Project profile — Natural Resources for Development Program in Indonesia

The expected outcomes for this project include: (1) improved sustainable and equitable management of the extractive sector, including revenues, by targeted national, regional and local governments and institutions in Indonesia; and (2) improved energy, environmental and gender-equitable social outcomes, including benefit sharing at local level, from the extractive sector in Indonesia.

Result achieved as of December 2021 include: (1) developed 125 knowledge products to help government officials make evidence-based policies. This improves management of natural resource revenues and environmental, energy and gender-equitable social outcomes from the natural resource sector. It also ensures better transparency, better quality of minerals data and provides clarity on land rights; (2) organized 112 events (including training seminars) to consult with stakeholders, to feed into the knowledge products (in connection with result no.1), to support their dissemination and increase Government capacity. The events provided targeted technical assistance and training to increase the capacity of the targeted institutions to govern and manage the natural resource sectors, including managing its revenues, and ensure equitable access to land and land-related resources. The targeted institutions include the Ministry of Finance, the Ministry of Energy and Mineral Resources, the broader mining, oil and gas authorities and state-owned operators, and the Spatial Planning/National Land Agency; (3) Improved government inventory database on mineral resources data through a review of the National Standardized Inventory System for mineral resources data. The review examined whether the current online systems for reporting mineral resources are effective, and provided recommendations for improving mineral inventory database. As a result, 19 subnational governments’ followed the recommendations and upgraded their online reporting system; (4) Developed 11 fiscal models to support deeper and more precise forecasting of revenue from minerals and subsidy payments for use by the Government. Supported the development of Government of Indonesia’s electronic system for mineral royalties and payment to the Government (ePNBP). As a result, the percentage of mining revenues collected and evaluated against its potential gains has improved from 57% in 2012 to over 70% at the end of the project; (5) increased clarity by government officials on the pathways to reduce and eliminate mercury in artisanal and small-scale gold mining, from a policy and investment perspective; (6) developed tools to ensure inclusivity of vulnerable and indigenous communities during land identification and registration process, including: a) an action plan for vulnerability mapping assessments, and b) an Indigenous people’s plan for a pilot location (Merangin district). These tools help identify vulnerable groups who might face challenges claiming or defending their land rights; (7) promoted gender mainstreaming in the mining activities through various means. This included creating a report on gender mainstreaming, communication materials to continue awareness raising, and an action plan. Overall, this helped government and mining companies’ become more aware of gender issues in extractive sector planning and operations; and (8) completed a series of analyses to reduce environmental pollution and address climate change. This included creating a report on solar photovoltaic (PV) market supply chain in Indonesia and a flare gas regulatory review. It also analyzed green industry potential, climate finance options and the impact of taxing single-use plastic bags.