Down to Earth IFIs Factsheet Series

No 18, December 2001

IFIs in Indonesia

This series of monthly factsheets on International Financial Institutions (IFIs) will include information on the World Bank Group, the International Monetary Fund (IMF) and the Asian Development Bank (ADB), focussing on their involvement in Indonesia.

The Global Environment Facility (GEF)

The Global Environment Facility (GEF) is a financial mechanism that provides grants and concessional funds to recipients from developing countries and countries in transition for projects and activities that aim to protect the global environment. Implemented by the World Bank, UNDP and UNEP, the GEF has to date disbursed almost USD 2,2 billion (around Rp 22 trillion).

The History

The Facility was created in 1991 when the U.S. and other governments from northern countries found the need for international co-operation to address environmental problems with global consequences, in the run-up to the 1992 UN Conference on Environment and Development (UNCED), commonly known as the Rio Earth Summit. The implementation of the Facility was entrusted to the World Bank, which then invited the United Nations Development Program (UNDP) and the United Nations Environment Program (UNEP) to join the GEF in a tripartite structure with a division of tasks. The UNDP is responsible for technical assistance projects, UNEP provides overall scientific guidance and the World Bank oversees GEF investment projects and the administration of the GEF trust fund. The UN agencies are junior in the tripartite structure as a result of the belief of the US and its allies from northern countries that the World Bank can manage the GEF funding more efficiently than the UN agencies.

In the late 1980s and early 1990s, developed countries were criticized for consuming the most natural resources and producing the most greenhouse gas emissions - responsible for climate change and considered to be the most serious environmental problem. The Facility was used by northern governments to demonstrate environmental leadership to domestic constituencies and to pre-empt developing countries' efforts to control the international environmental agenda at the 1992 Earth Summit. At the Summit, some southern governments were expected to propose a "green fund". The creation of GEF prior to the Summit allowed the U.S. and its allies to define global environmental problems and establish the limits and scope of their responsibilities in addressing the global environmental problems and in assisting developing countries.

The Conventions and GEF Activities

The Facility is the designated financial mechanism of two international treaties, the Convention on Biological Diversity and the UN Framework Convention on Climate Change. It also collaborates closely with other treaties and agreements, including the Montreal Protocol of the Vienna Convention on Ozone Layer Depleting Substances, the Convention to Combat Desertification, and a mosaic of regional and international water agreements.

In response to those conventions and agreements, the Facility funds projects in five main areas: (1) biodiversity, (2) climate change, (3) international waters, (4) ozone depletion, and (5) land degradation.

The GEF provide grants and concessional funds for projects ranging from (a) small grants program and project preparation grants to enabling activities, (b) medium-sized projects, and (c) full projects.

Governance and Management

The Facility voting structure is proportional to a nation's financial contribution. As a result, a few wealthy northern countries wield the most power, whereas developing countries - who form the majority of GEF country members - hold very little. Currently the GEF has 167 member governments as well as a number of leading development institutions, private sector, and non-governmental organisations.

The GEF Council functions as an independent board of directors with primary responsibility for developing, adopting, and evaluating GEF programs. The Council meets twice a year and makes decisions based on consensus. The Council represents 32 constituencies (16 from developing countries, 14 from developed countries, and two from countries with transitional economies). Ten slots at the GEF Council meetings are reserved for NGOs from both Southern and Nothern countries. NGOs themselves have the responsibility of choosing their representatives to be present at GEF Council meetings.

The GEF Assembly meets every three years to assess the GEF's overall direction. Its first assembly took place in 1998 when more than 1,000 leaders from governments, international institutions and NGOs attended. The next assembly will be held in Beijing in October 2002.

Focal points are established in each recipient country. There are two focal points who are designated government officials in each country: a political focal point who co-ordinates matters related to GEF governance and an operational focal point who oversees project-related matters. In Indonesia, both focal points are held by one person, Mr. Effendy Sumardja from the State Ministry for the Environment.

Regional NGO Focal Points are set up to encourage and strengthen NGO involvement in the governance of the GEF, notably during the GEF Council Meetings. For Indonesia, the Regional NGO Focal Point is Ms. Sylvia Mesina, based in the Philippines. The NGOs from the region choose their focal point.

Political and Operational Focal Points in Indonesia: NGO Regional Focal Point Southeast Asia:
Mr. Effendy Sumardja
Assistant to the Minister
Global Environment Affairs
State Ministry for the Environment
Jalan D.I. Pandjaitan, Kebon Nanas
Jakarta 13410, Indonesia
Phone: (62-21) 8580066
Fax: (62-21) 8580066
Ms. Sylvia Mesina
Foundation for the Philippine Environment
77 Matahimik Street
West Teachers Central
Quezon City 1101, Philippines
Phone (63-2) 931 3243
Fax: (63-2) 931 6243

The GEF Secretariat is staffed by 40 people in Washington, DC. The Secretariat reports to the GEF Council and Assembly, ensuring that their decisions are translated into effective action. The address of the Secretariat is:

Global Environment Facility (GEF), 1818 H Street, NW, G 6-602
Washington, DC 20433, USA
Telephone: (1) (202) 473-0508
Fax: (1) (202) 522-3240/3245

The GEF Chief Executive Officer and Chairman is Mr. Mohamed T. El-Ashry.

GEF's twelve-member Scientific and Technical Advisory Panel (STAP) reports to, and its terms of reference are set by, the GEF Council. The panel provides objective scientific and technical advice on GEF policies, operational strategies, and programs; conducts selective reviews of projects in certain circumstances and at specific points in the project cycle; and maintains a roster of experts. Its work is supported by a secretariat based at the UNEP headquarters in Nairobi.

Private Sector Involvement in the GEF

The GEF believes that global environmental problems like climate change and biodiversity loss will be solved only if the private sector weighs in with its vast technical, managerial and financial resources and expertise. The private sector's perspective is shifting as the long-term cost savings of environmentally benign processes become clear and as consumers demand environmental products and services that result in global benefits. The GEF encourages the private sector to seek opportunities to collaboratively engage in the identification of project concepts and objectives as well as in the financing, and monitoring and evaluation of GEF projects.

Example of GEF Private Sector Project: To date, there are no GEF private sector projects in Indonesia. An example below is taken from Thailand:
A World Bank-implemented GEF activity in Thailand, called the Thailand Promotion of Electricity Energy Efficiency, supports the Electricity Generating Authority of Thailand (EGAT) and its newly formed Demand-Side Management Organisation (DSMO), both of which are actively working to encourage local private companies to manufacture more energy-efficient lighting, refrigerators, motors, and other key energy-consuming devices and consumer appliances.

Criticisms of the GEF

While the Facility may bring improvement in the global environment, critics have pinpointed key underlying problems:

GEF in Indonesia

GEF has been active in Indonesia mostly through the World Bank. To date, there are 13 GEF-funded activities implemented in Indonesia and one project in preparation, amounting to USD 82.732 million in total. Some of them are listed below.

Project title Biodiversity Collections
Implementing Agency World Bank
Executing Agency Research & Development Center for Biology of the Indonesian Institute of Science; Herbarium Bogoriense and Museum Zoologicum Bogoriense
Approval/completion dates April 1992/ March 2001
Total cost/GEF allocation USD 11.4 million/7.2 million
Project title Kerinci Seblat Integrated Conservation Development
Implementing Agency World Bank
Executing Agency Bappenas; Ministry of Forestry
Approval/completion dates May 1995/September 2002
Total cost/GEF allocation USD 39.9 million/14.4 million
Project title Renewable Energy Small Power Project
Implementing Agency World Bank
Executing Agency Directorate General of Electricity and Energy Development; Private sector developers
Approval/completion dates October 1995/October 2001
Total cost/GEF allocation USD 141 million/4 million
Project title Eastern Indonesia Renewable Energy Development
Implementing Agency World Bank
Executing Agency National Power Utility Company (PLN)
Approval/completion dates October 1995/October 2001
Total cost/GEF allocation USD 58.8 million/2 million
Project title Solar Home Systems
Implementing Agency World Bank
Executing Agency Agency for the Assessment and Application of Technology (BPPT); Indonesia Rural Electrification Steering Committee
Approval/completion dates October 1995/September 2002
Total cost/GEF allocation USD 118.1 million/24.3 million
Project title Coral Reef Rehabilitation and Management Project (COREMAP)
Implementing Agency World Bank
Executing Agency National Development Planning Board (Bappenas); Indonesian Institute of Sciences (LIPI)
Approval/completion dates May 1997/October 2013
Total cost/GEF allocation USD 60.3 million/12.3 million
Project title Emergency Response Measure to Combat Fires in Indonesia and to Prevent Regional Haze in Southeast Asia
Implementing Agency UNEP
Executing Agency UNEP
Approval/completion dates July 1998/April 1999
Total cost/GEF allocation USD 0.85 million/0.75 million
Project title Maluku Conservation and Natural Resources Management
Implementing Agency World Bank
Executing Agency Provincial Government of Maluku, District Govt. of Maluku Tenggara, DG of Regional Development, of Ministry of Home Affairs, DG of Forest Protection and Nature Conservation of the Min. of Forestry
Approval/completion dates January 1999/January 2004
Total cost/GEF allocation USD 10.6 million/6 million
Project title Conservation of Elephant Landscapes in Aceh
Implementing Agency World Bank
Executing Agency Fauna and Flora International
Approval/completion dates October 1999/December 1999
Total cost/GEF allocation USD 1.025 million/0.74 million
Project title West Java/Jakarta Environmental Management Project
Implementing Agency World Bank
Executing Agency Jabotabek Waste Management Authority, Min. of Public Works
Approval/completion dates February 2000/not yet identified
Total cost/GEF allocation USD 27 million/10 million
Project title The Greater Berbak-Sembilang Integrated Coastal Wetlands Conservation Project
Implementing Agency World Bank
Executing Agency Wetlands International - Indonesia Program
Approval/completion dates July 2000/August 2000
Total cost/GEF allocation USD 0.732 million/0.732 million
"Global Environment Policy" by Korinna Horta. Foreign Policy in Focus volume 3, Number 39, December 1998.
GEF website

This IFI factsheet is published by Down to Earth, the International Campaign for Ecological Justice in Indonesia.

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