Jakarta – The government, through the Ministry of Environment and Forestry (MoE), issued Minister of Environment Regulation No. 2 of 2025 concerning the Development of Payment System for Environmental Services (PES). This regulation provides a legal basis for indigenous peoples, forest farmers, and local groups to receive real compensation for their role in maintaining the ecosystem.
“Conservation is not a sacrifice, but important work that deserves reward. Those who protect our nature so far, from now on have the legal right to get a return,” said Minister of Environment Hanif Faisol Nurofiq, during the handover ceremony of Danone’s environmental fee payment in collaboration with Pusur Institute and Padepokan Konservasi Ekologi Masyarakat (Pakem) to residents of Mriyan Village, Musuk District, Boyolali Regency, Central Java, Friday, 18 April.
Permen No. 2/2025 is a derivative of Government Regulation No. 46/2017 on Environmental Economic Instruments. This regulation aims to change the conservation paradigm from a voluntary activity to an integrated part of the economic system, with an incentive-based approach.
“This is not just about payment schemes, but about recognition. We want to make conservation the foundation of development, not the rest,” Hanif explained.
The funds for PES can come from the state budget, regional budget, CSR, international donors, and civil society mutual cooperation schemes. A national information system will also be developed so that compensation distribution is transparent and accountable throughout Indonesia.
Compensation for tangible services, from water to carbon
The environmental services referred to in this regulation cover a wide range of things-from water protection, carbon sequestration, biodiversity management, to soil and air preservation. All of that can now be calculated and valued.
In Klaten, Central Java, PT Tirta Investama (Danone-AQUA) and the community developed Padepokan Konservasi Ekologi Masyarakat (PAKEM). Instead of paying cash, residents are equipped with conservation technology, training, and legality. As a result, carbon emissions were reduced by 17,919 tonnes of CO₂ per year, and access to clean water returned to the community.
In Cidanau, Banten, farmers received USD 125 per hectare from a water company to protect upstream forests. Interestingly, 71 per cent of farmers had already made conservation efforts before being compensated.
In Sumberjaya, Lampung, farmers who implemented conservation practices received forest management rights for 25 years, and river sedimentation dropped dramatically. According to Hanif, Regulation No. 2/2025 is not just an administrative regulation, but a green economic framework that unites social justice with ecological sustainability.
“Who protects, we must protect. Who protects nature, we must protect. Because protecting nature is protecting our future together,” he said.
The Regent of Klaten, Hamenang Wajar Ismoyo, welcomed this policy and expressed his commitment to making his area a model for implementing PES at the district level. “We are ready to collaborate with all parties so that Klaten people can directly benefit from efforts to keep water, soil and air healthy,” he said.
With an incentive-based PES system and multi-sector participation, Indonesia asserts itself as a pioneer of a green economy integrated with social justice. The regulation also opens a space for collaboration between the government, the private sector, and local communities to create a sustainable conservation system.
“It’s not about who gives and who receives, but who cares and who is responsible,” Hanif concluded. (Hartatik)
Banner photo: shutterstock
