Ecological modernization of marine conservation

Transcription

1 Ecological modernization of marine conservation A case study of two entrepreneurial marine protected areas in Indonesia Mariska Bottema MSc Thesis July 2010 Wageningen University, Wageningen

2 The photograph on the front cover shows a Gili Trawangan dive boat taking tourists out to dive Meno Wall, a popular dive site at the neighboring island (source: author). 2

3 Wageningen University Department of Environmental Sciences Environmental Policy Group Ecological modernization of marine conservation A case study of two entrepreneurial marine protected areas in Indonesia Mariska Bottema MSc thesis Master Environmental Sciences Supervisor: Dr. Simon Bush Environmental Policy (ENP) 3

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5 Abstract The study of Entrepreneurial Marine Protected Areas (EMPAs) as a tool in marine conservation is still relatively underdeveloped: little is known about the challenges and the opportunities which lie in this novel form of marine protected areas where the private sector takes primary stewardship over marine resources. This thesis analyzes the potential role of the private sector in creating durable conservation and restoration agreements to protect coral reefs. It aims to determine how the private sector is able to steer marine conservation through the development of EMPAs; what the functions and characteristics of these entrepreneurs are, how they gain legitimacy for themselves, and in how far they are able to create durable institutions to steer marine conservation. This study applies the theory of ecological modernization to marine conservation; to determine the potential for the wider horizontal shift we are observing in marine governance, presenting the emerging presence of the private sector, to add value to marine conservation and present itself as a durable approach to marine conservation. Two EMPAs in Indonesia were researched using a case study approach; an EMPA in Pemuteran, North Bali and an EMPA on the island of Gili Trawangan Lombok. The empirical data collected during the field work, consisting primarily of unstructured interviews with important stakeholders at the two case study sites, presented two different EMPAs. The EMPA in Gili Trawangan is much more institutionalized than the EMPA in Pemuteran. Fishing rules have been formalized in a legalized contract supported by the government, and the private sector has organized itself and the coordination of its members by forming an association with a price agreement between the dive operators and an agreement to charge an eco-tax to fund marine conservation in Gili Trawangan. In Pemuteran, a number of individual entrepreneurs carry out marine conservation separately and have gained legitimacy from the local community and fishermen. This EMPA is far from institutionalized, and the support and consequentially the legitimacy which individual members of the private sector have gained is what appears to drive compliance in Pemuteran. Despite these significant differences, a comparison of the cases illuminates several patterns regarding the role of the private sector in EMPAs. The potential for the private sector to create durable conservation and restoration agreements to protect coral reefs appears to have an inherent dependency on state support. With state support, the private sector has much more room to exploit entrepreneurial opportunities and to use the advantages that they bring to marine conservation, because state support provides them with the capacity to institutionalize their ecological or environmental rationalities. Without this, the private sector still holds the ability to induce some level of social and institutional change and increase awareness, but will face more challenges of in terms of the institutionalization of their goals, and consequentially the durability of the arrangements they are able to create. This thesis shows that the ecological modernization of marine conservation through EMPAs can be characterized as hybrid governance arrangements in which the private sector carries a central role for funding and management. The state remains to be an important actor in these arrangements holding an integral function for supporting the private sector in the institutionalization of their ecological aims, and coral restoration technology such as Biorock can also contribute to building legitimacy for the private sector and aid the private sector in embedding themselves and their goals in marine conservation. 5

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7 Acknowledgements There are quite a few people I need to thank for their contribution and help throughout the process of writing this thesis. I want to begin with mentioning a few people that were invaluable to me before and during my field work in Indonesia. First of all a big thank you goes to Tom Goreau for his instant enthusiasm and for the initial introduction to the projects in Bali and Lombok. I want to thank Nara for welcoming me to Pemuteran, helping me find a place to stay and making me feel right at home. A special thank you goes out to Komang who was kind and patient enough to drive me around on his scooter, introduce me to interviewees from the village, and even offer his interpretation skills! Komang, Made and Putu gave me a sense of family in Pemuteran; they let me bother them every day at the Biorock Centre with questions and were happy to lend me snorkeling equipment for me to enjoy Pemuteran s reefs in my free time. I would like to thank Delphine in Gili Trawangan for being so open to a student like me, taking the time to speak to me and leading me to the countless people in Trawangan who were kind enough to share their thoughts with me. Also, a thank you goes out to fellow researcher Ed for keeping me company between all the holiday-goers! Of course, I cannot forget to thank my sister Tamar for patiently listening to my daily telephone reports on my adventures in the field. Naturally I wish to thank Simon Bush, my supervisor at Wageningen University for his valuable advice and support throughout the entire research process. His lasting enthusiasm about the topic was a prime motivator for me, especially during the last lap to shore. A final thank you goes to those people close to me, who have put up with me during this entire process. I want to thank my parents who have been supportive and enthusiastic about my thesis and Tamar for helping me out whenever I needed it. Lastly, a thank you goes out to my friends in Wageningen and Den Haag, who have reminded me throughout the entire process how lucky I am for being able to go to some of the most beautiful places in the world for my master thesis! 7

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9 Table of Contents 1 Introduction Problem Statement Objective Marine conservation policy in Indonesia: the role of the state Private sector involvement in marine conservation: what is known? Research methods and techniques Case study Case selection: research sites Data collection: sources and methods Limitations Outline of thesis Theoretical Framework Introduction Ecological modernization Shifts in ocean and coastal governance: increasing role of the private sector Entrepreneurship as a field of research Novel forms of entrepreneurship Social capital in entrepreneurship Institutionalization of entrepreneurship Framework for analysis Pemuteran Introduction History of fishing, tourism and marine conservation in Pemuteran The E in the EMPA in Pemuteran Opportunity 1: Developing tourism in Pemuteran Opportunity 2: Developing a sustainable diving industry in Pemuteran bay Opportunity 3: Adding value to the reef with Biorock Reflection Social capital of the entrepreneurs in Pemuteran Interrelations in the private sector: dive operators and dive operators Private sector and local community Private sector and fishing community Private sector and public sector Reflection Institutionalization of the EMPA Alteration of fishing industry norms: a ban and a No Take Zone Privately funded enforcement: Pecalan Laut Biorock Private sector projects Reflection Conclusion Gili Trawangan Introduction History of fishing, tourism and marine conservation in Gili Trawangan The E in the EMPA in Gili Trawangan Opportunity 1: Developing tourism in Gili Trawangan Opportunity 2: Creating a collective dive industry to manage coral reefs Opportunity 3: Introduction of Biorock to Gili Trawangan Reflection

10 4.4 Social capital of the entrepreneurs in Gili Trawangan Interrelations in the private sector: G.E.T Private sector and local community Private sector and fishing community Private sector and local security task force Private sector and public sector Reflection Institutionalization of the EMPA Fishing agreement based on local ruling: Awig-awig Privately funded enforcement: SATGAS Private sector alliance: Gili Eco Trust Biorock Reflection Conclusion Discussion Introduction Entrepreneurship Exploitation of entrepreneurial opportunities Dependence on individuals in EMPAs Evaluating the concept of entrepreneurship Social Capital Competition and collectivity within the private sector Relations with initial resource owners The social value of Biorock The role of funding in EMPAs Evaluating the concept of social capital Institutionalization Combining new institutions with existing traditional institutions State support: also important in EMPAs? The institutional role of Biorock Territorialization of the coral reefs Evaluating the concept of institutionalization Analyzing EMPAs through the eyes of ecological modernization Conclusions and Recommendations References Appendix Appendix 1: Interview List

11 List of tables and figures Tables Table 1: Existing EMPAs p.21 Figures Figure 1: Coral Triangle Region p.24 Figure 2: Map of case study sites p.25 Figure 3: Framework for analysis p.33 Figure 4: Map of Pemuteran p.43 Figure 5: Map of Kebun Chris with marine area use rules for the public p.48 Figure 6: Swimming and Snorkeling Rules p.50 Figure 7: Network diagram displaying communicative relations in the EMPA p.52 Figure 8: Biorock Centre and Karang Lestari Rules sign p.64 Figure 9: Map of Gili Indah with dive sites p.68 Figure 10: Zoning plan for muroami fishermen p.74 Figure 11: Network diagram displaying communicative relations in the EMPA in 2001 and 2010 p.77 Figure 12: Building a new Biorock structure p.77 Figure 13: GET manager preparing sign p.80 11

12 List of acronyms BKKPN BKSDA BRF CTI EMPA EU GET GCRA HMMR KRISMON LBRG LMMA MF MFSO MTP MMAF MPA MCA NCA NGO NTZ SATGAS TNC WWF Balai Kawasan Konservasi Perairan Nasional (National Institute for Aquatic Conservation Areas) Balai Konservasi Sumberdaya Alam (Agency for Natural Resources Conservation) Bali Rehabilitation Fund Coral Triangle Initiative Entrepreneurial Marine Protected Area European Union Gili Eco Trust Global Coral Reef Alliance Hotel Managed Marine Resort Krisis Monitair (Asian economic crisis) Lombok Barat Regency Government Locally Managed Marine Area Ministry for Forestry Marine Fisheries Service Office Marine Tourism Park Ministry for Marine Affairs and Fisheries Marine Protected Area Marine Conservation Area Natural Conservation Area Non-Governmental Organization No Take Zone Satuan Tugas (security task force) The Nature Conservancy World Wildlife Fund 12

13 1 Introduction 1.1 Problem Statement Coral reef ecosystems are complex and diverse, and they have a number of very important functions. They support an incredible diversity of marine life (Bell et al., 2006). Moreover, they provide ecological services in the form of storm and flood protection, but are also the source of many socio-economic benefits (Bell et al., 2006; Yeemin et al., 2006). Coral reefs are fundamental to the sustainable development of many coastal communities in tropical developing countries. They provide food and minerals to these communities, income to local fisheries, as well as income from tourism-related activities in and around these reefs (Bell et al., 2006; Svensson et al., 2009). Since in many cases a large percentage of the protein intake of these coastal communities comes from fish, and many coastal communities depend on fishing and tourism for their livelihood, dependence on healthy reefs can be fairly high (Bell et al., 2006). Unfortunately surveys of the ecological status of coral reefs have indicated the ongoing degradation of these ecosystems; they are highly threatened today and are in decline worldwide (Bell et al., 2006; Clifton, 2003). Many complex causes exist for what is sometimes referred to as this coral reef crisis but there is a general consensus that there are two main categories of pressure on these ecosystems; global-scale climatic change and local-scale impacts (Bell et al., 2006). Local impacts stem from natural phenomena such as storms, as well as from human activity of the populations on these coasts (Bell et al., 2006). Geographical information systems mapping indicates that 60% of the world s reefs are at risk from pressure arising from human activity (Clifton, 2003). A number of the human impacts which contribute to the destruction of reefs are deforestation as well as the use of fertilizers, herbicides and pesticides in agricultural practices which cause an increase in nutrient and sediment loads in the ocean; industrial effluents; modification of habitat through coastal development and tourism; destructive fishing practices; and overfishing (Bell et al., 2006; Goreau et al., 2005). These human-induced threats are particularly acute in South-East Asia, where 80% of the reefs have been found to be endangered by coastal development and fishing-related activities (Clifton, 2003). An important tool currently used in conventional marine biodiversity and fisheries management is conservation through Marine Protected Areas (MPAs) (WSSD, 2005). The need for more MPAs has been increasingly recognized in the past decade, and has been put forward in several international policy instruments and legislation (Bogaert et al., 2009; Svensson et al., 2009). However, in the last years there has also been an increasing perceived need and interest in coral reef restoration as a supplementary approach to conservation (Rinkevich, 2005; Spurgeon et al., 2000). The normative goal of MPAs is conservation, or the preservation, of original habitats. Hence, conservation biology places its main focus on passive measures, allowing natural processes to mitigate impacts, with minimal human interference (Rinkevich, 2005). However, many reefs are too degraded to allow the recovery of the coral, fish, and invertebrates to former levels due to the fact that the quality of the habitat is so badly degraded that reefs have lost most of their carrying capacity for these species. Based on the severity and vast expanse of areas of coral degradation, there has been increasing discussion regarding the need for coral reef restoration as an active tool to supplement MPAs, illustrated by the recent development of an increasing number of coral restoration methods (Kojis et al., 2001). Until recently coral restoration was not widely accepted as a management option. The topic is a controversial one due to its high cost and the fact that is has yet to be proven to be effective on a large scale (Kojis et al, 2001; Spurgeon et al., 2000). However, during the past decade restoration projects have been more widely employed on a small scale, with restoration ecology slowly developing into a new scientific discipline in environmental science (Rinkevich, 2005). As mentioned above, there are numerous approaches to coral restoration. Though direct coral transportation is still the most frequently applied method, other novel methods are coming to the foreground (Rinkevich, 2005). Tom Goreau and Wolf Hilbertz of the Global Coral Reef Alliance (GCRA), strong proponents for using coral restoration as a tool to fight 13

14 coral reef degradation, developed a new method of coral restoration referred to as Biorock technology; the GCRA s Biorock Ecosystem Restoration technology uses low voltage currents to grow limestone rock on steel structures in the sea (Goreau et al., 2005). Projects using Biorock have been set up in numerous locations, some more successfully than others. In this method coral is created, thereby adding value in these reefs. What is evident about this type of method is the dependency on initial investments in the materials needed for this technology. Without sufficient funding this technology cannot be implemented. Herein lies one of the limiting factors of such a method; its inherent dependency on investment. Until now no government or large funding agency has supported meaningful restoration efforts (Goreau et al., 2008). With governments disinterest in investing in this type of reef restoration, and the limitations in the capacity of local communities and non-governmental organizations (NGOs) in their ability to invest, who is going to pay? Furthermore, once this technology has been successfully implemented, how will the healthy reef be maintained? The emergence of novel types of MPAs could potentially present part of the solution. The majority of MPAs in South-East Asia, as well as the rest of the world, have been reported to fail in a number of different ways; the failure to meet objectives, being listed as a marine reserve but not succeeding in implementing management, or lying dormant at one of the development stages of an MPA. One of the major reasons for these failures has been argued to be the lack of long-term funding for the management costs of these parks, which results in the failure of legal enforcement of the protection of these parks (Svensson et al., 2009). As part of an attempt to approach this problem, there has recently been a transformation observable in the governance of MPAs, with the increasing presence of actors from the private sector involved in the governance of MPAs. The private sector, supported through tourism, can offer a source of revenue. Svensson et al. (2009) argue that this enables MPAs to become self-financing, establishing a truly successful and economically sustainable MPA, especially in developing countries (Svensson et al., 2009:72). These MPAs are believed to have been formed due to government failure to satisfy public demand for nature conservation, growing societal interest in biodiversity conservation and the rapidly expanding ecotourism industry. The Durban Action Plan from the World Parks Congress in 2003, called on the private sector to financially support the strategic expansion of the global network of protected areas and goes further to state that tourism can provide economic benefits and opportunities for communities and create awareness and greater knowledge the natural heritage of human kind (IUCN, 2003; Svensson, 2009). A particular form of these privately managed MPAs is Entrepreneurial Marine Protected Areas (EMPAs). These are commercially-supported MPAs where commercial entities, such as dive resorts for example, are acknowledged as full partners in the planning and management of MPAs (Colwell, 1997). Hence they provide primary stewardship for these coral resources, as well as economic benefits. A small number of existing examples can be found in which a combination of private actors, park authorities and NGOs have enclosed a marine area and channel funding to run conservation activities; Van Phong Bay, Vietnam, which hosts a Hotel Managed Marine Reserve; Chumbe Island Coral Park, a privately managed MPA in Tanzania; Sugud Islands Marine Conservation Area in Malaysia managed by a private management company called Reef Guardian; and Bonaire Marine Park managed by an NGO authority and dive operators in the Dutch Antilles (Dixon et al. 1993; Svensson et al., 2009; Teh et al, 2008; De Groot and Bush, 2010). Colwell (1999) suggests that many EMPAs will ultimately evolve into some form of hybrid MPA with increased partnership among private stewards, NGOs and governments (Colwell, 1999: 221). Currently the governance of privately managed MPAs, including EMPAs, is still widely undocumented and insufficiently researched (Svensson et al., 2009). One of the main issues for effective MPA implementation is using appropriate governance arrangements to determine rules for the access and inclusion of certain actors (Pomeroy et al., 2010). MPAs come in different forms (such as closed areas, no-take reserves, multiple use, and zoning of oceans) and carry different names (such as parks, reserves and sanctuaries). MPAs can be formed through different processes; some are formed from the top down, thus by the state, and others from the bottom up, i.e. by local communities. As a result, a number of different governance modes for MPAs have been applied to date: centralized or decentralized, comanagement or community-based (Jentoft et al., 2007). In EMPA s a new group of actors are 14

15 involved, namely entrepreneurs, and thus the governance modes of these types of MPAs will differ from those which involve other actors. According to Jameson et al. (2002: 1180) the usefulness of appropriately sized, wellmanaged MPAs is not in question. What requires closer scrutiny is the institutional and community capacity necessary for effective MPA management to occur. Hence, the success or failure of MPAs relies on their design as a governing system. In terms of the governance of EMPAs, little attention has been given to the challenges associated with EMPA management, the forms of control that are necessary for these EMPAs to gain legitimacy and to function successfully, and to the different forms EMPAs may take in different settings (De Groot and Bush, 2010). Colwell (1999) provides a general framework with the main functions of EMPAs but he does not explore further into the characteristics of EMPAs, the perils and promises which lie in EMPAs, nor does he provide a set of conditions under which EMPAs can function (De Groot, 2008). This brings forward the question of what the functions and characteristics of the entrepreneurs, which is what makes these MPAs different from generic MPAs, in these EMPAs are, and how they are able to steer the development of EMPAs. How do these actors gain legitimacy for themselves, and actually create new institutional arrangements to steer marine conservation? The Yayasasn Karang Lestari coral restoration project in Pemuteran, North Bali and the marine tourism park in Gili Trawangan, Lombok are two MPAs which are funded by individuals from the private sector, and can therefore be presented as EMPAs. What is interesting about these projects is that both EMPAs make use of Biorock technology and thus appear to be financing some degree of restoration and not just conservation, as would be the case in an EMPA as defined by Colwell, thereby presenting a new approach to fighting the degradation of coral reefs. The EMPAs control the access to the reefs through the formulation of guiding principles and the creation of institutions. Furthermore, these EMPAs include a number of different actors making the governance of the area a complex process with a large spectrum of social interactions, negotiations, conflict and decision-making. Though it is known that it was entrepreneurs that initiated these projects, little is known about what makes or defines an entrepreneurial approach to conservation and restoration, and the outcome of the institutional arrangements formed around these new access regimes and control mechanisms. 1.2 Objective This thesis aims to analyze the potential role of the private sector in creating durable conservation and restoration agreements to protect coral reefs, by investigating the social processes which shaped the EMPA in Pemuteran, North Bali and the EMPA in Gili Trawangan, Lombok. In both cases an individual or group of individuals from the private sector initiated the creation of a MPA in the area in response to the destruction of the reefs, and continue to fund the EMPAs. The two cases also have in common the application of Biorock restoration technology which in both places was initially invested in by entrepreneurs. Hence, in both areas entrepreneurs recognized the need to conserve the area which induced the creation of No Take Zones (NTZs), but they also recognized the opportunity to invest in technology to restore coral, thereby adding value to the existing reefs. In these projects entrepreneurs vested their own resources into the protection of the coral reefs. What are unknown, with so little research conducted in EMPAs, are the social processes which shape EMPAs; the ways in which the private sector is able promote conservation and restoration in their environment. The development of the EMPAs and the institutional arrangements through which they are managed at present, are the result of a process of interactions between these entrepreneurs and their environments. This process is made even more complex with the presence of a large number of different stakeholders which are also involved in this process. Two success stories in the Indonesian archipelago will be compared to analyze these processes. To reach this objective three main questions will be posed. 15

16 A logical opening to the research process is to define what entrepreneurial opportunities were the starting points for the development of marine conservation in these areas: (1) What were the entrepreneurial opportunities exploited in the two projects, which were relevant to the development of marine conservation? This descriptive question aims to explore what types of opportunities were directly, or indirectly, responsible for the development of marine conservation and restoration in these areas. The opportunities and how they contributed to the development of the EMPAs will be described, but also the individuals involved in this process. Who was responsible for discovering, evaluating and exploiting these opportunities, and what were their motivations to do so? What is it that makes these individuals entrepreneurs? Why was it these individuals who exploited these opportunities, and not the initial resource owners? Did they have access to information to identify the opportunity, and the cognitive properties necessary to evaluate the opportunity? Did they recognize the value that protecting, and adding value to, the reefs could have to their livelihoods? What was their motivation in creating value in these reefs? Once a clear picture of these opportunities and entrepreneurs has been sketched, more specific questions can be posed regarding how the entrepreneurs were able to exploit these opportunities and influence their environment. Hence, the following question focuses on the process of how the private sector was able to exploit these opportunities, by looking at the interactions between the private sector and their environment. (2) Through which types of processes were the entrepreneurs able to legitimize themselves in the eyes of the other actors involved in these EMPAs? This analytical question takes a more critical look at the linkages or relations between the entrepreneurs and the other actors in the network which is the EMPA, and the way that these relations have been established through the development of the EMPAs. It is important to begin with indicating the most relevant actors involved in the EMPA and how the entrepreneurs communicate with these. What follows is the question of what interactions have taken place between the entrepreneurs and their environment resulting in the legitimacy or lack thereof, of the entrepreneurs in the eyes of the other stakeholders: Is there equal participation in decision-making in the EMPA? What tools have the entrepreneurs used to build up trust amongst the other stakeholders? Are there conflicts between the entrepreneurs and the other actors? This process of social negotiation has led to the establishment of a certain level of legitimacy for these entrepreneurs. This in turn has determined the level of institutionalization of the EMPA, which leads to the last question. (3) To what extent has the private sector been able to alter or create institutions around marine conservation in the two cases? This question explores a more material concept of the rules and steering mechanisms that entrepreneurs have been able to develop through these EMPAs, as well as providing a measure to determine to what extent they were actually successful in institutionalizing the EMPA: what institutional arrangements and organizations have formed, or altered around these EMPAs? How is the management of the EMPA organized? How are other steering mechanisms such as economic incentives organized? Are there conflicts or problems around goals in terms of conflicting uses? Are these new arrangements legitimate in the eyes of the other stakeholders? How durable are they? Thus, the reader is left with a clear picture of the current governance arrangements in the two areas, which has been a direct result of the previously mentioned social negotiation process. 1.3 Marine conservation policy in Indonesia: the role of the state During the New Order Period in Indonesia, the years between 1967 and 1998, natural resource conservation and management was carried out using a centralized approach. National policy stated that all marine waters were state property to be managed centrally, through provincial, regency and village offices of the central government. Democracy was absent in Indonesia during this period, also in marine resource management. Accordingly, the 16

17 local government and communities had no significant role in resource management, whilst the central government had a very strong role (Satria et al., 2006a). At the time there were three main legal products which covered marine conservation policy, which are important to introduce as these laws still apply today, despite shifts in responsibilities in marine conservation: the Fisheries Law, the Living Natural Resources Conservation Law and the Environmental Law. The Fisheries Law was characterized by state-based fisheries conservation and management, and no articles in this law acknowledged traditional fishing systems, though many existed. Under the Living Natural Resources Conservation Law, the central government could establish wildlife reserves and sanctuaries, and classified Natural Conservation Areas (NCAs) into three types: national parks, forest parks and natural tourism parks. Management of these areas was under control of the central government, but could be delegated to individual states or privately controlled groups. To implement NCA policy the government developed the Technical Executive Office of the National Park Station and the Agency for Natural Resources Conservation, or Balai Konservasi Sumberdaya Alam (BBKSDA), as a representative of the central government both in province and regency areas. These agencies were linked to the Ministry of Forestry (MF) and were responsible for monitoring and controlling the NCAs. Finally, the Environmental Law stated that natural resources, on the mainland as well as in the ocean, were under state property rights and were to be utilized for the people s welfare. Article 12 of this law allowed the central government to transfer some authority to the local government for the implementation of environmental management, but this transfer of authority was identified as forms of delegation or deconcentration rather that devolution (Satria et al., 2006a). Natural resource management in Indonesia changed dramatically after the fall of president Soeharto s regime. Since the fall of his regime in 1998, Indonesia experienced a dramatic transferral of power from the central government to the provinces and regencies, often collectively referred to as reformasi (Clifton, 2003). These changes were led by the establishment of the Local Autonomy Law which states that as far as 12 miles from the shoreline is under provincial government authority, and within those 12 miles the first four miles are under the authority of the local or district government. The powers of these authorities include (1) exploration, exploitation, conservation and marine resource management within the authorized marine area, (2) administrative management, (3) zone management, and (4) law enforcement of local regulation and central government regulations that have been deconcentrated to the local government (Satria and Matsuda, 2004; Satria et al., 2006b). The second important change for marine conservation came forth in the establishment of the Ministry of Marine Affairs and Fisheries (MMAF). The main duty of the MMAF, as identified in the Presidential Decree No.177/2000, is to assist the president in conducting some governmental tasks in the marine and fisheries field, and to handle certain functions such as the establishment and monitoring of the local autonomy implementation plan in maritime and fisheries fields, and the management and implementation of plans for protection of natural resources of the seas within the 12 miles (Satria and Matsuda, 2004). There were a number of factors which prevented the local autonomy law from ensuring decentralization of marine conservation; there was considerable institutional conflict between the MF and MMAF. The MF referred to the Living Natural Resources Conservation Law and National Government Decree which mandated the MF to take responsibility over NCA s, whilst the MMAF, established in 1999 after these laws were enacted, claimed that authority of NCAs in the marine environment should be given to them as marine marks are part of marine ecosystems which is essentially their domain. This problem was intensified by the different, even conflicting, approaches the two ministries had toward conservation and preservation of natural resources (Satria et al., 2006a). Eventually a new Fisheries Law no. 31/2004 was issued entrusting the MMAF with the authority to manage Marine Conservation Areas (MCAs), including marine reserve areas, marine national parks, marine tourism parks (MTPs) and fisheries sanctuaries, which were previously formally under the management of the MF. This change led to the revision of the Living Natural Resources Conservation Law and the National Government Decree, now 17

18 recognizing the responsibility of the MMAF, removing some of the previously mentioned institutional conflicts (Satria et al., 2006a). The MMAF was given the responsibility for conservation of ecosystems, species, and genetic diversity of marine life, and this law has dramatically accelerated the development of MPAs in Indonesia (Yusri et al., 2009). The transfer of authority over marine conservation areas from the MF to the MMAF has however been a lengthy and difficult process. Research presented at the World Ocean Congress in 2009 showed that in 2008, the MMAF managed 53% of MPAs in Indonesia, whilst the MF still managed 39%. Furthermore, the MF managed almost twice the area of the MMAF, primarily because the former manages seven large national parks, and the latter manages mostly small MPAs. The most common type of MPA in Indonesia, with 30 in total, is referred to as the Locally Managed Marine Area (LMMA). The second and third most common are Mangrove Conservation Areas, with 28 in total, and MTPs, of which there are 18. The number of LMMUs has increased significantly since the issue of Law No. 27/2007 which enables district authorities to develop and manage their own MPAs. Local governments have the authority to manage conservation areas in their territory. The details on how a local government is to manage their conservation area is regulated through the MMAF. In an effort to accelerate the implementation of the local autonomy law in coastal and marine areas, the MMAF established a technical implementation unit, similar to the MF s BKSDA, for the management of coasts, marine areas and small islands: the Institute for Aquatic Conservation Areas, or Balai Kawasan Konservasi Perairan Nasional (BBKPN), located in Kupang. This unit, inaugurated March 2008, is devoted to manage, utilize and supervise MCAs in the east of Indonesia (Department of Fisheries Resource Allocation, 2009). At the World Oceans Congress held in Manado, May 2009, Indonesia signed a declaration approving the Coral Triangle Initiative (CTI). The CTI represents a unique and innovative international collaboration focusing on the conservation and sustainable use of marine resources (Clifton, 2009: 91). Since its announcement in 2007 the CTI has received much political support and culminated in the Regional Action Plan agreed at the World Oceans Congress. Central to this agreement is the establishment of a network of MPAs. The Indonesian president declared that Indonesia would designate 10 million hectares of MPAs across the archipelago by 2010 and 20 million hectares by 2020 (Wootliffe, 2009). At present Indonesia has in fact already over met this commitment. Thus, in recent years there appears to have been significant government effort to increase marine conservation in Indonesia. Though Indonesia has already designated more than 15 million hectares of MPAs, the effectiveness of these is questionable. There are numerous MPAs with unclear boundaries, and even without management plans. Yusri et al. (2009) argue that these problems need to be addressed quickly, because without proper design and management, MPAs cannot meet the marine and coastal conservation needs of Indonesia. Large NGOs like The Nature Conservancy (TNC) and World Wildlife Fund (WWF) have been closely involved in the CTI since 2003 and have been recognized as full partners in its implementation. Accordingly, the Indonesian government too is working with several of these global NGOs to reach their 2020 CTI targets with effectively managed MPAs, and not just paper parks, which are officially designated conservation parks but lack compliance by the resource users or enforcement by the management agencies (Jameson et al., 2002). The TNC is currently working on designing an effective management protocol for MPAs. They are working with the Indonesian government to design a system so that they can run a scorecard process to assess whether or not there is effective management in place in an MPA. The scorecard will produce a level of effective management so that they will be able to map all the MPAs in Indonesia in terms of management effectiveness. This will help distinguish paper parks from ones with effective management systems in place. Furthermore, the TNC is trying to design this so that the system can be used to assess all types of conservation areas: We have tried to design it to be used for any type of MPA, and not just national parks (personal communication: Senior Advisor Indonesia Marine Program: The Nature Conservancy 18/3/2010). TNC, as one of the major NGO collaborators with the 18

19 Indonesian government in the area of marine conservation recognizes the potential for novel types of MPAs, including small-scale privately-led MPAs, and aims to design the scorecard system so that private actors should be able to use the same protocol to assess what level their MPA is at in terms of effective management (personal communication: Senior Advisor Indonesia Marine Program TNC 18/3/2010). TNC has already started mapping 9 or 10 places where private actors have been exercising marine conservation, and even suggest that, if deemed affective, these should be included in the network of MPAs in Indonesia working toward reaching the 2020 CTI goals. Hence, recognition of the potential of these novel types of MPAs to work toward Indonesia s larger goals in marine conservation is growing. This recognition is also visible globally, as research into private sector-led MPAs is slowly beginning to appear in academic literature. The following section will discuss what has been done so far in terms of research into these novel MPAs in which the private sector plays a leading role. 1.4 Private sector involvement in marine conservation: what is known? Private terrestrial reserves have existed for centuries, but only in the last 50 years have they been accepted as a conservation tool (Svensson et al., 2009). There are numerous privately owned and managed terrestrial areas all over the world which protect biologically significant habitat. In South Africa alone more than half of the protected areas are under private control. In the Netherlands, Stichting Natuurmonumenten, a large Dutch NGO, owns wetlands as well as cultural heritage sites that it keeps under protected management and the TNC has bought up large amounts of land in the United States with endangered resources and manages these privately (Riedmiller and Carter, 2000). Rocliffe (2010) argues that comparatively there has been little interest in privately-led marine parks because it was always assumed that oceans are commons and can thus not be owned or leased the way terrestrial parks can. Interestingly, commercial enterprises have actually been acquiring rights to submerged lands for many years. This submerged land is owned or leased for oil extraction, dock construction, marina construction, aquaculture and fisheries to name a few. However, leasing submerged lands as a tool for marine conservation has not been as common despite the fact that the cost of leasing such areas is generally lower than for equivalent schemes on terrestrial land (Svensson et al., 2009). An increasing number of NGOs are interested in this idea, and TNC is currently looking at the conservation potential for attaining rights of submerged lands in Indonesia (personal communication: Leader Coral Triangle Program WWF 12/3/2010; personal communication: Senior Advisor Indonesia Marine Program TNC 18/3/2010). Currently a growing number of commercial enterprises such as hotels are also discovering the marine conservation potential of these legal mechanisms and are leasing or assuming quasi-tenure over coastal areas to protect these (Rocliffe, 2010). Svensson et al. (2009) present an example in Fiji where the Navina Island resort has taken advantage of the customary practice of owned limited access areas of the sea and its resources called tabu areas. The sea around an island is leased up to a depth of 30m and a monthly fee is paid to the owners who enforce fishing restrictions, and the resort follows the tabu rules which prohibit damaging the coral reef or extracting resources. There are also an increasing number of cases in which hotels or dive operators which have the financial backing, resources and economic incentive have taken over the day-to-day management of MPAs from the government. These areas are usually officially designated MPAs, but lack the resources to effectively manage the MPA. This handover can be done for part of total management, such as day-to-day enforcement, but can also take shape in a complete handover of responsibilities to private enterprises. Colwell (1999) reviewed a number of cases of private initiatives in coral reef conservation in Honduras and the Philippines and introduced the notion of entrepreneurial MPAs. Colwell (1997) argues that though EMPAs do not provide the large-scale protection needed globally, EMPAs perform several valuable functions; they can protect discrete areas which serve as a refuge for threatened marine life, they can build local capacity in MPA management, build public awareness for marine conservation and support of MPAs, and 19

20 provide the core areas for larger and slower developing MPAs. Though these MPAs may suffer because they are created with less research and planning than is generally recommended for the more traditional NGO or state-led MPAs, the main advantage for these MPAs is that they can use existing commercial infrastructure and management structures so that these MPAs can be created more quickly and management regimes can be instituted more easily than is possible with large-scale MPAs. The ultimate goal of Colwell s approach is to create a network of small locally-run MPAs which use tourism or other commercial support to achieve long term economic and environmental sustainability - a situation where economics and ecology are combined. Colwell (1999) provides a brief classification for EMPAs, outlining several criteria for success, as well as several limitations. He argues that EMPAs are most appropriate where the government or local community is unable or chooses not to manage local marine resources. In their place hotels or dive operators act as the primary stewards of these areas. Furthermore, these private sector members must be able to enforce restrictions on resource use. This requires the delegation of marine tenure or the right to control resource by prevailing authorities to these non-state organizations (De Groot and Bush, 2010). At the same time, Colwell illustrates some level of skepticism as to the role of private initiatives in conservation; he states that due to the nature of a commercial entity, with profit as the primary motive and the fact that it does not answer to a public constituency, the potential for the abuse of power is high. Thus, Colwell (1999) argues for the need for external reviews of EMPA managers. Colwell (1999) also presents two conflicting contextual criteria for the success of EMPAs. EMPAs appear to work best in relatively isolated areas where there are fewer potential conflicting uses of the marine resources by other stakeholders, and thus there is little existing enforcement of regulations or restrictions. This can be attributed to the fact that, similar to traditional MPAs, EMPAs are not likely to be sustainable without substantial input from all key stakeholders in defining issues, selecting management strategies and implementing management measures. Thus, these private actors must acknowledge the rights of other stakeholders and accommodate their needs (Colwell, 1999). With existing institutions around marine conservation, the private sector must then also build consensus and gain the support of local state and customary authorities. The second, somewhat conflicting criterion is that EMPAs must be relatively accessible to attract the clientele necessary to offset the costs of managing the EMPA. Revenues from in and around these areas may be used to fund EMPAs: user fees, accommodation charges, tour guide services, royalties, research charges, restaurant charges and private donations (Riedmiller and Carter, 2000). A last important point that Colwell brought forward is that the ongoing success of EMPAs requires institutional protection for investors. He suggests that if management is taken over by the government or another body, the initial investors should be compensated somehow, and that without this institutional security the likelihood of investments in infrastructure will be minimal (Colwell, 1999). Traditionally this oversight has been provided by the state. However, as argued by De Groot and Bush (2010) as industries such as recreational diving have become global in nature, more networked forms of oversight and control have also become possible. Since Colwell s introduction to the concept of EMPAs, there have been numerous studies into these novel MPAs. Some of these studies have brought forward several different management forms which these EMPAs can take on: 20

21 Table 1: Existing EMPAs Name Location Size (ha) Management/ownership structure Chumbe Island Coral Tanzania 30 Private management authority; wholly private with a 10 Park year renewable lease from the government Sugud Islands Marine Conservation Area Malaysia 46,700 Private (non-profit) management authority; wholly owned by Langkayan Island Dive Resort Wakatobi Diver Resort Indonesia 200 with Private management authority: informal agreement with 500 buffer government Misool Eco Resort No Take Zone Indonesia 20,000 Private management authority; wholly private with 25 year lease from local land owners Whale Island Bay Vietnam 16 Hotel managed marine reserve; wholly private with the area leased from government Bonaire National Marine Park Dutch Antilles 2,700 Private (non-profit) authority; national park status since 1999 (Source: Riedmiller and Carter, 2000; Svensson et al, 2009; Rocliffe, 2010; Heinrichs, 2008;Tel et al., 2008; Dixon et al., 1993; STINAPA, 2010) The majority of existing research into EMPAs has looked at the ecological impact of these forms of protection, staying predominantly within the sphere of the natural environment. Svensson et al. (2009), in their study of Whale Island Resort in Vietnam, claim that their findings provide good evidence that Hotel Managed Marine Resorts (HMMRs), a specific form of EMPAs, can increase fish stocks rapidly, matching, or in some cases surpassing officially established MPAs of a similar size. Dixon et al. (1993) in their study of the Bonaire Marine Park bring economics into the discussion of EMPAs and assess the trade-offs between marine protection and direct use of an EMPA for tourism. They find that proper EMPA management can yield ecological as well as development benefits, but questions of ecosystem carrying capacity and government retention of revenues raise issues for long term sustainability. Teh et al. (2008) in their case study of Sugud Island Marine Conservation Area in Malaysia, discuss the shortcomings and advantages of private management in operating an MPA to meet conservation objectives. Though the research is ecologically-oriented, they conclude some success factors for effective EMPA management. Some of these are interesting in their conformity to Colwell s contextual criteria for successful EMPAs. Like in traditional MPAs, buy-in and support from local inhabitants is essential to minimize the potential for social conflict in these EMPAs. Particularly support from local fishing communities is key, and Teh et al. (2008) emphasize that alienation of fishing communities from marine parks has led to violent confrontations between fishers and enforcement officials in the past. This strengthens Colwell s claim that the fewer conflicting uses, the easier it is for an EMPA to develop and function. At the same time, the research supports Colwell s conflicting claim that EMPAs should be located in areas which attract clientele to support the costs of management of the EMPA, as Teh et al. (2008) emphasize the importance of the availability of long term funding, the bulk of which comes from private sources. Another interesting point made by Teh et al. (2008), is their suggestion that dive resorts that engage in conservation should consider separating business from conservation to avoid potential conflicts between differing interests (Teh et al., 2008: 3075). In this particular EMPA conservation management is separate from the dive resort and it is argued that a distinct management body is better able to exercise objective judgment in implementing conservation interests. Furthermore, the management body is obliged to maintain environmental standards according to measures enforced the state, and this body s accountability to the stategovernment thus acts as a check against situations where conservation objectives may be compromised for business interests (Teh et al., 2008: 3073). This reflects Colwell s previously mentioned skepticism of the ability of the private sector to exercise conservation due to their overarching profit-seeking motives. This suggests that the inherent commercial nature of private sector may be a significant limitation to their involvement in MPAs. Riedmiller and Carter (2000) delve deeper into some social aspects of by privately-led MPAs in their research into the political challenges of private sector management of MPAs. They present some very interesting conclusions in a study of Chumbe Island National Park, Tanzania. They suggest that the success of privately-led MPAs largely depends on their political environment. They argue that the definition of boundaries and the implementation of 21

22 certain legislation such as the prohibition of dynamite fishing go far beyond the capacity of private owners, and require a committed governmental and institutional framework, thereby underlining a limitation of the private sector in exercising marine conservation through EMPAs. There are subject matters where private owners (or conservation projects) should pursue their interests by lobbying for more favorable government policies that will safeguard their effective operation (Riedmiller and Carter, 2000: 149). Furthermore, they argue it is up to the state to create appropriate institutional structures and appropriate legislation, and that there must be commitment between governments and private investors if private management of MPAs is to succeed. These findings are interesting as they underline the remaining important role of the state within these novel types of MPAs, as well as bringing forward the need for cooperation between the private sector and state. Alternatively, De Groot and Bush (2010), in a more recent investigation of EMPA establishment by dive operators and resorts on Curacao, have shown that these private actors are not necessarily dependent on state support or ownership of the reef to ensure compliance to regulations. Their research shows that non-state market driven governance systems have provided conditions to ensure compliance which is based on development of company based standards. This research has also placed a new light on certain aspects of Colwell s classification of EMPAs: De Groot and Bush (2010) introduce a regulatory function that EMPAs can perform, a function untouched in Colwell s classification. In the EMPA on Curacao, regulations can be enforced through a system based on regulation of diver behavior where there are financial consequences for violating the rules, and restriction of access (De Groot, 2008). The two cases on Curacao show the potential for regulating diver behavior which opens up a new type of EMPA management which moves beyond area-based control. This shift to behavior-based regulation extends the spatial extent of EMPA beyond house reefs to a wider coral reef area, because all dive sites that are visited also fall under some form of protection (De Groot and Bush, 2010: 8). This research introduces the notion that private sector involvement in marine conservation does not have to be highly areal in nature, as suggested in Colwell s initial classification. This approach may develop into wider networks of protection which connect the conservation of coral reef dive sites and the authors argue that a focus on behavior thus may make Colwell s approach more viable, and perhaps provide the basis for larger, slower developing MPAs in areas that have high tourism value and use. De Groot and Bush (2010) also present some potential limitations to the establishment of EMPAs. On this island, particularly the risks of market competition within the dive industry limit the development of EMPAs. Dive operators are on the one hand under pressure to modulate their activities to ensure less damage to the reefs based on standards set by global diving governing bodies, and on the other hand face pressure from customers, who demand a specific quality from their dive experiences. The market competition that dive consumers provoke can potentially lead to situations in which operators maximize their returns on increasingly marginal entrepreneurial conservation-based activities, which consequentially deters development of effective marine conservation (De Groot and Bush, 2010). In this case consumers play a primary role in granting market-based legitimacy, but the potential unfavorable situations which could arise emphasize the need for external oversight on private sector activities. Again, this brings in the seeming need, or dependence on outside, be it state or non-state, actors within private sector management of MPAs. As mentioned previously, large NGOs have also started to show interest in this form of MPAs. TNC has been doing studies into private MPAs and marine conservation agreements, and have found that the common thread of the successful ones they have encountered globally is the individuals who are passionate about these projects and have the drive to work hard to make them work. They suggest that it is those charismatic mega individuals who hold these things together and drive their developments (personal communication: Senior Advisor Indonesia Marine Program TNC 18/3/2010). There has clearly been some movement in terms of research into the challenges and possibilities posed by private sector management of MPAs in the last years. However these research efforts remain relatively scarce and underdeveloped when compared to research 22

23 into other institutional arrangements around marine conservation such as state-led MPAs, community-based MPAs and co-management arrangements, which bring forward the role of the state, local communities and civil society in the governance of MPAs. Studies like that of Jentoft et al. (2007), presenting an interesting analysis of what must precede the implementation of a co-management arrangement in fisheries, though very valuable, do not contribute toward a better understanding of the role of the market, or private sector in marine conservation. There is a visible gap in knowledge regarding the understanding of governance arrangements in which the private sector play the primary role in marine conservation. The small amount of contemporary research into EMPAs which does exist appears to be taking Colwell s initial classification of EMPAs and in some ways builds on this, and in other ways presents new ways to view EMPAs and the role that the private sector can play in marine conservation. However, this research is dispersed into various topic areas, presenting many angles at which one can approach the study of EMPAs, and has resulted in scattered impressions of this concept. The primary research aim of this thesis is to investigate the role of the private sector in creating durable conservation and restoration arrangements for the protection of coral reefs, by looking at the development of two EMPAs in Indonesia, a nation in which this type of governance arrangement is slowly being recognized. A secondary practical goal of the thesis is to present a sound and widely applicable approach to investigating this phenomenon. 1.5 Research methods and techniques The research methodology for this thesis is a case study approach. The majority of the empirical information collected consisted of interviews with key stakeholders in the field at the two case study sites in the village of Pemuteran in North Bali, and on the island of Gili Trawangan, Lombok. A short justification of why the case study approach was chosen will be given, followed by a brief explanation of the cases selected as the two research sites of this thesis. The time frame of the research will then be described with a review of the specific data collection methods used to collect data to answer the research questions. Finally some reflective remarks will be presented on the challenges and limitations posed by this data collection process in Pemuteran and Gili Trawangan Case study The research method for this thesis is purely qualitative because the phenomenon studied is far too complex to be broken down into variables prior to the research; in fact, it is these variables which are sought through the research itself. This research was carried out using the case study approach because a large part of the research is into the relations and communication between the different actors, and one could argue that human actions are significantly influenced by the setting in which they occur and that therefore, one should study this behavior in real life settings (Marshall and Rossman, 1999). Additionally, the social and physical setting, and internalized notions of norms, traditions, roles and values are all crucial aspects of the environment, which must be studied on site. Case studies entail the immersion of the researcher in the setting in which the phenomenon which is being studied occurs (Flyvbjerg, 2006). With little distance between the researcher and the objects of study feedback between the researcher and those studied could occur, giving the researcher an understanding of the phenomena within the context of a whole (De Vaus, 2001). Naturally the knowledge obtained in these two cases is context-specific, and some may argue that this poses a large limitation. However, as Flyvbjerg (2006) argues: Social science has not succeeded in producing general, context-independent theory and, thus, has in the final instance nothing else to offer than concrete, contextdependent knowledge. And the case study is especially well suited to produce this knowledge. (Flyvbjerg, 2006: 223) Despite producing context-specific date, this research is still believed to be a valid contribution to scientific progress because the collection and analysis of the information obtained is guided by, and builds on existing theory, which is described in detail in Chapter 3. Ecological modernization theory holds that by analyzing contemporary transformations, 23

24 feasible new strategies and institutions can be designed, which better protect the environment. Thus, this thesis aims to build on this theory by analyzing the transformations which took place in two distinct cases of sever coral degradation in Indonesia. Furthermore, recently the phenomenon of entrepreneurship has been observed in new contexts, and writers have asserted how entrepreneurship can serve as a central force in the development of an ecologically sustainable society. This research aims to build on this by determining the role of these entrepreneurs in marine conservation by studying case studies where entrepreneurs appeared to play an integral role in marine conservation Case selection: research sites As mentioned previously, this research is site-specific. Hence, the selection of the cases is very important for the validity of the research. The EMPAs selected are both located in Indonesia, one of the countries in the Coral Triangle. The first case is located in Pemuteran, North Bali, and the second in Gili Trawangan, Lombok. These two EMPAs were strategically selected for four main factors which they have in common. First and foremost, they are both EMPAs, using Colwell s understanding of the concept; they are exemplary cases of MPAs which have been initiated and are funded by the private sector, particularly the dive industry. Secondly, they are both located within the Coral Triangle, an area which has received increasing publicity in recent years and been recognized as a biodiversity hotspot : Figure 1: Coral Triangle Region (source: The perceived need for intensification of protection of this area has resulted in policies favoring the establishment of networks of MPAs (Clifton, 2009). This places the two cases in a very relevant area for studying the emergence of novel forms of MPAs. Furthermore, the two sites are both dive tourism destinations in Indonesia; the main industry practiced is identical, and they are located in the same nation. Hence these private sector-led marine conservation initiatives are faced with similar national laws and regulations. 24

25 Figure 2: Map of case study sites (source: Finally, both sites apply Biorock coral restoration technology within the EMPAs. Additionally, it is interesting that the EMPA in Gili Trawangan directly followed Pemuteran in its application of Biorock technology. At the same time, it is important to note that the sites do display different socio-economic and ecological features, which alters the context in which the EMPAs have been formed. Naturally, this amplifies the variation in the data obtained about the role of the private sector in the two EMPAs. However, the fact that multiple cases are used does provide a tougher test in that it can help specify whether the role of private actors in EMPAs is similar despite the existence of different conditions. Hence it can help specify the different conditions under which a theory may or may not hold (De Vaus, 2001) Data collection: sources and methods The research was carried out over a period of seven and a half months. The first two months were devoted to literature research and proposal writing. During this time, based on the information available in the literature and contact with the managers in the two case studies, a rough estimate of the key stakeholder types which should be interviewed was made. The data collection process in Bali and Lombok took two months in total. Fortunately there was not much extra time needed for adjustment to the environment and so forth, since the researcher was familiar with the language and the areas of research. Roughly three weeks were spent at each case study location. The two additional weeks in Southern Bali, were used to organize and conduct interviews with NGOs which were all located there. The last three and a half months of the thesis consisted of data analysis and writing. Interviews at both case study locations were sought with dive industry representatives, village representatives, fishermen representatives, Biorock representatives, government representatives and representatives of NGOs working in the case study locations. Purposive sampling was initially used to approach the key stakeholders which were found beforehand mainly through previous reports and studies on the projects found on the internet, and through contact with the co-founder of the Yayasan Karang Lestari in Pemuteran and the Gili Eco Trust (GET) manager in Gili Trawangan. However, the rest of the actors involved in the EMPA were found through snowball sampling: the first interviewees were asked who else would provide useful sources of information. The larger NGOs which were interviewed later in South Bali were also found through interviewees in Pemuteran and Gili Trawangan. A total of 17 interviews were carried out with stakeholders in the EMPA in Pemuteran, and 16 in Gili Trawangan. After the case studies were concluded interviews were conducted with three NGOs; representatives from Reef Check Indonesia, the WWF and TNC. Reef Check Indonesia is national NGO, and independent from Reef Check International, but shares the same vision and mission as its mother organization. This NGO has done a fair share of research in North Bali and aims to create a network of LLMAs, which Pemuteran could potentially be in. TNC has recently done research in the marine conservation agreement 25

26 which exists in Gili Trawangan. The interviewee from the WWF did not have any experience or direct connection to the two case studies, but as the leader for the Coral Triangle Program she was expected to have an interesting take on EMPAs. All the interviews with the stakeholders in the case studies were semi-structured. A fixed set of topics was addressed for every stakeholder, which lead into different directions, and went into differing levels of depth, depending on the interviewee. Questions were prepared, but only used when interviewees needed encouragement. The general topics covered were: (1) the origins of the EMPA and the role of the entrepreneurs in this (2) the rules around fishing and how these changed (3) their opinion on the value of Biorock for the area (4) communication and relations the interviewed stakeholder had with the other actors, particularly the private actors, and (5) support for the EMPA from the different stakeholders. All the interviews were carried out face-to-face. Two-thirds of the interviews were carried out in English, with the remaining 12 carried out in Indonesian. The first three interviews in Indonesian were carried with the Biorock manager in Pemuteran functioning as the interpreter. The remaining interviews were conducted without a translator. The majority, namely 95%, of the interviews were recorded, with only two actors objecting to this. Transcripts were made within a day or two after each interview. One of the key stakeholders in Gili Trawangan, namely a representative for the fishing community could not be interviewed, so transcripts from a previously held interview conducted by a student from the University of Sydney was used to gain the perspective of this particular stakeholder group. Although the interviews were the main data collection tool for the research, participant observation was important to complement the interviews to study the social and physical setting of the environment, and internalized notions of norms, traditions, roles and values. The researcher spent roughly three weeks at each case study location making field notes of events and interesting behaviors which were thought relevant to the research and interacting with the research population provided a large amount of data. In Pemuteran the researcher spent most of the time aside from the interviews at the Biorock Centre on the beach, observing the interaction of all the different actors set at the beach, spending time with the operators whilst they carried out their day-to-day jobs, and studying the Biorock structures. Furthermore, a glass-bottom boat tour for a tourist who joined the Adopt a Baby Coral program was joined, to gain a sense of how the Biorock Centre provides for tourists. In Gili Trawangan a GET meeting was attended, and the researcher joined the GET manager in some informal meetings with different stakeholders in the EMPA. Furthermore, the researcher helped out with the building and consequent sinking of a Biorock structure which provided a poignant example of how the dive community interacts. Lastly, the review of documents provided some supporting information, particularly details which were overseen or unknown by the interviewees. Documentaries, newspaper articles, student reports, pamphlets, and contracts were reviewed for details which were not obtained in the interviews. Secondary literature in the form of previous case studies of the areas and literature reviews on marine conservation policy in Indonesia were particularly useful in creating a history of the development of the EMPAs Limitations This method of research displayed some limitations and challenges. Firstly, it must be noted that three weeks is quite a short period of time to conduct a case study, and it is difficult to determine whether more in-depth information would have been collected had the researcher stayed longer. Furthermore, longer time in the field may have enabled the researcher to build up more trust amongst the interviewees, thereby increasing the information they may have shared. Carrying out research in Indonesia provided a large challenge for the researcher, despite being familiar with the culture and language. Initially the interviews in Indonesian were carried out with an interpreter, through which some information is likely to have been lost in translation. Later the Indonesian language interviews were carried out by myself, but because I speak the language at a moderate level, it is likely that much information was lost in this way too. Aside from the language, conducting research in a particularly bureaucratic country like Indonesia made it very difficult to make contact with government representatives. 26

27 Unfortunately, no regional level government representatives could be interviewed, inducing the need to obtain information on government involvement from other sources. Furthermore, being a foreigner made it difficult at times to establish trust and gain the cooperation of some of the locals, particularly in a place like Gili Trawangan where the local stakeholders have become quite used to being interviewed and may suffer from research fatigue. As mentioned previously, one of the critical stakeholders in Gili Trawangan could not be interviewed, and a different researcher s information had to be used to fill the gap in the research. Another large challenge as a foreigner research in terms of internal validity lies in trying to obtain open responses to overt sociological research such as this where the respondents may have a vested interest in directing their answers in certain directions. Despite these challenges, a large amount and variety of empirical data was obtained during the two case studies, with perspectives from all the important stakeholder groups covered. This was used to form a picture of the role of the private sector in the development of the EMPA in Pemuteran and Gili Trawangan, which will be presented in chapters 3 and 4 respectively. 1.6 Outline of thesis This thesis aims to analyze the role of the private sector in creating durable conservation and restoration agreements for the protection of coral reefs. Chapter two presents the analytical framework, with a description of supporting theories, which will be used to carry out this analysis. Chapter three and four form the centre of the thesis. These chapters present analyses of the role of the private sector in the two cases; Pemuteran in chapter three, and Gili Trawangan in chapter 4. These case studies will be analyzed using the three main concepts comprising the analytical framework. In chapter five the two cases will then be compared, and the role of the potential role of private sector in creating durable agreements in EMPAs, and consequentially their role in the bigger movement of marine conservation will be discussed, as well as the value of the analytical framework used. Finally, chapter six will draw the thesis to a close by answering the research questions with some conclusive statements and recommendations brought forward by the research. 27

28 2 Theoretical Framework 2.1 Introduction The objective of this chapter is to build an analytical framework capable of analyzing the role of the private sector in marine governance, particularly through creating conservation and restoration agreements to protect coral reefs in EMPAs. An ecological modernization approach is proposed to meet this objective. This theory addresses how ecological rationality has been brought into the economic process, which has led to new institutional arrangements. Furthermore, environmental problems are seen as manageable issues, to be managed by not only the state, but by a wide range of non-state stakeholders. Thus, it provides an ideal basis for sociological analysis of the phenomena studied in this thesis, where a novel set of private actors is approaching an environmental problem which has not yet been solved by the state. First ecological modernization theory will briefly be described in its broader context, pointing out the themes most relevant to this analysis. The next step narrows down the scope of analysis, using ecological and political modernization theory to present a description of shifts in ocean and coastal governance and how this is relevant to marine conservation in Indonesia, underlining the emergence of the private sector, or entrepreneurs, in ocean and coastal governance. This is followed by an overview of entrepreneurialism as an emerging field of research, highlighting what concepts exist which could be used to assess the nature of entrepreneurship in EMPAs. Theory on social capital will then be explored, underlining how entrepreneurs can use this concept to overcome problems of collective action. As a last component of the framework some basic theory on institutionalization will be discussed to determine how to analyze the extent to which the private sector was able to institutionalize their ecological aims in economic practices. Finally, an analytical framework using the relevant concepts from the theory explored will be defined. 2.2 Ecological modernization From the mid 1980s onward several lines of sociological and political science analyses on environmental problems and reforms converged into a more or less coherent perspective commonly known as ecological modernization. This perspective was originally developed in order to understand the changes that were taking place at the time in the institutions and social practices involved in environmental deterioration and reform in Germany, the Netherlands and Denmark. This perspective recognizes that modern institutions and practices could no longer be viewed solely in terms of their detrimental, all pervasive influence on the environment, which was the dominant view in most sociological analyses of the 1970s and 1980s. Instead, the ecological modernization perspective looks at how environmental interests and considerations are starting to make a difference with respect to the organization of modern society (Mol and Spaargaren, 2002). The process of environmental reform is given shape by the actions undertaken by various societal actors, and ecological modernization theory contributes to the understanding of these actions and processes by providing concepts which aid in understanding these developments (Van Den Burg, 2006). Mol and Spaargaren (2002) summarize: through all kinds of mechanisms, interest groups and social processes and dynamics, environmental considerations are beginning to transform the processes of production and consumption, and the institutions which are linked to that. Hence, modern society is experiencing shifting rationalities, which lead to societal action, which consequentially result in environmental reform. Furthermore, ecological modernization recognizes existing realities and further possibilities to transform the current institutional order into one that takes environmental considerations into account. Thus ecological modernization focuses on relative innovations, as opposed to revolutionary change, and sees merit in working within the system. By analyzing contemporary transformations feasible new strategies and institutions can be designed in the future, which better protect the environment. This thesis contributes to this by analyzing private sector involvement in marine governance through a new emerging governance arrangement, namely EMPAs. The environmental 28

29 considerations of a new set of actors, namely the private sector, have led to a seemingly important role for them in the areal management of MPAs. The framework built up in this chapter aims to provide a structure for analyzing this role, within the framework of ecological modernization. At the heart of ecological modernization theory lie the core clusters of modernity: science and technology, the industrial organization, the capitalist mode of production, and the state system (Mol and Spaargaren, 2002). Many interesting themes can be recognized. For this analysis we will mainly focus on the theme of shifts regarding the central role of the nation-state in environmental reform, to the increasing role of economic and market dynamics and agents in responses to environmental change (Mol and Spaargaren, 2002; Van Den Burg, 2006). Two influential German writers, Martin Jänicke and Joseph Huber, were the primary developers of the ecological modernization discourse and took the first steps to develop a theoretical framework for analyzing environmental change within the conditions of modernity. As summarized by Van Den Burg (2006) Jänicke in his work was particularly concerned with the role of the nation state. He saw the world s environmental crisis as the failure of the modern state to deal with environmental problems. The failure of the nation-state in turn had the potential to affect the legitimacy of the state as trust in the state decreased whilst problems grew. Jänicke emphasized that the nation-state should use the environmental crisis to increase their legitimacy by redefining their role in finding solutions to this crisis. In his later work his angle changed, and instead of emphasizing the expanding of the state, Jänicke focused on the enlargement of the state s steering capacity. Today, ecological modernization focuses more on the modernization of politics which is needed to deal with environmental problems, suggesting new styles of regulation characterized, amongst other things, by the growing importance of non-state actors (Mol and Spaargaren, 2002). The concept of political modernization refers to the structural processes of social change and their impacts on the political domain. As a consequence of social, economic and political processes such as globalization and individualization, new relations are forming between the state, market and civil society. There is a shifting relationship from traditional politics to novel arrangements between the state, market and civil society (Arts et al., 2006). This has consequences on governance of societal and environmental problems, and relations between the state, market and civil society. As a result new networks made up of private and public actors are emerging around environmental problems, and these are built upon new mechanisms of power and influence. Thus, ecological modernization combines elements of political modernization which are specific to environmental problems and includes an appeal for new coalitions and new institutions (Arts and Van Tatenhove, 2004). Hence, the tasks and responsibilities which bring about environmental reform are changing. It is no longer exclusively the nation-state which promotes the protection of the environment. Private actors, such as corporations and consumers play an increasing role in environmental reform. A variety of new actors and institutions appear on the political stage of environmental reform, presenting a shift to new hybrid governance arrangements (Mol and Spaargaren, 2002). These shifts between the state to new actors are accompanied by a move to innovation to reach the ecological goals of these new actors, through the reflexive use of institutions as well as technology. These shifts bring change in institutions which guide the interactions in environmental problems, and consequentially new environmental policy instruments. One can observe a shift from formal, democratic institutions, to informal, multiple and negotiable institutions. Previously, in the vertical networks that existed around environmental problems traditional command-and-control regulation was the norm, whilst with these new horizontal networks one can distinguish more use of alternative policy instruments, with an increasing use of economic instruments. Thus, we observe that environmental reform is increasingly realized through market mechanisms. Economic agents such as consumers, certification institutions, branch organizations and corporations now play a significant role in bringing about environmental reform and are gaining importance vis-à-vis governmental institutions (Van Den Burg, 2006). Another very important theme in ecological modernization theory is the pivotal role of science and technology in bringing about environmental reform. This perspective displays an 29

30 optimistic view of the role of science and technology and highlights the contributions of science and technology to the solution of environmental problems, and in creating a more sustainable organization of production and consumption, an idea developed by Huber (1982). Huber approached environmental reform from a slightly different angle than his colleague Jänicke. He observed that certain strategies for environmental reform could not be placed under the theoretical framework of political modernization (Huber, 1982). The 1980s featured situations in which various societal actors voiced their concern for damage to the environment; civil society groups negotiated with corporations, consumers exercised power through boycotting and companies pressured their suppliers to take environmental problems in account. These concerns challenged the existing industrial system and Huber argues that the industrial system has to re-invent itself through the ecological modernization of production and consumption (Van Den Burg, 2006). Thus, ecological modernization does not plead for the dismantling of capitalism altogether (Spaargaren, 2000: 325). It focuses on industrial modes of consumption and production and links these institutions, including the technologies used, directly to environmental problems. Problems are seen as challenges to innovation technological rather than political and as opportunities to reconcile economy and ecology therefore urging state, market and civil society agents to contribute their share (Arts and Van Tatenhove, 2004: 7). Hence, the solution can be found in adapting the industrial system to the demands posed by ecology. Key technologies have to be picked up by innovative entrepreneurs who bring about a new wave of industrial innovation (Van Den Burg, 2006). Ecological modernization theory argues that the independent set of ecological criteria should be used alongside other, existing economic criteria in order to adequately judge the productivity or performance of industries and technologies. (Spaargaren, 2000: 325) This highlights another very important theme brought forward by the ecological modernization discourse; that ecology and the economy are no longer seen as separate institutions, but two which can be married and lead to environmental reform. Thus, one of the underlying thoughts behind ecological modernization is that economic progress can be married to environmental conservation. In fact, part of what this thesis aims to show is the equal footing of economic and environmental rationalities in the construction and existence of EMPAs, and that traditionally economic concepts and practices, such as those carried by the private sector, can be seen in terms of marine conservation. The fundamental juxtaposition of the environment and economy of the 1970s is no longer found in the ecological modernization perspective. Economic and environmental considerations no longer have to be seen as counter-positional (Van Den Burg, 2006). Ecological modernization, as a modernity theory, is very much about finding alternative organizational structures and technologies which better meet the standards of sustainability. Though much literature has been devoted to the failure of governments in leading marine conservation through state-led MPAs and the rise of community-based marine resource management (Clifton, 2003; Pomeroy et al., 2010; Jentoft et al., 2007), there has been little application of the ecological modernization theory to marine conservation, exploring situations where new actors are taking the stage and leading marine conservation through novel institutional arrangements and technology. This thesis aims to view two cases of marine conservation led by the private sector through the spectacles of ecological modernization. 2.3 Shifts in ocean and coastal governance: increasing role of the private sector In the following paragraphs, the relevance of ecological modernization and political modernization themes in the context of ocean and coastal governance will be further explored, to illustrate how they can be applied to EMPAs in Indonesia. 30

31 People have different perceptions of the meaning of governance, and in many cases this difference revolves around the perceived role of the state. To put it very simply, some argue that the government has failed to live up to expectations, and with the state unable to carry out certain governing tasks, other actors have moved forward into prominent positions (Kooiman and Bavinck, 2005). Hence, to some governance is referred to as a paradigm shift in the way we govern (post)modern societies and organizations: Due to processes such as relocation of politics (from the state to international and sub-national organizations), de-territorialization (the emergence of new political spaces beyond the territorial nation state), diffusion of political power (from public authorities to semi-public and private actors) and de-legitimization of the state (crisis of the welfare state, state failures, lack of performance), the old paradigm of topdown, state-led, command and control ways of steering do no longer suffice. (Arts, 2005: 2) This trend applies to the steering of environmental problems as well, which is one of the themes put forward in the ecological modernization debate; new actors and institutions appear to be becoming involved in environmental reform. In the realm of ocean and coastal governance there has been a shift from the traditional notion of government to new hybrid governance arrangements, with the emergence of novel institutions and the emergence of new partnerships between the state, the market and civil society. These new arrangements are made up of new, sometimes informal, unclear or negotiable, institutions, together with new policy instruments, incentives and mechanisms (Pierre and Peters, 2000; Van Kersbergen and Waarden, 2004). New forms of governance are being applied nationally, and internationally: network-like arrangements of public and private actors are emerging, as is self-regulation by business organizations. Furthermore we are observing new types of partnerships such as public-private partnerships and green alliances between business and NGOs, or civic-private partnerships (Arts, 2005). Also, arrangements directly involving the market have become more common such as certification schemes, eco-taxes and trading schemes, which began with CO2 emissions, but are now even considered being applied to tuna fish in the marine environment. Vertical, as well as horizontal and outward shifts in state power appear to be the drivers of these changes. It is important to define the different shifts which exist to be able to define exactly what types of shifts are studied in this research. To begin with, a displacement of state power which is of particular relevance here is the downward shift of state authority to regional and local institutions (Hooge and Marks, 2003; Pierre and Peters, 2000). This has at times been fuelled by a decrease in trust of state governments, by political objectives, as responses to structural changes in the democratic state, but has also been argued to be due to the failure of the state government to address certain societal and environmental problems (Kooiman and Bavinck, 2005). These shifts, also referred to as decentralization can take on several forms such as deconcentration, where responsibility shifts away from the centre but actual power remains with the state, and devolution, where responsibility as well as power to make decisions shifts from the centre to the periphery. A practical example of decentralization in natural resource management can be found in co-management arrangements where responsibility is shared between the government and the resource users, or the community; there is de facto control over the resources by communities, whilst legitimacy and technical capacity are still provided by the state. In Indonesia, decentralization has been proceeded by the Local Autonomy Law of 1999, passing the bulk of authority concerning marine fisheries management to local government (Satria and Matsuda, 2004). Since then regencies, and sometimes individual villages, have established their own marine parks, though only some of these have been formally implemented. Some of these are managed through systems of co-management involving local government, local people and NGOs. Additionally, more and more community-based marine and coastal resource management systems have formed and community-based MPAs have been established, emphasizing the trend of new local actors emerging in the governance of marine and coastal resources (Satria et al., 2006). It is clear that the government is playing less of a role in marine conservation in Indonesia than it used to. 31

32 At the same time outward shifts in governance are of interest to this research. Powers and capabilities traditionally controlled by the state have been moved to institutions and organizations, such as private companies, NGOs and quasi-autonomous NGOs. The shift to these types of arrangements is in part triggered by the need to find formats which enhance efficiency in the public sector. Furthermore, the use of private organizations can also increase the local legitimacy for activities in which the government may have lost the trust and support of local actors. Additionally, these organizations may more easily be able to involve communities than public sector organizations would be (Pierre and Peters, 2000). In terms of marine and coastal governance a Dutch example could be found in the quasi-autonomous government organization Stichting Noordzee, which receives the bulk of their funding from the government. Again, this highlights the emergence of new actors in the governance of marine and coastal resources in areas where the state cannot effectively do so alone. This research studies how members of the private sector have taken on responsibilities in governing MPAs. However, due to the development of a market around these MPAs it is perhaps more logical to view this as a horizontal shift, as opposed to an outward shift in governance. Horizontal shifts show how many of the state s responsibilities are distributed to the market and civil society. Non-state members of society such as consumers and civil society groups are starting to voice their concern for environmental problems and display their concern through their consumption patterns for example (Huber, 1982). Spaargaren (2002) emphasizes the importance of the role of human agency in bringing about more sustainable consumption and production patterns. Hence, consumers have the power to bring about change and even influence policy through their purses through the choices they make (Iles, 2004: 127). Examples can be found in the certification provided by the Marine Stewardship Council which allows the consumer to choose a product based on the outcome they perceive is good for them, or the Aquaculture Certification Council which offers more of a process certification toward seafood buyers, thereby meeting global market demand for seafood produced in an environmentally and social manner (Van der Geest, 2007). However, these shifts can also be observed at a more local level in the form of EMPAs. In these types of MPAs entrepreneurs from the private sector have taken on a new role in marine conservation resulting in a novel form of marine governance, bringing together a hybrid network of actors. To study this emerging trend of private sector involvement in marine conservation, the role of the private sector in two EMPAs in Indonesia will be studied. The two MPAs which have been selected are entrepreneur-led and there has appeared to be little, if any, government involvement. We are faced with two very interesting cases which are thematically rich with the ecological modernization and political modernization perspectives: two situations of severe coral degradation where the government was not successful in finding a solution to this problem. In the absence of the state, actors from the private sector, which we refer to as entrepreneurs, played a central role in the development of marine conservation in these areas, and formed EMPAs. This can argued to have been a horizontal shift from (the lack of, or failure of) government involvement in marine conservation, to a novel governance arrangement in which entrepreneurs have taken on responsibility for marine conservation. In order to outline how one can approach analyzing this shift in governance, it is interesting to introduce Kooiman and Bavinck s (2005) definition of governance as: the whole of public and private interactions taken to solve societal problems and create opportunities. It includes the formulation and application of principles guiding those interactions and the care for institutions which enable them. (Kooiman and Bavinck, 2005: 17) These interactions can be seen as actions taken by the different actors involved to remove obstacles and tread new pathways. This definition highlights the importance of institutions, as well as the interactions between these different actors. Institutions offer structure, order and predictability in human relations so that societal actors know how to interact, what is expected of them and what others expect of them. Thus, Kooiman and Bavinck (2005) argue that caring for institutions is part of governance. An integral part of this research is thus how interactions between different actors and institutional arrangements have changed as a result 32

33 of the involvement of the private sector in marine governance, which can be viewed as a shift in governance in two particular cases. Hence, the first interesting concept to look at is entrepreneurship; to determine who these private sector actors are, and why they were able to, and chose to, exercise marine conservation in these areas. Furthermore, as mentioned above governance is about interactions, and the formulation and application of principles guiding those actions. New networks have emerged around these cases of coral degradation in the form of EMPAs which have been built upon new mechanisms of power and influence. What is important to determine is how these private actors were able to do so and actually induce social change and action through their interactions with the other actors involved in these EMPAs. This will be approached using the concept of social capital. Finally, it is interesting to determine how the institutional arrangements in the two case study locations actually changed through the influence of these private actors; how the new institutions brought by the private sector link with existing institutions, how novel hybrid institutions have been formed, and how durable these are. The role of the private sector in creating durable conservation and restoration agreements to protect coral reefs through EMPAs Network:? Market: entrepreneur(s) and their opportunities? Process: interactions and relations Outcome: (ever-changing) creation and alteration of institutions? State: Community: governmental bodies fishermen and village Figure 3: Framework for analysis The next section looks at whether and what type of theory exists around the role of entrepreneurs in environmental reform to date, in order to build a framework with which these can hence be analyzed. 2.4 Entrepreneurship as a field of research The emergence of entrepreneurship as a legitimate academic pursuit has begun to attract the interest of scholars. However, as the publication of empirical work increases, theoretical work remains at a consistently low level (Busenitz et al., 2003). Busenitz et al. (2003) argue that examining whether scholarship on the topic of entrepreneurialism is worthwhile and legitimate is important as entrepreneurial activity is increasingly relevant to the economic output and labor employment in developed as well as developing nations, and that knowledge about entrepreneurship can speed up the outcomes desired by enterprising individuals, firms and societies. 33

34 Shane and Venkataraman (2000) go further to define three factors which illustrate the relevance of entrepreneurship as a field of study. First of all, as put forward by Arrow (1962), much technical information is ultimately embodied in products and services. Entrepreneurship in turn is a mechanism by which society converts technical information into these products and services. Secondly, Kirzner (1997) defines entrepreneurship as a mechanism through which temporal and spatial inefficiencies in an economy are discovered and mitigated. He argues that the role of entrepreneurs is to equilibrate the conditions of existing markets (Kirzner, 1973). Thirdly, from the different sources of change in the capitalist society, Schumpeter (1934) isolates entrepreneurially driven innovation in products and process as the critical engine driving the change process. Busenitz et al. (2003) argue that for the field of research to reach a higher level of legitimacy boundaries need to be articulated more clearly. To date the phenomenon of entrepreneurship has lacked a conceptual framework, and as a result people have had trouble identifying the distinct contribution of the field to the broader domain of business studies, undermining the field s legitimacy (Shane and Venkataraman, 2000). One of the main obstacles to building this foundation has been brought to light; the challenge in finding the correct definition for the phenomena. This challenge has been the subject of numerous debates. What is the correct definition of entrepreneurship? Until now many researchers have defined entrepreneurship in terms of who the entrepreneur is and what he does. The problem is that entrepreneurship involves the linking of two phenomena; the presence of opportunities and the presence of enterprising individuals. Hence, Shane and Venkataraman (2000) define the field of entrepreneurship as the scholarly examination of how, by whom and with what effects opportunities to create future goods and services are discovered, evaluated and exploited. Hence the study of the field involves the study of the processes of discovery, evaluation and exploitation of opportunities as well as the individuals who do so. What is the correct definition of entrepreneurship is not of extreme significance to this research, what is important is that today it is widely recognized that the focus of entrepreneurship research should be the entrepreneurial process, and although the field is still characterized by multiple paradigms, the idea of opportunities has widely been accepted at the defining element of entrepreneurship (Mair and Martí, 2006). Entrepreneurial opportunities are one of the key concepts in this thesis, and can be defined as situations in which new goods, services, raw materials and organizing methods can be introduced at a price greater than their cost of production (Casson, 1982). Previous researchers, such as Kirzner, have argued that entrepreneurial opportunities exist because different members of society have different beliefs about the relative value of resources, given the potential to transform them into a different state. Due to the fact that different people posses different beliefs they make different predictions about at what price markets should clear, or about what possible new markets could be created in the future. If resource owners had the same conjectures as an entrepreneur the resource owners would exploit the opportunity, and not the entrepreneur. Hence, for entrepreneurship to occur the resource owners must not share the entrepreneur s conjectures. Furthermore, information is imperfectly distributed and all economic actors do not receive the same information at the same time. Thus, some people obtain information before others about markets opening up or new discoveries being made for example (Shane and Venkataraman, 2000). In EMPAs individuals from the private sector are responsible for developing marine conservation in areas through exploiting certain opportunities. One of the primary questions which lead from this theory and can be applied to EMPAs which are being studied in this research is why is it certain individuals who initially discover opportunities and not someone else? Why is it them who then exploit this opportunity? Did the original resource owners know about these opportunities? Did they have access to information to identify the opportunity? And did they have the cognitive properties necessary to evaluate the opportunity? Around 1990 a new era of research in entrepreneurship emerged as scholars began to question the widely held view that entrepreneurs are isolated as economic actors and that the entrepreneurial process is distinct from other social phenomena. Scholars began to explore the idea that entrepreneurs are tied, through their social relations, to a broader network of 34

35 actors; entrepreneurship as a process resulting from the continuous interaction between entrepreneurs and the context they are in, and in which their activities are embedded (Hoang and Antoncic, 2003; Mair and Martí, 2006). Researchers started to study the causes and consequences of embeddedness in the entrepreneurial process (Hoang and Antoncic, 2003). The theme of embeddedness is a red thread in this thesis as we are in essence looking at how the private sector has embedded itself in the communities in which they placed themselves, in the relations with the other actors in the network, and finally in the institutions which they created. Hence, scholarly analysis of entrepreneurship is clearly widening from the focus on entrepreneurs simply as market actors, to entrepreneurs as being embedded within sociocultural relations. With this, we bring in an important theme of ecological modernization; the connectedness and equal footing of economic and environmental rationalities, where environment is the ecological as well as the social environment. We are in fact studying the importance of economic institutions, which come with these entrepreneurs, alongside existing social and cultural institutions present in locations where these entrepreneurs operate. The relations between these institutions in turn are equally important in the construction of MPAs as the economic activities of these entrepreneurs. Hence, traditionally economic concepts like entrepreneurialism can be seen in terms of conservation, which will be expanded upon in the following section. 2.5 Novel forms of entrepreneurship Entrepreneurship is gaining more and more attention from scholars, but has always been approached from a business studies perspective (Busenitz et al., 2003; Shane and Venkataraman, 2000). It has predominantly been about studying how agents of change emerge in the business sector, what allows them to exist and to shape change. However, in this thesis, entrepreneurship is studied in the context of marine conservation, a new context in which this phenomenon has materialized. As mentioned above, studying entrepreneurship in this context touches upon a theme brought forward in ecological modernization; a theme in which economics meets ecology and these two can coexist. However, studying entrepreneurship in the context of marine conservation poses a challenge as there is no existing framework to study this. It is of value to explore how entrepreneurship is emerging in different spheres to help us define what the types of entrepreneurship can take place in EMPAs, and to bring forward some themes which are relevant to the research. The practice of social entrepreneurship which integrates economic and social value creation has long heritage and global presence, but the term is still, like entrepreneurship, poorly defined and its boundaries to other fields remain fuzzy (Mair and Martí, 2006). The main difference between entrepreneurship in the business sector and social entrepreneurship lies in the relative priority given to social wealth creation versus economic wealth creation. While in business entrepreneurship social wealth is a by-product of the economic value created, in social entrepreneurship the main goal is social value creation. Mair and Martí (2006) attempt to broadly define social entrepreneurship as the process involving the innovative use and combination of resources to pursue opportunities to catalyze social change and/or address social needs. Social entrepreneurship is thus viewed as a process of creating value by combining resources in new ways. These combinations are intended to explore and exploit opportunities to create social value by stimulating social change or meeting social needs. When viewed as a process social entrepreneurship involves the offering of products and services, but also can refer to the creation of new organizations. A more recent development is that of the concept of environmental entrepreneurship. If we take social entrepreneurship to refer to the integration economic and social value creation, we can take environmental entrepreneurship to be the integration of economic and environmental value creation. Recent scholars have asserted that entrepreneurship can serve as a central force in the development of an ecologically and sustainable society, and view entrepreneurship as the engine of sustainable development (Dean and McMullen, 2007; Pacheco et al., 2009). This can be linked directly to ecological modernization theory which underlines the coexistence of economic development and environmental reform. This concept 35

36 has been termed as sustainable entrepreneurship, green entrepreneurship, environmental entrepreneurship, eco-preneuring and social entrepreneurship. As with entrepreneurialism, little research on entrepreneurship and sustainable development has appeared in academic literature (Pacheco et al., 2009). Pacheco et al. (2009) suggest that one of the major differences which distinguishes sustainable entrepreneurship from the broader field of entrepreneurship lies in the public and non-exclusive character of environmental resources. Hardin, in his Tragedy of the Commons of 1968, drew attention to the fact that failure of resource users to cooperate does not necessarily signal ignorance, irrationality or malevolence. Everyone would be better off if everyone could cooperate. However, in the absence of coordination and credible mutual commitments, everyone defects rationally, and the environment gets damaged (Putnam, 1993). This idea is relevant to this study as we are looking at coral reefs, a non-exclusive environmental resource, and the tendency of fishermen to use destructive fishing practices which consequentially places sometimes irreversible damage on these reefs. Dean and McMullen (2007) summarize sustainable entrepreneurship as representing: a specific class of entrepreneurship which addresses, among other areas, the capturing of opportunities present in environmentally relevant market failures wherein the exploitation of the opportunity alleviates the market failure and reduces environmental degradation. (Dean and McMullen, 2007: 73) These entrepreneurs create such opportunities by proactively altering the rewards for sustainable behavior by devising and influencing the establishment of new industry norms, property rights and government legislation. Hence, a new characterization of the entrepreneur is brought forward, which expands on the previous characterizations mentioned: from an individual that discovers opportunities in the existing economic conditions of the market, and equilibrates these conditions (Kirzner, 1973) to someone that proactively affects the underlying institutions that drive economic incentives (Pacheco et al., 2009). The ability of entrepreneurs to actually create and alter institutions will be further explored in section 2.7. The question arises as to how these entrepreneurs can overcome the dilemma of collective action and actually succeed in altering institutions within existing communities of resource users. Putnam (1993) suggests that working together is easier in a community with a substantial stock of something referred to as social capital. The way that entrepreneurs used social capital to overcome the dilemma of collective action, and consequentially form new institutions around marine management will be discussed in the following section. 2.6 Social capital in entrepreneurship After defining the entrepreneurship opportunities and the forms this can take on, the actual entrepreneurial process of exploitation of these opportunities must then be explored. Mair and Martí (2006) argue that entrepreneurship cannot be understood in a purely economic sense, but should be studied in light of the social context, and the local environment. This is especially relevant in the context of managing common property environmental resources such as coral reefs which are shared by an entire community, and various authors have suggested the value of social capital in this process (Pretty, 2003; Putnam, 1993). The concept behind social capital is one which has been present since the beginnings of the discipline of sociology. The idea that involvement and participation in groups can have positive consequences for the individual and the community dates back to Durkheim s emphasis on group life as an antidote to anomie and self-destruction, and to Marx s distinction between an atomized class-in-itself and a mobilized as effective class-for-itself (Portes, 1998: 2). The first contemporary analysis of social capital was produced by Bourdieu. In his study of the concept he focused on the benefits accruing to individuals by participating in groups, and on the intentional construction of sociability to produce this resource. As Portes (1998) outlines in his review of the origin of social capital in modern sociology, Bourdieu defined the concept as the aggregate of the actual or potential resources which are linked to possession 36

37 of a durable network of more or less institutionalized relationships of mutual acquaintance or recognition (Portes, 1998: 3). Bourdieu s definition shows that the concept of social capital has two constituents; the social relationship that allows individuals to claim access to resources possessed by their associates, and the amount and quality of those resources (Portes, 1998). Another contemporary study of social capital can be found in the work of Loury. He used the term in his critique of neoclassical theories of racial income inequality and their policy implications. He argued that orthodox economic theories were too individualistic and focused too much on individual human capital, instead of social capital. As Portes (1998) points out Loury did not develop the concept of social capital in detail but after him, Coleman did a more refined analysis of the same concept. He analyzed the role of social capital in the creation of human capital: he highlighted its importance for the acquisition of human capital and identified some mechanisms through which it is generated. Since then the concept has been used to clarify a wide range of social phenomena. There appeared to be consensus on the idea that social capital stands for the ability of actors to secure benefits by virtue of membership in social networks and other structures. These analyses have all focused on the potential benefit accrued to actors due to their insertion into networks and broader social structures, and on the relationship between actors, or between an individual actor and a group (Portes, 1998). However, a twist was introduced by political scientists who equate social capital with the level of civicness in communities: towns, cities and entire countries, introducing a community, or collective notion to the concept. Putnam (1993) was the major proponent for the collective version of the concept of social capital. He sees social capital as features of social organizations, such as networks, norms, and trust, which facilitate action and cooperation for mutual benefit. In practice the stock of social capital is equal to the level of associational involvement and participatory behavior in a community, and can be measured by indicators like newspaper reading, membership in voluntary associations and expressions of trust in political authorities. Putnam argues that these stocks of social capital are self-reinforcing and cumulative in that successful collaboration in one venture builds connections and trust, which are social assets which facilitate future collaboration in other unrelated tasks (Putnam, 1993). Hence, as a property of communities and nations rather than individuals, social capital is a cause and an effect. Putnam claims that social capital is coming to be seen as a vital ingredient in economic development around the globe, and leads to other positive outcomes such as less crime. At the same time, its existence is inferred from these outcomes. Putnam s ideas are interesting to this research as we are looking at a dilemma of collective action. Other authors have expanded upon Putnam s ideas and applied them to the problem of the collective management of natural resources. Petty (2003) argues that social capital lowers the transaction costs of working together, and thereby facilitates cooperation; people have the confidence to invest in collective activities, knowing that other members of the community will do so as well. Collective resource management programs that seek to build social capital in a community, described using terms such as community-, participatory-, joint-, decentralized-, and co-management, have been effective in several sectors including wildlife and fisheries. Assuming legitimacy in Putnam s ideas, social capital may have the capacity to help overcome the type of dilemma we are faced with in our study of EMPAs. However, where does the term entrepreneurship come in? Entrepreneurs arguably are mostly responsible for setting up these above-mentioned programs in EMPAs, so how then do the terms entrepreneurship and social capital meet? Current research clearly documents the importance of social capital in the entrepreneurship process, stressing the ways in which individuals take advantage of their own social affiliations and network strategies in pursuit of their entrepreneurial goals (Kwon and Arenius, 2010). To understand the relevance of social capital for entrepreneurship it is helpful to define the difference between human capital and social capital. Social capital is a quality created between people, whereas human capital is a quality of individuals. 37

38 Social capital predicts that returns to intelligence, education, and seniority depend in some part on a person s location in the social structure of a market or hierarchy. While human capital refers to individual ability, social capital refers to opportunity. (Burt, 1997: 339) Burt (1997) argues that some portion of the value which a manager adds to a firm lies in their ability to coordinate others; by identifying opportunities to add value within an organization and getting the right people together to develop opportunities. In this research we are not studying firms, but the development of EMPAs, but this argument can be translated into the value which an individual entrepreneur can add to managing a MPA. Furthermore, Burt argues that certain network forms deemed social capital can enhance a manager's ability to identify and develop opportunities. Hence, this suggests that social capital can perhaps enhance the ability of the entrepreneurs in their process of developing the opportunities they discover. Social capital theory in general suggests that networks of relationships constitute a valuable resource for the conduct of social affairs, providing their members with this so-called social capital. A lot of this capital is embedded within networks of mutual acquaintance and recognition (Nahapiet and Ghoshal, 1998). There is still disagreement regarding the exact definition of social capital, with some authors limiting the definition to the structure of the relationship networks, while others actually include the resources which can be accessed through these networks. Nahapiet and Ghoshal (1998) present a broad definition which will be used to help measure social capital in EMPAs. They define social capital as: the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit. Social capital thus comprises both the network and the assets that may be mobilized through that network. (Nahapiet and Ghoshal, 1998: 243) Nahapiet and Ghoshal (1998) cluster the many attributes of social capital into three dimensions; the structural, relational and cognitive dimensions. The structural dimension of social capital is referred to as the overall pattern of connections between actors; who you reach and how you reach them. Thus, this dimension describes the network ties between different actors, the configuration of this network and morphology describing the pattern of linkages in terms of density, hierarchy and connectivity. The existence of networks is particularly important for entrepreneurship because it defines the possibility for the entrepreneur to access information, resources and support. The reason it is important to understand this dimension, and how it can be built, increased and maintained, is that this is one of the factors which determines whether entrepreneurs can solve social problems and elevate them to the public sphere (Mair and Martí, 2006). The relational dimension of social capital on the other hand refers to assets created and leveraged through relationships (Nahapiet and Ghoshal, 1998). This dimension looks at the types and quality of relations of the individual entrepreneurs. Key facets of this dimension are trust, norms and sanctions, expectations and obligations and identity. It important to understand how trust is created amongst the different actors in a situation, and how this is sustained, as there is increasing evidence that when trust is built up between actors, these actors are more eager to cooperate (Mair and Martí, 2006). The third dimension is the degree to which an individual shares a common code and systems of meaning with a community, and refers to how normative and mimetic forces shape behavior (Mair and Martí, 2006). It refers to those resources which provide shared representations and interpretations among parties and could include a shared language, shared codes and shared narratives (Nahapiet and Ghoshal, 1998). Many of these described features are highly interrelated. For the purpose of this research it is not important to distinguish between the different dimensions per se. However, they can be used to question how the entrepreneurs in EMPA are able to build up social capital for themselves, in order to gain legitimacy for themselves in the eyes of the other actors in the EMPA and to induce coordination and collective action; do entrepreneurs communicate with the other actors in the EMPA, and if so, in what way? Is this done formally, or informally? Is there any form of 38

39 hierarchy distinguishable in these networks, or is there equal participation of all actors in the EMPA? How much distance is there between the different actors? What is the nature of the relationship of the private sector vis-à-vis the other actors? Are these relationships based on trust and friendliness? Does the private sector speak the language of the other actors involved in the EMPA or are there any other things they share with the other actors? Once these questions have been addressed, it is possible to paint a picture of how private actors are able to build up social capital. The next step is to determine how these actors can use this to make rules and create legitimacy and authority over marine conservation and hence, how and the extent to which entrepreneurship can be institutionalized in an EMPA. Thus, the following section discusses how the extent to which the private sector is able to institutionalize ecological aims in economic practices will be analyzed. 2.7 Institutionalization of entrepreneurship Institutionalization refers to the phenomenon whereby patterns arise in people s actions, fluid behavior gradually solidifies into structures, and those structures in their turn structure behavior (Arts et al., 2006: 96). Relatively stable definitions of problems and approaches to solutions gradually arise, and more or less fixed patterns of divisions of tasks and interaction develop between actors. As discussed in the previous chapter, social capital can lead to cooperation and collective action. Determining the level of institutionalization thus is the next, and final step in the process of actually determining the role of the private sector in creating durable conservation and restoration arrangements to protect coral reefs in the two cases; it measures whether and to what extent these actors have been successful in steering marine conservation and actually structure the behavior of the people. Hardin drew attention to two human factors which drive environmental change; increasing demand for natural resources and environmental services, and the way in which humans organize themselves to extract resources from the environment, which social scientists refer to as institutional arrangements. He claimed that only two state-established institutional arrangements, namely a centralized government or private property, can sustain commons in the long run. He presumed that users of these resources are trapped in a commons dilemma and are unable to find solutions. As Dietz et al. (2003) point out, Hardin failed to see that social groups have successfully been able to fight resource degradation by developing and maintaining self-governing institutions. Marine ecosystems, such as coral reefs, too are under threat resulting from interactions between ocean ecologies, fishing technologies, and inadequate governance (Dietz et al., 2003). Territorial seas are what is referred to as a common property resource which is owned by a centralized government who can set rules about who can access the territory and who cannot, as well as what type of activities are permitted in such an area. As was mentioned in sections 2.2 and 2.3 a government in some cases fails to enforce such rules, and other actors, namely the private sector, who do have the capacity to enforce rules, have emerged in marine governance, and consequentially so has the existence of EMPAs. Major institutional change can be brought about by factors which are either endogenous or exogenous to the policy - or in this case governance - arrangement at stake. Endogenous factors are the activities of what Veenman et al. (2009) refer to as policy entrepreneurs within the existing arrangement. Exogenous factors can include (1) shock events, like natural disasters, which bring major changes in the arrangement s political, social or economic environment, (2) the influence of adjacent policy arrangements, for example the influence forest policy might have on marine policy in Indonesia, and lastly (3) the influence of political modernization processes: the development of new relations between state, market and civil society which leads to new policy arrangements (Veenman et al., 2009). In this analysis of EMPAs we are dealing with a number of these exogenous factors, probably a combination of the three, which have lead to institutional change. The common property nature of coral reefs means that any outside institution building is going to be juxtaposed with existing traditions and norms, and this can potentially lead to conflicts. Entrepreneurs are faced with existing local common property institutions. Property 39

40 rights regimes are complex social institutions, and they are about much more than just establishing and enforcing boundaries (Costanza, 1999). Externally led institutional change will generally lead to some form of resistance, and what is being studied in this thesis is a situation in which the private sector is negotiating new forms of engagement with common property institutions. As Costanza (1999) illustrates: the real challenge in the sustainable governance of the oceans is in designing an appropriate set of institutions, including property rights regimes and other management institutions, that can adequately deal with the complexities of both the ocean system itself and the humans involved. (Costanza, 1999: 204) Hence, entrepreneurs, in the creation of EMPAs have to deal with a number of local factors, in the natural environment, but also in the social environment. Before entrepreneurs emerge in the marine governance of an area this area already possesses institutions which have traditionally led or steered the use of these marine areas. An institution can be defined a set of rules or conventions (both formal and informal) that define a social practice, assign roles and guide interactions (Young, 1994: 26). Institutions can be seen as a delineation; they define the agents who are involved, and those who are not. They define the interrelations between the actors, and delineate the boundaries of coalitions in terms of who is in and who is out, how one can get in, how the relationship with outsiders is. These rules also delineate the possibilities and constraints for actors to act within a domain by describing how the political game should be played: how issues may be raised, agendas are set, interests are articulated, policies are formulated, decisions are made and measures are implemented. The rules essentially cover all modes of production and interpretation of meaningful and legitimate conduct (Arts and Van Tatenhove, 2004). Thus, when a new set of actors, namely entrepreneurs representing the private sector, get involved in marine conservation they step into existing political cultures, with existing institutions. New institutions the private sector bring with them in some ways perhaps challenge and conflict with existing institutions. In other ways they complement existing institutions, or are reinforced by existing state or community institutions. Furthermore, new institutional arrangements bring with them new problems of governability, accountability and legitimacy (Van Kersbergen and Van Waarden, 2004). Hence, it is important to determine how the private sector institutions are linked to those that already existed, how they formed new hybrid institutions in the form of an EMPA, and the problems of governability, accountability and particularly legitimacy these institutions are faced with. As was done in the previous chapter for social capital, it is important to link the concept of institutionalization with entrepreneurship. In 1988, DiMaggio introduced the concept of institutional entrepreneurialism to unravel how institutions arise or change. Institutional entrepreneurs are actors who have an interest in modifying institutional structures, or creating new ones. These actors control resources in order to transform institutions or create new ones (Mair and Martí, 2006). Thus, the institutional entrepreneurship perspective is argued to be a good way of understanding the role of entrepreneurship in changing or giving birth to norms, institutions or structure. This is of value for this research as one of the main research questions addresses the extent to which the private sector has been able to alter and create institutions around marine management in the two areas. The concept has come forward in recent literature about environmental entrepreneurship, introduced in section 2.5. Environmental entrepreneurs alter or create institutions in order to be able to capture opportunities of which the exploitation actually improves the environment. The institutions which will be focused on particularly include industry norms, property rights and government legislation. These institutions represent collective understandings and expectations of behavior which influence the interactions of all the actors involved, through different levels of formalization. When exploiting sustainable entrepreneurship creation opportunities entrepreneurs proactively influence the implementation of industry norms, property rights and government legislation through different mechanisms (Pacheco et al., 2009). 40

41 A norm is a standard of conduct or rule of behavior, whereby departure from the rule is followed by punishment of some sort (Bendor and Swistak, 2001). Thus, sanctioning is needed for the existence of a norm. Norms control the interaction between individuals with conflicting interests and bring uniformity of behavior because individuals are forced to conform given the expectation that others will too (Pacheco et al., 2009). Entrepreneurs who use a particular resource can develop norms or rules with respect to behavior in order to protect and monitor its sustained use, through for example rules which regulate activities in and around the resource. Other norms could include environmental principles or codes of conduct. Do entrepreneurs in EMPAs introduce new norms? If so, are the existing community resource users involved in these decisions? Consequentially, are these norms legitimate in the eyes of the existing community resource users or are there conflicts? To enforce cooperative behavior norms are often developed within the boundaries of a group to punish those who defect. Different mechanisms can be used for this. Sanctioning practices toward defection can range from minor penalties to ostracism. Furthermore, members of the group must invest in monitoring in order to identify when an infraction occurs and to evaluate its severity. However, these types of systems are also characterized by indirect sanctions in the form of loss of reputation or prestige. With this type of mechanism the perception of others serves as the controlling mechanism, so social pressure is actually used to enforce rules (Pacheco et al., 2009). Thus, one might ask how the norms in EMPAs are enforced. What types of mechanisms are used for this? Are existing institutions used to do this, or have new groups been formed? Entrepreneurs may create self-enforced property rights in order to protect a resource from defecting behavior and exploit creation opportunities. Dean and McMullen (2007) refer to this as Coasian entrepreneurship: the process of establishing excludability for public goods through the development and enforcement of property rights regimes by profit-motivated economic actors. Property rights define and delimit the range of privileges, duties, and obligations of individuals with respect to an asset. A full set of private rights includes the right to use an asset, exclude others from the use of an asset, derive income from an asset, and bequeath the asset to someone of choice (Pacheco et al., 2009:10). Often, with a lack of private rights uncertainty is created regarding the value of resources and this often encourages self-interest behavior. Pacheco et al. (2009) argue that with the existence of private rights incentives exist to maximize the value of resources since individuals can accrue direct benefits from these (Barzel, 1997; Eggertson, 1990). One can determine the success of these types of property systems by assessing their ability to conserve the resources, such as coral or fish, in the area. It is important to assess whether the entrepreneurs in EMPAs use property rights to protect the reefs. And if so, are the original resource owners part of these decisions? This type of system can simply be executed by controlling access to the area. Besides access rights, quotas and conditions can be applied to control the use of the resource. Again, like with norms, sanctions are needed to enforce the allocation of property rights. These can come in the form of payment, or the deprivation of one s share of the resources or other privileges. Thus, further questions arise: what tools do the entrepreneurs use to execute a system of property rights? What sanctions are used to enforce the allocation of property rights? Are these effective? Does this cause conflict with the original resource owners? Both the above institutions are voluntary adopted institutions. However, these may eventually evolve into mandatory rules which are codified and enforced by governmental bodies (Arts and Buizer, 2009). Entrepreneurs may be inclined to request the intervention of governmental bodies. Governmental intervention is often a good solution in that a law ensures that individuals are required to do that which is collectively beneficial, even if they do not have the incentive to cooperate. Hence, a law enhances the payoffs for cooperation and punishing defection (Pacheco et al., 2009). The tendency toward formalization is particularly observed when the size of an industry increases and the boundaries of its markets expand, or when conflictive norms create uncertainty about competitive behavior. Hence, how do governments intervene in EMPAs? What is the nature of this involvement? Does this increase the incentive for resource users to cooperate? 41

42 As a final, but important point: institutions, no matter how stable they appear at first sight, are subject to continual change and adjustment, deconstruction and reconstruction (Arts et al., 2006: 96). Thus, this section presents a framework for analyzing institutionalization of the aims of entrepreneurs in EMPAs around degraded coral reefs. It does not however present an end-point of the role of the private sector in creating new control mechanisms around coral reefs. It merely paints a picture of what it looks like at this point in time, and the process of getting there. 2.9 Framework for analysis This thesis aims to contribute to an insight to private sector involvement in marine conservation, specifically through EMPAs. Based on the preceding discussion of existing theory, a framework was created in order to use as a guide in the analysis of the role of the private sector in creating durable conservation and restoration agreements to protect coral reefs through EMPAs. This framework is built up around three main concepts; entrepreneurship, social capital and institutionalization; which have been recognized as important for understanding EMPAs. The first area of analysis lies in the nature of entrepreneurialism in the development of an EMPA. Opportunities and the individuals responsible for discovering and exploiting these must be defined. This sets the tone for the remainder of the analysis by defining to what extent the private sector leads the formation and development of an EMPA. This is followed by an analysis of the interactions between the entrepreneurs and the social context in which they operate, using the concept of social capital. This analysis will present a picture of how the private sector attempts to build legitimacy for themselves amongst the other actors in the EMPA, embeds itself in the EMPA, and induces cooperation and collective action. Finally, an examination of the extent to which the private sector is able to institutionalize their ecological aims into the economic practices will provide an indication of how and to what extent the private sector is able to create durable conservation and restoration agreements to protect coral reefs. This analytical framework will be applied to two case studies in Indonesia, an EMPA in Pemuteran and one in Gili Trawangan, in order to determine the specific role of the private sector in these two EMPAs. These results will be used as a basis for a concluding discussion on private sector involvement in EMPAs, and consequentially marine conservation in general. The following two chapters will present empirical results of the two case studies carried out, and define how the private sector has interacted with their environments and how this has led to the development of an EMPA at both case study sites. 42

43 3 Pemuteran 3.1 Introduction The objective of the two following chapters is to investigate the way that two separate EMPAs have been shaped through social relations, in order to be able to discuss the potential role of the private sector in creating durable conservation and restoration agreements to protect coral reefs, and more generally, in marine conservation, in chapter five. This chapter is about the EMPA in Pemuteran and studies the way that the private sector has interacted with the environment, and how this had led to the formation of an EMPA in this village in North Bali. The following section will describe the history of fishing and tourism in Pemuteran, highlighting the main eras relevant to marine conservation development in the village, in order to introduce the reader to the village, and to distinguish the main themes in this development process. These themes will be explored in the remaining three sections of this chapter. Section 3.3 presents an analysis of the relevance of entrepreneurialism in this history, with a description of the main opportunities discovered and exploited, and the main actors responsible for this. This is followed by a study of how the private actors built up social capital in Pemuteran; how trust was built between the different actors involved in the EMPA, and how these private actors gained legitimacy. Finally, section 3.5 describes how these actors actually succeeded in creating and altering institutions around marine management in Pemuteran. 3.2 History of fishing, tourism and marine conservation in Pemuteran Pemuteran is a small village, with roughly 6000 inhabitants, lying in the North West of the island of Bali. It stretches over roughly two kilometers and lies nestled between the mountains of Taman Nasional Bali Barat (West Bali National Park), and the Bali Sea. Figure 4: Map of Pemuteran (source: blog.baliwww.com) Pemuteran was once one of Bali s poorest areas, the local community forced to rely on the sea for their livelihood as it lies in one of the few areas of Bali that are too dry to grow rice (Piskurek, 2000). A number of migrants settled in Pemuteran, forced to move from the East after the last eruption of Mount Agung in These migrants came with nothing, and did what they had to in order to eat. The shallow offshore banks of Pemuteran have the largest area of coral reefs in Bali that are free of tidal currents. This gives Pemuteran the richest reef fisheries on the island, and traditionally most of the fish catch was used for subsistence or traded for rice (Goreau and Hilbertz, 2008). Between the influx of the migrants in 1963 and 1989 Pemuteran was a place of poverty, little education and no environmental awareness. Due to its remote location, far from Bali s tourist entry points, Pemuteran was the last coastal area to develop tourism, around 1992 (Goreau and Hilbertz, 2008; Piskurek, 2000). The 43

44 current-free reefs rich in biodiversity made Pemuteran a great location for diving. Around 1989 a Balinese tourism entrepreneur from the South and a British interior designer discovered Pemuteran as a potential tourist location. The two partnered up and bought land in the bay of Pemuteran. The designer started building cottages, Puri Ganesha, which eventually opened in 1997 and the tourism entrepreneur, with a German partner, developed Pondok Sari bungalows. In 1991 an Australian diver who had been working in the South of Bali arrived in Pemuteran. He was made responsible for the diving activities at Pondok Sari which were the beginnings of a small diving industry developing in this village. Later he developed Reef Seen Aquatics, a dive operation of his own. The two, often referred to as the pioneers in Pemuteran, made a pact agreeing that the diver would look after the sea, and the local tourism entrepreneur would be responsible for dealing with the village (personal communication: owner Taman Sari 5/2/2010). Up until 1997 the bay hosted only two bungalow resorts and dive operators (Piskurek, 2000). The tourism entrepreneur later sold his shares of Pondok Sari to his German counterpart and started building new bungalows named Taman Sari. Now the bay hosts seven resorts, with a few smaller bungalows oriented more to budget tourists and numerous dive shops. The resorts which developed deliberately avoided the mass tourism which the South of Bali is so famous for, resulting in a quiet, tranquil tourist destination attracting a foreign as well as domestic market (Piskurek, 2000). Traditional fishing practices in Pemuteran include using nets or bamboo poles with string, and boats with sails and paddles. The fishermen started using bombs and potassium cyanide as these became more affordable. The national government has placed laws against cyanide, big net and bomb fishing, but these laws have not always been very effective due to limited enforcement. Often in Bali, even if police see destructive fishermen, they will not act if enforcement of the national laws is not supported by the community in which they work (personal communication: owner Reef Seen Aquatics 3/2/2010). As yearly fish catches grew smaller in Pemuteran, it became evident that the reefs were under threat from local fishermen and their fishing methods. The government did not intervene or offer any support in enforcing the national laws. Research initiated by ACP-EU Fisheries showed that when the locals realized the decrease in the fish population they did not understand that it was partially their own fault. After many conversations with the locals during the initial tourism developments one of the main issues became clear; the locals did not understand the relationship between healthy reefs and the abundance of fish (Piskurek, 2000). The Australian diver, owner of Reef Seen Aquatics, began educating the local fishermen about the consequences of destructive fishing, and many village meetings were held to debate fishing in Pemuteran. In 1995 the village declared a NTZ and coral nursery in front of the beach; 500 meters along the beach from Taman Sari extending just past Reef Seen Aquatics and 200m out to sea; referred to as Kebun Chris, for which an entry fee was charged to tourists. A ban was also placed on the use of cyanide and for fishing the entire reef area offshore of the village, which was enforced by two tugas pantai, or beach guards, appointed by the village (Goreau and Hilbertz, 2008). In 1998 the Asian economic crisis, referred to as Krisis Monitair (KRISMON), hit Indonesia. As a consequence, many displaced workers in the nation turned to fishing as a way to survive. Bomb and cyanide fishing exploded all over Indonesia, including in Pemuteran and the ban on destructive fishing practices on the offshore reefs was no longer enforced. The tugas pantai were no longer effective in enforcing the ban, nor did the fishermen stay out of the previously appointed marine reserve any longer. Fisheries collapsed due to the lack of habitat. Most of the destruction in Pemuteran was blamed on fishermen who emigrated from Madura and Java to Bali during KRISMON because the fisheries on their own islands were also collapsing (Goreau and Hilbertz, 2008). El Niño hit Bali early 1998, inducing a coral bleaching event in Pemuteran which particularly affected the area in front of Taman Sari where the water reached up to 35 C as there is very little current in those waters. In addition to the collapse of fisheries, the diving tourism industry suffered as diving was no longer safe, and the bomb fishing had destroyed almost all of the shallow reefs on offshore banks (Goreau and Hilbertz, 2008). In response to declining food and tourism income the village decided to re-enforce the ban on destructive fishing methods, and the second coming of protection of the area came about (personal communication: owner Reef Seen Aquatics 3/2/2010). In May 2000, a local entrepreneur, President of Gahawisri (the Bali Branch of the Indonesian Watersports Federation), and owner Yos Diving met scientists Tom Goreau and Wolf Hilbertz 44

45 of the Global Coral Reef Alliance at a workshop in coral reef restoration sponsored by Action Magazine at the Asian Dive Exposition in Bangkok. Seeing potential in Biorock, their new method of coral restoration, to approach the problem of the destroyed reefs in Pemuteran he invited them to Pemuteran to start Biorock restoration projects. In June the two scientists worked with the entrepreneur and divers from his dive operation and built the first Biorock coral nursery in front of Pondok Sari Hotel, Pemuteran. In October of that year three more coral nurseries were installed during a small workshop in front of the Sea Temple. A German undersea photographer, filmer and frequent diver of Pemuteran was building bungalows in Taman Sari with her partner. She met one of the two scientists on the beach after this workshop and was introduced to the Biorock concept. She was responsible for getting her partner and business partner, the tourism pioneer, involved and the three of them took over the Biorock project and paid for the first 18 structures and a small fee for the Biorock scientists. In April 2001, 19 more coral nurseries were installed in front of Taman Sari hotel with assistance from Archipelago Dive shop, and another nursery was added in front of Reef Seen Aquatics. In May 2002, seven new fish habitats were installed in fishing grounds east of the protected area. These Biorock reefs now stretch over roughly half a kilometer in 40 separate structures. The village and fishermen agreed to designate the new nursery in front of Taman Sari as a NTZ. Shortly after the introduction of Biorock to Pemuteran, the village set up the Pecalan Laut, a group of local security guards, responsible for enforcing the ban on destructive fishing practices, as well as protecting the NTZ in front of Taman Sari. From this brief overview, one can conclude that there were a number of specific entrepreneurs who discovered opportunities in Pemuteran, and through exploiting these were responsible for introducing the concept of marine conservation to the area. Hence, it is clear that the private sector strongly led the formation of an EMPA in Pemuteran; first there were entrepreneurs involved in introducing tourism development to Pemuteran. These were later joined by an entrepreneur who introduced the dive industry, and later a number of other actors brought in new techniques for coral restoration to the area. Each of these, in their own way contributed to the introduction and development of marine conservation in Pemuteran. Over time, these entrepreneurs, together with the fishermen and village government, created the EMPA as it exists today; a NTZ and an agreement with the fishermen has been established, and a group of local men have been appointed to enforce this. This process involved a few different local stakeholder groups, resulting in quite a networked EMPA, with several centers of power. The path which led to the creation of these institutions is essentially what will be studied in the remainder of this chapter. This route was driven by numerous interactions between the entrepreneurs and the social context and local environment in which all these activities took place, which will be studied in section 3.4. In this process of building social capital, the private sector built up trust and thereby gained legitimacy for themselves, which essentially determined the level of institutionalization of the EMPA, which is covered in section 3.5. The next section will begin describing this process by introducing the private sector-led nature of this EMPA in Pemuteran. 3.3 The E in the EMPA in Pemuteran In this section the concept of entrepreneurship in the context of marine conservation in Pemuteran will be the focus. This chapter will assess the presence of entrepreneurialism in the development of marine conservation in Pemuteran, with a specific focus on the process of the discovery, evaluation and exploitation of the entrepreneurial opportunities. The different opportunities will be analyzed, illustrating the type of opportunity, the individual entrepreneurs involved, and the role these opportunities played in developing marine conservation in the area Opportunity 1: Developing tourism in Pemuteran There appears to be a general consensus amongst the stakeholders interviewed that the owner of Taman Sari was the pioneer behind the development of Pemuteran as a tourism destination, and for pushing his vision on how tourism should be developed in Pemuteran. The current owner of Taman Sari, a tourism entrepreneur in Bali, practicing the Hindu religion like the majority of the Balinese population, claims to have discovered Pemuteran during one of his spiritual hikes. Together with a British Egyptologist and interior designer, he believed 45

46 that he had found one of the ultimate natural beauties on the island (personal communication: owner Taman Sari 5/2/2010). Pemuteran lies between a shallow lagoon, and has nine mountains behind it as a backdrop. When describing his initial impressions of the bay he reveals his true entrepreneurial roots:...when you want to see the sunset and the sunrise, you don t need to book separate trips, you can see both in Pemuteran. And with its calm waters, the potential of the sea is so rich with all the coral and fish. (personal communication: owner Taman Sari 5/2/2010) He immediately recognized the place held great potential if one knew how to capture the benefits the area possessed. According to the owner of Taman Sari, the village was poor, the area was dry, and far from existing tourism areas. Hence, there were no investors interested in vesting time or money into the area. A consultant who had previously done a feasibility study for one of the Aman resorts in Bali, was invited by the tourism entrepreneur to do a study to determine the feasibility of developing the area as a tourist destination, and advised against this (personal communication: owner Taman Sari 5/2/2010). Despite this, the entrepreneur decided to develop Pemuteran as a tourism destination. It is interesting to ask why he did so, despite advice against this. As Kirzner (1997) argues, entrepreneurial opportunities exist because different members of society have different beliefs about the relative value of resources, given the potential to transform them into a different state. At any given time only a subset of a population will discover any given opportunity. Thus, it is interesting to determine why it was this man who discovered the opportunity to develop Pemuteran as a tourist destination: what value did he see, which other actors did not? As a well-off Indonesian man, from a high-caste Balinese family, with previous experience in investing in tourism developments this man had access to the information to recognize the potential of the area as a tourist destination. Furthermore, his previous experience also provided him with the cognitive abilities to value the opportunity. Sarasvathy et al. (1998) argue that successful entrepreneurs see opportunities in situations where others see risk: despite the arguably bleak outlook for Pemuteran, the pioneer saw an opportunity in developing the area into a tourist destination. This entrepreneur claims to have come to Pemuteran to develop a tourist area in harmony with nature (personal communication: owner Taman Sari 5/2/2010). His goal was to conserve the cultural and natural environment of the area. Some may consider him a social entrepreneur in that his claims suggest the relative priority he gave to social wealth creation of the village of Pemuteran versus his own economic wealth creation. Regardless of what his main motivation was, he was successful in gaining the support of the local community and setting himself up as a critical figure in Pemuteran. To many he is considered the bapak, or father, of the area (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). As someone from a higher caste he has certain obligations in the Balinese banjar system, the traditional community system, and his caste also resulted in the village listening to him. In Bali it is important to have someone of his status to take on the role that he has (personal communication: director Reef Check Indonesia 26/2/2010). The majority of the local stakeholders interviewed, regardless of their position or caste, when asked what his motivation to develop the area was, claim that his primary goal was to help the community. The locals are convinced he developed tourism as an alternative for the locals; he cares about the village, and he set it up for the public, not for himself (personal communication: leader PLM and owner Kokak Dive 28/1/2010). This entrepreneur also possessed a function vital to the foreign-owned tourism businesses in Pemuteran; he was the link between the local community and the business community. He translates the Western mind to the village and explains that they are trying to help, not take away from them. If the villagers did not understand this, it would not work. [...] An NGO with the best intentions would get stopped. There has to be a 46

47 bridge to the old community. (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010) He was able to explain to the people in their own terms how things work, and they accepted what he told them due to the trust he built up. Unfortunately he was diagnosed with cancer last year, so he is no longer a Pemuteran resident. He moved to the South and retired from his job in Pemuteran, and his two sons will take over his businesses, including Taman Sari (personal communication: owner Taman Sari 5/2/2010). It will be interesting to determine whether this has any affect on the relations between the different actors in the EMPA given his role as the link between the local community and the business community. Though he is giving up his active role and participation in the governance of Pemuteran, he does plan go back to Pemuteran to accomplish his goal of setting up Pemuteran s own body of authority to govern tourism and developments in Pemuteran. He envisions this as a trias politica, with governance of tourism and development divided into three branches: the regional government, Pemuteran village and businesses, each with separate areas of responsibility. Part of this system will include charging a diving tax, rules on recruitment, social responsibility, building rules and so forth (personal communication: owner Taman Sari 5/2/2010). Whether this will be accomplished or not, his departure from the role he played in Pemuteran puts Pemuteran at a critical point in its history, as they are losing one of the characters who played a critical role in the development of the area, and consequentially marine conservation in the area. Now that he is no longer a Pemuteran resident the link between the village and business community is no longer there. As one of the founders of Yayasan Karang Lestari states: [...] maybe we will start working closer with the village. Maybe the diving operators will be forced to make their own connections (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). Clearly this entrepreneur played a significant role in the development of marine conservation in the area. The question arises how he was able to influence the people in the area in the way he did and thereby contribute to the creation of the EMPA as it exists now. What did he do to get through to these people? What made them listen? This process of building trust and creating legitimacy for himself and other stakeholders in the EMPA will be studied in section Opportunity 2: Developing a sustainable diving industry in Pemuteran bay The second opportunity which can be clearly distinguished was that of creating a dive industry in Pemuteran. As with tourism development in the bay, there appears to have been one individual who was the main force behind this in the very beginning. An Australian diver, after having worked at some dive operations in the South of Bali, decided to start something for himself. He was told about Pemuteran and came there in 1991, stopping in Pemuteran and diving there during a dive safari he organized for some guests. At this point in time there was no diving in the area and Pondok Sari, the only hotel, had only 2 rooms. He started organizing dives for Pondok Sari guests for about a year until he founded his own dive operation, Reef Seen Aquatics, in He is seen as the founder of diving in Pemuteran Bay (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). As with the founder of tourism in Pemuteran, this individual possessed the information and cognitive abilities necessary to recognize the potential of Pemuteran as a dive destination. Casson (1982) defines entrepreneurial opportunities as situations where new services can be introduced at a price greater than their cost of production. This Australian man, as an experienced diver, recognized the quality of the coral reefs in Pemuteran bay, and the possibility to make profit from selling this service in the bay, thereby capturing such an opportunity, as defined by Casson. The concept of entrepreneurialism within the actions of this individual can be analyzed further. The dive pioneer discovered that there were a lot of broken and overturned corals in the areas in which he dived, and began repairing the coral with his staff during their dives. As business picked up, they continued doing so during their dives with the guests. The guests were told what they were doing and appeared to appreciate the dives more; at the same time as earning money they were able to repair more reefs (personal communication: owner Reef Seen Aquatics 3/2/2010). Hence, this dive operator was the first to introduce the concept of 47

48 environmental entrepreneurialism to Pemuteran where the exploitation of the opportunity of starting a dive operation in Pemuteran contributed to reducing environmental degradation. Obviously repairing the reef little by little is merely a small contribution to reducing environmental degradation, but these efforts later grew to a larger scale, when he approached the core cause of the problem of the broken corals, namely destructive fishing practices. When this entrepreneur arrived in Pemuteran, there were between 50 and 60 boats on shore every day practicing dynamite and cyanide fishing. Seeing the destructive fishing practices happening every day during his diving operations, he began to talking to, and educating the Pemuteran fishermen about the effects of destructive fishing practices. He is the one who raised the consciousness of the locals and introduced the understanding that coral is actually the foundation of the entire ecosystem (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). At this time there was no body of authority appointed by the village to stop these destructive fishing practices. When illegal fishing was observed by the dive pioneer and his staff, they would call the police. If the police came, which was often not guaranteed, they would talk to these fishermen, but would rarely make arrests due to lack of evidence (personal communication: owner Reef Seen Aquatics 3/2/2010). This is a reflection of the much discussed failure of the Indonesian government in enforcing rules of destructive fishing, and the need for community-level enforcement (Satria and Matsuda, 2004). Once some of the local fishermen started to understand the relationship between destructive fishing practices and the abundance of fish, he got some of the local fishermen involved to explain to the illegal fishermen why what they were doing was having a negative effect on fisheries. Eventually the fishermen could actually experience fish stocks increasing a few months after certain destructive fishermen were stopped. After this process took place several times over a few years it appeared to be sufficient evidence for the fishermen and village that destructive fishing had to stop, and that the government was not going to be the actor do this. Hence, the village placed a ban on destructive fishing practices in the bay to be enforced by two appointed beach guards, and declared a NTZ in front of Reef Seen Aquatics, the dive shop of the dive pioneer, and named this after him: Kebun Chris, or Chris Garden. Figure 5: Map of Kebun Chris with marine area use rules for the public (Source: Reef Seen Aquatics) The dive pioneer also set up two small NGOs in Pemuteran: first Proyek Penyu, a turtle hatchery project was created in Later, in 2006 the Reef Gardeners, a team of young men recruited from the various fishing organizations in Pemuteran trained to maintain and protect the reefs in Pemuteran bay was set up. Long after his initial efforts to introduce the concept of marine conservation to Pemuteran, this entrepreneur continues to have a vital function within the foreign diving community of the 48

49 area. Since his opening of the first dive shop in Pemuteran, many foreign-owned and a few local-owned dive shops have opened in Pemuteran. He continues to be the go-between for the dive shops and the fishermen as he has close relations with the latter, because he has been here the longest and speaks the language (personal communication: manager Bali Diving Academy 27/1/2010). He is there for communication between dive shops and fishermen (personal communication: owner Easy Divers 27/1/2010). Similar to the owner of Taman Sari, this dive entrepreneur was able to build up trust amongst a certain local stakeholder group in Pemuteran, namely the fishermen, and therefore established a vital communicative role in the EMPA in Pemuteran. The question arises how he was able to build up this trust, and how he was able to raise the consciousness of the locals, and eventually succeed in altering the institutions around fishing in Pemuteran. These themes will be further explored in sections 3.4 and 3.5 respectively Opportunity 3: Adding value to the reef with Biorock While the previous two sections described the discovery and exploitation of opportunities in the form of services which could be offered in Pemuteran, which had not been previously offered, this section will discuss the introduction of a new technology to the village of Pemuteran, namely Biorock coral restoration technology. As discussed in Chapter 2, technology is a very important theme in a lot of entrepreneurship literature, as well as in the wider concept of ecological modernization. The concept of entrepreneurially driven innovation in products and services as the critical engine driving change in capitalist society brought forward by Schumpeter as early as 1934, remains a very relevant theme today and translates to a place like Pemuteran, where technology has contributed to the promotion of marine conservation. Tom Goreau and Wolf Hilbertz, two scientists in the Global Coral Reef Alliance are the creators of Biorock technology. The GCRA s Biorock Ecosystem Restoration technology uses low voltage currents to grow limestone rock out of the sea on steel structures. It provides the material which coral skeletons are made of, and on which baby corals prefer to settle. It is self-repairing and can be designed to create denser and more varied hiding places for fish than a natural reef. Corals which grow on this Biorock grow two to six times faster than normal, and have a higher potential for survival from temperature increases caused by global warming. Besides being used to grow floating coral reefs in shallow banks, Biorock can be used to grow floating coral reefs in deep water, thereby providing habitat for pelagic fish such as tuna and squid (Goreau and Hilbertz, 2008). Yos Diving was the second dive operator to open in Pemuteran, after Reef Seen Aquatics. The owner of this dive operator met the two above-mentioned scientists and invited the two to Pemuteran to try out their technology in this bay. Being a dive operator and seeing the destruction on a daily basis, he wanted to try out this new technology and see if it would make a difference for Pemuteran (personal communication: manager Yos Diving 30/1/2010). Thus, in June 2000 Wolf and Tom worked with the crew from Yos Diving and built the first Biorock coral nursery in front of Pondok Sari hotel, which is where Yos Diving used to be located. The first structure and the accommodations for the scientists were fully funded by the owner of Yos Diving and Pondok Sari hotel (Scuba Diver Magazine, 2004). In October of that year three more coral nurseries where installed in front of the Sea Temple during a small workshop. After this, other actors took over the development of Biorock in Pemuteran. There are two classes of entrepreneurs which must be distinguished between. The two scientists who developed this product created an innovative product and placed this on the market. If one uses Schumpeter s (1934) previously mentioned argument that entrepreneurially driven innovation in products and services are the critical engine driving change in capitalist society, these two scientists can be illustrated as entrepreneurs which induce change in modern coral reef conservation efforts; from conservation to restoration. A second entrepreneur can be recognized in the individual who recognized the opportunity to introduce Biorock to Pemuteran. Again, an individual had access to information on coral restoration techniques, and the funds to try this out. When asked why it was him to introduce the technique to the area, almost all local stakeholders claim the same thing. He knew about tourism which was a very new concept for the locals. He knew about Biorock which the locals did not, and he could fund the project (personal communication: Village Secretary 49

50 25/1/2010). At this point it is interesting to bring in the concept of environmental entrepreneurship again: market failure in Pemuteran existed in the collapse of fisheries due to the use of destructive fishing practices destroying the coral reefs in the bay. Exploitation of the opportunity to restore this coral using an innovative technology may not by definition alleviate this market failure, but it does work toward reducing environmental degradation. Hence, this entrepreneur can be seen as another environmental entrepreneur in the history of the development of the EMPA in Pemuteran. The Biorock project was taken over by other actors who developed the application of the technology in Pemuteran further. The further development of the project had more important repercussions in terms of marine management in the area. A German videographer and frequent diver of the Pemuteran reefs, was in Pemuteran in 2000 as she was working on some bungalows in Taman Sari. Her and her partner at the time were business partners and good friends with the owner of Taman Sari as they were developing bungalows in his resort. As a videographer she had been taking footage of the reefs around Pemuteran since the initial developments of the area during the early 90 s, and has compiled some documentaries for publication. She had been living in the South of Bali, but as a frequent visitor of Pemuteran she had witnessed the coral bleaching event in 1998, and the effect of the Asian economic crisis on the fishing practices in Pemuteran and claims she had always felt helpless and did not know how she could contribute. She happened to be on the beach in October 2000 which is where she met Wolf Hilbertz after the first Biorock workshop. He introduced her to the Biorock concept and she observed the difference between the state of the structures placed in May, and the one that had just been installed. Biorock occurred to her as a way to actually do something to help in Pemuteran. She believed that the Biorock project would be great for the future for the village, and to increase the health of the coral reef (personal communications: co-founder[2] Yayasan Karang Lestari 3/2/2010). The videographer convinced her partner and business partner that this was a great project for Pemuteran and the three of them took over the Biorock project. The videographer and her partner paid for the first 18 structures and a small fee for the two scientists. After this several workshops followed and more and more structures were put in, supported by private donations. The technology which is used for Biorock such as the cables and the rest of the equipment necessary was far too expensive for the local community to invest in; the locals do not have enough money for something like Biorock. There has to be outside influence (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). Their access to financial resources is the primary reason why it was these actors who developed this project, and not the local community. Naturally, the introduction of a coral nursery required some form of protection, and the area in front of Taman Sari was designated as a NTZ for the fishermen, and signs were put up on the beach to educate the tourists in how to swim and snorkel without disturbing the coral: Figure 6: Swimming and Snorkeling Rules (source: Reef Seen Aquatics) 50

51 A few months later the village formed the Pecalan Laut to re-enforce the destructive fishing ban, as well as protect the NTZ (personal communication: owner Taman Sari 5/2/2010). Hence, it appears that Biorock, or the entrepreneurs responsible for developing this, have also had an effect on the attitude toward marine conservation amongst the local stakeholders in Pemuteran, and on the creation of institutions around marine management in the area. How this happened will be further explored in sections 3.4 and Reflection The process of the exploitation of entrepreneurial activities involves interactions between the different entrepreneurs and the context in which their activities take place. There are clear starting points at which the entrepreneurs came into the picture in Pemuteran; when hotels started being built by two entrepreneurs, when diving was first established to the area by a dive entrepreneur, and when Biorock was introduced, and later developed further. Entrepreneurs were not only responsible for developing a hospitality and diving industry in Pemuteran, but also for introducing marine conservation to the area, partially through capturing environmental entrepreneurship opportunities, where exploiting opportunities such as diving also had positive effects on the environment. Their efforts, some directly, some indirectly, led to the establishment of an EMPA in Pemuteran. It is interesting to note that these opportunities were exploited by mostly individual entrepreneurs, through separated efforts: (1) the dive pioneer who introduced sustainable diving, (2) another diver who brought in Biorock technology, and (3) a group of three other people affiliated with the tourism entrepreneur who developed Biorock further. The presence of these private actors in the EMPA however is not limited to the introduction of the concept marine conservation to the area; the above-mentioned entrepreneurs, as well as additional actors in the ever-developing private sector in Pemuteran have embedded themselves into the different institutions which define this EMPA. The private sector-led nature and presence of individual entrepreneurs in this MPA has now been introduced, but the connection between these entrepreneurs and with other stakeholders remains to be determined. The above-mentioned foundation for private sector involvement in the EMPA was followed by a process of social negotiation in which the private actors built up trust and support amongst the other actors in Pemuteran, in order to gain legitimacy for themselves. Trust is particularly important to study in this EMPA as it features multiple sites of power and control amongst the different stakeholder groups with which the entrepreneurs have interacted. There are several actors, with power and control over resources, involved resulting in polycentric powers existing in the EMPA. Hence, it is important to determine how the E s, or the entrepreneurs, in the EMPA have been able to legitimize themselves with respect to the other actors involved. Hence, the following section will explore the way that the private sector has built up trust, and created legitimacy and authority over marine conservation, necessary to institutionalize the EMPA. 3.4 Social capital of the entrepreneurs in Pemuteran This section aims to explore the process of social negotiation between the private sector and other actors in the EMPA, and subsequent building of social capital. The actual assets embedded in the relationships among the individual entrepreneurs, fishermen, village community and government will be analyzed. This will be done by exploring the network in which the EMPA is organized and the relations between the different actors. This analysis will be done for the four relations most relevant in the EMPA: the relations within the private sector, particularly between the dive operators, those between the private sector and the local community, between the private sector and the fishing community, and the private sector and the state. These will begin with a short description of the communication structure in these relations will be given, followed by a closer look at the quality of these relations; whether there is trust between the different actors, whether they cooperate, and how decision-making is organized. A network diagram illustrating the communicative relations between the actors is presented in the following diagram, in order to guide the reader through the next few sections: 51

52 Figure 7: Network diagram displaying communicative relations in the EMPA Interrelations in the private sector: dive operators and dive operators Despite the fact that there is no formal communication structure between the dive operators in Pemuteran, the relations amongst the dive industry appear to be based on mutual trust and cooperation. However, the lack of organization amongst these dive operators has led to inequitable distribution of benefits which dive operators reap from certain marine conservation initiatives versus their contribution to these initiatives. There used to be a business association made up out of all the tourism (dive and hotel) businesses in Pemuteran, but this no longer exists because people did not attend regularly. Now these businesses do not meet each other regularly, nor do the dive shops specifically (personal communication: owner Reef Seen Aquatics 3/2/2010). Furthermore, formally, none of the dive operators work together; they all operate separate from each other. All dive operators interviewed acknowledge there is no regular communication between the dive operators in the form of a formal communication system. However, informally most of the dive centers communicate and try to cooperate. They work together on eco-projects; for example, when new Biorock structures are placed the dive operators all contribute by supplying divers and equipment to help out. Furthermore, when it comes to the dive business itself, they do not cut each other s throats on prices (personal communication: owner Sea Rovers 30/1/2010). The dive shops in Pemuteran are competitive businesses but most of them cater to different markets. There are some operators which cater to segments based on nationality, with a dive operator catering mostly to Germans, another directed toward many Australians, and a few more directed at the local segment. Another operator works in cooperation with one of the hotels. Hence, there does not appear to be a level of competition which could potentially lead to price wars and lead to dive operators placing less importance on the environment. The owner of the oldest dive operator in Pemuteran goes as far as saying there is a better business environment in Pemuteran than in other tourist areas. People are happy in Pemuteran, guests sense this and are therefore inclined to come back (personal communication: owner Reef Seen Aquatics 3/2/2010). This implies that cooperation and good relations based on trust and friendliness in a dive industry are very much dependent on the degree of competition present. Moreover, this suggests that the nature of entrepreneurs in successful marine conservation efforts differs from entrepreneurs in business for example, as competition needs to be removed to induce cooperation and consequentially protect the environment. It is important to mention that it has been suggested that logically, more communication between the dive shops in Pemuteran would make decision-making much easier (personal communication: manager Biorock Centre 26/1/2010). However, it can be argued that the lack 52

53 of a formal agreement between the dive shops in Pemuteran is really not an issue simply because the reefs are still being well-maintained. It appears that even though there is no agreement, all the dive operators encourage no anchoring and similar codes of conduct for diving practices. Hence, perhaps sometimes working without a rigid frame can be more beneficial than working with one, depending on the area (personal communication: director Reef Check Indonesia 20/2/2010). In Pemuteran, this appears to work. However, one of the points of debate regarding the cooperation of the dive shops lies in the current level of equity in terms of contributing to and benefitting from the marine conservation initiatives in Pemuteran; none of the dive operators contribute financially to marine conservation initiatives such as Biorock and Reef Gardeners, whilst they do benefit from them. All the dive operators take their clients to dive in the Biorock area for free. The area is often used for introductory dives and night dives, but the Biorock Centre does not charge them for this (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). Furthermore, the Reef Gardeners keep the reefs on which the dive operators dive in a good state and they too, do not receive any sort of financial support from the dive industry in Pemuteran (personal communication: owner Reef Seen Aquatics 3/2/2010). This can partially be attributed to the fact that there is no communication between these initiatives and the dive operators. What is also remarkable is that there is no cooperation between these two initiatives themselves, whilst they share a common general goal toward healthy reefs. This will be discussed further in section 3.5. Though it has been suggested that decision-making may be improved if the dive operators in Pemuteran would communicate more, there appears to be consensus amongst the members of the dive industry in Pemuteran that they cooperate sufficiently, despite a lack of formal communication or organization of these dive operators. Most mention that they are friends with some of the other dive operators. Hence, (lack of) communication between the dive operators does not appear to be a distinguishable problem in the bay. The challenge without a formally organized dive industry lies in getting the entire industry to contribute equally to initiatives they benefit from Private sector and local community Members of the local community do not own any of the major tourism businesses in Pemuteran, with the exception of Kokak Dive. All the major hotels and dive shops are owned by foreigners or wealthy Indonesian tourism entrepreneurs. As a result, in general, the local community has no vested interest in the tourism businesses, so there was not an immediate link between the local community and the tourist industry. However, without village support and cooperation, it would have been difficult to institutionalize the EMPA and induce collective social action against the destructive fishing practices. Hence, the private sector has done a number of things to build social capital in Pemuteran and gain the trust, and thereby the support of the local community in Pemuteran. To understand how the relationship between the private sector and the local community has been built up, it is important to first describe communication within the village. The village is governed by a village council. This council is lead by the Kepala Desa, the village head, who enforces the rules of the Balinese government, and the Kepala Adat, the head of the religious authority. There is a department representing the fishermen in the village government (personal communication: Village Secretary 25/1/2010). In terms of communication between the business community and the village, the link was always the owner of Taman Sari. He would meet with the community and express information he would receive from the business community. He was seen as the go-between (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). As mentioned in section 3.2, he created this role for himself, and managed to build up trust and support amongst the local community of Pemuteran. Hence, this individual entrepreneur possessed a vital role in this EMPA as the link between the private sector and the local village community. This underlines the importance for good relations, and particularly good communication with the existing local institutions, in this case in the form of the village government, in an EMPA. 53

54 There are three specific tools which the private sector used to gain the trust amongst the local community, which has determined the level of institutionalization of the EMPA. The community was involved in decision-making, the village was provided with alternative income opportunities and the entrepreneurs provided the village with benefits. From day one the owner of Taman Sari approached the task of developing Pemuteran with the idea that community participation was key: What we are doing [...] will not succeed or be effective if we are not supported by the community, or without the participation of the community (personal communication: owner Taman Sari 5/2/2010). He attended village meetings and temple ceremonies, and repeated his intentions to the village, and his need for their support. Thus, as pushed by the tourism pioneer, decision-making about marine management in the area also had to be participatory. Early decisions to protect the bay of Pemuteran seemed to be largely village-made decisions. It was Reef Seen Aquatics and the village heads which set up the first marine reserve or NTZ, Kebun Chris, in front of Reef Seen Aquatics. It was also the village who appointed the tugas pantai at the time to guard the beach. These types of decisions are always supported by the Kepala Adat, which creates legitimacy in the eyes of the local residents, and leads to social control, an important tool for enforcing the agreements made around marine management in the area. When the founders of Yayasan Karang Lestari introduced the Biorock project to the owner of Taman Sari, eager to start things off immediately, he stopped the developments and emphasized the importance to involve the village, and said that without this, such a project would not work. Hence, in an effort to encourage community participation, he approached the village with the question how they would protect the Biorock area, and the village decided to appoint the existing local security force, and set up the Pecalan Laut (personal communication: co-founder[2] Yayasan Karang Lestari 3/2/2010). Hence, the private sector was able to bring in an existing legitimate local organization, thereby creating participation of the local community in marine conservation, and increasing local support of agreements around marine management. The use of an existing local organization, together with the previously mentioned efforts to gain the support of the Kepala Adat implies the importance for the private sector to acknowledge and support local culture and tradition in order for them to create the social control necessary to induce cooperation. Employment was also very strong tool used to reach, and gain the support of the local community. Both the two pioneers encouraged the employment of locals in tourism businesses. It was one of the first things the tourism entrepreneur and owner of Taman Sari promised when he first spoke to the Pemuteran public. He promised that the villagers would get all the jobs in the tourist industry. All jobs in his resort, aside from the architects which he employed from outside, would be for the village, and the villagers would be trained to work in the tourist industry (personal communication: owner Taman Sari 5/2/2010). Not only did employment provide the community with an income alternative, it is also a way to educate them and promote marine conservation. With the majority of staff in Pemuteran tourism businesses coming from the local village, locals experience for themselves that tourists, which bring them their income, come to Pemuteran for its marine life, and hence conclude that it is beneficial to protect this. They are more likely to believe each other and learn from each other than by hearing a foreigner telling them what to do (personal communication: owner Easy Divers 27/1/2010). Thus, sharing wealth with and including the local community in marine conservation activities appears to have been very important way for the private sector to prevent their role in Pemuteran from being interpreted as external actors imposing new rules on this existing community who marginalize the community s members in the process. It was with this idea that the dive pioneer employed ex-fishermen as the Reef Gardeners. Similarly, the founders of Yayasan Karang Lestari employed three local men as the operators for the Biorock Centre. They act as ambassadors to conservation in the village (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). Having locals working for these projects legitimizes the projects, and increases local understanding and awareness. Some of the entrepreneurs also invested in non-environment related benefits for the village which contributed to gaining their respect. The owner of Taman Sari invested a lot of money 54

55 into something which is very important to the Balinese: religion. He re-built temples, and spent a large sum of money on temple ceremonies for the people of Pemuteran. Recently he paid for a 100-year ceremony for the village which they would normally not be able to afford. These are all unrelated to tourism or conservation, but they are matters very important to the locals. In addition to this the 10% of profits from the Bali Dive Academy which would normally go to Taman Sari (as they are partners) is allocated to the village (personal communication: Kepala Adat 25/1/2010). Similarly, the owner of Reef Seen Aquatics donated space at his dive operation for kids to practice their Balinese dancing because the village did not have a big enough hall to do it. Setiasih, director Reef Check Indonesia, points out: A lot of conservation effort is dealing with and networking with people. Everywhere in the world, but especially in Indonesia, when you are in a village you are very much connected with each other, there is a strong social system. It is important to be part of this before working there. (personal communication: director Reef Check Indonesia 26/2/2010) Thus, the private sector in Pemuteran invested in non-market investments such as religion to gain legitimacy of the local community. This implies that investing in non-market assets is a way for the private sector to embed themselves into marine conservation Private sector and fishing community The fishing community is separate from the Pemuteran community in that some of the fishermen are very nomadic. There are however a number of fishermen who are from Pemuteran village, and have always had fishing as their major source of income. Since this stakeholder group essentially shares the resource from which they gain their livelihood with the dive operators, and the fishermen made use of this resource far before the private sector was in Pemuteran and consequentially build up their own common property institutions, their support was very important for the private sector to gain. The majority of the fishermen live in slums on the beach between Sari Amertha and Matahari. It is a mixed community with local Hindu Pemuteran fishermen, but also a lot of Javanese fishermen, resulting in a mix of religions represented (personal communication: manager Biorock Centre 26/1/2010). There are four fishing cooperatives within the fishing village of Pemuteran, each with a leader. The chief of the fishermen is also the leader of one of the four cooperatives. Each of the four fishing cooperatives has individual meetings every month, to solve problems and to discuss what is happening that month. The leaders of these groups only come together if necessary. A meeting between the chief of the fishermen and the village staff is only organized when necessary (personal communication: Chief Fishermen 28/1/2010). Representatives of all main stakeholder groups in Pemuteran; from the dive shops, hotels and village; had regular meetings with the fishermen in the past, when the blast and cyanide fishing was seen as a problem. These regular meetings no longer take place as bomb and cyanide fishing is no longer perceived as an issue (personal communication: manager Yos Diving 30/1/2010). Though these meetings may no longer be necessary for controlling the destructive fishing practices, communication between the dive shops and the fishermen is still very important as they share a resource on a daily basis. However, the individual dive operators do not have regular communication with the fishermen. The Australian dive pioneer, and owner of Reef Seen Aquatics, has an established role as communicator between the dive shops and the fishermen, which has been confirmed by representatives of the dive industry and fishing industry alike. If the dive shops have something to discuss they have a meeting, and then if necessary afterwards they invite the chief of the fishermen to meet with them, or the owner of Reef Seen Aquatics goes and speaks with the fishermen himself (personal communication: owner Easy Divers 27/1/2010). It is interesting that this is the second entrepreneur that has a vital role for communication and relations between the private sector and a local stakeholder group. This implies that two separate individual entrepreneurs have very strong roles in this EMPA. This increases a certain level of risk in the fact that a lot of power and responsibility are concentrated within two actors, and as mentioned previously one of these is not longer in Pemuteran. What this might mean for the 55

56 future of the EMPA essentially depends on the level of institutionalization that has been reached by the private sector, which will be addressed in section 3.5. Aside from the role the dive pioneer played in establishing a good relation between the private sector and the fishermen, the dive industry as a whole also played a role in this. Decision-making, employment, education and additional financial as well as non-financial incentives were the primary tools used to establish good relations with the fishing community. Early decisions regarding marine conservation in Pemuteran, when the tugas pantai were appointed and the first No Take Zone was appointed in 1995, were made as a result of many debates between the village, fishermen and the two pioneers. These were participatory decisions in which the fishermen were included. The later decisions during the second wave of marine conservation in Pemuteran appear to have been less participatory, which affected the behavior of the fishermen. Though the village and representatives from the fishing community, as well as dive operators and hotels are said to have been involved in the decision to introduce the NTZ on the Biorock area, the initiative came mainly from the two Biorock scientists and the owner of Taman Sari. They met with the leaders of the community and claimed they wanted the project to be a model for the island and for the country. They promised the village that when this model succeeds in making the fishing industry grow fast you will have lots of support (personal communication: owner Taman Sari 5/2/2010). The owner of Taman Sari admits that the way this decision was communicated to the village and fishermen was not very effective. He adds that the participation and support of the fishermen could have been stimulated better. The owner of Reef Seen Aquatics agrees that despite that fact that everyone was involved in the decision-making, the initiators were too aggressive with the local fishermen during these decisions, instead of sitting down and talking to them (personal communication: owner Reef Seen Aquatics 3/2/2010). The situation was interpreted as one where Westerners who had not been in Pemuteran for a very long time came in, telling the local community what to do (personal communication: owner Reef Seen Aquatics 3/2/2010). This created some disturbances in the beginning, and things took more time to change: when the NTZ was first introduced there were sometimes conflicts between the fishermen and the Biorock representatives because the fishermen did not understand the concept yet, and they had always fished in this area. It took about 1.5 years for the conflicts to die down (personal communication: manager Biorock Centre 26/1/2010). This example illustrates the importance that participation in decision-making had in Pemuteran to legitimize a NTZ for in the eyes of the fishermen, who made use of the resource originally, and formed their own common property institutions which were challenged by these new norms. Employment was also a very important tool to gain the support of the fishermen, mainly to offer an income alternative for the fishermen who could no longer fish in the NTZ. The dive shops were encouraged to employ the fishermen: They know the sea: don t get a farmer to fish, or a fisherman to go and farm (personal communication: owner Reef Seen Aquatics 3/2/2010). All the foreign dive shops, when asked how their relations are with the local community claim that they contribute by employing the majority of their staff from the fishing community which encourages fishing community support of the dive industry. Employing fishermen in the dive shops also educates them in terms of marine conservation and increases awareness amongst the fishing community specifically. Aside from this indirect form of education, the owner of Reef Seen Aquatics initially educated the fishermen, in order to teach them the relationship between a healthy reef and abundance of fish. For example, one of the first things he did was showing a few fishermen underwater videos of healthy and unhealthy reefs in the Philippines in order to show them this relationship. These initial efforts were vital for him personally to gain support of the fishermen, but also to ensure their support for rules put in place around fishing and marine management of the area. 56

57 The dive industry is aware that the best protection is reached if they also have good relations with the fishermen. They understand that the fishermen want to fish because they need to catch food for their family, and that the dive shops cannot simply tell them they cannot. They have created additional benefits for the fishermen to encourage their cooperation. Some of the dive shops pay the fishermen an additional monthly fee for using their area (personal communication: owner Reef Seen Aquatics 3/2/2010). The owner of Reef Seen Aquatics is responsible for collecting this money, and only some dive shops contribute (personal communication: manager Bali Diving Academy 27/1/2010). In return the fishermen protect the moorings which locate the dive sites, and ensure that fishermen do not cut mooring lines when their nets get caught in these. Some of the dive shops also supply the fishermen with additional non-financial benefits. One of the dive operations builds bamboo cages in the ocean which attract fish to provide alternative areas for the fishermen to fish and encourage them to leave the diving reefs alone (personal communication: owner Easy Divers 27/1/2010). Some use the fishermen s boats to dive, and pay the fishermen for this directly (personal communication: manager Yos Diving 30/1/2010) Private sector and public sector Government support for Pemuteran has been scarce. The government does not provide any sort of regular financial support or subsidies for Pemuteran (personal communication: Village Secretary 25/1/2010). They only offer a form of policy support in that Pemuteran is designated as a Daerah Parawista Laut, or Sea Tourism Area, part of the Kawasan Wisata Batu Ampat, or Batu Ampat Tourism Area. This reaches from the Mengangan National Park until Banyu Poh (East of Pemuteran). This tourism area is assigned by provincial law, and is already accommodated in the regency law (of Buleleng regency). In summary, the regency law states that the tourism area has to include some kind of conservation effort, but does not go into detail as to how. Each village has to develop these details under a village decree. Hence, in Pemuteran it is stated that the area designated for tourism can only be used for tourism, which supports the NTZ, where no fishing is allowed (personal communication: director Reef Check Indonesia 20/2/2010). The only substantial support for the area provided by the government was in the form of recognition; the project has been visited by Bali government officials, as well as ministers of Environment, Marine Affairs and Fisheries, and Culture and Tourism. In 2002, Gede Ardika, Indonesia s Culture and Tourism Minister presented the project at the United Nations Preparatory Committee & Ministerial Meeting of the World Summit, held in Bali in late May. In July 2002, Dr. Klaus Topfler, Executive Director United Nations Environmental Program visited the project (Goreau and Hilbertz, 2008) Reflection The government clearly does not play a role in the governance of this EMPA. The network which makes up this EMPA is very localized and independent from the state, which, as can be seen in the network diagram, is not regarded to be in the EMPA network. The network includes three main stakeholder groups; (1) the private sector, particularly the dive operators, and a number of their conservation projects, (2) the fishermen, and (3) the village government together with the Pecalan Laut. These groups appear to be quite separate from each other, and there is no organized cooperation or communication structure between any of these stakeholder groups. There is also no formalized cooperation within the private sector itself. The dive operators do not have a formal meeting structure, but claim that relations are still based on friendship and trust, which appears to be due to the lack of competition between the dive operators. Though the relations appear to be good, the representatives of two environmental projects initiated by members of the private sector display their concern for the lack of equal contributions to their initiatives by the different dive operators. Hence, perhaps the lack of an organization in the private sector does not have detrimental effects in their inter-relations, but it does lead to inequity in terms of contributions to projects they all benefit from. Despite being arguably quite separate from the fishing community and the village, the relations between the private sector and these local stakeholder groups appear to be friendly 57

58 as well. Communication between the private sector and the village government traditionally went through the tourism pioneer who acted as the middle man, when this was deemed necessary. It is unclear whether someone will take over this role from him. Communication between the fishermen and the dive sector is channeled through the dive pioneer. These individuals were able to build up trust which enabled them to take on this role as communicators. Hence, individuals have had a strong role in creating social capital for the private sector in this EMPA. The private sector as a whole also put in effort to gain the trust and legitimacy of the village as well as the fishermen; they provided employment from a very early stage onward, traditional village and fishermen institutions were generally included in decisions around marine management, and when they were not the result was a lack of cooperation on behalf of the fishermen. As a result of this process of social negotiation, the private sector in Pemuteran has been able to establish social capital and legitimacy for themselves. As is argued in Chapter 2, social capital has the potential to induce cooperation and shape social behavior. Hence, the next step lies in determining the extent to which the private sector has been successful in changing behavior and actually creating new institutions to lead marine management in Pemuteran. Thus, the next section will analyze the extent to which the private sector in Pemuteran was able to institutionalize their ecological aims in the economic behavior of the fishermen and other stakeholders. 3.5 Institutionalization of the EMPA The main environmental problem which needed to be overcome in Pemuteran could be found in the destructive fishing practices applied, which destroyed the coral reefs. Given the failure of the government to remove this problem, a gap existed in Pemuteran, which the private sector was able to fill, arguably largely due to their access to funding. This resulted in a shift to private sector involvement in governance in Pemuteran. The private sector were faced with existing traditions and institutions around fishing and use of the marine area, which in some cases were used to actually compliment the new institutions created by the private sector, but in some cases caused conflicts between the old and the new. This section will assess in how far the private sector have been successful in gaining legitimacy and actually altering the institutions around marine management conservation in Pemuteran; how the new and old institutions are linked, how incentive and reward systems were altered and created, how fishing and tourism norms changed, what organizations were created which contributed to changes in marine management, whether property rights were created, and whether the adopted voluntary institutions evolved into mandatory rules enforced by government Alteration of fishing industry norms: a ban and a No Take Zone Norms around fishing have changed over time in Pemuteran. Two agreements have been made in which rules have been set to regulate fishing activity, and the use of the marine environment in Pemuteran. These agreements were set between the fishermen and the Pemuteran village authorities. However, the private sector heavily influenced the formation of these agreements. Without the existence of the tourist industry it is unlikely that the need for a ban on destructive fishing practices would have been recognized. Furthermore, the introduction of the Biorock technology to Pemuteran directly led to the introduction of the NTZ Thus, the two agreements can conceptually be seen as being between the fishermen and the private sector. First of all, blast, cyanide and big net fishing are not allowed in the bay (personal communication: Village Secretary 25/1/2010). This agreement can be seen as simply a local application of the national law against destructive fishing practices, and, more importantly, the decision to enforce this by the community. This agreement was first established in 1995, induced by many village debates regarding the fishing crisis at the time. This dialogue was very much initiated by the two pioneers of Pemuteran who had the knowledge and experience to know that the fishing practices were damaging the environment, and that tourism would die out if the reef was destroyed any further. The blast fishermen and cyanide fishermen were disturbing the divers, and the catch of the fishermen was declining because of the methods they were using. The dive pioneer educated the fishermen in the consequences of their behavior and eventually the fishermen too acknowledged that something needed to be done. 58

59 Enforcement of this agreement was carried out by tugas pantai, but died out in 1998 when the Asian economic crisis hit Indonesia and fishermen from all over Indonesia came to Bali and blast fishing became a very big problem once again. In 2000 the ban was re-introduced following the introduction of Biorock, and the enforcement of this agreement resumed. This agreement appears to be legitimate in the eyes of the fishermen; they understand why they have to protect the marine environment in Pemuteran, and no longer use destructive fishing practices. According to the chief of the fishermen, they learned by experience; their catch was very low for 3 to 5 years, and when the cyanide and bomb fishers were stopped they could experience an increase in catch (personal communication: Chief Fishermen 28/1/2010). Hence the legitimacy of this agreement lies in the fact that the fishermen recognize that it lies in their own benefit, and not just of the dive industry, to use sustainable fishing practices. As stated by the chief, this is due to their own experience, but it can be argued that the education of the dive pioneer, as well as the numerous debates held between the fishermen, village and dive and tourism pioneers in the early days and consequentially the fishermen s involvement in setting this rule added to the legitimacy of this agreement. Furthermore, the fact that the ban is a local application of a national law also increases its legitimacy significantly. It is interesting to note that all the local actors interviewed which were in Pemuteran in the early 90s state that fisheries recovered when protection of the area was introduced. Whether this is because Pemuteran truly has an ecological function and the protection of the area truly contributes to wider fisheries, or solely because the destructive fishing practices were stopped is unknown. The second of the agreements for a NTZ in the Biorock area in front of Taman Sari was made in It is interesting to note that there was a similar agreement in the 90s, in the form of a NTZ referred to as Kebun Chris, which also ceased to exist in 1998 because of the effects of the Asian economic crisis. The fact that the ban as well as Kebun Chris ceased to exist as a result of the monetary crisis raises some questions about this EMPA, as well as EMPAs in general: did these two rules cease to exist because they were not institutionalized, and therefore not strong enough to withstand the effects of the economic crisis? Were the rules perhaps not actually legitimate in the eyes of the fishermen? Or, do EMPAs simply not work when the economy suffers? Research has not provided any insight about the legitimacy of Kebun Chris, but the above discussion suggests that the ban was in actual fact quite legitimate for the fishermen, suggesting the risk that the poor performance of an economy can bring to EMPAs. The current NTZ in front of Taman Sari is the only area in Pemuteran bay where fishermen cannot fish for consumption, with the exception of squid. This rule also applies to the village public who traditionally frequently fished in the shallows for food (personal communication: manager Biorock Centre 26/1/2010). This decision was supported by Pemuteran village government s local interpretation of the regency law which designates it as a tourism area where no other activities may take place. The legitimacy of the current NTZ is more debatable than the ban on destructive fishing practices, mainly because neither the village, nor the fishermen were the initiators of making the area in front of Taman Sari a NTZ. As mentioned in the previous section, it took time for the fishermen to get used to this new ruling because the private sector did not sufficiently include them in creating this new norm, and also simply because it opposed the way they used the area previously. The chief of the fishermen claims that now fishermen recognize that the area acts as a nursery for the fish, and that they actually benefit from not fishing there (personal communication: Chief Fishermen 28/1/2010). However, it must be mentioned at this point that there is no proof that this Biorock area actually has an ecological function, and would contribute to an increase in fish stock when protected. Hence, one must ask whether the legitimacy of this agreement does not also to some extent stem from the additional benefits offered to the Pemuteran fishermen and wider public. Employment, in the case of the NTZ, has been a very important source for support in that the fishermen and family members who work in the tourism industry experience first-hand that the NTZ caters to a lot of snorkelers, swimmers and divers, which in turn generate income for the Pemuteran public. 59

60 It is interesting to note that the fishing community has also created some additional rules of their own, as a direct effect of initially private sector marine conservation efforts. They have made it mandatory for any fisherman who accidentally catches a turtle to bring it to Proyek Penyu. The project nurses the turtle into health and finds a sponsor to pay a small donation for the release of the turtle. Half the proceeds go to the individual fisherman who caught the turtle to compensate him for damaged nets, and a percentage goes to project itself, and another to the fishermen s cooperative (personal communication: Chief Fishermen 28/1/2010; personal communication: owner Reef Seen Aquatics 3/2/2010). Furthermore, the fishing community created a rule against the intentional catching of turtles; if a fisherman is caught intentionally capturing a turtle he must pay a fine of Rp.100,000. If they are killed there is an additional fine of Rp.100,000. If this happens numerous times the fisherman risks being expelled from the fishing community (personal communication: Chief Fishermen 28/1/2010). Proyek Penyu, an organization set up by the dive pioneer has thus inspired the fishermen to make rules of their own, again illustrating the strong presence of the private sector in the creation of fishing norms in Pemuteran. Despite the legitimacy of these agreements amongst the fishermen and village, the dive industry are aware that the agreements with the fishermen are merely verbal, loose, agreements, and that there is no guarantee that the fishermen will keep to these (personal communication: owner Easy Divers 27/1/2010). Both the two fishing agreements are semivoluntary, which will be expanded upon below, and not fixed by law. Hence, the situation is arguably quite tenuous in that, if someone wanted to come in and develop the coastline, they could offer money to buy out the fishermen, and it remains the question whether the semivoluntary compliance of the fishermen would be able to out-compete that (personal communication: Senior Advisor Indonesia Marine Program TNC 18/3/2010) Privately funded enforcement: Pecalan Laut For the described fishing industry norms to exist, a form of sanctioning is needed, as departure of these norms must be followed by punishment. Monitoring of the bay by beach patrols has been the main tool used in Pemuteran to enforce these agreements. With the lack in government support of the area, it has again been the private sector that funds this enforcement. The private sector has succeeded in supporting a customary mode of protection, with existing legitimacy in the community. Before Biorock was introduced to Pemuteran, the village already appointed the tugas pantai to patrol Pemuteran s waters (personal communication: assistant leader Pecalan Laut and Biorock Centre operator 28/1/2010). Their salaries were paid for by contributions from the two bungalows and one dive operator existing in Pemuteran at the time, and from entry fees charged to tourists who wanted to enter Kebun Chris, the NTZ. However, as the monetary crisis struck, the problem of destructive fishing was enhanced, and it became more difficult to enforce the ban on destructive fishing practices and the tugas pantai ceased to patrol. The monetary crisis, accompanied with the coral bleaching event that took place in 1998, inspired the introduction of Biorock. About three months after Biorock was introduced to Pemuteran in 2000, the village created the Pecalan Laut and it became a permanent body within the village organization (personal communication: owner Taman Sari 5/2/2010). The Pecalan is a community-based security unit which has deep roots in Bali s well-preserved traditional culture (Atmodjo and Hermawan, 2007). The Pecalan s job has traditionally been to maintain the village s security and to manage traffic flows during religious and customary ceremonies. Pemuteran s Pecalan are different because they have additional responsibilities, in the form of controlling tourism, fishing and marine conservation, which is why Pemuteran s Pecalan are referred to as Pecalan Laut, laut meaning sea. They have a combination of functions: temple, land and the sea. In terms of the land they control the tourism areas. One of the things they enforce on the beach is the agreement that there are no sales people allowed on the beach, something which sets this village apart from the many other tourism centers in Bali, one of the tourism entrepreneur s initiatives in the very beginning. In terms of the sea they patrol 20 kilometers of beach by motor boat if necessary, or by foot along the beach, to ensure that there are no destructive fishermen in the bay (personal communication: Kepala Adat 25/1/2010). 60

61 The Pecalan Laut is separate from Biorock, though they share their office with the Biorock Centre. This is a prime of example of how close-knit the community of Pemuteran is. As the manager of the Biorock Centre points out, [...] everything here is connected (personal communication: manager Biorock Centre 26/1/2010). The Pecalan is made up of 30 rotating members, men from the Pemuteran village, and there are four fishermen, the heads of the cooperatives, in the Pecalan (personal communication: assistant leader Pecalan Laut and Biorock Centre operator 28/1/2010). They patrol the beach 15 days a month, and if there is a problem they can be summoned to do extra patrols. The Pecalan work under the Desa Adat, the village religious authority. Different rules are set up by the Adat of different villages; Pemuteran thus has a customized policy set by their Kepala Adat. The Pecalan s operational fund is about Rp.350,000 per month, most of it is used to fuel their motorboat. Next to this, the members get a small salary of Rp.50,000 to Rp.100,000 per month. As mentioned previously, the government provides no regular financial support for Pemuteran. They did however provide the Pecalan with patrol boats when it was first set up, but other than that there are no incoming funds from the government (personal communication: assistant leader Pecalan Laut and Biorock Centre operator 28/1/2010). Hence, the Pecalan Laut is funded entirely by the tourism businesses in Pemuteran; the dive operators and hotels. Every tourism business puts in $30 a month of which half goes toward supporting the Pecalan Laut, and half to the Adat, which is used for village ceremonies (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). The majority of dive shops claim that a sum of this money also goes toward compensating the fishermen. However, it is not clear how much of the money goes to the fishermen. The village comes to pick up the $30 every month, but the businesses are not aware exactly what happens with this. Hence, there is no transparency of these funds. The Pecalan Laut were very effective in 2000, when there were actually blast fishers in Pemuteran, but they have weakened over the years, as there is not actually much to do for them these days (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). There appears to be doubt amongst some of the dive operations as to whether the Pecalan is indeed effective in enforcing the fishing agreement, as they do not see the Pecalan patrolling very often. In addition to this, there have been situations in which a dive operator has caught fishermen doing big net fishing at night when there is no one patrolling the bay (personal communication: manager Bali Diving Academy 27/1/2010). There are a number of actors from the dive industry, as well as from Yayasan Karang Lestari, which have come forward and suggested ways to increase the effectiveness of the Pecalan Laut. The Pecalan Laut is taking an old voluntary system and applying it to the ocean. Hence, a short-term (as the members rotate), voluntary operation is applied to an existing long-term week after week system. The Pecalan receive a very small wage (to cover gas for transportation) and it can be argued that this results in very little incentive for the members to show up for their shifts, particularly in such a poor area: if there is something better to do which brings in more money to the family they will simply not show up (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). Furthermore, the Pecalan do not patrol every day so the area is not being monitored constantly. One of the founders of Yayasan Karang Lestari has put forward the idea to increase effectiveness of the Pecalan by making it into a private business, with four people receiving living wages who patrol every day, carrying out extra tasks like stopping tourists from walking on the coral, giving them full responsibility and an incentive to carry out their tasks. This idea has been supported by at least two of the dive operators in Pemuteran. However, this suggestion was stopped by the owner of Taman Sari and tourism pioneer in Pemuteran, stating that it would kill the spirit of community participation. He argues that it is more important that the community is involved, and that everyone is benefitting a little, as opposed to making it a private enterprise with people making a good salary, which might result in jealousy (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). Hence, the idea of privatizing this traditional organization has been rejected by the community. 61

62 Though there are divided opinions on whether the Pecalan is doing enough, there is a consensus amongst the dive operators that they were very effective in the beginning stopping the destructive fishermen and that their current presence is vital to keep destructive fishing practices out of Pemuteran: Some people say they aren t really doing anything anymore. But they did their job before, and if we stop paying them, word will get around and people will come back in. Even if they sit around and drink coffee, they are showing up, and other people from other villages know about it. (personal communication: owner Reef Seen Aquatics 3/2/2010) The fact that the Pecalan Laut was a village initiative, and is based on an existing highly respected organization within the village creates a large amount of legitimacy for them in the eyes of the public, and fishermen. The private sector has essentially been successful in funding an existing body, which possesses legitimacy based on the culture and traditions it encompasses and represents, to practice marine conservation Biorock Biorock, as one of the main reasons for creating the NTZ in front of Taman Sari, has been an important actor in bringing about change in marine management in Pemuteran. It has also been responsible for creating a tangible symbol as it were, for marine conservation in Pemuteran. Biorock s value in terms of altering institutions around marine conservation is difficult to define, with very divided opinions amongst the different stakeholders. The fact that the introduction of Biorock directly led to the creation of the NTZ, and indirectly the forming of the Pecalan Laut already illustrates how the private sector has succeeded in altering institutions in Pemuteran through the introduction of this technology. They have created a new institution by creating a territory where fishermen are no longer permitted to fish, and their influence has lead to a village-led initiative to alter an existing traditional institution, the Pecalan, and create one that features the added responsibility of working toward marine conservation. This alone demonstrates the power that the application of this technology has exercised in Pemuteran. However, the legitimacy of Biorock as an actual tool for marine conservation is questionable. Every dive shop interviewed agrees that Biorock has been a great education and awareness tool for the local community and tourists; it has taught the community and the tourists why it is important to conserve coral (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). As one of the dive operators points out: Biorock is the centre for ocean protection and also a powerful tool to show the locals that even when something is destroyed you can rebuild it and attract people again (personal communication: manager Bali Diving Academy 27/1/2010). Furthermore, Biorock has also been a great public relations tool for the village, for the dive industry, as well as for Taman Sari in particular. There have been numerous individual students carrying out research in Pemuteran, the Biorock workshops held in Pemuteran attracted (inter-)national participants, and Taman Sari gains free publicity from the project (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). The project has won a number of awards, and all of the local stakeholders interviewed agree that the Biorock project has attracted more tourism to Pemuteran. However, not all of the foreign dive operators agree; they do not believe that tourists come to Pemuteran especially for Biorock, but for certain impressive dive sites nearby, like Menjangan island (personal communication: manager Bali Diving Academy 27/1/2010). Regardless of whether the project can be held accountable for more tourists in Pemuteran, all the dive operators interviewed agree that the project serves as a great snorkel and night dive site, because it is close to shore, safe, and houses a lot of animals. It has served as source of income for the dive operators in Pemuteran (personal communication: owner Reef Seen Aquatics 3/2/2010). 62

63 A major criticism which is often mentioned, and questions the legitimacy of Biorock in Pemuteran, is that there has been no emphasis on record-keeping or measurements of growth on the structures. No statistics have been put out, and thus there is no documented evidence that shows Biorock is in fact contributing to the health of the coral reef ecosystem in Pemuteran. There have only been students doing research on a voluntary basis and they stay there for too little time to supply legitimate results (personal communication: owner Sea Rovers 30/1/2010). No one is doing academic research which is necessary not just to gain legitimacy in the eyes of larger international NGOs, and the academic world, but to promote the technology (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). Biorock appears to have symbolic meaning in Pemuteran. It is material evidence which represents marine conservation in Pemuteran. Dive shops and hotels have made material investments in Pemuteran, which generally have been for income generation. Though it can be argued that the main purpose behind initial investments into the technology was to promote the private sector in Pemuteran, the technology also represents a material investment into conservation with no direct income generation goal. Not only has its presence contributed to Pemuteran s image and put it on the map as an eco-tourism destination, it has also played a role in making marine conservation more recognizable and approachable to the local community. On top of this, the local community, as well as the dive community all contribute when new structures are placed. In this way, the technology also appears to be a tool to induce cooperation amongst the different actors in the EMPA. Director of Reef Check Indonesia argues that Biorock s primary value lies in the ability to glue these people to work together on the same vision (personal communication: director Reef Check Indonesia 26/2/2010). In a way Biorock symbolizes the two primary intentions of the private sector, their ecological intention to improve the coral and the intention to induce cooperation of the community in working towards improvement of the coral Private sector projects As mentioned previously, this EMPA is made up of multiple sites of power due to the different actors involved, such as the fishermen and the village authorities. This is also true within the private sector. A number of informal institutions have been created in the form of projects which have been set up by different entrepreneurs from the private sector. Though they all share a broad goal toward marine conservation and support each other in this, they stem from private investments. Hence, they have individual objectives, and are managed by different people. They operate individually, and since these organizations stem from the private sector, there will always be some form of competition between them. Proyek Penyu came about in 1992 when the dive pioneer discovered a turtle caught by a local fisherman, and he decided to purchase this to prevent the animal from being used for consumption. The project grew as more caught turtles were bought from the fishermen, as well as turtle eggs. The turtles are nursed until they have a better chance of surviving in the wild, and eventually released. The project is entirely self-sufficient and depends on donations from tourists. It can be seen as an example of payment for ecosystem services, where a tourist pays a small fee to ensure conservation of the turtle species. The project has contributed to marine conservation in several ways; it has educated the locals and fishermen about the need to protect turtles and it has increased awareness amongst tourists and attracted local schools for example. However, its most unique accomplishment was to contribute to the turtle fishing rules set up by the fishermen themselves. The project is thus legitimate in the eyes of the local fishermen, as they created their own fishing norms based on previous work the project did. Thus, a private sector created institution actually contributed to new rules set by fishermen which work toward marine conservation The Reef Gardeners was set up by the dive pioneer in The Bali Rehabilitation Fund (BRF), an AusAID sponsored program set up by the Australian government to counter the economic and social effects of the Bali Bombing of 12 October 2002, donated the initial funds to set up the Reef Gardeners, highly contributing to the project s legitimacy in the eyes of overseas actors. It is one of the few BRF projects which continue to run after the initial funds were used up. A group of ex-fishermen were trained as scuba divers, in methods of repairing broken coral, and methods to protect reefs such as removing crown of thorn starfish and drupella shell which destroy coral. Now that the BRF no longer provides funds to support the 63

64 Reef Gardeners, the Pemuteran Foundation, an NGO set up in 2007 by a group Dutch people which has set itself the objective of initiating and supporting small-scale projects in Pemuteran, is the main financial sponsor of the Reef Gardeners and pays them $600 a month to pay for the salaries of the 7 Reef Gardeners. The Reef Gardeners are in essence doing the repairing work that Reef Seen Aquatics had done in the Pemuteran reefs in the early 90s. When they were just set up, some of the funds were also used to create additional dive sites; damaged boats were bought from local fishermen and sunken (personal communication: owner Reef Seen Aquatics 3/2/2010). Hence, the Reef Gardeners not only contributed to the dive industry by creating dive sites, they also add value to the reefs through repairing and maintaining these. The third environmentally-tinted project in Pemuteran, Yayasan Karang Lestari, was founded by two shareholders at Taman Sari, and the tourism pioneer and owner of Taman Sari around 2001, after the Biorock project had existed in Pemuteran for some time. The Pemuteran public, the fishermen and dive shops were all involved with building the initial structures (personal communication: manager Biorock Centre 26/1/2010). However, the project, despite the intention to be a project for the village, is seen more as a Taman Sari project by a number of the dive operators (personal communication: owner Sea Rovers 30/1/2010); perhaps because the founders, and managers as it were, all have shares in Taman Sari and the electricity used to run the Biorock structures which adds up to between $300 and $400 a month, is donated entirely by Taman Sari. The two above-mentioned projects fall under Reef Seen Aquatics management, whilst Yayasan Karang Lestari falls under Taman Sari management. One of the dive operators points out that in Pemuteran there are two camps as it were (personal communication: owner Sea Rovers 30/1/2010). Yayasan Karang Lestari, as the project hosting the Biorock technology, was key to leading to the decisions to develop the NTZ in front of Taman Sari. This area was monitored solely by the Pecalan, until the creation of the Biorock Centre which employed 3 local men who monitor the area operate and maintain the Biorock technology. Figure 8: Biorock Centre and Karang Lestari Rules sign The Biorock Centre was built in May 2008 with funds donated by the three founders. It was necessary for generating income to cover the costs for employing the operators, and for properly supplying information to tourists; no one knew where to ask for information and a central point was needed (personal communication: co-founder[2] Yayasan Karang Lestari 3/2/2010). The Centre s boat of around $5000 was donated by an American couple who live in Pemuteran. The boat is used for snorkeling and glass bottom boat tours, as well as for the centre s day to day operations. It has only been a year that the centre is able to sustain itself financially and cover the salary of the three employees of the Biorock Centre. The centre finances itself through merchandise sales (t-shirts and postcards), glass bottom boat and snorkeling tours, and the Adopt a Baby Coral program where tourists can get their name attached to one of the structures and follow the growth of the coral on their name over some time. 64

65 These three projects have developed legitimacy for themselves in different ways, and with different results. They are managed by two separate parties, they are entirely reliant on tourism, with the exception of the Reef Gardeners, to finance themselves, and they are separate from the rest of the private sector in Pemuteran. The projects all contribute to the health of the marine environment in Pemuteran, but operate individually. Individual differences in the past have even led to tensions between the two managing bodies, creating even less room for cooperation. The individual nature of these projects, together with the lack of formal organization of the dive industry discussed in section 3.4, results in a private sector which benefits from the efforts of these projects, but does not support these initiatives. The founders of Yayasan Karang Lestari and the owner of Bali Dive Academy are currently trying to launch a project that would bring the dive community, and projects like these, together into a formal organization: the Pemuteran Eco Trust. The main motivation behind this idea is in response to a concern brought up previously; that all the businesses in Pemuteran benefit from the efforts of the Reef Gardeners and Yayasan Karang Lestari, whilst they do not equally contribute to these projects. It is based on a concept used in Gili Trawangan, which will be expanded upon in Chapter 4. The projects entails taking a small fee from every resource user (i.e. diver or snorkeler) and to dedicate this fund to projects (such as for example hygiene, erosion control, health care, water catchment, education and marine conservation) for the community. The existing projects in the village such as the Biorock Centre, Reef Gardeners, Pecalan Laut would also receive funding. The fund will be managed by the dive community, and not given directly to the village to ensure transparency of funds. Specialized NGOs will be brought in to work with the community and carry out the projects. In addition to this, outside companies which dive in Pemuteran do not make any sort of contribution either (personal communication: owner Reef Seen Aquatics 3/2/2010). It is important to note that as yet not all the dive operators are cooperating, so it is not definite that such an organization will become reality in Pemuteran (personal communication: cofounder[1] Yayasan Karang Lestari 24/1/2010) Reflection Entrepreneurs have been the main actors in inducing the creation of new industry norms in fishing and marine management. They have formed two informal agreements with the fishermen in Pemuteran, in cooperation with the village government. One of these is simply a local agreement to enforce the existing national ban on destructive fishing practices. The other is the creation of a NTZ in the area where most Biorock structures have been placed in Pemuteran. Despite the informal nature of these institutions, these agreements appear to have reached a sound level of legitimacy amongst the local stakeholders as destructive fishing is no longer a problem, and fishing in the NTZ no longer takes place. The agreements are enforced through an existing community-based security unit. This organization is funded by the private sector, but is based on customary modes of protection which has contributed significantly to the legitimacy of these rules. Aside from these village-based agreements, some informal private-sector led institutions have formed, which each in their own way contribute to marine conservation efforts in Pemuteran. Some have received international funding and recognition which has contributed to Pemuteran s image as an eco-tourism destination. These institutions however are managed by two separate groups, and there is virtually no cooperation between them. Hence, what we are presented with in Pemuteran is a networked EMPA with no governing body responsible for the management of the EMPA. There are numerous stakeholder groups involved outside the private sector, and even within the private sector marine conservation initiatives operate individually, resulting in a clearly polycentric EMPA with centers of control found within the village government, the Pecalan Laut which is governed by the village but funded by the private sector, the fishing community, the Yayasan Karang Lestari with Biorock, and Reef Seen Aquatics which manages the two other private-sector led projects. 65

66 3.6 Conclusion Though the EMPA in Pemuteran is a network of local and private actors, it is strongly entrepreneurial in nature. It has very much been steered by individuals with a drive to turn opportunities into reality, be they of a sustainable nature or purely profit-seeking. What comes forward in Pemuteran is that the institutions created around marine conservation are in place largely due to the efforts of a few individual, and independent, entrepreneurs. The most influential actors in this process were a tourism and dive pioneer. Both have and had vital communicative roles with two of the stakeholder groups in the EMPA, the village and the fishermen. Thus, Pemuteran is an EMPA where the E s are invaluable factors driving the development of the EMPA, but do not do so collectively. The EMPA which we see today was formed through numerous interactions of the private sector with the environment in which they exist. This process of social negotiation has secured several relations which are important to mention when assessing the role of the private sector in this EMPA. First, inter-relations within the private sector are based on little or no competition. Despite the fact that there is not a large amount of interaction or communication within the private sector, relations are good because there is no competition between the different dive shops, suggesting the important role of competition in EMPAs. The private sectors relations with the local stakeholders very much depend on the two individual entrepreneurs which appear to have steered the process of the formation of this EMPA. These entrepreneurs are the key links to the local stakeholders, emphasizing the strong role of individuals in this EMPA. This has resulted in relations based on trust and mutual cooperation. However, the vital roles of these individuals in establishing favorable relations needed for driving marine conservation, brings a significant risk along with it as the strong role of individuals also increases dependency on the presence of these individuals. Despite the lack of a formal communication structure between the individual members of the private sector, it has done several things collectively which characterize their role in this specific EMPA. They have invested in non-market assets such as religion which was very important for gaining the support of the local Balinese. Furthermore, they have been careful to establish the support of the head of the religious authority which is vital to exercise social control in a village on an island like Bali. Another important feature to mention is the strong efforts of the private sector to employ locals in order to share the wealth as well as include the locals in marine conservation activities, thereby embedding themselves or rather the idea of marine conservation amongst the local community, as opposed to being seen as extraneous body imposing this onto the local community. Through this process of social negotiation with existing institutions, the private sector was able, to some extent, to institutionalize their goals in the economic behavior of the stakeholders in Pemuteran. They were able to change norms and induce cooperative behavior toward protection of the reefs. In some cases this was quite an easy process, such as re-enforcing a ban on destructive fishing practices, arguably because this is based on an existing national law. However, in some cases this process was countered with existing common property institutions which were already in place. It is not surprising that the more the existing common property institutions, or the fishermen, were included in the setting of new norms, the more legitimate these new institutions were in the eyes of the original resource owners. An interesting feature of this EMPA is the private sectors use of an existing legitimate organization, based on culture and tradition, to enforce new rules; the private sector made use of an existing institution to institutionalize their own goals in Pemuteran. Despite the good relations built with the local stakeholders, overall, the level of institutionalization in this EMPA appears to be quite low, and no norms have been translated into rules supported by law. This puts the area at risk to being vulnerable to extraneous economic influences such as an economic crisis, which once before managed to wipe away institutions around marine governance in Pemuteran. The EMPA is essentially built up around several informal institutions which work toward a common goal, but operate individually. Aside from the above-mentioned local institutions, members from the private sector have formed three organizations, two set up by the dive entrepreneur and another by the tourism 66

67 entrepreneur, which contribute to promoting marine conservation in Pemuteran. These organizations have each in their own way contributed to marine management, or simply to the health of the coral reefs in Pemuteran, but operate separately. Biorock has taken on an interesting role in this. Some argue that despite the disputed ecological value this coral restoration technique has had for the health of the coral in the bay, it holds symbolic value in producing a tangible proof of marine conservation in Pemuteran. Despite the seemingly separatist or individual nature of this EMPA, the private sector has secured protection of its coral reefs through the informal institutions which have been created, but due to the low level of institutionalization the durability of these arrangements are questionable. 67

68 4 Gili Trawangan 4.1 Introduction In this thesis, the role of the private sector in creating durable conservation and restoration agreements to protect coral reefs is studied by analyzing the shaping of two separate EMPAs in Indonesia. In the preceding chapter the pathway that led to the formation of an EMPA in North Bali was analyzed. In this chapter this process will be determined for an EMPA located roughly 120 miles East of Pemuteran, on the island of Gili Trawangan. At first glance, this EMPA contrasts with the one in Pemuteran in three clear ways; the government is much more present than it is in Pemuteran, the EMPA in Gili Trawangan is clearly much more institutionalized, and this EMPA is based on a communally organized private sector as opposed to an individually operating one. These and more differences, as well as interesting similarities will come forward in the following analysis of the process through which the EMPA in Gili Trawangan has been shaped through the private sector and their interactions with the environment. This chapter is structured identical to the previous one, beginning with the history of fishing and tourism in Gili Trawangan, followed by an analysis of the concept of entrepreneurialism in the process of the development of marine conservation in Gili Trawangan. This is followed by an evaluation of how the private actors in built up social capital in Gili Trawangan, and the final section of the chapter will present the level of institutionalization of the EMPA which has been reached, describing how the private sector was able to create and alter institutions around marine conservation in Gili Trawangan, and create what one refers to as an EMPA today. 4.2 History of fishing, tourism and marine conservation in Gili Trawangan Gili Indah is a small island village, which comprises three small islands, or sub-villages, referred to as Gili Air, Gili Meno and Gili Trawangan. The Gili islands are located northwest of the island of Lombok, part of Nusa Tenggara province. All three islands are fringed by coral reefs supporting many fish species and other forms of marine life (Satria et al., 2006a): Figure 9: Map of Gili Indah with dive sites (source: lomboktrekkingonline.com) Gili Trawangan, the left of the three islands, was uninhabited until the mid-seventies. A colony of ten families was sent to the island to start a coconut plantation after a religion war in Central Lombok. Later, other ethnic groups, mostly from Gili Air came to the island for water, which was scarce on the islands at the time, and to grow cash crops, and eventually settled on the island (Soemodinoto and Wong, 2004). Traditionally the main sources of income on the island were coconut plantations and fishing (personal communication: owner Trawangan Dive and Blue Marlin Dive 17/2/2010). 68

69 Between late 1979 and early 1980 tourists started coming to the island. They came from Senggigi beach in Lombok and Gili Air on day trips, for sunbathing and swimming. Eventually the tourists started to stay on the island overnight, accommodation provided at the house of a local entrepreneur. A German travel writer who stayed at this house provided the entrepreneur with funds to start an accommodation business. A home stay was built in 1981, and between 1981 and 1983 the local entrepreneur was the only service provider to tourists on the island. In 1983 three more home stays were built, and by 1984 the island hosted six businesses and 46 rooms (Soemodinoto and Wong, 2004). In 1991 the local government forced a resettlement program which interrupted development on the island between 1991 and 1992, by which time there were 19 accommodation businesses all over the island. The program was aimed at relocating tourist facilities in Gili Trawangan since there had been uncontrolled spreading of accommodation throughout the island between 1984 and There had been no guidelines or development plan which the accommodation businesses kept to, in terms of the design of their accommodations, nor the location of these on the island. Hence, this is the first situation in the history of Gili Trawangan tourism where the government had to step in to control the private sector, for the islands future well-being and sustainability. The local government concentrated previously scattered accommodations in the south eastern side of the island. Later it was discovered that the real purpose behind the program was to support a Jakarta business man to acquire 100 hectares of land situated strategically in the middle of the island for the construction of a hotel and golf course. The conflict around this peaked in 1995 when forced demolition of facilities belonging to Gili Trawangan locals took place; representing a clash between private and public sector (Soemodinoto and Wong, 2004). Despite its original motive, the resettlement process, Soemodinoto and Wong (2004) argue, provided the tourism community with sound intervention and actually helped to revitalize tourism. The resettled businesses were compensated with 1,500m 2 land parcels and access to credit from the provincial development bank. In 1992 the number of accommodations rose to 36 licensed and 10 unlicensed accommodation businesses, with 32 of these on the south eastern part of the island. Three pioneering dive operators were established between 1987 and 1989, and the fourth was created in After 1995 secondary tourism services, such as diving and snorkeling, provided on the island became increasingly diverse. From 1997 and 1999 new investments on accommodations and diving operations seemed to dominate the local economy. Following the resignation of the Indonesian president in May 1998, the local victims of the April 1995 demolition re-colonized the disputed land and developed restaurants and kiosks on this land, further diversifying and adding to the tourist services on the island (Soemodinoto and Wong, 2004). The prevalent environmental problem in Gili Indah is the deterioration of coral reefs. The Regional Development Planning Board reported the percentage cover of live corals in Gili Air, Gili Meno and Gili Trawangan was 10%, 10% and 5-20% respectively. Thus, in 1998 the central government established Gili Indah as a MTP. The total area covers 2,945 hectares and can be utilized for various purposes such as tourism, research and development, education and culture supporting activities. The establishment of the MTP is based on the study conducted by a scientist group mandated by the central government in The study produced a management plan for the MTP. They identified existing and potential problems in the ecosystem and socio economy. They identified the economic activities in the area which includes tourism related businesses but did not include an analysis of fisheries activities even though fisheries were the original and main livelihood of the locals in Gili Indah. They designated two main zones: a protected zone and a utilization zone. The protected zone was intended for the protection of marine animals and plants and their ecosystem, and for the rehabilitation of the deteriorated coastal area. The utilization zone was intended for tourism without compromising the sustainability of marine resources. An institutional arrangement was necessary to support the management of the MTP. Hence, the government appointed the BKSDA to implement MTP policy on Gili Trawangan. This agency served as the managing body of the MTP and was mandated to involve the local government, tourism businesses, the police and the local community. A field officer referred to as the jaga wana, or forest security, was appointed to monitor, control and survey the area (Satria et. al, 2006a). 69

70 Due to the lack of the communication and extension services of the BKSDA the local people did not know what, where, how and why the MTP was been established and consequently the boundary of the MTP was undermined by the locals. The fishermen still claimed the area of the MTP as their own property and fished in the area as usual. Hence, the absence of the local s recognition of the MTP has led to difficulties for the BKSDA to enforce the rules. This problem was enhanced by hidden conflicts between the local government and the BSKDA. The BKSDA made the decision to prohibit muroami 1 fishing in the MTP, a common fishing practice in Gili Indah, which has been used for generations, without a compensation scheme. This resulted in confusion amongst the muroami fishermen who felt they were not violating the law since they had received official fishing authorization from the Marine Fisheries Service Office (MFSO) of the West Lombok Regency, illustrating the lack of coordination between the BKSDA and other agencies, including the local government. Furthermore, in line with the Local Autonomy Law, the local government considered that the management of the MTP should be devolved to them rather than managed to the BKSDA (Satria et al., 2006a). Hence, due to a lack of coordination between local government and BKSDA, the fishermen were able to resist the MTP ruling set by the central government, and continued to fish in the prohibited areas. Gili Indah MTP became more of a paper park. The rise of the local institution of fisheries management in West Lombok constituted the local fishers response to the monetary crisis and national reform from 1998 onwards. National reform in 1998 led to the unaccountability of the government authority, including their authority to enforce formal rules in fisheries. In addition to this, as happened in Pemuteran, the Asian economic crisis resulted in an increase in the use of destructive fishing practices in West Lombok, particularly dynamite, or bomb fishing. In response to these changes local people attempted to revitalize a local institution called Awig-awig in Awig-awig, meaning local rules, is what community-based coral reef management is referred to as in Gili Indah and their existence is officially recognized by the Lombok Barat Regency Government (LBRG) (Satria and Matsuda, 2004). A number of local men from Gili Trawangan formed the Yayasan Front Pemuda Satgas Gili Indah (SATGAS), or the Gili Indah Youth Task Force, to monitor and implement Awig-awig, in response to the government s ineffectiveness to stop the dynamite fishing around their island (Satria et al., 2006b). They registered officially as Awig-awig with the local government on 16 January They patrolled the water with speedboats borrowed from a Gili Trawangan foreign-owned dive operator, where some of the SATGAS members were employed at the time, and money donated from the occasional business who supported their efforts (personal communication: owner Sama Sama restaurant 12/2/2010 and member SATGAS). It is important to mention that though the SATGAS was initially set up for the three islands in Gili Indah, the two other islands in Gili Indah quickly wanted to become independent and set up secondary monitoring units for themselves in 2002, which is why the SATGAS is now seen as Gili Trawangan s security force (personal communication: head SATGAS 17/2/2010; Satria et al., 2006b). Soon after the formation of the SATGAS, three members of the SATGAS went to the BKSDA office in Lombok to demonstrate because the BKSDA had an office in Gili Trawangan, but were not doing anything in terms of supporting marine conservation in Gili Trawangan. They threatened to burn down their office if the BKSDA did not come and support the SATGAS. Hence, in 2000 the BKSDA came back to Trawangan, sending a team of five BKSDA officers who actively joined the SATGAS in their patrols (personal communication: owner Sama Sama restaurant and SATGAS member 12/2/2010). This was the origin of a co-management arrangement between the SATGAS, representing local ruling of the Gili Trawangan village, 1 Muroami fishing is a fishing technique, originating from Japan. It entails dragging a fine grid net along the ocean floor as it traps fish while using pounding devices to scare fish out of their coral refuges and into the net, which destroys coral (Garcia, 2005). In Pemuteran muroami fishing involves 35 fishermen; two boats are positioned adjacent to one another with a gap large enough for a 9mx9m net to sit between the boats. Four people hold the net in the boats, and the rest snorkel over the coral from the surrounding areas and usher the fish into the nets using metal chains dragged over the reef. Mogong fishing is a slightly different technique applied in Gili Trawangan, but also uses dragged metal chains and is thus equally destructive. The muroami fishermen mediate between the two fishing communities and the other stakeholders in the EMPA (personal communication: Bsc researcher thesis University of Sydney 21/2/2010). Hence, when referring to muroami fishermen in the remainder of the thesis, one can assume this represents the two fishing communities. 70

71 and the central government, represented by the BKSDA. Hence, in these days a form legal pluralism existed in Gili Trawangan in that there were two laws working together; Awig-awig with national law. A number of the major dive operators in Gili Trawangan, which were all foreign-owned at this time, set up an alliance of dive operators called the Gili Eco Trust (GET) in This alliance was set up to raise money to support the SATGAS, in an attempt to do something against the destruction of the coral reefs, and to form good relations between the dive shops (personal communication: part-owner Manta Dive 19/2/2010). In response to the peak of the conflict between the muroami fishermen and the GET about the existing zoning system, a new agreement was made between the different parties in 2003 (Satria et al., 2006b). In cooperation with the GET, the SATGAS negotiated a zoning system for Gili Trawangan with the muroami fishermen and a compensation scheme for these displaced fishermen. In this way, the private sector stepped into the picture and added another layer of control to the area. The members of the GET started charging a dive tax used to support the SATGAS and pay for compensation for the fishermen (personal communication: head SATGAS 17/2/2010). The first Biorock installation in Gili Trawangan took place November 2004 at the invitation of an Australian Bali resident and the owner of Bali Dive Adventures. As in Pemuteran, the two GCRA scientists showed them how to build the Biorock structures. The current manager of the GET, a dive instructor at the time, attended the third Biorock workshop in Pemuteran in November 2005 and observed the technique. She brought one of the two scientists back to Gili Trawangan and the two of them, with two of her diver instructor friends, built a structure in front of Trawangan Dive (personal communication: manager GET 11/2/2010). The following year, in November 2006 she organized the fourth Biorock workshop on Gili Trawangan, during which 10 new structures were built, and became part-time manager for the GET in In December 2008 the sixth Biorock workshop was organized on the island by the GET and the GCRA, with the support of local businesses. A total of 15 more structures were built, bringing the total number of structures surrounding the island to 28 (Naguran, 2008). Meanwhile, Indonesia has experienced a number of significant changes in politics of marine conservation. The nation-wide shift from MPA management from the MF to the MMAF induced by the issuance of Law no. 31/2004, has naturally had an influence on government presence in Gili Trawangan. In 2009 the MMAF officially also received ownership of MTPs, such as Gili Trawangan, which were previously under the control of the MF. Hence, since 2009, the MMAF-formed institute for conservation areas, the BKKPN, has taken on the responsibility for Gili Trawangan. Hence, government presence on the island is currently in the process of being handed over from the BKSDA representatives which had been patrolling with the SATGAS, to BKKPN representatives (personal communication: manager GET 11/2/2010). Unlike the neighboring tourism-centre in Lombok, in 2010 the island still does not allow any form of motorized transport, with everything done with horse carts and bicycles. Despite strong control over this issue, tourism development is not managed as strictly. In 1998 limits of carrying capacity for tourism developments on the islands were imposed by the Ministry of Home Affairs Directorate General of Regional Development and the Ministry of Forestry s Director General of Forest Protection and Nature Conservation. The limits stipulated the maximum number of rooms to be constructed on the three islands. This maximum was 250 rooms for Gili Trawangan. In 1999 the total number of rooms for Gili Trawangan already stood at 306 (Soemodinoto and Wong, 2004). Currently the island provides over 5000 rooms (personal communication: manager GET 11/2/2010), illustrating the much larger scale in tourism we are dealing with in Gili Trawangan, when compared to Pemuteran. Furthermore, officially beach-front construction is not allowed in Indonesia; permanent structures may not be placed less than 50 m from the water line, but this regulation was not kept to with particularly the south eastern strip hosting several beach-front buildings. Additionally, nothing should be made from concrete, and there should be no sea wall, two more rules which have not been enforced by the government on this island. Instead, the GET is taking on more and more responsibility to try and control these types of issues, in addition to the marine conservation issues. Hence, though the government and the SATGAS have created co- 71

72 management linkages in terms of marine conservation, the private sector have gone on to actually regulate development in the area to some extent. What comes forward very strongly from the history of Gili Trawangan is the government s failure to enforce marine conservation and tourism development regulations which it had attempted to set for the island. In response to this failure and subsequent gap, a number of local Gili Trawangan residents came forward and set up a system of community-based coral reef management, and started patrolling the waters. What these men, the SATGAS, lacked was sufficient funding, which is where the private sector entered in marine conservation of this area. Hence, private sector involvement in marine conservation took place at a later stage than it did in Pemuteran, where these actors actually initiated marine conservation. The foreign dive operators, which dominated the Gili Trawangan dive industry at the time, formed the GET and started charging a dive tax to support the SATGAS and compensate the fishermen, thereby essentially funding marine conservation in Gili Trawangan. What has resulted is a MPA based on a zoning system and compensation scheme, which is managed and funded by the private sector, and enforced by the SATGAS. There are many different stakeholder groups which can be located in this particular EMPA: the fishermen, a community-based security force, Gili Trawangan village, the dive entrepreneurs, and the government, resulting in a particularly networked EMPA. The current state of and level of institutionalization of the EMPA has been the result of numerous interactions between the private sector and all these stakeholders. During this process the private sector has gained a certain amount of legitimacy for themselves, and has created new and altered existing institutions around marine conservation in Gili Trawangan. The following section of this chapter will begin the breakdown of this process, and the role the private sector had in this development, by revealing the entrepreneurial nature of this process, or the extent to which this was actually led by entrepreneurs. 4.3 The E in the EMPA in Gili Trawangan In this section the concept of entrepreneurship in the context of marine conservation in Gili Trawangan will be the focus. The main opportunities which are relevant to the development of marine conservation in Gili Trawangan will be described, mentioning the individuals responsible for discovering, evaluating and exploiting the opportunities, and their motivations. This will provide a basis for asking further questions on how these entrepreneurs did so and further developed the EMPA into what it is today Opportunity 1: Developing tourism in Gili Trawangan In Gili Trawangan, one local tourism pioneer was fortunate enough to receive a contribution from a German travel-writer which enabled him to build the first accommodation business in Gili Trawangan (Soedmodinoto and Wong, 2004). The local tourism pioneer had discovered an opportunity to earn some money by offering tourists a place to eat and sleep at his own house when tourists first started visiting Gili Trawangan on day trips. This individual was an entrepreneur in the fact that he was able to recognize the potential of this area as a tourist destination. However, he did not possess the financial resources to exploit this opportunity, like the tourism entrepreneur in Pemuteran did for example. However, fortunately for this local tourism entrepreneur a foreign individual provided him with the resources needed to exploit this opportunity, and he was able to build the first home stay on Gili Trawangan, which marked the beginning of tourism in Gili Trawangan. After this, a rapid horizontal spreading of tourism-related services occurred on Gili Trawangan. Islanders, learning from the initial entrepreneur that catering to tourists could bring economic benefits to them, copied successful tourism products and services (Soedmodinoto and Wong, 2004). Until 1987 these services were only in the form of homestays, but in this year the opportunity to offer diving as a service to tourists was discovered and exploited. It is unknown who was the first to discover this opportunity, but it is quite likely to have been an individual who had seen this service offered in Bali or Lombok, or any of the other developing tourism destinations close to Gili Trawangan. He or she would have recognized the potential to offer this service in Gili Trawangan with the coral reefs fringing the island, and possessed the resources to build a dive operation. This too was copied by others, resulting in a local economy dominated by tourism accommodations and dive operators. 72

73 As mentioned previously, initially tourism developed unabated on Gili Trawangan, and research by Soemodinoto and Wong (2004) has suggested that this resulted in some negative ecological impacts. This uncontrolled development of tourism induced government intervention. Though this was initially not related to marine conservation, it can be argued that the government is less likely to have mandated the study in 1998 which eventually resulted in the establishment of the MNTP, without the presence of a tourism industry on the island. The initial intentions of the tourism and dive entrepreneurs in Gili Trawangan were not of a sustainable nature. They did not improve the environment through the exploitation of these opportunities. The role of the private sector was simply to offer goods and services which were previously not offered on the island. The government was in essence the first actor to attempt to establish sustainable practices in the tourism and dive industry through the zones designated in the MTP. However, the government failed to do so, and it was then the private sector which recognized the opportunity to use diving to improve the quality of the coral reefs on Gili Trawangan, which introduces the concept of environmental entrepreneurship in the history of Gili Trawangan Opportunity 2: Creating a collective dive industry to manage coral reefs The government was the first to react to the degradation of the coral reefs in Gili Trawangan, and formed a MTP in response. Hence, in contrast to Pemuteran, where the government had very little, if any, involvement in marine conservation in the area, the government was the first to recognize the need for this. However, as mentioned the government failed to gain the legitimacy amongst the local stakeholders to institutionalize the MTP in Gili Indah, and other actors had to take on the role of promoting marine conservation in Gili Trawangan. This task was taken on by the SATGAS together with foreign tourism entrepreneurs on the island, in the form of the GET. Three major dive operators in 2001 were responsible for founding the GET; managers from Blue Marlin Dive, Manta Dive and Big Bubble Dive. The GET was set up as a representation of all the dive shops environmental interests (personal communication: manager Trawangan Dive 15/2/2010). The dive shops recognized the detrimental effects of the blast fishing which was a major problem around 1998, as well as the effects practices of the muroami fishermen were having on the reefs. Thus, the dive shops, partially encouraged by several of their employees, SATGAS members at the time, met each other and created the GET, in order to make an agreement with the destructive fishermen and use income from diving to improve the quality of the reefs. This can be classified as a form of environmental entrepreneurship as it addresses the capturing of an opportunity, namely diving, in an environmentally relevant market failure, in which destructive fishing practices were destroying the reefs, wherein the exploitation of this opportunity alleviates the market failures and contributes to environmental improvement. Though different stakeholders place different emphasis on the two main goals of the GET, there is a general consensus that the GET was first set up to stop the destruction of the coral reefs by the fishermen, and to set a price agreement between the dive shops. The idea behind the price agreement was to encourage the cooperation between the dive operators and to remove the ruthless competition which you find in so many other places with a high concentration of dive centers (personal communication: owner Trawangan Dive and Blue Marlin Dive 17/2/2010). With cooperation, the dive operators could work together to stop the destructive fishing, implement other marine conservation projects, and eventually possibly implement land-based projects as well (personal communication: part-owner Manta Dive 19/2/2010). This collective entrepreneurial effort toward marine conservation presents a stark contrast to the separatist and individual nature of entrepreneurs in Pemuteran. The GET worked together with the SATGAS, who were responsible for negotiating an agreement with the muroami fishermen, creating two zones where the muroami fishermen are permitted to fish, marked in red in Figure 10, the rest constituting a NTZ for muroami fishermen. 73

74 Figure 10: Zoning plan for muroami fishermen (Source: Gili Eco Trust) The GET members started charging a dive-tax to their customers, and this money was used to support the SATGAS patrols of the area, and to compensate the muroami fishermen. Thus, the founders of the GET were collectively responsible for introducing the concept of environmental entrepreneurship to Gili Trawangan. The members also agreed on environmentally-friendly diving practices such as using moorings instead of dropping anchors. Hence, one could argue that they are diving sustainably. Thus, a segment, namely the diving segment, of the tourism entrepreneurs, who were initially responsible for developing tourism on the island which contributed to its degradation, went from exercising simple entrepreneurship in selling diving as a service, to exercising environmental entrepreneurship and actually contributing to improving the marine environment while selling diving and making profit. There appears to be a strong belief amongst the dive shops that usually diving as a tourism activity tends to damage the environment and deplete coral, but that in Gili Trawangan, the dive industry has been solely responsible for improving the marine environment:... if there was no divers here it would have been damaged beyond replacement years and years ago (personal communication: owner Trawangan Dive and Blue Marlin Dive 17/2/2010). This attitude very much sets the dive entrepreneurs apart from the rest of the stakeholders. Whether this is reflected in the communication and relations between the entrepreneurs in this EMPA and the other stakeholders will be explored in section 4.4. As mentioned previously, there are many different actors which have a stake in the marine environment of Gili Trawangan. The government was not successful in including all these actors during their efforts to promote marine conservation in the area, and did not gain the support they needed from the local stakeholders. The question arises whether the dive entrepreneurs were successful in doing so. How were the entrepreneurs able to gain legitimacy in the eyes of the other stakeholders involved? Were they, unlike the government, able to establish strong institutions around marine conservation in Gili Trawangan? These questions will be addressed in sections 4.4 and Opportunity 3: Introduction of Biorock to Gili Trawangan Similar to this process in Pemuteran, different individuals were responsible for the introduction and further development of Biorock technology in Gili Trawangan. An Australian Bali resident and founder of the Komodo Foundation, with the owner of Bali Diving Adventures were responsible for bringing Biorock technology into Gili Trawangan. They had both seen the technology applied in Pemuteran, where one of Bali Diving Academy shops is located. The first structure was funded by and placed in front of Vila Ombak Diving Academy, the Gili Trawangan branch of Bali Diving Academy. These two individuals were familiar with 74

75 the technology and had observed its success in a different location in Indonesia. Thus, they had information that others did not: the observed success of this technique in another place. Furthermore, they had the cognitive ability to combine this information with knowledge of Gili Trawangan s deteriorated reefs, and see potential for applying the technology in Gili Trawangan. Lastly, the owner of Bali Diving Academy also had the resources to fund this project. Hence, these two individuals combined displayed features of environmental entrepreneurs as they were responsible for exploiting the opportunity of introducing Biorock to Gili Trawangan, which essentially works toward improving the state of the environment though restoring reefs. Because the first Biorock structure was placed in front of Vila Ombak Diving Academy, which caters to guests of Vila Ombak, a large high-end resort in Trawangan, the dive community assumed that this technology was very expensive. Thus the current manager of GET, who was then a dive instructor, and her two diving instructor friends decided to use their own small salary and build their own Biorock structure. According to her their goal was to show the island that this coral restoration technique was possible without a large investment (personal communication: manager GET 11/2/2010). Hence, the second installation of Biorock was again an opportunity exploited by a number of entrepreneurs with the funds to do so. With this the concept of private sector funding in Gili Trawangan is again underlined; entrepreneurs were not only responsible for funding the SATGAS and compensation the muroami fishermen, but also for funding other marine environmental initiatives like Biorock. From this point onwards the GET manager took over the development of Biorock in Gili Trawangan. She pushed forward the entire process of developing Biorock in Gili Trawangan (personal communication: manager Trawangan Dive 15/2/2010). She organized the fourth Biorock workshop on Gili Trawangan; she collected money from restaurants, hotels and dive operators, and the workshop took place November 2006, during which 35 participants built 10 new Biorock structures. A year later the Biorock scientists wanted to organize another workshop because a PADI Biorock Specialty (a specialty in a PADI dive course) had been developed by Bali Diving Academy, and more people wanted to learn the technique. Since Pemuteran did not have sufficient funds to organize another workshop, and the GET had started to establish good relations with the university in Mataram, the GET and GCRA decided to hold the workshop in Gili Trawangan (personal communication: manager GET 11/2/2010). During this workshop which took place December 2008, Biorock was used to create anti-erosion reefs, since erosion is considered a real problem as the beach is disappearing fast (Segre, 2010a). Now, most of the Biorock structures are between Vila Ombak and Blue Marlin, the stretch along the south eastern coast on which most of the dive operators are situated. Private sponsors order new Biorock structures from the GET and pay for them to be installed. When structures are put in during workshops the sponsors pay a little more, but they gain free promotion from being part of the workshops, and earn money from the participants making use of their services, be it a dive operator or a hotel. It s a win-win situation for us (personal communication: manager GET 11/2/2010). Each business powers their own Biorock structure and all but one of the dive shops own a Biorock structure. They are generally placed in front of the dive shops that have funded them, and they supply the power to the structure from their dive operation. Hence, in Gili Trawangan, the dive industry as a whole have each invested in a technology for restoring coral. Biorock went from a technology pushed as it were by an individual entrepreneur, to one widely applied by the dive industry. Thus, almost all the dive operators, at face value, are also environmental entrepreneurs through their investment in Biorock. It is through Biorock that the current GET manager got further involved in marine conservation in Gili Trawangan. She became the part-time manager of GET in 2007, while she was still managing one of the dive shops. This turned into a full-time position in June 2009, which has expanded from a function solely responsible for marine conservation into one that covers all aspects of environmental sustainability, land and sea. This dive entrepreneur has been responsible for establishing Biorock as a widely applied coral restoration technique on the island, as well as for other environmental initiatives which will be expanded upon in section 4.5. How did she, together with the rest of the entrepreneurs in the 75

76 GET promote marine conservation in Gili Trawangan through Biorock and other initiatives? Did these environmental initiatives gain legitimacy, and what were their roles in institutionalizing marine conservation in Gili Trawangan? The questions will be explored in sections 4.4 and 4.5 respectively Reflection The E, or entrepreneur, in the EMPA in Gili Trawangan weaves through the development of marine conservation as a red thread, but the nature of private sector involvement appears to be quite different from what we encountered in Pemuteran. Entrepreneurs were not the actors who initially recognized the need for marine conservation. The initial unabated development of the private sector in Gili Trawangan induced governmental recognition of this need, and the public sector attempted to establish a MTP. When this failed it was a group of local entrepreneurs who initiated community-based coral reef management, marking the first entrepreneurial involvement in marine conservation. From this point onwards a group of foreign dive entrepreneurs got involved as they saw the opportunity to form an alliance and funded marine conservation though diving, illustrating the private-sector led nature of this MPA. This also underlines the collective nature of private sector involvement in this EMPA. Recently this appears to have changed, as the role of an individual entrepreneur who manages the GET became an increasingly essential factor driving the development of this EMPA in later years. Thus, the role of the private sector in promoting marine conservation in Gili Trawangan appears to have changed over time. Now that the private sector actors, or entrepreneurs, involved have been described, the following step is to describe the process through which the private actors have been able to promote marine conservation in Pemuteran. In the process of exploiting the above-mentioned opportunities there have been numerous interactions between the entrepreneurs and the other stakeholders involved in Gili Trawangan, through which the private sector has built up social capital and induced cooperation from the other actors in the sustainable use of coral reefs, the natural resource they share with these actors. There are many actors involved with power and control over the marine resources on the island, resulting in networked sites of power. Hence it is important to look at the interactions between the entrepreneurs and the different actors involved, in order to determine whether and how they were able to legitimize themselves with respect to the other actors. This will be analyzed in the following section. 4.4 Social capital of the entrepreneurs in Gili Trawangan In this chapter the linkages, or relations, between the private actors, and the other actors in this networked EMPA will be studied. The way that the private actors have used relations in order to build up social capital, and consequentially induce collective action will be evaluated. This will be done by analyzing the network of relations between the entrepreneurs and the rest of the stakeholders in EMPA, and the tools the entrepreneurs have used to build trust an create good relations with the other actors. This will be done for the five relations most relevant in this EMPA: the relations between the entrepreneurs themselves, those between the private sector and the local community, the private sector and the fishermen, those between the entrepreneurs and the SATGAS, and those between the private sector and public sector. To guide the reader through these five relations, the figure 11 presents the network of relations between these actors when the GET was set up, and now: 76

77 Figure 11: Network diagram displaying communicative relations in the EMPA in 2001 and Interrelations in the private sector: G.E.T The GET was partially set up to improve the relations between the dive shops, a goal which they have appeared to achieve through a price agreement set in However, since 2001 many things have changed within the private sector in Gili Trawangan, which have altered these relations once again. The relations between the dive shops were very poor before the GET formed: people would look up if a diver from another dive operator walked into another (personal communication: part-owner Manta Dive 19/2/2010). This was mainly because they were undercutting each other with prices. On islands with many dive shops like Honduras and Koh Tao, there tends to be a lot of competition resulting in price wars and negative relations. This emphasizes the important role competition has in forming relations between entrepreneurs, which was introduced in chapter 3. The existence of competition can prevent cooperation between entrepreneurs and collective action toward sustainable behavior. Hence, the founders of the GET saw the need to create a price agreement. According to all the dive operators interviewed this price agreement is the sole reason why the dive shops work together, instead of against each other, today. Though the dive operators in Pemuteran also claim there is little competition within the industry, Gili Trawangan differs in that there is actually a formal agreement in place to ensure this. Some dive operators go as far as saying a sense of community can be found amongst the dive operators in Gili Trawangan, thanks to the price agreement made (personal communication: manager Trawangan Dive 15/2/2010). Tom Goreau of the GCRA has also claimed that this is the reason why the island hosts so many Biorock structures successfully; because it takes a community effort to place new structures and host workshops, and seemingly, there is a dive community on Gili Trawangan. Community-involvement is encouraged during the building and sinking of Biorock structures by the manager of the GET manager who spreads the word. In February, an artist who designed the structure, the GET manager, the two GET volunteers, two students doing research on the island, and one of the dive operator employees helped out the building of the structure in the volleyball court of Big Bubble Dive, from where the GET manager operates. Figure 12: Building a new Biorock structure 77

78 The sinking was carried out by about 20 people. This process entailed carrying it to a boat, supplied by one of the dive operators, travelling to the North of the island, hoisting the structure in the water, and 5 people diving to establish the structure underwater. This group of people was made up of the GET manager and volunteers, some foreign dive employees, the local dive employees from Big Bubble Dive, the DKP representative and a few tourists (personal communication: sinking Biorock structure 22/2/2010). It was a prime example of a situation in which the collective nature of the dive industry in Gili Trawangan was displayed. This is an important factor in which this EMPA contrasts with the one in Pemuteran; the private sector in Gili Trawangan works collectively in their promotion of marine conservation, which is supported by formal membership in the GET, whilst in Pemuteran relations within the dive sector are informal and not organized in a formal structure and thus efforts toward marine conservation are separated. The GET has expanded its membership and now includes some non-dive industry members of the private sector such Tri Nah Nog Irish Bar, Sama Sama restaurant, and Vila Ombak (personal communication: owner Sama Sama restaurant 12/2/2010 and member SATGAS). The members meet once a week at the GET meetings, chaired by the manager of the GET. During these meetings the chair shares with the members what the GET has been doing, and what they plan to do in the coming month. The floor is then opened to any points which members wish to discuss (personal communication: Gili Eco Trust meeting 10/2/2010). Some of the dive operators question the participation and inclusiveness of these meetings. The monthly meetings have been described as meetings in which the dive shops are told what the GET are trying to achieve, and them asking for money to do so (personal communication: manager Buddha Dive 16/2/2010). Though the GET was set up to encourage the cooperation of the dive shops in Gili Trawangan, decision-making no longer appears to be very participatory with dive operators claiming that things will be put open for discussion during GET meetings, but in the end the GET manager will decide what action will be taken (personal communication: manager Trawangan Dive 15/2/2010). In addition to this, management of the dive operators generally does not know the details about the zoning of the fishermen s agreement (personal communication: manager Trawangan Dive 15/2/2010). The dive boats do not know details about the types of fishermen which can and cannot fish. The GET manager claims that they call her when they see line fishing, or angling, whilst this form of fishing is actually permitted in the agreement (personal communication: manager GET 11/2/2010). Thus, the managers are not well informed at all, which brings forward the question of why. Some of the dive operators claim that the GET does not give a lot of information about the fishing regulations and so forth, which again suggests that the GET is no longer very participatory. On the other hand, one could argue that this lack of awareness can be accountable to the high turnover of managers in some the dive operators (personal communication: part-owner Manta Dive 19/2/2010). Regardless of whether this is because of lack of inclusiveness on the GET s part, or lack of awareness due to high turnover of the dive operators, there is a clear difference regarding level of awareness between those that were in Gili Trawangan during the founding of the GET, and the foreign management employees in the dive operators which represent the GET today Private sector and local community The background of the Gili Trawangan locals as poor fishermen or farmers, with a limited educational background, did not prevent them from acquiring tourism as their alternative or new major livelihood. According to a local government survey in 1999, more than 70% of the local population are engaged in tourism directly (Soemodinoto and Wong, 2004). However, it is important to mention here that in Gili Trawangan, it is the non-local entrepreneurs dominate tourism. Soemodinoto and Wong (2004) suggest that this is partially attributable to Gili Trawangan having different ethnic groups without a strong social cohesion, i.e. weak social structure, weak social ties and no core community, which is necessary to prevent the invasion of outsiders taking business away from the locals. They also argue that the changing nature of tourism in terms of increased tourist demands and services complexities, coupled by local weaknesses in terms of skills and capital, has caused the islanders to be less successful in their business, and that they were gradually side-lined from tourism. Hence, as in Pemuteran, with the foreign tourism entrepreneurs dominating the tourism economy, it has been an 78

79 important challenge to build a sense of trust amongst the local community in order to successfully induce collective action toward protection of the reefs. Additionally, there are many people from outside Gili Trawangan, mainly Lombok, on the island for temporary work in construction, and also to work in the tourism facilities. According to one of the dive operators, roughly 90% of the staff are from Lombok (personal communication: manager Dream Divers 15/2/2010). This high percentage of non-trawangan locals makes it more difficult to promote marine conservation to the local community, as outsiders are less likely to feel responsible for the island s environmental sustainability. The rest of this section will describe what the private sector did in order to reach the local community, and gain their legitimacy. Gili Indah island village has one Kepala Desa, or village head, who governs the three islands. The three islands have their own Kepala Dusun, responsible for their one island. The current Kepala Desa as well as Gili Trawangan s Kepala Dusun were both initially in the SATGAS. This illustrates how small the community of Gili Indah really is. What is interesting about Gili Trawangan, and very relevant to the network of relations in the EMPA, is traditional muroami fishermen do not live on Gili Trawangan, only a few anglers (Satria et al., 2006b). Hence, the Gili Trawangan community is dominated by tourism, and it is essentially through this common area that the foreign tourism entrepreneurs communicate with the local community. The dive shops themselves do not have a lot of, if any, contact with the village government. In fact, they do not have much contact with the locals in general, except those working for them, or the owners of the land on which the dive shops are situated (personal communication: manager Buddha Dive 16/2/2010). Like in Pemuteran, the dive shops have employed local fishermen in their dive shops. If there is anything of relevance the dive operators discuss it with these people, who relay it to the relevant people in the village government (personal communication: owner Trawangan Dive and Blue Marlin Dive 17/2/2010). Furthermore, the dive shops do not have regular meetings with the head of the village (personal communication: owner Sama Sama restaurant 12/2/2010 and member SATGAS). Hence, there is a clear division between the businesses and the local village, which appears to be more defined than in Pemuteran where a good relationship between the village and private sector was upheld through the local tourism pioneer. However, in the last two years the GET manager appears to have taken on the role as sole communicator with the local community, similar to the way the tourism pioneer did in Pemuteran. The manager of GET learnt Indonesian in order to be able to communicate with the locals (Segre, 2010b). One of the most relevant things she did to gain legitimacy as the GET manager is to take a full-time function and no longer teach diving on the side. This was done in an attempt to shed the image of the GET as representing dive operators, i.e. the private sector s, interests and create an image as an organization dedicated to the environmental interests of Gili Trawangan as a whole. It is very clear that since there is a fulltime manager in the GET, the communication between the GET and the village has become more frequent, as opposed to when the GET was first set up and all communication went via the SATGAS. The manager has done several things in order to establish trust amongst a number of key local actors. The cooperasi is the local transportation monopoly and are an influential local stakeholder. They manage all the modes of the transport on the island; the boats, horse carts for tourists, horse carts for transporting materials, and more. Any boat that comes in to the island is required to pay the cooperasi. The manager of GET has established good relations with them. The cooperasi support her, and sometimes even contribute around Rp. 200,000 per month to the GET. When she goes to speak to the cooperasi leader, he is happy to speak to her, and he has given her permission to put up a sign in the harbor which describes sustainable handling of the coral and turtles for the tourists and boat captains (personal communication: manager GET 11/2/2010): 79

80 Figure 13: GET manager preparing sign The GET manager has visited every business and many private homes to raise awareness about garbage. She encouraged residents to use the garbage dump and not burn garbage in gardens, and explained the health hazards associated with this (Segre, 2010b). She has also started teaching marine ecology at the local school to increase environmental awareness amongst the younger generation of Gili Trawangan. She has planted a garden, a vetiver grass nursery, at the school, where she and the children will nurse the plants before moving them to the hill of Gili Trawangan where they can exercise their anti-erosion function. The GET also organizes a Clean Up Day, during which the manager of GET explains to the children the importance of disposing of rubbish in designated places, for the future of the island. School children, local residents and tourists are encouraged to join in picking up trash. This too has been organized to increase local awareness. Biorock plays a significant role in the establishment of support from local businesses, and creating awareness. The technology itself has created a physical structure for the locals to see, and to generate marine conservation awareness amongst these. Furthermore, the Biorock workshops attract participants to Gili Trawangan, which generates income for the local businesses, and serves as a promotional tool for the island (personal communication: manager Trawangan Dive 15/2/2010). When it comes to non-gili Trawangan Indonesian residents working in Gili Trawangan, neither the dive operators, nor the GET has put in any effort to establish relations, due to the temporary nature of their stay. However, the head of the three islands believes it is important that the non-local public working in Trawangan need to be educated about conservation because most of them do not know about this (personal communication: Kepala Desa 17/2/2010) Private sector and fishing community The locals that are not involved in tourism, namely the fishermen, must be divided into the anglers from Gili Trawangan who have nothing to do with the EMPA or the zoning agreement, and the muroami fishermen who come from Gili Air. As was introduced in the previous section, the families in Gili Indah are very large, and everyone is related. There are only really three families on the whole island of Gili Trawangan. It is thus very likely that a fisherman will have family members employed in the dive industry (personal communication: manager Trawangan Dive 15/2/2010). This section will discuss the relations between the private sector and the muroami fishermen. None of the dive shops communicate with the fishermen. They claim that the GET does this, through the SATGAS. One of the dive operators states that it is better to stay away from the fishermen as a diver from a foreign country, and that someone else negotiates with them (personal communication: manager Vila Ombak Diving Academy). This has been the case from day one. Unlike in Pemuteran, where the dive pioneer represents the dive industry in negotiations with the fishermen, there is no representative from the dive industry who has established good relations with the fishermen. In fact, there appears to be no relation at all between these two stakeholder groups. The dive industry, aside from contributing money 80