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Sarah Maxim has worked as a program director and consultant for Indonesian and international civil society organizations focused on environmental and democratization issues. In 2003, she became Vice-Chair of the Center for Southeast Asian Studies at University of California-Berkeley.
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Indonesia is one of the world's three mega-diverse countries for the range and breadth of its biological resources.1 In recent decades, however, this biodiversity has come under threat. Growth-oriented development policies have led to unsustainable pressures being placed on natural resources and a dramatic reduction in habitat areas for endangered species. Compounded problems of pollution, deforestation, erosion, and the disruption of watersheds are severely impacting the environment. Moreover, a history of corruption and inconsistency in the application of the rule of law have limited the government's ability to adhere to acceptable guidelines, or common principles, in the sustainable management of Indonesia's natural resources.
This marked decline in the quality of Indonesia's environment by the mid-1980s pushed the subject to the forefront of the agenda of the country's nascent community of non-governmental organizations (NGOs) as well as some government sectors, particularly the State Ministry of Population & the Environment.2 Between 1983 and 1993, Dr. Emil Salim, a Berkeley-trained economist, directed this ministry. It was during his tenure as minister that Indonesia developed a strategic plan to promote biodiversity conservation, participated in the 1992 Rio Summit, and signed and ratified the International Convention on Biological Diversity.3
Although the State Ministry of Population & the Environment was an effective voice in calling for the country to pay more attention to sustainable development, its status as a state ministry meant it had little implementing or enforcement authority, and only a limited budget.4 Local NGOs also lacked sufficient resources to spearhead the kind of initiatives that would have substantive impact in addressing the degradation of the natural environment.
The Birth of a Foundation for Biodiversity Conservation
Amidst these developments, two contiguous events collided to give birth to KEHATI's endowment. First, a 1992 summit meeting in Tokyo between US President George H.W. Bush and Japanese Prime Minister Kiichi Miyazawa resulted in the governments of Japan and the United States agreeing to a common agenda for the environment with Indonesia selected as a pilot country. Called the "Tokyo Declaration," funds provided by the two countries were allocated to support the implementation of Indonesia's biodiversity strategy.
The second event occurred with Salim's departure from his post as minister in 1993. At this time, he established a plan for a national organization devoted to environmental sustainability. Yayasan Keanekaragaman Hayati Indonesia, abbreviated to KEHATI, was officially formed in January 1994 and came under the direction of a board of prominent Indonesians chaired by Salim.5
At the same time, officials of the US Agency for International Development (USAID) charged with following through on the US government's commitment under the Tokyo Declaration to support biodiversity conservation in Indonesia, decided to fund an endowment managed by an independent national Indonesian organization. Funds derived from interest earned on the endowment would be used for grantmaking activities focused on conservation objectives. While USAID officials believed in endowments as a means to generate long-term support for sustainable development, they also recognized the endowment's role in building financial sustainability within local organizations and empowering civil society. Other examples of environmental organizations supported by USAID-funded endowments during this same period include the Foundation for the Philippine Environment, established in 1992, and the Mexican Nature Conservation Fund (Fondo Mexicano para la Conservación de la Naturaleza), established in 1996.6
USAID officials determined that KEHATI was the organization best suited to manage the endowment in Indonesia. They believed that KEHATI would be able to command the requisite international profile because of its highly esteemed board, and that it would be the most appropriate organization to meet the criteria of the US government and Congress that would be disbursing the funds. The final terms for how the endowment would be transferred and managed were drawn up through the mechanism of a Cooperative Agreement, which covers a ten-year period from 1995 to 2005.7
Notes
1 The other two mega-diverse countries are Brazil and the Democratic Republic of Congo (formerly Zaire).
2 The ministry became the State Ministry for the Environment after Dr. Emil Salim ended his term as minister.
3 This international treaty was drawn up in 1992 to promote three goals: biodiversity conservation, sustainable use of the earth's biological resources, and the "fair and equitable" sharing of the benefits from the use of natural genetic materials. The treaty has 182 parties. See www.biodiv.org.
4 This situation has continued to the present day under the State Ministry for the Environment. For example, the ministry does not have direct supervision of the country's many natural parks and conservation areas; these areas are instead coordinated by a department in the Ministry of Forestry.
5 An amendment was made to the foundation's Articles of Association in August 1995, but otherwise the formal terms for establishing KEHATI remain as stated in 1994.
6 The interest of USAID staff in endowments as a funding strategy, including descriptions of endowments funded by the agency in the 1980s and early 1990s, are covered in detail in Kathleen M. Horkan and Patricia L. Jordan's USAID working paper "Endowments as a Tool for Sustainable Development." The authors also note that new laws and guidelines issued in the early 1990s made it possible for USAID to set up dollar-based endowments using congressionally appropriated funds. Endowments established prior to 1990 could only be funded with local currency, and not with US dollars.
7 While the US government's contribution ensured it met its commitment to the Tokyo Declaration, the US government also counted it as a contribution to the Global Environment Facility, a trust fund managed by the United Nations Development Programme, the United Nations Environment Programme, and the World Bank. The Facility provides grants and other funding for environmental programs in countries around the world. Under the Tokyo Declaration, Japanese government officials supported biodiversity conservation in Indonesia by adding funds to existing grants it was already making in Indonesia. Specifically, a national biodiversity research center and Indonesia's national parks received the additional grants. As the funds from the two governments were disbursed according to a strategic plan drawn up by the State Ministry for Population & the Environment, the funds' use reflected Indonesia's own priorities for its sustainable development.