Jakarta, June 2026 — At COP30, President Prabowo Subianto announced Indonesia's commitment to placing 1 billion USD as junior capital in the Tropical Forest Forever Facility (TFFF), while taking a seat on the scheme's steering committee. This position brings Indonesia into unfamiliar territory: not merely as a beneficiary of tropical forest funding, but also as an investor who helps determine the scheme's direction.

This dual position makes the question regarding the Environmental Fund Management Agency (BPDLH) even more concrete. BPDLH is the institution that has been the main channel for international climate funding in Indonesia, and will likely play a similar role for TFFF, although no official appointment has been made, and the government could choose a different mechanism. Is BPDLH's safeguard system sufficient to meet TFFF's standards? This question prompted the MADANI team to meet directly with BPDLH leadership in Jakarta on June 8, 2026.

The Foundation is Already Established

BPDLH is not starting from zero, and this needs to be noted from the outset. The institution has developed an Environmental and Social Management System (ESMS) since 2021, ratified in 2022, with its main framework adopting World Bank standards. Standards from the Green Climate Fund (GCF), the Forest Carbon Partnership Facility (FCPF), and the Norwegian government have also been integrated into the ESMS, though still on a project-by-project basis.

BPDLH has also obtained accreditation from the GCF under a one-shot accredited entity status, with the process towards full accreditation currently underway. This includes a peatland program worth USD 47 million over the next seven years.

Experience in directly channeling funds to indigenous peoples and local communities already exists. Through the Community Service Fund and schemes such as Terra-CF (Terra for Customary Forest), supported by the Ford Foundation, BPDLH has managed grants in 18 provinces. Indigenous peoples in West Kalimantan are recorded as the largest beneficiaries in the program. This note is important: this existing experience of distributing funds to indigenous peoples is a tangible asset. The gaps identified below do not mean BPDLH has completely failed, but rather that TFFF's standards are higher than those for the schemes managed previously, and that the gap needs to be concretely bridged before the funds flow.

Four Gaps to Bridge

MADANI's study identifies four areas where the current BPDLH system is not yet fully aligned with TFFF standards:

BPDLH itself acknowledged these gaps during the dialogue. It is this acknowledgment that makes room for strengthening possible.

What Emerged from the Dialogue

First, BPDLH has greater flexibility than appears on paper. The institution can combine various safeguard standards, including TFFF standards, once operational, provided there is a mandate from the funder. This flexibility can be a strength, but it can also be a loophole. Without solid and binding safeguard principles, this same flexibility could be used to accommodate lower standards for administrative convenience. This is what civil society needs to anticipate.

Second, TFFF is not yet included in BPDLH's safeguard terms of reference, as the scheme only emerged in 2025. BPDLH is committed to conducting an evaluation for about six months prior to official disbursement, assuming TFFF becomes operational and funds flow. This six-month window is not just administrative space for BPDLH. It is a critical moment for civil society, indigenous peoples, and donors to push for stronger standards to be incorporated into BPDLH's framework before funds are disbursed and the pressure to "not hinder disbursement" becomes dominant.

Third, BPDLH's experience in channeling funds to Indigenous Peoples already exists. What needs to be improved is not access to funding but rather IPLC's position in decision-making. The shift from "beneficiary" to "co-design" is both a conceptual and an operational homework assignment.

Fourth, the internal GRM (Grievance Redress Mechanism) gap integrated with the Ministry of Finance's system is the most distinct gap. TFFF explicitly requires third-party verification. This means BPDLH needs to redesign its grievance mechanism; merely expanding the existing one is insufficient. A mechanism that is self-managed and structurally integrated with the Ministry of Finance system cannot be independent, regardless of good intentions.

Four Steps Forward

Based on the study and dialogue, MADANI urges four concrete steps that can be taken during the time window before TFFF funds flow:

1. Operational FPIC protocol. Free, Prior, and Informed Consent needs to be structured as a procedure that can be executed on the ground, not just a principle in policy documents. This is a prerequisite for fulfilling right-based safeguards relevant in the REDD+ and TFFF contexts.

2. IPLC as co-designers. The decision-making structure at BPDLH needs to accommodate the active involvement of Indigenous Peoples and local communities, including in determining priorities and funding distribution mechanisms.

3. Publicly trackable transparency system. The ongoing development of the Management Information System needs to be accelerated and oriented towards active openness in accordance with public information disclosure regulations. The public needs to understand the flow of funds to ensure accountability.

4. Independent and multi-stakeholder GRM. The grievance mechanism needs to be redesigned to involve independent external parties with adequate verification capacity, in accordance with TFFF requirements and the best practices of international climate funding institutions.

These four steps are not recommendations aimed solely at BPDLH. This is a shared agenda: for civil society to push and monitor, for donors to make it a prerequisite before funds flow, and for the government to prove that Indonesia's position as an investor in TFFF is not only financially meaningful but also substantive in protecting rights and the environment.

One additional note is worth raising. BPDLH stated that their latest ESMS has not been updated on the official website, so the current public reference is not the latest version. This update should not be done one-way. Multi-stakeholder discussions involving civil society organizations, Indigenous Peoples, and academics, prior to or concurrent with the launch of the latest version, will strengthen the legitimacy of the resulting safeguards and identify gaps as early as possible.

Before the Funds Flow: Who Must Push

Indonesia enters the TFFF not as a country passively waiting for funds, but as an investor claiming a voice in determining its direction. That claim carries consequences: the standards Indonesia applies domestically will reflect the position it takes in international forums.

BPDLH has a foundation. But a foundation is not the goal. The gaps identified in this study are real gaps, have been discussed with BPDLH, and have concrete deadlines. The six-month window before funds flow is an opportunity, but only if used actively.

For civil society and indigenous peoples, this is not the time to wait for results. This is the time to push: so that FPIC becomes a procedure, not a promise; so that the GRM becomes a mechanism genuinely accessible to those harmed; so that transparency becomes an obligation, not goodwill. Before the funds are disbursed, not after.

This article was compiled based on MADANI's study of the BPDLH ESMS documents and a direct dialogue between the MADANI team and BPDLH leadership on June 8, 2026. In addition, MADANI has published an in-depth analysis on the paradox of TFFF funding in the context of deforestation realities in Indonesia, available via this link.