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Climate Governance Integrity Programme

Climate & Corruption Case Atlas - Climate Governance Integrity Programme

  • Indonesia

Indonesia’s Military Dictatorship used Reforestation Funds to boost Crony Businesses

Corruption Type

Fraud

The Indonesian Reforestation Fund (Dana Reboisasi, DR) is a national fund to support reforestation and forest rehabilitation.

During the 31-year reign of dictator Suharto, the Ministry of Forestry allocated more than US $1.0 billion in cash grants and loans from the Reforestation Fund to promote commercial plantation development. Many recipients fraudulently marked up their costs and overstated areas planted, causing the programme to fall well short of targets. The Ministry also disbursed US $600 million to finance politically favoured projects outside the Fund's mandate of promoting reforestation and forest rehabilitation.

Since 1998, successive post-Soeharto governments have taken steps to improve financial governance but continuing problems with the Reforestation Fund hold significant implications for future REDD+ payment schemes.

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