1. Significance of handling agrarian and natural resources conflicts and KADIN initiatives

• The occurrence of agrarian and natural resource conflicts is often attributed to developmental models that prioritize economic growth. Such models promote land expansion in order to meet the rising demand for raw materials and technological advancement, resulting in heightened competition for land due to population growth and consumption. The excessive exploitation of land in this manner also causes significant damage to the environment, surpassing its natural ability to recuperate. If left unmanaged, this competition for land can escalate into conflicts.
• Agrarian and natural resource conflicts can often arise due to the rapid changes in regulations and policies, which are often influenced by political-economic dynamics at the national, regional, and global levels. These frequent policy changes can create instability in the rules surrounding land and resource use, resulting in uncertainty and potential conflicts. Therefore, there is a pressing need for more consistent and coordinated policies to help mitigate the risk of conflict.
• If left unaddressed, agrarian and natural resource conflicts become a burden, risk and cost for local and indigenous communities, private and state-owned enterprises, and the government. Conflicts can disrupt and even halt businesses and cause losses in the form of social, ecological and economic costs, as well as lost opportunities for future business development (opportunity costs).
• To reduce the risk of agrarian and natural resource conflicts, there needs to be an integrated conflict prevention and management strategy in the governance of production and consumption. This involves implementing fair, transparent and sustainable policies, as well as clear land use arrangements. These efforts ensure that the production and consumption of natural resources is done responsibly, reducing the potential for future disputes and conflicts.
• Therefore, several prominent figures of the Chamber of Commerce and Industry (KADIN) initiated the Conflict Resolution Unit (CRU) in 2015 with the aim of improving the business and investment climate in Indonesia by addressing agrarian and natural resource conflicts. The initiative aims to create a more stable and transparent business environment, and minimise potential disputes related to land use. As such, the CRU helps ensure that investments and business activities can run more smoothly and sustainably.
• CRU is a strategic project of KADIN because it is an expression of the business community’s commitment to the importance of efforts to address agrarian and natural resource conflicts as an important prerequisite for improving the business climate, as well as for achieving equitable, inclusive and sustainable development.

2. What efforts have been made by various parties to address agrarian and natural resource conflicts in Indonesia besides the CRU initiative by KADIN in 2015?

It has long been recognised that agrarian and natural resource conflicts are a serious problem in development and must be addressed. Several initiatives have been undertaken, among others:

• MPR Decree No. IX of 2001 on Agrarian and Natural Resources Management Reform.
• The National Commission for Agrarian Conflict Resolution (KNUPKA) was proposed by Komnas HAM in 2005. It is hoped that KNUPKA can oversee and initiate efforts to resolve land conflicts in Indonesia.
• The proposal of the Draft Law on Natural Resources Management (RUU PSDA) by the PSDA Working Group, a coalition of civil society organisations, academics and the Office of the Minister of Environment and the National Development Planning Agency (Bappenas) in 2002.
• Proposal for the establishment of a special agency under the President to handle agrarian and natural resource conflicts by ADKASI (Asosiasi DPRD Kabupaten Seluruh Indonesia) on 2015.
• KADIN’s initiative through CRU to improve the business climate and efforts to address climate change related to land and natural resources in 2014.

3. How are agrarian and natural resource conflicts linked to climate change?

• Agrarian and natural resource conflicts are closely linked to climate change, through deforestation, land use change, property rights insecurity, social vulnerability and governance issues. These conflicts exacerbate climate change by encouraging unsustainable land practices and exploitation of natural resources, while climate change also increases tensions over land use. Managing and resolving these conflicts is critical to climate change mitigation and adaptation.
• Agrarian and natural resource conflicts are important contributors to tenure insecurity, which has led to rapid land use/land cover change and deforestation.
• Conflicts over agrarian and natural resources are often caused by tenure uncertainty. Unclear land rights make it an open access area, utilised without long-term responsibility due to a lack of incentives for conservation. As a result, this can contribute to climate change.
• As the world’s third-largest contributor of greenhouse gas emissions, Indonesia faces increasing global scrutiny of its forest management practices. These emissions mainly come from the land use and forestry sectors. Effective resolution of agrarian and natural resource conflicts is essential to achieving sustainable development and emission reduction targets as committed by Indonesia in its Nationally Determined Contribution (NDC) to the Paris climate agreement

4. Why did CRU as a KADIN project transform into CRU Indonesia as an independent organisation?

• Independence, impartiality and neutrality are basic prerequisites in building the trust of the partners served. While CRU as a Kadin project adheres to these three principles, CRU’s association with Kadin could potentially be interpreted as favouring business.
• CRU’s conflict resolution activities have been funded by donors in the form of projects. This becomes a problem when project management requires a fixed schedule of activities and budget while conflict resolution activities demand high flexibility in order to be responsive to conditions at the site level that are not only unknown in advance but also change frequently.
• Another part of institutional transformation is the development of funding capacity, particularly for conflict resolution financing. Apart from the difficulties of project funding management described above, this is also necessary because the cost of conflict resolution cannot be borne by the parties to the conflict. The huge disparity in financing capacity between the parties to the conflict will lead to the perception that the process will be biased in favour of those who contribute the most to the cost of conflict management