Tropical Forest Conservation Action for Sumatra (TFCA-Sumatra) or also called Real Action for Conservation of Tropical Forests Sumatra is a debt-for-nature swap scheme created by the United States Government and the Government of Indonesia aimed at preserving forest areas tropics in Sumatra where the deforestation rate is very high. The agreement between the two countries and the parties involved (KEHATI Foundation and Conservation International Indonesia) was signed on 30 June 2009 at Manggala Wanabhakti, Jakarta.
The Government of the United States of America (US) agreed to write off Indonesia’s foreign debt, amounting to nearly 30 million US dollars over 8 years. The Government of Indonesia is committed to channeling the payment of its debt payments to the United States Government which is held in a special account to support the provision of grants for the protection and improvement of Indonesia’s tropical forests.
The agreement, which is a debt swap (swap-debt), was implemented by involving two NGOs as a partner implementing activities (swap partner) namely Conservation International and the Indonesian Biodiversity Foundation (KEHATI), each of which contributed 1 million US $ so that this program also called subsidized debt-for-nature swap. This scheme is the first in Indonesia and is the largest transfer of debt to the environment made by the United States with other countries.
This scheme is possible because of the policy of the Tropical Forest Conservation Act (TFCA), which was approved by the American Congress in 1998 as a mechanism to reduce foreign debt for countries with high tropical forest wealth.
This program is managed by an agency called the Oversight Committee (OC) with permanent members consisting of the Government of Indonesia represented by the Ministry of Environment and Forestry, the United States Government represented by USAID and representatives of swap partners namely CI and KEHATI.
In its implementation, to provide more transparent and accurate decisions, OC membership is added by three non-permanent members (designated members) from independent institutions with a term of 3 years. At present OC representatives of non-permanent members are Transparency International Indonesia, Indonesia Business Link and Syiah Kuala University. The Oversight Committee holds the highest authority in managing grant funds which in its daily implementation is assisted by the Administrator and concurrently as the OC Secretariat (KEHATI).
The funds generated by the debt diversion program will be directed to help Indonesia protect critical forest habitats in Sumatra. The Sumatra region is home to hundreds of species of mammals, birds and plants, many of which are rare or endangered, including the Sumatran Tiger, Elephants, Rhinos and Orangutans. These grants are designed to improve natural resource management and conservation efforts, while building sustainable livelihoods for local communities and surrounding forests who depend on forest resources.