of value of the remaining property.� (f) Restore or replace public The Law No. 2 Year 2012 and Presidential Regulation No. 71 Year 2012 do not No gap infrastructure and specify compensation for public infrastructure and community services that may be community services that adversely affected. However, it is included when it is found or identified during the may be adversely affected parcel-by-parcel basis appraisal as indicated. The appraisal includes land, above- by the Program. ground and underground space, buildings, plants, objects related to land and/or other appraisable loss. Provision/restoration should be made to community and public resources of civic infrastructure and community services impacted/lost. Actions and Opportunities Risks 1. When a proposed investment involves the acquisition of land or other Displaced and other project-affected people may require more systematic/holistic assets, or restriction of access to customarily-used land that will cause approaches to restore and improve livelihoods, as well as to achieve alternative loss of income-generating or subsistence opportunity, the Program will livelihood schemes and benefit sharing, The scope and capacity of agencies support: needing to manage livelihood restoration and/or resettlement may be limited by a. training and assistance for the agencies implementing the investment sectoral focus; livelihood restoration requires joint efforts and collaboration with to prepare and implement a Land Acquisition Plan (as required by Law other agencies and local government for the Program to be successful. Otherwise, 2/2012) that includes assistance and/or a livelihood restoration program physically or economically displaced peoples may be exposed directly to negative especially for squatters and the vulnerable, with the procedures, impacts of tourism development. requirements, and format of an abbreviated LARAP. The training also includes how to prepare documentation of the abbreviated LARAP’s implementation. b. training and assistance for the agencies implementing the investment to prepare and implement a Plan for Action for the affected persons due to access restriction to have alternative livelihood scheme and/or benefit from the Program with procedures, requirements and format of a Plan for Action. The training also includes how to prepare documentation of the implementation of the Plan of Action. 2. The MPWH (RIDA) with the assistance of the Program Management Support (through Program Management Support Consultants’ Services with social development specialist financed under the IPF, and/or additional qualified MPWH staff) will review the Abbreviated LARAPs or the Plan of Action, provide assistance to involved agencies implementing the investment, and monitor the implementation of these planning documents ensuring that the intended objectives are achieved. 3. Stakeholder agencies involved in such investments ensure that sufficient 58 DRAFT, June 21, 2017 qualified staff/consultants and budgets are allocated for the preparation and implementation of an abbreviated LARAP that includes assistance and/or livelihood restoration plan or Plan of Action that includes alternative livelihood scheme and/or benefit sharing from the Program. 4. Awareness and capacity strengthening of the involved agencies at the national, provincial, and district/city levels at the destination areas on the necessary assistance and livelihood restorations, alternative livelihood schemes due to access restriction and benefit sharing; 5. Assistance and facilitation on the collaborative work among involved agencies to effectively prepare and implement the abbreviated LARAP and Plan of Action. Policy Element 5: Program systems give due consideration to cultural appropriateness of, and equitable access to, Program benefits, giving special attention to rights and interests of Indigenous Peoples and to the needs or concerns of vulnerable groups. Key Elements Program System Gaps (a) undertake free, prior, and Indonesia has national and sectoral laws and regulations that are relevant to and No significant gaps insofar as IPs informed consultations if recognize and respect “Masyarakat Adat� (MA), or Masyarakat Hukum Adat� concerned are legally recognized. Indigenous Peoples are (MHA), or “Masyarakat Tradisional� who are Indigenous Peoples as per criteria However, the processes to obtain potentially affected used in the OP 4.10 on Indigenous Peoples (IPs). legal recognition is cumbersome, (positively or negatively), to bureaucratic, and in some cases, Both the amendment of the Constitution 1945 and the Basic Agrarian Law (BAL determine whether there is political. No.5 Year 1960) stipulate that the State recognizes and respects MHA and its broad community support for traditional rights provided that they are still exist and in accordance with the the Program activities. development of the society and the State unity as regulated in the laws; cultural The extent of such conditionality for identity and rights of traditional community are respected in accordance with the recognition of IP’s existence development of civilization. With these provisions, the BAL recognizes “hak (cumulative or optional) and forms of ulayat� (customary rights) of MHA. legal recognition vary across Sector laws on the environment and natural resources (i.e. Law No. 41 Year 1999 regulations. on Forestry with some changes by the Constitutional Decree No. 35 Year 2012; Law No. 22 Year 2001 on Fishery and amended by Law 45 Year 2009; Law No. 27 Year 2007 on Coastal Zone and Small Island Management and amended through Screening does not specify gender Law No. 1 Year 2014; Law No. 32 Year 2009 on the Protection and Management analysis however it provides an of the Environment and Law No. 18 Year 2013 on the Prevention and Eradication opportunity for gender analysis if of Forest Distraction; Regulation No. 28 Year 2011 on Preservation Area and necessary as indicated in the scope or Natural Conservation Area and its amendment in the regulation No. 108 Year 2015) area that can be covered in other contain provisions on IPs to a varying degree. The abovementioned laws contain studies if required. 59 DRAFT, June 21, 2017 provisions that the state respects the customary rights of IPs over land and natural resources as well as their traditional knowledge and wisdom related to the environment. Other laws and regulations pertaining regional local governments and development planning also have provisions on IPs. Law 23 Year 2014 on Local Government; Law No. 6 Year 2014 on Village; Law No. 26 Year 2007 on Spatial Planning; Law No. 39 Year 1999 on Human Rights; Law No. 28 Year 2014 on Copyrights; Law No. 23 Year 2003 on Constitutional Court and Law No. 20 Year 2003 on the National Education System, as well as Law No. 7 Year 2012 on Social Conflict Management have provisions on the recognition, respects the rights of and empowerment of the participation of MA, or MHA, or traditional communities in planning, local development, and customary-based public administration, and honor the ownership and management authority of their cultural heritage; and acknowledge the resolution of social conflicts on the basis of the “adat� and “adat� law; and the right of IPs to receive high quality education, with special educational services for those living in remote areas. However, these regulations point out that IPs’ rights would be recognized and respected as long as the IPs concerned have fulfilled the determined conditions of the constitutional recognition, such as existence, conformity to national development visions and civilization, to the national interest, and the principles of the unitary state. Such conditionality is further translated into criteria such as the existence or presence of in-group feeling, traditional territory, adat rules and organization in order to obtain legal recognition from respective district/provincial governments. (b) ensure that the Indigenous Law No. 27 Year 2007 on Costal Zone and Small Island Management stipulates Although most regulations contain Peoples can participate in specific provisions on public consultations for the development of coastal provisions for free, prior, and devising opportunities to management plans. Such consultations stress the needs for accuracy, transparency, informed consultations with IPs, benefit from exploitation of and access to information. Conflict resolution can be handled through customary specific guidelines for such customary resources or ways. consultations have not been indigenous knowledge, the developed and therefore their Law No. 2 Year 2012 on Land Acquisition for Public Interest requires 60 working implementation is subject to multiple latter (indigenous days for public consultations (although not explicitly mentioned but this provision interpretations. knowledge) to include the includes IPs if they are the PAPs). An additional window of 30 working days is agreement of the Indigenous allocated for extended consultations in the event of stalemate. The Grievance Peoples Redress Process is managed by directly by the Governor, based on the request of In the forestry sector for instance, projects’ proponents. A team consisting of relevant government representatives and standards and guidelines for free, academics will be established to investigate and make recommendations on prior, and informed consultations are grievance handling. Based on the recommendations, decisions whether or not to usually available for donor-funded 60 DRAFT, June 21, 2017 pursue land acquisition will be made by the Governor. projects such as REDD+ and therefore their implementation is not In the forestry sector, provisions of free, prior, and informed consultations are not binding across government-funded specified in the Law No. 41 Year 1999 on Forestry and its guiding ministerial projects. In the Directorate General regulations. Standards for such consultations are available in the General Director of of Sustainable Production Forest Forestry Business Units’ Directive No. P.14/VI-BPPHH/2014 on Standards and Management of Ministry of Guidelines for Performance Assessment in Sustainable Production Forest Environment and Forestry, such Management and Timber Legal Verification. The standards outline indicators and standards are applicable at the verification criteria for free, prior, informed consultations; however, no specific Directorate General Level and may protocols for such consultations are incorporated. not necessarily be enforceable across the Ministry. (c) give attention to groups Ministerial Regulation 39 Year 2013 on community partnership in the forestry sector Forestry partnership is not mandatory vulnerable to hardship or requires forest concession holders to engage in partnership with communities based and is usually contingent upon disadvantage, including as on the principles of mutual agreement, participation, transparency, and trust. Such concession holders’ community relevant the poor, the benefit sharing schemes may include smallholder plantations, livelihood activities, engagement strategies. In the disabled, women and training, facilitation, etc. However, for these communities to be able to engage in the plantation sector, land acquisition is children, the elderly, or schemes, they need to provide valid proof of identification (ID card, or reference often conducted through willing- letter from the village head) and reside within the concession areas, demonstrate buyer and willing-seller scheme. In marginalized ethnic groups; reliance on natural resources, and have capacity to engage in productive and some instances, community elites act and, if necessary, take sustainable activities. In limited cases, such requirements may be difficult to be on behalf of the community to special measures to promote implemented for MHAs who are not recognized or who are nomadic. negotiate and transact with equitable access to the concession holders in a non- Program benefits. IPs need to be legally recognized to be able to claim their land rights (Joint participatory manner. Conflicts due Regulation No. 79 Year 2014 on Protocols on Conflict Resolution in Forest Areas, to land claims and unfair Agrarian Ministerial Regulation No. 9 Year 2015 on Protocols on Communal Land compensation are well documented. Rights for Customary Law Communities and Local Communities in Forest Areas, and Ministerial Regulation No. 32 Year 2015 on Property Forests). Once the In general, to various extents all existence of these communities is legally recognized, recognition of land rights and regulations provide rights to IPs and rights to avail (hak ulayat) requires a decree issued by the MOEF and Land Agency, local community to benefit from the with adat forest schemes for the former and communal property titles for the latter. natural resources and cultural heritage. Law No. 27 Year 2007 on There is an exception in the Law No. 1 Year 2014 on the rights to coastal and small Coastal Zone and Small Island island resources. In this regulation, MHA are not necessarily required to have "legal Management and Law No. 11 Year recognition" issued by the governments as a precondition for the communities to 2010 on Cultural Heritage and access natural resources in their territory. Regulation No. 28 Year 2011 on Law No. 6 Year 2014 on Villages provides greater space for indigenous peoples to Preservation Areas and Natural be recognized for their existence, including through the creation or existence of adat Conservation Areas for instance villages. More than just providing space for recognition of existence, the Law also promote IPs and local community to provides space to generate plurality because it states that the adat village is based on utilize and manage natural resources and cultural heritage. There is also 61 DRAFT, June 21, 2017 indigenous local structures and rights. The Law grants adat villages the authority to encouragement to partnership in conduct adat-based public administration. managing and utilization of natural resources with local government and/or with the concessionaires who hold the permit. Although IPs’ and local communities’ rights to benefit from and utilize the natural resources are enshrined at the higher regulatory level (i.e. Undang-undang/Law), laws around IPs often lack guiding regulations and such regulations often suffer from weak enforcement. Further specific guidelines for implementing the rights of the IPs and local community in harnessing, benefitting and managing natural resources and cultural heritage are not in place. (d) Give attention to groups Education Ministerial Regulation No. 27 Year 2016 on Education Services for Faiths To implement provisions in the vulnerable to hardship or to God Almighty provides a greater space for IPs to accommodate local faiths and current regulations i.e. education for disadvantage, including as religions in the mainstream education system. A new Directorate General on IPs and other basic services, relevant the poor, the Indigenous Faiths is now embedded in the current structure of the Ministry of government agencies often suffer disabled, women and Education, which is a transfer from the Ministry of Tourism. from resource constrains and lack of children, the elderly, or qualified personnel to deliver tailored marginalized ethnic groups; services for IPs. and, if necessary, take Presidential Instruction No. 186 Year 2014 and Ministerial Regulation No. 12 Year To access government assistance, IPs special measures to promote 2015 on the guideline of empowerment for Isolated Customary Communities set out are often required to obtain a legal equitable access to the development measures for this subset group of IPs (IPs in remote areas) in the area personality (e.g. legally recognized Program benefits of basic services, i.e. housing, employment, health, education, and welfare. A groups, cooperatives, etc.) before Directorate within the Ministry of Social Affairs was established to implement and their rights can be legally conferred. oversee programs related to isolated IPs empowerment. Such programs are often In addition, access to basic services aimed to mainstream IPs communities to be able to integrate with the general is often constrained by the populations. requirements for legal identification such as ID cards and birth certificates, which many IPs groups are not formally registered. 62 DRAFT, June 21, 2017 Measures introduced to empower IPs often lack the provisions for free, prior, and informed consultations and often hinge on the premise that IPs are primitive and backward and therefore need to be mainstreamed in the general populations. There is also lack of specific guidelines on FPIC. This has resulted in poor programming strategies and targeting. Actions and Opportunities Risks  Indigenous Peoples and/or vulnerable groups are excluded from the planning 1. Integrated Tourism Master Plans ensure stakeholder engagement process and implementation stage of the Program, and therefore may not get (including IPs, through free, prior, informed consultations that lead to fair and proper benefits from the tourism development. broad community support) throughout the master planning process and will address needs of and potential impacts on the IPs and will take into  IPs may only be adversely affected by the Program without proper account potential tourism benefits from IPs culture. compensation. Physical assets, livelihoods, and cultural values may degrade 2. Asset monitoring and protection arrangements will provide for due to the tourism development. Access to natural resources that the IPs monitoring of Master Plan implementation and their impacts on IPs and depend on for their living and customary practicing may become limited or vulnerable groups. more restricted due to tourism development. 3. Stakeholder agencies implementing the investments in the Master Plans  Coordination and collaborative synergy among sectors may not be effective in should ensure that the concerns and needs of IPs and vulnerable groups ensuring that IPs are fully included in the Program, due to the sectoral nature are taken into account in designs and budgets based on a social of the institutional arrangements governing the recognition and empowerment assessment and plan developed with free, prior, informed consultations of IPs. that lead to broad community support ensuring the cultural appropriateness of, and equitable access to, Program benefits 4. Training and assistance for the involved agencies implementing the investment in areas where there is IPs presence in carrying out free, prior, informed consultations that lead to broad community support to the Program during the social assessment and to empower the affected IPs in benefitting from the Program and address potential impacts through the development of an Indigenous Peoples Plan. 5. Under Results Area 4, as part of the awareness and capacity building activities, the Program will support the development of a practical tool/guidance tailored for the tourism development program to implement free, prior, informed consultations that lead to broad 63 DRAFT, June 21, 2017 community support and empower IPs so that they will benefit from the Program as operationalization of relevant sectoral laws and regulations. 6. As part of the local community satisfaction surveys (under RA4, where increased satisfaction is aimed for over the Program period), sufficient IPs will be included to monitor their satisfaction as well. Increased community satisfaction is one of Program results indicators, and includes perceived benefits received from tourism (individual or community benefits, economic or social benefits, conservation of traditions, etc.), changes in socio-economic conditions (e.g. prices, access to resources, traditional values), changes in environmental conditions (improvement or degradation), and interaction with tourists.48 7. MPWH (RIDA) with the assistance of the Program Management Support Consultant will assist and facilitate the collaborative efforts of various agencies responsible for IPs empowerment. 8. IPs are part of the “sadar wisata� tourism awareness-raising programs. Policy Element 6: Program systems avoid exacerbating social conflict, especially in fragile states, post-conflict areas, or areas subject to territorial disputes Key Elements Program System Gaps (a) consider conflict risks, Law No. 7 Year 2012 and Government Regulation No. 2 Year 2015 on Social No gaps. OP 4.12 applies to activities including distributional Conflict Management details the provision of social conflict management covering that will restrict access to the equity and cultural prevention, responding to conflict, and post-conflict. It underlines the importance of involuntary restriction of access to community strengthening through awareness and capacity building, poverty legally designated parks and sensitivities. alleviation, strengthening access to local wisdom, social harmony, and community protected areas resulting in adverse forums. The Law stipulates the important roles of adat leaders in the settlement of impacts on the livelihoods of the social conflicts and promotes the adoption of adat or adat law in resolving social displaced persons. This OP also conflict, particularly through reconciliation. Conflict management involves the applies to involuntary restriction of partnership among local government, community, religious, and adat leaders, and access on the use of resources other stakeholders, and takes a consultative approach as the main principle. The imposed on people living outside the 48 UNWTO. 2004. Indicators of Sustainable Development for Tourism Destinations. A Guidebook. 64 DRAFT, June 21, 2017 regulation respects religious norms as well as local cultures, rules, and values and is park or protected areas, or on those consistent with the prevailing laws and regulations. who continue living inside the park or protected area during and after project implementation. These regulations address social conflicts that result from any triggering factors, not only due the impacts of access restriction, but also beyond, such as unresolved land issues, social jealousy among community groups/members, etc. Potential social conflicts that could occur due to this restriction can be avoided and addressed with the consistent implementation of Law No. 7 Year 2012 and Government Regulation No. 2 Year 2015 as part of the Process Framework and Plan of Action included in the natural resource management plan. In the case that social conflict is triggered by other factors beyond access restriction, prevention or mitigation measures should be included in the Social Management Plan as part of the AMDAL. (b) Consider conflict risks, Both regulations above specify that social conflicts should be prevented through No gaps. The principles set out in including distributional various combinations of efforts, among others: maintenance of peace in the these regulations are in line with the equity and cultural community; development of a peaceful conflict resolution system; stifling of principles of OP 4.10 and OP 4.12 sensitivities potential conflict; and development of an early warning system. As explained whereby impacts on IPs and above, institutional community strengthening is important to avoid social conflicts, involuntary land and conflict management should engage partnerships among the local government, acquisition/resettlement should be community, religious leaders, adat leaders, etc., and adopt the local values, cultures, properly addressed, ensuring that and norms with consultative (“musyawarah�) principle. affected persons are treated fairly and in a culturally sensitive way. Actions and Opportunities Risks 65 DRAFT, June 21, 2017  Some or all of the activities and investments specified in the Integrated Master 1. The Integrated Tourism Master Plan for the Tourist Destinations should anticipate potential social conflicts that could occur due to the Plan cannot be implemented as intended or timely, due to the failures to avoid downstream activities and investment as results of plan and/or mitigate social conflicts. The objective of tourism development in the implementation. destination areas may not be fully achieved. 2. Stakeholder engagement during the process of ITMP preparation and  Social conflicts may arise due to the “jealousy� of local communities if they implementation, as well as in the preparation of downstream planning are not given access or opportunities to benefit from the Program, greater documents. disparity among community groups that benefit from the Program and those 3. The Program can be developed by harnessing existing social values, who do not enjoy the benefit from the Program (and instead, adversely culture, and practices to leverage the uniqueness of the destination and impacted). to provide opportunities to local communities to develop in harmony  Local culture, values, and practices as attractions to tourism might degrade with tourism development and therefore could reduce potential social due to the tourism development. conflict. 60. Below is the initial assessment of the local government agencies based on field notes, follow-up questions by email, and literature report/government reports on the performance and their capacity to address risk and impacts. During the draft ESSA public consultation, the Task Team will focus on the area of strengthening to obtain inputs for the final draft ESSA. In the IPF component, the TORs for Program Management Support services and also in the Program Action Plan in the Program will be able to focus on the area of strengthening that needed to be considered by the national coordination team. The role of STOs would be part of the monitoring team without enforcement authority but engaging local stakeholders as it will consist of local government agencies, universities, and NGOs to promote and provide the periodically monitoring reports. It will be published based on pre-agreed geographic scope of tourism areas and list of critical indicators. Table 10. Institutional capacity to address risks and impacts and areas that can be improved through the Program. A) Central Level Institutional Arrangement Ministry/ DG Institutional capacity to address risks and impacts Area of strengthening a) Directorate Regional Infrastructure and Development/Badan 1. Ministry of Public Work and Program Management Support Pengembangan Infrastructure Wilayah (BPIW) Housing (MPWH) (through Program Management  All Directorates General of MPWH RIDA-MPWH as Implementing Agency is a well-established government Support Consultants’ Services allocated annual budget for land agency with a growing and substantial workforce from different areas of financed under the IPF, and/or acquisition, especially for national expertise. Among the areas of expertise are Architecture, Engineering, additional qualified MPWH staff) to and strategic projects. This Regional and Urban Planning, Environmental Engineering, Anthropology, develop and implement a tourism- excludes DG of Housing Provision Law, and Economics. The Regional Infrastructure Development Agency specific training program for consultants that prepare AMDALs 66 DRAFT, June 21, 2017 as they do not acquire land; mostly (RIDA) as the Program Executor has a Core team (PNS) which consists of and UKL-UPL and for the agencies the land is prepared by the local 36 civil servants working in a Work Unit of the Strategic Area that review, approve, and enforce governments. Development Center or in total 117 people in RIDA and also individual them.  In 2015, MPWH allocated IDR 4.7 consultants. The Work Unit of the Strategic Area Development Center will trillion for land acquisition. develop a Technical Expert Team (Professional Specialist) consisting of experts from several areas of expertise stipulated through Decree (SK), especially related to environmental and social aspects. RIDA-MPWH has its own Land Facilitation Division (LFD). LFD is responsible for facilitating land acquisition for regional development. The tasks of the sub-directorate of land facilitation include i) preparing coordination materials for land acquisition with other related agencies; ii) providing technical guidance and land acquisition assistance; iii) facilitation of handling land acquisition issues in the management of water resources; and iv) facilitation of security protection and certification of the state property in the form of land. Since its establishment in July 2015, the Land Facilitation Division (safeguard unit) has been active in identifying all lands to be acquired for strategic and national projects and ensuring that the projects have been included in the regional spatial planning. The division also supports BPIW in enhancing the capacity of the staff in land acquisition and resettlement by holding regular trainings, seminars, and workshops and inviting key speakers from its own ministry or from external organizations. They also develop and maintain good relationships with other government agencies involved in land acquisition such as the Ministry of Environment and Forestry (MoEF), the state-owned Forest Enterprise (Perhutani), and the National Land Office. In BPIW, the number of staff working at the land facilitation unit is limited. However, there are plans to add sufficient staff to this land facilitation unit to enable it to properly handle its facilitation of land acquisition tasks. b) Directorate General of Water Resources (DGWR)  The Program would be able to help to facilitate the actions A Comprehensive Water Resource Management Plan (Pola and Rencana) and measures to identify the has been prepared together with the establishment of a river basin right infrastructure to make a organization (RBO) in each of 131 River Basin Territories or Wilayah sustainable Tourism 67 DRAFT, June 21, 2017 Sungai (WS) to manage water resources for current and future usages. Destination with emphasis on Another strength of the DG for managing water catchment basins is the green technology investments. current governance framework for Water Basin Regional Management Demand assessment shows the Planning (BWRMP) which has incorporated spatial planning and water importance for access to clean resources planning. However, the challenges of implementing BWRMP water as part of the require coordination effort over multiple sectors and ministries, especially sustainability tourism in involving all Integrated Water Resource Management (IWRM) Lombok, Lake Toba, and stakeholders. There are still gaps in technical capacity to create a large Borobudur/Yogyakarta. pool of specialists with the knowledge and skills to formulate and execute plans. Allocation of budget for normal operation and maintenance (O&M) No gap for strengthening. and investments for water resource infrastructure (piped water supply and water treatment plants) needs continuous support from the government.* c) Directorate General of Highways (DGH)  No area for strengthening. DGH has developed social and environmental safeguard manuals and undertaking training its personnel on safeguards. They are also asked to be trainers on safeguards in MPWH training centers in different regions and also local governments, as arranged by the Directorate of Human Resource and Management. There is a lack of trainers in the DG to support the necessary demand for training needed by the different regional offices. However, the Directorate of Human Resources and Management has a well-planned training program in 2017 and will continue their training program for 2018 depending on the allocated budget for the numbers of staff that need training. d) Directorate General of Human Settlement (DGHS)  No area for strengthening. As in other DGs in MPWH, DGHS also have their own distinct projects with the Bank, for instance Urban Water Supply and Sanitation Project (UWSSP) (implemented in FY2010 – FY2015), PAMSIMAS and other World Bank funded MPWH’s projects. They are very familiar with and knowledgeable of the Bank’s procedures in implementing environment and social safeguards during project implementation. However, at the central-level the human capacity in DGHS still needs to be strengthened as a number of projects under their portfolio are increasingly important, and assistance is needed in providing adequate safeguard focal contract points/counterparts at the Central PMU to lead the coordination of all 68 DRAFT, June 21, 2017 relevant project safeguard aspects/requirements and the management process during implementation at destination-level locations. e) Directorate for Human Resources and Management (BPSDM)  No area for strengthening. MPWH has their own in-house human resource development programs including its own training facilities down to the regional levels. All training related to environment, health and safety, water resource management, civil works, and social land acquisition are already built into the institutional arrangements for capacity building.** The agency also conducts a yearly standard competency assessment through their Center of Competency Assessment and Monitoring of Performance for all MPHW staff. It includes criteria of minimum credit hours and a competency test for all staff and senior staff for promotions and skills upgrades. They also conduct a standard competency assessment on all staff. In 2017, the budget allocated to BPSDM for training and managing is estimated at IDR 490 million. It is also estimated that about 8,300 officials/staff members will be trained by the end of year 2017. On the topic of land acquisition, two main DGs of MPWH were selected to be in a trial study. Two most important DG is BPIW and also Bina Marga staffs were chosen for the trial study. The training materials on land acquisition covered BAPPENAS’s Guidelines on Land Acquisition and PINA (Pembiayaan Infrastruktur Non Anggaran Pemerintah/Infrastructure Non-Government Financing.) This is positive for the Program as competency training for MPWH staffs and incorporating the latest guidelines on land acquisition had already being implemented by BPSDM. BPSDM is also looking at the possibility of providing similar training to their consultants and contractors using their well-equipped training facilities in the whole country, their experienced trainers, and also their well-developed program modules which are based on country systems, best practices and proper procedures for implementing AMDALs and Abbreviated LARAPs during project preparation and project operation. They have acknowledged the needs and demands from the outside public and enabled the improvement of the work synergy between MPWH supervision staffs, consultants, and contractors during project 69 DRAFT, June 21, 2017 implementation.  No area of strengthening 2. Ministry of Land and Spatial The capacity of the agency is rated strong, as it has strong mandates and is needed. Planning supported by directorates general supporting land acquisition, including the Directorate General of Spatial Planning and the Directorate General of Land Acquisition. It also has a Directorate of Valuation, and a Center of Legal Study and Public Relation. The ministry is intensively involved in the government coordination for infrastructure development and also involved in the sector agency’s task force for land acquisition. It has a program for capacity building improvement for staff of regional land offices. Unfortunately, the program is not conducted regularly because of the budget limitation. The number of staffers at the national level in 2016 is 19,965 persons. Of that number, 60% staff graduated from university (from diploma, bachelor, and post graduate), 33% staff graduated from high school, and the rest graduated from the secondary and elementary school. However, an undersupply of land surveyors and high demand by the regional/provincial MASP/NLA office to facilitate land acquisition implementation have caused delays in the land acquisition process. The current administration has been endorsing a large-scale agrarian reform to hand over 12.7 million hectares to the poor including forest- and land-dependent MHA. This initiative is currently being led by the ministry and MOEF through TORA (Tanah Obyek Reformasi Agraria/Land Objects for Agrarian reform) and social forestry schemes respectively. However, under Indonesian regulations, recognition of MHAs’ rights ove r land is conditional upon recognition of their existence by district and/or provincial governments. As indicated in Table 9, that the process to getting recognition and rights is a bureaucratic process and historically takes time. Streamlining the process is beyond the scope of this Program. a) Directorate General of Infrastructure Development and Tourism Integrated Tourism Master Plan to 3. Ministry of Tourism Ecosystem define the arrangement (IPF) through stakeholder mapping. With a strong mandate, the Ministry of Tourism signed an MOU with UNWTO in September 2016 to promote sustainable competitive growth Establish arrangements as part of as part of their national level directional strategy for Indonesian Tourism. Program Action Plan and In their development concept, for each national tourism destination implementation throughout Program 70 DRAFT, June 21, 2017 (DPN)/National Strategic Tourism Area (KSPN) there will be a period is incentivized in RA4, where Sustainable Tourism Observatory (STO). It will act as a monitoring team its regular reporting is a DLI. without enforcement authority but engaging local stakeholders as it will Program Management Support consist of local government agencies, universities, and NGOs to promote (through Program Management sustainable tourism and programs from the Ministry. In the PforR Support Consultants’ Services Program, as part to support this great initiative from the GoI, it is part of financed under the IPF, and/or the DLI to achieve a balance of process, monitoring, and verification additional qualified Ministry of during project implementation. They will provide periodic monitoring Tourism staff) to provide reports and will publish based on a pre-agreed geographic scope of coordination and training. tourism areas and list of critical indicators. The strength of the STOs lies in the Currently, the first three pilot STOs are housed in three major coordination with the university, universities—University of Mataram (Lombok), Bandung Institute which has the necessary technical Technology (Bandung, West Java), and Gajah Mada University (Sleman, knowledge and capacity to provide Yogyakarta). The collaboration of STO organization consists of a local the necessary guidance to local university, local government, the Ministry of Tourism, and UNWTO. government agencies and act as an “auditor� through the monitoring and verification reports that will be produced throughout the Program cycle. a) Directorate General for Environmental Protection 4. Ministry of Environment and No area of strengthening needed at Forestry Currently, the MOEF has the most relevant and elaborate capacity building national level. system. It involves a network of 16 universities accredited to train At subnational level, training needs AMDAL (EIA) compilers and evaluators. The system allows the MOEF to to be provided. influence the quality of Environmental Assessments nationwide by accrediting training institutions, standardizing training curricula, and subjecting individual AMDAL professionals (both compiler/preparer and reviewer/evaluator) to an accreditation process. In the three tourism destinations, there are university training centers accredited by MOEF to provide training on AMDAL. In districts/cities, the environmental management structures created by each district or city will or may have either an Environmental Service Agency (Dinas Lingkungan Hidup) or Environmental Office (Kantor Lingkungan Hidup). Environmental service agencies develop technical and operational policies in the field of environmental impact management. Relevant environment departments (provincial or district) do not always have budgets and skilled human resources to provide resources for supervision and enforcement of implementation. 71 DRAFT, June 21, 2017 The MOEF, especially DG Social Forestry and Environmental Partnership, (together with the Ministry of Home Affairs and the Ministry of Agrarian and Spatial Development) are mainly responsible for the recognition of the MHA rights over land, use of forest, and recognition of the presence of MHA.49 Table Notes: *River Basin Management Planning in Indonesia: Policy and Practice. 2016. Asian Development Bank. **Training program based on the Human Resource Development Agency under MPHW Calendar 2017. Source: Human Resource Development Agency (BPSDM). B) Destination Level Institutional Arrangement50 Destination(s) Institutional capacity to address risks and impacts Area of strengthening Lake Toba 1) North Sumatera Province One of the three selected provincial governments to be trained on management of regional development master plans as part of the JICA’s 49 In recent years following Constitutional Court Ruling (MK35), there has been increasing political pressure for land rights recognition. Such pressure has helped to shift greater roles in the recognition and protection of the rights of MHA to the Ministry of the Environment and Forestry (MOEF), since many MHAs reside or have claims in forest areas. In the past, government-sponsored MHA empowerment only focused on a specific subset of MHA, namely Komunitas Adat Terpencil (Isolated Adat Communities), which falls under the purview of the Ministry of Social Affairs (MoSA) in the Directorate of KAT empowerment. The latter was often criticized for lack of free, prior, and informed consultations with KAT concerned due to its top down priorities. The issuance of MK35 on the recognition of Adat Forests as separate from the State forest has helped to change the dynamics in MHA empowerment where greater recognition of land rights shall go in tandem with community empowerment. To support this effort, the current administration has been endorsing a large-scale agrarian reform to hand over 12.7 million hectares to the poor including forest and land dependent MHA. 50 At the kabupaten/district level, various agencies involved in the protecting, empowering and ensuring that the MHA would benefit from development and use/management of natural resources. Among others, Dinas Sosial ((e.g. Social Agency), Dinas Pendidikan, Dinas Pemberdayaan Masyarakat Desa (Education Agency, Village Empowerment Agency) contribute to MHA empowerment through various cross-cutting initiatives and are often financed through the national government’s programs. During public consultations the role and relevance of these agencies will be further explored. 72 DRAFT, June 21, 2017 BAPPEDA program on technical cooperation support to provide capacity development for local governance. The program cycle was for 8 years  No area of strengthening (from 2001–2007). Compilation of good practice cases had been made into needed. manuals to implement the Local Government. However, at the provincial The Program will incorporate level human capacity needs to be constantly strengthened as it is common recommendations based on a for experienced and trained staff to be frequently moved to other study (in preparation) on a divisions/organizations. targeted infrastructure program 2) Authority Board of Toba Area The Authority Board had been set up with the mandate (Presidential for improving the water quality (Badan Otorita Danau Toba) Decree No. 49 Year 2016) to function as Implementing Agency under and managing the impact of Ministry of Tourism. Its main tasks consisted of a) coordination, growth of tourism or other synchronization and facilitation of planning, developing, construction, and industries in the Lake Toba management in the tourism area of Lake Toba; and b) preparing planning, area. It is part of a technical development, construction, and management and control in the zone of the study titled “Advisory services Lake Toba Tourism Authority. on developing a roadmap for improving water quality of Lake Two previous successful major post-disaster reconstruction operations in Toba Tourism Destination.� Indonesia had been based on organizations set up as “Authority Board� by The technical study aimed to the GoI in responding to the Aceh Tsunami in 2004 and Earthquake in facilitate a stakeholder process Jogjakarta and Central Java in 2006. The strengths of the Authority Board to involve all relevant from previous experiences were: 1) the Board had coordination and stakeholders and the necessary execution functions and its own annual budget; 2) it had direct reporting to infrastructure and monitoring the President; 3) determined and prepared the strategy steps to deal with budget for ensuring the carrying obstacles in planning and implementation; 4) conducted monthly meeting capacity of the ecosystem is to assess the progress of the project. protected. 3) MOEF North Sumatera/ One of the agencies that is actively playing an important role in Environmental Management Agency maintaining and managing the area of Lake Toba. They have strong (BLH/BPLHD) capacity in terms of researchers and they also have a technical unit that is monitoring the water quality of Lake Toba (BLH North Sumatera). They have conducted monitoring operational program since 2012 as part of their routine monitoring water quality program. The program also includes education and awareness to local people on cleanliness and registration of local industry and local business through questionnaire to identify the type of potential source of water pollution. They do regular check-ups on the septic tanks and wastewater outlets from industry and human settlements. Every year, they publish yearly report on the Operational Technical Unit activities for managing water quality in Lake Toba and it is shared with the BAPPEDA of North Sumatera Province. It is noted in each report, 73 DRAFT, June 21, 2017 there was evidence of declining water quality over the past few years due to pollutants from such as human settlements, hillslope erosions from surrounding aquaculture and pig farms, and also boat operators. In terms of technical capacity for human resources, they have substantial and well- trained staff. To ensure effective coordination and implementation capabilities, an adequate budget is important for them to do regular monitoring and enforcement. 4) MPWH North Sumatera Lake Toba is part of the program of Institutional Strengthening for IWRM (DG Water Resources) – Balai under the program by GoI under MPWH. The outcome of the program is Wilayah Sungai II. the Pola (Strategic WRM plan) and Rencana (River Basin Master Plan) for Lake Toba-Asahan water management district. It has two coordination platforms: one for Water Resources Management (TKPSDA, Tim Koordinasi Pengelolaan Sumber Daya Air) will be guided by national regulations for Pola and Rencana, and the other for Environmental Sustainability (Badan Koordinasi Perlestarian Ekosistem Danau Toba – BKPEDT) is a special body established by Governor of North Sumatera. The outcome of the consultant services included spatial planning and development of key policies and strategies for IWRM. One of their roles is also to ensure the water quality of the lake for drinking water. Lombok 1) Environmental and Research Agency, The province has their own AMDAL commission and technical team with No area of strengthening Province West Nusa Tenggara (Nusa cooperation with universities, and it is a strong team as they do have needed. Tenggara Barat) license of competency. They also support other local governments as AMDAL reviewers for local governments in Lombok when needed. The strength of the provincial staff team is their fulfillment of the standard requirements for reviewing AMDAL, UKL-UPL, and SPPL documents. However, there is still need for strengthening efforts in building the capacity and certification of competency for local consultants. In terms of facilities and instruments, their laboratory had been set up and human resources are currently being trained. It is targeted to be in operation next year. The lab was funded the central government and it is based on national standards compliance. It will function as a reference lab in the West Nusa Tenggara province for all local governments, as well as for the neighboring province, East Nusa Tenggara (NTT). In terms of processing and issuance of environmental permits, the same 74 DRAFT, June 21, 2017 agency has their own office which ensures all permit issuing is based on law and regulations. This ensures the smooth process and reduces bottlenecks in paperwork. 2) Tourism Agency, Province West Nusa The tourism agency staffs totaled 161 people. Staff is allocating into to Program Management Support Tenggara (Nusa Tenggara Barat, NTB) tourism, museums, and cultural parks. There is no mentioned of staff (through Program Management training, especially on managing sustainable tourism or managing Support Consultants’ Services integrated master plan tourism-related skill improvement programs. financed under the IPF, and/or additional qualified MPWH staff) to provide coordination and training. 3) Public Works Agency, Province West As mentioned earlier, all staffs of MPHW needs to be trained according to No area of strengthening Nusa Tenggara (Nusa Tenggara Barat, the same training module determined by BPSDM. This helps to centralize needed. NTB) the law and regulation especially for environmental documentations. All projects have to fulfil the required environmental documentation prior to the construction including SPPL, UKL-UPL or AMDAL depending on the size of the projects. The agency has 3 staff that possess AMDAL certificates, but none has a competency certificate. 4) Environmental Agency, Lombok With a total of 38 staff, the team consists of 22 undergraduates and 4 post- Program Management Support Barat graduates, and is still understaffed for the tasks and responsibilities of (through Program Management managing the agency, especially in the fields of IT and laboratory testing. Support Consultants’ Services Only one staff is certified with the AMDAL commission. Their laboratory financed under the IPF, and/or has been in operation since 2012 and equipped with selective instruments additional qualified MPWH and portable ones for use in field. staff) to provide coordination and training. 5) Tourism Agency, Lombok Barat The agency is part of the AMDAL commission, although none of the staff Program Management Support has a certificate to prepare or review AMDAL documents. Their main role (through Program Management is to provide recommendations in the tourism sector. The capacity of the Support Consultants’ Services agency could be increased through training focusing on sustainable financed under the IPF, and/or tourism and basic training UKL-UPL. additional qualified MPWH staff) to provide coordination and training. 6) Public Works Agency, Lombok The agency has 256 staff, with approximately 20% having completed No area of strengthening Barat undergraduate studies, and about 80% having completed high school and needed. elementary studies. The current projects under the agency mainly required UKL-UPL and are done by the agency. The agency has no staff members 75 DRAFT, June 21, 2017 who are AMDAL certified, except for the acting Head of the Agency (Plt Kadis). They also support other local agencies by providing inputs on environmental related meetings. Program Management Support 7) Sustainable Tourism Organization The establishment of STOs for three pilot chosen destinations (Sesaot, (through Program Management (University of Mataram, Lombok) Lombok; Sleman, Yogyakarta and Pangandaran, West Java) was Support Consultants’ Services formalized through an MOU signed between UNWTO and the Ministry of financed under the IPF, and/or Tourism in Jakarta in September 2016. The Sesaot STO currently has additional qualified MPWH support from the West Lombok government, Tourism Agency, and staff) to provide coordination. BAPPEDA who come together in the Forum Tata Kawasan Pariwisata. Ministry of Tourism to provide However, there is still work to be done to expand the STO outreach sufficient financing and including: training. a) the mandate needs to be strengthen by the Governor to extend the legal framework of the Forum to include other regencies to support sustainable tourism; b) sufficient allocation of budget/funding to STOs to develop their five- year plans for green sustainable results need to be agreed upon by different stakeholders; c) the environmental monitoring for water quality assessments can be conducted jointly with the University of Mataram and Badan Lingkungan Hidup (BLH) in Lombok Barat. Borobudur/Yogyakarta/Prambanan 1) Yogyakarta Special Region This is one of the few provinces in Java that has been selected for a few No area of strengthening. BAPPEDA integrated master plans, including connectivity (e.g. establishment harbors, ports) and road and railway accessibility with MPWH. They are also currently working on an integrated solid waste feasibility study for three major cities (Solo, Semarang and Yogyakarta). This shows their management capacity and their understanding of regional development master planning. 2) MOEF Kabupaten Magelang With a totaled of 81 staff members, the team has two staff with AMDAL No area of strengthening. certificates. They have enough skilled staff to process the UKL-UPL documents and also the SPPL documents. They are also preparing local regulations on solid waste management and currently waiting for the approval from the district level. They also published their technical 76 DRAFT, June 21, 2017 management booklet on solid waste management in 2016 together with a feasibility study and AMDAL done by the province for the final disposal area. There are critical needs at the temporary disposal locations to implement the 3R approach to waste management prior to the final disposal at the landfill. 3) MPWH, Yogyakarta Providence. For the training for the local MPHW staff in Yogyakarta, it is done No area of strengthening is through the training center (Balai) and trained according to the same needed. training module determined by BPSDM. Different DGs of MPHW (e.g. Highway – Bina Marga, Water Resources, Human Settlements – Cipta Program Management Support Karya) staff have training organized by the Balai, which covering (through Program environmental and social topics including land acquisition and Management Support environmental documents for UKL-UPL/ SPPL activities. The working Consultants’ Services financed relationship with the central MPWH and PWH agencies at the provincial under the IPF, and/or level is good in terms of program implementation. additional qualified MPWH staff) to provide coordination and training. 4) Borobudur Heritage Conservation The current monitoring and maintenance implementation plan by the No area of strengthening is Institution Conservation Agency are as follows: needed. 1) They have their own team that is focused on carrying out restoration and conservation of the Borobudur Temple. All workers were trained Program Management Support under the UNESCO program and they were sent to Cambodia to learn (through Program about the restoration process in Angkor Wat. They have a joint training Management Support with UNESCO on conservation techniques and the training is held at Consultants’ Services financed the Borobudur Conservation Agency. under the IPF, and/or 2) Monthly reports on micro-climate data are compiled and sent to additional qualified MPWH UNESCO periodically and the weather station is being managed by the staff or possible UNESCO conservation agency team. support) to provide 3) A team of cleaning and protection workers that works round the clock coordination and training. to clean and cover the stupas of the Borobudur Temple each time there is volcanic eruption from Mount Merapi. Currently there is no restriction on the number of tourist that can visit the Borobudur Temple each day. They can only report and submit any environmental impacts report to the provincial level. Their cost of restoration is about 4-5 million IDR each year; this includes the cost of instruments/tools, manpower, and projects with local communities. In total, the agency currently has about 137 staff members and about 21% of the staffs have completed university. Their research units also published own conservation journal and complied conservation report to World Heritage committee. 77 DRAFT, June 21, 2017 Table Notes: 1 JICA. Ex-Post Evaluation Study on Regional Development Policies for Local Governments Report . March 2008. PT. Indokoei International, Indonesia. 2 Deltares. Institutional strengthening for IWRM in 6 Ci’s river basin territory, Indonesia Package B. Government of Indonesia. 2009 – 2012. 3 Operational activity report for BLH North Sumatera (Technical Unit for Monitoring Water Quality Lake Toba) Year 2012 – 2015. 78 DRAFT, June 21, 2017 6 INPUTS TO THE PROGRAM’S DESIGN AND ACTION PLAN 61. Based on the Program Environmental and Social Systems Assessment, gaps identified with respect to the PforR Policy, data collected during site visits conducted to potential Program locations, and consultations with various stakeholders, the measures summarized in Table 11 are proposed to improve the performance of the environmental and social management system for the Program. The proposed measures will be implemented in one or more of three different ways as indicated in the table: as part of Results Areas 2 and 4, by inclusion in the IPF component of the Operation, or as part of the Program Action Plan (PAP). 62. The MPWH (RIDA) will be allocating Program Management Support Consultants’ Services financed under the IPF, and/or additional qualified MPWH staff to the following tasks: a) Providing assistance to the RIDA Team in the coordination and synergy of program implementation related to the Tourism Development Program; b) Assisting the RIDA Team in conducting activities and compiling documents (including preparation of the UKL-UPL/AMDAL documents and preparation of the Social Environmental Strategic Assessment (SESA)). This is also related to the other activities component of the Tourism Development Program; c) Preparing and submitting reports on the implementation of their duties to the Head of RIDA through coordination with the RIDA Team. 63. The capacities and capacity-building needs of other national agencies involved in the PforR and provincial and local government agencies that will be responsible for activities supported by the Program are described in the ESSA. The implementation and types of capacity building training programs for other key ministries to be funded under the IPF component of the Operation are described in the ESMF and will not be repeated in the ESSA. Table 11. Environmental and Social Measures for the Program Design and Action Plan. Environmental and Social Objective Implementation via Timing Responsible Actions 79 DRAFT, June 21, 2017 Prepare Integrated Tourism Master Plans (ITMPs) for each destination. Undertake free, prior, Ensure integrated informed consultations that development of lead to broad community tourism facilities and support during the supporting preparation of the ITMPs infrastructure and downstream plans ensuring the cultural appropriateness of, and IPF (technical equitable access to, assistance) component Program benefits. of the Operation, especially the ITMP by August Ensure that the Provide training and Integrated Tourism 2018, with destination’s assistance to involved Master Plan (ITMP) interim environmental, social, agencies implementing the Consultants’ Services, deliverable to and cultural investments in areas where and downstream inform the 2018 opportunities and there is IPs presence in plans. expenditure MPWH constraints are carrying out a free, prior, program. considered in informed consultations that Program Management development planning lead to broad community Support52 to provide During the Avoid locating support to the Program training, review IPPs, implementation infrastructure in during the social monitor their of the PforR. disaster-prone areas assessment and to empower implementation, the affected IPs in and facilitate benefitting from the collaboration among Program and address involved agencies. Provide opportunities potential impacts through for stakeholders, the development of the including indigenous Indigenous Peoples Plan peoples (IPs) and (IPP).51 vulnerable groups, to participate in the Assist and facilitate the planning process collaborative efforts of various agencies responsible for IPs empowerment. 51 This includes support to the development of a practical tool/guidance tailored for the Program to implement free, prior, informed consultations that lead to broad community support and to empower IPs so that they will benefit from the Program as operationalization of the relevant sectoral laws and regulations. 52 Through Program Management Support Co nsultants’ Services financed under the IPF, and/or additional qualified MPWH staff. 80 DRAFT, June 21, 2017 ITMP to recommend the arrangement through stakeholder mapping. Mitigate risk that Establish actions of tourism Establish arrangements or arrangements as part development itself will strengthen emerging of Program Action not degrade the natural arrangements, such as MPWH Plan and and cultural resources Sustainable Tourism Ministry of implementation Arrangements that attract the visitors. Observatories (STOs), as Tourism throughout Program established end part of UNWTO Universities period is incentivized 2017; Mitigate risk that International Network of Environmental in Results Area 4, Ongoing natural and cultural Sustainable Tourism Management where its regular implementation resources that IPs Observatories (INSTO), for Agency reporting is a DLI. depend on for their monitoring and protection (BLH) living and customary of natural and cultural Program Management practices become more assets at each destination. Support53 to provide limited or restricted. training to protection agencies. Community satisfaction surveys. 54 Anticipate potential for social conflict and provide for conflict management in Integrated Tourism Master Plans. Integrated Tourism Include harmony with local Master Plans (IPF); Avoid social conflict social values and culture in RA4 financing and During the MPWH that could occur as a development plans. results indicators for implementation Ministry of result of tourism Leverage uniqueness of the community awareness of the PforR Tourism development destination by being raising programs and sensitive to local culture. community feedback Enhance local tourism surveys. awareness raising programs (“Sadar Wisata�) and strengthen community feedback through annual surveys. 53 Through Program Management Support Consultants’ Services financed under the IPF, and/or additional qualified MPWH staff. 54 As part of the local community satisfaction surveys (under RA4, where increased satisfaction is aimed for over the Program period) on satisfaction with participation in destination planning and budgeting processes as well as access to Program activities, sufficient IPs will be included to monitor their satisfaction as well. 81 DRAFT, June 21, 2017 Include assistance and livelihood restoration especially to squatters and the vulnerable groups in the Abbreviated LARAPs.55 Provide budgets to support Program Management assistance and livelihood Support56 to provide Ensure livelihoods are restoration activities. training, review restored when people Assess capacity to Abbreviated LARAPs (including IPs and implement Abbreviated and a Plan of Action MPWH During the other vulnerable LARAPs and provide (as applicable), Central and implementation groups) affected by training to agencies monitor their local of the PforR investments lose land, implementing the implementation, government other assets, or access Abbreviated LARAPs as provide training and to assets. needed. facilitate collaboration Provide assistance and among involved facilitation on the agencies. collaborative work among involved agencies to effectively prepare and implement the abbreviated LARAP. Program Management Support. Include health and safety in all environmental Implementing Minimize risk of MPWH management plans. /contracting agencies accidents to workers Ongoing local to supervise and local residents government Supervise adherence to contractors for safety rules. compliance (RA1). Adoption of the Investment Ensure that funds from and Expenditure Menu of the PforR Program are the Program, the not used to support mechanism for reviewing investments that are the proposed annual work MPWH in ineligible because of plan against the Menu and Before loan Program Action Plan consultation significant adverse, the Integrated Tourism effectiveness with the Bank environmental or social Master Plans, and the impacts that are screening mechanism for sensitive, diverse, or year 1 investments and unprecedented. proposed additions to the Menu. 55 As applicable this should include a Plan of Action in the case that an investment lead to access restriction to natural resources in designated parks and protected areas. 56 Through Program Management Support Consultants’ Services financed under the IPF, and/or additional qualified MPWH staff. 82 DRAFT, June 21, 2017 Improve quality of Develop and implement a UKL-UPLs and tourism-specific training AMDALs that often program for consultants Developed end MPWH lack analytical rigor; that prepare UKL-UPL 2017 (Program are weak in the areas of Program Management and, as applicable, Action Plan) and Ministry of cumulative impacts, Support and/or RA4 AMDALs and for the ongoing Environment associated facilities, agencies that review, implementation and Forestry analysis of alternatives, approve, and enforce (MOEF) and social impacts; and them.57 are not always well implemented. 57 Most of the investments in Results Area 1 of the Program (Table 3) will require UKL-UPL, but an SPPL will suffice for some. Few, if any, are likely to need AMDAL. 83 DRAFT, June 21, 2017 7 ENVIRONMENTAL AND SOCIAL RISKS 7.1 Potential environmental and social risks 64. Environment. The main identified environmental risks before measures to avoid or mitigate them are put into effect are: (i) individual infrastructure investments may proceed in a non-integrated manner, without consideration environmental constraints at the destination level, or of interactions and cumulative impacts, with the result that tourism development degrades the natural and cultural resources on which it depends; (ii) environmental assessments may lack analytical rigor and sufficient depth, particularly on social issues; (iii) environmental management and monitoring plan implementation may not be adequately monitored or enforced; (iv) natural and cultural resources important for tourism may be degraded by third-party actions not related to the Program; and (v) disregard of health and safety rules will pose risk of accidents to workers and local residents. 65. Social. Items (i) through (iii) in the paragraph above are risks that apply equally to the human environment. Other social risks, again before avoidance or mitigation measures, are: (i) Indigenous Peoples (i.e., Masyarakat Hukum Adat, which fall under the criteria as per World Bank OP 4/10), local community and/or vulnerable groups may not benefit equitably from the Program; (ii) Indigenous Peoples may be adversely affected through loss or degradation of physical assets, cultural values, or livelihoods, or through restriction of access to natural resources important for their customary practices; (iii) social conflicts may arise, resulting in local unrest and delays in implementing Program investments; and (iv) the livelihoods of persons losing land or other assets, or losing access to assets on which their livelihoods depend. 7.2 Risk Mitigation 66. The Program has three vehicles to mitigate the environmental and social risks: the Program design itself, specifically Results Area 1 which focuses on addressing existing basic services gaps and reversing environmental degradation, Results Area 2 to promote local participation in the tourism economy, and Results Area 4 to build capacity for integrated and sustainable tourism development; the IPF component of the Operation that will support specialized consulting services;58 and the Program Action Plan. The measures to fill gaps in the national safeguards system and to mitigate risks identified in Table 9 have been summarized in Table 11, and the implementation vehicle for each is indicated. Two of the measures warrant elaboration here. 58 For (i) integrated tourism master planning; (ii) downstream planning documents; (iii) Program management capabilities, including capacity building to strengthening the natural, cultural and social asset monitoring and preservation capabilities; and (iv) additional studies related to SME and skill development and business environment improvements. 84 DRAFT, June 21, 2017 67. Integrated Tourism Master Plans. Capabilities for integrated master planning are included in Results Area 4, but the IPF component is financing the engagement of the necessary consultants’ services. The terms of reference for the plans call for:  Review of the legal and statutory framework within which the Integrated Master Plan will be prepared for the specific destination  Consultation with stakeholders. In the case that IPs presence can be identified and potentially affected by any proposed tourism development, carry out a free, prior, informed consultations (FPIC).  If sufficient information on the presence of and potential impacts on IPs is available for a particular land/infrastructure/facilities development as recommended by the ITMP, and if it has been decided that the ITMP recommendation will be implemented, then the Consultant will also prepare an Indigenous Peoples Plan (IPP) in accordance with the Indigenous Peoples Planning Framework (IPPF) as specified in the ESMF  Assessment of growth in demand (population growth, tourism, commercial, industrial, agriculture/fishing)  Assembly and mapping of base line information (land use, topography, hydrology, vegetation, infrastructure, protected areas, cultural sites, population including ethnic minorities, vulnerable group, IPs)  Collect and mapping baseline information including land ownership status and typical land issues particularly in the clusters of tourist attractions. The ITMP consultant will consider potential land issues as one of the various factors in determining the physical/land development plans in the ITMP59.  If sufficient information on the land acquisition and/or resettlement is available for a particular land/infrastructure/facilities development as recommended by the ITMP, and if it has been decided that the ITMP recommendation will be implemented, then the Consultant will also prepare a Land Acquisition and Resettlement Action Plan (LARAP) in accordance with the Land Acquisition and Resettlement Policy Framework (LARPF) as specified in the ESMF60 59 The Program will document the land ownership, issues, and resolution status of such land issues in the strategic tourism areas in all of the three destinations as part of the ITMP preparation. The ITMP will screen and identify the environmentally and socially sensitive areas, including those where legacy issues on land remain. The ITMP, through its analysis of development opportunities and constraints, will direct the development of tourism-related infrastructure including those under RA-1 so that it will not impinge on environmentally and socially sensitive areas, including those with legacy issues on land. Land legacy issues can be considered as constraints from further development of the affected area in the ITMPs, until the issues are resolved meeting the Indonesian Regulations, or if there is a clear plan to resolve this issue (with monitoring milestones and clear timeline) in accordance with the prevailing Indonesian Regulations. Such locations will be excluded from short-term or medium-term tourism development or beyond, until the legacy issues are addressed properly, agreed by the involved parties, in accordance to the prevailing Indonesian laws and regulations. 60 For addressing land legacy issues : The planning area of the ITMPs might have some sites with land legacy issues. In this case, the consultant of the ITMPs should carry out rapid assessment to: (a) identify the sites (with map) with land legacy issues during the development of baseline information; (b) assess the potential risks and opportunities should such sites be included in the ITMPs; 85 DRAFT, June 21, 2017  Assessment of infrastructure planning required in support of future development (water supply, wastewater management, storm water management, solid waste management, transportation, energy, telecommunications and other utilities)  Development of detailed guidelines required to manage development (water use, landscaping, architecture, scenic vistas and view-points, recreational use of waterways, environmental and social opportunities and constraints, etc.  Preparation of a phased spatial development plan, including land use recommendations to accommodate future growth with consideration of among others, potential persistent or future land issues  Preparation of a phased investment plan in infrastructure and services to guide and support tourism development. 68. The integrated tourism master planning process will address the environmental and social risks of non-integrated development and related degradation of natural and cultural resources, lack of attention to cumulative impacts, and adverse impacts of third-party activities. The planning process will provide a mechanism for consultation with all stakeholders including IPs, traditional communities, women, and other vulnerable groups to reduce the risks that they will be adversely affected or will not share in Program benefits. RA 1 could also address some of the potential social risks and impacts of the Program. Decisions on the priorities and locations of physical investments to be implemented under RA 1 will be taken from the recommendations of the ITMPs. As the ITMPs already took consideration of IPs, vulnerable groups, local communities and suitable (legally and physically) land for physical/land development, the physical investment to be built under RA 1 should provide equitable access and services to these groups. (c) assess options for possible solutions, each with its risks and opportunities; (d) historical background, identify legacy issues and status of solutions that have been achieved by the local government and the likely solutions in the future The rapid assessment should be done in close discussion with the relevant local government agencies (could be provincial or district or cities), and include site visits and interviews with relevant stakeholders. The report of this rapid assessment will be part of the information for the ITMPs consultant team that should be used as key consideration in analyzing and developing development scenario in the ITMPs and in recommending land development and physical investment The ITMPs consultant team should share the Rapid Assessment Report and discuss with the RIDA and the Bank to find a solution on how to proceed with the ITMPs, provided tradeoffs between the risks (including reputational risks) and opportunities. Some possible options which might make it feasible to proceed with the ITMPs based on the information provided by the Rapid Assessment Report and agreement between the RIDA and the Bank include: (a) include the sites with legacy issues in the planning area with clear and agreed measures to mitigate risks as part of the provisions in the ITMPs; (b) exclude/screen out the sites with legacy issues from the planning area, with provisional measures to avoid associated risks with the remaining planning area; (c) a combination of (a) and (b) for the cases in which an acceptable solution through phased-resolutions (issues can be solved one after the other gradually with clear time frame) can be found based on Indonesia regulations. 86 DRAFT, June 21, 2017 69. As explained in Table 9, there is a need to ensure that FPIC is implemented properly during the preparation of ITMPs. The Consultant for the ITMPs will work with IP organizations (such as AMAN 61 network and local universities) to ensure IP participation in the public consultations. As part of the local community satisfaction surveys (under RA4, where increased satisfaction is aimed for over the Program period) on perceived benefits received from tourism (individual or community benefits, economic or social benefits, conservation of traditions, etc.), changes in socio-economic conditions (e.g. prices, access to resources, traditional values), changes in environmental conditions (improvement or degradation), interaction with tourists, sufficient IPs will be included to monitor their satisfaction as well. IPs are also part of the “sadar wisata� tourism awareness raising programs. 70. Ensuring the implementation of Abbreviated Land Acquisition and Resettlement Action Plan (LARAP) and Indigenous Peoples Plan (IPP). As commonly practice, preparation and implementation of LARAP and IPP are the responsibility of the owners of the physical investment. This means that budget to carry out these activities will have to be made available by the owners of the physical investment, which could be kabupaten/city government, provincial government, and/or central government depending on the nature of the physical investment. Once the ITMPs (including the Detail Development Plans—DDPs) are completed, these three levels of governments should be able to identify which physical investment (and the location) would need land and/or involve IP communities. ITMPs would also identify the extent to which priority physical investments need land. When the Program has decided on which physical investment will be implemented in a given year, the consultant of ITMPs will inform the concerned agencies at the kabupaten/city/provincial/central government to prepare a budget allocation in their APBD I/II/APBN to prepare (abbreviated) LARAP/IPP and to implement them in the following fiscal year or sooner. Preparation for land acquisition in accordance with Law No. 2 Year 2012 62 and its implementing regulation should start immediately. Simultaneously, preparation of IPP and its implementation by concerned local government (kabupaten and/or provincial) should start after the completion of the ITMP. The Program Management Support (particularly the social development specialist, provided through IPF financed Consultants’ Services and/or additional qualified staff at the MPWH) will monitor the budgeting process for the preparation and implementation of the abbreviated LARAP and IPP at 61 Aliansi Masyarakat Adat Nusantara or Indigenous Peoples Alliance of the Archipelago. AMAN has as members more than 2,300 MHA communities in the country covering 17 million individuals. AMAN has also networks in Lombok and Toba destinations. They have information on the presence and characteristics of their members MHA communities in the respective provinces until the village level. 62 As explained in the Table 9 on Evaluation of the GoI Environmental and Social Systems in Relation to the PforR Policy of the World Bank, Policy Element 4, Law No. 2 Year 2012 regulates that compensation level is assessed by a licensed- independent appraisers, and is defined based on values of physical assets and non-physical assets including premium. Regardless whether the abbreviated LARAP and/or LARAP is prepared and implemented under the IPF or not, compensation level defined based on consistent implementation of Law 2/2012 reflects the replacement value as required by OP 4.12 on Involuntary Resettlement. 87 DRAFT, June 21, 2017 the local government level ensuring that budget allocation will be available timely and sufficiently. As specified in Table 9, Policy Element 4 and 5, respectively, the abbreviated LARAP should include assistance and livelihood restoration plans, especially for squatters and the vulnerable, and the IPP (including Social Assessment) should be developed with a free, prior, informed consultations that lead to community broad support ensuring the cultural appropriateness of, and equitable access to, Program benefits. 71. Arrangements for monitoring and protection of natural and cultural resources important for tourism. Establishment of these arrangements is part of the Program Action Plan and implementation throughout the Program period is incentivized in Results Area 4 of the Program, where its regular reporting is a DLI. “One size fits all� is probably not applicable; arrangements are likely to be different from one location to another. Options range from setting up a single, special purpose agency on the one hand, to formalizing a cooperative agreement among existing organizations on the other. Possible participating agencies include:  Sustainable Tourism Observatories (STO) established under a UN WTO program to monitor indicators for sustainable tourism. The STO could function as a single monitoring entity, if the Program provided additional budget, but it more likely would be part of a cooperating group.  Local universities. The Lombok STO is housed in University of Mataram. Faculties of economics, sociology, and archaeology may be good choices for monitoring socio- economic indicators and effects on cultural property  Environment Department (BLH) in district of provincial government. BLHs already have responsibility to monitor environmental quality and enforce implementation of environmental management plans but are typically understaffed and under-resourced to fully carry out these functions.  Management Authority for the destination. Where such an authority has been established, as is the case for the Lake Toba destination, it would have to be involved in monitoring and protection. It would at the very least receive the monitoring reports and participate in any corrective measures the reports may call for.  Provincial and District Social Offices to monitor the impacts caused by natural resources degradation and negative excess of tourism that put more threat to all vulnerable groups in society such as children, the poor, and disabled as they are entitled to greater protection of human rights.  Special agencies for the destination, such as those operating at Borobudur. 7.3 Evaluation of the Environmental and Social Risks 72. Table 12 presents the environmental and social risk screening in the format of the Environmental and Social Risk Screening Worksheet included as Attachment 4.3 in the Interim Guidelines Notes to Staff on Assessment. Table 12. Environmental and Social Risk Screening Risk Environmental Risk Screening Social Risk Screening Associated or The Program will have many The Program will have a number of positive Likely Social environmental benefits resulting impacts and benefits to the local and from improving solid waste communities, which will ultimately improve 88 DRAFT, June 21, 2017 Environmental management, water supply and the sustainability and carrying capacity of Effects waste water and sanitation services. tourism destinations. Local communities will Also, some of the interventions will benefit from the development of improved have indirect benefits such as infrastructure and services, and they will reducing traffic congestions, have opportunities to establish or expand improving road safety, and possible their current economic activities or tourism- enhancement of environmental related businesses, and to create new jobs. services. The assessment indicates There are some social risks and potential that no Category-A-type adverse impacts. The main risks and impacts interventions are expected and that are: all such interventions will be screened out during the planning Potential social risks impacts would occur stage by screening against the mainly due to land acquisition and/or Investment and Expenditure Menu resettlement, including access restriction to and the ITMPs, and—as long as public goods and natural resources, and ITMPs are not finalized—a disturbance (e.g. livelihoods, health, screening mechanism based on convenience) during construction. Activities Annex 3. involving large-scale and/or significant social There are some environmental risks impacts, including induced social impacts, and potential adverse impacts. The will not be financed under this Program. main risks and impacts are: Other typical potential adverse social impacts (i) individual infrastructure of tourism development (beyond the impacts investments may proceed in a non- of land acquisition and/or resettlement) may integrated manner, without include: greater economic and social consideration of environmental disparity and limited access for the constraints at the destination level, community to public natural resources (such or of interactions and cumulative as beaches) due to “enclave tourist resort� impacts, with the result that tourism development; internal conflict within development degrades the natural communities due to inequality of capacity to and cultural resources on which it harness new opportunities, especially for the depends; less-educated, poorest, elderly, and disabled; (ii) environmental assessments loss of jobs due to conversion of agricultural may lack analytical rigor and activities into tourism-related build-up areas; sufficient depth, particularly on disturbance and unsustainable social issues; commercialization of local cultures, (iii) environmental management practices, and values; and loss of livelihoods and monitoring plan and assets due to land acquisition. implementation may not be Community health and safety may also be adequately monitored or enforced; issues, particularly transmitted diseases and (iv) natural and cultural resources the dangers of busier traffic. Also, if not important for tourism may be managed properly, there may be induced degraded by third-party actions not uncontrolled growth of settlements and/or related to the Program; and small businesses surrounding the tourist (v) disregard of health and safety attractions. rules will pose risk of accidents to workers and local residents. Environmental Lombok destination includes three key areas for tourism development: the Gili and social Islands, Senggigi and the southern coast. context The Borobudur area (Kecamatan Borobudur and Kecamatan Mungkid) includes the 89 DRAFT, June 21, 2017 Borobudur Temple Complex—an UNESCO World Heritage Site—that consists of Borobudur Temple—a ‘must-see’ Buddhist temple dating from the 8th and 9th century—, and Pawon Temple and Mendut Temple; The Prambanan-Boko area (Kecamatan Prambanan in Central Java Province and Kecamatan Prambanan in the Special Region of Yogyakarta) includes the Prambanan Temple Compound and Ratu Boko. Prambanan Temple Compound—another UNESCO World Heritage Site—consists of Prambanan Temple—a Hindu temple dating from the 9th century—, Sewu Temple, Bubrah Temple and Lumbung Temple. In Yogyakarta (Kecamatan: Kraton, Gedongtengen, Danurejan, Ngampilan, Kotagede and Gondomanan), key attractions are the Kraton (Palace), the sultan’s residence and a living museum; Taman Sari (Water Castle), a former royal garden of the Sultanate of Yogyakarta, and Malioboro shopping street. Within the Lake Toba destination boundary there are three areas for tourism development. First, Parapat (Kecamatan Girsang Sipangan Bolon) is the main gateway to Samosir Island in the lake. Samosir Island (especially Kecamatan Simanindo and Kecamatan Pangururan) has several tourism attractions such as the Stone Chair of King Siallagan and King Sidabutar’s Tomb; Ambarita, a traditional village that provides sights of Batak culture; Parbaba beach; the hot springs at Gubung Pusuk Buhit Mountain; and Tutuk Village. Third, Kecamatan Balige offers some interesting Batak architecture and is the closest lake-side village to Silangit Airport. Program The Program has a strategic The sustainability of the program is highly Strategy and objective of improving services and dependent on communities’ commitment and Sustainability economic activities in tourism sense of ownership of and benefits from the destinations. There are obvious various components and activities and the environmental consequences capacity of the implementing agencies to resulting from low access to manage the Program in a sustainable manner services, such as solid waste and establish the necessary mechanism to management, water supply and ensure constant dialogue between local sanitation. Program investments communities and the government. implemented under ITMPs will improve the environmental sustainability of tourism development. Institutional The country environmental and social system already includes an institutional complexity and structure for assessing social and environmental impacts, identifying risks, pre- capacity identification of impact/risk mitigation measures and monitoring and follow up of development projects. The institutional capacity of all involved different stakeholders had been assessed and recommended action is in the Program Action Plan. There are also some capacity limitations with regard to available external experts and consultants which will be addressed in the Program Management Consultant. The institutional risk, given the existing conditions, is moderate; but the PAP includes measures to strengthen the capacity of the key stakeholders which are designed to minimize those risks. Reputational There are no governance or The Program includes a number of measures and political corruption risks associated with the to mitigate potential social risks and to risk context environmental aspects of the ensure citizen engagement and participation Program. in planning and implementation of the Program. If the committed measures cannot 90 DRAFT, June 21, 2017 be implemented adequately, there might be a risk of losing local people’s trust and confidence to the government and the Bank. Legacy issues related to land acquisition for investments not financed under the Program, but perceived to be associated to the Program, could pose reputational risk. The ESSA describes measures to ensure that such issues are identified in the ITMP process and to resolve the issues or, in the event that resolution is not possible, to eliminate the affected area from the Program. Overall The assessment indicates that the The ESSA sets forth the measures needed to Assessment program will not include Category- address and mitigate the social risks. In the A-type activities. Accordingly, the meantime, the design of the Investment and PforR instrument is suitable for Expenditure Menu, combined with the use of financing the program. The overall the ITMPs, avoids activities/projects that environmental risk for the program could be of significant social risk (e.g. those is moderate. The implementation of activities that may result in physical the recommended PAP would displacement, impacts on livelihoods or effectively minimize the risk. significant involuntary resettlement impacts). Although the social system assessment indicates that the risk is moderate, the measures recommended in the PAP and elsewhere in the Program design will minimize these risks. 73. Table 13 summarizes the environmental and social risks associated to the Program, developed based on the explanation in the Section 1.3 on Typology of Works and Activities under each RA, Section 3 of this ESSA, and Table 12 above. Table 13. Global risk assessment of the Program. Risks Valuation Environment Social Environmental and social effects associated with Moderate Moderate Program activities National environmental and social context Low Low Strategy and sustainability of the Program Moderate Moderate Local capacity and institutional complexity Moderate Moderate Reputational and political risk Low Moderate Global evaluation Moderate Moderate 91 DRAFT, June 21, 2017 8 INPUTS TO THE PROGRAM IMPLEMENTATION SUPPORT PLAN 74. Table 14 indicates the environmental and social activities to be undertaken by the Bank or its consultants within the Program Implementation Support Plan. Table 14. Environmental and Social Support Plan for the Implementation of the Program Activity Timing  Review of draft Integrated Tourism Master Plans When documents are available and records of stakeholder consultations  Evaluation of natural and cultural asset When arrangements are established and functioning monitoring and protection arrangements  Review of monitoring reports  Review annual work plans to check that the During Bank implementation support missions adopted screening procedure has been applied in the selection of projects for PforR funding; and abbreviated LARAP and IPP (as applicable) for the proposed investments have been prepared.  Supervisions, field visits to destinations and During Bank implementation support missions project sites o To review implementation progress of the environmental and social aspects of the action plans o To review the implementation of the training programs on environmental and social safeguards  Based on the findings of implementation support At the Mid-Term Review missions, as needed, implement independent environmental and social audit of the Program 92 DRAFT, June 21, 2017 9 INFORMATION DISCLOSURE, CONSULTATION AND PARTICIPATION 75. In the course of preparing the ESSA, the task team made field visits to five tourism destinations: Belitung Island, Borobudur-Yogyakarta-Prambanan, Lake Toba, Lombok, and Tanjung Lesung. Consultations were conducted with provincial and district officials, destination management authorities (where already established), the Sustainable Tourism Observatory for Lombok at University of Mataram, tourism development companies, NGOs, and local residents and businesses. In Jakarta, the team consulted with officials from the Ministries of Public Works and Housing, Tourism, and Environment and Forestry. Annex 2 provides details on the visits and persons consulted. 76. The Bank will publicly disclose the draft ESSA and conduct stakeholder consultation workshops in July 2017. The final version of the ESSA incorporating stakeholder inputs from the consultations on the draft will be disclosed at RIDA of MPWH’s website www.bpiw.go.id, in the Bank’s InfoShop. Results of the consultations on the draft are summarized in Annex 1. 77. Following the kick-off meeting of the identification mission of the Tourism Development Program (February 15, 2017), a series of consultations with different stakeholders to gather information from key government agencies at the national level, provincial level, district level, and at the destinations has been conducted in order to develop the ESSA. During the data collection for ESSA development, the consultations with key government agencies and concerned stakeholders at the national, provincial, and district level were conducted jointly by the Regional Infrastructure Development Agency (RIDA) of the Ministry of Public Works and Housing (MPWH) and the World Bank Safeguards Team (Environmental and Social Specialists). The process of consultation includes discussions with the heads of the relevant agencies and one-on-one meetings with specific agencies. Site visits to the tourism destination area were also conducted by the World Bank Safeguard team. The output of the consultations is the environmental and social systems assessment. 78. The tourism destination areas that the Safeguards Team had visited included Lombok, Tanjung Lesung-Banten, Lake Toba, Sumatra, and Tanjung Kelayang-Bangka Belitung. Based on the screening and scoping and also the prioritized three tourism destinations—Lake Toba, Borobudur, and Lombok, the Safeguards Team prepared the assessment of the environmental and social systems of the proposed Program. The initial consultations for were conducted from February 2016 to June 2016. 79. A more thorough and focused series of consultations were applied in the prioritized tourism destinations areas (Borobudur-Yogyakarta-Prambanan, Lake Toba, and Lombok). The Safeguards Team explored not only the current environmental and social issues, but also the potential environment and social effects that may be relevant to the Program. Findings of the ESSA included identification and assessment on social and environmental regulatory frameworks, specific institutional arrangements and the capacity building needed for mitigating tourism potential effects during implementation stage. The second stage of consultations was held from August to October 2017. 93 DRAFT, June 21, 2017 80. The stakeholder consultations will be carried out in two stages. The first initial consultation was done in December 2016 on the first draft of the Environmental and Social Systems Assessment (ESSA) with the stakeholders who are part of the national tourism coordination team. The second-stage stakeholder consultations will include local-level stakeholders at the national level and in three priority destinations, i.e., Lake Toba, Borobudur- Yogyakarta-Prambanan, and Lombok, and will be accompanied by the main executing agency for the Program, MPWH-RIDA. Relevant inputs or comments from the public consultations will be incorporated into the final draft ESSA. 94 DRAFT, June 21, 2017 ANNEX 1: RESULTS OF PUBLIC CONSULTATION [To be completed after consultations on the draft] Draft ESSA of Indonesia Tourism Development Program Who & how many How these issues were Key issues raised during the No When Where people participated addressed in the revised consultation documents 95 DRAFT, June 21, 2017 ANNEX 2: FIELD MISSIONS AND LIST OF MEETINGS 1. Lombok, Mandalika (20th February, 2016) Lombok BAPPEDA of Nusa Tenggara Syamsudin S. Hut Head of Sub-sector for Spatial Barat and Natural Resources BAPPEDA of Central Taufikurrahman Pua Note Head of Sub-sector for Lombok District (Arman) Physical Infrastructure and Regional Development FTKDP (Tourism Destination Governance Forum), Central Lombok Lombok Destination Asmuni Irpan Facilitator Management Organization (DMO) GIZ – RED NTB Prayitno Basuki Regional Coordinator Eco Regions Indonesia John Higson President Director Investment and Integrated Winarto, MM Head Permit Agency, Central Lombok District 2. Tanjung Lesung, Banten (22nd – 24th February, 2016) Banten BAPPEDA of Banten District Hudaya Head of BAPPEDA, Banten PT Jababeka (Tanjung Setiawan Mardjuki Director Lesung) PT Jababeka (Tanjung Alan Ye Executive Director Lesung) PT Jababeka (Tanjung L.M. Wardhani Advisor/Infrastructure Lesung) Director PT Jababeka (Tanjung Poernomo Siswoprasetijo Director Lesung) PT Jababeka (Tanjung Rully Lasahido Managing Director Lesung) PT Jababeka (Tanjung Setiawan Mardjuki Director Lesung) 3. Medan-Lake Toba, North Sumatera (2nd – 4th March, 2016) North Sumatera BAPPEDA of Samosir District Geopark Toba Alimin Gintang Chairman Geopark Toba Theodora General Manager District Government of Rafidin Simbolon Bupati, Kabupaten Samosir Samosir, North Sumatera 96 DRAFT, June 21, 2017 4. Tanjung Kelayang, Bangka-Belitung (14th – 15th June, 2016) Bangka - Belitung BAPPEDA Belitung Holmes Kabid Fisik dan Prasarana BAPPEDA Arpani Head Public Works Rosfandi Kabid Tourism and Creative Hermanto Head BLHD Mardis Molik Kabid AMDAL Bina Marga Oscar Kabid Cipta Karya Ibnu Kabid Agus Tourism and Creative Senta Kabid Destinasi Forestry, Agriculture, and Hendra Kabid Forestry Food Marine and Fishery Firdaus Idhamsyah Kabid Capture Fishery Province of Bangka-Belitung Darmansyah Advisor to the Governor (former Bupati) 5. Semarang-Borobodur, Central Java (15th – 17th August, 2016) Central Java Borobudur Conservation Marsis Sutopo Director Office Borobudur Conservation Iskandar M. Siregar, S.Si Head of Conservation Service Office Section Office PT Taman Wisata Candi Achmad Muchlis Head of Investment Borobudur PT Taman Wisata Candi Pujo Suwarno Secretary of Industry Borobudur PT Taman Wisata Candi Riwaman Pradiptyo Chairman Borobudur Central Java Provincial Agung Tejo Prabowo Secretariat Infrastructure and Government Development Provincial Development Planning Agency at Sub-National Level 6. Lombok, West Nusa Tenggara (17th – 19th October, 2016) West Nusa Tenggara Sustainable Tourism Dr. Akhmad Saufi Team Leader/Lecturer in Observatory (University of Tourism and Hospitality Mataram) Sustainable Tourism Sulhaini Lecturer in Marketing Observatory (University of Mataram) Sustainable Tourism Ida Ayu Putri Lecturer in Tourism 97 DRAFT, June 21, 2017 Observatory (University of Mataram) Sesaot Village Yuni Hari Senin Head of Village Buwun Sejati Village Bambang Kurdi Head of Village Pokdarwis (NGO) (Kelompok Azudin Nur Head of the Pokdarwis Sadar Wisata) Environmental and Research Haris Rayed Head of Agency Agency of NTB Province Environmental and Research Gatot Planning and Development Agency of NTB Province Environmental and Research Nyoman Kasi AMDAL Agency of NTB Province Environmental and Research Syaiful Head of Laboratory Agency of NTB Province Environmental and Research Syahrul Head of Research UPT Agency of NTB Province Environmental and Research Retno Researcher Agency of NTB Province Tourism Agency of NTB Muhamad Secretary of the Agency Province Tourism Agency of NTB Alfi Head of Destination Sub- Province division Tourism Agency of NTB Budi Geo-park Secretariat Province Tourism Agency of NTB Akbar Geo-park Secretariat Province National Land Agency in NTB Dina Mapping Province National Land Agency in NTB Dipta Head, Land Measuring and Province Mapping Section National Land Agency in NTB Mardon Land Title and Registration Province Section National Land Agency in NTB Bayu Land Control and Province Management Section National Land Agency in NTB Elman Land Control and Province Empowerment Section Public Works Agency of NTB Mahfud Secretary of the Agency Province Public Works Agency of NTB Ahlul Housing Province Public Works Agency of NTB Sahdan Bina Marga Province Public Works Agency of NTB Teguh Spatial Plan Province 98 DRAFT, June 21, 2017 Public Works Agency of NTB Syuaib SDA Province Environment Agency of L Edy Sadikin Head of Agency Lombok Barat Tourism Agency of Lombok Ristan Junaidi Head of Agency Barat Tourism Agency of Lombok Sandra Secretary of Agency Barat Public Works Agency of L Sudiana Head of Program Sub- Lombok Barat division Public Works Agency of Utami Head of Section of BM Lombok Barat Public Works Agency of Ahad Head of Cipta Karya Lombok Barat Public Works Agency of Arif Head of Infrastructure Lombok Barat Division BAPPEDA of Lombok Barat H Junaidy Head of Agency Social Affairs District Office of Drs. Faturrahium M.si Head of Office Lombok Barat Social Affairs District Office of Anik Soelistyoi, Bsw Head of Social Lombok Barat Empowerment Sub-division Social Affairs District Office of Drs. Yunus Suhaimi Head of Social of Social Lombok Barat Welfare Sub-division Social Affairs District Office of Lalu Muliadi S.sos Head of Social Lombok Barat Rehabilitation and Violence Sub-division District Land Office of Lombok H Lukman SH, MH Head of Office Barat - NTB Province District Land Office of Lombok I Gusti Ketut Suardika SH Head of Land Title and Barat - NTB Province Registration Section District Land Office of Lombok Salhin SH Head of land Survey, Barat - NTB Province Measuring and Mapping Section District Land Office of Lombok Salah Basyarah SH Head of Land Dispute, Barat - NTB Province Conflict and Litigation Section 7. Other meetings in Jakarta Ministry/Agency Name Title Jakarta Ministry of Public Works and Hermanto Dardak Director General of Regional Housing Infrastructure Development Agency 99 DRAFT, June 21, 2017 Ministry of Public Works and Rezeki Peranginangin Head of Strategic Area Housing Development Center, Ministry of Public Works and Endra S. Atmawidjaja Deputy Director for Big Cities Housing and New Towns Infrastructure Ministry of Public Works and IGW Samsi Gunarta Head of Division/Land Housing Acquisition Facilitation Ministry of Tourism Frans Teguh Director of Destination and Investment Planning Ministry of Tourism Dadang Rizki Ratman Deputy Minister for Development of Tourism Destinations and Industry Ministry of Environment and Heru Waluyo Director of Coastal and Forestry Marine Pollution and Degradation Control Ministry of Environment and Nugraha Prasetyadi Directorate of Environmental Forestry Control and Policies for District and Sector Ministry of Environment and Wahyu Rudjanto Head Balai Kepulauan Seribu Forestry Ministry of Environment and Agus Supriyanto Head Section of Law KSDAE Forestry 100 DRAFT, June 21, 2017 ANNEX 3: SCREENING FOR PROGRAM ELIGIBILITY A Framework for Screening Proposed Investments In terms of environmental and social risk management, the Program must comply with Bank Policy: Program-for-Results Financing issued on July 10, 2015. Activities that are judged to be likely to have significant impacts that are sensitive, unprecedented, or diverse are not eligible for PforR financing. The environmental assessment category that would apply if the Program were financed by a Bank IPF is shown in Table 3 to make clear that no Category A-type investments will be financed under the Program. It is of course possible that an investment that would normally have only moderate impacts could have significant impacts if placed in a location with sensitive environmental, social, or cultural features. One of the objectives of the ITMPs is to prevent this through systematic and sound siting of infrastructure. In the first year of the Program, before ITMPs are finalized, a screening process based on the Indonesian system will be applied. In case the Program’s Steering Committee wants to add new types of investments to the Program’s Investment and Expenditure Menu, they also need to be screened according to the significance of their potential environmental and social impacts using the adopted screening process. This screening process is described in this Annex. For the first-year investments that will be implemented before the ITMPs are completed, and in case the Program’s Steering Committee wants to add new types of investments to the Program’s Investment and Expenditure Menu (Table 3), the Program will rely on the two-level screening system described below to ensure that this policy requirement is met.  Level 1: the Indonesian system for identifying investments for which AMDAL (full environmental and social impact assessment) is required, i.e., projects that in most cases would fall into environmental assessment Category A if being implemented under World Bank safeguards policies, hence are normally not eligible for PforR financing.  Level 2: supplementary screening criteria adopted for the Program to account for the fact that the Indonesian system relies heavily on size thresholds – capacity, area, length, volume, etc. – and thus may exempt a proposed project from AMDAL that could because of sensitive environmental or social context have significant impacts that would make it ineligible for PforR financing. Level 1. Requirement for AMDAL The Indonesian Ministry of Environment Regulation No. 5 of Year 2012 states the requirement on activities required to have AMDAL (full environmental and social impact assessment). It is in itself a two-level screening process. Annex 1, which is an integral part of this regulation, is an extensive list of types of activities organized by sector. A few of them require AMDAL regardless of size, but for most, the size threshold at or above which AMDAL is required is defined. Below the threshold, the less intensive “environmental management effort� (UKL) and “environmental monitoring effort� (UPL) must be prepared, except in cases of negligible impact. UKL-UPL is comparable to the ESMP that is often used for Category B projects being implemented under Bank safeguards. When impacts are negligible, in projects that would be in 101 DRAFT, June 21, 2017 Category C under Bank safeguards, the Indonesian system provides for a third instrument, a Statement of Environmental Management and Monitoring Undertaking (SPPL) to be executed by the proponent. Most of the investments in Results Area 1 of the Program will probably require UKL-UPL, but an SPPL will suffice for some. Annex 1 of the regulation is too extensive to reproduce in this ESSA, but some examples of the types of activities or investment plans which require AMDAL are:  Shoreline land reclamation of ≥ 25 ha  Cut and fill involving ≥ 500,000 m3  Surface water withdrawal ≥ 250 l/sec  Groundwater withdrawal ≥ 50 l/sec  At-grade railway construction ≥ 25 km  Port construction involving piers or breakwaters ≥ 200 m in length  Airports with runway ≥ 1200 m or terminal buildings ≥10,000 m2  Dams ≥ 15 m high  Construction or widening of roads ≥ 5 km that involve land acquisition of 30 ha or more in cities, or 40 or more in rural areas Toll roads ≥ 5 km  Sanitary landfills ≥ 10 ha  Wastewater treatment plants with area ≥ 3 ha or organic load ≥ 2.4 tons/day Annex 2 in this regulation provides for screening of investments and activities regardless of type or scale to determine whether AMDAL is required based on their location sensitivity. Annex 2 lists 20 types of protected or sensitive areas in which AMDAL is mandatory for any activity that could adversely affect the environment. Examples include protection forests, nature reserves, mangroves, peatlands, coastal areas, national parks, coral reefs, cultural preservation districts, and refuges for protected animals and marine biota. Level 2. Supplementary Screening Recognizing that the Indonesian screening process is based on quantitative thresholds and location with respect to protected or sensitive areas, whereas the Bank’s is more risk-based, the main function of this second level of screening is to eliminate from PforR financing proposed investments that do not require AMDAL but are high risk because of their environmental or social context or intrinsic characteristics. The list below is not intended to be exclusive; the Consultants for the Integrated Tourism Master Plans and for Program Management may identify additional criteria for Level 2. An investment for which AMDAL is not required would still be ineligible for PforR financing if it had any of the following characteristics:  It would result in significant conversion or degradation of natural habitat.  It would reduce or cause fragmentation of habitat important for the survival of threatened or endangered species.  It would cause the physical displacement of more than 200 persons. 102 DRAFT, June 21, 2017  It would involve production of hazardous waste or storage or use of hazardous substances that would pose risk to surrounding communities.  It would pose unavoidable risk of destruction of or damage to physical cultural resources.  It would affect land or other assets of indigenous peoples and does not have documented proof of free, prior and informed consultation leading to broad community support.  It would have air emissions that would result in exceedance of the stricter of Indonesian or WHO ambient air quality standards or guidelines.  It would generate solid or liquid wastes for which proper treatment and disposal facilities are not available, and/or produce effluents exceeding the stricter of Indonesian or World Bank Group limits.  It could result in induced development with potentially adverse social and environmental impacts for which adequate local management capacity does not exist.  The proposed location is so sensitive to the potential impacts of the investment that effective mitigation is unlikely. Sites with unique visual amenity, uses for traditional cultural events, and essential sources of livelihoods are examples.  There are land legacy issues that have not been addressed properly, agreed by the involved parties, in accordance to the prevailing Indonesian laws and regulations. The negative list of investment that contains items that the Program cannot finance. They include:  No new landfills  Roads – construction or rehabilitation of roads that require significant resettlement of people (more than 200 people).  No large regional solid waste facilities  No large regional waste water facilities/ system  No new toll roads 103