M Ambari, Jakarta – A milestone debt-for-nature agreement to conserve coral reefs in Indonesia, the world's largest archipelagic country, has drawn a mix of optimism and skepticism from environmentalists.
While welcoming the flush of funding and attention to the country's imperiled reef ecosystems, some warn that to be successful, the agreement must reshape the way reef conservation is practiced, in particular by enhancing monitoring of project outcomes.
"If we want to continue coral reef restoration and conservation projects over the next nine years in the same way as before, then we will repeat the same failures," Parid Ridwanuddin, oceans lead at the Indonesian Forum for the Environment, a prominent national pressure group known as Walhi, told Mongabay Indonesia.
The $35 million debt-for-nature swap between Indonesia and the U.S. aims to conserve coral reefs in eastern Indonesia over the next nine years, with the funding offset by canceled sovereign debt payable to the U.S. On Aug. 8 the Global Fund for Coral Reefs (GFCR) formally announced the deal, although the governments of Indonesia and the U.S. had sealed it in July. The GFCR, an international public-private finance body, provided financial and technical support for the debt swap, according to the announcement.
"This agreement helps reinforce the idea that a healthy ocean is in the global interest and a shared responsibility," said Victor Gustaaf Manoppo, director-general of marine management at Indonesia's Ministry of Marine Affairs and Fisheries.
Indonesian conservation organizations Yayasan Konservasi Alam Nusantara (YKAN) and Yayasan Konservasi Cakrawala Indonesia (YKCI), along with their respective international affiliates, The Nature Conservancy and Conservation International, will oversee fieldwork using grant funding established under the swap.
The U.S. Tropical Forest and Coral Reef Conservation Act of 1998 enables low- and middle-income countries to relieve their debt to the U.S. government by directing funding of tropical forest and reef conservation.
The $35 million swap, the first such agreement covering coral reefs as well as the first reached between the U.S. and Indonesia, will focus on reefs in the Banda Seascape, the Bird's Head Seascape, and in Lesser Sunda, all located in the east of the archipelago in a biodiversity zone known as the Coral Triangle that encompasses Indonesia, Malaysia, Papua New Guinea, the Philippines, the Solomon Islands and Timor-Leste.
Programs funded under the agreement will aim to strengthen marine protected areas, upgrade natural resource management, and foster sustainable livelihoods across Indonesia's portion of the Coral Triangle, the GFCR said in a statement.
However, environmental groups say an important consequence of the debt swap will ideally be more robust monitoring of the impact of reef conservation work commissioned under the swap.
Walhi's Parid cited a 2022 study published in the journal Marine Policy showing that of 533 coral restoration initiatives conducted in Indonesia over the last decade, only 16% included post-installation monitoring.
Many are believed to have failed or yielded inadequate results after their project funding expired.
Indonesia is home to 16% of the world's coral reef areas and almost two-thirds of all coral species. The goods and services provided by these coral reefs, from fisheries to tourism, are valued at approximately $1.6 billion annually, according to the GFCR statement.
How the swap works
A debt-for-nature swap is a financial arrangement where a portion of a developing country's external debt is canceled in exchange for the country's commitment to invest the saving in conservation work.
Ordinarily, a government or conservation organization purchases the debt at a discounted rate, then cancels it. The mechanism aims to soothe debt distress while simultaneously addressing environmental challenges.
In 2022, Belize signed a debt-for-nature swap with The Nature Conservancy that cut the Central American state's external debt by a historic 10% of national income.
The far smaller Indonesia-U.S. agreement signed this year will see the government in Jakarta establish a dedicated coral reef fund.
The deal will unleash new conservation activities conducted by Indonesian nonprofits and local communities. A grant oversight committee that includes such groups will establish a strategic plan and oversee its implementation, Meizani Irmadhiany, chair of YKCI, said in the GFCR statement. "In parallel with the grant program, Konservasi Indonesia will work to strengthen the capacity of the coral-dependent communities to have access to the grant," Meizani said.
The plan aims to protect more than 800,000 hectares (nearly 2 million acres) of coral reefs in all.
International funding for reefs
Some civil society organizations in Indonesia maintain that debt-for-nature swaps can only have marginal conservation effects, given the scale of the challenge presented by ocean acidification and warming. Research shows as much as half of Indonesia's coral reefs risk death by 2030 due to climate change.
Meanwhile, civil society groups highlight contradictory laws allowing conservation areas to be converted for exploitation, while extensive reclamation and sand mining threaten coastal ecosystems.
"Debt swaps won't create enough fiscal space for countries in the Global South to address development and climate challenges," said Parid of Walhi.
Some debt campaigners argue debt-for-nature swap agreements are slow to enact, involve high transaction costs, and can exclude public participation. Allegations of "greenwashing" and concerns about the long-term viability of the conservation work they mandate are also common sources of criticism.
Aid agencies have called for outright cancelation of debts to countries in distress, or suspension of debt payments in the event of extreme weather events driven by climate change. For example, several countries in Southern and Central Africa expanded their debt levels relative to national income after a severe drought prevented millions of farmers from planting food crops this year. The African Development Bank estimated that Africa will need to spend a total of $3 trillion by 2030 to manage the effects of climate change.
Beyond the Indonesia-U.S. debt-for-nature swap, the GFCR aims to raise $515 million in grants and investment capital before the June 2025 U.N. Ocean Conference to help conserve 3 million hectares (7.4 million acres) of coral reefs globally.
This represents around 25% of the area targeted by the Coral Reef Breakthrough, an international initiative the GFCR co-leads that aims to invest more than $12 billion in preserving at least 125,000 square kilometers (48,000 square miles) of shallow-water tropical coral reefs and enhancing the resilience of more than half a billion people worldwide by 2030.
In the meantime, many in Indonesia working on one of the world's most fragile coral ecosystems have welcomed the deal as an infusion of funding for vital projects.
"It benefits not only Indonesian waters and local communities, but also the global community," said Victor, the marine ministry official.
YKCI's Meizani said the agreement also represented "an important and strategic stride for Indonesia in the establishment of a future blended conservation financing mechanism."
Banner image: A coral reef off the coast of Raja Ampat, Southwest Papua province, Indonesia. Image courtesy of Ronal Mambrasar/Konservasi Indonesia.
This story was adapted from original reporting by Mongabay's Indonesia team that was first published here on our Indonesian site on Aug. 2, 2024.
Citation
Razak, T. B., Bostrom-Einarsson, L., Alisa, C. A., Vida, R. T., & Lamont, T. A. (2022). Coral reef restoration in Indonesia: A review of policies and projects. Marine Policy, 137, 104940. doi:10.1016/j.marpol.2021.104940
Source: https://news.mongabay.com/2024/08/35m-debt-for-nature-deal-aims-to-protect-indonesias-coral-reefs