Local Service Delivery Improvement Project

pipeline

Over the past two decades, Indonesia has experienced high economic growth accompanied by rapid urbanization. The country's GDP in 2021 increased by 3.7 percent compared to the previous year, rebounding after a slowdown during the COVID-19 pandemic. However, the urbanization process has placed stress on infrastructure and service provision in cities, as the growth of infrastructure has yet to keep pace with economic expansion. Indonesia's high urbanization, particularly in coastal areas, has also led to increased climate risks and vulnerabilities. The country ranks as the 10th largest emitter of greenhouse gases globally, with waste contributing significantly to emissions. Climate change poses a significant threat to coastal cities and low-lying areas, necessitating action to reduce emissions and adapt to the impacts of climate change. Local governments play a crucial role in providing infrastructure and services, but capacity gaps remain. Improving local service delivery capacity, especially in rapidly growing medium-sized cities, is vital for Indonesia's comprehensive development. These cities are projected to become future growth engines but will also face increasing waste volumes. Efforts to improve cities' infrastructure and service delivery capacities will significantly affect Indonesia's future.The Government of Indonesia (GOI) has set ambitious targets for solid waste management (SWM) to reduce climate change impacts, improve urban environments, and ensure public health. These targets include waste reduction (30%) and handling (70%) goals for 2025 and marine debris reduction targets (70%). The GOI has developed regulatory frameworks and policies, such as the Waste Management Law (UU 18/2008), to support sustainable SWM practices. However, the SWM sector faces challenges in financing, planning, institutions, collection, and SWM infrastructures. The GOI has been implementing infrastructure programs and initiatives to address these challenges. However, there are gaps in implementation/operationalization due to the lack of capacity, financing, and behavioral practice at the local level. The SWM service delivery is the responsibility of local governments, but the institutions are weak, fragmented, and lacking incentives and sanctions. These challenges make the ultimate goals for the country SWM, e.g., waste reduction, segregation at source, behavior changes, and resource recovery will need much stronger efforts and longer time.This proposed project aims to support local governments (LGs, which covers cities and regencies) in Indonesia to improve the delivery of SWM services through a two-pronged approach of support for national-level policy action areas and capacity-building performance-based grants (PBGs) for LGs. The project will complement the existing project of ISWMP (Improvement of SWM to Support Regional and Metropolitan Area Project) that focused its investment on large-scale waste treatment facilities.The project will be composed of three components. Component 1 (Technical advisory, policy development support and project management for national government) will provide technical support for national-level policies, regulations, and updating national waste accounting platform needed as the basis for improving SWM service delivery at the local level and having better monitoring at the national level. Among the most important activities under this component will be laying the path to adding SWM as Mandatory Basic Service (SPM). With SWM as SPM, LG will have to allocate an adequate budget for SWM service. In addition, National Management Consultant (NMC) will be hired under this component to support the CPMU and CPIUs with project management.Component 2 (Performance-based grants to LG for SWM service delivery) will provide grants that will incentivize institutional reforms through financial allocations. Disbursement of PBGs will be conditional on LGs undertaking policy changes and reaching specific targets of SWM. The LGs will also use the grants for implementing their SWM plans (e.g., LG SWM Policy and Strategy (Jakstrada), SWM Masterplan). The grant for LGs will be on top of their current budgetary allocation for the sector. The grant disbursement through PBGs will be conditional on LGs undertaking policy changes and reaching specific targets. The grant will focus on upstream activities of the SWM that include waste segregation and collection, transport, transfer, recycling, and construction of small-scale intermediate treatment facilities.Lastly, Component 3 will provide technical assistance (TA), implementation support and project management for local governments to support project activities. The TA will focus on supporting the development or updating of Jakstrada and SWM masterplan, the establishment of institutions that separate operator-regulator roles for SWM service delivery, the implementation of the waste tariff, as well as supporting detailed planning and engineering design of the proposed LG investments. The Local Management Consultants will also be procured for each participating LGs.The World Bank study in 2018, as part of the preparation of ISWMP, utilizing data from the Ministry of Environment and Forestry (MOEF) and Ministry of Public Works and Housing (MPWH), assessed the SWM system for 104 LGs with urban populations of more than 100,000. The result showed that about 50% of the LGs fall under the "Tier 3" category. This category has the characteristic of LG with a low commitment of LG that is shown by very low budget allocation for SWM to be considered adequate (less than 1% of APBD/Annual LG Budget). In order to finance decent SWM service, the budget will need to be more than 3%, if possible 5%. This insufficient budget allocation causes an unacceptable low waste collection rate, high mismanaged waste (loss rate), countless illegal dump sites (fly-tipping), and open dumping practices on landfills that were constructed as sanitary landfills. A high loss rate also means the wastes are openly burnt, thrown into waterways, and dumped illegally, resulting in significant adverse impacts on human health, the environment, and society. This Tier 3 category is predominantly occupied by medium size LGs in Java and Sumatera islands; the low collection rate in the LGs is the main factor for the high emission of marine plastic debris as these LGs are crisscrossed by waterways and rivers that empty into Indonesia seas and Indian Ocean. The landmark publication in Science, "Plastic Waste Inputs from Land into the Ocean," by Jambeck et al. (2015), places Indonesia as the world's second biggest marine plastic debris contributor.The ISWMP also found that in terms of waste management at the household level, surveys showed that women in households are the most involved and the ones who make decisions about offering waste to collectors, finding other outlets for household waste, and sorting types of waste. These are not activities with equal opportunity issues, but it is important that waste reduction campaigns (e.g., on household-level waste separation) should make special efforts to reach out to women to be successful. The importance of consulting women is based on evidence that waste collected at the household and village level is a critical part of the waste management logistical chain, upon which the entire systems depend. Special care is needed to identify and overcome barriers to women's participation (i.e., illiteracy, poverty, social norms). For example, consultations with women should be arranged through pre-existing channels and platforms – such as Neighborhood housewife groups (PKK) and waste NGOs – and at suitable times for women. Facilitators can increase the likeliness of inclusive decision-making concerning the design, management, and maintenance of new infrastructure using a strengths-based approach. This involves focusing on areas that are working well and building on local resources, aspirations, and strengths. Consultation