PROJECT BRIEF
1. IDENTIFIERS:
PROJECT NUMBER:
PROJECT NAME:
DURATION:
IMPLEMENTING AGENCY:
EXECUTING AGENCY:
P040528
Indonesia: West Java /Jakarta Environment
Management (WJJEMP)
9 years (Adaptable Program Loan)
World Bank
Jabotabek Waste Management Authority; Ministry
of Public Works; Local Governments
Republic of Indonesia
Indonesia ratified the UNFCCC on 8/24/94
Climate Change
Short Term Measure
REQUESTING COUNTRY OR COUNTRIES:
ELIGIBILITY:
GEF FOCAL AREA:
GEF PROGRAMMING FRAMEWORK:
2. SUMMARY:
The 50 million people of Indonesia’s West Java/Jakarta metropolitan area generate 50,000
tonnes of solid waste per day, much of it organic. Only 50-60% is collected – the rest is
dumped in canals, vacant lots, or burned. Poor solid waste management degrades local
waterways and creates air pollution. It causes respiratory ailments and spreads diseases, such as
Dengue Fever. Anaerobic decomposition of organic waste in crude landfills produces 6 tonnes
of CO2 equivalent per tonne of waste processed. In addition, useful organic matter is wasted,
and soil fertility correspondingly reduced, because it is not returned to the soil as compost.
The WJJEMP will improve waste management and the environment of this large urban area. Its
proposed GEF component – a community-based organic waste compost scheme – would pilot
an innovative, environmentally-sound and cost-effective alternative method of organic waste
management. It would separate organic waste and convert it to agricultural compost by a
process of aerobic decomposition, which produces much lower GHG emissions. The compost
would be sold to farmers as a soil enrichment product. Diverting organic waste from landfills
would avoid significant methane gas production, and thus reduce Indonesia’s GHG emissions.
Converting it to agricultural compost would enhance agricultural productivity and soil
biodiversity in neighboring agricultural areas. The compost scheme’s results would be
monitored, evaluated and disseminated throughout Indonesia and to other developing countries.
GEF support of $10 million would be provided in three tranches. In tranche 1, GEF would
contribute $3 million to launch a compost incentive scheme and $0.4 million for scientific
assistance and awareness. Release of tranche 2 funds of $4 million would be conditional on at
least 150,000 tonnes of quality waste compost being sold. Tranche 3 funds of $2.6 million
would require a further 450,000 tonnes of compost sales. The overall target is 1 million tonnes
of compost sales and 6 million tonnes of CO2 emissions avoided at a cost to GEF of $1.7/tonne.
3. COSTS AND FINANCING (MILLION US):
-Project
10.0
GEF:
-PDF:
N/A
Subtotal GEF:
10.0
-Jabotabek WMA
0.5
CO-FINANCING OF
-Communities (in kind)
16.5
GEF COMPONENT
-Subtotal Co-Financing:
17.0
TOTAL GEF COMPONENT:
27.0
FINANCING OF NON –
GEF COMPONENTS
-Country
-IA
-Subtotal
TOTAL PROJECT COST:
77.7
141.7
219.4
246.4
4. ASSOCIATED FINANCING (MILLION US$)
N/A
5. OPERATIONAL FOCAL POINT ENDORSEMENT:
Name: Effendy Sumardja
Organization: State Ministry of Environment
Title: Assistant Minister for Coordination
Date: January 27, 2000
6. IA CONTACT:
Robin Broadfield, GEF Regional Coordinator, EAP,
Tel. # 202-473-4355 Fax: 202-522-1666
Internet: rbroadfield@worldbank.org
2
ABBREVIATIONS AND ACRONYMS
ADB
ALGAS
AMDALs
APL
BAPPENAS
BOD
CAS
CDS
CO2
DPRDs
EA
GDP
GEF
GHG
GOI
GTZ
IUDP
KIP
LPG
MEIP
MOU
O&M
OECF
OED
PCR
PDF
PMO
PMU
RSI
Asian Development Bank
Asia Least-Cost Greenhouse Gas Abatement Study
Environmental Assessment Process/Report, Govt. of Indonesia
Adaptable Program Loan
Ministry of Plan, Indonesia
Bio-chemical Oxygen Demand
Country Assistance Strategy
Country Development Strategy
Carbon Dioxide
Local Councils of Indonesia
Environmental Assessment
Gross Domestic Product
Global Environment Facility
Greenhouse Gas
Government of Indonesia
German Technical Cooperation
Integrated Urban Infrastructure Development Projects
Kampung (Slum) Improvement Program
Liquefied Petroleum Gas
Metropolitan Environmental Improvement Program
Memorandum of Understanding
Operating and Maintenance
Overseas Economic Cooperation Fund
Operations Evaluation Department
Project Completion Report
Participatory Development Fund
Project Management Office
Project Management Unit
World Bank Resident Mission, Indonesia
3
A: Program Purpose and Project Development Objective
1. Program purpose and program phasing:
1.
The West Java/Jakarta Environment Management Adaptable Lending Program
(APL) fits the Bank's assistance strategy for Indonesia in four ways: (i) it supports the
drive for better governance and stronger institutions; (ii) it alleviates poverty and
improves the local environment through community-based action; (iii) it assists a region west Java - that was hard hit by the recent economic crises and, as home to many of
Indonesia's industries, faces severe population density and pollution issues; and (iv) it
supports Indonesia’s efforts to reduce its greenhouse gas emissions from decomposition
of organic waste, a national priority under the Climate Change Convention.
2.
The program’s main aim is to improve municipal environment service delivery.
This will be accomplished by promoting greater community participation and private
sector involvement in the provision of those services; stronger local government finance;
and improved local government management capacity and better coordination between
provincial and central government agencies. A three phased approach will coincide with
and promote the devolution of service delivery to local governments, increased public
awareness and participation in local governance, economic development in western Java,
enhanced environmental awareness, and increased willingness and capacity of local
governments (and residents) to pay for environmental services in the municipalities.
3.
APL1 will define performance targets that must be achieved before APL2 can
begin. This will: (i) overcome the implementation problems experienced in past landfill
operations, e.g. by requiring establishment of community advisory boards in APL1 before
new landfills are developed in APL2; (ii) encourage focus on service delivery planning
and management in APL1, ahead of construction in APL2; (iii) promote involvement of
civil society in service delivery planning and provision, e.g. by establishing annual local
"State of the Environment" reports and mechanisms of community consultation up front;
(iv) encourage integration between components and across government agencies; and (v)
exclude localities where the community or administration does not support improved
environmental service delivery at this time. Phasing also requires a smaller financial
commitment from local government at a time when revenues are uncertain. Phasing the
GEF waste composting component will link the commitment of GEF resources to actual
GHG emission reductions achieved by a functioning organic waste compost system.
4.
The move from APL2 to APL3 will be predicated on greater willingness and ability
of local governments to finance and manage environmental services (with increased
community and private sector assistance), on adherence to minimum service standards,
e.g. operating sanitary landfills, and to further GHG emission reductions.
5.
The program also supports the Government's objectives of poverty alleviation, e.g.
assisting waste pickers and coastal zone settlements; and effective decentralization of
governments services, and improved urban environments (the cities in the project area
are among the most polluted in Indonesia). At a regional level the project is important to
DKI Jakarta's goal of being an "international service city" and West Java's program of
industrialization and improved livability.
4
2. Project development objective:
A. Assist GOI and participating communities to improve the environment in the
major urban areas of Jakarta and West Java (Serang, Cilegon, Bandung, Bogor,
Kabupaten/Kotamadya, Tangerang, Bekasi, and Cirebon).
B. Assist GOI to enhance the efficiency of urban environment service delivery
and municipal waste management in these areas, and promote waste composting as
an alternative to collection and landfill dumping.
C. Improve the quality of life and economic well-being of waste pickers.
D. Reduce the rate of growth in waste generation.
E.
Increase awareness in environmental issues and suitable responses.
3. Global environment objective:
6.
The program will support the GEF’s objective of reducing the risk of climate
change by avoiding significant methane gas production from the decomposition of
organic waste in landfills and the resulting emission of this potent greenhouse gas. It will
also enhance agricultural productivity and soil biodiversity in the surrounding area by
making productive use of the organics that are removed from the urban waste stream.
These benefits will be achieved by converting the organic fraction of the solid waste
stream to agricultural compost, rather than trucking it to and dumping it in landfills.
7.
Tonne for tonne, a 20-fold decrease in GHG emissions can be achieved if organic
wastes are degraded aerobically, i.e. composted, rather than degraded anaerobically in
landfills. In landfills, 75% of organic waste degrades anaerobically. This generates 330
Kg of CH4 (methane) per tonne of waste, or 6600 Kg of CO2 equivalent. The remaining
25% degrades aerobically, contributing 110 Kg CO2 per tonne of waste. Therefore one
tonne of waste deposited in a landfill generates 6710 Kg of CO2 equivalent.
8.
In contrast, composting - which degrades the organic waste aerobically - generates
only 440 Kg of CO2 per tonne of waste processed. So processing waste by composting,
versus landfilling, reduces CO2 emissions by about 6 tonnes per tonne of waste treated.
The GEF component will divert at least 1 million tonnes of organic waste from landfill
dumping to composting, hopefully much more. Therefore a conservative estimate of its
GHG emission benefits is that it will reduce Indonesia’s emissions of CO2 equivalent by
at least 6 million tonnes over the program’s nine year life.
4. Key performance indicators:
A. Solid Waste Management: establishment of Jabotabek Waste Management
Authority; increased waste collection; improved waste disposal; reduction in the
increase of waste generation; significant amount diverted to composting.
B. Community Environment Facility: number and success (pollution reduction and
employment generation) of community programs.
C. Medium and Small Scale Industries: reduction in pollution and increased
profitability of participating businesses.
D. Environmental Education: number of teachers trained, overall success in
increase in community awareness.
5
E. Environmental Management: ability of local governments to identify and
respond to local environmental issues; establishment and effective operation of
local "environment forums".
F. Integration and Support: effectiveness of local governments to respond to
environmental issues that transcend and, single department (i.e. local leadership,
management, and team work); number of key staff properly trained and able to
apply their learning; ability of Central and Provincial agencies to support local
governments.
G. Greenhouse Gas Emission Avoidance: Amount of compost produced and sold
(quality and cost per tonne of GHG avoided). Tartget - at least 1,000,000 tonnes of
compost to be produced (of which at least 150,000 tonnes in APL1). Each tonne of
compost produced reduces GHG emissions by 6 tonnes of CO2 equivalent.
B: Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project:
Document number: 18963
Date of latest CAS discussion:
02/16/99
9.
The program will address the CAS goal of greater government decentralization by
promoting service delivery at the local government level, with assistance from the
provincial and national levels. Institutional capacity of local governments will be
increased. It will also help achieve the broad goal of improving urban environments, as
well as enhancing the role of the private sector in providing urban services. It is the first
urban activity to work with newly-empowered local Councils (DPRDs) and to produce a
specific and agreed program to strengthen the partnership between civil society and local
government.
1a. GEF Operational Strategy/Program objective addressed by the project:
10.
The GEF component is submitted under, and is fully consistent with the Short
Term Climate Change window of the GEF's Operational Strategy. It meets the criteria
for such projects in that it is; (a) highly cost effective (unit GHG abatement cost of
$1.7/tonne of carbon equivalent), (b) very likely to succeed, as demonstrated by previous
small-scale pilot compost activities and the sustainability analysis, and (c) is one of
Indonesia's priority GHG abatement initiatives, as confirmed by in its First National
Communication to the Climate Change Convention (page 4-19), the ALGAS Report, (pp
13 and 15), and by the support expressed by the government, community representatives
and local administrators. An independent scientific committee will be established to
monitor and verify the compost production and GHG emission reductions and their costs.
This scientific committee will help to establish Indonesia as a "center of excellence" on
both compost production and research and will facilitate the project’s replication.
2. Main sector issues and Government strategy:
11. The main issues relating to the urban environment are: (a) insufficient recurrent
budgets for operations and maintenance; (b) inadequate capital investments to keep pace
with the rapid rate of urban growth in the area; (c) high levels of air and water pollution
from disparate point and non-point sources; (d) institutional weaknesses and poor
6
coordination among responsible agencies; (e) low awareness among the public on the
impact of urban pollution and suitable ways to respond.
12. The principal issues associated with environmental management at the municipal
government level are: (a) inadequate operating and capital resources; (b) unclear roles
vis-à-vis provincial and central government agencies; and (c) weak institutional capacity.
The promotion of composting as an alternative to organic waste collection and landfill
dumping, responds to one of Indonesia's top GHG emission-reduction priorities which,
without GEF assistance with its incremental costs, could not be achieved.
13.
The following reports highlight key sectoral issues to be addressed by the project:
Indonesia Environment and Development: Challenges for the Future (Report No. 12083-IND,
March 21, 1994)
14. This report provides a comprehensive analysis of environmental challenges facing
Indonesia; their causes, their impacts, costs and proposed ways to pay for remediation,
and a priority action list. It provides order of magnitude estimates which were sufficient
to identify the highest priority issues: namely, water supply and sanitation, solid waste
management, vehicle emissions and industrial pollution control - particularly in Java.
The report calls for a doubling of investments in urban water supply and drainage,
sewerage and sanitation and solid waste management ( from about Rp 2.0 trillion or 0.2%
of GDP to about 0.4% for Indonesia).
Private Sector Participation in Solid Waste in Indonesia (Informal Sector Work, March 1995)
15. This report summarizes the barriers to greater private sector participation in waste
management (e.g. lack of technical knowledge, inadequate planning and contract periods
being too short) and suggests ways to improve service delivery through the judicious use
of private firms; largely through increased competition, accountability and transparency.
Community Based Composting and Recycling Pilot Project (1996)
16. Through the Fund for Innovative Approaches in Human and Social Development,
the World Bank carried out six pilot community waste composting sub-projects. They
provided many lessons (e.g. strong community enthusiasm and technical feasibility), and
highlighted the potential for community involvement in waste management activities.
Jabotabek Environmental Management Strategy (1995)
17. Funded by the Third Jabotabek Urban Development Project, this comprehensive
report reviews the causes of environmental degradation in Jabotabek (economic and
technical review) and prioritizes activities to respond to it. This study was part of a
similar exercise (assisted by the UNDP Municipal Environmental Improvement Program)
carried out in Kuala Lumpur, Manila, Bombay, Katmandu, and Beijing, and forms the
basis of this program.
Miscellaneous Reports
18.
During project preparation, five related reports were prepared: Community Based
7
Solid Waste Management, May 1998; Rapid Appraisal of Industrial Pollution Abatement
in Semarang, Indonesia – Issues and Opportunities, September 1998; Review of
Kampung Improvement Program – Jakarta, September, 1998; Evaluation of the
Sanitation Component of KIP JUDP3, July 1996; Assessment of Popular Participation of
KIP JUDP3, June 1995. These reports highlight the complexity of community
involvement in urban environmental activities and the clear need to bridge community
demands and local government capabilities.
19. Two other important reports, specific to Indonesia, were prepared by the Bank's
Environment and Social Unit; A review of Landfills in Indonesia, and Environmental
Management Plan Implementation in Indonesia: Review of Selected Urban Projects.
Both highlight current difficulties in properly operating landfills and other pollution
control facilities, and recommend greater community involvement and more attention on
operations. To help prepare the GEF component, compost quality guidelines have been
prepared for Indonesia, in addition to two related studies; the Compost Credit Program
and Establishing a Jabotabek Waste management Corporation (prepared by the Bank with
consultant trust funds).
3. Sector issues to be addressed by the project and strategic choices:
20. The project is part of a larger strategy supported by the Government of Indonesia,
ADB, OECF and other bilateral agencies to bring about improved municipal
management, greater cost recovery, and reduced environmental contamination. A serious
constraint in addressing urban environmental degradation is that the a response to the
issue is so complex and costly, that it is very difficult for governments to know where to
begin. Project preparation has been slow and protracted, trying to build a consensus for
moving forward, while being consistent with sound technical and economic planning.
These difficulties have been exacerbated by recent political and economic developments
in Indonesia (western Java was the hardest economically hit area in Indonesia) and the
relatively rapid and uncertain decentralization efforts now underway (local governments
are reluctant to commit to programs before they know what their new budgetary
discretion will be under new laws). However, throughout project preparation there has
been a keen desire to get on with urban environmental improvements. The project will
endeavor to shift more of the locus of decision making from central government to local
government. This project is working with some of the most capable local governments in
Indonesia.
21. Poor Sector Planning. (a) it is piecemeal--the three levels of government, and
adjacent local governments, do not necessarily coordinate their plans; communication is
poor (b) it is sporadic--many studies exist, often driven by availability of financing; (c)
communities have little involvement in decision-making; and (d) policy issues such as
incentives, institutional arrangements, implementation capabilities, and proper landfill
siting processes are seldom addressed.
22. Inadequate Provision of Municipal Services. (a) poorly integrated services (e.g.
waste collection, transport and disposal) across agencies and the private sector; (b)
insufficient focus on cost recovery, inadequate and inefficient investments, poor
operations management and inefficient asset use.
8
23. Fast Growth of Waste. Waste generation is increasing much faster than local
populations, and its composition is changing even faster – due to consumerism - so
compounding waste management problems. The amount of waste requiring disposal
would increase even faster without the GEF-supported composting activity. This would
in turn increase the overall levels of methane generated as more waste is deposited in
anaerobically-functioning landfills. Composting is also a less technically demanding
option than sanitary landfilling (with methane recovery), land reclamation, or incineration
and provides a cost effective way to partially deal with the growing waste stream.
24. Complexity of Environmental Degradation and Improvement. (a) solid waste is
a major source of air and water pollution and local flooding, but linkages across sectors
are difficult to see, e.g. the connection between green space and leaking landfills; (b)
environmental upgrading needs a holistic approach -- incremental improvements in many
interrelated areas, e.g., improving solid waste collection will have minimal benefits in
BOD loads if there are not corresponding advancements in sewerage and industrial
pollution; (c) public and government agencies are easily overwhelmed (or conditioned)
by the magnitude and lack of clarity in addressing environmental problems.
25. The GEF-supported composting project is an example of how to address the
complexity of good environmental management. Composting is technically feasible and
has potential benefits for many levels of government and society, yet in current financing
structures, the costs of such environmentally-sound initiatives are borne exclusively by
local governments. Studies have shown that erosion costs Java over $300 million per
year, which could be reduced by applying compost to vulnerable soils. Factoring in
externalities like these requires a broader framework than local government’s traditional
areas of responsibility. The GEF’s grant resources encourage the testing of such holistic
and innovative environmental solutions and the transition to a more strategic approach.
26. Need for Local Government Leadership. Local governments are the key
agencies to address urban environmental issues. Traditionally, Indonesian local
governments have not assumed a leadership role on these issues; empowerment is still
needed. With regards to urban environmental management, Provincial and National
government agencies must adopt the role of assistant and regulator, and move away from
implementation (in addition to assistance in the funding and legislative regime).
27. Private Sector Involvement in the GEF Composting Component – The compost
component (GEF supported) of the program is expressly designed to maximize private
sector involvement. This will be accomplished through the mechanism of compost credit
distribution. Funds will be allocated to any private business that registers as either a
compost producer or user. The system is very simple and promotes a wide range of
business sizes. This is designed to promote a natural “evolution” of compost businesses.
For example there are no dictates on size or process controls (other than quality and local
environmental (nuisance) controls). Compost producers will be encouraged to move
towards the most efficient method of production, e.g. larger scale or smaller localized
facilities. The GEF component’s objective is simply to maximize the amount of compost
that can be sustainably produced – which is consistent with local government’s objective
as well. The assurance of compost credit availability, which GEF can provide, will
enable the private sector to make capital investments, since they know that these can be
recouped through sale of compost.
9
4. Program summary and performance triggers for subsequent phases:
APL1(a) –31 Sept 2000 to 31 Sept 2001 (GEF Component)
28.

Establish international compost advisory board and national research team

Prepare compost monitoring, evaluation and dissemination plan,

Design and launch compost credit system

Report to World Bank and GEF how compost credit system operates and is
audited; its initial results; and monitoring, evaluation and dissemination plan)
APL1 – 31 Sept., 2000 to 31 Dec., 2003
29.
 Establish Jabotabek Waste Management Agency
 Launch environmental education and awareness
 Prepare publicly vetted AMDALs (with RKL/RPL) for new TPAs (with
acceptable site selection methodology) and IPLTs
 Complete hospital waste review
 Complete Serang ‘Emergency Response Plan’ and ‘Environmental Strategy’
 Complete AMDAL and detailed financing plan (year 1) and construction of
JIEP waste water treatment plant in DKI Jakarta (years 2 and 3)
 Establish loan/grant funding relationships between Pemda and TKI/Pusat for
environmental management activities
 TA assistance to project secretariat, Bapedal, industry associations, compost
marketing, air pollution mitigation review in Jabotabek and Bandung, improved
TPA management
 Plan and mobilize assistance to pemulung (waste pickers)
 Produce and sell at least 150,000 tonnes of compost from organic waste
 Convene international workshop on organic waste composing
 Phase 1 community environment facility
 Construct TPS’ (waste transfer depots)
 Establish baseline environmental indicators
APL2 – 1 January, 2003 to 31 Dec., 2006
30.









31.
Construct new TPAs
Convert vehicles from benzene to LPG
Implement hospital waste management strategy (part 1)
Construct waste water treatment facilities
Procurement solid waste processing equipment
Produce and sell at least 450,000 tonnes of compost from organic waste
Assist small and medium sized industries to improve waste management
Phase 2 community environment facility
Continue TA
APL3 – 1 January, 2006 to 31 Dec., 2009
 Similar to tranche 2 with an additional focus on management of facilities built in
tranche 2 and greater cost recovery and contribution by local governments
10
Proposed “Trigger Points”
32. Following are proposed activities to be met prior to moving to Tranches 2 and 3.
Since the project intends to mesh with GOI’s desire to largely decentralize urban
management responsibilities to Pemdas, the trigger points should reinforce good
management practices by local governments.
33.
Agreement to move from APL1 to APL2
 Jabotabek Waste Management Corporation established (operations funded by project)
 Greater Bandung Waste Management Corporation established. Waste Management
Master Plans updated for both regions.
 Publicly vetted AMDALs (consistent with World Bank environmental assessment
requirements) and clear operating plans exist for all operating and proposed TPAs
 Hospital waste study completed and proposed facilities designed and reviewed,
consistent with GOI and World Bank requirements
 Ratio of grant / counterpart matching fund levels / SLAs defined and agreed to by all
levels of government
 Pemda solid waste revenues increased by 20% from tipping and private waste hauler
license fees (estimated – amount to be confirmed after year 1 when baseline levels
known and measuring program established)
 Public Advisory Boards established for all TPAs (funded by project – grants to the
Pemda)
 Preparation of annual “State of the Environment” (NKLD reports) reports by each
Pemda and Province of West Java (funded by project – as grants from Pusat)
 Production of at least 150,000 tonnes of good quality compost from organic waste
34.
Agreement to move from APL2 to APL3
 Jabotabek Waste Management Agency operating (operations funded by Pemda)
 operations of hospital waste facilities funded significantly by Pemda (or direct cost
recovery from hospitals)
 Pemda solid waste revenues increased by 60% from tipping and private waste hauler
license fees (estimated – amount to be confirmed after year 1 when baseline levels
known and measuring program established)
 Public Advisory Boards established for all TPAs (funded by Pemda)
 preparation of annual NKLD or “State of the Environment” reports by each Pemda
(funded by Pemda)
 Production of at least 450,000 tonnes of compost
C: Program and Project Description Summary
1. Components of the first project – APL1:
35. APL1 will focus on ensuring adequate planning, community participation, and
design of subsequent components, particularly waste collection, landfills (TPAs) and
wastewater treatment facilities (IPLTs). As APL1 "sets the stage" for APL2 and APL3,
its financial scale has been minimized and its policy impact maximized. However,
activities with tangible and immediate environmental benefits are also included.
11
1a.
GEF Component
36. Description The GEF component aims to overcome the barriers to a large-scale
sustainable organic waste composting system – which is a superior local and global
environment alternative to conventional waste collection and landfill dumping. The
major barrier to organic waste composting is insufficient financial incentive. The GEF
component will overcome this barrier by establishing a compost credit system to reward
compost users for every tonne of agricultural-quality compost they purchase. A total of
$9.6 million of GEF resources would be allocated to support the credit system over nine
years. The funds will be released in three tranches if and when defined compost sales
and associated GHG emission reduction targets are achieved. $3 million of GEF support
will be provided to help launch the compost credit system in APL1. A further $4 million
will be provided in APL2 if at least 150,000 tonnes of good quality compost is produced
in APL1. The balance of GEF credit funds will be disbursed in APL3, provided the
APL2 sales target of at least 450,000 tonnes of compost is achieved.
37. As explained in paragraph 40, the unit size of the credits will be reduced over time
as the agricultural compost market grows and unit compost sales revenues increase. In
parallel, as sustainable waste management systems (sanitary landfills), are established by
local governments, they will be increasingly able and will be encouraged to compensate
compost producers for the avoided cost of collecting and processing the waste they
compost. By the end of the nine-year program, the combination of compost sales and
compensation payments should make the waste compost system sustainable.
38. A second GEF sub-component, costing about $400,000, would support independent
reviews of compost quality and production levels, and assist in marketing, monitoring,
evaluating and disseminating the results of the compost program. Together, the two subcomponents are designed to establish and build a commercial organic waste composting
system that will divert part of the waste stream from the conventional waste collection
and landfill system to productive use in the agricultural landscape.
39. Design of the Compost Credit System Recognizing the GEF component’s
innovative and evolving nature, within 12 months of project effectiveness, the GOI will
present to the Bank and the GEF CEO a report outlining how the compost credit delivery
mechanism will operate, how the funds will flow and its audit arrangements. Further
disbursement of GEF funds will be conditional upon GEF’s agreement (in writing) to
proceed, following its review of this report. Within 12 months of project effectiveness
the GOI must also establish an international waste management/composting advisory
board, as well as a national research team. These teams must develop a national and
international program for disseminating the results of the composting initiative.
40. Operation of the Compost Credit System Under the proposed compost credit
scheme, any accredited compost user (an individual, firm, farmer, or government agency
that agrees to adhere to compost quality and application standards and registers with the
Waste Corporation) will be able to submit invoices showing the amount of compost it has
purchased from similarly registered compost producers and be reimbursed a compost
credit for the amount purchased. This will help to ensure sustainability as it is the user
who is being assisted, thus placing the emphasis on producing good quality useable
compost, rather than simply disposing of the waste. The amount of the compost credit
12
will be based on the level of GEF support available and on possible revenues, and would
be established every six months and advertised. A compost/vermicomposting producers
and marketing association would be started and assisted to expand both the amount of
compost produced and the potential markets. All invoices would be randomly audited by
the independent technical team, as well as government auditing agencies. Spot checks of
users, e.g. farms, and producers will also be made. As the composting system develops
and demonstrates its benefits, waste disposal organizations will be encouraged to pay
compost producers the avoided costs of processing the organic waste that is being
composted. Together, these payments and revenue from the sales of compost will allow
the GEF support to phase out and the compost system to become financially sustainable.
41. Prior to Bank and GEF agreement to proceed to APL2, at least 150,000 tonnes of
good quality compost must have been produced and sold and an international workshop
on compost and its role in municipal waste management must have been convened by
GOI. Prior to moving to APL3, 450,000 tonnes of compost must have been produced and
sold and all participating communities must be operating sanitary landfill sites
42. An international panel of experts to monitor compost activities and provide
independent verification of project activities. Local neighborhood groups would also be
established to assist local waste management authorities to ensure that high quality
organic waste is separated and waste diversion activities are maximized.
Component
Solid Waste Management
Sector
Indicative
Costs
(US$M)
GEF
financing
(US$M)
BankFinancing
(US$M)
% of
Bankfinancing
9.67
32.9
3.00
6.45
31.1
2.49
8.5
0.00
1.85
8.9
2.67
9.1
0.00
1.58
7.6
4.33
14.7
0.00
3.64
17.6
6.91
23.5
0.00
4.60
22.2
3.32
11.3
0.43
2.61
12.6
Total Project Costs
29.39
100.0
3.43
20.73
100.0
Total Financing Required
29.39
100.0
3.43
20.73
100.0
Community Environment
Facility
Small and Medium sized
Industries
Environmental Education
Environmental Management
Training & Support
Pollution
Control / Waste
Management
Other
Environment
Pollution
Control / Waste
Management
Urban
Environment
Urban
Management
Urban
Management
% of
Total
*NB The above cost table is for APL1. A total of $10 million is being requested from GEF – the
remaining $6.6 million would be disbursed in APL2 and APL3.
13
2. Key policy and institutional reforms supported by the project:
43. (a) Improved cost recovery for solid waste services, with a special focus on
business waste collection, an area in which local government collection will be phased
out as collection by the private sector increases (local governments to concentrate on
residential collection, especially from poor areas); (b) The establishment of a Jabotabek
regional waste disposal authority; (c) strengthened compost marketing associations to
increase composting and better integrate it with the agricultural community (with GEF
assistance); (d) Large scale policy assistance from central government e.g. timetable for
lead removal from fuel and waste minimization strategies; (e) Preparation of annual plans
for participating communities that highlight last year’s achievements and next year’s
goals.
3. Benefits and target population:
44. The project will improve the urban environment (or reduce the rate of degradation)
in targeted communities, with an affected urban population of some 50 million by 2025.
This will in-turn improve human health and overall environmental sustainability. Well
functioning, healthier urban areas are critical to the long term economic success of
Indonesia. The project will help to develop environmental services in a manner that
maximizes environmental benefits while minimizing service delivery costs.
45. West Java has some 30 million persons in urban areas. About 15% of this
population, or 4.5 million, are poor and are often the most affected by sub-standard
services. Special targeted efforts will be provided for the estimated 150,000 waste
pickers. In addition to urban dwellers, the agricultural community will benefit from the
large-scale availability of good quality organic waste compost.
4. Institutional and implementation arrangements:
46. Late in the preparation process BAPPENAS directed that D.G. Cipta Karya would
be the project’s executing agency; initially it was envisaged that the Ministry of Home
Affairs, or perhaps BAPPENAS, would be the executing agency. This change is
predictable considering the recent directive from MOF that BAPPENAS could no longer
execute projects and the wholesale changes now underway at the Ministry of Home
Affairs. The project was structured to be able to accommodate a change in executing
agency since the majority of implementation is to be carried out by local governments.
Central government support is needed more for coordination and assistance with
legislative and policy changes. Since the tasks proposed for this project transcend any
single ministry, e.g. the Ministries of Finance, Home Affairs, Environment, Education,
Industry, Public Works and BAPPENAS, a Steering Committee will be established to
oversee project issues at a central level (as was used during project preparation). This
Steering Committee will be supported by a Project Secretariat with membership from
DKI Jakarta, West Java, Bappedal, and DGCK. This Steering Committee and Project
Secretariat will be charged with providing assistance to the local governments and
implementing the central government components (about 15% of the project).
47. The GEF supported compost credits will be administered through a relatively
simple program where users of compost are provided "compost credits" upon proof of
use (submission of invoices which are randomly audited). The Jabotabek Waste
Management Corporation will provide the administrative structure for this. A separate
14
technical assistance contract will be provided through the scientific community
(Indonesia has excellent agricultural research centers for example). This group will
randomly test compost quality, and verify the independent audit reviews of compost use
(e.g. field checks). They will also assist with market development and dissemination of
the results. An international bi-annual Composting Conference will be established in
Indonesia. Under this contract the nascent compost (and vermicomposting) marketing
association will be assisted, as will independent local NGOs to provide community
education and verification of composting activities.
Monitoring and Evaluation Arrangements:
48. The Project Secretariat will be responsible for overall project monitoring based on
reports from each local government (PMUs). These results will be summarized every six
months and presented to the Steering Committee. Every year a "Environmental Update"
will be prepared by the Secretariat. This document will be made up "State of the
Environment" reports prepared by all local governments. The Environmental Update will
be publicly discussed at an annual workshop, to which the media, community
representatives, political leaders, and government staff will be invited. The discussions
will include a summary of how local environments are improving/degrading.
49. Collection of project data will largely be contracted to local secondary schools.
Collection of this data will be integrated with the Environmental Education component.
The Project Steering Committee will also take an active role in transferring lessons across
participating governments. For nationally implemented components, DG Cipta Karya
will be responsible for monitoring project accounts (in addition to local government
accounts) and Bappedal will be responsible for the review and monitoring of progress for
technical studies.
50. Monitoring and evaluation of the GEF component is a critical issue since there is a
keen desire to replicate the process in Indonesia and internationally if successful. There is
also an important requirement to disseminate monitoring and evaluation results to the
general public. There is a strong push within the community for local governments to
expand composting activities as they are seen as much more “environmentally friendlier”
than alternatives (e.g. The Jakarta Post, 22 July, 1999, quoted Salam H.S. of the
Indonesian Forum for Environment claiming that 90% of Jakarta’s organic waste could
be composted). Three broad mechanisms for monitoring and evaluating - and
disseminating - the results of compost activities will be used: (i) an independent scientific
team with input from the Agricultural University at Bogor will be retained to monitor
compost quality, Greenhouse gas emission reductions, and identify new markets (this
group will also be assisted by the compost / vermicomposting marketing association
which already exists), (ii) both government and independent project financed auditors
will review invoices, compost production, and distribution of compost credits, and (iii)
each local government will be required to have extensive public consultations every year,
leading towards the preparation of an annual “State of the Environment” report which
will include data on how much compost was produced in the city and where it went.
Financial Management System:
15
51. A Financial Management System (FMS) will be established under the project, in
line with the Bank's OD 10.02 and the LACI standards. The project accounting system
and procedures will follow the government accounting system. The PMU will be
responsible for maintaining the accounting records (through CPMO or similar DG Cipta
Karya based office), on cash basis, and for keeping all the supporting documents for
annual audits; and the audit opinions shall be submitted to the Bank within six months
after the end of each FY.
52. A manual documenting the FMS and procedures shall be adopted prior to loan
effectiveness. The manual will include control, accounting and disbursement procedures,
project management reporting (PMR) and auditing arrangements.
53. A Special Account under the custodian of DG Budget would be held in Bank
Indonesia. The Bank's disbursement to the Special Account would be made upon
submission of quarterly PMR by the PMU. Withdrawal of funds from the Special
Account against eligible expenditures would be authorized by DG Budget upon receipt of
PMU requests.
D: Project Rationale
1. Project alternatives considered and reasons for rejection:
54. Limiting the project to solid waste management activities - A self-standing solid
waste management project was the initial preference. However by moving forward with
this, we would have reduced the considerable community and local government support
now behind the project. Also, the key issues needing resolution in the solid waste sector
are not so much investment requirements, but rather management and policy initiatives,
e.g. shared disposal facilities, phasing out collection from businesses, increased (and
more transparent) revenue collection. These policy changes require considerable
commitment from local governments, and obtaining the support is more likely when the
politicians and communities see the need as part of a larger strategy.
55. Although improper solid waste management is the cause of some 30% of the BOD
loading of local waterways and is a significant source of particulate air pollution, benefits
from improved service would not be readily visible to the general community, e.g.
waterways would still be polluted from sewage and the air would still be dirty from
automobile emissions. Unlike Beijing for example, where a single intervention, such as
replacing coal fired boilers will yield visible environmental improvements, the urban
pollution problems of metropolitan Jakarta and Bandung require more complicated and
longer term interventions to see tangible results.
56. Limiting the project to Jabotabek - This would make sense. Addressing only
Jabotabek naturally follows the JUDP 1, 2 and 3 series of interventions and is a much
more manageable geographic scope. However, West Java clearly stated its desire to
include other key urban areas. BAPPENAS agreed. During preparation the benefits of a
broader West Java focus emerged; (i) by including other urban areas there is more
support from the Governor of West Java and key staff to implement policy reforms, (ii)
Bandung’s environmental problems are among the worst in the country and urgent efforts
are needed, (iii) the Bank’s City Development Strategy in Bandung is helpful in directing
16
implementation requirements, and can be replicated both within and outside of this
project investments, (iv) the larger area of western Java allows more support at a national
level to look at nation-wide policies such as waste minimization and environmental
awareness, (v) critical issues such as emergency preparedness in Serang and waste
disposal in Cirebon emerged - and can be assisted through the project, (vi) the broader
scope has also enabled a more senior and representative Steering Committee, (vii) the
project’s broad scope has the potential to show the general community both the
complexity and possible practical responses to neighborhood pollution.
57. Limiting implementation to one government agency - This too makes sense and
would be the preferred approach. However, as shown in efforts such as Integrated Urban
Infrastructure Development Projects, no single government agency has the ability to
break through the bureaucratic challenges of working through one agency while trying to
obtain changes in another. Also, the issue of urban management and pollution reduction
should be led by local governments. As decentralization proceeds in Indonesia, nowhere
is there a better opportunity to work with newly empowered local governments as with
environmental management. Although supervision of this project will be daunting, there
are however only two management agencies: DKI Jakarta and TKI West Java. Key
supervision will have to be delegated to these two very capable agencies.
58. Cofinancing and more programmatic lending - A review of solid waste activities in
this area was undertaken (misc. Report 1 mentioned in Strategic Context B) which
highlighted that many agencies are active in this sector, e.g. some sixty donor-funded
waste management pilot projects. OECF is financing a large scale transfer station in
Jakarta; and ADB has far more experience in Bandung; the Swiss government in
Cirebon; and GTZ in recycling activities. This is good as there is more than enough work
to do for every possible development agency. Attempts were made during preparation to
coordinate these activities and much progress was made, e.g. the project follows the
recommendations of ADB’s Sanitation Review. However, since issues of solid waste, and
other urban environmental activities are complicated and require mostly a sustained and
professional local government response, this project attempts to place the responsibility
for these services (and hopefully the tools to meet these challenges) squarely with local
governments. The World Bank, and other agencies as well as provincial and central
government representatives, will help, but ultimate responsibility rests with the local
governments. These numerous activities cannot be coordinated under a single project,
especially as it is already a complicated undertaking. In order to help local governments
with coordination and encourage cofinancing activities, the management committees
being established in each local government will not be limited to project activities, but
rather focus on environmental management in general, and identify specific ways in
which the project, or other donor assistance, can help. These committees will be headed
by the Sekwilda and report to the Walikota / Bupati.
59. The project already has a significant programmatic component though it was not
considered prudent to make it wholly programmatic since local governments and their
communities want to see tangible environmental improvements as soon as possible.
BAPPENAS has already expressed interest in replicating this project format in other
areas. Experience will be gained quickly and this issue could be reviewed within the first
12 months of implementation.
17
60. Non Adaptable Program Lending - Initially the project was designed as a standard
investment project, i.e. 5 year implementation and about $130 total cost. With recent
changes to local governments in Indonesia, e.g. greater autonomy, larger role of DPRD,
more involvement of civil society, and considerable uncertainty about future local
government finances, it was clear that a more flexible approach was needed. More
emphasis is needed on policy initiatives and clearly met activities prior to large scale
investments. Also the general community in Indonesia (e.g. local NGOs) is concerned
about Indonesia's current external debt and is keen to see any future loans as small as
possible, especially those with sub loans to local government.
61. A higher lending ratio for local governments - As solid waste management, waste
water treatment, and general environmental management are increasingly the sole
responsibility of local governments in Indonesia, a case could be made that more of the
funds should be on-lent to local governments, and the proposed 80:20 Bank: GOI cost
sharing ratio be reduced. The overall three part APL is consistent with this approach,
however APL1 is heavily geared towards technical assistance and developing the broad
policy framework consistent with all local governments. Also there is now considerable
uncertainty on local government financing capacities. This will be verified over the next
two years however it is imperative that some (albeit more modest) activities to reduce
urban pollution begin immediately. The APL format has enabled tailoring of the project
to be more consistent with current circumstances, however this results in an upfront
predominance of studies and management (e.g. institutional) changes. Assistance from
the GEF, approximately US$ 3.4 million in APL1, helps to offset local government solid
waste management costs (the largest project sector).
2. Major related projects financed by the Bank and/or other development agencies
(completed, ongoing and planned).
Sector Issue
Project
Latest Supervision
(PSR) Ratings
(Bank-financed projects only)
Implementation
Progress (IP)
Development
Objective (DO)
-Improve provision of basic urban
Third JABOTABEK Urban
services, especially in low income
Development Project (JUDP3)
communities;
-Strengthened environmental protection
S
S
Improved regional planning in urban
JABOTABEK Urban
transport and water supply respectively Development Project (JUDP1),
JUDP2
Municipal service provision
Various decentralized Urban
Projects (e.g. EJBUDP,
SIJUDP, KUDP, Second
Sulawesi UDP)
Institutional Strengthening
Bappeda Assistance
Teacher Training
West Java Basic Education
S
S
S
S
S
S
S
S
Bank-financed
Other development agencies
ADB
Bandung UDP
18
OECF
Swiss Government
USAID
GEF
Botabek UDP
Jakarta Transfer Station
Cirebon Urban Assistance
Private Sector Activities
Small-scale Composting
Land Management Programs
IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
3. Lessons learned and reflected in the project design:
62. There is no PCR related to the specific sector and geographical area of the proposed
project. Ongoing projects, e.g. JUDP 3 however provide important lessons; (a) working
with DKI Jakarta is considered difficult by the neighboring, less affluent and powerful
municipalities; (b) the Jabotabek Environmental Strategy (funded under JUDP 3) is
technically one of the best, but the strategy that had the least stakeholder involvement and
follow-through compared to the other 5 MEIP cities (Kuala Lumpur, Manila, Bombay,
Katmandu, Beijing - based on an internal Bank review). The clear lesson being that
stakeholder involvement and meaningful and sustained dialogue is critical for the long
term success of environmental projects in Indonesia.
63. These findings were corroborated by the OED review of Kampung Improvement
Projects, which found that targeted urban-sector development can have a very positive
impact on low income areas and that the majority of residents experienced environmental
improvement through neighborhood programs. This came about largely when local
governments acted as facilitator and a respectful partnership was established between
local government and civil society.
64. IUIDP projects (i.e. Integrated Urban Infrastructure Development Projects) have
had considerable success in improving municipal service delivery, however they are not
appropriate for technically complex investments and those that span several
administrative jurisdictions, or require a greater than 5 year planning horizon.
Furthermore, the development effectiveness of the investments is critically dependent on
the existence of appropriate sub-sector policies.
65. Perhaps one of the clearest lessons is emerging from the Second Sulawesi UDP.
The objective of infrastructure development is being successfully met, but the more
nebulous objective of improved urban management is not yet successful. This is mostly
due to two broad issues; (i) D.G. Cipta Karya and the local governments prime focus
(understandably) on contract awarding and implementation, and (ii) the longer term and
broader institutional changes needed for better municipal management, e.g. adequate pay
based on measurable output, connecting community wants and ability to pay, working
partnerships that transcend single departments or local governments. Although this
management improvement may be more difficult to achieve and measure than
infrastructure developments, there is evidence that improvements are possible and
already accruing to local governments that show leadership in these areas, e.g. Gorantalo
is a better managed community than Manado (these skills and attitudes are transferable).
66. The World Bank has significant experience in urban environmental management
activities. Within the region, China provides important lessons on better integration of
19
local government authorities and the Philippines SWEEP project highlights the potential
political sensitivities associated with solid waste management. The LAC region likely
provides the most comprehensive experience on overall improvements to solid waste
management. An important lesson on scale and investment requirements for air pollution
reduction is provided through the Bank's long standing activities in Mexico City. In terms
of metropolitan city management the Asian Development Bank's recent research
activities and publications (including the sanitation study carried out for Indonesia) are
very helpful.
67. Six small scale composting facilities were previously established through World
Bank grants. They verified that composting is a practical waste management option and
highlighted the need for larger scale marketing programs, and inclusion of avoided waste
disposal collection and disposal costs to ensure sustainability. Similarly, the World Bank
hosted an international workshop in 1997 to explore ways in which the urban waste
could be integrated with agricultural needs (see Reuse of Urban Waste for Agriculture:
An Investment Program for Progressive Action, May 1998). The consensus from this
workshop and follow-up reports (and evidence from countries such as India), promoted
composting as a key component of municipal waste management in developing countries.
4. Indications of borrower and recipient commitment and ownership:
68. GOI has consistently emphasized environmental improvement as a development
objective in previous Repelitas and investment projects. Indonesia is a recognized leader
in developing innovative environmental management programs, e.g. PROKASIH,
Adipura, Blue Sky, and Industrial Rating. Implementation and day to day management is
the area now seen as needing the greater focus.
69. This project was first proposed as solid waste management intervention, specific to
Jabotabek. However, through preparation efforts (led by BKSP), government agencies
requested an expansion of the scope and geographic extent to include additional urban
areas of West Java (Botabek Bandung, Serang). The government has also expressed
interest in other Metropolitan Waste Management Projects.
70. Bappenas and local government staff have actively encouraged project
development. Bappenas has insisted on maintaining a broader project perspective in
developing a comprehensive urban environmental management action plan.
71. Highlighting the increase in environmental awareness, past President Suharto
authorized the phase-out of lead in fuel by 1999 (program delayed). Many agencies have
considerable interest in moving forward with this commitment. Government agencies
(e.g. Bappenas) threatened the progress of the project if it did not contribute in some
catalytic way in phasing out lead in fuel.
72. DKI, Jakarta, often finds the Bank’s project requirements onerous and generally
does not want to borrow. They are interested in more visible, large scale investments.
However DKI Jakarta has taken a leadership role in ensuring a technically sound
approach to environmental management during project preparation. Their assistance is
already helping other participating governments.
20
73. An important indication of commitment is the relatively lengthy preparation
process that this project underwent. Public workshops were held, advertisements placed
in newspapers and a thorough stakeholder consultation process undertaken. However,
once a firm commitment was given (i.e. political conditions improved and D.G. Cipta
Karya was asked to finalize project preparation, and act as the executing agency) progress
was extremely rapid (and funded by governments own funds). Recent meetings, both
with the public and local government staff and leaders (including DPRD) have been very
productive and better refined the project to mesh with recent developments
74. All levels of the government, and increasingly importantly, the local community,
are committed to composting. Environmental groups consistently encourage the
government to adequately incorporate composting into the waste management system.
Indonesia has one of the highest levels of support for composting in the world, and could
easily become a "center of excellence" for the production and use of good quality
compost.
5. Value added of Bank and GEF support in this project:
75. The Bank is well positioned to assist GOI in meeting the objectives of the proposed
project. The broad scope, and multi-jurisdictional nature of this project require a
concerted and long term effort - with investment finance, assistance in practical
management methods, and complementary research activities. This project will require a
partnership between GOI, the community, and various bilateral and multi-lateral agencies
(e.g. World Bank, ADB, OECF, USAID and GTZ). This partnership is already being
strengthened and hopefully led by participating local governments e.g. the Bandung CDS.
76. The Bank has considerable experience in urban environmental management in
Indonesia, as well as international experience; both of which will be required to
maximize the impact of this project. The Bank is also active at all three levels of
government; all of which will need to be involved in the project. The Bank’s widespread
presence in Indonesian urban areas will allow relatively rapid replication of successful
project components.
77. The Bank is also able (hopefully increasingly so) to provide an integrated approach
to municipal management activities. For example the project intends to have two main
components (environmental education and compost marketing) incorporated within other
existing Bank activities. The Bank will also facilitate international linkages between
secondary schools for the design and monitoring of the project’s performance indicators
(making them more relevant).
78. Assistance from the Global Environment Facility will enable Indonesia to establish
an internationally renowned 'center of excellence' for composting application and
research, in addition to large scale exploration on how best to make composting an
integral component of an overall municipal waste management strategy. Significant
overall environmental benefits will accrue from these activities. The GEF funds will
make it possible for both significant reductions in Greenhouse gas emissions as well as
providing an incentive to establish a better overall waste management system. The
compost will also aid in better land management practices, e.g. reducing land degradation
and conserving biodiversity. GEF support is essential to (a) overcome the barriers to the
21
world's first large-scale GEF supported composting program - particularly its high startup costs and perceived risks, and (b) support independent scientific monitoring,
evaluation, and dissemination to demonstrate the system's global and local benefits and
cost-effectiveness and thus promote its replication. By providing sufficient amounts of
compost and assurances of a relatively stable level of production the GEF assistance will
also enable exploration of innovative ways in which the private sector can be involved in
production, marketing and use of compost to help alleviate some of the challenges facing
local governments.
79. The Bank will also endeavor to bring international experience into the project. One
such example being the hopeful replication of a successful waste picker assistance
program in Brazil. A simple concept in Brazil, where poor families are paid scholarships
(Bolsa Escola) to keep children in school, should be readily transferable to Indonesia.
The transfer of this knowledge will hopefully be both ways and Indonesia should be able
to export some of its composting acumen. The Bank will also facilitate the establishment
of an international panel of compost/waste management experts to provide assistance to
Indonesia and help transfer technically-sound information.
E. Summary Project Analysis
1. Economic:
80. As many as 30 million people could benefit from this proposed project through
improvements to local environments. Although a single project cannot hope to alleviate
all of western Java’s urban pollution, the proposed project will provide tangible benefits
through: (i) improved solid waste collection and disposal; (ii) improved public health;
(iii) increased economic growth including employment generation both within
participating industries and local neighborhoods; (v) improved municipal management;
and (vi) enhanced environmental awareness.
81. Improved solid waste management will reduce localized flooding and water and
vector borne ailments and respiratory problems associated with particulate air pollution
(it was also reduce nuisances and enhance civic pride). Enhanced private sector
involvement in solid waste management will increase overall efficiencies and enable
local governments to concentrate on residential collection, especially poorer
neighborhoods (where economic benefits are greatest). Programs to assist waste pickers
will improve their health, economic opportunities and overall quality of life. Local and
national economies will be strengthened through assistance to participating small and
medium sized industries.
82. Wherever possible, costs and benefits will be quantified in monetary terms.
Economic analyses with cost-benefit reviews (on a with and without basis) will be
conducted for all solid waste and environmental management components in excess of
US$ 100,000. The benefits associated with environmental improvements are difficult to
quantify due to factors such as improved quality of life and reduced mortality and it may
be necessary to carry out a least-cost analysis for these components.
83. The estimated incremental cost of the GEF component (the NPV of the difference
between the net economic costs of the Baseline and the GEF Alternative systems) for
22
handling 1 million tonnes of organic waste is $11.1 million (Annex 2). This translates
into a unit GHG abatement cost of $1.7/tonne of carbon equivalent. This is far below the
$10/tonne upper limit for Short Term GEF Projects and highlights the potential
replicability of this option, as both a cost effective municipal waste management option
and global GHG emission reduction program.
2. Financial
84. Financing Arrangement: The exact ratio of loan versus grant from central
government to provincial government and on to local government is still not certain. This
has been the most contentious issue during project preparation, since budgetary issues are
still unclear vis a vis the new decentralization directives. The consultants have
recommended that funds for environmental education, "new innovations" in solid waste
management, and project management be provided through grants from central
government Small and medium sized industries and solid waste management would have
counterpart loan components and also private sector financing. Community
environmental facilities would have grants and revolving loan finance and environmental
management would be addressed on a case-by-case basis. Land acquisition is not eligible
for Bank financing.
85. Cost Recovery: Inadequate levels of operation and maintenance funds for solid
waste operations are the most debilitating problems in the sector. The policy initiatives
being promoted by this project will increase O&M requirements which is obviously a
serious concern. However, current levels of solid waste collection and typical disposal
practices are unacceptable; government agrees with this assessment. Through
introduction of the Jabotabek Waste Management Authority, more efficient waste
disposal is anticipated; the increased costs for this will be largely borne by tipping fees,
which will affect commercial establishments the most (although costs will still be far
below international norms). Detailed cost recovery proposals will be discussed with local
governments during appraisal.
86. Cost recovery analyses will be completed for all components over US$ 100,000
except environmental education.
Fiscal Impact:
87. There is now much financial uncertainty within Indonesian local governments; new
decentralization laws have been passed, but their impact and execution is still unclear. All
local governments were very reluctant to take on any additional debt as part of this
project. This was one of the main reasons for structuring it into an APL format. APL1 has
minimal borrowing requirements for local government and the size has been
intentionally minimized (the main waste water treatment facility in Jakarta will be repaid
by participating industries). APL1 will provide local governments an opportunity to see
how the new fiscal decentralization unfolds, as well as work with the private sector to
develop ways in which more funding can be provided from them, e.g. a privately
operated landfill in Serang. The environmental awareness campaign will also inform the
public why tariffs are necessary for urban service delivery.
88. At the National level the APL has also been useful in keeping the size of the project
as small as possible while still bringing about the policy initiatives needed.
23
3. Technical:
89. The consultants have reviewed landfill site requirements and current operating
practices and suggested numerous improvements. A key requirement is better site
selection processes that involves more community participation. The community should
not only be involved in the selection process but should also be part of an active and
credible monitoring committee (which would report directly to the Walikota / Bupati).
The project intends to help improve landfill operations in participating communities: this
will include training; improved designs, site selection, and operations; increased
operating budgets; professionalization of the Jabotabek Waste Authority; monitoring
programs, and; private sector participation.
90. Other technical issues in the solid waste sector are composting--facility design,
operations and siting, and medical waste management (adoption of an environmentally
sound and affordable program). The introduction of "compost credits"-- to be financed
through the Global Environment Facility--is also a logistical challenge. Ways to maintain
compost quality and ensure long term markets need to be verified. National compost
quality guidelines were developed as part of project preparation.
91. Waste minimization is a difficult task at which developing countries are rather
inexperienced--where the total volume of waste is not so much the issue as is the rate of
increase. International activities and regional cooperation are needed. Providing tangible
assistance to waste pickers is also a technical challenge. They can seriously impede
proper waste collection and disposal, they are often difficult to organize and considerable
social acumen is needed to provide meaningful assistance.
92. The design, financing, and operating arrangements for all wastewater treatment
plants to be financed by the project still need to be reviewed.
93. A broad based environmental awareness campaign is proposed for inclusion within
the project. There is little experience within Indonesia and the World Bank in carrying
out these programs.
94. Assistance to participating industries needs to be structured within a practical
business framework as well as effectively reducing pollution loads. Trade associations
need to be mobilized to assist in implementation.
4. Institutional:
a. Executing agencies:
95. The Project's Executing Agency will be D.G. Cipta Karya of the Ministry of Urban
Development and Human Settlements. Implementation will be the responsibility of
participating local governments (overseen by the local Council (DPRD) and
Walikota/Bupati, the Province of West Java (Bappeda) and participating national
ministries (Bappedal, Industry, Education).
b. Project management:
24
96. Project preparation is now being managed by D.G. Cipta Karya. Key project
management is expected to be assigned to three staff seconded to the Project Secretariat
(from DKI Jakarta, West Java, and Bappedal). The bulk of implementation will rest with
each participating pemda. Classroom related environmental education activities will be
overseen by the Ministry of Education, the Ministry of Industry will assist with business
assistance, and the Ministry of Agriculture will be asked to help compost marketing
efforts through their extension workers.
5. Social:
97. Women and children bear the brunt of poor urban environments. The key areas for
improved solid waste collection will be slums (these areas are traditionally not collected
by municipal crews because waste collection from businesses is more lucrative).
Environmental education activities will be targeted at school children; simple, yet highly
effective things such as visiting the zoo are included in the education program.
98. The community must play a pivotal role in the Community Environment Facility.
This is still a concern as local governments often prefer to work through known
intermediaries.
99. Working with the waste picking community requires sensitivity and sustained
contact. Project officers may at times find themselves mediating between waste pickers
and local government waste management staff. Key to this component will be its ability
to enhance mutual respect.
100. Good solid waste management requires good community relations. Through recent
decentralization laws and political turmoil, Indonesia’s local governments are undergoing
a transformation and both they and the community need to work together. For example
JUDP3 tried for 18 months to get DKI Jakarta to accept assistance from the local Rotary
Club. Building this trust takes time.
101. There is also an international social issue that needs to be raised; affluent Asians
are among the world’s most profligate waste generators. Although this project focuses on
improved environmental services for the urban poor, it also needs to work with national
agencies, the international business community, and the global community, to champion
waste minimization. Indonesia and the Philippines are two of the world’s most
challenged countries for waste management needs over the next 25 years, therefore
international partnerships need to be developed to address this issue.
102. Compost activities have been promoted by community groups and environmental
NGOs. These individuals need to be kept involved in the composting activities to both
help with community education aspects and market development, and provide input to
compost producers on any potential concerns neighboring residents or compost users may
have.
6. Environmental assessment:
Environment Category: B
103. The largest environmental threat from the project is probably poorly located and
operated landfills; this is certainly the case now. Landfills are typically set ablaze, with
corresponding air pollution (undoubtedly very unhealthy for workers and waste pickers),
25
leachate escapes to local watercourses and groundwater, damaging local ecosystems and
impacting health, and they are usually a nuisance to neighboring residents.
104. Uncollected solid waste is a perfect spot for breeding mosquitoes (improving solid
waste collection is one of the easiest ways to reduce dengue fever) and when dumped in
canals it further contaminates them and exacerbates flooding. "Temporary" waste
disposal sites are common throughout the project area--their environmental impacts can
also be severe.
105. Improvements in landfill operations are not easily obtained in Indonesia.
Environmental assessments, consistent with both the Bank’s and Government of
Indonesia’s requirements, are critical but they are inadequate. Along with the required
EAs this project will attempt to ensure that credible landfill operating plans are also in
place, and more importantly provide mechanisms to ensure that they are followed.
106. Potential environmental impacts from compost facilities and the overall impact if
compost quality is poor also needs to be carefully monitored within this project. The
project also calls for a program to address medical waste (to be further refined in APL1).
Current practices are woefully inadequate, but this does not imply that Bank supported
follow-up activities can be lax in environmental safeguards. A thorough EA should be
completed on any medical waste program. Similarly all landfill operating plans supported
by the project need to provide for adequate medical waste treatment.
107. Individual components within the project may have adverse environmental impacts,
e.g. a proposed waste water treatment facility in Pulogadung. All components will be
screened for environmental impacts and EAs, and operating plans will be required where
warranted. Environmental reviews will be closely supervised by RSI staff since the
Bank’s environmental safeguards obviously need to be followed, but more important is
the project’s goal of assisting in attitudinal shifts within government staff and helping to
provide practical ways in which they can minimize the environmental impact of their
municipal activities. Experience in this partnership is being developed in the Second
Sulawesi UDP.
108. In order to overcome past problems with landfill operations and management
shortcomings of landfills and wastewater treatment plants, the project was structured as a
3 Phase APL. Phase 1 has no actual construction of landfills but rather concentrates on
improving the management aspects and public monitoring of landfills. Agreement to
finance any new landfills (in APL 2 or 3) is predicated on the following: i) acceptable
Environmental Assessments and operating plans - to the Government of Indonesia
(Bappedal), ii) acceptable Environmental Assessments and operating plans - to the World
Bank, iii) land acquisition plans consistent with the Government of Indonesia and World
Bank local and National standards, iv) establishment of Community Advisory Boards to
independently and objectively evaluate landfill operations and report directly to the
public, Walikota/Bupati, and DPRD, and v) sufficient allocation of annual operating
budgets to meet day to day operation requirements of the site(s).
109. Similarly, agreement to move from APL1 to APL2 is predicated on successful
operation of at least one wastewater treatment facility now operating in DKI Jakarta and
West Java. Progression from APL2 to APL3 requires successful (meeting Bapppedal
26
standards) operation of at least one wastewater treatment facility in every participating
kotamadya.
110. This program structure enables far more attention to be devoted to the management
of these facilities rather than the construction of new facilities. The format also provides
an opportunity for local governments to explore innovative ways to involve the private
sector prior to large scale facility construction. This should assist in the provision of
much needed operating funds for these facilities.
7. Participatory Approach (key stakeholders, how involved, and what they have
influenced or may influence; if participatory approach not used, describe why not
applicable):
a. Primary beneficiaries and other affected groups:
111. This project intends to be participatory throughout all stages of preparation and
implementation. Many groups were contacted for their input into project design. Further
(and sustained) discussions are needed in the area of waste pickers and programs and
mechanisms within the Community Environment Facility. Public workshops were held in
all participating communities and these will continue to be an integral part of project
implementation. Another key area will be the work with individual schools - as they will
be set up to monitor key project performance indicators.
112. The agricultural community is a key stakeholder for the widespread use of
compost, as is the private sector (potential compost manufactures and users) and
community based organizations and environmental NGOs who have been, and need to
continue to be, involved in the production and marketing of compost.
b. Other key stakeholders:
113. This project is one of the Bank's first urban interventions to establish a key role for
'civil society'. As a key stakeholder the community will be asked to monitor local
government performance, participate in programs, e.g. waste separation and greater fee
payment, and encourage government to reduce environmental pollution.
114. The international consumer products industry, e.g. Proctor and Gamble, Coca Cola,
newspapers, will also be asked to assist Indonesia (and other Asian countries) to address
the increasing waste stream. The local business (and perhaps international) community
will also be a key stakeholder through their participation in service provision.
F: Sustainability and Risks
1. Sustainability:
115. Project sustainability is key in two areas; solid waste management and improved
management capacity. Sustainability in solid waste management will depend on greater
cost recovery for waste collection, particularly through licensing arrangements with the
private sector for collection of business waste, improved collection of tariffs and tipping
fees, successful development and operation of the Jabotabek Waste Disposal Corporation,
and greater transparency of service delivery and associated charges.
27
116. Sustainability in management improvement depends largely on the leadership and
professionalism shown by local government representatives, as well as commensurate
improvements to working environments, e.g. salaries. The project is moving forward with
other Country-wide initiatives (e.g. the issue of government salaries beyond the scope of
this project), however discrete activities and ways to measure their success are being
defined as part of project preparation. Another important management area is improved
relations between the three levels of government, i.e. central, provincial, and local.
During project implementation, especially APL1, all levels of government will be
refining their roles, resource allocations, and staff salaries and accountabilities.
Sustainability needs to be predicated on a transparent and reliable government structure.
Sustainability is also conditional on local governments assuming, and being empowered
to assume, responsibility for such activities as waste disposal.
117. There are no significant technical issues though care is needed to ensure adequate
training and operating budgets and thorough review of medical waste and composting
proposals.
Sustainability of Global Environment Facility Component
118. Composting should not require grant financing when the alternative is sustainable
waste management and hence the benefits of composting, such as avoided disposal and
transportation costs can be captured. However, currently in Indonesia, as in many
countries, composting (including vermicomposting) is not as widespread as it could be.
This is due mainly to the inertia of existing programs, e.g. more emphasis on landfilling
and incineration, and the natural priority of local governments to first focus on waste
collection, and then improve waste disposal. Previous composting activities, while
generally successful, have not been sufficient to develop large scale and sustained
composting programs as integral parts of overall waste management strategies. Market
development activities and more efficient processing is still needed. The GEF component
of the project will overcome the barriers to large scale composting by: assuring sustained
production, and thus helping with market development, e.g. sufficient compost will be
produced for large scale agricultural markets; financing technical reviews and an
international composting center of excellence; integrating the private sector in the
production, marketing and application of compost; and developing a key cadre of
professionals who have technical and business experience.
119. Financial viability should be achieve as net compost production costs are reduced
to about US$ 25.00 per tonne by 2006, while waste disposal costs rise towards that
figure. These disposal costs are conservative as they do not include; i) possible
incineration costs which is being proposed for some urban areas of western Java
(incineration costs are a minimum of US$ 85.00 per tonne), ii) more costly land
reclamation activities (which would benefit from the removal of organic), iii) avoided
disposal costs - new landfills are increasingly difficult to locate in western Java, iv)
composting's ability to enhance recycling activities, and, v) broad based environmental
benefits, e.g. reduced soil erosion and pollutants from transportation. A key aspect of
sustainability that will be negotiated in APL1 is the explicit agreement by local
governments that some of the avoided disposal costs must be paid to compost producers
by them to ensure sustainable composting activities. It is unrealistic to expect that
revenues alone from compost can pay all the associated collection and production costs.
28
120. The system of "compost credits" (payment per tonne of compost used) is expressly
designed to enhance the role of the private sector in the system. Both large scale and
small scale producers would be eligible for funding. This mechanism also provides a very
simple way to guarantee that CO2 emissions have been reduced as agreed to in the
project concept. Funds will only be allocated per volume of compost produced, and CO2
reductions are guaranteed when organic waste is composted. Random checks to verify
amounts produced and compost quality would be undertaken by project authorities and
supervised by Bank staff. An extremely simple performance indicator, i.e. amount of
compost produced, will be used to monitor the GEF component. Another important role
of the GEF funds is to encourage composting on a scale in Indonesia that enables the
country to be a world leader in composting and provide sufficient production to benefit
the agricultural community. This increased pride and national expertise is also critical to
assure sustainability.
2. Critical Risks:
Risk
From Outputs to Objective
Jabotabek Waste Management
Corporation not well established or
poorly financed and managed
Risk Rating
Risk Minimization Measure
S
Commitment received from both
Governors as part of project
preparation, financing structured so
that there is a benefit for pemda to
participate.
Local governments do not phase out
of commercial waste collection.
S
Landfills not properly operated.
S
Coordination between various
project agencies and departments
remains weak
M
Agreement from governments is
part of loan effectiveness and
support for the policy has been
obtained from central and
provincial agencies. Licensing fees
for private waste haulers are
expected to compensate for loss
revenue.
Prior to any construction each new,
and expanded landfill will require
an agreed-to operating plan (with
budget allocations and names of
responsible staff). Local
communities will be involved in
siting and monitoring operations.
Governments given clearly defined
responsibilities and performance
measurements. Project secretariat to
be staffed by competent and
committed staff.
From Components to Outputs
Slow implementation because of
procurement delays.
M
29
Bank organizes procurement
training for all levels of
Government and support from
international consultants for
Waste Authority is unable to attract
and retain high caliber staff.
M
Poor compost quality.
M
Ineffective teacher training and
public education campaign.
M
Poor targeting or control of funds in
the Community Environment Fund.
M
Ineffective assistance to small and
medium sized industries.
M
Poor synergies between project
components.
S
Overall Risk Rating
S
procurement processing.
Authority given more autonomy for
staff recruitment and salary
provision. Partnering Authority
with a similar authority in
Australia. Agency held accountable
for performance.
Guidelines already prepared for
Indonesia and a review of waste
streams to be made prior to
construction of any facility.
Public education campaign to be
run by a professional and
experienced firm. Teacher training
to be integrated with the West Java
Basic Education Project.
Control mechanisms developed in
previous projects to be used.
Community consultation and NGO
involvement on advisory boards.
Involvement of industry
associations, independent banking
reviews, pollution targets set for
each participant.
Responsibility for all activities
within a local government rests
with Walikota/Bupati and
Sekwilda. Annual plans to be
produced by each city. All local
governments to publicly discuss
and agree to participation in the
project through DPRD (local
Council) resolution.
Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)
3. Possible Controversial Aspects:
121. Indonesia's recently empowered civil society is taking an active part in project
preparation (and implementation). Recently, of the 10 NGOs invited to a preparation
meeting, 8 boycotted the meeting, concerned with Indonesia taking on any new external
debt.
122. Landfills, to be constructed in APL2 are a controversial issue. Jakarta is already
experiencing public opposition to existing landfills. Similarly, medical waste disposal
facilities, which may be financed in APL2, can be contentious. Activities with waste
30
pickers should not generate any controversy but this has traditionally been a sensitive
issue in Indonesia.
G: Main Loan and Grant Conditions
1. Effectiveness Condition
123. The Government of Indonesia will be required to meet the following conditions for
Board presentation:
124. Guidelines for MOUs with all local governments, including formats and procedures
for financial and work plan reporting, and criteria for fund disbursement, have been
finalized.
125. Local government Councils (DPRDs) to have passed resolutions (Perdas)
supporting their participation in the project and agreeing to public consultation and
reporting mechanisms. Those who do not would be excluded from APL1.
126. PMUs, local "Environmental Forums" and PMOs established, and the
qualifications, remuneration, support, and annual performance review criteria for
individuals proposed for key PMO positions agreed with the Bank.
127. The firm(s) and individual(s) to support the Project Secretariat to have been
selected.
2. Other [classify according to covenant types used in the Legal Agreements.]
128.
Conditions to be agreed to at Negotiations:
 Government to have passed required legislation (SKs) to establish the Jabotabek
Waste Management Corporation.
 Project performance indicators, and a mechanism to monitor and report them, to
be agreed-to.
 Completion of the Project Implementation Plan and a Project Operational
Manual.
 GOI will maintain, until program completion, and PMO with competent fulltime staff, including representatives from DKI Jakarta, Province of West Java,
Bappedal, and D.G Cipta Karya.
 All participating local governments and the province of West Java will complete
annual "State of the Environment" Reports which will be discussed with the
general public (all concerned citizens and interested groups) and will always be
available for easy public review. These reports will include project performance
indicators and information on local environmental quality.
 GOI will authorize an independent agency to evaluate the all "State of the
Environment" Reports.
I. Compliance with Bank Policies
129.
This project complies with all applicable Bank policies.
31
ANNEX 1: LOGFRAME MATRIX
PAGE 1 OF 4
ANNEX 1: PROJECT DESIGN SUMMARY / LOGFRAME MATRIX
INDONESIA: WEST JAVA AND JAKARTA ENVIRONMENTAL MANAGEMENT PROJECT
\
Hierarchy of
Objectives
Sector-related CAS Goal:
Improve environmental
quality in participating
urban areas
Key Performance
Indicators
Sector Indicators:
Monitoring &
Evaluation
Sector/ country reports:
(from Goal to Bank Mission)
Solid waste, health, air
Annual "State of the
pollution data; details below Environment Report" by
each participating locality
Political support; financing
plans can be agreed
Strengthen communities
and agencies’ awareness
and actions/ effectiveness.
PMO
Abate air pollution policy
National statistics
Program Purpose:
End-of-Program Indicators:
Improve institutions
Functioning a) Community
Environment Forum
/Advisory Board; b)
Jabotabek Waste
Management Corporation
Define investments justified Good feasibility studies;
for APL2
good designs for justified
investments
Small Environmental
Subprojects sustainable
Subprojects implemented by and self financing
communities and local
agencies
Environmental awareness Community interest; new
proposals
Define national strategy to
abate air pollution from
vehicles
GEF Operational
Program
Short-term project.
Critical Assumptions
Agreed Action Plan
Willingness a) by
Community to spend time
on this; b) by agencies to
"commercialize".
Program reports:
(from Purpose to Goal)
Project Secretariat
Independent monitoring
World Bank supervision
Interministerial /local
agency taskforces
.
TA or incentives
ineffective
Little cooperation among
agencies involved;
insufficient funding
capacity
Lack of interest by groups;
inadequate preparation or
implementation
Some financial support
may be needed but
unavailable
Financing needed exceeds
availability or willingness
to borrow
Cost-effectiveness of GHG Independent verification of Compost output and cost
mitigation.
quantities and cost of waste monitoring program
composted and diverted
effective.
from landfills.
Cost competitiveness with Cost comparison between
conventional waste
composting and landfilling.
treatment
ANNEX 1: LOGFRAME MATRIX
PAGE 2 OF 4
Hierarchy of
Objectives
Project Development
Objective:
Key Performance
Indicators
Outcome / Impact Indicators:
Improve solid waste
collection and disposal
Monitoring &
Evaluation
Critical Assumptions
Project reports:
(from Objective to Purpose)
TPAs well designed
operated Improved waste
collection Bappedaldas,
efficient /trained
Lessen industrial damaging Identified solutions and
effluents
benefits
Feasibility studies
Detailed designs and
operating/management
plans
Industry workshops
Environmental community Improvement of baseline
improvement
indicators
Abate air pollution from
Willingness to implement
fuels
the Action Plan
(national policy/strategy)
Global Environment
Objective:
Sustainably reduce
Volume of organic waste
greenhouse gas emissions
composted and used, thus
diverted from landfills.
Annual local reports
e.g. New regulations
Incentives, pricing difficult
issues in sector with
negative externalities.
Monitoring, enforcement
and penalties are difficult
to carry out. Poor management by local agencies.
Support from private sector
parties affected.
Independent verification of Compost production can be
compost production and
accurately recorded and
use.
monitored at many small
production sites, and
markets
Output from each
component:
Output Indicators:
Project reports:
1. Solid waste management
(a) waste disposal
regionally managed in
Jabotabek
(b) landfills better planned
and managed
(c) hospital waste better
managed
(d) waste collection
improved - proposed
facilities well planned and
designed
(e) waste pickers assisted
(a) JWMC established
(b) Agreed-to regional
Waste Management Master
Plans
(c) Agreed-to program in
place
(d) credible contract
documents - budget
capacity of local
governments and revenues
reported by waste agencies
(e) number of waste
pickers assisted - and their
integration within overall
program
(a) Articles of
incorporation; biannual
project reports
(b) Master Plans by MTR
(c) Master Plan, with
policy and finance
agreements
(d) bi-annual reports and
final bid packages
(e) bi-annual reports
2. Composting Support
Amount and quality of
compost produced
(from Outputs to Objective)
(a) sufficient political
commitment and
professional capacity to
maintain the Corporation
(b) sufficient cooperation
between local
governments, community
groups, and DPRDs
(c) agreement by stakeholders to finance
recommendations technically appropriate
(d) sufficient attention paid
to management and
finance aspects of landfills
(e) sufficient desire to help
this group - and that they
want to be helped.
Monthly statements
Composting can compete
compiled quarterly by Proj. with other waste manageSec.
ment alternatives and
Independent confirmation external environmental
(reports)
benefits can be included in
overall sustainability
review.
ANNEX 1: LOGFRAME MATRIX
PAGE 3 OF 4
3. Environmental
Management and
Awareness
3a. Community
Environment Facility
3b. Environmental
Management
3c. Environmental
Education
3a.1 - Number and success
of pilot activities
3a.2 - Quality of program
proposed for APL2 and
APL3
3b.1 - Number and success
of pilot activities and
environmental
management reports
prepared
3b.2 - Quality of program
proposed for APL2 and
APL3
3c.1 - Quality of in-school
program proposed for
APL2 and APL3
Monthly reports compiled
quarterly by Proj. Sec.
Disparate activities within
participating communities
can be woven into an
Programs presented, with
effective response to urban
required documentation, to pollution.
World Bank for APL2 and
APL3 appraisal before
Local governments will
MTR
assume responsibility for
urban pollution reduction
efforts.
4. Industrial Waste Water
Reduction
Success (level of pollution
reduction) of pilot
activities.
Preparation of program for
APL2 and APL3
implementation.
Individual reports on each
activity - compiled and
reviewed by Proj. Sec.
Program presented, with
required documentation, to
World Bank for APL2 and
APL3 appraisal before
MTR
Local governments able to
work with industry;
sufficient commitment to
finance and legislate
pollution reductions.
5. Training and Support
Number of staff trained.
Competence of key
agencies.
Monitored by Pemda
(through monthly reports),
compiled and verified by
Project Secretariat
(quarterly reports)
Staff capabilities and pride
can be improved through
targeted training.
Quality assistance can be
provided.
Project Components / Subcomponents:
Inputs: (budget for each
component)
Project reports:
(from Components to
Outputs)
1. Solid Waste
Management
(a) establish Jabotabek
Waste Management
Corporation
(b) complete waste
management master plans
and establish community
advisory boards
(c) hospital waste program
(d) detailed engineering
design and develop
environmental /
management program
(e) waste picker assistance
7.20 m
(a) reports (and minutes of
meetings) prepared by the
JWMC, government
agencies (PMUs), and
supervision reports by
Bank missions
(b and c) reports prepared
and adopted by respective
government agencies
(d) bid packages,
AMDALs and Bank EAs
(e) Proj. Sec. and Bank
supervision reports
(a) adequate operating
budget and competency of
key staff
(b) sufficient cooperation
between local
governments, community
groups, and DPRDs
(c) agreement by
stakeholders to finance
recommendations technically appropriate
(d) adequate budgets and
staff allocated to landfill
management
(e) assistance programs
well targeted and useful
Acceptable EM&A
programs can be developed
in APL1.
ANNEX 1: LOGFRAME MATRIX
PAGE 4 OF 4
2. Composting Support GEF Program
(a) run composting credit
program
(b) technical assistance
3a. Community
Environment Facility
(a) carry out Community
Environment Facility pilot
program
(b) finalize program for
APL2 and APL3
3.40 m
3.0 m
0.4 m
2.10 m
3b. Environmental
4.00 m
Management
(a) carry out specific and
targeted pilot initiatives
(b) prepare local and
regional environmental
management strategies, e.g.
air pollution strategy
3c. Environmental
1.40 m
Education
(a) Finalize in-school
program for APL2 and
APL3.
(b) Run public awareness
campaign
4. Industrial Waste Water
Reduction
(a) pilot activities and
industry assistance
(b) Finalize industry
assistance program for
APL2 and APL3
(c) JIEP waste water
program
5.10 m
5. Training and Support
(a) support project
secretariat
(b) run formal/informal
courses
2.50 m
a) Invoices for compost
sales and credits. Random
audits.
(b) Advisory Board
minutes.
(a) Individual reports
prepared by Pemda and
reviewed by independent
NGOs on each activity.
(b) CEF APL2 and APL3
Program agreed to by
participating stakeholders
and appraised by Bank.
(a) Project reports and
community consultation
documents.
(b) Agreed to policies and
documents.
(a) Project documentation
reflecting that program
agreed to by every
stakeholder and appraised
by Bank.
(b) Annual preparation of
"State of the Environment"
reports and independent
verification by NGOs.
(a) Project documents
produced by Proj. Sec.,
individually assisted
enterprises, business
leaders, and trade
associations reflecting
workshop results and
industry performance.
(b) Final report reflecting
policy agreement by all
stakeholders and Bank.
(c) Bid documents and
project supervision reports
Project reports and separate
training documents
prepared by participants and
Proj. Sec.
Local governments and
community want to enter
into large scale composting
programs.
(a) Pilot activities can be
well targeted and yield
important results.
(b) CEF activities can be
designed to both benefit
local environments and
mesh with other similar
poverty relief activities.
(a) Individual programs
maintain Pemda and
community ownership.
(b) Environment
Management reports
prepared, sustained and
adopted elsewhere.
(a) Government wants to
borrow for in-school
education programs.
(b) Environmental reporting
maintained, sufficient
community consultation,
and quality documents
prepared (through a credible
process).
(a) Industries capable to
implement, and interested
in, pollution reduction
programs (with improved
profitability).
(b) Attainment of
consensus possible;
industries and government
willing to finance these
activities.
(c) A credible cost sharing
and management program
can be developed.
(a) Proj. Sec. Operates
effectively, i.e. capable
staff, sufficient finance and
discretionary freedom
(b) Conditions developed
and sustained to enable
qualified staff to act in a
more professional and
efficient manner.
ANNEX 2: INCREMENTAL COST ANALYSIS
PAGE 1 OF 4
ANNEX 2: INCREMENTAL COST ANALYSIS
Broad Development Goals
The proposed West Java and Jakarta Environmental Management Project (WJJEMP) will
improve urban environmental services and municipal waste management, promote the
Indonesian government’s municipal service decentralization efforts, and support local
economic development in the major urban areas of West Java and Jakarta. The proposed
GEF component – an innovative organic waste composting program – will pilot an
environmentally sound and potentially efficient method of managing organic waste that
would also cost-effectively reduce Indonesia’s GHG emissions. If successful, it will
provide a replicable model for organic waste management that can be applied in other
urban areas of Indonesia and in other developing countries.
Baseline
Currently, about 50% to 60% of the urban waste stream in the West Java and Jakarta area
is collected and dumped at “basic” landfills, which are mostly open dumps. Collection
rates are lower in poor neighborhoods – Jakarta’s collection is estimated at 66%, but
Botabek’s is only 23%. The rest of the waste is dumped in canals or vacant lots or is
burned. Management of the existing disposal sites is deficient in a number of areas:
irregular waste covering, sporadic compaction, poor dumping control, ineffective
leachate collection and treatment, etc. Anaerobic decomposition of the organic waste that
is dumped creates significant quantities of methane, a potent greenhouse gas. However,
in the unfavorable landfill operating conditions, methane collection and flaring has not
been attempted at any of the sites, so most of the methane escapes to the atmosphere. An
alternative means of reducing methane emissions from wastes - separating organic and
non-organic waste and composting the organic component - has been tried on a small
scale in about 40 local areas, and a few such programs are still operating. Areas of high
organic waste supply have been identified and many people are aware of composting and
its potential role in a cost-effective integrated waste management system.
All levels of government within Indonesia recognize the environmental unsustainability
of existing waste management programs and are attempting to remedy the situation. The
proposed project is one example of the environmentally-sustainable baseline situation
that the government is striving to achieve. The project’s goal for the Jabotabek urban
region is 100% collection coverage and sanitary landfilling by end 2006. Since most of
the waste disposal will occur in existing sites where retrofitting for methane collection
would be very costly and difficult, methane collection will not be attempted under the
baseline scenario. Although will costs vary considerably between sites, it is estimated
that the sustainable waste management baseline system (sanitary landfilling with no
methane collection) will cost an average of $35.00 per tonne of waste received on site by
2009. The baseline costs will be much less than this initially, but will rise over time as
more effective and sustainable waste collection and disposal techniques are applied.
These costs will financed by Indonesia.
ANNEX 2: INCREMENTAL COST ANALYSIS
PAGE 2 OF 4
Global Environment Objective
The global environment objective of the project’s GEF component is to cost-effectively
reduce GHG emissions from the decomposition of collected organic waste in the West
Java and Jakarta urban area. Assuming the component is successful, a second objective
is to facilitate its replication and hence further GHG reductions in other urban areas in
Indonesia and other developing countries.
GEF Alternative
The GEF alternative would promote an alternative, less technically demanding and hence
potentially more widely replicable way to reduce landfill GHG emissions than sanitary
landfill with methane collection, which is to compost part of the organic waste stream in
the neighborhoods that produce it and sell the compost to farmers for use in their fields.
Composting is an aerobic (with oxygen) waste degradation process that produces CO2 as
a by-product. Sanitary landfilling results in anaerobic decomposition, which produces
methane (CH4). Composting is a potentially cost-effective way to reduce GHG emissions
because: (a) Methane produced by anaerobic decomposition is a much more potent GHG
than the CO2 produced by composting. Plus the best designed and operated landfill gas
recovery systems (or anaerobic “fuel cells”) collect 80% of the methane, at the very most.
(b) Composting occurs much closer to the waste generation source, thus reducing waste
collection and transportation costs and their associated emissions, and composting also
avoids the operation of landfill equipment. (c) Compost application reduces the use of
synthetic fertilizers, which involve an energy-intensive, GHG-emitting manufacturing
process. (Although compost only has a low fertilizer contribution, its ability to improve
soil structure enables more efficient use of fertilizers).
Under the GEF alternative, communities in the Jabotabek region would be encouraged by
financial incentives and assisted technically to aerobically compost an average of at least
100,000 tonnes/year of the organic waste they produce over the nine year life of the
program. Mechanisms would be developed to market the compost to local farmers. The
GEF Alternative would thus divert at least 100,000 tonnes/year of organic waste from
landfills, where it would otherwise decompose anaerobically. In so doing, the it would
reduce GHG emissions by about 600,000 tonnes of CO2 equivalent per year.
Scope of the Analysis
The scope of the analysis is: (a) the urban organic waste stream and the associated system
for the collection and disposal of this waste in the Jabotabek region of Indonesia; and (b)
the agricultural area around this region that will use the compost that is produced by the
GEF Alternative method for processing this share of the organic waste stream.
Costs
The objective of the GEF Alternative is to divert 1,000,000 tonnes of organic waste from
local dumps and landfills to compost production over the program’s nine year life. The
estimated cash flows of the Baseline and GEF Alternative systems are summarized in the
following table:
ANNEX 2: INCREMENTAL COST ANALYSIS
PAGE 3 OF 4
INCREMENTAL COST ANALYSIS TABLE
2001
40000
2002
60000
Costs PER TONNE
Collection
Separation
Residue Disposal
Public Education
Processing (incl land and capital)
Transport
Management/Quality Assur
3.5
3.0
2.0
2.5
28.0
3.0
3.0
3.5
3.0
2.0
2.5
28.0
3.0
3.0
3.5
3.0
2.0
2.5
27.0
3.0
3.0
3.5
3.5
2.0
2.5
27.0
3.5
3.0
3.5
3.5
2.0
2.5
26.0
3.5
3.0
3.5
3.5
2.0
2.5
25.0
3.5
3.0
4.0
4.0
2.0
2.5
25.0
4.0
3.0
4.0
4.0
2.0
2.5
24.0
4.0
3.0
4.0
4.0
2.0
2.5
23.0
4.0
3.0
Total Costs
45.0
45.0
44.0
45.0
44.0
43.0
44.5
43.5
42.5
REVENUES PER TONNE
Revenue from Disposal fee (same as the Total Landfilling Cost)
Revenue from sale of compost
Total revenue (US$ per tonne of waste)
4.0
0.0
4.0
4.8
1.0
5.8
10.1
2.0
12.1
13.0
3.0
16.0
16.9
4.0
20.9
20.8
5.0
25.8
32.5
6.0
38.5
33.8
7.0
40.8
35.0
8.0
43.0
Cost difference between composting and landfiling(US$ per ton)
41.0
39.2
31.9
29.0
23.1
17.3
6.0
2.8
-0.5
Cost difference stream (for all waste) in million US$
Total cost difference stream (million US$)
Present value of cost difference stream of INCREMENTAL COST (million US$)
at discount factor of
1.6
16.0
11.1
10%
2.4
2.4
2.9
2.9
2.6
0.9
0.4
-0.1
Waste treated (tonnes per year)
2003
2004
2005
2006
2007
2008
2009
75000 100000 125000 150000 150000 150000 150000
COMPOSTING
LANDFILLING COSTS
Uncontrolled disposal
> Landfilling
costs
Investments PER TONNE
Environmental remediation (if required for the landfill) incl. closure
Site Acquisition (incl. community compensation)
Transfer
Design and Costr.
Operational costs
1.0
0.0
0.0
0.0
3.0
1.0
0.0
0.8
0.0
3.0
2.0
2.0
1.6
1.0
3.5
2.9
2.6
2.4
1.0
4.0
3.9
3.3
3.3
1.8
4.8
4.8
3.9
4.1
2.5
5.5
7.5
4.8
6.0
5.5
8.8
8.0
4.9
6.3
5.8
8.9
8.5
5.0
6.5
6.0
9.0
Total Costs
4.0
4.8
10.1
13.0
16.9
20.8
32.5
33.8
35.0
ANNEX 2: INCREMENTAL COST ANALYSIS
PAGE 4 OF 4
The agreed incremental cost of the GEF Alternative is $11.1 million. Indonesia requests
a GEF grant of $10.0 million, and will fund the balance of these costs from its own
resources. The GEF grant request equates to a unit GHG abatement cost of $1.7/tonne of
carbon equivalent.
INCREMENTAL COST MATRIX
Global Environment
Benefit
Domestic Benefit
Costs
Baseline
Negative. Expanded
waste collection and
sanitary landfilling
increases anaerobic
decomposition and
methane emissions.
Better community
health from more
effective waste
treatment.
US$22.9 million
Alternative
6.0 million tonnes
of methane gas
emissions avoided
by diverting
1,000,000 tonnes of
organic waste to
composting.
Same as baseline.
US$34.0 million
Increment
US$11.1 million
ANNEX 3: STAP REVIEW AND RESPONSE
PAGE 1 OF 8
UNIVERSITY OF CALIFORNIA, BERKELEY
BERK ELEY
•
DA VI S •
IRVI NE
•
LOS AN GELES
•
RIVERSID E
•
SAN D IEGO
ENERGY AND RESOURCES GROUP
310 BARROWS HALL
UNIVERSITY OF CALIFORNIA
BERKELEY, CA 94720-3050
WWW: http://socrates.berkeley.edu/erg
•
SAN FRA NCISCO
SAN TA BA RBA RA
•
SAN TA CRU Z
DANIEL M. KAMMEN
ASSOCIATE PROFESSOR OF ENERGY AND SOCIETY
DIRECTOR,
RENEWABLE AND APPROPRIATE ENERGY LABORATORY
EMAIL: dkammen@socrates.berkeley.edu
TEL: (510) 642-1139 (OFFICE)
FAX: (510) 642-1085
TEL/FAX: (510) 643-2243 (RAEL)
To:
Robin Broadfield, Daniel Hoornweg
The World Bank
Email:
Rbroadfield@worldbank.org, Dhoornweg@worldbank.org
Re:
Review of West Java and Jakarta Environmental Management Project
From:
Daniel M. Kammen
Date:
January 15, 2000
Project Overview:
This is an ambitious GEF undertaking that will require the integration of a wide range of
administrative, environmental, and social programs in the Jabotabek region to succeed in
collecting and managing the municipal waste. The project calls for the initiation of an entire new
institution, the Regional Jabotabek Waste Management Authority to oversee, coordinate, and
implement the plan. The extent of solid waste pollution in Jakarta and West Java has clearly
surpassed crisis proportions and poses significant health, environmental, and economic risks.
Further, the recycling rates reported for poorer communities in the Jabotabek region are as low as
20%, making it clear that a well organized and equitable program could access a significant
waste resource and provide much-needed resources for development.
The project economics are, on paper, favorable and do not pose an obstacle to the project. The
cost per ton of carbon ($1.7 t/carbon) is remarkably low, and if achieved, will represent a
significant breakthrough. An extensive literature survey as part of this project review revealed
remarkably few projects with any direct sort of comparability. It would therefore be ideal if
detailed records of actual costs as well as expenses could be maintained for this project. This
would increase the utility of this project through the ability of other cities and regions to learn
from the experience gained in this effort.
ANNEX 3: STAP REVIEW AND RESPONSE
PAGE 2 OF 8
The critical issue in this project, more so than many GEF projects, is that the economics depend
so heavily on a regional recycling-economic network that does not yet exist in the target area.
This situation means that financial assessments of project viability at this stage are highly
imprecise. This is not in any way to question the capacity of this project team, in fact the reports
produced (c.f. Hoornweg, Thomas and Otten, 2000) clearly demonstrate superior technical and
social background knowledge, regional analysis skills and expertise, and working relationships
with the anticipated local implementing agencies.
My concern lies simply in the proposal to implement such an ambitious and wholly novel plan
without a clearly tested set of local buy-ins. Municipal and regional waste management and
composting programs globally have been widely debated in terms of their efficacy (Hendrickson,
Lave and McMichael, 1995). In fact, few cases exist where an unequivocal answer is possible
that waste management through collective composting efforts has succeeded (c.f. Liu et. al.,
1999; Rose, 1999). In a large-scale program in the state of New Jersey, efforts to raise the solid
waste recycling, lets alone composting, rates to only over 50% largely failed despite clear signals
and penalties/rewards from the state legislature (Kammen et. al., 1995)1. At the same time,
novel programs deserve to be tested and refined, particularly when they are as needed as is this
effort.
To address this situation I suggest a that the waste management master plan utilize some sort of
iterative plan to facilitate local input and attachment, or cultural ‘ownership’ of the project to
better integrate it into the local economy and social structure. Many models exist, but one might
be four-step process for the Jabotabek region whereby:

One municipality or location2 is identified and utilized as a test case to evaluate the
procedures to be used in the whole region. In this context, one could convene a truly
representative planning commission that would consist of Regional Jabotabek Waste
Management Authority, waste engineers and regional planners, and critically both
homeowner associations, business consortia and representatives from the informal sector and
from the pemulung.

Empower this group to develop a waste management plan that would include a study of the
waste collection and processing capabilities, the impacts on all statekholders across socioeconomic strata. This analysis would necessarily include the economic and health impacts
on the community, and the local view on the ability of the Regional Jabotabek Waste
Management Authority (or another group that the panel envisions) to implement this plan.

Implement the pilot-phase plan for a limited duration (e.g. six months) in the single region to
rest the management capacity, and the actual project economics.
1
2
A copy of this document has been sent to Dan Hoornweg of the Jabotabek project team.
Example locations could be Cipinang Muara or at a larger scale Jakarta Timur.
ANNEX 3: STAP REVIEW AND RESPONSE
PAGE 3 OF 8

Present the findings of this pilot study to the initial commission as well as the World Bank
for review in evaluating this overall Jabotabek project, and in refining and adapting the plan
to the realities of local implementation, education, and operation.
Again, because the whole GEF project is a pilot in the sense of developing a plan to determine
how best to get the compost credits to work, only the spirit of the steps (1 – 4) proposed above
need be implemented. The important lesson is that a successful initial stage where community
input is clearly sought and valued will most likely convince the broader Jabotabek area that the
program does have merit, regardless of the initial hurdles or unanticipated issues that will
inevitably arise.
Specific Issues:
Costs:
The project cost assessment of $1.7t/Carbon is based on a variety of essentially untested
assumptions. This value may in fact be correct, but it is certainly a very uncertain and I would
argue optimistic value, particularly for long-term expenses. The project team may wish to
commission a short review of municipal or other efforts to collect, manage, sort, and utilize
suitable waste. Few direct parallel cases exist, but a considerable data-base can be found to
illustrate the range of potential project costs (c.f. Kammen et al., 1995; Rose, 1999). This
author, among others would be potential candidates to perform such a review that would attempt
to estimate the costs in the Jabotabek project from a set of case studies elsewhere.
Institutional Uncertainty and Public Health:
The change from BAPPENAS to D.G. Cipta Karya in institutional oversight and implementation
itself may be a good step, but this raises questions about local capacity to oversee and undertake
the project. In particular the training of the managers, and the degree to which this project
will/will not meet local refuse management and public health needs and concerns as well as the
financial responsibility remain unclear. The health risks in particular are likely to be diverse, and
may impact different socioeconoimc, gender, and age groups very differently. An analysis of
Disability Adjusted Life Years is recommended.
The Severe risks listed in the project document (Table 1, below) do an excellent job in
summarizing the issues. The project proposal does not fully address the issues that the report
itself raises.
Table 1 Significant Risks (from the WJJEMP Concept Paper):
Jabotabek Waste Management Corporation not well established or poorly financed and managed
Local governments do not phase out of commercial waste collection.
Landfills not properly operated.
Community Integration, Support, and Benefits:
One crucial stakeholder in the project are the waste scavengers (called "pemulung" in
Indonesian). Thousands of families make their living from going through the garbage dumps and
ANNEX 3: STAP REVIEW AND RESPONSE
PAGE 4 OF 8
finding recyclables etc. that can be sold as scrap or used again. If the dumps are converted to
other uses, or managed differently, the livelihoods for these hundreds of thousands of people will
be severely affected. Any scheme for rejuvenating Jakarta's waste management system must
include these people in its planning, and work to incorporate them somehow in the new system
(or to offer training and support to find other avenues of subsistence/employment). There are
important social and political issues involved in either targeting or excluding this group.
Thankfully, and to their credit the project team does seem well aware of the pitfalls and avenues
needed to be explored to develop a clear social development agenda as part of the project.
Gender:
The section on gender and women’s involvement sounds good on paper, but a skeptic -- as I
generally am unless explicitly proven wrong in a given case -- might see this as more or less the
standard rhetoric on the issue. With community integration overall a concern, the gender aspect
here also needs more than a discussion in the proposal to become compelling. In this case, the
project is one that will succeed or fail on the strength of the involvement and benefit to the
communities. I would suggest that even this initial project document would need to have letters
of interest/commitment from community/neighborhood groups and not simply the government
top-down plan to appear viable. This is an unusual step, I know, but it does seem critical to this
effort.
Composting is Unfamiliar:
Despite significant national attention, and some strong pockets of local knowledge and involvement,
among many individuals composting is quite unknown in Jakarta. Who will want it or pay for it? Most
land around Jakarta is no longer used much for agricultural purposes to the scale where composting would
matter. This part of the plan will be particularly important to the eventual economic and environmental
goals of the project. In particular this will directly impact the feasibility of meeting anything like the $1.7
t/carbon goal. I think it is a key question for the program, as it will require a lot of work and
commitment from the government. Public awareness campaigns are likely to be important and must be
stressed in the actual implementation.
Compost Credits Largely Unspecified.
The plan for ‘compost credits’ will naturally require added detail and refinements. While the
initial plan is clearly a design overview, an interesting step of the project will be to develop one –
an ideally several – plans for implemetation under different conditions. This component could
be tested in the regional version suggested above (items #1 - #4) and then further refined before
the full-scale introduction. A number of pitfalls, particularly among the most poor that
dramatically worsen the impact of the project on the poorest members of the community unless
not particularly well planned.
References:
Hendrickson, C., Lave, L. and McMichael, F. (1995) “Time to dump recycling?”, Issues Science
and Technology, 11, 79 – 84.
Hoornwig, D., Thomas, L., and Owen, L. (2000) Composting and its Applicability in Developing
Countries, Urban Develoment Division: The World Bank, Washington, DC).
ANNEX 3: STAP REVIEW AND RESPONSE
PAGE 5 OF 8
Kammen, Daniel M. et al. (1995) A Cross-County Evaluation of Recycling Efforts in New Jersey
(Center for Domestic and Comparative Policy Studies: Woodrow Wilson School of
Public and International Affairs: Princeton, NJ).
Liu, Gary, Harris, Justin, and Adams, Chris (1999) China - Solid Waste Management
Technologies (Industry Sector Analysis Series: ISA990701).
Rose, Gregory D. (1999) Community-Based Technologies for Domestic Wastewater Treatment
and Reuse: Options for Urban Agriculture, Cities Feeding People Report No. 27
(International Development Research Center, Ottawa, Canada).
Bank Response to the STAP Review,
Project Overview
One of the strengths of the GEF funding proposal is that it is fully integrated within a
long range and substantive development project to be financed by the World Bank. For
example, the establishment of the Jabotabek Waste Management Corporation is not a
condition for allocation of GEF funds, rather it is a key development objective of the
West Java and Jakarta Environmental Management Project. The GEF funds will simply
strengthen the overall development of this Corporation, e.g. Compost Credits could be
disbursed by existing government agencies if needed.
Recycling is currently wide-spread thorough out the project area. Composting also exists
within the project area, albeit on relatively small scale. Indonesia likely has the world’s
most supportive community vis-à-vis composting and recycling activities, e.g. it is the
only country that has formally recognized (through a Presidential Decree) the value and
importance of waste pickers (pemulung).
The pilot approach suggested by Dr. Kammen has been used in project design. GEF
assistance is integrated within a three phase Adaptable Program Loan. The concerns
addressed by Dr. Kammen, i.e. the substantial risks of Table 1 are identified as clear
“trigger points” on which the project would be stopped until those activities are met;
namely establishment of the Jabotabek Waste Management Corporation and landfills
being operated in a sanitary manner (commercial waste collection by municipal crews has
no bearing on the GEF supported activities).
Further small scale pilot activities should be minimized as over 60 of these pilots were
identified in the region during project preparation. The results of these efforts, some
financed through grants and loans of the World Bank, have been incorporated in project
design. The Third Jabotabek Urban Development Project financed a detailed and long
term pilot on waste separation and composting (including vermicomposting). The World
Bank also funded six small scale compost activities in Bali, East Java and Sulawesi. All
of these were successful, however their wide-spread replicability was limited due to
scale. The GEF assisted effort is designed to overcome this problem by producing
ANNEX 3: STAP REVIEW AND RESPONSE
PAGE 6 OF 8
sufficient compost to warrant larger scale compost marketing activities and much needed
community advocacy activities.
The four phased pilot project suggested by Dr. Kammen is an excellent proposal and has
been incorporated into APL1, in which Waste Management Master Plans for the regions
of Jabotabek and Bandung would be updated. This four-step approach will be integrated
with the terms of reference of the Master Plan preparation. Progress to APL2 would be
conditional upon successful completion of these activities, however there should still be
sufficient GEF funds allocated in APL1 to ensure that the problem of insufficient scale is
overcome, e.g. GEF financing allocated approximately one third to each of the three APL
phases. Scheduling of pilot projects within an active World Bank investment program is
often difficult; therefor an adaptable program loan approach was used which in essence is
a three phased pilot project with more formal conditionality to proceed from APL1 to
APL2 to APL3.
Indonesia has a respected and politically powerful waste picker (pemulung) association.
They would be a key stakeholder in the preparation of these Master Plans. The study
would also specifically ask for the trade associations assistance in addressing any
possible health impacts as suggested by Dr. Kammen. Key to the success of any wide
spread composting initiative is the integration of the system within existing and new local
government management systems (they are the entity legally charged with waste
collection and disposal in Indonesia). The development of new waste management
strategies such as composting and greater recycling is not restricted in Indonesia by lack
of community support but rather more often with difficulties associated with
incorporating new programs within local government management systems.
Specific Issues
Costs
The project intends to establish an advisory committee of international composting /
waste management experts. One of the first areas of assistance sought will be comparison
of costs from other compost activities around the world. For example India, Cuba, and
parts of Latin America have relatively well established systems as does Europe and
Canada. These will be reviewed. A “Center of Excellence” for research in composting
will also be established at IPB (Indonesia’s premier agricultural university in Bogor) and
as suggested by Dr. Kammen they will be asked to review international and national
literature. The World Bank also has considerable experience in this area which will be
provided to the project team.
Institutional Uncertainty
The change from BAPPENAS to Ministry of Human Settlements (formerly D.G. Cipta
Karya) as project executing agency has very little impact on local governments ability to
implement activities. In fact the switch is a positive one in that the Ministry of Human
Settlements has far more “hands on” experience. Training activities were always
ANNEX 3: STAP REVIEW AND RESPONSE
PAGE 7 OF 8
envisaged to be carried out by the Ministry of Human Settlements (or private sector
educators) as BAPPENAS does not have this capacity. These training activities would
encompass the technical, health and finance aspects of composting.
Significant Risks
The risks outlined in Table 1 are addressed through key “trigger points” to proceed from
APL1 to APL2 and APL3. This is the most powerful way in which these risks can be
addressed; activities do not proceed unless the risks have been overcome. This is the
strength of the adaptable program loan format. An independent team will evaluate
whether or not these risks have been overcome prior to proceeding. The project is also
being proposed to GEF as a three-part initiative, where success in APL1 is a prerequisite
to receive funds for activities in APL2. A key condition in each APL will be the total
amount of compost produced, with the corresponding GHG emission reductions.
Community Integration
Waste pickers (pemulung) are included in project design. There is a separate component
to assist waste pickers (hopefully modeled after the successful Brazil programs) and they
would be fully defined as a critical stakeholder in the Waste Management Master Plans to
be undertaken in APL1. There is no doubt that any activity to rejuvenate Jakarta’s waste
management system must include the pemulung in planning and implementation
activities.
Gender
This may net be well reflected in the documentation but gender issues are a key
consideration in any new waste management system. For example a recent
comprehensive review by the World Bank of key concerns for Indonesia’s poor found
that the environment is the second most important consideration for women (and only
eighth for men). This difference must be incorporated in the design of the public
awareness campaign. Also, previous pilot waste management activities in Jakarta have
found more success when targeted to women.
The suggestion of “letters of interest/commitment” from community groups is sound and
will be adopted. Past innovations in waste management in Indonesia have not been
constrained by community interest but rather the inability of local government waste
management departments to provide the desired service level. The “top-down” approach
in waste management is not the problem but rather the ability to meet the “bottom-up”
desires. The letters of commitment are however an excellent idea and when signed by the
local government waste management authorities would provide a powerful “social
contract”.
ANNEX 3: STAP REVIEW AND RESPONSE
PAGE 8 OF 8
Composting is Unfamiliar
Indonesia is among the world’s most experienced composter and there is no doubt that
the community (and with help, the local government waste management authorities or the
private sector) can produce significant quantities of good quality compost. Preliminary
studies by the project preparation consultants also identified potential compost markets
for at least twice the amount of compost that could be produced. However as stated a
comprehensive public awareness campaign is required, as is sufficient production to
overcome the scale problems associated with previous compost activities, e.g. quantities
too small to involve the agricultural community. Existing compost facilities in Jakarta
can not meet local demand. The project includes a large scale public awareness campaign
(environmental education is about 15% of total project costs). This is however an
important concern since the global amount of composting is today very much below the
potential envisaged through development of this project.
Compost Credits
The provision of compost credits has been purposely kept simple. Funds would be
allocated to the user based on quantities of good quality compost (as previously defined)
used. The system encourages small scale operators and private sector initiatives and is
expressly designed to work with the poorest members of the community e.g. pemulung at
both landfills and households. The system is self limiting, i.e. a pilot, in its design since
the funds would not be allocated unless compost is produced and used. This addresses the
concerns of the reviewer (and the project team) while enabling a fledgling system to
become established.
World Bank User
M:\RAMON\Bilateral\January2000\WB\Indonesia Final II.doc
1/31/00 4:57 PM
GEF National Focal Point Endorsement Letter
West Java-Jakarta Environmental Management Project (WJJEMP)