The Request alleges that the Project is causing serious environmental and social harm to the community. It claims the Project is exacerbating unresolved land and boundary disputes, and delayed recognition of the community as Indigenous Peoples. The Project aims to incentivize reduced deforestation and forest degradation in East Kalimantan, through payments for verified emission reductions (ERs) and to ensure distribution of these payments under an agreed Benefit Sharing Plan (BSP).
The community identifies as Indigenous Peoples and considers that it meets the criteria under the relevant Bank’s safeguard policy. The Request alleges that the Project fails to recognize the community’s land rights and their customary land use, undermining cultural practices such as forest rituals and rotational farming resulting in livelihood losses. It further alleges that the Project “replaces Indigenous-led forest governance with a market-based, commercial-actor-driven model,” commodifying forests as carbon assets and marginalizing Indigenous stewardship systems “under the guise of sustainable management.” The Request claims the BSP “entrenches structural discrimination” by denying direct access to benefits, as ‘reward allocations’ are reserved for recognized Indigenous communities and ‘performance allocations’ require partnerships with government or concession holders.
The Request states that the consultations for the Project were “inadequate, misleading, coercive, and discriminatory from the outset.” It adds that the consultations misrepresented the Free Prior Informed Consent (FPIC) process as it pertained to their community. The Request claims the Project makes minimal effort to ensure that women’s participation in consultations, benefit-sharing, or grievance processes reflect their needs and cultural roles. Finally, the Request states that since raising concerns, the community has faced “veiled threats”, coercion and retaliation rather than meaningful engagement, despite having notified the Bank.
On December 23, 2025, the Panel registered the Request for Inspection and received the Management’s Response on February 11, 2026. In its Response, Management recognized weaknesses and potential non-compliances in the original BSP, and initiated a BSP revision, as well as additional consultations. Management also acknowledged that initial consultations were insufficient and that communities were inadequately informed about the Project and its objective. Management ensured that the Project increased its efforts to engage and consult with villages and community stakeholders, particularly during the revision of the BSP and the socialization of the revised BSP and the Final Payment. Management indicated that it took the allegation of retaliation seriously, it raised these concerns with the authorities at various levels. A Panel team visited Indonesia from February 16 to 27, 2026, to assess the eligibility of the Requesters, the issues raised in the Request, and to determine whether it would recommend an investigation to the Board.
On March 17, 2026, the Panel submitted to the Board its Report and Recommendation. In its report, the Panel noted that the Request for Inspection meets all the technical eligibility criteria set forth in the Panel Resolution. However, the Panel did not recommend an investigation as it is satisfied that Management has dealt appropriately with those allegations of harm that are plausibly linked to the Project – including the allegations of institutionalized discrimination and exclusion caused by implementation of the BSP, inadequate consultations, and fear of retaliation against the community for its decision not to engage with the Project – and that these allegations have been or are being addressed. The Panel also determined that the Requesters’ other allegations – the delays in the MHA recognition process, the disregard of the customary right to occupy, use, and manage ancestral lands, and the allegation of gender-based violence, exclusion, and discrimination against women – were not be plausibly linked to the Project. The Panel further noted that the Requesters are not precluded from submitting another Request for Inspection based on new evidence or circumstance not known at the time of this current Request.
On March 31, 2026, the Board approved the Panel’s recommendation not to investigate the Project.
