Submitted on 2/7/2019 for MOT1451 – Inter- and Intra- Organizational Decision Making. Grade: 9/10.
Co-written with Angginta Ramdani Ibrahim.
Word count: 3758.
Jakarta, the capital city of Indonesia, is the fastest-sinking city in the world (Lin, 2018). Currently, 40% of Jakarta is situated below sea level, and as a waterfront city, it is prone to coastal flood (Widodo, 2017). As the center of most economic activities, Jakarta’s population grows rapidly, leading to land scarcity and massive building construction that contributes to land subsidence (Widodo, 2017). The surface of Jakarta has sunk 4 meters in the last three decades (Tarrant, 2014), and the most recent data indicated that the land subsides at a rate of 15-25 cm/year (Waterstaat, 2012). In 2007, Jakarta was hit by the worst flood in the past three hundred years (WHO, 2007). After this disaster, the Indonesian government called the Dutch government for assistance to protect Jakarta from sinking. As a response to the call, the Dutch government formed a consortium of Dutch companies that came up with a strategic plan called National Capital Integrated Coastal Development (NCICD). The solution offers flood protection and major contribution to socio-economic development at a cost of US$40 billion (Kemenko Perekonomian, 2014).
The earliest concept of a coastal development plan was introduced in 1995 as a land reclamation project. Since then, it has undergone constant changes in the design and goals that resulted from multiple negotiations and interactions between the actors (Octavianti et al., 2018), until the plan transformed into a one-for-all answer to the problems of Jakarta. Although the massive coastal development will affect the livelihood of local fishermen, destroy the environment, and expose the government to financial risks caused by the preconditions of the project (Bakker et al., 2017), it is still being championed as the answer to save Jakarta from sinking. This situation leads to our research question: Why does the integrated coastal development project remain entrenched in the agenda of Indonesian government for more than two decades despite internal and public disapproval?
As a ‘wicked’ problem, the combination of problem-solution is a result of negotiations between actors (Rittel & Webber, 1973). Conflicting parties are equally capable in describing the problem, but the problem definition is greatly influenced by their power, interest, and their idea of an ideal solution. Multiple studies proposed different problems to be tackled; unregulated groundwater extraction, rapid urbanization, and pressure from excessive construction (Abidin et al., 2011; Mohsin, 2015; Bakker et al., 2017). There is also no immediate and ultimate test for the solution, because the effectiveness of this project can only be measured if a major flood or other disastrous event occurs. The consequences of this project will span over a long period of time, leaving irreversible traces (Bakker et al., 2017). Other than that, as a ‘wicked’ problem that has no stopping rule, even after NCICD is implemented, there is no guarantee that the problem will be solved and the search for solutions can be put to an end.
In analyzing this case, the rounds model was chosen because it is suitable for analyzing decision-making process within complex network that involves many actors (Teisman et al., 2012), providing the contextual details on how the actors interacted and what were exchanged. We will also utilize the tracks model to comprehensively analyze the ambitions of the actors, knowledge dynamics, and framing processes. The key actors will be further assessed based on their judgements and interests, alongside with the notable negotiation and framing strategies used throughout the NCICD decision-making process between 1995 and 2018.
Presidential decree on land reclamation
The key actors in this round are the central government, Jakarta provincial government (DKI), and private developers (e.g. Lippo). In 1995, a presidential decree on land reclamation was signed and DKI was appointed as the controlling body of the project. The hierarchical relationship between the central and local government is in contrast to the relationship between government and private developers that were built on the principle of reciprocity. Private developers are largely involved in the urban development in Jakarta, which subsequently contribute to the economic growth of the region. In return, the government issues regulations and permits (Herlambang et al., 2019).
By using the tracks model to interpret this decision, we argue that the main reason behind this plan is the ambition of private developers that wanted to expand their business. In the backstage, the private developers influence the decision-making processby utilizing their close relationship with the government officials, particularly Soerjadi Soedirdja, who was both a governor of Jakarta (1992-1997) and a vice president of Lippo Board of Commissioners (Herlambang et al., 2019). Meanwhile, in the frontstage, the project was communicated as a means to expand the economy of the capital city. In order to justify this decision, Soedirdja used the fact that North Jakarta was lagging behind the other four districts of Jakarta. It was also framed that the expansion towards the land was not feasible due to the established satellite cities surrounding Jakarta, leaving land reclamation as the only viable solution. This is an evidence of a process-based activities backstage, project-based communication frontstage strategy. In 1999, the existing spatial planning document of Jakarta was revised, opening a 2.700ha land reclamation opportunity to further accommodate the ambition of the private developers.
The Dutch entrance to the decision-making process
The key actors in this round are the Dutch government, Ministry of Public Works (PU), Ministry of Environment and Forestry (KLHK), and court. In 2001, four ministries of Indonesia and the Netherlands signed an MoU on water issues. The MoU was a result of the longstanding postcolonial relationship between Indonesia and the Netherlands, which is demonstrated by multiple development cooperation projects that dated back to the 1960s (Nobbe, 2018). The projects include development aid that amounts to hundreds of millions of euros per year. By maintaining the relationship with Indonesia, the Netherlands is able to simultaneously build a growing dependency and strategically position itself within the decision-making network of the Indonesian government. An example of a successful Dutch influence can be found on the construction of Eastern Flood Canal in Jakarta. The plan was first presented in 1973 but had only started construction in 2003 after PU collaborated with the Dutch government (Simanjuntak et al., 2012).
Meanwhile, the resistance towards the land reclamation project began to emerge. As a central government body, the KLHK has both the responsibility and the authority to maintain the sustainability of the environment, which was threatened by this project. In 2003, KLHK used the facts obtained from an environmental impact assessment (EIA) to construct a victim-villain-hero frame, positioning itself as the hero against the private developers (the villain) that will damage the marine ecosystem and hurt the fishermen income (Bakker et al., 2017), harming the environment and society (the victims). The facts were used as a basis to ban land reclamation, igniting a court war between the ministry and private developers. However, in 2007, the court ruled that private developers won the dispute.
In the same year, a major flood from the sea hit Jakarta and left it debilitated for 10 days. This disaster created a sense of urgency and the Indonesian government decided to call for the Dutch assistance in ‘protecting Jakarta from high water’ (Waterstaat, 2014). Aside from the fact that the Dutch is globally-known for its expertise in water management, its close relationship with Indonesia has positioned itself as a convenient and reliable emergency contact. We argue that the Dutch expertise results in power, which subsequently grant it a claim to hearings on Indonesia’s water issues, an essential factor for a policy entrepreneur. This round ended with a formal introduction of the Dutch actors to the decision-making process.
The first conception of coastal development
In this round, two decision-making arenas were identified. The first arena centered on the land reclamation project, with KLHK and private developers as the main actors, and the second arena focused on the initial concept of coastal development. The key actors in the second arena consisted of Indonesia government bodies and a network of Dutch actors that were introduced in the preceding round.
The interactions in the first arena started in July 2009, when KLHK filed an appeal against the court’s 2007 decision that won private developers. The court ruled in favor of private developers, pushing KLHK to file for cassation. Supreme court granted the cassation and declared that reclamation violated EIA. However, in 2011, the supreme court issued a new ruling that legalized the reclamation, stating that the president is the only actor that has the power to stop it. The interactions in this arena were concluded with a green light for private developers to proceed with the project.
The interactions in the second arena started in November 2009 when the National Planning Agency (BAPPENAS) collaborated with the Dutch water sector to formulate a strategic plan for Jakarta coastal defense (van der Kerk et al., 2013). Between 2010-2011, the Jakarta Coastal Defense Strategy (JCDS) project was carried out, and the end-of-project report warned that North Jakarta will sunk 4 to 5 meters below sea level in the coming 15-20 years (Waterstaat, 2012). A massive infrastructural project was proposed as a solution. Framing the threat of sinking as an emergency was a negotiated knowledge established by the experts in charge of the project, thus justifying the neglect of the main cause of the problem (Waterstaat, 2012).
Using the tracks model, we argue that the proposed solution was heavily influenced by the ambition of the main entity that initiated and financed JCDS: the Dutch government. The fact that Dutch excels in water management was utilized to include a consortium of Dutch water organizations to develop JCDS proposal. This is an implementation of selective activation of actors strategy to secure the involvement of Dutch organizations, giving them the power to use their frame in constructing the problem-solution set. In July 2011, Dutch Ministry of Development Cooperation contributed €4 million to the project, followed by a meeting in the Hague between Dutch representatives and Indonesian authorities, preparing the terms of reference (Bakker et al., 2017). The persistence of the Dutch government to push through with the project demonstrates another important factor that affects its success as a policy entrepreneur.
The introduction and evolvement of NCICD
This round started in 2012 when the End-of-Project review of JCDS was presented to Hatta Rajasa, CoordinatingMinister for Economic Affairs (Kemenko Perekonomian). As JCDS was related to the economic development of DKI, Rajasa decided to include it in the Master Plan for Acceleration and Expansion of Indonesia Economic Development (MP3EI) 2011-2025 (Waterstaat, 2012). The presentation acted as a policy window that enabled the coastal defense design to be incorporated in a much bigger setting. The key actors in this round are Kemenko Perekonomian, DKI, the Government of the Netherlands, and the Dutch consortium.
DKI governor issued a decree on the construction of 17 artificial islands in 2012. In the following year, Jakarta was hit by another flood, resulting in US$3 billion of damage (APADM, 2013). This disaster further instilled a sense of urgency, proving that the existing flood prevention system was insufficient to guard the city from water. In November 2013, Dutch Prime Minister presented the first draft of National Capital Integrated Coastal Development (NCICD) master plan in Jakarta, and the final version was published in October 2014. The highlight of the proposal is a giant seawall constructed as a 1.250ha reclaimed island in the shape of garuda – Indonesia’s mythical bird (Kemenko Perekonomian, 2014).
We argue that the NCICD master plan is a result of a multi-issue game that accommodates different ambitions of actors within the network. Kemenko Perekonomian viewed JCDS as an essential instrument for the country’s economic development, an incentive for it to join the process. From this point onwards, it became the leading entity of the decision-making process, reconfiguring the coastal defense as just one part of a selective multi-issue portfolio. The focus shifted from Jakarta flood problem into an ambitious projection of urban development that includes waterfront real estate development, toll roads, and port expansion (Kemenko Perekonomian, 2014). The coastal defense project was no longer positioned as a solution to Jakarta flood problem, but a crucial means to achieve the government’s bigger goals. However, this project came with a staggering US$40 billion price tag, making it impossible to be realized without external sources of funding. This condition required a participation from another key actor: the private developers.
Using the tracks model, we observe that the master plan utilized the fact that private developers have been actively constructing private islands in Jakarta coast and frame it as a pre-existing solution for the financing needs of the giant seawall. This coupling acts an incentive for private developers to join the process, offering an opportunity to develop valuable real estate in Jakarta bay in exchange for covering 70% of the project costs (Wade, 2019). Other than that, this setup provides a narrative that could justify the presence of land reclamation and potentially reduce public resistance. Utilizing the victim-villain-hero frame, the land reclamation project was reframed from being a villainthat harms the environment and society (victim) into a hero that will save Jakarta (victim) from sinking (villain). This new frame presented NCICD as a win-win package for Indonesian government to realize its ambitious urban development while simultaneously guarding its capital from water, and for the private developers to continue with land reclamation and gain future real estate development opportunities.
On top of that, we argue that the NCICD master plan contained the Dutch actors ambitions as much as its Indonesian counterparts. The ambitions of the Dutch government could be translated from their ‘aid and trade’ policy agenda that utilizes development cooperation and close relationship to partner countries to open doors for Dutch business sector and promote their expertise (BZ, 2013). NCICD was designed to rely on the Dutch expertise in water management, hydraulic engineering, and other technical aspects, a strategy to ensure future dependency when the project progresses past the planning phase. This round ended in 2015 when Dutch government granted another €8.5 million to the same consortium for continuing the plan development. The final decision-making content in this round is an integrated coastal development plan.
Period of turbulence
The key actors in this round are local fishing communities, Corruption Eradication Commission (KPK), Ministry of Maritime Affairs and Fisheries (KKP), the Coordinating Minister of Maritime Affairs (Kemenko Maritim), President Jokowi, DKI, and private developers. This round started in 2015 when the local fishing communities sued DKI, claiming that land reclamation will block access to fishing grounds and cause them to lose significant income (Bakker et al., 2017). In April 2016, KPK arrested a local politician for accepting bribes from a developer involved in the construction of one of the islands: Island G. In May 2016, the fishing communities used the procedural accusation strategy and challenged the decision legitimacy on the grounds of exclusionas they were not properly involved in the decision-making process (Bakker et al., 2017), leading to the court decision to suspend the reclamation permit issued by DKI.
Moreover, the project is considered to be too “driven” by private companies. Thus, President Jokowi declared moratorium and instructed the governmental bodies to take over the process (Humas, 2016). In April 2016, DKI Governor (Ahok) stressed that the moratorium would not affect the continuation of the project, as it was only intended to sort coordination issues. President Jokowi also showed his support, presenting the coupling of land reclamation and giant seawall as inseparable elements of NCICD (Kuwado, 2016). He used the principle frame to highlight the core values of NCICD that are aligned with what the public needs: safety and economic growth.
Following the suspension, in June 2016, KKP utilized principle frame to uphold the values of environmental sustainability by announcing that island G had to be cancelled permanently due to the violation of regulations. The accusation was contested by the developer, reframing the case using the principle frame, referring to its value of rule compliance (Bakker et al., 2017). The promotion of the project was re-intensified after the replacement of the coordinating ministry of Kemenko Maritim, who stated that the development of all 17 reclaimed islands will continue (Affan, 2016). In October 2016, DKI won the appeal procedure against fishing communities, followed by the reissuance of reclamation permit for island G (Aziza, 2016).
The facts of bribery scandals, law violations, and negative environmental impacts of the project were utilized by different actors (KKP and fishing communities) to push their ambitions in stopping the project. They used the victim-villain-hero frame to depict the project as a villain that will harm the victims (fishing communities and environment), and framed themselves as the heroes. This round ended with re-intensification of the support for NCICD.
A revised version of NCICD
The key actors in this round are Save Jakarta Bay coalition (KSTJ), Dutch actors (government, consortium, NGOs), Governor of DKI, and BAPPENAS. This round started in October 2016, when KSTJ requested a meeting with Dutch Prime Minister. They stressed that the Dutch involvement in NCICD disrespects the principles of sustainable policies and good governance as it will harm the environment and local community (KSTJ, 2016). However, the Dutch government insisted on continuing its involvement in this project, igniting critics and accusations from its own public about how it places business interests above commitment to sustainable development (Bakker et al., 2017). The Dutch NGOs saw this situation as an incentive to participate in the decision-making process because these issues have affected their core values. They implemented the explain and expose strategy by publishing an investigative report on the Dutch role in the project in April 2017, forcing the Dutch actors to moderate their behavior to avoid being perceived as opportunists.
In October 2017, a new DKI governor who promised the public to stop land reclamation was inaugurated. He decided to retract permits and halt 13 islands based on the factthat developers did not fulfil their obligations. However, the construction of the remaining four islands have already finished (Arbi, 2018). This could be seen as a successful implementation of the point of no return strategy by the private developers, allowing them to continue with the development. In response to this situation, the Head of BAPPENAS decided to uncouple the controversial land reclamation element from NCICD and stated that the giant seawall will still continue (Daud, 2018). This inconsistency demonstrated the government’s opportunistic way of dealing with a dilemma in the decision-making process, putting them at risk of being deemed as an unreliable partner. This decision also forced the actors to find other financial resources to fund the giant seawall because the private developers’ land reclamation project was dropped from the multi-issue portfolio. In July 2017, a revised design of NCICD was presented, where the iconic garuda-shaped seawall was replaced with ‘just a seawall’ (PMU NCICD, 2017).
Using the tracks model to analyze this round, the Dutch NGOs, government, and consortium have conflicting ambitions between business interests and sustainability that subsequently affected the facts and frames that were used. Inside Indonesian government, the ambition between DKI to stop land reclamation and BAPPENAS to proceed with NCICD also clashed, each utilizing favorable facts to frame different set of problem-solution (DKI: environmental damage – stop land reclamation, BAPPENAS: flood problem – construct giant seawall). This round concludes the two-decades long decision-making process with a final content that has evolved drastically compared to the beginning.
Based on our analysis of the reconstruction of the decision-making process, we concluded that the integrated coastal development continued to be entrenched for several reasons. Firstly, the project is a result of a multi-issue game that incorporates interests and ambitions of an increasingly large number of actors. Each actor has invested a substantial amount of resources, and as the time elongates, the incentives to continue participating also increases. Everybody is still expecting the prospect of gain that will not be available until the project is successfully implemented. In addition, the actors cannot exit the process and bear the risk of being considered untrustworthy by the others. Secondly, the status of the project is volatile due to the interdependencies of the actors. The Indonesian government has the authority to decide and govern, but lacks the technical expertise and financial resources to realize the project. The Dutch actors has the expertise power needed to design and implement the project, but it needs financial resources. Both actors depend on private developers, the owner of the much needed production power. This could be illustrated by the dancing table where every actor pushes and pulls within the decision-making process without any outcome that could satisfy all of the actors involved. Thirdly, the presence of the opponents’ blockade power is an obstruction to the progress. Smaller players such as the fishing community has actually managed to won a court case against DKI, and contributed to the suspension of the construction of several islands. With the help of NGOs, they were able to exert ‘chaos power’ in order to threaten big players, enforcing their values and interests to be considered, thus creating hindrance to the overall implementation of the project.
NCICD forces the opposing parties (e.g. NGOs and the fishing communities) to face win-lose situation. Although these parties have exerted ‘chaos power’ against the supporters of NCICD in order to disturb the process, the development has already reached a point of no return where four artificial islands have been built. One way to minimize their loss is to recognize the winner’s need to respect the rules of the game and use it in their favor. As a loser, they have the right to extra negotiations and compensation (de Bruijn & Heuvelhof, 2018). For instance, the fishing community and other harmed parties should negotiate a compensation package with the winners, utilizing the help of NGOs to increase their leverage.
The Indonesian government should also learn from this decision-making process. The government’s dependence on the Dutch expertise and private developers’ financial resources has created an increasing need to cooperate and negotiate, reducing its formal decision-making power and resulting in moderated behavior. To remain as the most powerful actor in the network and retain its system responsibility, the government has to build on competence, expertise, and resources that are relevant to solve its ‘wicked’ problems. Moreover, the government has to ensure the satisfaction of the actors, learning process, chances for future collaboration, and the fairness of the process (de Bruijn & Heuvelhof, 2018): the characteristics of a good decision-making process.
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