The Nature Conservancy 351 views

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The Nature Conservancy (TNC) Indonesia Program has been supporting improved natural resource
planning and management in Indonesia for more than 20 years, including working with government,
private sector, and local communities. Over the past decade, TNC has focused on supporting
sustainable forest management in the Indonesian province of East Kalimantan. Interventions to
strengthen management of production forests are among key strategies implemented by TNC in this
area. Since early 2000, TNC has employed several strategies to improve production forest management
by providing technical assistance for natural forest concessions. In addition, since 2016 TNC has also
supported the strengthening of Forest Management Unit (FMU), a newly developed government
institution that is responsible to manage forests at site level. FMU is expected to play a significant
role in improved forest governance, resulting an urgent action for strengthening FMU’s capacity at
provincial and national levels.
FMU becomes a transition policy to improve forest governance, and it is also expected to be
financially independent and self-supporting agency. FMU should have ability to develop proper
business investments while conserving forest as public interest as well as improving local livelihood.
Financial sustainability is the most challenging factor for FMU because of limited local and central
funding resources support. As such, a comprehensive business plan that covers organizational funding
strategy and policy recommendation needs to be identified for FMU sustainable operation. At the same
time, the most suitable financial management scheme allowing the FMU to receive and spend the
money from their business or activities needs to be further explored. As FMU is a governmental
organization, there are at least three potential financial schemes to ensure the sustainability of
FMU. First, Financial Management Pattern – Regional Public Service Agency (PPK-BLUD; Pola
Pengelolaan Keuangan-Badan Layanan Umum Daerah) is anticipated to be one of the best
alternative options to manage FMU’s income acquiring from production forests utilization.
Second option is by implementing East Kalimantan Provincial Regulation No. 4 Year 2018 on Business
Service Retribution that allows KPH for generating revenue from retribution scheme. The last option is
by establishing Regional State-owned Enterprise (BUMD- Badan Umum Milik Daerah) which allows local
government to generate profits and contribute to government revenue. Among these options (but are
not limited to), TNC wants to find the most suitable financial model or scheme for strengthening FMU’s
financial capability in East Kalimantan which correspond with businesses that have been and will be
developed by the FMU, and support the operationalization of the scheme.

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