Consultant as Environmental and Fiscal Law Researcher

Tags: climate change Law finance English Environment
  • Added Date: Monday, 12 February 2024
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Program Overview

In Indonesia, the Endowment Fund (EF) has recently gained prominence as an alternative financing option. Two legal developments are in place for EF: the Law on Intergovernmental Fiscal Relations (Undang-Undang Hubungan Keuangan Pemerintah Pusat dan Daerah, UU HKPD 1/2022) and the Government Regulation on Special Autonomy in Papua (PP 107/2021). These legal documents encourage the development of EFs at the sub-national level, emphasizing the allocation of revenues from the exploitation of natural resources (domestic public finances) as capital for the EF. The EF operates by investing its capital in low-risk instruments, with the stipulation that only the generated interest is used to finance agreed-upon development agendas or specific project activities. The EF is regarded as a promising alternative financial mechanism that can address both recurring and long-term funding needs for various purposes, including sustainability. Its key feature lies in its ability to function as a funding pool that can access financing sources beyond conventional public finances, with operations that extend beyond fiscal year constraints.

Recently, a follow-up regulation, Government Regulation number 1 of 2024 on Fiscal Harmonization (Peraturan Pemerintah tentang Harmonisasi Kebijakan Fiskal, PP 1/2024), was enacted. This regulation is imperative as it allows special autonomy provinces, even those with considerably low fiscal capacity, to establish their own EF for investment and savings purposes under Article 25. West Papua, a forest-rich province in Indonesia, is one of the first provinces on the path to developing its own EF for sustainability objectives.

For context, the Papua provinces are home to various endemic fauna and carbon-rich mangroves, which hold some of the highest carbon values in Indonesia. Preserving these vital carbon sinks and rich biodiversity requires substantial and flexible financing sources, including innovative and โ€˜patientโ€™ financing options. Considering its specific needs for the protection of the climate, natural resources, and the welfare of its people, the EF for the Papua provinces should be designed as a financing vehicle to help address the province's long-term financing needs, which encompass development agendas, poverty alleviation, forest protection, and sustainable economic growth.

In addition to that, Papua provinces operate under a special autonomy law within an asymmetrical decentralization system in Indonesia. With special autonomy, the provinces have been granted authority to manage their own development agendas, including sustainability aspirations as reflected in initiatives like the Manokwari Declaration and Papua 2100. However, given their specific decentralization arrangement, an EF established for the special autonomy provinces of Papua will operate with a mix of government authority and development interests, including fiscal coordination between national and sub-national levels (Mumbunan, 2023). Therefore, there are critical gaps in understanding the intricacies of the fiscal governance and government arrangement of the EF under the special autonomy provinces of Papua, which underpins the objectives of this initiative.

Job Highlight

The Environmental and Fiscal Law Researcher will report to WRI Indonesiaโ€™s Political Economist and will have the primary responsibility of providing systematic and comprehensive legal and technical analysis of the existing fiscal, governance, and environmental laws and regulations related to the establishment of an Endowment Fund in the special autonomy provinces of Papua, Indonesia. He/She will work within a research team to develop evidence-based, context-driven legal recommendations and document them in the form of high-quality knowledge products and advocacy materials for relevant policymakers. The researcher will be based in Jakarta, with office-flex working arrangement and possibility to travel to the Papua provinces as needed, and will coordinate closely with WRI's Papua Regional Team.

What You Will Do

Research (70%):

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