Upon establishing a shortlist of environmental and social issues under Section 2.3.3, a follow-up analysis was carried out to understand specific environmental and social risks associated with the ERP’s components and sub-components, which covers:
Component 1: Forest and Land Governance. The ER Program will focus on four key aspects that support improved land governance. Component 1 consists of the following sub- components:
o Sub-component 1.1: Strengthening the licensing regime, o Sub-component 1.2: Dispute settlement,
o Sub-component 1.3: Support the recognition of customary (Adat) land, and o Sub-component 1.4: Strengthening village spatial planning.
In addition to leading to significant emissions reductions, it is expected that this component will provide important non-carbon benefits to local stakeholders, including concession companies and local and customary communities;
Component 2: Improving forest supervision and administration. The ER Program will address institutional weaknesses to improve forest supervision and administration. Within the State Forest Area, the focus will be on strengthening East Kalimantan’s FMUs, which cover the entire production and protection forest area. To improve the governance of forests outside the State Forest Area, in particular remaining forests within estate crop areas, the Program will strengthen relevant non-forestry institutions. Component 2 consists of the following sub- components:
o Sub-component 2.1: Strengthening management capacity within the State Forest Area:
Forest Management Unit (FMU) development; and
o Sub-component 2.2: Strengthening provincial and district governments to supervise and monitor the implementation of sustainable Estate Crops;
Component 3: Reducing deforestation and forest degradation within licensed areas.
Component 3 aims to protect forests that are located within oil palm estates and within forestry concessions by supporting the finalization and implementation of HCV, and RIL
policies. These activities directly engage the concession and estate crops companies, and thereby complement the broader policy improvements related to the licensing regime that are covered under Component 1. To further support the adoption of RIL and HCV policies, the ER Program will develop a mechanism to provide monetary and nonmonetary incentives. This will be developed through a consultative process with private and public-sector stakeholders and will be linked to the REDD+ Benefit Sharing Mechanism. Reducing deforestation linked to palm oil expansion to address the lack of incentives and capacity for sustainable management practices (forest, estate crops). Component 3 consists of the following sub- components:
o Sub-component 3.1: Implementation of HCV policies for Oil Palm Estates;
o Sub-component 3.2: Support for smallholders and Community Based Fire Management and Monitoring Systems (CBFMMS); and
o Sub-component 3.3: Implementation of SFM and HCV for Forestry Concession.
Component 4: Sustainable Alternatives for Communities. This directly addresses the lack of alternative sustainable livelihoods which was identified as an underlying driver of encroachment. Activities are designed to provide livelihood opportunities within sensitive areas, including peat areas, mangroves, and conservation areas. Also, by promoting social forestry activities within the State Forest Area, the component supports improved access to forested areas for local communities and contributes to improved land governance. In addition to reducing deforestation and degradation linked to encroachment, the activities in this component are expected to lead to significant non-carbon benefits, contribute to more equitable outcomes, and are an important part of the strategy to reduce the risk of reversal.
Component 4 consists of the following sub-components:
o Sub-component 4.1: Sustainable livelihoods;
o Sub-component 4.2: Conservation partnerships; and o Sub-component 4.3: Social forestry.
Component 5: Project Management and Monitoring. This component consists of the following sub-components:
o Sub-component 5.1: Project coordination and management;
o Sub-component 5.2: Monitoring and evaluation; and o Sub-component 5.3: Program communication.
Identification of key risks under the ERP’s components and sub-components forms the basis for the development of the Program’s ESMF. Ultimately, this process fed into improvements in the ERP.
2.4.1 Risk and Impact Analysis
The key objective of the SESA process is identifying environmental and social implications from the implementation of plans, policies and programs proposed under the ERP. Risk and impact analysis was carried out as a hypothetical exercise based on multiple factors and strategic issues as mentioned in previous section. Plans, policies and proposed interventions under the ERP were
examined in light of the contextual risks based on the result of consultation with stakeholders and analysis of spatial data.
The baseline conditions and socio-economic characteristics presented in the SESA serve as a starting point for a preliminary analysis of potential risks and impacts from each program component and sub-component. This process was then followed by a shortlisting of environmental and social issues through a series of stakeholder consultations in East Kalimantan with the purpose of:
Verifying initial assumptions/hypothesis;
Obtaining additional data relevant to the assessment of risks and impacts;
Identifying new stakeholders for future engagement; and
Forming the basis for the ESMF.
Once the risks are identified, the next step includes impact assessment to forecast the potential impacts if risks are not mitigated or managed. Impacts identified in this step are descriptive, and may be ranked using categories (low, medium and high). Quantification of impacts will be done through stakeholder participations and/or expert judgement.
Subsequently, as part of the shortlisting process, impacts identified using the above process will be grouped into the following clusters:
Positive environmental impacts;
Negative environmental impacts;
Positive social impacts; and
Negative social impacts.
Cross referencing between risks and impacts clusters is designed to identify relevant World Bank Operational Policies (OP) and Bank Policies (BP) that can potentially be triggered. These Ops and BPs consist of:
Environmental Assessment (OP/BP 4.01);
Natural Habitats (OP/BP 4.04);
Forests (OP/BP 4.36);
Pest Management (OP 4.09);
Involuntary Resettlement (OP/BP 4.12) in the context of precautionary for potential access restriction, and resettlement risks; and
Indigenous Peoples (OP/BP 4.10).
Risk and impact analysis and identification of World Bank’s OP/BPs that can potentially be triggered by ERP lead to the gap analysis.
2.4.2 Gap Analysis
Gap analysis was done by comparing the risks identified in the interim SESA (and further analysed in the SESA) with existing safeguards and World Bank’s OP/BPs. Gap analysis is done to ensure that all risks caused by the ERP are addressed by the existing safeguards and to ensure compliance with the World Bank’s standards. Gap analysis was also done to identify shortcomings in the current regulatory framework to address the safeguards’ requirements.
This analysis aims to identify whether existing national regulations and safeguards (e.g., SIS REDD+, PRISAI, and SES REDD Kaltim) are relevant to address the above-mentioned risks. Safeguard mechanisms to address these risks will be formulated in ESMF documents that will be developed separately from the SESA.