Indigenous groups push back against Indonesia’s conservation law in court

Nature & Climate Perspective

**Legal uncertainty surrounding customary land tenure poses immediate risks to the ecological integrity and permanence of Indonesian forest and Blue Carbon ecosystems. **

• Diminished recognition of customary tenure undermines proven Indigenous-led biodiversity preservation across critical tropical forest habitats.
• Contested territorial designations threaten the baseline carbon sequestration dynamics and carbon stock stability within national LULUCF accounting frameworks.
• Fragmented conservation enforcement without local stewardship increases vulnerability to illegal encroachment, degradation, and loss of long-term environmental stability.

Market & Policy Outlook

**The constitutional challenge exposes significant compliance gaps with ICVCM Core Carbon Principles on social safeguards, threatening Indonesian crediting eligibility across international carbon markets. **

• Potential circumvention of Free, Prior, and Informed Consent (FPIC) directly breaches the ICVCM Core Carbon Principles (CCPs) safeguard requirements, risking market discounts and loss of CCP-tagging for Indonesian nature-based units.
• Regulatory instability dampens institutional investor confidence and creates legal friction for sovereign authorizations of ITMOs under Article 6.2 and Article 6.4 crediting pipelines.
• Corporate buyers targeting Scope 3 supply chain interventions or SBTi-aligned voluntary offsets face severe reputational and integrity risks when sourcing from contested jurisdictional jurisdictions.