Nusantara Fund: direct funding to IPLCs to scale up climate crises mitigation

Jun 4, 2023

It was a sunny afternoon when we were warmly greeted by a group of farmers uphills in Kamojang, West Java. We had travelled by motorcycle on a twisting, muddy dirt road along the ridge of Mount Rakutak, which is part of the Kamojang Nature Reserve area. As we walked among the trees, reforested by the community, the brisk wind blew, carrying the smell of fresh coffee. We gathered in a circle and listened intently to the uplifting stories of the farmers.

“This used to be a prone-to-disaster area; fires happened almost every year,” said Amir, a farmer from Ibun Village and chief of the Sauyunan Social Forestry Unit Business (KUPS Sauyunan). “With the social forestry program, we received official permits to manage the land; we no longer have to pay or share yield with the previous managers,” added Amir, explaining that before the villagers managed the land, it was managed by Perhutani, a state-own forest agency.


Community of Ibun village


Amir and his community in Ibun village are among thousands of community members in Kamojang Regency who manage the 1000 hectares of social forestry permits. One family household manages about one hectare of land. The Ministry of Environment and Forestry granted the permits in late 2017, covering five villages, including Ibun village in the Rakutak landscape. 


Amir, the head of KUPS Sauyunan.


With the help of assisting organisations, including WALHI, local communities in Ibun are now allowed to manage the area for 35 years, after which permits can be extended for an additional 35 years.

Communities in Ibun are part of 30 pilot projects that received direct funding of 50 million rupiahs from Dana Nusantara (Nusantara Fund). This new initiative by three organisations, WALHIAMAN and KPA, aims to establish strong support for Indigenous peoples and local communities (IPLCs’) to protect and manage their land, territories, and resources to increase contribution to reducing emissions related to deforestation and forest degradation, increase carbon stocks and improve people’s quality of life.

“We now have a coffee production house; slowly but surely, we are improving the quality and quantity of our production while also preserving the environment,” said Syahrudin, Amir’s deputy. Syahrudin explained that with the help from Nusantara Fund, his communities could strive with the infrastructure provided by the fund. While this is not enough, capacity building continues to be beneficial in assisting the community in better managing and producing.

Amir and his community recognise the significance and benefits of managing the land to preserve the ecosystem and climate. Their coffee plantation is an example of this. Scattered through the coffee plantation were cabbage and chilli plants. Communities in Ibun village intercrop with other plants as it is believed to bring fertility to the land, help ecological recovery, and increase biodiversity.


The reforested land by the community with an agroforestry model.


Since the government granted the community social forestry permits, it has provided farmers the opportunity to manage the land as they see fit. This has attracted people who left the village to work in the city to return to their communities. Communities in Ibun are hopeful for the future of their livelihoods.

“After years of working to restore land that was once prone to fires, which was full of shrubs and sandy, the land is now fertile for cultivating a variety of crops,” added Syahrudin.

While efforts to combat the climate crisis continue, indigenous people and communities have consistently asserted themselves as the best guardians of our planet. Research in the past ten years has shown how IPLCs have contributed significantly to stopping deforestation, protecting biodiversity, and improving public health. Yet, less than five percent of global development funds reach them directly. While at the same time, IPCLs are increasingly at risk due to weak protection and recognition from the government.

The Nusantara Fund is set to support IPLCs in Indonesia to receive recognition, secure rights over land and resources, and strengthen IPLCs governance systems. It will also empower indigenous people and local community organisations to continue doing the work they have been doing so effectively.

This direct fund is part of the 1.7 billion government and philanthropist organisations pledges announced at COP26 in Glasgow. The goal is to invest in indigenous peoples and local communities in helping to safeguard the biodiversity of tropical forests that are critical to protecting the planet from climate change, biodiversity loss, and pandemic risk.

“The people closest to the problem are the same people who can solve it. This is not just a metaphor; it is a necessity,” said Darren Walker, the President of the Ford Foundation, during the launch of the Nusantara Fund in Jakarta in May 2023. The foundation was among the groups that pledged 1.7 billion over five years.

Kevin Currey, Ford Foundation’s Natural Resources and Climate Change Program Officer, shares from the funder’s perspective, “The more money we can get to the local level, the more we can devolve decision-making to people on the ground in communities who know it’s really needed, the better off will be.” Kevin added that these new direct fundings would be very important in providing a new pathway for philanthropist donors to support communities more directly.


IPLCs, best guardians of the planet 

Indonesia is the second most biodiverse country on the planet. Regarding cultural diversity, Indonesia has more than 1300 tribes officially registered by the government, with thousands more unregistered. Indonesia’s wealth in terms of biodiversity and culture should serve as the foundation to build its nation. However, the relentless expansion of extractive industries threatens the cultural diversity and biodiversity of the country. According to WALHI, at least 33,000 villages have disappeared to date. The gradual erasure of IPLCs and their knowledge marks not only an irreversible loss for Indonesia but also for the world.

According to Zenzi Suhadi, executive director of WALHI National, the two crises the world is currently dealing with, climatic and economic crises, result from the prioritisation of economic development and the disregard for social and environmental concerns.

Indonesia, in particular, has experienced environmental crises and contributed significantly to the release of emissions in the last sixty years. The country has deliberately concentrated its economy on extractive industries. It has failed to recognise the characteristics and long history of the archipelago people who used to shape their social, environmental, and economic order by adapting to nature.

“This country [Indonesia] has developed its economic base through extractive industries but has failed to recognise the archipelago’s economy, which has existed for thousands of years,” said Zenzi. “The reason we are still able to see distinctive sets of cultures and traditional clothes, such as tenun, as well as the numerous plants that can be utilized, is because IPLCs in the past did not prepare them only for themselves, but for present and future generations to use and preserve.” 

IPLCs have long lived in harmony with nature, preserving and utilising the ecosystem without damaging it. However, they continue to receive little recognition or protection.  

“With this Nusantara Fund, we have to put our trust to those on the front lines [IPLCs]. They are not objects of development. They have big potential to address the climate and economic crises,” said Zenzi.

“We don’t have an alternative planet, but we do have an alternative economy,” added Zenzi. With the Nusantara Fund, the communities can restore their environment and economy. Zenzi expects that the community’s production will help build the road for this nation’s economy to grow in the right direction. “The right path for this nation is the people’s economy, which restores the environment, protects people’s rights, and develops the economy.”

In line with Zenzi, Secretary General of AMAN– Indonesia’s largest indigenous group, Rukka Sombolinggi stated, “IPLCs is the biggest private sector. The biggest private sector comes from the villages and the communities. When all of the businesses of the villages are incorporated into one, we are the largest private sector.” 


Global recognition and potential of scaling up 

In the hope of more significant global recognition and awareness of IPLCs roles, the potential of scaling up this direct funding exists. These funds have been around for approximately a decade and have shown very good results. The Nusantara Fund follows the first direct fund given to other countries, such as the Mesoamerica Fund in Central America. 

David Kaimowitz, Program Officer Chief at The Tenure Facility, is confident these funds will become more common. There is rising donors’ proclivity to enhance the possibility of supporting this kind of model because it helps us reach our goals in combating the crisis.

“I think this is a really exciting development for Indonesia, and what’s happening in Indonesia is also part of a global story about indigenous peoples and local communities responding,” said David. 

“One thing I was thinking of is the amount of money involved here is quite small. Usually, one would think that is not newsworthy because other people are pledging billions of dollars. Why be interested in $3 million? But precisely what is newsworthy is that these territorial funds are well positioned to accomplish with a few million dollars what governments and big donors have not been able to do even though they throw huge amounts of money at these things,” added David Kaimowitz.

These relatively small funds might not make it into the headlines, but they cause significant differences. In contrast to what we are used to hearing when hundreds of millions of dollars are invested in a particular project, the results are sometimes unclear or even disastrous and merely add to the severity of climate crises. However, with this direct support and the hope that it will continue to increase, it is making a significant difference that, in many respects, can be more successful because communities on the ground know best how to manage.

What WALHI, AMAN, and KPA are doing is just the beginning. We need to spread the message that indigenous peoples and local communities are the best guardians of the earth. 


Written by Agus Dwi Hastutik, WALHI/Friends of the Earth Indonesia