pdf, 1597k - Marine Conservation Agreements

Ecological modernization ofmarine conservationA case study of two entrepreneurial marineprotected areas in IndonesiaMariska BottemaMSc ThesisJuly 2010Wageningen University, Wageningen

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

Wageningen University – Department of Environmental SciencesEnvironmental Policy GroupEcological modernization of marineconservationA case study of two entrepreneurial marine protectedareas in IndonesiaMariska BottemaMSc thesisMaster Environmental SciencesSupervisor:Dr. Simon BushEnvironmental Policy (ENP)3

AcknowledgementsThere are quite a few people I need to thank for their contribution and help throughout theprocess of writing this thesis.I want to begin with mentioning a few people that were invaluable to me before and during myfield work in Indonesia. First of all a big thank you goes to Tom Goreau for his instantenthusiasm and for the initial introduction to the projects in Bali and Lombok. I want to thankNara for welcoming me to Pemuteran, helping me find a place to stay and making me feelright at home. A special thank you goes out to Komang who was kind and patient enough todrive me around on his scooter, introduce me to interviewees from the village, and even offerhis 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 tolend 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, takingthe time to speak to me and leading me to the countless people in Trawangan who were kindenough to share their thoughts with me. Also, a thank you goes out to fellow researcher Edfor keeping me company between all the holiday-goers! Of course, I cannot forget to thankmy sister Tamar for patiently listening to my daily telephone reports on my adventures in thefield.Naturally I wish to thank Simon Bush, my supervisor at Wageningen University for hisvaluable advice and support throughout the entire research process. His lasting enthusiasmabout 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 thisentire process. I want to thank my parents who have been supportive and enthusiastic aboutmy thesis and Tamar for helping me out whenever I needed it. Lastly, a thank you goes out tomy friends in Wageningen and Den Haag, who have reminded me throughout the entireprocess how lucky I am for being able to go to some of the most beautiful places in the worldfor my master thesis!7

Table of Contents1 Introduction ........................................................................................................................... 131.1 Problem Statement........................................................................................................ 131.2 Objective ....................................................................................................................... 151.3 Marine conservation policy in Indonesia: the role of the state ...................................... 161.4 Private sector involvement in marine conservation: what is known? ............................ 191.5 Research methods and techniques............................................................................... 231.5.1 Case study ............................................................................................................. 231.5.2 Case selection: research sites ............................................................................... 241.5.3 Data collection: sources and methods ................................................................... 251.5.4 Limitations .............................................................................................................. 261.6 Outline of thesis............................................................................................................. 272 Theoretical Framework ......................................................................................................... 282.1 Introduction .................................................................................................................... 282.2 Ecological modernization .............................................................................................. 282.3 Shifts in ocean and coastal governance: increasing role of the private sector ............. 302.4 Entrepreneurship as a field of research ........................................................................ 332.5 Novel forms of entrepreneurship ................................................................................... 352.6 Social capital in entrepreneurship ................................................................................. 362.7 Institutionalization of entrepreneurship ......................................................................... 392.9 Framework for analysis ................................................................................................. 423 Pemuteran ............................................................................................................................ 433.1 Introduction .................................................................................................................... 433.2 History of fishing, tourism and marine conservation in Pemuteran ............................... 433.3 The „E‟ in the EMPA in Pemuteran................................................................................ 453.3.1 Opportunity 1: Developing tourism in Pemuteran .................................................. 453.3.2 Opportunity 2: Developing a sustainable diving industry in Pemuteran bay ......... 473.3.3 Opportunity 3: Adding value to the reef with Biorock ............................................. 493.3.4 Reflection ............................................................................................................... 513.4 Social capital of the entrepreneurs in Pemuteran ......................................................... 513.4.1 Interrelations in the private sector: dive operators and dive operators .................. 523.4.2 Private sector and local community ....................................................................... 533.4.3 Private sector and fishing community .................................................................... 553.4.4 Private sector and public sector ............................................................................. 573.4.4 Reflection ............................................................................................................... 573.5 Institutionalization of the EMPA .................................................................................... 583.5.1 Alteration of fishing industry norms: a ban and a No Take Zone .......................... 583.5.2 Privately funded enforcement: Pecalan Laut ......................................................... 603.5.3 Biorock ................................................................................................................... 623.5.4 Private sector projects ........................................................................................... 633.5.5 Reflection ............................................................................................................... 653.6 Conclusion ..................................................................................................................... 664 Gili Trawangan...................................................................................................................... 684.1 Introduction .................................................................................................................... 684.2 History of fishing, tourism and marine conservation in Gili Trawangan ........................ 684.3 The „E‟ in the EMPA in Gili Trawangan ......................................................................... 724.3.1 Opportunity 1: Developing tourism in Gili Trawangan ........................................... 724.3.2 Opportunity 2: Creating a collective dive industry to manage coral reefs ............. 734.3.3 Opportunity 3: Introduction of Biorock to Gili Trawangan ...................................... 744.3.4 Reflection ............................................................................................................... 769

4.4 Social capital of the entrepreneurs in Gili Trawangan .................................................. 764.4.1 Interrelations in the private sector: G.E.T .............................................................. 774.4.2 Private sector and local community ....................................................................... 784.4.3 Private sector and fishing community .................................................................... 804.4.4 Private sector and local security task force ........................................................... 814.4.5 Private sector and public sector ............................................................................. 824.4.6 Reflection ............................................................................................................... 834.5 Institutionalization of the EMPA .................................................................................... 844.5.1 Fishing agreement based on local ruling: Awig-awig ............................................ 844.5.2 Privately funded enforcement: SATGAS ............................................................... 854.5.3 Private sector alliance: Gili Eco Trust .................................................................... 874.5.4 Biorock ................................................................................................................... 894.5.7 Reflection ............................................................................................................... 914.6 Conclusion ..................................................................................................................... 925 Discussion ............................................................................................................................ 945.1 Introduction .................................................................................................................... 945.2 Entrepreneurship ........................................................................................................... 945.2.1 Exploitation of entrepreneurial opportunities ......................................................... 945.2.2 Dependence on individuals in EMPAs ................................................................... 955.2.3 Evaluating the concept of entrepreneurship .......................................................... 955.3 Social Capital ................................................................................................................ 965.3.1 Competition and collectivity within the private sector ............................................ 965.3.2 Relations with initial resource owners .................................................................... 975.3.3 The social value of Biorock .................................................................................... 985.3.4 The role of funding in EMPAs ................................................................................ 985.3.5 Evaluating the concept of social capital ................................................................. 995.4 Institutionalization ........................................................................................................ 1005.4.1 Combining new institutions with existing traditional institutions .......................... 1005.4.2 State support: also important in EMPAs? ............................................................ 1005.4.3 The institutional role of Biorock ............................................................................ 1015.4.4 Territorialization of the coral reefs ....................................................................... 1025.4.5 Evaluating the concept of institutionalization ....................................................... 1035.5 Analyzing EMPAs through the eyes of ecological modernization ............................... 1036 Conclusions and Recommendations .................................................................................. 105References ............................................................................................................................ 109Appendix ................................................................................................................................ 115Appendix 1: Interview List ................................................................................................. 11510

List of tables and figuresTablesTable 1: Existing EMPAs p.21FiguresFigure 1: Coral Triangle Region p.24Figure 2: Map of case study sites p.25Figure 3: Framework for analysis p.33Figure 4: Map of Pemuteran p.43Figure 5: Map of „Kebun Chris‟ with marine area use rules for the public p.48Figure 6: Swimming and Snorkeling Rules p.50Figure 7: Network diagram displaying communicative relations in the EMPA p.52Figure 8: Biorock Centre and Karang Lestari Rules sign p.64Figure 9: Map of Gili Indah with dive sites p.68Figure 10: Zoning plan for muroami fishermen p.74Figure 11: Network diagram displaying communicative relations in the EMPA in 2001 and 2010 p.77Figure 12: Building a new Biorock structure p.77Figure 13: GET manager preparing sign p.8011

List of acronymsBKKPNBKSDABRFCTIEMPAEUGETGCRAHMMRKRISMONLBRGLMMAMFMFSOMTPMMAFMPAMCANCANGONTZSATGASTNCWWFBalai Kawasan Konservasi Perairan Nasional (National Institute for AquaticConservation Areas)Balai Konservasi Sumberdaya Alam (Agency for Natural ResourcesConservation)Bali Rehabilitation FundCoral Triangle InitiativeEntrepreneurial Marine Protected AreaEuropean UnionGili Eco TrustGlobal Coral Reef AllianceHotel Managed Marine ResortKrisis Monitair (Asian economic crisis)Lombok Barat Regency GovernmentLocally Managed Marine AreaMinistry for ForestryMarine Fisheries Service OfficeMarine Tourism ParkMinistry for Marine Affairs and FisheriesMarine Protected AreaMarine Conservation AreaNatural Conservation AreaNon-Governmental OrganizationNo Take ZoneSatuan Tugas (security task force)The Nature ConservancyWorld Wildlife Fund12

1 Introduction1.1 Problem StatementCoral reef ecosystems are complex and diverse, and they have a number of very importantfunctions. They support an incredible diversity of marine life (Bell et al., 2006). Moreover, theyprovide ecological services in the form of storm and flood protection, but are also the sourceof many socio-economic benefits (Bell et al., 2006; Yeemin et al., 2006). Coral reefs arefundamental to the sustainable development of many coastal communities in tropicaldeveloping countries. They provide food and minerals to these communities, income to localfisheries, as well as income from tourism-related activities in and around these reefs (Bell etal., 2006; Svensson et al., 2009). Since in many cases a large percentage of the proteinintake of these coastal communities comes from fish, and many coastal communities dependon fishing and tourism for their livelihood, dependence on healthy reefs can be fairly high (Bellet al., 2006).Unfortunately surveys of the ecological status of coral reefs have indicated the ongoingdegradation of these ecosystems; they are highly threatened today and are in declineworldwide (Bell et al., 2006; Clifton, 2003). Many complex causes exist for what is sometimesreferred to as this „coral reef crisis‟ but there is a general consensus that there are two maincategories of pressure on these ecosystems; global-scale climatic change and local-scaleimpacts (Bell et al., 2006). Local impacts stem from natural phenomena such as storms, aswell 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 riskfrom pressure arising from human activity (Clifton, 2003). A number of the human impactswhich 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 andsediment loads in the ocean; industrial effluents; modification of habitat through coastaldevelopment 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 andfishing-related activities (Clifton, 2003).An important tool currently used in conventional marine biodiversity and fisheriesmanagement is conservation through Marine Protected Areas (MPAs) (WSSD, 2005). Theneed for more MPAs has been increasingly recognized in the past decade, and has been putforward 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 increasingperceived need and interest in coral reef restoration as a supplementary approach toconservation (Rinkevich, 2005; Spurgeon et al., 2000). The normative goal of MPAs isconservation, or the preservation, of original habitats. Hence, conservation biology places itsmain focus on „passive‟ measures, allowing natural processes to mitigate impacts, withminimal human interference (Rinkevich, 2005). However, many reefs are too degraded toallow the recovery of the coral, fish, and invertebrates to former levels due to the fact that thequality of the habitat is so badly degraded that reefs have lost most of their carrying capacityfor 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 increasingnumber of coral restoration methods (Kojis et al., 2001). Until recently coral restoration wasnot widely accepted as a management option. The topic is a controversial one due to its highcost 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 morewidely employed on a small scale, with restoration ecology slowly developing into a newscientific discipline in environmental science (Rinkevich, 2005).As mentioned above, there are numerous approaches to coral restoration. Though directcoral transportation is still the most frequently applied method, other novel methods arecoming to the foreground (Rinkevich, 2005). Tom Goreau and Wolf Hilbertz of the GlobalCoral Reef Alliance (GCRA), strong proponents for using coral restoration as a tool to fight13

coral reef degradation, developed a new method of coral restoration referred to as Biorocktechnology; the GCRA‟s Biorock Ecosystem Restoration technology uses low voltagecurrents to grow limestone rock on steel structures in the sea (Goreau et al., 2005). Projectsusing 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 aboutthis type of method is the dependency on initial investments in the materials needed for thistechnology. Without sufficient funding this technology cannot be implemented. Herein lies oneof the limiting factors of such a method; its inherent dependency on investment. Until now nogovernment or large funding agency has supported meaningful restoration efforts (Goreau etal., 2008). With governments‟ disinterest in investing in this type of reef restoration, and thelimitations 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 beensuccessfully implemented, how will the healthy reef be maintained?The emergence of novel types of MPAs could potentially present part of the solution. Themajority of MPAs in South-East Asia, as well as the rest of the world, have been reported tofail in a number of different ways; the failure to meet objectives, being listed as a marinereserve but not succeeding in implementing management, or lying dormant at one of thedevelopment stages of an MPA. One of the major reasons for these failures has been arguedto be the lack of long-term funding for the management costs of these parks, which results inthe failure of legal enforcement of the protection of these parks (Svensson et al., 2009). Aspart of an attempt to approach this problem, there has recently been a transformationobservable in the governance of MPAs, with the increasing presence of actors from theprivate sector involved in the governance of MPAs. The private sector, supported throughtourism, can offer a source of revenue. Svensson et al. (2009) argue that this enables MPAsto become self-financing, establishing a „truly successful and economically sustainable MPA,especially in developing countries‟ (Svensson et al., 2009:72). These MPAs are believed tohave been formed due to government failure to satisfy public demand for nature conservation,growing societal interest in biodiversity conservation and the rapidly expanding ecotourismindustry. The Durban Action Plan from the World Parks Congress in 2003, called on theprivate sector to „financially support the strategic expansion of the global network of protectedareas‟ and goes further to state that tourism can provide economic benefits and opportunitiesfor communities and create awareness and greater knowledge the natural heritage of humankind (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 diveresorts for example, are acknowledged as full partners in the planning and management ofMPAs (Colwell, 1997). Hence they provide primary stewardship for these coral resources, aswell as economic benefits. A small number of existing examples can be found in which acombination of private actors, park authorities and NGOs have enclosed a marine area andchannel funding to run conservation activities; Van Phong Bay, Vietnam, which hosts a HotelManaged Marine Reserve; Chumbe Island Coral Park, a privately managed MPA inTanzania; Sugud Islands Marine Conservation Area in Malaysia managed by a privatemanagement company called Reef Guardian; and Bonaire Marine Park managed by an NGOauthority 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 willultimately evolve into some „form of hybrid MPA with increased partnership among privatestewards, NGOs and governments‟ (Colwell, 1999: 221).Currently the governance of privately managed MPAs, including EMPAs, is still widelyundocumented and insufficiently researched (Svensson et al., 2009). One of the main issuesfor effective MPA implementation is using appropriate governance arrangements to determinerules for the access and inclusion of certain actors (Pomeroy et al., 2010). MPAs come indifferent 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 formedthrough different processes; some are formed from the top down, thus by the state, andothers from the bottom up, i.e. by local communities. As a result, a number of differentgovernance modes for MPAs have been applied to date: centralized or decentralized, comanagementor community-based (Jentoft et al., 2007). In EMPA‟s a new group of actors are14

involved, namely entrepreneurs, and thus the governance modes of these types of MPAs willdiffer from those which involve other actors.According to Jameson et al. (2002: 1180) „the usefulness of appropriately sized, wellmanagedMPAs is not in question. What requires closer scrutiny is the institutional andcommunity capacity necessary for effective MPA management to occur‟. Hence, the successor failure of MPAs relies on their design as a governing system. In terms of the governance ofEMPAs, 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 functionsuccessfully, and to the different forms EMPAs may take in different settings (De Groot andBush, 2010). Colwell (1999) provides a general framework with the main functions of EMPAsbut he does not explore further into the characteristics of EMPAs, the perils and promiseswhich 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 ofthe entrepreneurs, which is what makes these MPAs different from generic MPAs, in theseEMPAs are, and how they are able to steer the development of EMPAs. How do these actorsgain legitimacy for themselves, and actually create new institutional arrangements to steermarine conservation?The Yayasasn Karang Lestari coral restoration project in Pemuteran, North Bali and themarine tourism park in Gili Trawangan, Lombok are two MPAs which are funded byindividuals from the private sector, and can therefore be presented as EMPAs. What isinteresting about these projects is that both EMPAs make use of Biorock technology and thusappear to be financing some degree of restoration and not just conservation, as would be thecase in an EMPA as defined by Colwell, thereby presenting a new approach to fighting thedegradation of coral reefs. The EMPAs control the access to the reefs through the formulationof guiding principles and the creation of institutions. Furthermore, these EMPAs include anumber of different actors making the governance of the area a complex process with a largespectrum of social interactions, negotiations, conflict and decision-making. Though it is knownthat it was entrepreneurs that initiated these projects, little is known about what makes ordefines an entrepreneurial approach to conservation and restoration, and the outcome of theinstitutional arrangements formed around these new access regimes and controlmechanisms.1.2 ObjectiveThis thesis aims to analyze the potential role of the private sector in creating durableconservation and restoration agreements to protect coral reefs, by investigating the socialprocesses which shaped the EMPA in Pemuteran, North Bali and the EMPA in GiliTrawangan, Lombok.In both cases an individual or group of individuals from the private sector initiated the creationof a MPA in the area in response to the destruction of the reefs, and continue to fund theEMPAs. The two cases also have in common the application of Biorock restorationtechnology which in both places was initially invested in by entrepreneurs. Hence, in bothareas entrepreneurs recognized the need to conserve the area which induced the creation ofNo Take Zones (NTZs), but they also recognized the opportunity to invest in technology torestore coral, thereby adding value to the existing reefs. In these projects entrepreneursvested their own resources into the protection of the coral reefs.What are unknown, with so little research conducted in EMPAs, are the social processeswhich shape EMPAs; the ways in which the private sector is able promote conservation andrestoration in their environment. The development of the EMPAs and the institutionalarrangements through which they are managed at present, are the result of a process ofinteractions between these entrepreneurs and their environments. This process is made evenmore complex with the presence of a large number of different stakeholders which are alsoinvolved in this process. Two „success stories‟ in the Indonesian archipelago will be comparedto analyze these processes. To reach this objective three main questions will be posed.15

A logical opening to the research process is to define what entrepreneurial opportunities werethe starting points for the development of marine conservation in these areas:(1) What were the entrepreneurial opportunities exploited in the two projects, which wererelevant to the development of marine conservation?This descriptive question aims to explore what types of opportunities were directly, orindirectly, responsible for the development of marine conservation and restoration in theseareas. The opportunities and how they contributed to the development of the EMPAs will bedescribed, but also the individuals involved in this process. Who was responsible fordiscovering, evaluating and exploiting these opportunities, and what were their motivations todo so? What is it that makes these individuals entrepreneurs? Why was it these individualswho exploited these opportunities, and not the initial resource owners? Did they have accessto information to identify the opportunity, and the cognitive properties necessary to evaluatethe opportunity? Did they recognize the value that protecting, and adding value to, the reefscould 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, morespecific questions can be posed regarding how the entrepreneurs were able to exploit theseopportunities and influence their environment. Hence, the following question focuses on theprocess of how the private sector was able to exploit these opportunities, by looking at theinteractions between the private sector and their environment.(2) Through which types of processes were the entrepreneurs able to legitimizethemselves 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 theentrepreneurs and the other actors in the network which is the EMPA, and the way that theserelations have been established through the development of the EMPAs. It is important tobegin with indicating the most relevant actors involved in the EMPA and how theentrepreneurs communicate with these. What follows is the question of what interactionshave taken place between the entrepreneurs and their environment resulting in the legitimacyor lack thereof, of the entrepreneurs in the eyes of the other stakeholders: Is there equalparticipation in decision-making in the EMPA? What tools have the entrepreneurs used tobuild up trust amongst the other stakeholders? Are there conflicts between the entrepreneursand the other actors? This process of social negotiation has led to the establishment of acertain level of legitimacy for these entrepreneurs. This in turn has determined the level ofinstitutionalization of the EMPA, which leads to the last question.(3) To what extent has the private sector been able to alter or create institutions aroundmarine conservation in the two cases?This question explores a more material concept of the rules and steering mechanisms thatentrepreneurs have been able to develop through these EMPAs, as well as providing ameasure to determine to what extent they were actually successful in institutionalizing theEMPA: what institutional arrangements and organizations have formed, or altered aroundthese EMPAs? How is the management of the EMPA organized? How are other steeringmechanisms such as economic incentives organized? Are there conflicts or problems aroundgoals in terms of conflicting uses? Are these new arrangements legitimate in the eyes of theother stakeholders? How durable are they? Thus, the reader is left with a clear picture of thecurrent governance arrangements in the two areas, which has been a direct result of thepreviously mentioned social negotiation process.1.3 Marine conservation policy in Indonesia: the role of the stateDuring the New Order Period in Indonesia, the years between 1967 and 1998, naturalresource 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 wasabsent in Indonesia during this period, also in marine resource management. Accordingly, the16

local government and communities had no significant role in resource management, whilstthe 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 inresponsibilities in marine conservation: the Fisheries Law, the Living Natural ResourcesConservation Law and the Environmental Law. The Fisheries Law was characterized bystate-based fisheries conservation and management, and no articles in this lawacknowledged traditional fishing systems, though many existed. Under the Living NaturalResources Conservation Law, the central government could establish wildlife reserves andsanctuaries, and classified Natural Conservation Areas (NCAs) into three types: nationalparks, forest parks and natural tourism parks. Management of these areas was under controlof the central government, but could be delegated to individual states or privately controlledgroups. To implement NCA policy the government developed the Technical Executive Officeof the National Park Station and the Agency for Natural Resources Conservation, or BalaiKonservasi Sumberdaya Alam (BBKSDA), as a representative of the central government bothin 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 Lawstated that natural resources, on the mainland as well as in the ocean, were under stateproperty rights and were to be utilized for the people‟s welfare. Article 12 of this law allowedthe central government to transfer some authority to the local government for theimplementation of environmental management, but this transfer of authority was identified asforms of delegation or deconcentration rather that devolution (Satria et al., 2006a).Natural resource management in Indonesia changed dramatically after the fall of presidentSoeharto‟s regime. Since the fall of his regime in 1998, Indonesia experienced a dramatictransferral of power from the central government to the provinces and regencies, oftencollectively referred to as „reformasi‟ (Clifton, 2003). These changes were led by theestablishment of the Local Autonomy Law which states that as far as 12 miles from theshoreline is under provincial government authority, and within those 12 miles the first fourmiles are under the authority of the local or district government. The powers of theseauthorities include (1) exploration, exploitation, conservation and marine resourcemanagement within the authorized marine area, (2) administrative management, (3) zonemanagement, and (4) law enforcement of local regulation and central government regulationsthat have been deconcentrated to the local government (Satria and Matsuda, 2004; Satria etal., 2006b).The second important change for marine conservation came forth in the establishment of theMinistry of Marine Affairs and Fisheries (MMAF). The main duty of the MMAF, as identified inthe Presidential Decree No.177/2000, is to assist the president in conducting somegovernmental tasks in the marine and fisheries field, and to handle certain functions such asthe establishment and monitoring of the local autonomy implementation plan in maritime andfisheries fields, and the management and implementation of plans for protection of naturalresources of the seas within the 12 miles (Satria and Matsuda, 2004).There were a number of factors which prevented the local autonomy law from ensuringdecentralization of marine conservation; there was considerable institutional conflict betweenthe MF and MMAF. The MF referred to the Living Natural Resources Conservation Law andNational 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 ofNCAs in the marine environment should be given to them as marine marks are part of marineecosystems which is essentially their domain. This problem was intensified by the different,even conflicting, approaches the two ministries had toward conservation and preservation ofnatural resources (Satria et al., 2006a).Eventually a new Fisheries Law no. 31/2004 was issued entrusting the MMAF with theauthority to manage Marine Conservation Areas (MCAs), including marine reserve areas,marine national parks, marine tourism parks (MTPs) and fisheries sanctuaries, which werepreviously formally under the management of the MF. This change led to the revision of theLiving Natural Resources Conservation Law and the National Government Decree, now17

ecognizing the responsibility of the MMAF, removing some of the previously mentionedinstitutional conflicts (Satria et al., 2006a). The MMAF was given the responsibility forconservation of ecosystems, species, and genetic diversity of marine life, and this law hasdramatically 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 hashowever been a lengthy and difficult process. Research presented at the World OceanCongress 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 theMMAF, primarily because the former manages seven large national parks, and the lattermanages mostly small MPAs. The most common type of MPA in Indonesia, with 30 in total, isreferred to as the Locally Managed Marine Area (LMMA). The second and third mostcommon are Mangrove Conservation Areas, with 28 in total, and MTPs, of which there are18. The number of LMMUs has increased significantly since the issue of Law No. 27/2007which enables district authorities to develop and manage their own MPAs.Local governments have the authority to manage conservation areas in their territory. Thedetails on how a local government is to manage their conservation area is regulated throughthe MMAF. In an effort to accelerate the implementation of the local autonomy law in coastaland marine areas, the MMAF established a technical implementation unit, similar to the MF‟sBKSDA, for the management of coasts, marine areas and small islands: the Institute forAquatic Conservation Areas, or Balai Kawasan Konservasi Perairan Nasional (BBKPN),located in Kupang. This unit, inaugurated March 2008, is devoted to manage, utilize andsupervise 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 declarationapproving the Coral Triangle Initiative (CTI). „The CTI represents a unique and innovativeinternational collaboration focusing on the conservation and sustainable use of marineresources‟ (Clifton, 2009: 91). Since its announcement in 2007 the CTI has received muchpolitical support and culminated in the Regional Action Plan agreed at the World OceansCongress. Central to this agreement is the establishment of a network of MPAs. TheIndonesian president declared that Indonesia would designate 10 million hectares of MPAsacross the archipelago by 2010 and 20 million hectares by 2020 (Wootliffe, 2009). At presentIndonesia has in fact already over met this commitment.Thus, in recent years there appears to have been significant government effort to increasemarine conservation in Indonesia. Though Indonesia has already designated more than 15million hectares of MPAs, the effectiveness of these is questionable. There are numerousMPAs 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 andmanagement, MPAs cannot meet the marine and coastal conservation needs of Indonesia.Large NGOs like The Nature Conservancy (TNC) and World Wildlife Fund (WWF) have beenclosely involved in the CTI since 2003 and have been recognized as full partners in itsimplementation. Accordingly, the Indonesian government too is working with several of theseglobal 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 theresource users or enforcement by the management agencies (Jameson et al., 2002). TheTNC is currently working on designing an effective management protocol for MPAs. They areworking with the Indonesian government to design a system so that they can run a scorecardprocess to assess whether or not there is effective management in place in an MPA. Thescorecard will produce a level of effective management so that they will be able to map all theMPAs in Indonesia in terms of management effectiveness. This will help distinguish paperparks 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 alltypes of conservation areas: „We have tried to design it to be used for any type of MPA, andnot 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 the18

Indonesian government in the area of marine conservation recognizes the potential for noveltypes of MPAs, including small-scale privately-led MPAs, and aims to design the scorecardsystem so that private actors „should be able to use the same protocol to assess what leveltheir MPA is at in terms of effective management‟ (personal communication: Senior AdvisorIndonesia Marine Program TNC 18/3/2010). TNC has already started mapping 9 or 10 placeswhere private actors have been exercising marine conservation, and even suggest that, ifdeemed affective, these should be included in the network of MPAs in Indonesia workingtoward reaching the 2020 CTI goals. Hence, recognition of the potential of these novel typesof 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 slowlybeginning to appear in academic literature. The following section will discuss what has beendone so far in terms of research into these novel MPAs in which the private sector plays aleading 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 theybeen accepted as a conservation tool (Svensson et al., 2009). There are numerous privatelyowned and managed terrestrial areas all over the world which protect biologically significanthabitat. 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 wellas cultural heritage sites that it keeps under protected management and the TNC has boughtup large amounts of land in the United States with endangered resources and manages theseprivately (Riedmiller and Carter, 2000). Rocliffe (2010) argues that comparatively there hasbeen little interest in privately-led marine parks because it was always assumed that oceansare commons and can thus not be owned or leased the way terrestrial parks can.Interestingly, commercial enterprises have actually been acquiring rights to submerged landsfor 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 submergedlands as a tool for marine conservation has not been as common despite the fact that the costof 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 TNCis currently looking at the conservation potential for attaining rights of submerged lands inIndonesia (personal communication: Leader Coral Triangle Program WWF 12/3/2010; personalcommunication: Senior Advisor Indonesia Marine Program TNC 18/3/2010).Currently a growing number of commercial enterprises such as hotels are also discoveringthe marine conservation potential of these legal mechanisms and are leasing or assumingquasi-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 thecustomary 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 tothe owners who enforce fishing restrictions, and the resort follows the tabu rules whichprohibit damaging the coral reef or extracting resources.There are also an increasing number of cases in which hotels or dive operators which havethe financial backing, resources and economic incentive have taken over the day-to-daymanagement of MPAs from the government. These areas are usually officially designatedMPAs, but lack the resources to effectively manage the MPA. This handover can be done forpart of total management, such as day-to-day enforcement, but can also take shape in acomplete handover of responsibilities to private enterprises. Colwell (1999) reviewed anumber of cases of private initiatives in coral reef conservation in Honduras and thePhilippines and introduced the notion of entrepreneurial MPAs.Colwell (1997) argues that though EMPAs do not provide the large-scale protection neededglobally, EMPAs perform several valuable functions; they can protect discrete areas whichserve as a refuge for threatened marine life, they can build local capacity in MPAmanagement, build public awareness for marine conservation and support of MPAs, and19

provide the core areas for larger and slower developing MPAs. Though these MPAs maysuffer because they are created with less research and planning than is generallyrecommended for the more traditional NGO or state-led MPAs, the main advantage for theseMPAs is that they can use existing commercial infrastructure and management structures sothat these MPAs can be created more quickly and management regimes can be institutedmore easily than is possible with large-scale MPAs. The ultimate goal of Colwell‟s approach isto create a network of small locally-run MPAs which use tourism or other commercial supportto achieve long term economic and environmental sustainability - a situation whereeconomics 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 thegovernment 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 resourceuse. This requires the delegation of marine tenure or the right to control resource byprevailing authorities to these non-state organizations (De Groot and Bush, 2010). At thesame time, Colwell illustrates some level of skepticism as to the role of private initiatives inconservation; he states that due to the nature of a commercial entity, with profit as theprimary motive and the fact that it does not answer to a public constituency, the potential forthe abuse of power is high. Thus, Colwell (1999) argues for the need for external reviews ofEMPA 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 potentialconflicting uses of the marine resources by other stakeholders, and thus there is little existingenforcement of regulations or restrictions. This can be attributed to the fact that, similar totraditional MPAs, EMPAs are not likely to be sustainable without substantial input from all keystakeholders in defining issues, selecting management strategies and implementingmanagement measures. Thus, these private actors must acknowledge the rights of otherstakeholders and accommodate their needs (Colwell, 1999). With existing institutions aroundmarine conservation, the private sector must then also build consensus and gain the supportof local state and customary authorities. The second, somewhat conflicting criterion is thatEMPAs must be relatively accessible to attract the clientele necessary to offset the costs ofmanaging the EMPA. Revenues from in and around these areas may be used to fundEMPAs: 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 EMPAsrequires institutional protection for investors. He suggests that if management is taken overby 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 beminimal (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 havebecome global in nature, more networked forms of oversight and control have also becomepossible.Since Colwell‟s introduction to the concept of EMPAs, there have been numerous studies intothese novel MPAs. Some of these studies have brought forward several differentmanagement forms which these EMPAs can take on:20

Table 1: Existing EMPAsName Location Size (ha) Management/ownership structureChumbe Island Coral Tanzania 30 Private management authority; wholly private with a 10Parkyear renewable lease from the governmentSugud Islands MarineConservation AreaMalaysia 46,700 Private (non-profit) management authority; wholly ownedby Langkayan Island Dive ResortWakatobi Diver Resort Indonesia 200 with Private management authority: informal agreement with500 buffer governmentMisool Eco Resort NoTake ZoneIndonesia 20,000 Private management authority; wholly private with 25 yearlease from local land ownersWhale Island Bay Vietnam 16 Hotel managed marine reserve; wholly private with thearea leased from governmentBonaire National MarineParkDutch Antilles 2,700 Private (non-profit) authority; national park status since1999(Source: Riedmiller and Carter, 2000; Svensson et al, 2009; Rocliffe, 2010; Heinrichs, 2008;Tel et al., 2008; Dixon etal., 1993; STINAPA, 2010)The majority of existing research into EMPAs has looked at the ecological impact of theseforms 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 theirfindings provide good evidence that Hotel Managed Marine Resorts (HMMRs), a specific formof EMPAs, can increase fish stocks rapidly, matching, or in some cases surpassing officiallyestablished MPAs of a similar size. Dixon et al. (1993) in their study of the Bonaire MarinePark bring economics into the discussion of EMPAs and assess the trade-offs betweenmarine protection and direct use of an EMPA for tourism. They find that proper EMPAmanagement can yield ecological as well as development benefits, but questions ofecosystem carrying capacity and government retention of revenues raise issues for long termsustainability.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 tomeet conservation objectives. Though the research is ecologically-oriented, they concludesome success factors for effective EMPA management. Some of these are interesting in theirconformity 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 socialconflict in these EMPAs. Particularly support from local fishing communities is key, and Teh etal. (2008) emphasize that alienation of fishing communities from marine parks has led toviolent confrontations between fishers and enforcement officials in the past. This strengthensColwell‟s claim that the fewer conflicting uses, the easier it is for an EMPA to develop andfunction. At the same time, the research supports Colwell‟s conflicting claim that EMPAsshould be located in areas which attract clientele to support the costs of management of theEMPA, 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 thatengage in conservation should consider separating business from conservation to avoidpotential conflicts between differing interests‟ (Teh et al., 2008: 3075). In this particular EMPAconservation management is separate from the dive resort and it is argued that a distinctmanagement body is better able to exercise objective judgment in implementing conservationinterests. Furthermore, the management body is obliged to maintain environmental standardsaccording to measures enforced the state, and this body‟s accountability to the stategovernmentthus „acts as a check against situations where conservation objectives may becompromised for business interests‟ (Teh et al., 2008: 3073). This reflects Colwell‟spreviously mentioned skepticism of the ability of the private sector to exercise conservationdue to their overarching profit-seeking motives. This suggests that the inherent commercialnature 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 MPAsin their research into the political challenges of private sector management of MPAs. Theypresent 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 theirpolitical environment. They argue that the definition of boundaries and the implementation of21

certain legislation such as the prohibition of dynamite fishing go far beyond the capacity ofprivate owners, and require a committed governmental and institutional framework, therebyunderlining a limitation of the private sector in exercising marine conservation throughEMPAs. „There are subject matters where private owners (or conservation projects) shouldpursue their interests by lobbying for more favorable government policies that will safeguardtheir effective operation‟ (Riedmiller and Carter, 2000: 149). Furthermore, they argue it is upto the state to create appropriate institutional structures and appropriate legislation, and thatthere must be commitment between governments and private investors if privatemanagement of MPAs is to succeed. These findings are interesting as they underline theremaining important role of the state within these novel types of MPAs, as well as bringingforward the need for cooperation between the private sector and state.Alternatively, De Groot and Bush (2010), in a more recent investigation of EMPAestablishment by dive operators and resorts on Curacao, have shown that these privateactors are not necessarily dependent on state support or ownership of the reef to ensurecompliance to regulations. Their research shows that non-state market driven governancesystems have provided conditions to ensure compliance which is based on development ofcompany based standards.This research has also placed a new light on certain aspects of Colwell‟s classification ofEMPAs: 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 beenforced through a system based on regulation of diver behavior where there are financialconsequences for violating the rules, and restriction of access‟ (De Groot, 2008). The twocases on Curacao show the potential for regulating diver behavior which opens up a new typeof EMPA management which moves beyond area-based control. „This shift to behavior-basedregulation 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 andBush, 2010: 8). This research introduces the notion that private sector involvement in marineconservation does not have to be highly areal in nature, as suggested in Colwell‟s initialclassification. This approach may develop into wider networks of protection which connect theconservation of coral reef dive sites and the authors argue that a focus on behavior thus maymake Colwell‟s approach more viable, and perhaps provide the basis for larger, slowerdeveloping MPAs in areas that have high tourism value and use.De Groot and Bush (2010) also present some potential limitations to the establishment ofEMPAs. On this island, particularly the risks of market competition within the dive industrylimit the development of EMPAs. Dive operators are on the one hand under pressure tomodulate their activities to ensure less damage to the reefs based on standards set by globaldiving governing bodies, and on the other hand face pressure from customers, who demand aspecific quality from their dive experiences. The market competition that dive consumersprovoke can potentially lead to situations in which operators maximize their returns onincreasingly marginal entrepreneurial conservation-based activities, which consequentiallydeters development of effective marine conservation (De Groot and Bush, 2010). In this caseconsumers play a primary role in granting market-based legitimacy, but the potentialunfavorable situations which could arise emphasize the need for external oversight on privatesector activities. Again, this brings in the seeming need, or dependence on outside, be it stateor 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, andhave found that the common thread of the successful ones they have encountered globally isthe individuals who are passionate about these projects and have the drive to work hard tomake them work. They suggest that it is those charismatic „mega individuals‟ who hold thesethings together and drive their developments (personal communication: Senior AdvisorIndonesia Marine Program TNC 18/3/2010).There has clearly been some movement in terms of research into the challenges andpossibilities posed by private sector management of MPAs in the last years. However theseresearch efforts remain relatively scarce and underdeveloped when compared to research22

feasible new strategies and institutions can be designed, which better protect theenvironment. Thus, this thesis aims to build on this theory by analyzing the transformationswhich took place in two distinct cases of sever coral degradation in Indonesia. Furthermore,recently the phenomenon of entrepreneurship has been observed in new contexts, andwriters have asserted how entrepreneurship can serve as a central force in the developmentof an ecologically sustainable society. This research aims to build on this by determining therole of these entrepreneurs in marine conservation by studying case studies whereentrepreneurs appeared to play an integral role in marine conservation.1.5.2 Case selection: research sitesAs mentioned previously, this research is site-specific. Hence, the selection of the cases isvery important for the validity of the research. The EMPAs selected are both located inIndonesia, 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 incommon. First and foremost, they are both EMPAs, using Colwell‟s understanding of theconcept; they are exemplary cases of MPAs which have been initiated and are funded by theprivate sector, particularly the dive industry. Secondly, they are both located within the CoralTriangle, an area which has received increasing publicity in recent years and beenrecognized as a biodiversity „hotspot‟:Figure 1: Coral Triangle Region (source: http://www.worldwildlife.org)The perceived need for intensification of protection of this area has resulted in policiesfavoring the establishment of networks of MPAs (Clifton, 2009). This places the two cases ina very relevant area for studying the emergence of novel forms of MPAs. Furthermore, thetwo sites are both dive tourism destinations in Indonesia; the main industry practiced isidentical, and they are located in the same nation. Hence these private sector-led marineconservation initiatives are faced with similar national laws and regulations.24

Figure 2: Map of case study sites (source: http://maps.google.com/)Finally, both sites apply Biorock coral restoration technology within the EMPAs. Additionally, itis interesting that the EMPA in Gili Trawangan directly followed Pemuteran in its application ofBiorock technology.At the same time, it is important to note that the sites do display different socio-economic andecological 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 sectorin the two EMPAs. However, the fact that multiple cases are used does provide a „toughertest‟ in that it can help specify whether the role of private actors in EMPAs is similar despitethe existence of different conditions. Hence it can help specify the different conditions underwhich a theory may or may not hold (De Vaus, 2001).1.5.3 Data collection: sources and methodsThe research was carried out over a period of seven and a half months. The first two monthswere devoted to literature research and proposal writing. During this time, based on theinformation available in the literature and e-mail contact with the managers in the two casestudies, a rough estimate of the key stakeholder types which should be interviewed wasmade. The data collection process in Bali and Lombok took two months in total. Fortunatelythere was not much extra time needed for adjustment to the environment and so forth, sincethe researcher was familiar with the language and the areas of research. Roughly threeweeks 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. Thelast 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, villagerepresentatives, fishermen representatives, Biorock representatives, governmentrepresentatives and representatives of NGOs working in the case study locations. Purposivesampling was initially used to approach the key stakeholders which were found beforehandmainly through previous reports and studies on the projects found on the internet, andthrough e-mail contact with the co-founder of the Yayasan Karang Lestari in Pemuteran andthe Gili Eco Trust (GET) manager in Gili Trawangan. However, the rest of the actors involvedin the EMPA were found through snowball sampling: the first interviewees were asked whoelse would provide useful sources of information. The larger NGOs which were interviewedlater 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 16in Gili Trawangan. After the case studies were concluded interviews were conducted withthree NGOs; representatives from Reef Check Indonesia, the WWF and TNC. Reef CheckIndonesia is national NGO, and independent from Reef Check International, but shares thesame vision and mission as its mother organization. This NGO has done a fair share ofresearch in North Bali and aims to create a network of LLMAs, which Pemuteran couldpotentially be in. TNC has recently done research in the marine conservation agreement25

which exists in Gili Trawangan. The interviewee from the WWF did not have any experienceor direct connection to the two case studies, but as the leader for the Coral Triangle Programshe was expected to have an interesting take on EMPAs.All the interviews with the stakeholders in the case studies were semi-structured. A fixed setof topics was addressed for every stakeholder, which lead into different directions, and wentinto differing levels of depth, depending on the interviewee. Questions were prepared, butonly 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 fishingand 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 outin English, with the remaining 12 carried out in Indonesian. The first three interviews inIndonesian were carried with the Biorock manager in Pemuteran functioning as theinterpreter. 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 stakeholdersin Gili Trawangan, namely a representative for the fishing community could not beinterviewed, so transcripts from a previously held interview conducted by a student from theUniversity 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, participantobservation was important to complement the interviews to study the social and physicalsetting 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 ofevents and interesting behaviors which were thought relevant to the research and interactingwith the research population provided a large amount of data. In Pemuteran the researcherspent 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 theoperators 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 GiliTrawangan a GET meeting was attended, and the researcher joined the GET manager insome informal meetings with different stakeholders in the EMPA. Furthermore, the researcherhelped out with the building and consequent sinking of a Biorock structure which provided apoignant example of how the dive community interacts.Lastly, the review of documents provided some supporting information, particularly detailswhich were overseen or unknown by the interviewees. Documentaries, newspaper articles,student reports, pamphlets, and contracts were reviewed for details which were not obtainedin the interviews. Secondary literature in the form of previous case studies of the areas andliterature reviews on marine conservation policy in Indonesia were particularly useful increating a history of the development of the EMPAs.1.5.4 LimitationsThis method of research displayed some limitations and challenges. Firstly, it must be notedthat three weeks is quite a short period of time to conduct a case study, and it is difficult todetermine whether more in-depth information would have been collected had the researcherstayed longer. Furthermore, longer time in the field may have enabled the researcher to buildup more trust amongst the interviewees, thereby increasing the information they may haveshared.Carrying out research in Indonesia provided a large challenge for the researcher, despitebeing familiar with the culture and language. Initially the interviews in Indonesian were carriedout with an interpreter, through which some information is likely to have been lost intranslation. Later the Indonesian language interviews were carried out by myself, but becauseI speak the language at a moderate level, it is likely that much information was lost in this waytoo. Aside from the language, conducting research in a particularly bureaucratic country likeIndonesia made it very difficult to make contact with government representatives.26

Unfortunately, no regional level government representatives could be interviewed, inducingthe need to obtain information on government involvement from other sources.Furthermore, being a foreigner made it difficult at times to establish trust and gain thecooperation of some of the locals, particularly in a place like Gili Trawangan where the localstakeholders have become quite used to being interviewed and may suffer from researchfatigue. As mentioned previously, one of the critical stakeholders in Gili Trawangan could notbe interviewed, and a different researcher‟s information had to be used to fill the gap in theresearch. Another large challenge as a foreigner research in terms of internal validity lies intrying to obtain open responses to overt sociological research such as this where therespondents 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 duringthe 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 theEMPA in Pemuteran and Gili Trawangan, which will be presented in chapters 3 and 4respectively.1.6 Outline of thesisThis thesis aims to analyze the role of the private sector in creating durable conservation andrestoration agreements for the protection of coral reefs. Chapter two presents the analyticalframework, with a description of supporting theories, which will be used to carry out thisanalysis. Chapter three and four form the centre of the thesis. These chapters presentanalyses of the role of the private sector in the two cases; Pemuteran in chapter three, andGili Trawangan in chapter 4. These case studies will be analyzed using the three mainconcepts comprising the analytical framework. In chapter five the two cases will then becompared, and the role of the potential role of private sector in creating durable agreementsin EMPAs, and consequentially their role in the bigger movement of marine conservation willbe discussed, as well as the value of the analytical framework used. Finally, chapter six willdraw the thesis to a close by answering the research questions with some conclusivestatements and recommendations brought forward by the research.27

2 Theoretical Framework2.1 IntroductionThe objective of this chapter is to build an analytical framework capable of analyzing the roleof the private sector in marine governance, particularly through creating conservation andrestoration agreements to protect coral reefs in EMPAs. An ecological modernizationapproach is proposed to meet this objective. This theory addresses how ecological rationalityhas been brought into the economic process, which has led to new institutionalarrangements. Furthermore, environmental problems are seen as manageable issues, to bemanaged by not only the state, but by a wide range of non-state stakeholders. Thus, itprovides 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 notyet been solved by the state. First ecological modernization theory will briefly be described inits broader context, pointing out the themes most relevant to this analysis. The next stepnarrows down the scope of analysis, using ecological and political modernization theory topresent a description of shifts in ocean and coastal governance and how this is relevant tomarine conservation in Indonesia, underlining the emergence of the private sector, orentrepreneurs, in ocean and coastal governance. This is followed by an overview ofentrepreneurialism as an emerging field of research, highlighting what concepts exist whichcould be used to assess the nature of entrepreneurship in EMPAs. Theory on social capitalwill then be explored, underlining how entrepreneurs can use this concept to overcomeproblems of collective action. As a last component of the framework some basic theory oninstitutionalization will be discussed to determine how to analyze the extent to which theprivate 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 modernizationFrom the mid 1980s onward several lines of sociological and political science analyses onenvironmental problems and reforms converged into a more or less coherent perspectivecommonly known as ecological modernization. This perspective was originally developed inorder to understand the changes that were taking place at the time in the institutions andsocial practices involved in environmental deterioration and reform in Germany, theNetherlands and Denmark. This perspective recognizes that modern institutions and practicescould no longer be viewed solely in terms of their detrimental, all pervasive influence on theenvironment, which was the dominant view in most sociological analyses of the 1970s and1980s. Instead, the ecological modernization perspective looks at how environmentalinterests and considerations are starting to make a difference with respect to the organizationof modern society (Mol and Spaargaren, 2002).The process of environmental reform is given shape by the actions undertaken by varioussocietal actors, and ecological modernization theory contributes to the understanding of theseactions and processes by providing concepts which aid in understanding these developments(Van Den Burg, 2006). Mol and Spaargaren (2002) summarize: through all kinds ofmechanisms, interest groups and social processes and dynamics, environmentalconsiderations are beginning to transform the processes of production and consumption, andthe institutions which are linked to that. Hence, modern society is experiencing shiftingrationalities, which lead to societal action, which consequentially result in environmentalreform. Furthermore, ecological modernization recognizes existing realities and furtherpossibilities to transform the current institutional order into one that takes environmentalconsiderations into account. Thus ecological modernization focuses on relative innovations,as opposed to revolutionary change, and sees merit in working within the system. Byanalyzing contemporary transformations feasible new strategies and institutions can bedesigned in the future, which better protect the environment.This thesis contributes to this by analyzing private sector involvement in marine governancethrough a new emerging governance arrangement, namely EMPAs. The environmental28

considerations of a new set of actors, namely the private sector, have led to a seeminglyimportant role for them in the areal management of MPAs. The framework built up in thischapter aims to provide a structure for analyzing this role, within the framework of ecologicalmodernization. At the heart of ecological modernization theory lie the core clusters ofmodernity: science and technology, the industrial organization, the capitalist mode ofproduction, and the state system (Mol and Spaargaren, 2002). Many interesting themes canbe recognized. For this analysis we will mainly focus on the theme of shifts regarding thecentral role of the nation-state in environmental reform, to the increasing role of economic andmarket 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 primarydevelopers of the ecological modernization discourse and took the first steps to develop atheoretical framework for analyzing environmental change within the conditions of modernity.As summarized by Van Den Burg (2006) Jänicke in his work was particularly concerned withthe role of the nation state. He saw the world‟s environmental crisis as the failure of themodern state to deal with environmental problems. The failure of the nation-state in turn hadthe potential to affect the legitimacy of the state as trust in the state decreased whilstproblems grew. Jänicke emphasized that the nation-state should use the environmental crisisto increase their legitimacy by redefining their role in finding solutions to this crisis. In his laterwork his angle changed, and instead of emphasizing the expanding of the state, Jänickefocused on the enlargement of the state‟s steering capacity.Today, ecological modernization focuses more on the modernization of politics which isneeded to deal with environmental problems, suggesting new styles of regulationcharacterized, amongst other things, by the growing importance of non-state actors (Mol andSpaargaren, 2002). The concept of political modernization refers to the structural processesof social change and their impacts on the political domain. As a consequence of social,economic and political processes such as globalization and individualization, new relationsare forming between the state, market and civil society. There is a shifting relationship fromtraditional politics to novel arrangements between the state, market and civil society (Arts etal., 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 upof private and public actors are emerging around environmental problems, and these are builtupon new mechanisms of power and influence. Thus, ecological modernization combineselements of political modernization which are specific to environmental problems and includesan appeal for new coalitions and new institutions (Arts and Van Tatenhove, 2004).Hence, the tasks and responsibilities which bring about environmental reform are changing. Itis 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 environmentalreform. A variety of new actors and institutions appear on the political stage of environmentalreform, 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 toinnovation to reach the ecological goals of these new actors, through the reflexive use ofinstitutions as well as technology.These shifts bring change in institutions which guide the interactions in environmentalproblems, and consequentially new environmental policy instruments. One can observe ashift from formal, democratic institutions, to informal, multiple and negotiable institutions.Previously, in the vertical networks that existed around environmental problems traditionalcommand-and-control regulation was the norm, whilst with these new horizontal networks onecan distinguish more use of alternative policy instruments, with an increasing use of economicinstruments. Thus, we observe that environmental reform is increasingly realized throughmarket mechanisms. Economic agents such as consumers, certification institutions, branchorganizations and corporations now play a significant role in bringing about environmentalreform 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 scienceand technology in bringing about environmental reform. This perspective displays an29

optimistic view of the role of science and technology and highlights the contributions ofscience and technology to the solution of environmental problems, and in creating a moresustainable organization of production and consumption, an idea developed by Huber (1982).Huber approached environmental reform from a slightly different angle than his colleagueJänicke. He observed that certain strategies for environmental reform could not be placedunder the theoretical framework of political modernization (Huber, 1982). The 1980s featuredsituations in which various societal actors voiced their concern for damage to theenvironment; civil society groups negotiated with corporations, consumers exercised powerthrough boycotting and companies pressured their suppliers to take environmental problemsin account. These concerns challenged the existing industrial system and Huber argues thatthe industrial system has to re-invent itself through the ecological modernization of productionand consumption (Van Den Burg, 2006). Thus, „ecological modernization does not plead forthe dismantling of capitalism altogether‟ (Spaargaren, 2000: 325). It focuses on industrialmodes of consumption and production and links these institutions, including the technologiesused, 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 byecology. „Key technologies have to be picked up by innovative entrepreneurs who bring abouta new wave of industrial innovation‟ (Van Den Burg, 2006).„Ecological modernization theory argues that the independent set of ecological criteriashould be used alongside other, existing economic criteria in order to adequatelyjudge the productivity or performance of industries and technologies.‟ (Spaargaren,2000: 325)This highlights another very important theme brought forward by the ecological modernizationdiscourse; that ecology and the economy are no longer seen as separate institutions, but twowhich can be married and lead to environmental reform. Thus, one of the underlying thoughtsbehind ecological modernization is that economic progress can be married to environmentalconservation. In fact, part of what this thesis aims to show is the equal footing of economicand environmental rationalities in the construction and existence of EMPAs, and thattraditionally economic concepts and practices, such as those carried by the private sector,can be seen in terms of marine conservation. The fundamental juxtaposition of theenvironment and economy of the 1970s is no longer found in the ecological modernizationperspective. Economic and environmental considerations no longer have to be seen ascounter-positional (Van Den Burg, 2006).Ecological modernization, as a modernity theory, is very much about finding alternativeorganizational structures and technologies which better meet the standards of sustainability.Though much literature has been devoted to the failure of governments in leading marineconservation through state-led MPAs and the rise of community-based marine resourcemanagement (Clifton, 2003; Pomeroy et al., 2010; Jentoft et al., 2007), there has been littleapplication of the ecological modernization theory to marine conservation, exploring situationswhere new actors are taking the stage and leading marine conservation through novelinstitutional arrangements and technology. This thesis aims to view two cases of marineconservation led by the private sector through the spectacles of ecological modernization.2.3 Shifts in ocean and coastal governance: increasing role of theprivate sectorIn the following paragraphs, the relevance of ecological modernization and politicalmodernization themes in the context of ocean and coastal governance will be furtherexplored, to illustrate how they can be applied to EMPAs in Indonesia.30

People have different perceptions of the meaning of governance, and in many cases thisdifference revolves around the perceived role of the state. To put it very simply, some arguethat the government has failed to live up to expectations, and with the state unable to carryout 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 shiftin the way we govern (post)modern societies and organizations:„Due to processes such as „relocation of politics‟ (from the state to international andsub-national organizations), „de-territorialization‟ (the emergence of new politicalspaces beyond the territorial nation state), „diffusion of political power‟ (from publicauthorities to semi-public and private actors) and „de-legitimization of the state‟ (crisisof 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 thethemes put forward in the ecological modernization debate; new actors and institutionsappear to be becoming involved in environmental reform. In the realm of ocean and coastalgovernance there has been a shift from the traditional notion of government to new hybridgovernance arrangements, with the emergence of novel institutions and the emergence ofnew partnerships between the state, the market and civil society. These new arrangementsare made up of new, sometimes informal, unclear or negotiable, institutions, together withnew policy instruments, incentives and mechanisms (Pierre and Peters, 2000; VanKersbergen and Waarden, 2004). New forms of governance are being applied nationally, andinternationally: network-like arrangements of public and private actors are emerging, as isself-regulation by business organizations. Furthermore we are observing new types ofpartnerships such as public-private partnerships and green alliances between business andNGOs, or civic-private partnerships (Arts, 2005). Also, arrangements directly involving themarket have become more common such as certification schemes, eco-taxes and tradingschemes, which began with CO2 emissions, but are now even considered being applied totuna fish in the marine environment.Vertical, as well as horizontal and outward shifts in state power appear to be the drivers ofthese changes. It is important to define the different shifts which exist to be able to defineexactly what types of shifts are studied in this research. To begin with, a displacement ofstate power which is of particular relevance here is the downward shift of state authority toregional and local institutions (Hooge and Marks, 2003; Pierre and Peters, 2000). This has attimes been fuelled by a decrease in trust of state governments, by political objectives, asresponses to structural changes in the democratic state, but has also been argued to be dueto 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 onseveral forms such as deconcentration, where responsibility shifts away from the centre butactual power remains with the state, and devolution, where responsibility as well as power tomake decisions shifts from the centre to the periphery. A practical example of decentralizationin natural resource management can be found in co-management arrangements whereresponsibility 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 technicalcapacity 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, haveestablished their own marine parks, though only some of these have been formallyimplemented. Some of these are managed through systems of co-management involvinglocal government, local people and NGOs. Additionally, more and more community-basedmarine and coastal resource management systems have formed and community-basedMPAs have been established, emphasizing the trend of new local actors emerging in thegovernance of marine and coastal resources (Satria et al., 2006). It is clear that thegovernment is playing less of a role in marine conservation in Indonesia than it used to.31

At the same time outward shifts in governance are of interest to this research. Powers andcapabilities traditionally controlled by the state have been moved to institutions andorganizations, such as private companies, NGOs and quasi-autonomous NGOs. The shift tothese types of arrangements is in part triggered by the need to find formats which enhanceefficiency in the public sector. Furthermore, the use of private organizations can also increasethe local legitimacy for activities in which the government may have lost the trust and supportof local actors. Additionally, these organizations may more easily be able to involvecommunities than public sector organizations would be (Pierre and Peters, 2000). In terms ofmarine and coastal governance a Dutch example could be found in the quasi-autonomousgovernment organization Stichting Noordzee, which receives the bulk of their funding from thegovernment. Again, this highlights the emergence of new actors in the governance of marineand coastal resources in areas where the state cannot effectively do so alone. This researchstudies 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 logicalto 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 marketand civil society. Non-state members of society such as consumers and civil society groupsare starting to voice their concern for environmental problems and display their concernthrough their consumption patterns for example (Huber, 1982). Spaargaren (2002)emphasizes the importance of the role of human agency in bringing about more sustainableconsumption and production patterns. Hence, consumers have the power to bring aboutchange 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 StewardshipCouncil which allows the consumer to choose a product based on the outcome they perceiveis good for them, or the Aquaculture Certification Council which offers more of a processcertification toward seafood buyers, thereby meeting global market demand for seafoodproduced 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. Inthese types of MPAs entrepreneurs from the private sector have taken on a new role inmarine conservation resulting in a novel form of marine governance, bringing together ahybrid network of actors. To study this emerging trend of private sector involvement in marineconservation, the role of the private sector in two EMPAs in Indonesia will be studied. The twoMPAs which have been selected are entrepreneur-led and there has appeared to be little, ifany, government involvement. We are faced with two very interesting cases which arethematically rich with the ecological modernization and political modernization perspectives:two situations of severe coral degradation where the government was not successful infinding 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 marineconservation in these areas, and formed EMPAs. This can argued to have been a horizontalshift from (the lack of, or failure of) government involvement in marine conservation, to anovel governance arrangement in which entrepreneurs have taken on responsibility formarine conservation.In order to outline how one can approach analyzing this shift in governance, it is interesting tointroduce Kooiman and Bavinck‟s (2005) definition of governance as:„the whole of public and private interactions taken to solve societal problems andcreate opportunities. It includes the formulation and application of principles guidingthose interactions and the care for institutions which enable them.‟ (Kooiman andBavinck, 2005: 17)These interactions can be seen as actions taken by the different actors involved to removeobstacles and tread new pathways. This definition highlights the importance of institutions, aswell as the interactions between these different actors. Institutions offer structure, order andpredictability in human relations so that societal actors know how to interact, what is expectedof them and what others expect of them. Thus, Kooiman and Bavinck (2005) argue thatcaring for institutions is part of governance. An integral part of this research is thus howinteractions between different actors and institutional arrangements have changed as a result32

of the involvement of the private sector in marine governance, which can be viewed as a shiftin governance in two particular cases.Hence, the first interesting concept to look at is entrepreneurship; to determine who theseprivate sector actors are, and why they were able to, and chose to, exercise marineconservation in these areas. Furthermore, as mentioned above governance is aboutinteractions, and the formulation and application of principles guiding those actions. Newnetworks have emerged around these cases of coral degradation in the form of EMPAs whichhave been built upon new mechanisms of power and influence. What is important todetermine is how these private actors were able to do so and actually induce social changeand action through their interactions with the other actors involved in these EMPAs. This willbe approached using the concept of social capital. Finally, it is interesting to determine howthe institutional arrangements in the two case study locations actually changed through theinfluence of these private actors; how the new institutions brought by the private sector linkwith existing institutions, how novel hybrid institutions have been formed, and how durablethese are.The role of the private sector in creating durableconservation and restoration agreements toprotect coral reefs through EMPAsNetwork:?Market:entrepreneur(s)andtheir opportunities?Process:interactionsandrelationsOutcome:(ever-changing)creationandalterationofinstitutions?State:Community:governmentalbodiesfishermen andvillageFigure 3: Framework for analysisThe next section looks at whether and what type of theory exists around the role ofentrepreneurs in environmental reform to date, in order to build a framework with which thesecan hence be analyzed.2.4 Entrepreneurship as a field of researchThe emergence of entrepreneurship as a legitimate academic pursuit has begun to attract theinterest of scholars. However, as the publication of empirical work increases, theoretical workremains at a consistently low level (Busenitz et al., 2003). Busenitz et al. (2003) argue thatexamining whether scholarship on the topic of entrepreneurialism is worthwhile and legitimateis important as entrepreneurial activity is increasingly relevant to the economic output andlabor employment in developed as well as developing nations, and that knowledge aboutentrepreneurship can speed up the outcomes desired by enterprising individuals, firms andsocieties.33

Shane and Venkataraman (2000) go further to define three factors which illustrate therelevance 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. Entrepreneurshipin turn is a mechanism by which society converts technical information into these productsand services. Secondly, Kirzner (1997) defines entrepreneurship as a mechanism throughwhich temporal and spatial inefficiencies in an economy are discovered and mitigated. Heargues 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 asthe critical engine driving the change process.Busenitz et al. (2003) argue that for the field of research to reach a higher level of legitimacyboundaries need to be articulated more clearly. To date the phenomenon of entrepreneurshiphas lacked a conceptual framework, and as a result people have had trouble identifying thedistinct contribution of the field to the broader domain of business studies, undermining thefield‟s legitimacy (Shane and Venkataraman, 2000). One of the main obstacles to building thisfoundation has been brought to light; the challenge in finding the correct definition for thephenomena.This challenge has been the subject of numerous debates. What is the correct definition ofentrepreneurship? Until now many researchers have defined entrepreneurship in terms ofwho the entrepreneur is and what he does. The problem is that entrepreneurship involves thelinking of two phenomena; the presence of opportunities and the presence of enterprisingindividuals. Hence, Shane and Venkataraman (2000) define the field of entrepreneurship asthe scholarly examination of how, by whom and with what effects opportunities to createfuture goods and services are discovered, evaluated and exploited. Hence the study of thefield involves the study of the processes of discovery, evaluation and exploitation ofopportunities as well as the individuals who do so. What is the correct definition ofentrepreneurship is not of extreme significance to this research, what is important is thattoday it is widely recognized that the focus of entrepreneurship research should be theentrepreneurial process, and although the field is still characterized by multiple paradigms,the idea of opportunities has widely been accepted at the defining element ofentrepreneurship (Mair and Martí, 2006).Entrepreneurial opportunities are one of the key concepts in this thesis, and can be definedas situations in which new goods, services, raw materials and organizing methods can beintroduced at a price greater than their cost of production (Casson, 1982). Previousresearchers, such as Kirzner, have argued that entrepreneurial opportunities exist becausedifferent members of society have different beliefs about the relative value of resources, giventhe potential to transform them into a different state. Due to the fact that different peopleposses different beliefs they make different predictions about at what price markets shouldclear, or about what possible new markets could be created in the future. If resource ownershad the same conjectures as an entrepreneur the resource owners would exploit theopportunity, and not the entrepreneur. Hence, for entrepreneurship to occur the resourceowners must not share the entrepreneur‟s conjectures. Furthermore, information isimperfectly distributed and all economic actors do not receive the same information at thesame time. Thus, some people obtain information before others about markets opening up ornew discoveries being made for example (Shane and Venkataraman, 2000). In EMPAsindividuals from the private sector are responsible for developing marine conservation inareas through exploiting certain opportunities. One of the primary questions which lead fromthis theory and can be applied to EMPAs which are being studied in this research is why is itcertain individuals who initially discover opportunities and not someone else? Why is it themwho then exploit this opportunity? Did the original resource owners know about theseopportunities? Did they have access to information to identify the opportunity? And did theyhave the cognitive properties necessary to evaluate the opportunity?Around 1990 a new era of research in entrepreneurship emerged as scholars began toquestion the widely held view that entrepreneurs are isolated as economic actors and that theentrepreneurial process is distinct from other social phenomena. Scholars began to explorethe idea that entrepreneurs are tied, through their social relations, to a broader network of34

actors; entrepreneurship as a process resulting from the continuous interaction betweenentrepreneurs and the context they are in, and in which their activities are embedded (Hoangand Antoncic, 2003; Mair and Martí, 2006). Researchers started to study the causes andconsequences 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 athow the private sector has embedded itself in the communities in which they placedthemselves, in the relations with the other actors in the network, and finally in the institutionswhich they created.Hence, scholarly analysis of entrepreneurship is clearly widening from the focus onentrepreneurs simply as market actors, to entrepreneurs as being embedded within socioculturalrelations. With this, we bring in an important theme of ecological modernization; theconnectedness and equal footing of economic and environmental rationalities, whereenvironment is the ecological as well as the social environment. We are in fact studying theimportance of economic institutions, which come with these entrepreneurs, alongside existingsocial and cultural institutions present in locations where these entrepreneurs operate. Therelations between these institutions in turn are equally important in the construction of MPAsas the economic activities of these entrepreneurs. Hence, traditionally economic concepts likeentrepreneurialism can be seen in terms of conservation, which will be expanded upon in thefollowing section.2.5 Novel forms of entrepreneurshipEntrepreneurship is gaining more and more attention from scholars, but has always beenapproached from a business studies perspective (Busenitz et al., 2003; Shane andVenkataraman, 2000). It has predominantly been about studying how agents of changeemerge in the business sector, what allows them to exist and to shape change. However, inthis thesis, entrepreneurship is studied in the context of marine conservation, a new context inwhich this phenomenon has materialized. As mentioned above, studying entrepreneurship inthis context touches upon a theme brought forward in ecological modernization; a theme inwhich economics meets ecology and these two can coexist. However, studyingentrepreneurship in the context of marine conservation poses a challenge as there is noexisting framework to study this. It is of value to explore how entrepreneurship is emerging indifferent spheres to help us define what the types of entrepreneurship can take place inEMPAs, and to bring forward some themes which are relevant to the research.The practice of social entrepreneurship which integrates economic and social value creationhas long heritage and global presence, but the term is still, like entrepreneurship, poorlydefined and its boundaries to other fields remain fuzzy (Mair and Martí, 2006). The maindifference between entrepreneurship in the business sector and social entrepreneurship liesin the relative priority given to social wealth creation versus economic wealth creation. Whilein business entrepreneurship social wealth is a by-product of the economic value created, insocial entrepreneurship the main goal is social value creation.Mair and Martí (2006) attempt to broadly define social entrepreneurship as the processinvolving the innovative use and combination of resources to pursue opportunities to catalyzesocial change and/or address social needs. Social entrepreneurship is thus viewed as aprocess of creating value by combining resources in new ways. These combinations areintended to explore and exploit opportunities to create social value by stimulating socialchange or meeting social needs. When viewed as a process social entrepreneurship involvesthe 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 wetake social entrepreneurship to refer to the integration economic and social value creation, wecan take environmental entrepreneurship to be the integration of economic and environmentalvalue creation. Recent scholars have asserted that entrepreneurship can serve as a centralforce in the development of an ecologically and sustainable society, and viewentrepreneurship as the engine of sustainable development (Dean and McMullen, 2007;Pacheco et al., 2009). This can be linked directly to ecological modernization theory whichunderlines the coexistence of economic development and environmental reform. This concept35

has been termed as sustainable entrepreneurship, green entrepreneurship, environmentalentrepreneurship, eco-preneuring and social entrepreneurship. As with entrepreneurialism,little research on entrepreneurship and sustainable development has appeared in academicliterature (Pacheco et al., 2009).Pacheco et al. (2009) suggest that one of the major differences which distinguishessustainable entrepreneurship from the broader field of entrepreneurship lies in the public andnon-exclusive character of environmental resources. Hardin, in his Tragedy of the Commonsof 1968, drew attention to the fact that failure of resource users to cooperate does notnecessarily signal ignorance, irrationality or malevolence. Everyone would be better off ifeveryone could cooperate. However, in the absence of coordination and credible mutualcommitments, 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-exclusiveenvironmental resource, and the tendency of fishermen to use destructive fishing practiceswhich consequentially places sometimes irreversible damage on these reefs. Dean andMcMullen (2007) summarize sustainable entrepreneurship as representing:„a specific class of entrepreneurship which addresses, among other areas, thecapturing of opportunities present in environmentally relevant market failures whereinthe exploitation of the opportunity alleviates the market failure and reducesenvironmental degradation.‟ (Dean and McMullen, 2007: 73)These entrepreneurs create such opportunities by proactively altering the rewards forsustainable behavior by devising and influencing the establishment of new industry norms,property rights and government legislation. Hence, a new characterization of the entrepreneuris brought forward, which expands on the previous characterizations mentioned: from anindividual that discovers opportunities in the existing economic conditions of the market, andequilibrates these conditions (Kirzner, 1973) to someone that proactively affects theunderlying institutions that drive economic incentives (Pacheco et al., 2009). The ability ofentrepreneurs 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 collectiveaction and actually succeed in altering institutions within existing communities of resourceusers. Putnam (1993) suggests that working together is easier in a community with asubstantial stock of something referred to as social capital. The way that entrepreneurs usedsocial capital to overcome the dilemma of collective action, and consequentially form newinstitutions around marine management will be discussed in the following section.2.6 Social capital in entrepreneurshipAfter defining the entrepreneurship opportunities and the forms this can take on, the actualentrepreneurial process of exploitation of these opportunities must then be explored. Mair andMartí (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 isespecially relevant in the context of managing common property environmental resourcessuch as coral reefs which are „shared‟ by an entire community, and various authors havesuggested 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 thediscipline of sociology. The idea that involvement and participation in groups can havepositive consequences for the individual and the community dates back to „Durkheim‟semphasis on group life as an antidote to anomie and self-destruction, and to Marx‟sdistinction 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 ofthe concept he focused on the benefits accruing to individuals by participating in groups, andon 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 theconcept as „the aggregate of the actual or potential resources which are linked to possession36

of a durable network of more or less institutionalized relationships of mutual acquaintance orrecognition‟ (Portes, 1998: 3). Bourdieu‟s definition shows that the concept of social capitalhas two constituents; the social relationship that allows individuals to claim access toresources 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 theterm in his critique of neoclassical theories of racial income inequality and their policyimplications. He argued that orthodox economic theories were too individualistic and focusedtoo much on individual human capital, instead of social capital. As Portes (1998) points outLoury did not develop the concept of social capital in detail but after him, Coleman did a morerefined analysis of the same concept. He analyzed the role of social capital in the creation ofhuman capital: he highlighted its importance for the acquisition of human capital and identifiedsome mechanisms through which it is generated.Since then the concept has been used to clarify a wide range of social phenomena. Thereappeared to be consensus on the idea that social capital stands for the ability of actors tosecure benefits by virtue of membership in social networks and other structures. Theseanalyses have all focused on the potential benefit accrued to actors due to their insertion intonetworks and broader social structures, and on the relationship between actors, or betweenan individual actor and a group (Portes, 1998).However, a twist was introduced by political scientists who equate social capital with the levelof civicness in communities: towns, cities and entire countries, introducing a community, orcollective notion to the concept. Putnam (1993) was the major proponent for the collectiveversion of the concept of social capital. He sees social capital as features of socialorganizations, such as networks, norms, and trust, which facilitate action and cooperation formutual benefit. In practice the stock of social capital is equal to the level of associationalinvolvement and participatory behavior in a community, and can be measured by indicatorslike newspaper reading, membership in voluntary associations and expressions of trust inpolitical authorities. Putnam argues that these stocks of social capital are self-reinforcing andcumulative in that successful collaboration in one venture builds connections and trust, whichare 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 acause and an effect. Putnam claims that social capital is coming to be seen as a vitalingredient in economic development around the globe, and leads to other positive outcomessuch 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 collectiveaction. Other authors have expanded upon Putnam‟s ideas and applied them to the problemof the collective management of natural resources. Petty (2003) argues that social capitallowers the transaction costs of working together, and thereby facilitates cooperation; peoplehave the confidence to invest in collective activities, knowing that other members of thecommunity will do so as well. Collective resource management programs that seek to buildsocial capital in a community, described using terms such as community-, participatory-, joint-, decentralized-, and co-management, have been effective in several sectors including wildlifeand fisheries. Assuming legitimacy in Putnam‟s ideas, social capital may have the capacity tohelp 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 mostlyresponsible for setting up these above-mentioned „programs‟ in EMPAs, so how then do theterms entrepreneurship and social capital meet?Current research clearly documents the importance of social capital in the entrepreneurshipprocess, stressing the ways in which individuals take advantage of their own social affiliationsand network strategies in pursuit of their entrepreneurial goals (Kwon and Arenius, 2010). Tounderstand the relevance of social capital for entrepreneurship it is helpful to define thedifference between human capital and social capital. Social capital is a quality createdbetween people, whereas human capital is a quality of individuals.37

„Social capital predicts that returns to intelligence, education, and seniority depend insome 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 theirability to coordinate others; by identifying opportunities to add value within an organizationand getting the right people together to develop opportunities. In this research we are notstudying firms, but the development of EMPAs, but this argument can be translated into thevalue which an individual entrepreneur can add to managing a MPA. Furthermore, Burtargues that certain network forms deemed social capital can enhance a manager's ability toidentify and develop opportunities. Hence, this suggests that social capital can perhapsenhance the ability of the entrepreneurs in their process of developing the opportunities theydiscover.Social capital theory in general suggests that networks of relationships constitute a valuableresource for the conduct of social affairs, providing their members with this so-called socialcapital. A lot of this capital is embedded within networks of mutual acquaintance andrecognition (Nahapiet and Ghoshal, 1998). There is still disagreement regarding the exactdefinition of social capital, with some authors limiting the definition to the structure of therelationship networks, while others actually include the resources which can be accessedthrough these networks. Nahapiet and Ghoshal (1998) present a broad definition which willbe 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 socialunit. Social capital thus comprises both the network and the assets that may bemobilized through that network.‟ (Nahapiet and Ghoshal, 1998: 243)Nahapiet and Ghoshal (1998) cluster the many attributes of social capital into threedimensions; the structural, relational and cognitive dimensions. The structural dimension ofsocial capital is referred to as the overall pattern of connections between actors; who youreach and how you reach them. Thus, this dimension describes the network ties betweendifferent actors, the configuration of this network and morphology describing the pattern oflinkages in terms of density, hierarchy and connectivity. The existence of networks isparticularly important for entrepreneurship because it defines the possibility for theentrepreneur to access information, resources and support. The reason it is important tounderstand this dimension, and how it can be built, increased and maintained, is that this isone of the factors which determines whether entrepreneurs can solve social problems andelevate them to the public sphere (Mair and Martí, 2006).The relational dimension of social capital on the other hand refers to assets created andleveraged through relationships (Nahapiet and Ghoshal, 1998). This dimension looks at thetypes and quality of relations of the individual entrepreneurs. Key facets of this dimension aretrust, norms and sanctions, expectations and obligations and identity. It important tounderstand how trust is created amongst the different actors in a situation, and how this issustained, as there is increasing evidence that when trust is built up between actors, theseactors are more eager to cooperate (Mair and Martí, 2006).The third dimension is the degree to which an individual shares a common code and systemsof meaning with a community, and refers to how normative and mimetic forces shapebehavior (Mair and Martí, 2006). It refers to those resources which provide sharedrepresentations and interpretations among parties and could include a shared language,shared codes and shared narratives (Nahapiet and Ghoshal, 1998). Many of these describedfeatures are highly interrelated. For the purpose of this research it is not important todistinguish between the different dimensions per se. However, they can be used to questionhow the entrepreneurs in EMPA are able to build up social capital for themselves, in order togain legitimacy for themselves in the eyes of the other actors in the EMPA and to inducecoordination and collective action; do entrepreneurs communicate with the other actors in theEMPA, and if so, in what way? Is this done formally, or informally? Is there any form of38

hierarchy distinguishable in these networks, or is there equal participation of all actors in theEMPA? How much distance is there between the different actors? What is the nature of therelationship of the private sector vis-à-vis the other actors? Are these relationships based ontrust and friendliness? Does the private sector speak the language of the other actorsinvolved 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 privateactors are able to build up social capital. The next step is to determine how these actors canuse this to make rules and create legitimacy and authority over marine conservation andhence, 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 toinstitutionalize ecological aims in economic practices will be analyzed.2.7 Institutionalization of entrepreneurshipInstitutionalization refers to the „phenomenon whereby patterns arise in people‟s actions, fluidbehavior gradually solidifies into structures, and those structures in their turn structurebehavior‟ (Arts et al., 2006: 96). Relatively stable definitions of problems and approaches tosolutions gradually arise, and more or less fixed patterns of divisions of tasks and interactiondevelop between actors. As discussed in the previous chapter, social capital can lead tocooperation 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 creatingdurable conservation and restoration arrangements to protect coral reefs in the two cases; itmeasures whether and to what extent these actors have been successful in steering marineconservation and actually structure the behavior of the people.Hardin drew attention to two human factors which drive environmental change; increasingdemand for natural resources and environmental services, and the way in which humansorganize themselves to extract resources from the environment, which social scientists referto as institutional arrangements. He claimed that only two state-established institutionalarrangements, namely a centralized government or private property, can sustain commons inthe long run. He presumed that users of these resources are trapped in a commons dilemmaand are unable to find solutions. As Dietz et al. (2003) point out, Hardin failed to see thatsocial groups have successfully been able to fight resource degradation by developing andmaintaining self-governing institutions.Marine ecosystems, such as coral reefs, too are under threat resulting from interactionsbetween 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 ownedby a centralized government who can set rules about who can access the territory and whocannot, as well as what type of activities are permitted in such an area. As was mentioned insections 2.2 and 2.3 a government in some cases fails to enforce such rules, and otheractors, namely the private sector, who do have the capacity to enforce rules, have emerged inmarine governance, and consequentially so has the existence of EMPAs.Major institutional change can be brought about by factors which are either endogenous orexogenous to the policy - or in this case governance - arrangement at stake. Endogenousfactors 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 naturaldisasters, which bring major changes in the arrangement‟s political, social or economicenvironment, (2) the influence of adjacent policy arrangements, for example the influenceforest policy might have on marine policy in Indonesia, and lastly (3) the influence of politicalmodernization processes: the development of new relations between state, market and civilsociety which leads to new policy arrangements (Veenman et al., 2009). In this analysis ofEMPAs we are dealing with a number of these exogenous factors, probably a combination ofthe three, which have lead to institutional change.The common property nature of coral reefs means that any outside institution building isgoing to be juxtaposed with existing traditions and norms, and this can potentially lead toconflicts. Entrepreneurs are faced with existing local common property institutions. Property39

ights regimes are complex social institutions, and they are about much more than justestablishing and enforcing boundaries (Costanza, 1999). Externally led institutional changewill generally lead to some form of resistance, and what is being studied in this thesis is asituation in which the private sector is negotiating new forms of engagement with commonproperty institutions. As Costanza (1999) illustrates:„the real challenge in the sustainable governance of the oceans is in designing anappropriate set of institutions, including property rights regimes and othermanagement institutions, that can adequately deal with the complexities of both theocean 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 emergein the marine governance of an area this area already possesses institutions which havetraditionally led or steered the use of these marine areas. An institution can be defined „a setof rules or conventions (both formal and informal) that define a social practice, assign rolesand guide interactions‟ (Young, 1994: 26). Institutions can be seen as a delineation; theydefine the agents who are involved, and those who are not. They define the interrelationsbetween the actors, and delineate the boundaries of coalitions in terms of who is in and whois out, how one can get in, how the relationship with outsiders is. These rules also delineatethe possibilities and constraints for actors to act within a domain by describing how thepolitical game should be played: how issues may be raised, agendas are set, interests arearticulated, policies are formulated, decisions are made and measures are implemented. Therules essentially cover all modes of production and interpretation of meaningful and legitimateconduct (Arts and Van Tatenhove, 2004).Thus, when a new set of actors, namely entrepreneurs representing the private sector, getinvolved in marine conservation they step into existing political cultures, with existinginstitutions. New institutions the private sector bring with them in some ways perhapschallenge and conflict with existing institutions. In other ways they complement existinginstitutions, or are reinforced by existing state or community institutions. Furthermore, newinstitutional arrangements bring with them new problems of governability, accountability andlegitimacy (Van Kersbergen and Van Waarden, 2004). Hence, it is important to determinehow the private sector institutions are linked to those that already existed, how they formednew 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 ofinstitutionalization with entrepreneurship. In 1988, DiMaggio introduced the concept ofinstitutional entrepreneurialism to unravel how institutions arise or change. Institutionalentrepreneurs are actors who have an interest in modifying institutional structures, or creatingnew ones. These actors control resources in order to transform institutions or create newones (Mair and Martí, 2006). Thus, the institutional entrepreneurship perspective is argued tobe a good way of understanding the role of entrepreneurship in changing or giving birth tonorms, institutions or structure. This is of value for this research as one of the main researchquestions addresses the extent to which the private sector has been able to alter and createinstitutions around marine management in the two areas. The concept has come forward inrecent literature about environmental entrepreneurship, introduced in section 2.5.Environmental entrepreneurs alter or create institutions in order to be able to captureopportunities of which the exploitation actually improves the environment.The institutions which will be focused on particularly include industry norms, property rightsand government legislation. These institutions represent collective understandings andexpectations of behavior which influence the interactions of all the actors involved, throughdifferent levels of formalization. When exploiting sustainable entrepreneurship creationopportunities entrepreneurs proactively influence the implementation of industry norms,property rights and government legislation through different mechanisms (Pacheco et al.,2009).40

A norm is a standard of conduct or rule of behavior, whereby departure from the rule isfollowed by punishment of some sort (Bendor and Swistak, 2001). Thus, sanctioning isneeded for the existence of a norm. Norms control the interaction between individuals withconflicting interests and bring uniformity of behavior because individuals are forced toconform given the expectation that others will too (Pacheco et al., 2009). Entrepreneurs whouse a particular resource can develop norms or rules with respect to behavior in order toprotect and monitor its sustained use, through for example rules which regulate activities inand around the resource. Other norms could include environmental principles or codes ofconduct. Do entrepreneurs in EMPAs introduce new norms? If so, are the existing communityresource users involved in these decisions? Consequentially, are these norms legitimate inthe eyes of the existing community resource users or are there conflicts?To enforce cooperative behavior norms are often developed within the boundaries of a groupto punish those who defect. Different mechanisms can be used for this. Sanctioning practicestoward defection can range from minor penalties to ostracism. Furthermore, members of thegroup must invest in monitoring in order to identify when an infraction occurs and to evaluateits severity. However, these types of systems are also characterized by indirect sanctions inthe form of loss of reputation or prestige. With this type of mechanism the perception ofothers serves as the controlling mechanism, so social pressure is actually used to enforcerules (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 havenew groups been formed?Entrepreneurs may create self-enforced property rights in order to protect a resource fromdefecting behavior and exploit creation opportunities. Dean and McMullen (2007) refer to thisas Coasian entrepreneurship: the process of establishing excludability for public goodsthrough the development and enforcement of property rights regimes by profit-motivatedeconomic actors. „Property rights define and delimit the range of privileges, duties, andobligations of individuals with respect to an asset. A full set of private rights includes the rightto use an asset, exclude others from the use of an asset, derive income from an asset, andbequeath the asset to someone of choice‟ (Pacheco et al., 2009:10). Often, with a lack ofprivate rights uncertainty is created regarding the value of resources and this oftenencourages self-interest behavior. Pacheco et al. (2009) argue that with the existence ofprivate rights incentives exist to maximize the value of resources since individuals can accruedirect benefits from these (Barzel, 1997; Eggertson, 1990). One can determine the success ofthese types of property systems by assessing their ability to conserve the resources, such ascoral or fish, in the area. It is important to assess whether the entrepreneurs in EMPAs useproperty rights to protect the reefs. And if so, are the original resource „owners‟ part of thesedecisions? 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 theresource. Again, like with norms, sanctions are needed to enforce the allocation of propertyrights. These can come in the form of payment, or the deprivation of one‟s „share‟ of theresources or other privileges. Thus, further questions arise: what tools do the entrepreneursuse to execute a system of property rights? What sanctions are used to enforce the allocationof property rights? Are these effective? Does this cause conflict with the original resourceowners?Both the above institutions are voluntary adopted institutions. However, these may eventuallyevolve into mandatory rules which are codified and enforced by governmental bodies (Artsand Buizer, 2009). Entrepreneurs may be inclined to request the intervention of governmentalbodies. Governmental intervention is often a good solution in that a law ensures thatindividuals are required to do that which is collectively beneficial, even if they do not have theincentive to cooperate. Hence, a law enhances the payoffs for cooperation and punishingdefection (Pacheco et al., 2009). The tendency toward formalization is particularly observedwhen the size of an industry increases and the boundaries of its markets expand, or whenconflictive norms create uncertainty about competitive behavior. Hence, how do governmentsintervene in EMPAs? What is the nature of this involvement? Does this increase the incentivefor resource users to cooperate?41

As a final, but important point: „institutions, no matter how stable they appear at first sight, aresubject to continual change and adjustment, deconstruction and reconstruction‟ (Arts et al.,2006: 96). Thus, this section presents a framework for analyzing institutionalization of theaims of entrepreneurs in EMPAs around degraded coral reefs. It does not however presentan „end-point‟ of the role of the private sector in creating new control mechanisms aroundcoral reefs. It merely paints a picture of what it looks like at this point in time, and the processof getting there.2.9 Framework for analysisThis thesis aims to contribute to an insight to private sector involvement in marineconservation, specifically through EMPAs. Based on the preceding discussion of existingtheory, a framework was created in order to use as a guide in the analysis of the role of theprivate sector in creating durable conservation and restoration agreements to protect coralreefs through EMPAs. This framework is built up around three main concepts;entrepreneurship, social capital and institutionalization; which have been recognized asimportant for understanding EMPAs.The first area of analysis lies in the nature of entrepreneurialism in the development of anEMPA. Opportunities and the individuals responsible for discovering and exploiting thesemust be defined. This sets the tone for the remainder of the analysis by defining to whatextent the private sector leads the formation and development of an EMPA. This is followedby an analysis of the interactions between the entrepreneurs and the social context in whichthey operate, using the concept of social capital. This analysis will present a picture of howthe private sector attempts to build legitimacy for themselves amongst the other actors in theEMPA, embeds itself in the EMPA, and induces cooperation and collective action. Finally, anexamination of the extent to which the private sector is able to institutionalize their ecologicalaims into the economic practices will provide an indication of how and to what extent theprivate sector is able to create durable conservation and restoration agreements to protectcoral reefs.This analytical framework will be applied to two case studies in Indonesia, an EMPA inPemuteran and one in Gili Trawangan, in order to determine the specific role of the privatesector in these two EMPAs. These results will be used as a basis for a concluding discussionon 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 ledto the development of an EMPA at both case study sites.42

3 Pemuteran3.1 IntroductionThe objective of the two following chapters is to investigate the way that two separate EMPAshave been shaped through social relations, in order to be able to discuss the potential role ofthe private sector in creating durable conservation and restoration agreements to protectcoral reefs, and more generally, in marine conservation, in chapter five. This chapter is aboutthe EMPA in Pemuteran and studies the way that the private sector has interacted with theenvironment, 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 orderto introduce the reader to the village, and to distinguish the main themes in this developmentprocess. 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 adescription of the main opportunities discovered and exploited, and the main actorsresponsible for this. This is followed by a study of how the private actors built up social capitalin Pemuteran; how trust was built between the different actors involved in the EMPA, and howthese private actors gained legitimacy. Finally, section 3.5 describes how these actorsactually succeeded in creating and altering institutions around marine management inPemuteran.3.2 History of fishing, tourism and marine conservation in PemuteranPemuteran is a small village, with roughly 6000 inhabitants, lying in the North West of theisland of Bali. It stretches over roughly two kilometers and lies nestled between the mountainsof 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 thesea 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 Eastafter the last eruption of Mount Agung in 1963-1964. These migrants came with nothing, anddid what they had to in order to eat. The shallow offshore banks of Pemuteran have thelargest area of coral reefs in Bali that are free of tidal currents. This gives Pemuteran therichest reef fisheries on the island, and traditionally most of the fish catch was used forsubsistence or traded for rice (Goreau and Hilbertz, 2008). Between the influx of the migrantsin 1963 and 1989 Pemuteran was a place of poverty, little education and no environmentalawareness.Due to its remote location, far from Bali‟s tourist entry points, Pemuteran was the last coastalarea to develop tourism, around 1992 (Goreau and Hilbertz, 2008; Piskurek, 2000). The43

current-free reefs rich in biodiversity made Pemuteran a great location for diving. Around1989 a Balinese tourism entrepreneur from the South and a British interior designerdiscovered Pemuteran as a potential tourist location. The two partnered up and bought landin the bay of Pemuteran. The designer started building cottages, Puri Ganesha, whicheventually opened in 1997 and the tourism entrepreneur, with a German partner, developedPondok Sari bungalows. In 1991 an Australian diver who had been working in the South ofBali arrived in Pemuteran. He was made responsible for the diving activities at Pondok Sariwhich were the beginnings of a small diving industry developing in this village. Later hedeveloped 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, andthe local tourism entrepreneur would be responsible for dealing with the village (personalcommunication: owner Taman Sari 5/2/2010). Up until 1997 the bay hosted only twobungalow resorts and dive operators (Piskurek, 2000). The tourism entrepreneur later sold hisshares of Pondok Sari to his German counterpart and started building new bungalows namedTaman Sari. Now the bay hosts seven resorts, with a few smaller bungalows oriented moreto budget tourists and numerous dive shops. The resorts which developed deliberatelyavoided 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, andboats with sails and paddles. The fishermen started using bombs and potassium cyanide asthese 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 limitedenforcement. Often in Bali, even if police see destructive fishermen, they will not act ifenforcement 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 grewsmaller in Pemuteran, it became evident that the reefs were under threat from local fishermenand their fishing methods. The government did not intervene or offer any support in enforcingthe national laws. Research initiated by ACP-EU Fisheries showed that when the localsrealized the decrease in the fish population they did not understand that it was partially theirown fault. After many conversations with the locals during the initial tourism developmentsone of the main issues became clear; the locals did not understand the relationship betweenhealthy reefs and the abundance of fish (Piskurek, 2000). The Australian diver, owner of ReefSeen Aquatics, began educating the local fishermen about the consequences of destructivefishing, and many village meetings were held to debate fishing in Pemuteran. In 1995 thevillage declared a NTZ and coral nursery in front of the beach; 500 meters along the beachfrom 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 theuse of cyanide and for fishing the entire reef area offshore of the village, which was enforcedby 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 tosurvive. Bomb and cyanide fishing „exploded‟ all over Indonesia, including in Pemuteran andthe ban on destructive fishing practices on the offshore reefs was no longer enforced. Thetugas pantai were no longer effective in enforcing the ban, nor did the fishermen stay out ofthe previously appointed marine reserve any longer. Fisheries collapsed due to the lack ofhabitat. Most of the destruction in Pemuteran was blamed on fishermen who emigrated fromMadura and Java to Bali during KRISMON because the fisheries on their own islands werealso collapsing (Goreau and Hilbertz, 2008). El Niño hit Bali early 1998, inducing a coralbleaching event in Pemuteran which particularly affected the area in front of Taman Sariwhere the water reached up to 35C as there is very little current in those waters. In additionto 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 (Goreauand Hilbertz, 2008). In response to declining food and tourism income the village decided tore-enforce the ban on destructive fishing methods, and the „second coming of protection ofthe 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 IndonesianWatersports Federation), and owner Yos Diving met scientists Tom Goreau and Wolf Hilbertz44

of the Global Coral Reef Alliance at a workshop in coral reef restoration sponsored by ActionMagazine at the Asian Dive Exposition in Bangkok. Seeing potential in Biorock, their newmethod of coral restoration, to approach the problem of the destroyed reefs in Pemuteran heinvited them to Pemuteran to start Biorock restoration projects. In June the two scientistsworked with the entrepreneur and divers from his dive operation and built the first Biorockcoral nursery in front of Pondok Sari Hotel, Pemuteran. In October of that year three morecoral nurseries were installed during a small workshop in front of the Sea Temple. A Germanundersea photographer, filmer and frequent diver of Pemuteran was building bungalows inTaman Sari with her partner. She met one of the two scientists on the beach after thisworkshop and was introduced to the Biorock concept. She was responsible for getting herpartner and business partner, the tourism pioneer, involved and the three of them took overthe Biorock project and paid for the first 18 structures and a small fee for the Biorockscientists. In April 2001, 19 more coral nurseries were installed in front of Taman Sari hotelwith assistance from Archipelago Dive shop, and another nursery was added in front of ReefSeen Aquatics. In May 2002, seven new fish habitats were installed in fishing grounds east ofthe protected area. These Biorock reefs now stretch over roughly half a kilometer in 40separate structures. The village and fishermen agreed to designate the new nursery in frontof Taman Sari as a NTZ. Shortly after the introduction of Biorock to Pemuteran, the village setup the Pecalan Laut, a group of local security guards, responsible for enforcing the ban ondestructive 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 specificentrepreneurs who discovered opportunities in Pemuteran, and through exploiting these wereresponsible for introducing the concept of marine conservation to the area. Hence, it is clearthat the private sector strongly led the formation of an EMPA in Pemuteran; first there wereentrepreneurs involved in introducing tourism development to Pemuteran. These were laterjoined by an entrepreneur who introduced the dive industry, and later a number of otheractors brought in new techniques for coral restoration to the area. Each of these, in their ownway contributed to the introduction and development of marine conservation in Pemuteran.Over time, these entrepreneurs, together with the fishermen and village government, createdthe EMPA as it exists today; a NTZ and an agreement with the fishermen has beenestablished, and a group of local men have been appointed to enforce this. This processinvolved a few different local stakeholder groups, resulting in quite a networked EMPA, withseveral centers of power. The path which led to the creation of these institutions is essentiallywhat will be studied in the remainder of this chapter. This route was driven by numerousinteractions between the entrepreneurs and the social context and local environment in whichall these activities took place, which will be studied in section 3.4. In this process of buildingsocial 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 insection 3.5. The next section will begin describing this process by introducing the privatesector-led nature of this EMPA in Pemuteran.3.3 The ‘E’ in the EMPA in PemuteranIn this section the concept of entrepreneurship in the context of marine conservation inPemuteran will be the focus. This chapter will assess the presence of entrepreneurialism inthe development of marine conservation in Pemuteran, with a specific focus on the process ofthe discovery, evaluation and exploitation of the entrepreneurial opportunities. The differentopportunities will be analyzed, illustrating the type of opportunity, the individual entrepreneursinvolved, and the role these opportunities played in developing marine conservation in thearea.3.3.1 Opportunity 1: Developing tourism in PemuteranThere appears to be a general consensus amongst the stakeholders interviewed that theowner of Taman Sari was the pioneer behind the development of Pemuteran as a tourismdestination, 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 religionlike the majority of the Balinese population, claims to have discovered Pemuteran during oneof his spiritual hikes. Together with a British Egyptologist and interior designer, he believed45

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 ninemountains behind it as a backdrop. When describing his initial impressions of the bay hereveals his true entrepreneurial roots:„...when you want to see the sunset and the sunrise, you don‟t need to book separatetrips, you can see both in Pemuteran. And with its calm waters, the potential of thesea is so rich with all the coral and fish.‟ (personal communication: owner Taman Sari5/2/2010)He immediately recognized the place held great potential if one knew how to capture thebenefits the area possessed.According to the owner of Taman Sari, the village was poor, the area was dry, and far fromexisting tourism areas. Hence, there were no investors interested in vesting time or moneyinto the area. A consultant who had previously done a feasibility study for one of the Amanresorts in Bali, was invited by the tourism entrepreneur to do a study to determine thefeasibility of developing the area as a tourist destination, and advised against this (personalcommunication: owner Taman Sari 5/2/2010). Despite this, the entrepreneur decided todevelop Pemuteran as a tourism destination. It is interesting to ask why he did so, despiteadvice against this. As Kirzner (1997) argues, entrepreneurial opportunities exist becausedifferent members of society have different beliefs about the relative value of resources, giventhe potential to transform them into a different state. At any given time only a subset of apopulation will discover any given opportunity. Thus, it is interesting to determine why it wasthis man who discovered the opportunity to develop Pemuteran as a tourist destination: whatvalue did he see, which other actors did not?As a well-off Indonesian man, from a high-caste Balinese family, with previous experience ininvesting in tourism developments this man had access to the information to recognize thepotential of the area as a tourist destination. Furthermore, his previous experience alsoprovided 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 indeveloping the area into a tourist destination.This entrepreneur claims to have come to Pemuteran to develop a tourist area in harmonywith nature (personal communication: owner Taman Sari 5/2/2010). His goal was to conservethe cultural and natural environment of the area. Some may consider him a socialentrepreneur in that his claims suggest the relative priority he gave to social wealth creationof the village of Pemuteran versus his own economic wealth creation. Regardless of what hismain motivation was, he was successful in gaining the support of the local community andsetting himself up as a critical figure in Pemuteran. To many he is considered the „bapak‟, orfather, of the area (personal communication: co-founder[1] Yayasan Karang Lestari24/1/2010). As someone from a higher caste he has certain obligations in the Balinese banjarsystem, the traditional community system, and his caste also resulted in the village listeningto 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 localstakeholders interviewed, regardless of their position or caste, when asked what hismotivation 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 caresabout 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 inPemuteran; 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 tohelp, not take away from them. If the villagers did not understand this, it would notwork. [...] An NGO with the best intentions would get stopped. There has to be a46

idge to the old community.‟ (personal communication: co-founder[1] YayasanKarang Lestari 24/1/2010)He was able to explain to the people in their own terms how things work, and they acceptedwhat he told them due to the trust he built up.Unfortunately he was diagnosed with cancer last year, so he is no longer a Pemuteranresident. He moved to the South and retired from his job in Pemuteran, and his two sons willtake over his businesses, including Taman Sari (personal communication: owner Taman Sari5/2/2010). It will be interesting to determine whether this has any affect on the relationsbetween the different actors in the EMPA given his role as the link between the localcommunity and the business community. Though he is giving up his active role andparticipation in the governance of Pemuteran, he does plan go back to Pemuteran toaccomplish his goal of setting up Pemuteran‟s own body of authority to govern tourism anddevelopments in Pemuteran. He envisions this as a „trias politica‟, with governance of tourismand development divided into three branches: the regional government, Pemuteran villageand businesses, each with separate areas of responsibility. Part of this system will includecharging 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 Pemuteranputs Pemuteran at a critical point in its history, as they are losing one of the characters whoplayed a critical role in the development of the area, and consequentially marine conservationin the area. Now that he is no longer a Pemuteran resident the link between the village andbusiness community is no longer there. As one of the founders of Yayasan Karang Lestaristates: „[...] maybe we will start working closer with the village. Maybe the diving operators willbe forced to make their own connections‟ (personal communication: co-founder[1] YayasanKarang Lestari 24/1/2010). Clearly this entrepreneur played a significant role in thedevelopment of marine conservation in the area. The question arises how he was able toinfluence the people in the area in the way he did and thereby contribute to the creation of theEMPA as it exists now. What did he do to get through to these people? What made themlisten? This process of building trust and creating legitimacy for himself and otherstakeholders in the EMPA will be studied in section 3.3.3.3.2 Opportunity 2: Developing a sustainable diving industry in Pemuteran bayThe second opportunity which can be clearly distinguished was that of creating a diveindustry in Pemuteran. As with tourism development in the bay, there appears to have beenone 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 somethingfor himself. He was told about Pemuteran and came there in 1991, stopping in Pemuteranand diving there during a dive safari he organized for some guests. At this point in time therewas no diving in the area and Pondok Sari, the only hotel, had only 2 rooms. He startedorganizing dives for Pondok Sari guests for about a year until he founded his own diveoperation, Reef Seen Aquatics, in 1992. He is seen as the founder of diving in PemuteranBay (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010). As with thefounder of tourism in Pemuteran, this individual possessed the information and cognitiveabilities necessary to recognize the potential of Pemuteran as a dive destination. Casson(1982) defines entrepreneurial opportunities as situations where new services can beintroduced at a price greater than their cost of production. This Australian man, as anexperienced diver, recognized the quality of the coral reefs in Pemuteran bay, and thepossibility to make profit from selling this service in the bay, thereby capturing such anopportunity, as defined by Casson.The concept of entrepreneurialism within the actions of this individual can be analyzedfurther. The dive pioneer discovered that there were a lot of broken and overturned corals inthe areas in which he dived, and began repairing the coral with his staff during their dives. Asbusiness picked up, they continued doing so during their dives with the guests. The guestswere told what they were doing and appeared to appreciate the dives more; at the same timeas earning money they were able to repair more reefs (personal communication: owner ReefSeen Aquatics 3/2/2010). Hence, this dive operator was the first to introduce the concept of47

environmental entrepreneurialism to Pemuteran where the exploitation of the opportunity ofstarting a dive operation in Pemuteran contributed to reducing environmental degradation.Obviously repairing the reef little by little is merely a small contribution to reducingenvironmental degradation, but these efforts later grew to a larger scale, when heapproached the core cause of the problem of the broken corals, namely destructive fishingpractices.When this entrepreneur arrived in Pemuteran, there were between 50 and 60 boats on shoreevery day practicing dynamite and cyanide fishing. Seeing the destructive fishing practiceshappening every day during his diving operations, he began to talking to, and educating thePemuteran fishermen about the effects of destructive fishing practices. „He is the one whoraised the consciousness of the locals and introduced the understanding that coral is actuallythe foundation of the entire ecosystem‟ (personal communication: co-founder[1] YayasanKarang Lestari 24/1/2010).At this time there was no body of authority appointed by the village to stop these destructivefishing practices. When illegal fishing was observed by the dive pioneer and his staff, theywould call the police. If the police came, which was often not guaranteed, they would talk tothese fishermen, but would rarely make arrests due to lack of evidence (personalcommunication: owner Reef Seen Aquatics 3/2/2010). This is a reflection of the muchdiscussed failure of the Indonesian government in enforcing rules of destructive fishing, andthe need for community-level enforcement (Satria and Matsuda, 2004). Once some of thelocal fishermen started to understand the relationship between destructive fishing practicesand the abundance of fish, he got some of the local fishermen involved to explain to the illegalfishermen why what they were doing was having a negative effect on fisheries. Eventually thefishermen could actually experience fish stocks increasing a few months after certaindestructive fishermen were stopped. After this process took place several times over a fewyears it appeared to be sufficient „evidence‟ for the fishermen and village that destructivefishing had to stop, and that the government was not going to be the actor do this. Hence, thevillage placed a ban on destructive fishing practices in the bay to be enforced by twoappointed beach guards, and declared a NTZ in front of Reef Seen Aquatics, the dive shop ofthe 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 turtlehatchery project was created in 1992. Later, in 2006 the Reef Gardeners, a team of youngmen recruited from the various fishing organizations in Pemuteran trained to maintain andprotect the reefs in Pemuteran bay was set up.Long after his initial efforts to introduce the concept of marine conservation to Pemuteran, thisentrepreneur continues to have a vital function within the foreign diving community of the48

area. Since his opening of the first dive shop in Pemuteran, many foreign-owned and a fewlocal-owned dive shops have opened in Pemuteran. He continues to be the go-between forthe dive shops and the fishermen as he has close relations with the latter, because he hasbeen here the longest and speaks the language (personal communication: manager BaliDiving Academy 27/1/2010). „He is there for communication between dive shops andfishermen‟ (personal communication: owner Easy Divers 27/1/2010). Similar to the owner ofTaman Sari, this dive entrepreneur was able to build up trust amongst a certain localstakeholder group in Pemuteran, namely the fishermen, and therefore established a vitalcommunicative role in the EMPA in Pemuteran. The question arises how he was able to buildup this trust, and how he was able to raise the consciousness of the locals, and eventuallysucceed in altering the institutions around fishing in Pemuteran. These themes will be furtherexplored in sections 3.4 and 3.5 respectively.3.3.3 Opportunity 3: Adding value to the reef with BiorockWhile the previous two sections described the discovery and exploitation of opportunities inthe form of services which could be offered in Pemuteran, which had not been previouslyoffered, this section will discuss the introduction of a new technology to the village ofPemuteran, 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 thewider concept of ecological modernization. The concept of entrepreneurially driven innovationin products and services as the critical engine driving change in capitalist society broughtforward by Schumpeter as early as 1934, remains a very relevant theme today and translatesto a place like Pemuteran, where technology has contributed to the promotion of marineconservation.Tom Goreau and Wolf Hilbertz, two scientists in the Global Coral Reef Alliance are thecreators of Biorock technology. The GCRA‟s Biorock Ecosystem Restoration technology useslow voltage currents to grow limestone rock out of the sea on steel structures. It provides thematerial which coral skeletons are made of, and on which baby corals prefer to settle. It isself-repairing and can be designed to create denser and more varied hiding places for fishthan a natural reef. Corals which grow on this Biorock grow two to six times faster thannormal, and have a higher potential for survival from temperature increases caused by globalwarming. Besides being used to grow floating coral reefs in shallow banks, Biorock can beused to grow floating coral reefs in deep water, thereby providing habitat for pelagic fish suchas 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 toPemuteran to try out their technology in this bay. Being a dive operator and seeing thedestruction on a daily basis, he wanted to try out this new technology and see if it would makea 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 Biorockcoral nursery in front of Pondok Sari hotel, which is where Yos Diving used to be located. Thefirst structure and the accommodations for the scientists were fully funded by the owner ofYos Diving and Pondok Sari hotel (Scuba Diver Magazine, 2004). In October of that yearthree more coral nurseries where installed in front of the Sea Temple during a smallworkshop. After this, other actors took over the development of Biorock in Pemuteran.There are two classes of entrepreneurs which must be distinguished between. The twoscientists who developed this product created an innovative product and placed this on themarket. If one uses Schumpeter‟s (1934) previously mentioned argument thatentrepreneurially driven innovation in products and services are the critical engine drivingchange in capitalist society, these two scientists can be illustrated as entrepreneurs whichinduce change in modern coral reef conservation efforts; from conservation to restoration. Asecond entrepreneur can be recognized in the individual who recognized the opportunity tointroduce Biorock to Pemuteran. Again, an individual had access to information on coralrestoration techniques, and the funds to try this out. When asked why it was him to introducethe technique to the area, almost all local stakeholders claim the same thing. „He knew abouttourism which was a very new concept for the locals. He knew about Biorock which the localsdid not, and he could fund the project‟ (personal communication: Village Secretary49

25/1/2010). At this point it is interesting to bring in the concept of environmentalentrepreneurship again: market failure in Pemuteran existed in the collapse of fisheries due tothe use of destructive fishing practices destroying the coral reefs in the bay. Exploitation ofthe opportunity to restore this coral using an innovative technology may not by definitionalleviate this market failure, but it does work toward reducing environmental degradation.Hence, this entrepreneur can be seen as another environmental entrepreneur in the history ofthe development of the EMPA in Pemuteran.The Biorock project was taken over by other actors who developed the application of thetechnology in Pemuteran further. The further development of the project had more importantrepercussions in terms of marine management in the area. A German videographer andfrequent diver of the Pemuteran reefs, was in Pemuteran in 2000 as she was working onsome bungalows in Taman Sari. Her and her partner at the time were business partners andgood 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 theinitial developments of the area during the early 90‟s, and has compiled some documentariesfor publication. She had been living in the South of Bali, but as a frequent visitor of Pemuteranshe had witnessed the coral bleaching event in 1998, and the effect of the Asian economiccrisis on the fishing practices in Pemuteran and claims she had always felt helpless and didnot know how she could contribute. She happened to be on the beach in October 2000 whichis where she met Wolf Hilbertz after the first Biorock workshop. He introduced her to theBiorock concept and she observed the difference between the state of the structures placedin May, and the one that had just been installed. Biorock occurred to her as a way to actuallydo something to help in Pemuteran. She believed that the Biorock project would be great forthe future for the village, and to increase the health of the coral reef (personalcommunications: co-founder[2] Yayasan Karang Lestari 3/2/2010).The videographer convinced her partner and business partner that this was a great project forPemuteran and the three of them took over the Biorock project. The videographer and herpartner paid for the first 18 structures and a small fee for the two scientists. After this severalworkshops followed and more and more structures were put in, supported by privatedonations. The technology which is used for Biorock such as the cables and the rest of theequipment necessary was far too expensive for the local community to invest in; „the locals donot 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 tofinancial 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 infront of Taman Sari was designated as a NTZ for the fishermen, and signs were put up on thebeach 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

A few months later the village formed the Pecalan Laut to re-enforce the destructive fishingban, 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, havealso had an effect on the attitude toward marine conservation amongst the local stakeholdersin 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 3.5.3.3.4 ReflectionThe process of the exploitation of entrepreneurial activities involves interactions between thedifferent entrepreneurs and the context in which their activities take place. There are clearstarting points at which the entrepreneurs came into the picture in Pemuteran; when hotelsstarted being built by two entrepreneurs, when diving was first established to the area by adive entrepreneur, and when Biorock was introduced, and later developed further.Entrepreneurs were not only responsible for developing a hospitality and diving industry inPemuteran, but also for introducing marine conservation to the area, partially throughcapturing environmental entrepreneurship opportunities, where exploiting opportunities suchas diving also had positive effects on the environment. Their efforts, some directly, someindirectly, led to the establishment of an EMPA in Pemuteran. It is interesting to note thatthese opportunities were exploited by mostly individual entrepreneurs, through separatedefforts: (1) the dive pioneer who introduced sustainable diving, (2) another diver who broughtin Biorock technology, and (3) a group of three other people affiliated with the tourismentrepreneur who developed Biorock further. The presence of these private actors in theEMPA however is not limited to the introduction of the concept marine conservation to thearea; the above-mentioned entrepreneurs, as well as additional actors in the ever-developingprivate sector in Pemuteran have embedded themselves into the different institutions whichdefine this EMPA.The private sector-led nature and presence of individual entrepreneurs in this MPA has nowbeen introduced, but the connection between these entrepreneurs and with otherstakeholders remains to be determined. The above-mentioned foundation for private sectorinvolvement in the EMPA was followed by a process of social negotiation in which the privateactors built up trust and support amongst the other actors in Pemuteran, in order to gainlegitimacy for themselves. Trust is particularly important to study in this EMPA as it featuresmultiple sites of power and control amongst the different stakeholder groups with which theentrepreneurs have interacted. There are several actors, with power and control overresources, involved resulting in polycentric powers existing in the EMPA. Hence, it isimportant to determine how the E‟s, or the entrepreneurs, in the EMPA have been able tolegitimize themselves with respect to the other actors involved. Hence, the following sectionwill explore the way that the private sector has built up trust, and created legitimacy andauthority over marine conservation, necessary to institutionalize the EMPA.3.4 Social capital of the entrepreneurs in PemuteranThis section aims to explore the process of social negotiation between the private sector andother actors in the EMPA, and subsequent building of social capital. The actual assetsembedded in the relationships among the individual entrepreneurs, fishermen, villagecommunity and government will be analyzed. This will be done by exploring the network inwhich the EMPA is organized and the relations between the different actors. This analysis willbe done for the four relations most relevant in the EMPA: the relations within the privatesector, particularly between the dive operators, those between the private sector and the localcommunity, between the private sector and the fishing community, and the private sector andthe state. These will begin with a short description of the communication structure in theserelations will be given, followed by a closer look at the quality of these relations; whether thereis trust between the different actors, whether they cooperate, and how decision-making isorganized. A network diagram illustrating the communicative relations between the actors ispresented in the following diagram, in order to guide the reader through the next few sections:51

Figure 7: Network diagram displaying communicative relations in the EMPA3.4.1 Interrelations in the private sector: dive operators and dive operatorsDespite the fact that there is no formal communication structure between the dive operators inPemuteran, the relations amongst the dive industry appear to be based on mutual trust andcooperation. However, the lack of organization amongst these dive operators has led toinequitable distribution of benefits which dive operators reap from certain marine conservationinitiatives 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, noneof the dive operators work together; they all operate separate from each other. All diveoperators interviewed acknowledge there is no regular communication between the diveoperators in the form of a formal communication system. However, informally most of the divecenters 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 diversand equipment to help out.Furthermore, when it comes to the dive business itself, they „do not cut each other‟s throatson prices‟ (personal communication: owner Sea Rovers 30/1/2010). The dive shops inPemuteran are competitive businesses but most of them cater to different markets. There aresome operators which cater to segments based on nationality, with a dive operator cateringmostly to Germans, another directed toward many Australians, and a few more directed at thelocal segment. Another operator works in cooperation with one of the hotels. Hence, theredoes not appear to be a level of competition which could potentially lead to price wars andlead to dive operators placing less importance on the environment. The owner of the oldestdive operator in Pemuteran goes as far as saying there is a better business environment inPemuteran than in other tourist areas. „People are happy in Pemuteran, guests sense thisand are therefore inclined to come back‟ (personal communication: owner Reef SeenAquatics 3/2/2010). This implies that cooperation and good relations based on trust andfriendliness 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 conservationefforts differs from entrepreneurs in business for example, as competition needs to beremoved to induce cooperation and consequentially protect the environment.It is important to mention that it has been suggested that logically, more communicationbetween the dive shops in Pemuteran would make decision-making much easier (personalcommunication: manager Biorock Centre 26/1/2010). However, it can be argued that the lack52

of a formal agreement between the dive shops in Pemuteran is really not an issue simplybecause the reefs are still being well-maintained. It appears that even though there is noagreement, all the dive operators encourage no anchoring and similar codes of conduct fordiving practices. Hence, perhaps sometimes working without a rigid frame can be morebeneficial than working with one, depending on the area (personal communication: directorReef 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 thecurrent level of equity in terms of contributing to and benefitting from the marine conservationinitiatives in Pemuteran; none of the dive operators contribute financially to marineconservation initiatives such as Biorock and Reef Gardeners, whilst they do benefit fromthem. All the dive operators take their clients to dive in the Biorock area for free. The area isoften used for introductory dives and night dives, but the Biorock Centre does not chargethem 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 goodstate and they too, do not receive any sort of financial support from the dive industry inPemuteran (personal communication: owner Reef Seen Aquatics 3/2/2010). This canpartially be attributed to the fact that there is no communication between these initiatives andthe dive operators. What is also remarkable is that there is no cooperation between these twoinitiatives themselves, whilst they share a common general goal toward healthy reefs. Thiswill be discussed further in section 3.5.Though it has been suggested that decision-making may be improved if the dive operators inPemuteran would communicate more, there appears to be consensus amongst the membersof the dive industry in Pemuteran that they cooperate sufficiently, despite a lack of formalcommunication or organization of these dive operators. Most mention that they are friendswith some of the other dive operators. Hence, (lack of) communication between the diveoperators does not appear to be a distinguishable problem in the bay. The challenge withouta formally organized dive industry lies in getting the entire industry to contribute equally toinitiatives they benefit from.3.4.2 Private sector and local communityMembers of the local community do not own any of the major tourism businesses inPemuteran, with the exception of Kokak Dive. All the major hotels and dive shops are ownedby foreigners or wealthy Indonesian tourism entrepreneurs. As a result, in general, the localcommunity has no vested interest in the tourism businesses, so there was not an immediatelink between the local community and the tourist industry. However, without village supportand cooperation, it would have been difficult to institutionalize the EMPA and induce collectivesocial action against the destructive fishing practices. Hence, the private sector has done anumber of things to build social capital in Pemuteran and gain the trust, and thereby thesupport of the local community in Pemuteran.To understand how the relationship between the private sector and the local community hasbeen built up, it is important to first describe communication within the village. The village isgoverned by a village council. This council is lead by the „Kepala Desa‟, the village head, whoenforces the rules of the Balinese government, and the „Kepala Adat‟, the head of thereligious authority. There is a department representing the fishermen in the villagegovernment (personal communication: Village Secretary 25/1/2010).In terms of communication between the business community and the village, the link wasalways the owner of Taman Sari. He would meet with the community and express informationhe would receive from the business community. He was seen as the go-between (personalcommunication: co-founder[1] Yayasan Karang Lestari 24/1/2010). As mentioned in section3.2, he created this role for himself, and managed to build up trust and support amongst thelocal community of Pemuteran. Hence, this individual entrepreneur possessed a vital role inthis EMPA as the link between the private sector and the local village community. Thisunderlines the importance for good relations, and particularly good communication with theexisting local institutions, in this case in the form of the village government, in an EMPA.53

There are three specific tools which the private sector used to gain the trust amongst the localcommunity, which has determined the level of institutionalization of the EMPA. Thecommunity was involved in decision-making, the village was provided with alternative incomeopportunities and the entrepreneurs provided the village with benefits.From day one the owner of Taman Sari approached the task of developing Pemuteran withthe idea that community participation was key: „What we are doing [...] will not succeed or beeffective if we are not supported by the community, or without the participation of thecommunity‟ (personal communication: owner Taman Sari 5/2/2010). He attended villagemeetings and temple ceremonies, and repeated his intentions to the village, and his need fortheir support. Thus, as pushed by the tourism pioneer, decision-making about marinemanagement in the area also had to be participatory. Early decisions to protect the bay ofPemuteran seemed to be largely village-made decisions. It was Reef Seen Aquatics and thevillage heads which set up the first marine reserve or NTZ, Kebun Chris, in front of Reef SeenAquatics. It was also the village who appointed the tugas pantai at the time to guard thebeach. These types of decisions are always supported by the Kepala Adat, which createslegitimacy in the eyes of the local residents, and leads to social control, an important tool forenforcing the agreements made around marine management in the area.When the founders of Yayasan Karang Lestari introduced the Biorock project to the owner ofTaman Sari, eager to start things off immediately, he stopped the developments andemphasized the importance to involve the village, and said that without this, such a projectwould not work. Hence, in an effort to encourage community participation, he approached thevillage with the question how they would protect the Biorock area, and the village decided toappoint the existing local security force, and set up the Pecalan Laut (personalcommunication: co-founder[2] Yayasan Karang Lestari 3/2/2010). Hence, the private sectorwas able to bring in an existing legitimate local organization, thereby creating participation ofthe local community in marine conservation, and increasing local support of agreementsaround marine management. The use of an existing local organization, together with thepreviously mentioned efforts to gain the support of the Kepala Adat implies the importance forthe private sector to acknowledge and support local culture and tradition in order for them tocreate the social control necessary to induce cooperation.Employment was also very strong tool used to reach, and gain the support of the localcommunity. Both the two pioneers encouraged the employment of locals in tourismbusinesses. It was one of the first things the tourism entrepreneur and owner of Taman Saripromised when he first spoke to the Pemuteran public. He promised that the villagers wouldget all the jobs in the tourist industry. All jobs in his resort, aside from the architects which heemployed from outside, would be for the village, and the villagers would be trained to work inthe tourist industry (personal communication: owner Taman Sari 5/2/2010). Not only didemployment provide the community with an income alternative, it is also a way to educatethem and promote marine conservation. With the majority of staff in Pemuteran tourismbusinesses 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 concludethat it is beneficial to protect this. „They are more likely to believe each other and learn fromeach 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 communityin marine conservation activities appears to have been very important way for the privatesector to prevent their role in Pemuteran from being interpreted as external actors imposingnew rules on this existing community who marginalize the community‟s members in theprocess.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 operatorsfor the Biorock Centre. „They act as ambassadors to conservation in the village‟ (personalcommunication: co-founder[1] Yayasan Karang Lestari 24/1/2010). Having locals working forthese projects legitimizes the projects, and increases local understanding and awareness.Some of the entrepreneurs also invested in non-environment related benefits for the villagewhich contributed to gaining their respect. The owner of Taman Sari invested a lot of money54

into something which is very important to the Balinese: religion. He re-built temples, andspent a large sum of money on temple ceremonies for the people of Pemuteran. Recently hepaid 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 thelocals. In addition to this the 10% of profits from the Bali Dive Academy which would normallygo 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 hisdive operation for kids to practice their Balinese dancing because the village did not have abig 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 inthe world, but especially in Indonesia, when you are in a village you are very muchconnected with each other, there is a strong social system. It is important to be part ofthis before working there.‟ (personal communication: director Reef Check Indonesia26/2/2010)Thus, the private sector in Pemuteran invested in non-market investments such as religion togain legitimacy of the local community. This implies that investing in non-market assets is away for the private sector to embed themselves into marine conservation.3.4.3 Private sector and fishing communityThe fishing community is separate from the Pemuteran community in that some of thefishermen are very nomadic. There are however a number of fishermen who are fromPemuteran village, and have always had fishing as their major source of income. Since thisstakeholder group essentially shares the resource from which they gain their livelihood withthe dive operators, and the fishermen made use of this resource far before the private sectorwas in Pemuteran and consequentially build up their own common property institutions, theirsupport 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 Javanesefishermen, resulting in a mix of religions represented (personal communication: managerBiorock Centre 26/1/2010). There are four fishing cooperatives within the fishing village ofPemuteran, each with a leader. The chief of the fishermen is also the leader of one of the fourcooperatives. Each of the four fishing cooperatives has individual meetings every month, tosolve problems and to discuss what is happening that month. The leaders of these groupsonly come together if necessary. A meeting between the chief of the fishermen and the villagestaff is only organized when necessary (personal communication: Chief Fishermen28/1/2010).Representatives of all main stakeholder groups in Pemuteran; from the dive shops, hotelsand village; had regular meetings with the fishermen in the past, when the blast and cyanidefishing was seen as a problem. These regular meetings no longer take place as bomb andcyanide fishing is no longer perceived as an issue (personal communication: manager YosDiving 30/1/2010). Though these meetings may no longer be necessary for controlling thedestructive fishing practices, communication between the dive shops and the fishermen is stillvery important as they share a resource on a daily basis. However, the individual diveoperators do not have regular communication with the fishermen. The Australian divepioneer, and owner of Reef Seen Aquatics, has an established role as communicatorbetween the dive shops and the fishermen, which has been confirmed by representatives ofthe dive industry and fishing industry alike. If the dive shops have something to discuss theyhave a meeting, and then if necessary afterwards they invite the chief of the fishermen tomeet with them, or the owner of Reef Seen Aquatics goes and speaks with the fishermenhimself (personal communication: owner Easy Divers 27/1/2010). It is interesting that this isthe second entrepreneur that has a vital role for communication and relations between theprivate sector and a local stakeholder group. This implies that two separate individualentrepreneurs have very strong roles in this EMPA. This increases a certain level of risk in thefact that a lot of power and responsibility are concentrated within two actors, and asmentioned previously one of these is not longer in Pemuteran. What this might mean for the55

future of the EMPA essentially depends on the level of institutionalization that has beenreached 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 theprivate 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-financialincentives were the primary tools used to establish good relations with the fishing community.Early decisions regarding marine conservation in Pemuteran, when the tugas pantai wereappointed and the first No Take Zone was appointed in 1995, were made as a result of manydebates between the village, fishermen and the two pioneers. These were participatorydecisions 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 affectedthe behavior of the fishermen.Though the village and representatives from the fishing community, as well as dive operatorsand hotels are said to have been involved in the decision to introduce the NTZ on the Biorockarea, 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 amodel for the island and for the country. They promised the village that „when this modelsucceeds in making the fishing industry grow fast you will have lots of support‟ (personalcommunication: owner Taman Sari 5/2/2010). The owner of Taman Sari admits that the waythis decision was communicated to the village and fishermen was not very effective. He addsthat the participation and support of the fishermen could have been stimulated better. Theowner of Reef Seen Aquatics agrees that despite that fact that everyone was involved in thedecision-making, the initiators were too aggressive with the local fishermen during thesedecisions, instead of sitting down and talking to them (personal communication: owner ReefSeen Aquatics 3/2/2010).The situation was interpreted as one where Westerners who had not been in Pemuteran for avery 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, andthings took more time to change: when the NTZ was first introduced there were sometimesconflicts between the fishermen and the Biorock representatives because the fishermen didnot understand the concept yet, and they had always fished in this area. It took about 1.5years for the conflicts to die down (personal communication: manager Biorock Centre26/1/2010). This example illustrates the importance that participation in decision-making hadin Pemuteran to legitimize a NTZ for in the eyes of the fishermen, who made use of theresource originally, and formed their own common property institutions which werechallenged by these new norms.Employment was also a very important tool to gain the support of the fishermen, mainly tooffer an income alternative for the fishermen who could no longer fish in the NTZ. The diveshops were encouraged to employ the fishermen: „They know the sea: don‟t get a farmer tofish, or a fisherman to go and farm‟ (personal communication: owner Reef Seen Aquatics3/2/2010). All the foreign dive shops, when asked how their relations are with the localcommunity claim that they contribute by employing the majority of their staff from the fishingcommunity which encourages fishing community support of the dive industry. Employingfishermen in the dive shops also educates them in terms of marine conservation andincreases awareness amongst the fishing community specifically.Aside from this indirect form of education, the owner of Reef Seen Aquatics initially educatedthe fishermen, in order to teach them the relationship between a healthy reef and abundanceof fish. For example, one of the first things he did was showing a few fishermen underwatervideos of healthy and unhealthy reefs in the Philippines in order to show them thisrelationship. 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 managementof the area.56

The dive industry is aware that the best protection is reached if they also have good relationswith the fishermen. They understand that the fishermen want to fish because they need tocatch food for their family, and that the dive shops cannot simply tell them they cannot. Theyhave created additional benefits for the fishermen to encourage their cooperation. Some ofthe dive shops pay the fishermen an additional „monthly fee for using their area‟ (personalcommunication: owner Reef Seen Aquatics 3/2/2010). The owner of Reef Seen Aquatics isresponsible for collecting this money, and only some dive shops contribute (personalcommunication: manager Bali Diving Academy 27/1/2010). In return the fishermen protect themoorings which locate the dive sites, and ensure that fishermen do not cut mooring lineswhen their nets get caught in these. Some of the dive shops also supply the fishermen withadditional non-financial benefits. One of the dive operations builds bamboo cages in theocean which attract fish to provide alternative areas for the fishermen to fish and encouragethem 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 (personalcommunication: manager Yos Diving 30/1/2010).3.4.4 Private sector and public sectorGovernment support for Pemuteran has been scarce. The government does not provide anysort of regular financial support or subsidies for Pemuteran (personal communication: VillageSecretary 25/1/2010). They only offer a form of policy support in that Pemuteran isdesignated as a Daerah Parawista Laut, or Sea Tourism Area, part of the Kawasan WisataBatu Ampat, or Batu Ampat Tourism Area. This reaches from the Mengangan National Parkuntil Banyu Poh (East of Pemuteran).This tourism area is assigned by provincial law, and is already accommodated in the regencylaw (of Buleleng regency). In summary, the regency law states that the tourism area has toinclude some kind of conservation effort, but does not go into detail as to how. Each villagehas to develop these details under a village decree. Hence, in Pemuteran it is stated that thearea designated for tourism can only be used for tourism, which supports the NTZ, where nofishing 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 ofrecognition; the project has been visited by Bali government officials, as well as ministers ofEnvironment, Marine Affairs and Fisheries, and Culture and Tourism. In 2002, Gede Ardika,Indonesia‟s Culture and Tourism Minister presented the project at the United NationsPreparatory Committee & Ministerial Meeting of the World Summit, held in Bali in late May. InJuly 2002, Dr. Klaus Topfler, Executive Director United Nations Environmental Programvisited the project (Goreau and Hilbertz, 2008).3.4.4 ReflectionThe government clearly does not play a role in the governance of this EMPA. The networkwhich makes up this EMPA is very localized and independent from the state, which, as canbe seen in the network diagram, is not regarded to be in the EMPA network. The networkincludes 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 governmenttogether 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 thesestakeholder groups.There is also no formalized cooperation within the private sector itself. The dive operators donot have a formal meeting structure, but claim that relations are still based on friendship andtrust, which appears to be due to the lack of competition between the dive operators. Thoughthe relations appear to be good, the representatives of two environmental projects initiated bymembers of the private sector display their concern for the lack of equal contributions to theirinitiatives by the different dive operators. Hence, perhaps the lack of an organization in theprivate sector does not have detrimental effects in their inter-relations, but it does lead toinequity in terms of contributions to projects they all benefit from.Despite being arguably quite separate from the fishing community and the village, therelations between the private sector and these local stakeholder groups appear to be friendly57

as well. Communication between the private sector and the village government traditionallywent through the tourism pioneer who acted as the middle man, when this was deemednecessary. It is unclear whether someone will take over this role from him. Communicationbetween the fishermen and the dive sector is channeled through the dive pioneer. Theseindividuals were able to build up trust which enabled them to take on this role ascommunicators. Hence, individuals have had a strong role in creating social capital for theprivate sector in this EMPA. The private sector as a whole also put in effort to gain the trustand legitimacy of the village as well as the fishermen; they provided employment from a veryearly stage onward, traditional village and fishermen institutions were generally included indecisions around marine management, and when they were not the result was a lack ofcooperation on behalf of the fishermen.As a result of this process of social negotiation, the private sector in Pemuteran has beenable 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, thenext step lies in determining the extent to which the private sector has been successful inchanging behavior and actually creating new institutions to lead marine management inPemuteran. Thus, the next section will analyze the extent to which the private sector inPemuteran was able to institutionalize their ecological aims in the economic behavior of thefishermen and other stakeholders.3.5 Institutionalization of the EMPAThe main environmental problem which needed to be overcome in Pemuteran could be foundin the destructive fishing practices applied, which destroyed the coral reefs. Given the failureof the government to remove this problem, a gap existed in Pemuteran, which the privatesector was able to fill, arguably largely due to their access to funding. This resulted in a shiftto private sector involvement in governance in Pemuteran. The private sector were faced withexisting traditions and institutions around fishing and use of the marine area, which in somecases were used to actually compliment the new institutions created by the private sector, butin some cases caused conflicts between the „old‟ and the „new‟. This section will assess inhow far the private sector have been successful in gaining legitimacy and actually altering theinstitutions around marine management conservation in Pemuteran; how the new and oldinstitutions are linked, how incentive and reward systems were altered and created, howfishing and tourism norms changed, what organizations were created which contributed tochanges in marine management, whether property rights were created, and whether theadopted voluntary institutions evolved into mandatory rules enforced by government.3.5.1 Alteration of fishing industry norms: a ban and a No Take ZoneNorms around fishing have changed over time in Pemuteran. Two agreements have beenmade in which rules have been set to regulate fishing activity, and the use of the marineenvironment in Pemuteran. These agreements were set between the fishermen and thePemuteran village authorities. However, the private sector heavily influenced the formation ofthese agreements. Without the existence of the tourist industry it is unlikely that the need for aban on destructive fishing practices would have been recognized. Furthermore, theintroduction of the Biorock technology to Pemuteran directly led to the introduction of the NTZThus, the two agreements can conceptually be seen as being between the fishermen and theprivate sector.First of all, blast, cyanide and big net fishing are not allowed in the bay (personalcommunication: Village Secretary 25/1/2010). This agreement can be seen as simply a localapplication of the national law against destructive fishing practices, and, more importantly, thedecision 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 wasvery much initiated by the two pioneers of Pemuteran who had the knowledge and experienceto know that the fishing practices were damaging the environment, and that tourism would dieout if the reef was destroyed any further. The blast fishermen and cyanide fishermen weredisturbing the divers, and the catch of the fishermen was declining because of the methodsthey were using. The dive pioneer educated the fishermen in the consequences of theirbehavior and eventually the fishermen too acknowledged that something needed to be done.58

Enforcement of this agreement was carried out by tugas pantai, but died out in 1998 when theAsian economic crisis hit Indonesia and fishermen from all over Indonesia came to Bali andblast fishing became a very big problem once again. In 2000 the ban was re-introducedfollowing 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 whythey have to protect the marine environment in Pemuteran, and no longer use destructivefishing practices. According to the chief of the fishermen, they learned by experience; theircatch was very low for 3 to 5 years, and when the cyanide and bomb fishers were stoppedthey could experience an increase in catch (personal communication: Chief Fishermen28/1/2010). Hence the legitimacy of this agreement lies in the fact that the fishermenrecognize that it lies in their own benefit, and not just of the dive industry, to use sustainablefishing practices. As stated by the chief, this is due to their own experience, but it can beargued that the education of the dive pioneer, as well as the numerous debates held betweenthe fishermen, village and dive and tourism pioneers in the early days and consequentially thefishermen‟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 itslegitimacy significantly. It is interesting to note that all the local actors interviewed which werein Pemuteran in the early 90s state that fisheries „recovered‟ when protection of the area wasintroduced. Whether this is because Pemuteran truly has an ecological function and theprotection of the area truly contributes to wider fisheries, or solely because the destructivefishing practices were stopped is unknown.The second of the agreements for a NTZ in the Biorock area in front of Taman Sari was madein 2000. It is interesting to note that there was a similar agreement in the 90s, in the form of aNTZ referred to as Kebun Chris, which also ceased to exist in 1998 because of the effects ofthe Asian economic crisis. The fact that the ban as well as Kebun Chris ceased to exist as aresult of the monetary crisis raises some questions about this EMPA, as well as EMPAs ingeneral: did these two rules cease to exist because they were not institutionalized, andtherefore not strong enough to withstand the effects of the economic crisis? Were the rulesperhaps not actually legitimate in the eyes of the fishermen? Or, do EMPAs simply not workwhen the economy suffers? Research has not provided any insight about the legitimacy ofKebun Chris, but the above discussion suggests that the ban was in actual fact quitelegitimate for the fishermen, suggesting the risk that the poor performance of an economy canbring to EMPAs.The current NTZ in front of Taman Sari is the only area in Pemuteran bay where fishermencannot fish for consumption, with the exception of squid. This rule also applies to the villagepublic who traditionally frequently fished in the shallows for food (personal communication:manager Biorock Centre 26/1/2010). This decision was supported by Pemuteran villagegovernment‟s local interpretation of the regency law which designates it as a tourism areawhere no other activities may take place.The legitimacy of the current NTZ is more debatable than the ban on destructive fishingpractices, mainly because neither the village, nor the fishermen were the initiators of makingthe area in front of Taman Sari a NTZ. As mentioned in the previous section, it took time forthe fishermen to get used to this new ruling because the private sector did not sufficientlyinclude them in creating this new norm, and also simply because it opposed the way theyused the area previously. The chief of the fishermen claims that now fishermen recognize thatthe 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 thispoint that there is no proof that this Biorock area actually has an ecological function, andwould contribute to an increase in fish stock when protected. Hence, one must ask whetherthe legitimacy of this agreement does not also to some extent stem from the additionalbenefits offered to the Pemuteran fishermen and wider public. Employment, in the case of theNTZ, has been a very important source for support in that the fishermen and family memberswho work in the tourism industry experience first-hand that the NTZ caters to a lot ofsnorkelers, swimmers and divers, which in turn generate income for the Pemuteran public.59

It is interesting to note that the fishing community has also created some additional rules oftheir own, as a direct effect of initially private sector marine conservation efforts. They havemade it mandatory for any fisherman who accidentally catches a turtle to bring it to ProyekPenyu. The project nurses the turtle into health and finds a sponsor to pay a small donationfor the release of the turtle. Half the proceeds go to the individual fisherman who caught theturtle to compensate him for damaged nets, and a percentage goes to project itself, andanother to the fishermen‟s cooperative (personal communication: Chief Fishermen 28/1/2010;personal communication: owner Reef Seen Aquatics 3/2/2010). Furthermore, the fishingcommunity created a rule against the intentional catching of turtles; if a fisherman is caughtintentionally capturing a turtle he must pay a fine of Rp.100,000. If they are killed there is anadditional fine of Rp.100,000. If this happens numerous times the fisherman risks beingexpelled 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 tomake rules of their own, again illustrating the strong presence of the private sector in thecreation of fishing norms in Pemuteran.Despite the legitimacy of these agreements amongst the fishermen and village, the diveindustry 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 (personalcommunication: 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 isarguably quite tenuous in that, if someone wanted to come in and develop the coastline, theycould offer money to buy out the fishermen, and it remains the question whether the semivoluntarycompliance of the fishermen would be able to out-compete that (personalcommunication: Senior Advisor Indonesia Marine Program TNC 18/3/2010).3.5.2 Privately funded enforcement: Pecalan LautFor the described fishing industry norms to exist, a form of sanctioning is needed, asdeparture of these norms must be followed by punishment. Monitoring of the bay by beachpatrols has been the main tool used in Pemuteran to enforce these agreements. With the lackin government support of the area, it has again been the private sector that funds thisenforcement. The private sector has succeeded in supporting a customary mode ofprotection, with existing legitimacy in the community.Before Biorock was introduced to Pemuteran, the village already appointed the tugas pantaito patrol Pemuteran‟s waters (personal communication: assistant leader Pecalan Laut andBiorock Centre operator 28/1/2010). Their salaries were paid for by contributions from the twobungalows and one dive operator existing in Pemuteran at the time, and from entry feescharged to tourists who wanted to enter Kebun Chris, the NTZ. However, as the monetarycrisis struck, the problem of destructive fishing was enhanced, and it became more difficult toenforce the ban on destructive fishing practices and the tugas pantai ceased to patrol. Themonetary crisis, accompanied with the coral bleaching event that took place in 1998, inspiredthe introduction of Biorock. About three months after Biorock was introduced to Pemuteran in2000, the village created the Pecalan Laut and it became a permanent body within the villageorganization (personal communication: owner Taman Sari 5/2/2010).The Pecalan is a community-based security unit which has deep roots in Bali‟s well-preservedtraditional culture (Atmodjo and Hermawan, 2007). The Pecalan‟s job has traditionally been tomaintain the village‟s security and to manage traffic flows during religious and customaryceremonies. Pemuteran‟s Pecalan are different because they have additional responsibilities,in the form of controlling tourism, fishing and marine conservation, which is why Pemuteran‟sPecalan are referred to as Pecalan Laut, „laut‟ meaning sea. They have a combination offunctions: temple, land and the sea. In terms of the land they control the tourism areas. Oneof the things they enforce on the beach is the agreement that there are no sales peopleallowed on the beach, something which sets this village apart from the many other tourismcenters in Bali, one of the tourism entrepreneur‟s initiatives in the very beginning. In terms ofthe sea they patrol 20 kilometers of beach by motor boat if necessary, or by foot along thebeach, to ensure that there are no destructive fishermen in the bay (personal communication:Kepala Adat 25/1/2010).60

The Pecalan Laut is separate from Biorock, though they share their office with the BiorockCentre. This is a prime of example of how close-knit the community of Pemuteran is. As themanager of the Biorock Centre points out, „[...] everything here is connected‟ (personalcommunication: manager Biorock Centre 26/1/2010). The Pecalan is made up of 30 rotatingmembers, men from the Pemuteran village, and there are four fishermen, the heads of thecooperatives, in the Pecalan (personal communication: assistant leader Pecalan Laut andBiorock Centre operator 28/1/2010). They patrol the beach 15 days a month, and if there is aproblem 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 operationalfund 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 forPemuteran. 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 (personalcommunication: 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 diveoperators and hotels. Every tourism business puts in $30 a month of which half goes towardsupporting 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 ofdive 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 topick up the $30 every month, but the businesses are not aware exactly what happens withthis. Hence, there is no transparency of these funds.The Pecalan Laut were very effective in 2000, when there were actually blast fishers inPemuteran, but they have weakened over the years, as there is not actually much to do forthem these days (personal communication: co-founder[1] Yayasan Karang Lestari24/1/2010). There appears to be doubt amongst some of the dive operations as to whetherthe Pecalan is indeed effective in enforcing the fishing agreement, as they do not see thePecalan patrolling very often. In addition to this, there have been situations in which a diveoperator has caught fishermen doing big net fishing at night when there is no one patrollingthe 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 PecalanLaut. 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-termweek after week system. The Pecalan receive a very small wage (to cover gas fortransportation) and it can be argued that this results in very little incentive for the members toshow up for their shifts, particularly in such a poor area: „if there is something better to dowhich brings in more money to the family they will simply not show up‟ (personalcommunication: co-founder[1] Yayasan Karang Lestari 24/1/2010). Furthermore, the Pecalando not patrol every day so the area is not being monitored constantly. One of the founders ofYayasan Karang Lestari has put forward the idea to increase effectiveness of the Pecalan bymaking it into a private business, with four people receiving living wages who patrol everyday, carrying out extra tasks like stopping tourists from walking on the coral, giving them fullresponsibility and an incentive to carry out their tasks. This idea has been supported by atleast two of the dive operators in Pemuteran.However, this suggestion was stopped by the owner of Taman Sari and tourism pioneer inPemuteran, stating that it would kill the spirit of community participation. He argues that it ismore important that the community is involved, and that everyone is benefitting a little, asopposed to making it a private enterprise with people making a good salary, which mightresult in jealousy (personal communication: co-founder[1] Yayasan Karang Lestari24/1/2010). Hence, the idea of privatizing this traditional organization has been rejected bythe community.61

Though there are divided opinions on whether the Pecalan is doing enough, there is aconsensus amongst the dive operators that they were very effective in the beginning stoppingthe destructive fishermen and that their current presence is vital to keep destructive fishingpractices out of Pemuteran:„Some people say they aren‟t really doing anything anymore. But they did their jobbefore, and if we stop paying them, word will get around and people will come backin. Even if they sit around and drink coffee, they are showing up, and other peoplefrom other villages know about it.‟ (personal communication: owner Reef SeenAquatics 3/2/2010)The fact that the Pecalan Laut was a village initiative, and is based on an existing highlyrespected organization within the village creates a large amount of legitimacy for them in theeyes of the public, and fishermen. The private sector has essentially been successful infunding an existing body, which possesses legitimacy based on the culture and traditions itencompasses and represents, to practice marine conservation.3.5.3 BiorockBiorock, as one of the main reasons for creating the NTZ in front of Taman Sari, has been animportant „actor‟ in bringing about change in marine management in Pemuteran. It has alsobeen responsible for creating a tangible „symbol‟ as it were, for marine conservation inPemuteran. Biorock‟s value in terms of altering institutions around marine conservation isdifficult 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 indirectlythe forming of the Pecalan Laut already illustrates how the private sector has succeeded inaltering institutions in Pemuteran through the introduction of this technology. They havecreated a new institution by creating a territory where fishermen are no longer permitted tofish, and their influence has lead to a village-led initiative to alter an existing traditionalinstitution, the Pecalan, and create one that features the added responsibility of workingtoward marine conservation. This alone demonstrates the power that the application of thistechnology has exercised in Pemuteran. However, the legitimacy of Biorock as an actual toolfor marine conservation is questionable.Every dive shop interviewed agrees that Biorock has been a great education and awarenesstool for the local community and tourists; it has taught the community and the tourists why it isimportant to conserve coral (personal communication: co-founder[1] Yayasan Karang Lestari24/1/2010). As one of the dive operators points out: „Biorock is the centre for ocean protectionand also a powerful tool to show the locals that even when something is destroyed you canrebuild it and attract people again‟ (personal communication: manager Bali Diving Academy27/1/2010).Furthermore, Biorock has also been a great public relations tool for the village, for the diveindustry, as well as for Taman Sari in particular. There have been numerous individualstudents carrying out research in Pemuteran, the Biorock workshops held in Pemuteranattracted (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 haswon a number of awards, and all of the local stakeholders interviewed agree that the Biorockproject has attracted more tourism to Pemuteran. However, not all of the foreign diveoperators 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, allthe dive operators interviewed agree that the project serves as a great snorkel and night divesite, because it is close to shore, safe, and houses a lot of animals. It has served as source ofincome for the dive operators in Pemuteran (personal communication: owner Reef SeenAquatics 3/2/2010).62

A major criticism which is often mentioned, and questions the legitimacy of Biorock inPemuteran, is that there has been no emphasis on record-keeping or measurements ofgrowth on the structures. No statistics have been put out, and thus there is no documentedevidence that shows Biorock is in fact contributing to the health of the coral reef ecosystem inPemuteran. There have only been students doing research on a voluntary basis and they staythere for too little time to supply legitimate results (personal communication: owner SeaRovers 30/1/2010). No one is doing academic research which is necessary not just to gainlegitimacy in the eyes of larger international NGOs, and the academic world, but to promotethe technology (personal communication: co-founder[1] Yayasan Karang Lestari 24/1/2010).Biorock appears to have symbolic meaning in Pemuteran. It is material evidence whichrepresents marine conservation in Pemuteran. Dive shops and hotels have made materialinvestments in Pemuteran, which generally have been for income generation. Though it canbe argued that the main purpose behind initial investments into the technology was topromote the private sector in Pemuteran, the technology also represents a materialinvestment into conservation with no direct income generation goal. Not only has its presencecontributed to Pemuteran‟s image and put it on the map as an eco-tourism destination, it hasalso played a role in making marine conservation more recognizable and approachable to thelocal community. On top of this, the local community, as well as the dive community allcontribute when new structures are placed. In this way, the technology also appears to be atool to induce cooperation amongst the different actors in the EMPA. Director of Reef CheckIndonesia argues that Biorock‟s primary value lies in the „ability to glue these people to worktogether on the same vision‟ (personal communication: director Reef Check Indonesia26/2/2010). In a way Biorock symbolizes the two primary intentions of the private sector, theirecological intention to improve the coral and the intention to induce cooperation of thecommunity in working towards improvement of the coral.3.5.4 Private sector projectsAs mentioned previously, this EMPA is made up of multiple sites of power due to the differentactors involved, such as the fishermen and the village authorities. This is also true within theprivate sector. A number of informal institutions have been created in the form of projectswhich have been set up by different entrepreneurs from the private sector. Though they allshare a broad goal toward marine conservation and support each other in this, they stemfrom private investments. Hence, they have individual objectives, and are managed bydifferent people. They operate individually, and since these organizations stem from theprivate 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 alocal fisherman, and he decided to purchase this to prevent the animal from being used forconsumption. The project grew as more caught turtles were bought from the fishermen, aswell as turtle eggs. The turtles are nursed until they have a better chance of surviving in thewild, and eventually released. The project is entirely self-sufficient and depends on donationsfrom tourists. It can be seen as an example of payment for ecosystem services, where atourist pays a small fee to ensure conservation of the turtle species. The project hascontributed to marine conservation in several ways; it has educated the locals and fishermenabout the need to protect turtles and it has increased awareness amongst tourists andattracted local schools for example. However, its most unique accomplishment was tocontribute to the turtle fishing rules set up by the fishermen themselves. The project is thuslegitimate in the eyes of the local fishermen, as they created their own fishing norms basedon previous work the project did. Thus, a private sector created institution actually contributedto new rules set by fishermen which work toward marine conservationThe Reef Gardeners was set up by the dive pioneer in 2006. The Bali Rehabilitation Fund(BRF), an AusAID sponsored program set up by the Australian government to counter theeconomic and social effects of the Bali Bombing of 12 October 2002, donated the initial fundsto set up the Reef Gardeners, highly contributing to the project‟s legitimacy in the eyes ofoverseas actors. It is one of the few BRF projects which continue to run after the initial fundswere used up. A group of ex-fishermen were trained as scuba divers, in methods of repairingbroken coral, and methods to protect reefs such as removing crown of thorn starfish anddrupella shell which destroy coral. Now that the BRF no longer provides funds to support the63

Reef Gardeners, the Pemuteran Foundation, an NGO set up in 2007 by a group Dutch peoplewhich has set itself the objective of initiating and supporting small-scale projects inPemuteran, is the main financial sponsor of the Reef Gardeners and pays them $600 a monthto pay for the salaries of the 7 Reef Gardeners. The Reef Gardeners are in essence doing therepairing 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 thedive industry by creating dive sites, they also add value to the reefs through repairing andmaintaining these.The third environmentally-tinted project in Pemuteran, Yayasan Karang Lestari, was foundedby two shareholders at Taman Sari, and the tourism pioneer and owner of Taman Sari around2001, after the Biorock project had existed in Pemuteran for some time. The Pemuteranpublic, the fishermen and dive shops were all involved with building the initial structures(personal communication: manager Biorock Centre 26/1/2010). However, the project, despitethe intention to be a project for the village, is seen more as a Taman Sari project by a numberof the dive operators (personal communication: owner Sea Rovers 30/1/2010); perhapsbecause the founders, and managers as it were, all have shares in Taman Sari and theelectricity used to run the Biorock structures which adds up to between $300 and $400 amonth, is donated entirely by Taman Sari. The two above-mentioned projects fall under ReefSeen Aquatics management, whilst Yayasan Karang Lestari falls under Taman Sarimanagement. One of the dive operators points out that in Pemuteran „there are two camps asit were‟ (personal communication: owner Sea Rovers 30/1/2010).Yayasan Karang Lestari, as the project hosting the Biorock technology, was key to leading tothe decisions to develop the NTZ in front of Taman Sari. This area was monitored solely bythe Pecalan, until the creation of the Biorock Centre which employed 3 local men who monitorthe area operate and maintain the Biorock technology.Figure 8: Biorock Centre and Karang Lestari Rules signThe Biorock Centre was built in May 2008 with funds donated by the three founders. It wasnecessary for generating income to cover the costs for employing the operators, and forproperly supplying information to tourists; no one knew where to ask for information and acentral point was needed (personal communication: co-founder[2] Yayasan Karang Lestari3/2/2010). The Centre‟s boat of around $5000 was donated by an American couple who livein Pemuteran. The boat is used for snorkeling and glass bottom boat tours, as well as for thecentre‟s day to day operations. It has only been a year that the centre is able to sustain itselffinancially and cover the salary of the three employees of the Biorock Centre. The centrefinances itself through merchandise sales (t-shirts and postcards), glass bottom boat andsnorkeling tours, and the „Adopt a Baby Coral‟ program where tourists can get their nameattached to one of the structures and follow the growth of the coral on their name over sometime.64

These three projects have developed legitimacy for themselves in different ways, and withdifferent results. They are managed by two separate parties, they are entirely reliant ontourism, with the exception of the Reef Gardeners, to finance themselves, and they areseparate from the rest of the private sector in Pemuteran. The projects all contribute to thehealth of the marine environment in Pemuteran, but operate individually. Individualdifferences in the past have even led to tensions between the two managing bodies, creatingeven less room for cooperation. The individual nature of these projects, together with the lackof formal organization of the dive industry discussed in section 3.4, results in a private sectorwhich 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 currentlytrying 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 behindthis idea is in response to a concern brought up previously; that all the businesses inPemuteran benefit from the efforts of the Reef Gardeners and Yayasan Karang Lestari, whilstthey do not equally contribute to these projects. It is based on a concept used in GiliTrawangan, which will be expanded upon in Chapter 4. The projects entails taking a small feefrom every resource user (i.e. diver or snorkeler) and to dedicate this fund to projects (suchas for example hygiene, erosion control, health care, water catchment, education and marineconservation) for the community. The existing projects in the village such as the BiorockCentre, Reef Gardeners, Pecalan Laut would also receive funding. The fund will be managedby 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. Inaddition to this, outside companies which dive in Pemuteran do not make any sort ofcontribution either (personal communication: owner Reef Seen Aquatics 3/2/2010). It isimportant to note that as yet not all the dive operators are cooperating, so it is not definite thatsuch an organization will become reality in Pemuteran (personal communication: cofounder[1]Yayasan Karang Lestari 24/1/2010).3.5.5 ReflectionEntrepreneurs have been the main actors in inducing the creation of new industry norms infishing and marine management. They have formed two informal agreements with thefishermen in Pemuteran, in cooperation with the village government. One of these is simply alocal agreement to enforce the existing national ban on destructive fishing practices. Theother is the creation of a NTZ in the area where most Biorock structures have been placed inPemuteran. Despite the informal nature of these institutions, these agreements appear tohave reached a sound level of legitimacy amongst the local stakeholders as destructivefishing is no longer a problem, and fishing in the NTZ no longer takes place. The agreementsare enforced through an existing community-based security unit. This organization is fundedby the private sector, but is based on customary modes of protection which has contributedsignificantly to the legitimacy of these rules.Aside from these village-based agreements, some informal private-sector led institutions haveformed, which each in their own way contribute to marine conservation efforts in Pemuteran.Some have received international funding and recognition which has contributed toPemuteran‟s image as an eco-tourism destination. These institutions however are managedby 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 governingbody responsible for the management of the EMPA. There are numerous stakeholder groupsinvolved outside the private sector, and even within the private sector marine conservationinitiatives operate individually, resulting in a clearly polycentric EMPA with centers of controlfound within the village government, the Pecalan Laut which is governed by the village butfunded 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

3.6 ConclusionThough the EMPA in Pemuteran is a network of local and private actors, it is stronglyentrepreneurial in nature. It has very much been steered by individuals with a drive to turnopportunities into reality, be they of a sustainable nature or purely profit-seeking. What comesforward in Pemuteran is that the institutions created around marine conservation are in placelargely due to the efforts of a few individual, and independent, entrepreneurs. The mostinfluential actors in this process were a tourism and dive pioneer. Both have and had vitalcommunicative roles with two of the stakeholder groups in the EMPA, the village and thefishermen. Thus, Pemuteran is an EMPA where the E‟s are invaluable factors driving thedevelopment of the EMPA, but do not do so collectively.The EMPA which we see today was formed through numerous interactions of the privatesector with the environment in which they exist. This process of social negotiation hassecured several relations which are important to mention when assessing the role of theprivate sector in this EMPA. First, inter-relations within the private sector are based on little orno competition. Despite the fact that there is not a large amount of interaction orcommunication within the private sector, relations are good because there is no competitionbetween 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 twoindividual entrepreneurs which appear to have steered the process of the formation of thisEMPA. These entrepreneurs are the key links to the local stakeholders, emphasizing thestrong role of individuals in this EMPA. This has resulted in relations based on trust andmutual cooperation. However, the vital roles of these individuals in establishing favorablerelations needed for driving marine conservation, brings a significant risk along with it as thestrong 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 theprivate sector, it has done several things collectively which characterize their role in thisspecific EMPA. They have invested in non-market assets such as religion which was veryimportant for gaining the support of the local Balinese. Furthermore, they have been careful toestablish the support of the head of the religious authority which is vital to exercise socialcontrol in a village on an island like Bali. Another important feature to mention is the strongefforts of the private sector to employ locals in order to share the wealth as well as include thelocals in marine conservation activities, thereby embedding themselves or rather the idea ofmarine conservation amongst the local community, as opposed to being seen as extraneousbody imposing this onto the local community.Through this process of social negotiation with existing institutions, the private sector wasable, to some extent, to institutionalize their goals in the economic behavior of thestakeholders in Pemuteran. They were able to change norms and induce cooperativebehavior toward protection of the reefs. In some cases this was quite an easy process, suchas re-enforcing a ban on destructive fishing practices, arguably because this is based on anexisting national law. However, in some cases this process was countered with existingcommon property institutions which were already in place. It is not surprising that the morethe existing common property institutions, or the fishermen, were included in the setting ofnew norms, the more legitimate these new institutions were in the eyes of the originalresource owners. An interesting feature of this EMPA is the private sectors‟ use of an existinglegitimate organization, based on culture and tradition, to enforce new rules; the privatesector 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 ofinstitutionalization in this EMPA appears to be quite low, and no norms have been translatedinto rules supported by law. This puts the area at risk to being vulnerable to extraneouseconomic influences such as an economic crisis, which once before managed to wipe awayinstitutions around marine governance in Pemuteran. The EMPA is essentially built up aroundseveral informal institutions which work toward a common goal, but operate individually.Aside from the above-mentioned local institutions, members from the private sector haveformed three organizations, two set up by the dive entrepreneur and another by the tourism66

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

4 Gili Trawangan4.1 IntroductionIn this thesis, the role of the private sector in creating durable conservation and restorationagreements to protect coral reefs is studied by analyzing the shaping of two separate EMPAsin Indonesia. In the preceding chapter the pathway that led to the formation of an EMPA inNorth Bali was analyzed. In this chapter this process will be determined for an EMPA locatedroughly 120 miles East of Pemuteran, on the island of Gili Trawangan. At first glance, thisEMPA contrasts with the one in Pemuteran in three clear ways; the government is much morepresent than it is in Pemuteran, the EMPA in Gili Trawangan is clearly much moreinstitutionalized, and this EMPA is based on a communally organized private sector asopposed to an individually operating one. These and more differences, as well as interestingsimilarities will come forward in the following analysis of the process through which the EMPAin Gili Trawangan has been shaped through the private sector and their interactions with theenvironment.This chapter is structured identical to the previous one, beginning with the history of fishingand tourism in Gili Trawangan, followed by an analysis of the concept of entrepreneurialism inthe process of the development of marine conservation in Gili Trawangan. This is followed byan evaluation of how the private actors in built up social capital in Gili Trawangan, and thefinal section of the chapter will present the level of institutionalization of the EMPA which hasbeen reached, describing how the private sector was able to create and alter institutionsaround marine conservation in Gili Trawangan, and create what one refers to as an EMPAtoday.4.2 History of fishing, tourism and marine conservation in GiliTrawanganGili 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 ofthe island of Lombok, part of Nusa Tenggara province. All three islands are fringed by coralreefs 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 colonyof ten families was sent to the island to start a coconut plantation after a religion war inCentral 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 settledon the island (Soemodinoto and Wong, 2004). Traditionally the main sources of income onthe island were coconut plantations and fishing (personal communication: owner TrawanganDive and Blue Marlin Dive 17/2/2010).68

Between late 1979 and early 1980 tourists started coming to the island. They came fromSenggigi beach in Lombok and Gili Air on day trips, for sunbathing and swimming. Eventuallythe tourists started to stay on the island overnight, accommodation provided at the house of alocal entrepreneur. A German travel writer who stayed at this house provided theentrepreneur 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 touristson the island. In 1983 three more home stays were built, and by 1984 the island hosted sixbusinesses and 46 rooms (Soemodinoto and Wong, 2004).In 1991 the local government forced a resettlement program which interrupted developmenton the island between 1991 and 1992, by which time there were 19 accommodationbusinesses all over the island. The program was aimed at relocating tourist facilities in GiliTrawangan since there had been uncontrolled spreading of accommodation throughout theisland between 1984 and 1991. There had been no guidelines or development plan which theaccommodation businesses kept to, in terms of the design of their accommodations, nor thelocation of these on the island. Hence, this is the first situation in the history of Gili Trawangantourism where the government had to step in to control the private sector, for the islandsfuture well-being and sustainability. The local government concentrated previously scatteredaccommodations in the south eastern side of the island. Later it was discovered that the realpurpose behind the program was to support a Jakarta business man to acquire 100 hectaresof land situated strategically in the middle of the island for the construction of a hotel and golfcourse. The conflict around this peaked in 1995 when forced demolition of facilities belongingto 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 revitalizetourism. The resettled businesses were compensated with 1,500m 2 land parcels and accessto credit from the provincial development bank. In 1992 the number of accommodations roseto 36 licensed and 10 unlicensed accommodation businesses, with 32 of these on the southeastern part of the island. Three pioneering dive operators were established between 1987and 1989, and the fourth was created in 1990. After 1995 secondary tourism services, suchas diving and snorkeling, provided on the island became increasingly diverse. From 1997 and1999 new investments on accommodations and diving operations seemed to dominate thelocal economy. Following the resignation of the Indonesian president in May 1998, the localvictims of the April 1995 demolition re-colonized the disputed land and developed restaurantsand 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. TheRegional 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 thecentral government established Gili Indah as a MTP. The total area covers 2,945 hectaresand 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 thestudy conducted by a scientist group mandated by the central government in 1998. The studyproduced a management plan for the MTP. They identified existing and potential problems inthe ecosystem and socio economy. They identified the economic activities in the area whichincludes tourism related businesses but did not include an analysis of fisheries activities eventhough fisheries were the original and main livelihood of the locals in Gili Indah. Theydesignated two main zones: a protected zone and a utilization zone. The protected zone wasintended for the protection of marine animals and plants and their ecosystem, and for therehabilitation of the deteriorated coastal area. The utilization zone was intended for tourismwithout compromising the sustainability of marine resources. An institutional arrangementwas necessary to support the management of the MTP. Hence, the government appointedthe BKSDA to implement MTP policy on Gili Trawangan. This agency served as themanaging body of the MTP and was mandated to involve the local government, tourismbusinesses, 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

Due to the lack of the communication and extension services of the BKSDA the local peopledid not know what, where, how and why the MTP was been established and consequently theboundary of the MTP was undermined by the locals. The fishermen still claimed the area ofthe MTP as their own property and fished in the area as usual. Hence, the absence of thelocal‟s recognition of the MTP has led to difficulties for the BKSDA to enforce the rules. Thisproblem 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 fishingpractice 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 violatingthe law since they had received official fishing authorization from the Marine Fisheries ServiceOffice (MFSO) of the West Lombok Regency, illustrating the lack of coordination between theBKSDA and other agencies, including the local government. Furthermore, in line with theLocal Autonomy Law, the local government considered that the management of the MTPshould 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 ableto resist the MTP ruling set by the central government, and continued to fish in the prohibitedareas. Gili Indah MTP became more of a paper park.The rise of the local institution of fisheries management in West Lombok constituted the localfishers response to the monetary crisis and national reform from 1998 onwards. Nationalreform in 1998 led to the unaccountability of the government authority, including theirauthority 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 inWest Lombok, particularly dynamite, or bomb fishing. In response to these changes localpeople attempted to revitalize a local institution called Awig-awig in 1999. Awig-awig,meaning „local rules‟, is what community-based coral reef management is referred to as in GiliIndah 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 GiliIndah‟ (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 theirisland (Satria et al., 2006b). They registered officially as Awig-awig with the local governmenton 16 January 2000. They patrolled the water with speedboats borrowed from a GiliTrawangan foreign-owned dive operator, where some of the SATGAS members wereemployed at the time, and money donated from the occasional business who supported theirefforts (personal communication: owner Sama Sama restaurant 12/2/2010 and memberSATGAS). It is important to mention that though the SATGAS was initially set up for the threeislands in Gili Indah, the two other islands in Gili Indah quickly wanted to becomeindependent and set up secondary monitoring units for themselves in 2002, which is why theSATGAS is now seen as Gili Trawangan‟s security force (personal communication: headSATGAS 17/2/2010; Satria et al., 2006b).Soon after the formation of the SATGAS, three members of the SATGAS went to the BKSDAoffice in Lombok to demonstrate because the BKSDA had an office in Gili Trawangan, butwere not doing anything in terms of supporting marine conservation in Gili Trawangan. Theythreatened 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 officerswho actively joined the SATGAS in their patrols (personal communication: owner Sama Samarestaurant and SATGAS member 12/2/2010). This was the origin of a co-managementarrangement 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 oceanfloor as it traps fish while using pounding devices to scare fish out of their coral refuges and into the net, whichdestroys coral (Garcia, 2005). In Pemuteran muroami fishing involves 35 fishermen; two boats are positionedadjacent to one another with a gap large enough for a 9mx9m net to sit between the boats. Four people hold the netin the boats, and the rest snorkel over the coral from the surrounding areas and usher the fish into the nets usingmetal chains dragged over the reef. Mogong fishing is a slightly different technique applied in Gili Trawangan, butalso uses dragged metal chains and is thus equally destructive. The muroami fishermen mediate between the twofishing communities and the other stakeholders in the EMPA (personal communication: Bsc researcher thesisUniversity of Sydney 21/2/2010). Hence, when referring to muroami fishermen in the remainder of the thesis, one canassume this represents the two fishing communities.70

and the central government, represented by the BKSDA. Hence, in these days a form legalpluralism existed in Gili Trawangan in that there were two laws working together; Awig-awigwith national law.A number of the major dive operators in Gili Trawangan, which were all foreign-owned at thistime, set up an alliance of dive operators called the Gili Eco Trust (GET) in 2001. This alliancewas set up to raise money to support the SATGAS, in an attempt to do something against thedestruction of the coral reefs, and to form good relations between the dive shops (personalcommunication: part-owner Manta Dive 19/2/2010). In response to the peak of the conflictbetween the muroami fishermen and the GET about the existing zoning system, a newagreement was made between the different parties in 2003 (Satria et al., 2006b). Incooperation with the GET, the SATGAS negotiated a zoning system for Gili Trawangan withthe muroami fishermen and a compensation scheme for these displaced fishermen. In thisway, the private sector stepped into the picture and added another layer of control to thearea. The members of the GET started charging a dive tax used to support the SATGAS andpay 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 ofan Australian Bali resident and the owner of Bali Dive Adventures. As in Pemuteran, the twoGCRA scientists showed them how to build the Biorock structures. The current manager ofthe GET, a dive instructor at the time, attended the third Biorock workshop in Pemuteran inNovember 2005 and observed the technique. She brought one of the two scientists back toGili Trawangan and the two of them, with two of her diver instructor friends, built a structure infront of Trawangan Dive (personal communication: manager GET 11/2/2010). The followingyear, 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 in2007. In December 2008 the sixth Biorock workshop was organized on the island by the GETand 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 marineconservation. The nation-wide shift from MPA management from the MF to the MMAFinduced by the issuance of Law no. 31/2004, has naturally had an influence on governmentpresence 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, since2009, the MMAF-formed institute for conservation areas, the BKKPN, has taken on theresponsibility for Gili Trawangan. Hence, government presence on the island is currently inthe process of being handed over from the BKSDA representatives which had been patrollingwith the SATGAS, to BKKPN representatives (personal communication: manager GET11/2/2010).Unlike the neighboring tourism-centre in Lombok, in 2010 the island still does not allow anyform of motorized transport, with everything done with horse carts and bicycles. Despitestrong control over this issue, tourism development is not managed as strictly. In 1998 limitsof carrying capacity for tourism developments on the islands were imposed by the Ministry ofHome Affairs‟ Directorate General of Regional Development and the Ministry of Forestry‟sDirector General of Forest Protection and Nature Conservation. The limits stipulated themaximum number of rooms to be constructed on the three islands. This maximum was 250rooms for Gili Trawangan. In 1999 the total number of rooms for Gili Trawangan alreadystood 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 intourism we are dealing with in Gili Trawangan, when compared to Pemuteran. Furthermore,officially beach-front construction is not allowed in Indonesia; permanent structures may notbe placed less than 50 m from the water line, but this regulation was not kept to withparticularly the south eastern strip hosting several beach-front buildings. Additionally, nothingshould be made from concrete, and there should be no sea wall, two more rules which havenot been enforced by the government on this island. Instead, the GET is taking on more andmore responsibility to try and control these types of issues, in addition to the marineconservation issues. Hence, though the government and the SATGAS have created co-71

management linkages in terms of marine conservation, the private sector have gone on toactually regulate development in the area to some extent.What comes forward very strongly from the history of Gili Trawangan is the government‟sfailure to enforce marine conservation and tourism development regulations which it hadattempted to set for the island. In response to this failure and subsequent gap, a number oflocal Gili Trawangan residents came forward and set up a system of community-based coralreef management, and started patrolling the waters. What these men, the SATGAS, lackedwas sufficient funding, which is where the private sector entered in marine conservation ofthis area. Hence, private sector involvement in marine conservation took place at a laterstage than it did in Pemuteran, where these actors actually initiated marine conservation. Theforeign dive operators, which dominated the Gili Trawangan dive industry at the time, formedthe GET and started charging a dive tax to support the SATGAS and compensate thefishermen, thereby essentially funding marine conservation in Gili Trawangan. What hasresulted is a MPA based on a zoning system and compensation scheme, which is managedand funded by the private sector, and enforced by the SATGAS. There are many differentstakeholder groups which can be located in this particular EMPA: the fishermen, acommunity-based security force, Gili Trawangan village, the dive entrepreneurs, and thegovernment, resulting in a particularly networked EMPA. The current state of and level ofinstitutionalization of the EMPA has been the result of numerous interactions between theprivate sector and all these stakeholders. During this process the private sector has gained acertain amount of legitimacy for themselves, and has created new and altered existinginstitutions around marine conservation in Gili Trawangan. The following section of thischapter will begin the breakdown of this process, and the role the private sector had in thisdevelopment, by revealing the entrepreneurial nature of this process, or the extent to whichthis was actually led by entrepreneurs.4.3 The ‘E’ in the EMPA in Gili TrawanganIn this section the concept of entrepreneurship in the context of marine conservation in GiliTrawangan will be the focus. The main opportunities which are relevant to the development ofmarine conservation in Gili Trawangan will be described, mentioning the individualsresponsible 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 andfurther developed the EMPA into what it is today.4.3.1 Opportunity 1: Developing tourism in Gili TrawanganIn Gili Trawangan, one local tourism pioneer was fortunate enough to receive a contributionfrom a German travel-writer which enabled him to build the first accommodation business inGili Trawangan (Soedmodinoto and Wong, 2004). The local tourism pioneer had discoveredan opportunity to earn some money by offering tourists a place to eat and sleep at his ownhouse when tourists first started visiting Gili Trawangan on day trips. This individual was anentrepreneur in the fact that he was able to recognize the potential of this area as a touristdestination. 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 localtourism entrepreneur a foreign individual provided him with the resources needed to exploitthis opportunity, and he was able to build the first home stay on Gili Trawangan, whichmarked the beginning of tourism in Gili Trawangan.After this, a rapid horizontal spreading of tourism-related services occurred on GiliTrawangan. Islanders, learning from the initial entrepreneur that catering to tourists couldbring 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 discoveredand exploited. It is unknown who was the first to discover this opportunity, but it is quite likelyto have been an individual who had seen this service offered in Bali or Lombok, or any of theother developing tourism destinations close to Gili Trawangan. He or she would haverecognized the potential to offer this service in Gili Trawangan with the coral reefs fringing theisland, 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

As mentioned previously, initially tourism developed unabated on Gili Trawangan, andresearch by Soemodinoto and Wong (2004) has suggested that this resulted in somenegative ecological impacts. This uncontrolled development of tourism induced governmentintervention. Though this was initially not related to marine conservation, it can be argued thatthe government is less likely to have mandated the study in 1998 which eventually resulted inthe 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 theseopportunities. The role of the private sector was simply to offer goods and services whichwere previously not offered on the island. The government was in essence the first actor toattempt to establish sustainable practices in the tourism and dive industry through the zonesdesignated in the MTP. However, the government failed to do so, and it was then the privatesector which recognized the opportunity to use diving to improve the quality of the coral reefson Gili Trawangan, which introduces the concept of environmental entrepreneurship in thehistory of Gili Trawangan.4.3.2 Opportunity 2: Creating a collective dive industry to manage coral reefsThe 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 hadvery little, if any, involvement in marine conservation in the area, the government was the firstto recognize the need for this. However, as mentioned the government failed to gain thelegitimacy amongst the local stakeholders to institutionalize the MTP in Gili Indah, and otheractors had to take on the role of promoting marine conservation in Gili Trawangan. This taskwas taken on by the SATGAS together with foreign tourism entrepreneurs on the island, inthe form of the GET.Three major dive operators in 2001 were responsible for founding the GET; managers fromBlue Marlin Dive, Manta Dive and Big Bubble Dive. The GET was set up as a representationof all the dive shops‟ environmental interests (personal communication: manager TrawanganDive 15/2/2010). The dive shops recognized the detrimental effects of the blast fishing whichwas a major problem around 1998, as well as the effects practices of the muroami fishermenwere having on the reefs. Thus, the dive shops, partially encouraged by several of theiremployees, SATGAS members at the time, met each other and created the GET, in order tomake an agreement with the destructive fishermen and use income from diving to improvethe quality of the reefs. This can be classified as a form of environmental entrepreneurship asit addresses the capturing of an opportunity, namely diving, in an environmentally relevantmarket failure, in which destructive fishing practices were destroying the reefs, wherein theexploitation of this opportunity alleviates the market failures and contributes to environmentalimprovement.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 coralreefs by the fishermen, and to set a price agreement between the dive shops. The ideabehind the price agreement was to encourage the cooperation between the dive operatorsand to remove the ruthless competition which you find in so many other places with a highconcentration of dive centers (personal communication: owner Trawangan Dive and BlueMarlin Dive 17/2/2010). With cooperation, the dive operators could work together to stop thedestructive fishing, implement other marine conservation projects, and eventually possiblyimplement land-based projects as well (personal communication: part-owner Manta Dive19/2/2010). This collective entrepreneurial effort toward marine conservation presents a starkcontrast to the separatist and individual nature of entrepreneurs in Pemuteran.The GET worked together with the SATGAS, who were responsible for negotiating anagreement with the muroami fishermen, creating two zones where the muroami fishermen arepermitted to fish, marked in red in Figure 10, the rest constituting a NTZ for muroamifishermen.73

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 usedto 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 ofenvironmental entrepreneurship to Gili Trawangan. The members also agreed onenvironmentally-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 initiallyresponsible for developing tourism on the island which contributed to its degradation, wentfrom exercising simple entrepreneurship in selling diving as a service, to exercisingenvironmental entrepreneurship and actually contributing to improving the marineenvironment while selling diving and making profit. There appears to be a strong beliefamongst the dive shops that usually diving as a tourism activity tends to damage theenvironment and deplete coral, but that in Gili Trawangan, the dive industry has been solelyresponsible for improving the marine environment: „... if there was no divers here it wouldhave 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 inthis EMPA and the other stakeholders will be explored in section 4.4. As mentionedpreviously, there are many different actors which have a stake in the marine environment ofGili Trawangan. The government was not successful in including all these actors during theirefforts to promote marine conservation in the area, and did not gain the support they neededfrom the local stakeholders. The question arises whether the dive entrepreneurs weresuccessful in doing so. How were the entrepreneurs able to gain legitimacy in the eyes of theother stakeholders involved? Were they, unlike the government, able to establish stronginstitutions around marine conservation in Gili Trawangan? These questions will beaddressed in sections 4.4 and 4.5.4.3.3 Opportunity 3: Introduction of Biorock to Gili TrawanganSimilar to this process in Pemuteran, different individuals were responsible for theintroduction and further development of Biorock technology in Gili Trawangan. An AustralianBali resident and founder of the Komodo Foundation, with the owner of Bali DivingAdventures were responsible for bringing Biorock technology into Gili Trawangan. They hadboth seen the technology applied in Pemuteran, where one of Bali Diving Academy shops islocated. 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 with74

the technology and had observed its success in a different location in Indonesia. Thus, theyhad 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 GiliTrawangan‟s deteriorated reefs, and see potential for applying the technology in GiliTrawangan. Lastly, the owner of Bali Diving Academy also had the resources to fund thisproject. Hence, these two individuals combined displayed features of environmentalentrepreneurs as they were responsible for exploiting the opportunity of introducing Biorock toGili Trawangan, which essentially works toward improving the state of the environmentthough restoring reefs.Because the first Biorock structure was placed in front of Vila Ombak Diving Academy, whichcaters to guests of Vila Ombak, a large high-end resort in Trawangan, the dive communityassumed that this technology was very expensive. Thus the current manager of GET, whowas then a dive instructor, and her two diving instructor friends decided to use their own smallsalary and build their own Biorock structure. According to her their goal was to show theisland that this coral restoration technique was possible without a large investment (personalcommunication: manager GET 11/2/2010). Hence, the second installation of Biorock wasagain an opportunity exploited by a number of entrepreneurs with the funds to do so. With thisthe concept of private sector funding in Gili Trawangan is again underlined; entrepreneurswere not only responsible for funding the SATGAS and compensation the muroamifishermen, but also for funding other marine environmental initiatives like Biorock.From this point onwards the GET manager took over the development of Biorock in GiliTrawangan. She pushed forward the entire process of developing Biorock in Gili Trawangan(personal communication: manager Trawangan Dive 15/2/2010). She organized the fourthBiorock workshop on Gili Trawangan; she collected money from restaurants, hotels and diveoperators, and the workshop took place November 2006, during which 35 participants built 10new Biorock structures. A year later the Biorock scientists wanted to organize anotherworkshop because a PADI Biorock Specialty (a specialty in a PADI dive course) had beendeveloped by Bali Diving Academy, and more people wanted to learn the technique. SincePemuteran did not have sufficient funds to organize another workshop, and the GET hadstarted to establish good relations with the university in Mataram, the GET and GCRAdecided to hold the workshop in Gili Trawangan (personal communication: manager GET11/2/2010). During this workshop which took place December 2008, Biorock was used tocreate anti-erosion reefs, since erosion is considered a real problem as the beach isdisappearing fast (Segre, 2010a).Now, most of the Biorock structures are between Vila Ombak and Blue Marlin, the stretchalong the south eastern coast on which most of the dive operators are situated. Privatesponsors order new Biorock structures from the GET and pay for them to be installed. Whenstructures are put in during workshops the sponsors pay a little more, but they gain freepromotion from being part of the workshops, and earn money from the participants makinguse of their services, be it a dive operator or a hotel. „It‟s a „win-win‟ situation for us‟ (personalcommunication: manager GET 11/2/2010). Each business powers their own Biorock structureand all but one of the dive shops own a Biorock structure. They are generally placed in frontof the dive shops that have funded them, and they supply the power to the structure from theirdive operation. Hence, in Gili Trawangan, the dive industry as a whole have each invested ina technology for restoring coral. Biorock went from a technology pushed as it were by anindividual entrepreneur, to one widely applied by the dive industry. Thus, almost all the diveoperators, at face value, are also environmental entrepreneurs through their investment inBiorock.It is through Biorock that the current GET manager got further involved in marineconservation in Gili Trawangan. She became the part-time manager of GET in 2007, whileshe was still managing one of the dive shops. This turned into a full-time position in June2009, which has expanded from a function solely responsible for marine conservation intoone that covers all aspects of environmental sustainability, land and sea. This diveentrepreneur has been responsible for establishing Biorock as a widely applied coralrestoration technique on the island, as well as for other environmental initiatives which will beexpanded upon in section 4.5. How did she, together with the rest of the entrepreneurs in the75

GET promote marine conservation in Gili Trawangan through Biorock and other initiatives?Did these environmental initiatives gain legitimacy, and what were their roles ininstitutionalizing marine conservation in Gili Trawangan? The questions will be explored insections 4.4 and 4.5 respectively.4.3.4 ReflectionThe „E‟, or entrepreneur, in the EMPA in Gili Trawangan weaves through the development ofmarine conservation as a red thread, but the nature of private sector involvement appears tobe quite different from what we encountered in Pemuteran. Entrepreneurs were not the actorswho initially recognized the need for marine conservation. The initial unabated developmentof the private sector in Gili Trawangan induced governmental recognition of this need, and thepublic sector attempted to establish a MTP. When this failed it was a group of localentrepreneurs who initiated community-based coral reef management, marking the firstentrepreneurial involvement in marine conservation. From this point onwards a group offoreign dive entrepreneurs got involved as they saw the opportunity to form an alliance andfunded marine conservation though diving, illustrating the private-sector led nature of thisMPA. 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 whomanages the GET became an increasingly essential factor driving the development of thisEMPA in later years. Thus, the role of the private sector in promoting marine conservation inGili Trawangan appears to have changed over time.Now that the private sector actors, or entrepreneurs, involved have been described, thefollowing step is to describe the process through which the private actors have been able topromote marine conservation in Pemuteran. In the process of exploiting the above-mentionedopportunities there have been numerous interactions between the entrepreneurs and theother stakeholders involved in Gili Trawangan, through which the private sector has built upsocial capital and induced cooperation from the other actors in the sustainable use of coralreefs, the natural resource they share with these actors. There are many actors involved withpower and control over the marine resources on the island, resulting in networked sites ofpower. Hence it is important to look at the interactions between the entrepreneurs and thedifferent actors involved, in order to determine whether and how they were able to legitimizethemselves with respect to the other actors. This will be analyzed in the following section.4.4 Social capital of the entrepreneurs in Gili TrawanganIn this chapter the linkages, or relations, between the private actors, and the other actors inthis networked EMPA will be studied. The way that the private actors have used relations inorder 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 therest of the stakeholders in EMPA, and the tools the entrepreneurs have used to build trust ancreate good relations with the other actors. This will be done for the five relations mostrelevant in this EMPA: the relations between the entrepreneurs themselves, those betweenthe private sector and the local community, the private sector and the fishermen, thosebetween the entrepreneurs and the SATGAS, and those between the private sector andpublic sector. To guide the reader through these five relations, the figure 11 presents thenetwork of relations between these actors when the GET was set up, and now:76

Figure 11: Network diagram displaying communicative relations in the EMPA in 2001 and 20104.4.1 Interrelations in the private sector: G.E.TThe GET was partially set up to improve the relations between the dive shops, a goal whichthey have appeared to achieve through a price agreement set in 2001. However, since 2001many things have changed within the private sector in Gili Trawangan, which have alteredthese relations once again.The relations between the dive shops were very poor before the GET formed: „people wouldlook 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 eachother with prices. On islands with many dive shops like Honduras and Koh Tao, there tends tobe a lot of competition resulting in price wars and negative relations. This emphasizes theimportant role competition has in forming relations between entrepreneurs, which wasintroduced in chapter 3. The existence of competition can prevent cooperation betweenentrepreneurs and collective action toward sustainable behavior. Hence, the founders of theGET saw the need to create a price agreement. According to all the dive operatorsinterviewed this price agreement is the sole reason why the dive shops work together, insteadof against each other, today. Though the dive operators in Pemuteran also claim there is littlecompetition within the industry, Gili Trawangan differs in that there is actually a formalagreement in place to ensure this.Some dive operators go as far as saying a sense of community can be found amongst thedive operators in Gili Trawangan, thanks to the price agreement made (personalcommunication: manager Trawangan Dive 15/2/2010). Tom Goreau of the GCRA has alsoclaimed 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, andseemingly, there is a „dive community‟ on Gili Trawangan. Community-involvement isencouraged during the building and sinking of Biorock structures by the manager of the GETmanager who spreads the word. In February, an artist who designed the structure, the GETmanager, the two GET volunteers, two students doing research on the island, and one of thedive operator employees helped out the building of the structure in the volleyball court of BigBubble Dive, from where the GET manager operates.Figure 12: Building a new Biorock structure77

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 thestructure in the water, and 5 people diving to establish the structure underwater. This group ofpeople was made up of the GET manager and volunteers, some foreign dive employees, thelocal 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 asituation 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; theprivate 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 thedive sector are informal and not organized in a formal structure and thus efforts towardmarine conservation are separated.The GET has expanded its membership and now includes some non-dive industry membersof 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, andwhat they plan to do in the coming month. The floor is then opened to any points whichmembers 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 toldwhat the GET are trying to achieve, and them asking for money to do so‟ (personalcommunication: manager Buddha Dive 16/2/2010). Though the GET was set up to encouragethe cooperation of the dive shops in Gili Trawangan, decision-making no longer appears to bevery participatory with dive operators claiming that things will be put open for discussionduring 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 detailsabout the zoning of the fishermen‟s agreement (personal communication: managerTrawangan Dive 15/2/2010). The dive boats do not know details about the types of fishermenwhich can and cannot fish. The GET manager claims that they call her when they see linefishing, or angling, whilst this form of fishing is actually permitted in the agreement (personalcommunication: 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 GETdoes not give a lot of information about the fishing regulations and so forth, which againsuggests that the GET is no longer very participatory. On the other hand, one could arguethat this lack of awareness can be accountable to the high turnover of managers in some thedive operators (personal communication: part-owner Manta Dive 19/2/2010). Regardless ofwhether this is because of lack of inclusiveness on the GET‟s part, or lack of awareness dueto high turnover of the dive operators, there is a clear difference regarding level of awarenessbetween those that were in Gili Trawangan during the founding of the GET, and the foreignmanagement employees in the dive operators which represent the GET today.4.4.2 Private sector and local communityThe background of the Gili Trawangan locals as poor fishermen or farmers, with a limitededucational background, did not prevent them from acquiring tourism as their alternative ornew major livelihood. According to a local government survey in 1999, more than 70% of thelocal population are engaged in tourism directly (Soemodinoto and Wong, 2004). However, itis important to mention here that in Gili Trawangan, it is the non-local entrepreneurs dominatetourism. Soemodinoto and Wong (2004) suggest that this is partially attributable to GiliTrawangan having different ethnic groups without a strong social cohesion, i.e. weak socialstructure, weak social ties and no core community, which is necessary to prevent the invasionof outsiders taking business away from the locals. They also argue that the changing natureof tourism in terms of increased tourist demands and services complexities, coupled by localweaknesses in terms of skills and capital, has caused the islanders to be less successful intheir 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 an78

important challenge to build a sense of trust amongst the local community in order tosuccessfully induce collective action toward protection of the reefs.Additionally, there are many people from outside Gili Trawangan, mainly Lombok, on theisland for temporary work in construction, and also to work in the tourism facilities. Accordingto one of the dive operators, roughly 90% of the staff are from Lombok (personalcommunication: manager Dream Divers 15/2/2010). This high percentage of non-Trawanganlocals makes it more difficult to promote marine conservation to the local community, asoutsiders are less likely to feel responsible for the island‟s environmental sustainability. Therest of this section will describe what the private sector did in order to reach the localcommunity, 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 currentKepala 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 GiliTrawangan, and very relevant to the network of relations in the EMPA, is traditional muroamifishermen do not live on Gili Trawangan, only a few anglers (Satria et al., 2006b). Hence, theGili Trawangan community is dominated by tourism, and it is essentially through this commonarea 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. Infact, 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 localfishermen in their dive shops. If there is anything of relevance the dive operators discuss itwith these people, who relay it to the relevant people in the village government (personalcommunication: owner Trawangan Dive and Blue Marlin Dive 17/2/2010). Furthermore, thedive shops do not have regular meetings with the head of the village (personalcommunication: 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 bemore defined than in Pemuteran where a good relationship between the village and privatesector was upheld through the local tourism pioneer.However, in the last two years the GET manager appears to have taken on the role as solecommunicator with the local community, similar to the way the tourism pioneer did inPemuteran. The manager of GET learnt Indonesian in order to be able to communicate withthe locals (Segre, 2010b). One of the most relevant things she did to gain legitimacy as theGET manager is to take a full-time function and no longer teach diving on the side. This wasdone in an attempt to shed the image of the GET as representing dive operators‟, i.e. theprivate sector‟s, interests and create an image as an organization dedicated to theenvironmental interests of Gili Trawangan as a whole. It is very clear that since there is a fulltimemanager in the GET, the communication between the GET and the village has becomemore frequent, as opposed to when the GET was first set up and all communication went viathe SATGAS. The manager has done several things in order to establish trust amongst anumber 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 isrequired to pay the cooperasi. The manager of GET has established good relations withthem. The cooperasi support her, and sometimes even contribute around Rp. 200,000 permonth to the GET. When she goes to speak to the cooperasi leader, he is happy to speak toher, and he has given her permission to put up a sign in the harbor which describessustainable handling of the coral and turtles for the tourists and boat captains (personalcommunication: manager GET 11/2/2010):79

Figure 13: GET manager preparing signThe GET manager has visited every business and many private homes to raise awarenessabout garbage. She encouraged residents to use the garbage dump and not burn garbage ingardens, and explained the health hazards associated with this (Segre, 2010b). She has alsostarted teaching marine ecology at the local school to increase environmental awarenessamongst the younger generation of Gili Trawangan. She has planted a garden, a vetivergrass nursery, at the school, where she and the children will nurse the plants before movingthem 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 thechildren the importance of disposing of rubbish in designated places, for the future of theisland. 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, andcreating awareness. The technology itself has created a physical structure for the locals tosee, and to generate marine conservation awareness amongst these. Furthermore, theBiorock workshops attract participants to Gili Trawangan, which generates income for thelocal 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 thetemporary nature of their stay. However, the head of the three islands believes it is importantthat the non-local public working in Trawangan need to be educated about conservationbecause most of them do not know about this (personal communication: Kepala Desa17/2/2010).4.4.3 Private sector and fishing communityThe locals that are not involved in tourism, namely the fishermen, must be divided into theanglers 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 previoussection, the families in Gili Indah are very large, and everyone is related. There are only reallythree families on the whole island of Gili Trawangan. It is thus very likely that a fisherman willhave family members employed in the dive industry (personal communication: managerTrawangan Dive 15/2/2010). This section will discuss the relations between the private sectorand 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 thefishermen 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 casefrom day one. Unlike in Pemuteran, where the dive pioneer represents the dive industry innegotiations with the fishermen, there is no representative from the dive industry who hasestablished good relations with the fishermen. In fact, there appears to be no relation at allbetween these two stakeholder groups. The dive industry, aside from contributing money80

toward compensating the muroami fishermen are not linked to this group in any way, unlike inPemuteran where the dive industry offer additional financial and non-financial incentives toencourage cooperation of the fishermen and create good relations.The SATGAS are the link between the private sector and the fishing community. In fact, theyrepresent the private sector in negotiations with the fishermen, which is one of the reasonswhy their legitimacy has been questioned, which will be expanded upon in section 4.5. Initiallythe heads of the fishing community were invited to Gili Trawangan to start the negotiations forthe zoning agreement. The BKSDA joined in some the meetings and helped the SATGASnegotiate (personal communication: patrol guard SATGAS 14/2/2010). These negotiationswere a difficult and lengthy process. This was partially due to the fact that the SATGAS andGili Trawangan locals all have family in the muroami. In addition to this, the muroami were inTrawangan before the divers were, and felt that their own set of property rights were beingundermined (Satria et al., 2006a).According to SATGAS‟ secretary at the time, the zoning plan was made together with thefishermen. They were given the task to decide where the fishing and diving zones should be.He claims they were very involved, which is why they understand the zoning system, and thatthey are also involved in security of the area: when fishermen from outside Gili Trawanganuse destructive fishing techniques the muroami fishermen are active in monitoring this andcall the SATGAS (personal communication: owner Sama Sama restaurant 12/2/2010 andmember SATGAS). However, previous research suggests that there was in actual fact aminimal involvement of these fishermen in the planning, implementation, monitoring andevaluation of this zoning system (Satria et al., 2006a).After the negotiations were made, the communication with the fishermen no longer happenedon a regular basis; the SATGAS and the official head of the GET, an ex-SATGAS member,only meet the head of the muroami fishing community when necessary, when there is aproblem (personal communication: owner Sama Sama restaurant 12/2/2010 and memberSATGAS).4.4.4 Private sector and local security task forceThere has been a gradual shift in the communication pattern between the GET and SATGASbetween 2001 and today. Though the GET pay the SATGAS a small salary, the two bodiesused to cooperate and share decision-making power regarding funds, as well as newprojects, but the communication structure, as well as decision-making structure has changed,and the two do not appear to work as equal partners any longer.When the SATGAS and GET were first set up, the GET was not allowed to use any fundswithout informing the SATGAS first, and the SATGAS could not use funds without getting anagreement from the GET first. This transparency of funding no longer exists; the SATGAS nolonger know how much money the GET have, and how they use it (personal communication:head SATGAS 17/2/2010). This is all handled by the current manager of the GET. The onlyGili Trawangan local in the GET, the head of the GET, is an ex-SATGAS member, but he ismore of a figure head and does not know details about GET funding.Regarding new decisions, the SATGAS are no longer consistently informed. The SATGAS isonly contacted by GET when the SATGAS is required to do something, or if there areproblems. The SATGAS no longer knows what projects the GET is doing which has proven tobe a source for problems in the past. A situation occurred where the GET chose places tobuild new Biorock structures without informing the SATGAS, and later found out a placewhere it is customary for the locals to drop anchor was used. The locals continued using thisas a harboring area, and the GET complained to the SATGAS, which could have beenavoided if the SATGAS had been informed (personal communication: head SATGAS17/2/2010).In terms of communication, the SATGAS always functioned as the middle man, not justbetween the fishermen and the GET, but also between the local community and the GET; ifthe locals had problems with the GET, they would go to the SATGAS. If the GET hadproblems, they would approach the SATGAS. However, this role has changed as the GET81

has grown and diversified its activities. Nowadays, when the village has a problem regardingthings like waste disposal, they go straight to the GET while they used to go via the SATGAS(personal communication: head SATGAS 17/2/2010).This lack of communication also counts for outside projects. Every year different localgovernment heads are voted in with different ideas. As a result new projects are started allthe time, without informing the SATGAS. When the funding for these projects is used up, thepeople leave, and the SATGAS is held responsible. The SATGAS head feels that theseprojects should meet with the SATGAS before so that they can give advice on what is viableand what is not on their island (personal communication: head SATGAS 17/2/2010).Furthermore, the differing approach of the SATGAS and the GET has also come to thesurface. The SATGAS members emphasize the SATGAS‟ goal has always been to educatethe fishermen. When new moorings needed to be placed the SATGAS would look for bombfishers or muroami fishermen and pay them to do this work. This way the fishermen wouldunderstand the concept behind these moorings, and feel responsible for them, and hopefullythis would result in the fishermen taking care of these moorings themselves. The leader of theSATGAS argues that this does not work when moorings are placed by outsiders. He arguesthat the GET has a different mentality, a more goal-oriented approach; they place themoorings, or ask the SATGAS to help them do this, and if there is an issue, they call thepolice. The GET will supply the materials and ask the SATGAS to help them build moorings.However, the SATGAS does not believe building moorings is their job, nor is it effective in thelong run (personal communication: head SATGAS 17/2/2010). These approaches clash, andas a result often the GET manager ends up doing things without cooperation with theSATGAS.4.4.5 Private sector and public sectorThe EMPA in Gili Trawangan has never received financial support from the local government.The SATGAS was always responsible for communicating with the local government. As theGET has expanded and appointed a full-time manager the GET has established their ownrelations with the local, as well as central government. Government involvement is a point onwhich Gili Trawangan differs significantly from Pemuteran, as the government has been animportant actor within the network of this EMPA.The EMPA can speak of successful cooperation with the central government in the past,when there was a form of co-management in place between the SATGAS and BKSDA,representatives from central government, when the BKSDA was joining the SATGAS in theirpatrols. The private sector supported this co-management arrangement by supplying theBKSDA officers with accommodation and some money for food (personal communication:head SATGAS 17/2/2010). The BKSDA‟s support in turn enabled the enforceability ofsanctions, which will be expanded upon in section 4.5.However, as mentioned previously control over the MTP has been handed over to theBKKPN, who do not cooperate with the SATGAS and GET the way the BKSDA did. Theirclosest office is in Kupang, East Timor, which is in the East of Nusa Tenggara Barat. Hence,two regional managers are now responsible for Gili Trawangan, and are meant to be therefive days a week. Currently they do not receive any operational funds for their work in GiliTrawangan, which makes it very expensive for them to travel from Lombok to Gili Trawanganfive times a week, and impossible to carry out monitoring or patrolling tasks. Theycommunicate with the GET manager, head of Gili Trawangan, head of Gili Indah and theSATGAS. However, they have not had any communication with the head of the fishermen.They only perform the tasks which they are told to by their superiors. Hence, they are notpatrolling with the SATGAS, which is what both the SATGAS and GET argue the SATGASneeds. The BKKPN also plans on sending an official to Gili Trawangan, but it is not knownwhen this will happen (personal communication: manager GET 11/2/2010).Aside from the above-mentioned system of co-management, one of the most importantconcrete accomplishments for the EMPA in terms of government support took place in 2007.In January 2007 the fishermen‟s agreement was written up in an official contract signed bythe Indonesian government with the Head of the BKSDA of Nusa Tenggara Barat, the Section82

Head Conservation Area (SKW) I of Lombok, and 5 village leaders, securing governmentsupport for the SATGAS and GET efforts in Gili Trawangan. Hence, the local governmentrecognizes, accepts and supports what the SATGAS and GET do in Trawangan.Though the EMPA has not received any funding from the Lombok regency government, theGET manager has established amicable relations with the regent of Lombok Barat Regency,and claims that the governor of Lombok supports what the GET does. The island receivesofficial visits from government officials in which the GET is always asked to present what theyare doing, and these representatives generally leave a donation, but the island is notreceiving regular funding from the government. The GET manager applied for financialsupport from the Lombok government again in February 2010 and hopes for more supportthis year (personal communication: manager GET 11/2/2010). The head of the three islandsemphasizes that the government, and not just the tourism business through the GET, shouldbe funding Gili Trawangan for all their programs. One of his concerns is that if conservationefforts on the island are a success, the government gets credit for it, whilst they do notcontribute enough (personal communication: Kepala Desa 17/2/2010).4.4.6 ReflectionThe network of actors involved in the EMPA in Gili Trawangan is an intricate one, in whichmany relations have appeared to change over time. The relations within the dive industryremain organized within a formal structure in the form of the GET. The formation of the GEThas been very important in guiding sustainable behavior of the private sector and for inducingcooperation, partially due to the removal of competition. The way this specific relation isorganized will be further analyzed in section 4.5, but it is important to emphasize that thestrength of this relation is a very important contributor to the cooperation within the privatesector, a defining element of this particular EMPA.Alternatively, the relations between the private sector and the rest of the actors in the networkare not based on this notion of collectivity. In fact, the dive shops have no relationship, andonly very little sporadic communication with the village community. Furthermore, the privatesector does not have any communication or relation with the fishermen, other than that theyfund their cooperation through a compensation scheme. Hence, the private sector very muchseparates itself from the local stakeholders and has not carried out specific actions to build upsocial capital for themselves. The SATGAS initially always represented the dive operators ofGili Trawangan vis-à-vis the other actors in the EMPA. They functioned as the middle man interms of communication between the private sector and the fishermen, and when necessaryalso the village and local government. This set-up has changed, as the function of theSATGAS and GET has changed over the years.The SATGAS and GET started off as bodies with an open communication channel, shareddecision-making and transparency in terms of funds. This relation has altered as the GETbecame a more independent body. There is less communication between the two actors, anddecisions regarding the EMPA made by the GET are no longer all made in consultation withthe SATGAS. In addition to this, the SATGAS no longer holds the function as the middle-manbetween the GET and all the other actors. The GET manager has actually established herown relations with the local community, and has attempted to build trust among thesestakeholders, and to encourage sustainable behavior of the locals. The same counts for thelocal government, with whom the GET manager is building relations independently from theSATGAS. What has remained the same however is the SATGAS‟ responsibility forcommunication with the fishermen. This illustrates the large barrier which remains betweenthe fishermen and the foreign tourism entrepreneurs in Gili Trawangan, and underlines theentrepreneurs‟ remaining dependence on the SATGAS for this function.There has clearly been a shift in the pattern of connections between the different actors, andthe quality of relations between these actors. The quality of these relations, and the trustwhich has or has not been built up between the actors and the private sector, has created acertain level of legitimacy for the private sector, which has determined the level ofinstitutionalization of this EMPA in Gili Trawangan. The following chapter will describe theinstitutional arrangement as a „result‟ of the previously described process of building socialstructure of the private sector in Gili Trawangan.83

4.5 Institutionalization of the EMPAThough the government was the first to introduce marine conservation in Gili Trawangan,they failed to create legitimacy for the institutional arrangements they had created to managethe MTP which they arguably failed to „establish‟ in Gili Trawangan. Hence the private sector,with assistance from the local security task force, took over the governance of the marineenvironment. The previous section focused on how these private actors interacted with andbuilt up trust amongst all the other stakeholders involved in marine management in GiliTrawangan. They were faced with existing institutions and in some cases conflicted withthese, and in other ways collaborated with these and created new hybrid institutions. Thefollowing section aims to describe this next step in the process of the creation of the EMPA,that is the level of institutionalization which has been reached which can be viewed as themomentary „end-point‟ of the EMPA as it exists today. Thus, this section will describe how theprivate sector has been successful in gaining legitimacy and actually altering the institutionsaround marine conservation in Gili Trawangan, leading to sustainable use of the coral reefsaround the island.4.5.1 Fishing agreement based on local ruling: Awig-awigThe introduction of Awig-awig, as an institution for coral reef and fisheries management, toGili Trawangan was catalyzed by the combination of national reform and the Asian economiccrisis in 1998, and the consequent inability of the government to deal with the issue ofdestructive fishing practices. It is interesting to note that in Pemuteran the economic crisisappeared to result in some existing institutions around marine management becomingineffective and eventually encouraged the re-enforcement of these institutions, whilst in GiliTrawangan, the crisis, together with national reform, marked the beginning of local andprivate sector involvement in marine conservation.The Awig-awig, or local rule, set a clear territorial boundary consisting of the sea surroundingGili Indah village as far as 30-100m from the coastline. The GET were the actors who pushedfor an agreement with the fishermen (personal communication: patrol guard SATGAS14/2/2010). The SATGAS, as mentioned prior, were responsible for negotiating the zoningareas with the village and fishermen. The territory was divided into many zones with differentallotments. Different zones were established in which different activities were allowed (Satriaet al., 2006b). According to Satria et al. (2006b) the representation of the muroami fishermenin this process was low with territorial representation guiding the deliberation process, asopposed to functional representation of interests, in which case the fishermen‟s voice wouldperhaps have been „louder‟ during these deliberations.According to one of the founding foreign dive pioneers in Gili Trawangan, in the verybeginning the fishermen were simply paid not to bomb. Only later this turned into acompensation scheme for the muroami fishermen not to fish (personal communication: ownerTrawangan Dive and Blue Marlin Dive 17/2/2010). A latent conflict existed between theprivate sector and fishermen from the beginning because the fishermen felt they had beenunfairly treated as their fishing area had been restricted by the Awig-awig zoning, whencompared to the past. This conflict peaked March 2003 when the GET and SATGAS reportedmuroami fishermen to the BKSDA, who handed this over to the local police office. Thefishermen rejected the complaint because their believed their fishing operations were not inthe restricted zone, but also because they had previously received authorization to practicemuroami fishing from the MFSO (Satria et al., 2006b).A meeting took place in the Gili Indah Village Office, attended by the muroami fishermen, theGET and SATGAS, and village heads. The meeting concluded with a new agreementbetween the two parties, with a zoning system and compensation scheme. There are twomoorings in the north of the island, and two in the south which limit the zones where themuroami fishermen are permitted to fish using their traditional methods. In the rest of thewaters around Gili Trawangan this method is not permitted. The fishermen traditionallyfavored certain waters around Gili Trawangan where the currents worked in their favor.The fishermen receive Rp. 6,000,000 compensation per month from the GET to cover theloss of revenue that can be generated from fishing around the island (personal84

communication: manager GET 11/2/2010). If they violate the contract and are caught fishingthey receive 50% of their compensation for that month. At a second offense there is nopayment the following month and the boast is confiscated. The muroami believe they are notpaid enough. They claim that the compensation does not cover the additional petrol coststhey need for fishing farther away from their usual fishing grounds. They initially wanted 10million, but this was bargained down to 6 million (personal communication: researcher Bscthesis University of Sydney).Fortunately for the entrepreneurs, through their relations with the government, they havebeen able to increase the enforceability of the rules when the BKSDA, the governmentagency previously responsible for marine conservation in Indonesia, and the localgovernment signed the fishing agreement in 2007, illustrating their full support (Satria andMatsuda, 2004; personal communication: manager GET 11/2/2010). Thus the rules havebeen placed in a legal document, signed by government representatives.The SATGAS claims that the muroami no longer fish in the zones where they are notpermitted to (personal communication: patrol guard SATGAS 14/2/2010). At the same time,some of the dive operators claim that violation of the contract is still happening, and claim tocatch fishermen all the time (personal communication: owner Trawangan Dive and BlueMarlin Dive 17/2/2010). The legitimacy of these rules in the eyes of the fishermen isquestionable. The zoning system restricts the scope of the muroami fisher‟s originaloperational area. If the fishermen were indeed not sufficiently included in the zoning decisionsas has been suggested by previous research, this is likely to have contributed to a lack oflegitimacy of these rules in their eyes. According to Satria et al. (2006a) the fishers have losttheir fishing ground and feel that their own set of property rights has been graduallyundermined.The fishermen also believe that the rules set by the Awig-awig are biased toward the interestof the tourism entrepreneurs. The tourism entrepreneurs have become the leading group inholding these management and exclusion rights, and they argue that thus, the loss of thefishers‟ rights leads to the marginalization of the fishers in their own area. This intensifies thepreviously mentioned gap, or social polarization which exists between the private sector andfishermen in Gili Trawangan (Satria et al., 2006b).Hence, the private sector, with help in negotiating efforts of the SATGAS, have beensuccessful in developing a formalized agreement with the fishermen, supported by theBKSDA and local government, with an incentive system for the fishermen to fish elsewhere inthe form of a compensation plan. However, this agreement does not appear to be verylegitimate in the eyes of the fishermen. Additionally, it is an arguably tenuous solution,because according to the village head: „as soon as the payment stops there will be conflict‟(personal communication: Kepala Desa 17/2/2010).Next to the legitimacy and enforceability of the rules set, the legitimacy and authority of theenforcers of this agreement are also questioned. This will be addressed in the followingparagraphs.4.5.2 Privately funded enforcement: SATGASWhen the SATGAS was first set up, Vila Ombak and Blue Marlin Dive supplied them withspeedboats, and petrol for patrolling was paid for by local donations, or from their ownpockets. The current Kepala Desa, or villade head, one of the first members of the SATGASand previous head of the GET, explains that the three islands were already an area ofconservation, but that the government were not doing anything, which was the primary reasonwhy the SATGAS formed (personal communication: Kepala Desa 17/2/2010). The SATGASquickly realized that they needed funding and made a proposal requesting money from all thebusinesses on the island, but the islanders did not understand that what the SATGAS wasdoing was also beneficial for them (personal communication: owner Sama Sama restaurant12/2/2010 and member SATGAS). Hence, the GET was formed partially to support theSATGAS financially, and compensate the fishermen, with income from dive taxes.85

The SATGAS had to give each other titles and structure themselves in order for thegovernment to recognize them as a legitimate body (personal communication: head SATGAS17/2/2010). They appointed a leader, secretary, treasurer and so forth. All of the sevenSATGAS members own a business in the tourist industry next to their position in SATGAS,except for one of the two patrol guards. Hence, their salary of Rp.2,000,000 per month is notvery relevant to them for their livelihood. „They just have the heart and motivation to carry onthe project‟ (personal communication: manager GET 11/2/2010).The head of the SATGAS is still mainly responsible for relations with the government when itcomes to marine security, despite the GET manager forming her own relations with thegovernment. If one of the patrol guards catches a fishermen breaching the contract, the patrolguard reports it to the SATGAS leader, and he is the one who processes this with the law(personal communication: head SATGAS 17/2/2010). There are two patrol guards who patrol20 days a month. The rest are concerned with what they refer to as „socialization‟; going tohomes and businesses to give them information about conservation (personalcommunication: Kepala Desa 17/2/2010). The original SATGAS were all from families whodid bomb fishing.In the beginning the locals did not receive the SATGAS very well (personal communication:manager GET 11/2/2010). The locals did not understand what they were there for, nor werethey taken serious. This contrasts with the body which enforces the fishing agreement inPemuteran, the Pecalan Laut, who were taken serious from the beginning because thePecalan is an existing local organization based on culture and tradition, supplying theenforcing body with instant legitimacy. The SATGAS did not have this existing legitimacy towork with; they had to build this up. This changed when the SATGAS caught a bomb fisher, afamily member of one of the SATGAS members, and brought in the local police who put himin jail for three months. This action was enough for the fishermen and the Trawangan publicto see that the SATGAS were serious. After this the bomb fishing on the three islandsdeclined sharply (personal communication: owner Sama Sama restaurant 12/2/2010 andmember SATGAS). There is a general consensus that the SATGAS were effective instopping the destructive fishing practices when they peaked after 1998 (personalcommunication: manager GET 11/2/2010; Satria and Matsuda, 2004).According to the SATGAS head it was difficult to exercise authority over fishermen if theycould not actually send people to jail. „There are so many laws in Indonesia, but when no onegets put into jail, it remains empty talk‟ (personal communication: head SATGAS 17/2/2010).However, sending someone to jail can cost up to Rp. 17 million per person, which theSATGAS had to pay for. This is a problem they no longer have to struggle with because theynow have an alternative strategy to exercise authority: Sometimes the head of the SATGAStakes violating fishermen to the Lembaga Masyarakat Nelayan Lombok Utrara whichrepresents the fishermen in the northern part of West Lombok, for support. This fishermen‟sassociation is where the collective Awig-awig rules are made. In the case of violation by afisherman, here it is decided what the fishermen has to pay for his violation.Another problem with authority which the SATGAS still experience is that without agovernment officer they still lack the authority they need for patrolling (personalcommunication: manager GET 11/2/2010). The SATGAS is „only‟ Awig-awig, so they cannotexercise authority over the fishermen because they are not employed by the government;they do not own any documents to legitimize themselves to the fishermen, and thus are oftennot taken serious (personal communication: patrol guard SATGAS 14/2/2010). In fact, theonly time that the SATGAS can prosecute fishermen is when these are caught dynamitefishing; they can be put in jail. Even then, the SATGAS need proof to show the authoritiesshowing the person in question, and the equipment they used. This is why the patrol guardspatrol with a camera; to be ready to take a photograph of any fishermen breaking rules.During the period that the BKSDA was in Gili Trawangan, the SATGAS were content with thesupport this government agency provided. The government did not support the EMPAfinancially, but helped them through assistance in enforcement. There was a clear case of comanagementbetween the two parties, and the presence of BKSDA on the island wasenabled by funds from the GET. The BKSDA‟s boat on Gili Trawangan had no engine so the86

BKSDA joined the SATGAS in their patrols. Having a government officer on the SATGASboat gave them the authority necessary to send away fishermen or condemn them fordropping anchor (personal communication: manager GET 11/2/2010). According to the headof the SATGAS the BKSDA understood the vision of the SATGAS; when people were caughtusing destructive fishing practices, the SATGAS would not prosecute them immediately. Theywould first go to their house and explain to them why they could not do that. The BKSDAwould join, and also looked for a resolution rather than prosecution (personal communication:head SATGAS 17/2/2010). Now that the BKSDA is being replaced by the BKKPN theSATGAS hope that eventually they too will send an officer to support the SATGAS andincrease their authority when they patrol. Ideally the BKKPN would place an officer in GiliTrawangan, who has good connections with the government, particularly with the heads ofpolice. According to the head of the SATGAS without the right connections it is difficult to getthings done (personal communication: head SATGAS 17/2/2010).The fishermen also question the SATGAS‟ legitimacy as the enforcing body because they areexpected to act in the interest of the tourism pioneers, and to be bias. This contrasts with thesituation in Gili Trawangan where the enforcing body, the Pecalan Laut, was born out of elegitimate body operating under the village religious authority, giving them instant credibilityand legitimacy. Furthermore, the SATGAS receive a salary from the private sector. Thissalary is small, and does not mean much to the members considering their alternative incomegeneration, but it does mean that their work is not on a voluntary basis, but on salary basis(Satria et al., 2006a). Traditionally, monitoring activities in Awig-awig should be taken on as acommon responsibility of all the local people. Because the fishermen view Awig-awig as acommunity-based management model it is seen as an impropriety for them to receivepayment (Satria et al., 2006b). Hence, this causes jealousy and distrust amongst the fishers(Satria et al., 2006a). This links directly to the objection of the tourism pioneer in Pemuteranto the enforcing body of the EMPA to get paid and become a private business. The situationin Gili Trawangan supports what he claimed: the private sector in Gili Trawangan funds theenforcement of the fishermen‟s agreement by paying for the SATGAS‟ salary, but in this, theyundercut the legitimacy of the SATGAS.As mentioned previously, the relations and communications between the SATGAS and GEThave altered somewhat, resulting in two separate bodies, with differing mentality. „TheSATGAS used to be the main force behind the GET, but they have kind of slipped to the sidenow‟ (personal communication: manager Trawangan Dive 15/2/2010). According to one of theGET founders, the SATGAS are the ones who got it all going in the first place, but due tolocal politics, a lot of the people in the SATGAS have backed out. The SATGAS were againsta lot of the developments such as the building on the beach front and so forth (personalcommunication: part-owner Manta Dive 19/2/2010). The SATGAS, as well as one of thefounders of the GET, acknowledges that the SATGAS has taken a step back as it were: „nowthe only thing the SATGAS concern themselves is protecting the reefs‟ (personalcommunication: part-owner Manta Dive 19/2/2010). They tend to remain quiet about newprojects and so forth, be they marine related or not, and are now only really responsible forwhether agreements are kept to or not (personal communication: head SATGAS 17/2/2010).Hence, they went from a group involved in negotiating and implementing marine conservationrules, to solely the enforcers of these rules.4.5.3 Private sector alliance: Gili Eco TrustThe GET was set up to create good relations between the dive operators at the time, and todo something against the destructive fishing practices which were destroying the reef. Itsucceeded in reaching both these goals in that a price agreement was made amongst thedive shops, and a fishermen‟s agreement was negotiated with the fishermen which is fundedby the GET. However, this organization has taken on a life of its own over time, which hashad consequences on the legitimacy of the GET in the eyes of the other stakeholders, andeven in the eyes of its own members.Before discussing these changes, it is important to illustrate some of the initialaccomplishments of the GET. The organization GET was successful in building up trust in thedive industry which is quite a novel accomplishment as traditionally in places with a boomingdive industry, the dive operators are separated by competition. They did this through setting a87

price agreement. Their second accomplishment was creating a dive tax to generate income tofund the fishermen‟s agreement. Every dive shop must charge a tax of Rp. 50,000 per dive.This money is used to pay salaries for the SATGAS, for their patrol boats, for petrol, and tocompensate the muroami fishermen. Through the GET the private sector were finally able tocooperate with each other.However, according to the founders and first members, the GET was quite chaotic for a longtime. Dive shops owners would meet and talk about what they wanted to do, but there wasnobody running it. It was not very effective because everyone was trying to run their ownbusiness (personal communication: manager Trawangan Dive 15/2/2010). There was a needfor someone who was independent from the dive industry to take the lead, to prove to theother stakeholders that they were not simply working in the interest of the tourismentrepreneurs. In the beginning the GET comprised three dive operators, and the fishermenknew this and they would go directly to the dive boats of these operators if they had aproblem (personal communication: head SATGAS 17/2/2010). With an independent manager,these types of problems no longer occur. The appointment of a leader for the private sectorcan on some level be compared to Pemuteran where the tourism entrepreneur took on such aposition. The difference however is that in Pemuteran the tourism actually still worked in theprivate sector and was not an independent actor, and, though it is questionable whether thelocals in Gili Trawangan see the GET manager as an independent actor, the intention toappoint her was to appoint an independent actor. Another major difference is that in GiliTrawangan a formal leader has been in appointed, whilst in Pemuteran, like most of theinstitutions there, the leader is an informal position.The manager of GET was quite an empty title until the current manager took on the jobsummer 2009. She no longer works as a dive instructor and works fulltime for the GET.Though her function began as one responsible for marine conservation in Gili Trawangan,this has expanded into one responsible for managing the environmental sustainability of thewhole of Gili Trawangan. Accordingly, the GET is expanding its programs; the GET managerset up a horse clinic for the often poorly taken care of animals on the island. She keeps busykeeping up with the construction of a new rubbish dump, establishing networks with otherenvironmental organizations like EcoBali which may be interested in collaborating in thecollection of rubbish to recycle, organizing meetings with local authorities, and checking onthe progress of the erosion-resistance scheme on the island (Segre, 2010b). The manageralso wants each hotel to appoint a number of individuals from the kitchen or garden staff whowill be referred to as „Mr. Green‟ or „Green Team‟ which will be responsible for wastemanagement in those establishments. She will educate this staff, and try and establish asense of responsibility amongst them (personal communication: Gili Eco Trust meeting10/2/2010). Thus, the GET no longer aims to represent solely the interests of the diveoperators anymore, and a Dive Association was set up in late 2009. The Dive Association isnow the main body for the dive shops can discuss on price changes, and operationalstandards (personal communication: manager Trawangan Dive 15/2/2010). Hence, the GETis now an organization independent of the dive industry. The private sector has movedbeyond marine conservation to general environmental conservation. This classifies the „state‟this EMPA finds itself in; it has evolved into something new with a significantly larger scope.The GET has not only diversified its programs and altered their main goals; they have alsoexpanded their members. A few hotels and restaurants are now also members, who are alsoencouraged to charge the same tax as the dive operators do. The dive community contributesto keeping the reefs healthy with their contribution, and in terms of equity, it is logical thatother businesses which benefit from the healthy reefs indirectly, through tourism on theisland, do so as well. This brings with it several practical issues: charging a eco tax ofRp.50,000 to divers, who already pay a significant amount of money for a dive, is generally alot easier and acceptable to customers than charging this amount on top of a relatively lowroom rate (personal communication: Gili Eco Trust meeting 10/2/2010). Hence, hotel andrestaurant members of the GET are finding it difficult to charge the same tax the diveoperators have been charging since 2001. This problem of equitable benefits andcontributions appears to be one step further than the same problem in Pemuteran, where thedive operators are not yet contributing equally. In Gili Trawangan, this is already the case, thechallenge lies in finding a way for other members of the private sector to be able to charge a88

tax to their customers. Until now the health of the marine environment in Gili Trawangan hasonly been invested in by the dive shops through their dive tax and Biorock.In addition to these conflicts which arise due to new membership, criticisms have alsodeveloped within the dive industry. As mentioned previously, many of the dive operators arenot well-informed about the fishermen‟s agreements, nor are they about exactly what projectsthe GET is investing money in. As a result, some remain critical of the GET, and question theprojects in which the GET appears to be investing most of their time and effort in, such asrecycling and so forth. One of the employees of a dive operator suggests they do not spendso much on things like recycling which simply does not exist yet on the island, and spendmore resources in ensuring that actual programs such as patrolling by the SATGAS isactually happening, since he claims to not know whether there are local people patrolling.This not only illustrates the distrust and lack of support caused by a lack of involvement of thedive operators, but also the lack of awareness which is caused by this.The GET manager claims she needs an office so that she can receive people, so that peoplecan see the accounting and there is transparency in terms of the budget of the GET, and sothat people can look at the details of all the projects toward which GET money is going(personal communication: manager GET 19/2/2010). Hence, she appears to some extent tobe aware of the lack of awareness of some of the members. For now the GET is stilloperating from the old office of the GET manager from when she was still employed as adiver of Big Bubble Dive, which, despite that she is no longer employed at the dive operator,does send off the signal that she represents the dive industry to the local community.At the moment there are two individuals which are temporarily working for the GET; they aremainly responsible for cleaning and maintaining the Biorock structures. They work on avoluntary basis, but the GET pays for their visa extension every month (personalcommunication: manager GET 11/2/2010). Biorock has become a GET project; whenbusinesses want a Biorock structure they pay the materials and GET, the manager and anyvolunteers who want to help, places the structure. An artist is responsible for designing a lotof the structures in Gili Trawangan. In February she came and designed a new whale-shapedstructure which was put together and welded by her and any volunteers who wanted tocontribute. Though Biorock is part of the GET, is has a strong presence in Gili Trawangan,with so many different opinions of it, so it will be discussed in a separate section.4.5.4 BiorockThe Biorock technology, though its legitimacy amongst the different stakeholders is veryvaried, has managed to contribute to marine conservation in Gili Trawangan in numerousways. It has played an interesting role in Gili Trawangan, as a symbolic capital whichappears, in some ways, to hold the network which comprises the EMPA together.Some of the locals can place the link between Biorock and healthy coral and tourism, whilstsome of the locals have never even heard of Biorock (personal communication: volunteer atGET 13/2/2010). Particularly those working in the dive industry, or those who own their ownbusinesses understand the value of Biorock for their livelihood; they know that diving is themain stake business in the area, and that if they lose that they will lose their jobs (personalcommunication: manager Trawangan Dive 15/2/2010). But there are many that simply do notunderstand what the technology does. Many local people do not even know about the Biorockbecause it is underwater. Many people also think it is dangerous because it involveselectricity (personal communication: manager GET 19/2/2010). It has been suggested by amember of the SATGAS that it should be explained to the locals, in their own language, whatit is. He suggests that people from Mataram university for example should come and educatethe locals about the technology (personal communication: owner Sama Sama restaurant12/2/2010 and member SATGAS).However, regardless of whether the local community understands the goal behind Biorock,they do understand that they should not anchor their boats above these Biorock areas, andactually make use of the moorings built by the GET (personal communication: managerDream Divers 15/2/2010). The head of the three islands claims that the value of Biorock liesin the fact that it causes the public not to use anchors (personal communication: Kepala Desa89

17/2/2010). Interestingly, despite many of the locals not knowing what the technology is for,one of the dive operators values Biorock in that it also gets the islanders involved and bringsforward community spirit. It is a good tool to provide something which needs to be donetogether (personal communication: part-owner Manta Dive 19/2/2010), which coincides withwhat has been said of Biorock in Pemuteran.However, the GET manager herself emphasizes that Biorock is truly more of a Western,rather than a local community involvement in Gili Trawangan. She is of the opinion that it isnot possible to work with the local community on Biorock projects in Gili Trawangan. TomGoreau of the GCRA encouraged her to involve the fishermen in the project, but she does notbelieve this is a possibility here. The fishermen know it exists but they are not really interestedin being a part of it, nor are most of the local public, with the exception of a few local diveemployees who sometimes help sinking structures at the request of the GET manager. Unlikein Pemuteran where the Biorock Centre is run by three locals, Biorock in Gili Trawanganmostly involves Westerners (personal communication: manager GET 19/2/2010).At the same time there is not a lot of evidence to support the involvement of any Westernersapart from those directly involved in the GET. Though there were a number of foreign diveemployees helping out with the sinking of the Biorock, they are not involved in day-to-dayBiorock maintenance and so forth. Generally dive operators do not maintain their ownstructures, despite every sponsor getting the opportunity of getting two of their staff to learnhow to maintain the structures during the workshops (personal communication: manager GET11/2/2010). The two GET volunteers and the manager do this. According to the manager ofGET: „Everyone appreciates the project, but not everyone knows the details about it, and areinterested to go in and brushing the structures and things like this‟ (personal communication:manager GET 11/2/2010). In summary, the dive shops share the fact they own Biorock, butthey do not actually maintain this technology.However, despite the lack of intense involvement of the local community or the foreign divecommunity, the dive industry does see the value of Biorock for their well-being. „Customerslove the Biorock‟ (personal communication: part-owner Manta Dive 19/2/2010). In manycases divers find more marine life in the Biorock structures than on the other reefs (personalcommunication: manager Vila Ombak Diving Academy 15/2/2010). One of the dive shopsclaims that there are people that go diving just to see the Biorock (personal communication:owner Trawangan Dive and Blue Marlin Dive 17/2/2010). Furthermore, the structures providea very good night dive (personal communication: manager Buddha Dive 16/2/2010). Hence,the technology contributes to a fraction of income from diving, and hence indirectlycontributes to funding the fishing agreements. Thus, regardless of whether the technologyactually has an ecological value in terms coral restoration, it contributes to marineconservation through increasing income from dive taxes which go to the GET.That said, there are a number of different stakeholders who question the ecological value ofBiorock, as stakeholders in Pemuteran do about the application in their own area. Localexperts question the value of Biorock. They state that from the viewpoint of conservationother methods of coral restoration may be better. They claim that Biorock is unnatural anddisturbs the ecosystem, with the cables placed on the seabed and electricity which getspumped into the sea. Furthermore they argue that Biorock is a very expensive method ofcoral restoration, and that the money could be used for other methods such as using cementblocks, methods which run themselves, an opinion supported by a number of dive operatoremployees. They do state that the long term goal of Biorock is a good one, but argue in favorof other methods. When questioned why they believe the dive entrepreneurs introducedBiorock into this area they claim that they wanted quick results, and the Biorock method givesfaster results than other methods (personal communication: regional governmentconservation experts 12/2/2010).There is also concern amongst the locals about the health of the areas where the brokencoral which is attached to Biorock structures is collected from. Firstly, it is argued that this isnot conservation: „in conservation, if something falls, you do not touch it, and maybe it willcome back more beautiful‟ (personal communication: head SATGAS 17/2/2010). Biorock is acoral restoration technique, by definition not conservation and this illustrates the lack of local90

understanding of the technique, even amongst those directly involved. Furthermore, a validpoint is made in that no studies have been done to determine whether this process ofcollecting broken coral influences the health of the areas from which the broken coral is takenfor the Biorock structures.This brings with it an argument made by a number of the dive operators: as in Pemuteran,there is a lack of scientific evidence supporting the ecological value of the technology versusits cost (personal communication: manager Buddha Dive 16/2/2010; personal communication:manager Trawangan Dive 15/2/2010). In 2007 students studying fisheries in Jakarta came tostudy the growth of certain coral forms in the Biorock structures. In 2009 a student fromHelsinki studied how coral growth varies with the electric field around the Biorock structure.Four more students studying fisheries in Jakarta are expected to come this year (personalcommunication: manager GET 11/2/2010). This has widened the recognition of the EMPA inthe academic world. However, none of this research has been published in internationaljournals, which undermines the legitimacy somewhat further.The manager of Trawangan Dive hopes to see Gili Trawangan become a centre for coralresearch, attracting students from universities all over the world, and has used Biorock as afirst step in this process. This dive shop is offering student programs which incorporateBiorock. For example, they offer a two week course where students do the PADI BiorockSpecialty, training in coral conservation, and learn about coral gardening, an example of theinstitutionalization of Biorock. Through these programs the existing Biorock structures receivemaintenance from these students. At the end of this program the students can design theirown Biorock which is built and placed with assistance for the GET manager. These types ofprograms naturally promote Biorock, but they also increase marine conservation awareness.In this case Biorock can be viewed as a first step toward a greater movement in coralrestoration in the Indonesian archipelago; the manager would eventually like to see othercoral restoration techniques applied in the area as well (personal communication: managerTrawangan Dive 15/2/2010).4.5.7 ReflectionThe EMPA in Gili Trawangan is clearly far more institutionalized that the one studied in theprevious chapter. It is also at a further „stage‟ in terms of institutionalization. It presents anarguably „ideal‟ institutional setting created around an agreement set with muroami fishermen,supported by the central and local government in a formal contract. This agreement is fundedentirely by the private sector which set up a system of dive taxes which generate enoughmoney to compensate the fishermen, as well as pay for the SATGAS, who enforce the fishingagreement. Furthermore, a system of co-management existed between the SATGAS andBKSDA, also funded by the private sector, which increased the authority of the SATGAS,thereby increasing the enforceability of the agreement.Despite this seemingly ideal setting there are several issues of legitimacy and authority whichthe private sector are still faced with, which is attributable to the process of social negotiationdescribed in section 4.4. Most importantly the agreement, despite being formalized, is notlegitimate in the eyes of the fishermen. These formed common property institutions aroundthe use of these coral reefs before the arrival of the private sector, and though initial conflictsbetween the two parties have been removed, the fishermen remain displeased with theagreement and believe that the rules have been set in favor of the private sector, and notthem, the original resource owners. It has been suggested that this could be due to the lack ofinvolvement of the fishermen in initial forming of rules. This distrust also has significant effectson the legitimacy of the enforcers, also a formal organization registered with the government,simply because they too are assumed to be bias in favor of the tourism entrepreneurs. Thus,even though the EMPA comprises a number of formalized institutions, their legitimacy isquestioned. Furthermore, this does not change due to the remaining social polarizationbetween the fishermen and the tourism entrepreneurs; there is a large space between the twogroups, filled with distrust from both parties.The private sector has not only organized fishing practices in a formalized institution, but alsotheir own diving practices, through the formation of the GET. The power in this EMPAappears to lie within this group and its ability to collectively induce change together with the91

SATGAS, in a united front. They induced their own cooperation by setting a price agreementand sustainable diving practices, and Biorock too played a role in securing this sense ofcommunity. Furthermore, their ability to induce the cooperation of the fishermen can also beheld attributable to this collective effort; without each dive operator charging a dive tax, thefishermen could not be compensated and would not cooperate. Hence, their collectivity iswhere the power of the private sector in stems from.It is clear from the changes in communication and decision-making power that themanagement of the EMPA now mainly lies in the hands of the GET, as opposed to the GETtogether with the SATGAS, which was initially the case. The GET now comes forward as asomewhat independent body which no longer only represents the dive industry, but claims torepresent the environmental interests of the whole island. As a result, this initial cohesion ofthe dive community which the GET initially prided itself in, appears to be lessening, while therole of the SATGAS shrinks.4.6 ConclusionThe first step taken by the private sector toward the establishment of the EMPA, whichessentially sets the tone for the rest of the developments in terms of marine management onthe island, was the creation of an alliance, the GET, amongst the dive operators in GiliTrawangan. This organization represents the level of formalization, control and coordinationwhich can be recognized throughout the development of this EMPA.Private sector involvement in this EMPA has been a collective effort from the beginnings ofthe EMPA. They formed an alliance, in which they set a price agreement which removedindustry competition, and collectively took action against the destructive fishing practiceswhich were threatening the reefs in Gili Trawangan. The private sector did this incollaboration with a local security force, the SATGAS. Later, the promotion of marineconservation became more of an individual effort as an individual, who stepped out of theprivate sector, took over control of the GET, making it more of a privately-funded NGO.Hence, the nature of entrepreneurship in this EMPA changed over time.Accordingly, the relations within this networked EMPA have also changed. The first step theprivate sector took in terms of building social capital, through forming the GET, wasestablishing good relationships amongst themselves, and with the SATGAS, which isessentially what enabled them to take collective action against the destructive fishingpractices which were threatening the reefs. However, there was no effort to build relationswith the local village, and more importantly with the fishermen. A large distance has been inplace between the private sector and the fishermen from day one of private sectorinvolvement. Recently, the GET has become an increasingly independent organization fromthe SATGAS, as its goals have expanded from marine conservation, to generalenvironmental conservation. A manager has been appointed who has individually establishedrelations with the village and local government, no longer requiring as much aid from theSATGAS. However, communication with the fishermen remains in the hands of the SATGAS,keeping the existing polarization of the fishermen and private sector in Gili Trawangan inplace.A fishing agreement has been established, based on Awig-awig, or local rule, an existinglocal institution for marine management. Negotiations with the fishermen were in the name ofAwig-awig, and the regency government recognized the agreement when this wasestablished. This agreement, a zoning system and compensation plan, was further formalizedin 2007, when the private sector and the local security force succeeded in getting the BKSDA,representatives of the central government responsible for marine conservation areas, as wellas the local government to sign this agreement. This development was a largeaccomplishment as the fishing agreement went from a voluntary agreement to a legalizedone, supported by the government.Despite the high level of institutionalization of the fishing agreement in Gili Trawangan,fishermen still question the legitimacy of this agreement, and subsequently the legitimacy andauthority of the SATGAS, the enforcers of this agreement. Some researchers argue that this92

is due to the lack of involvement of the fishermen in creating this zoning plan. It also stemsfrom the belief of the fishermen that the agreement, is strongly bias toward the interests of thedive entrepreneurs, as opposed to that of the fishermen, and that the agreement marginalizesthe original resource users. Even though negotiations were carried out by the SATGAS, whoofficially represent a local institution, the dive industry pays for the salary of the SATGAS, andfor the compensation of the fishermen. Thus, despite their apparent success in establishingthe agreement, the private sector are at the same time responsible for undercutting thelegitimacy of the SATGAS and the agreement which these men negotiated. This raises thequestion of how much an actor such as the private sector can really achieve in a situation likethis. Will they always be seen as actors with profit as their main interest?Despite these issues of legitimacy, the private sector has succeeded in creating a number offormal institutions which appear to prevent destructive fishing practices, with little, if any,relations between the private sector and the local community. The support they have receivedfrom the government has strengthened the agreements significantly, and has resulted in asituation in which the fishermen must comply despite the fact that they appear to question thelegitimacy. Hence, institutionalization was accomplished, without the private sector buildingsocial capital amongst the local community. Now the EMPA appears to be going into a newphase with the expansion of the responsibilities, activities and members of the GET. Thisorganization is becoming more independent from the dive industry, as well as from their initialpartner, the SATGAS. With this transformation a trend toward less participation andinclusiveness within the private sector is coming forward, as the GET takes distance from itsposition as a representative of the private sector, particularly the dive industry. The questionarises what these changes mean for the ongoing trust and the legitimacy of the privatesectors vis-à-vis other stakeholders in the EMPA such as the SATGAS, and amongst theprivate sector themselves. This development also brings forward a number of questions forthe future of marine conservation of the island. As Gili Trawangan goes into this new phase,what will happen in terms of marine conservation? Has a status quo been reached, or will theGET instigate more marine conservation in future?93

5 Discussion5.1 IntroductionThe aim of the two preceding chapters was to investigate the shaping of two separate EMPAsin order to be able to compare these and discuss the role of the private sector in creatingdurable conservation and restoration agreements through EMPAs, and consequentially theirrole in the bigger movement of marine conservation, in this chapter. However, as introducedin section 1.5 EMPAs are always context-specific in that the context or environment in whichthey are embedded drives the formation and functioning of these EMPAs. Accordingly, thetwo cases contrast in a number of significant ways. Particularly the presence of the statediffers considerably in the two case study sites, which has affected the role of the privatesector in the EMPAs. The private sector‟s mode for gaining legitimacy and their practices inincreasing institutional linkages between groups visibly differ in the two EMPAs.The EMPA in Gili Trawangan is clearly much more institutionalized than the EMPA inPemuteran. Firstly, fishing rules have been formalized in a legalized contract supported by acentral government agency for marine conservation and by the regency government.Secondly, the private sector has organized itself and the coordination of its members byforming an association with a price agreement between the dive operators and an agreementto charge an eco-tax to fund marine conservation in Gili Trawangan. In this EMPA institutionsand the collective nature of the private sector have played the primary role in maintaining anddriving conservation. In contrast, Pemuteran‟s strength lies in the support which a number ofindividual entrepreneurs have been able to gain from the local community and fishermen.This EMPA is far from institutionalized, and in Pemuteran it is the support and consequentiallythe legitimacy which individual members of the private sector have gained that appears todrive compliance of agreements.Despite these significant differences, comparison of the cases illuminates several patternsregarding the role of the private sector in EMPAs. Additionally, some opportunities can beidentified and questions are raised about the role of the private sector in creating durableconservation and restoration agreements for the protection of coral reefs in EMPAs. Thus, theremainder of this chapter will discuss important themes illustrating the role of the privatesector which come forward upon comparison of the two cases. This will be done using thethree concepts which compose the analytical framework set out in chapter 2;entrepreneurship, social capital and institutionalization. Additionally, the value of eachconcept as a theoretical tool to determine the role of the private sector in EMPAs will beassessed to ascertain the value of the theoretical framework used for this thesis.5.2 Entrepreneurship5.2.1 Exploitation of entrepreneurial opportunitiesThe nature of entrepreneurship in marine conservation in Gili Trawangan and Pemuterandiffers, which consequentially has an effect on the role of the private sector in these EMPAs.Both cases display situations in which entrepreneurs exploit opportunities which lead tomarine conservation, but the way that the entrepreneurs organize themselves in order toexploit these opportunities is different in the two case study sites.The strength of the EMPA in Gili Trawangan appears to lie in the formalized collectivity of thedive industry. An association initially formed by the dive sector ensures the sector-widecharging of a dive tax, bringing up sufficient funds to compensate the muroami fishermenwhich threatened the reefs. Alternatively, in Pemuteran, environmental entrepreneurshipopportunities are exploited individually; there is not a collective effort toward „sustainablediving‟ like in Gili Trawangan. Though certain members of the dive sector in Pemuteran investin good relations with the fishermen, and some do this in collaboration with others, there is noorganized or formalized system in place for incentivizing the fishermen, nor are the diveshops required to charge a dive tax. Instead, Pemuteran hosts a number of marineconservation projects set up by individual entrepreneurs, which operate separately toward aseemingly shared goal toward marine conservation.94

These two cases illustrate different viable approaches to applying the previously economicconcept of entrepreneurship to marine conservation. Both cases present a situation where theprivate sector successfully promote marine conservation and have changed institutionsaround protection of the reef. One proposed approach is through a collectively organizedprivate sector which charges a dive tax, used to fund reef protection. Another approach is tooperate through an informally organized private sector, primarily functioning separately, with anumber of separate conservation-oriented projects. These approaches themselves bothdisplay advantages and disadvantages which partially depend on their context. However,what is important in this research is that the cases show that entrepreneurship can be appliedto marine conservation in EMPAs in a variety of ways.5.2.2 Dependence on individuals in EMPAsThe role of individuals is an important theme in studies on entrepreneurship. Thoughpresently increasing attention in literature is being given to the process of discovering anddeveloping these opportunities, initially many studies in entrepreneurship were done aboutthe personality of individual entrepreneurs and what it is that makes these individualseffective. The importance of individual entrepreneurs throughout the process of developingentrepreneurship opportunities, not just for discovery and initial exploitation, has comeforward upon comparison of the two cases. This supports the results of previous studies doneby TNC which suggest that the common thread in the success stories of privately-led MPAshas been certain individuals who hold everything together (personal communication: SeniorAdvisor Indonesia Marine Program TNC 18/3/2010).In Pemuteran, the development of the EMPA was clearly driven by the efforts of a number ofindividuals. One could argue that strong leadership which was consistent over a long time hasbeen an important success factor in Pemuteran (personal communication: director ReefCheck Indonesia 26/2/2010). This is comparable to studies on alternative forms of MPAssuch as community-based MPAs, which also show that leadership is an important conditionfor effectiveness of an MPA (Crawford et al., 2006; Pollnac et al., 2001). Dependence onindividual entrepreneurs in Pemuteran is high; for example, there has always been highdependence on the tourism entrepreneur for communication with the local community inPemuteran. This brings significant risk with it, and raises the question: what happens whenthey leave? Pemuteran is already faced with a vacuum now in terms of villagecommunication, as the tourism entrepreneur has left the village and his involvement is nolonger present. Similarly, in Gili Trawangan the manager of the GET has played anincreasingly important role in pushing for certain developments in the EMPA. Someinterviewed dive operators suggested that before this individual took the stage of the EMPAthe efforts of the GET were not very well-organized and effective. Hence, in Gili Trawangantoo there is a clear question in the air as to the future of the EMPA upon departure of certainindividuals.This raises an important discussion point; do EMPAs inherently rely on the efforts ofindividual entrepreneurs? If this is true, and the primary strength of an EMPA generally lies inthe efforts of individuals, the strength of an EMPA intrinsically also holds a major limitationsince individuals from the private sector are temporary by nature. The question then arises asto how EMPAs can be made more durable with this inbuilt dependency on individuals. Whatcan entrepreneurs do to secure the future of the EMPA, knowing that the original creators willno longer be present in a matter of time?5.2.3 Evaluating the concept of entrepreneurshipPlenty of literature exists on the development of MPAs, and other institutional arrangementsaround marine conservation. Though very useful in bringing forward institutionalarrangements in marine governance in which the state collaborates with local communitiesand civil society, these studies do not contribute to a better understanding of the role of themarket, or private sector, in marine conservation. The use of the concept of entrepreneurshipin this analysis immediately shifts the focus of study onto the private sector. This in itselfplaces value on the use of this concept as it is entrepreneurs, or the private sector, which weare studying.95

This concept is still relatively new, especially when applied outside the sphere of business. Inbusiness, opportunities drive entrepreneurship. This also counts for entrepreneurship inmarine conservation. Hence, this concept contributes to this research as it induces the needto define what opportunities we are dealing with, which enables one to determine to whatextent these entrepreneurship opportunities actually contribute to marine conservation.Furthermore, the concept separates the notion of entrepreneurship into individuals whichdiscover opportunities, and the process of exploiting and developing these opportunities.Hence, when analyzing entrepreneurship in EMPAs one is required to determine who,individuals or groups, are responsible for promoting marine conservation, and it then raisesthe question of how they do so.Though the concept appears to be a promising tool to highlight the private sector-led natureof EMPAs, the concept possesses some limitations as a theoretical tool. These limitationsstem from the as yet underdevelopment of this concept outside the business sphere. Firstly,the different novel classes of entrepreneurship described in chapter two, such asenvironmental and social entrepreneurship, though helpful in that they possess clear cutcharacteristics of the type of entrepreneurship found in the case studies, are new conceptsthemselves and are still in the process of being developed. Consequentially, none of theframeworks which have been proposed by different scholars to analyze the process ofentrepreneurship in these different classes are wholly ideal to apply to entrepreneurship in thecontext of marine conservation. Pacheco et al. (2009) propose a heavily economic gametheory-based approach to studying environmental entrepreneurship, which lacks a moresocial focus on the interaction between the entrepreneurs and their environment. Mair andMartí (2006) address this nicely and present a number of interesting sociology tinted theorieswhich could be used to study social entrepreneurship. However, due to their focus on creatingsocial value, they fail to define the ideal approach to study entrepreneurship in cases ofenvironmental common property issues in which changing social behavior is aimed atcreating ecological value and protection of a common property resource.The same counts for ecological modernization literature: there has been little application ofthe concept of entrepreneurship in the context of common pool resources. Increasingattention has been given to the upcoming role of private actors, including entrepreneurs, inenvironmental reform (Mol and Spaargaren, 2002). Human agency is argued to have animportant role in bringing about more sustainable consumption and production patterns, andplenty of research has been done into the way that these economic actors can bring aboutchange. What is missing in ecological modernization literature is a focus on entrepreneurshipin the context of collective action issues, such as problems around coral reef degradation.Ecological modernization has not yet addressed such problems in great detail, especially inthe context of marine conservation. The question arises whether the private sector can alsoplay a role in collective action issues, and if so under what conditions?In summary, the concept of entrepreneurship is a good way of bringing the emergence ofeconomic actors into marine conservation, and their motivations to do so. However, it doesnot yet provide an ideal way to study the process of developing these entrepreneurialopportunities and actually changing behavior and institutions around marine conservation forcommon pool resources. Thus, the concepts of social capital and institutionalization wereused address this.5.3 Social Capital5.3.1 Competition and collectivity within the private sectorThe main difference, in terms of social capital, between the dive industries in the two casestudy sites lies in the structural capital within the private sector; that is the configuration of thenetwork of ties between the actors in the private sector (Nahapiet and Ghoshal, 1998). In GiliTrawangan the dive operators are organized collectively in a formalized organization, theGET, whilst in Pemuteran relations amongst the members of the dive industry are informaland sporadic. However, in both places the quality of relations within the industry, or therelational capital, appears to be high.96

Dive operators in both locations suggest that these good relations can be attributed to thelack of competition; in Pemuteran the dive operators cater to different niches and they do nottry and undercut each other on prices, and in Gili Trawangan the dive industry has set a priceagreement, removing any opportunity for price wars. This suggests that the absence ofruthless competition in a dive industry contributes to good relations within the dive industry.These good relations have been suggested to be the reason why these places can effectivelypromote marine conservation and apply technology such as Biorock. In the absence ofruthless competition, there is likely to be a higher level of trust, a component of the relationaldimension of social capital, in the dive industry. A higher level of trust theoretically leads toactors which are more eager to cooperate (Nahapiet and Ghoshal, 1998). Thus, competitionis suggested to be a very important factor in the ability of the private sector to exercise a rolein marine conservation and actually induce change, regardless of whether that industry isorganized in a rigid frame. This coincides with claims made by De Groot and Bush (2010) thathigh market competition in a dive industry is a risk for EMPAs and can potentially limit thedevelopment of EMPAs and effective marine conservation.As mentioned above, the structural dimension of social capital differs in the two case studysites. In Gili Trawangan this is characterized by an organized and cooperative private sector,which is brought about by the existence of a rigid frame. This has several advantages to theprivate sector as a whole. The GET in Gili Trawangan ensures that each member contributesequally to marine conservation. This type of system does not exist in Pemuteran, whichresults in unequal contributions to marine conservation by the members of the dive industry.This could potentially lead to dissatisfaction of the individuals who have set up these marineconservation efforts, and eventually lead to hostile relations within the private sector. This, inturn, would limit the potential the private sector to carry out effective marine conservation.Hence, competition as well as an organized frame which requires the different members ofthe private sector to contribute equally to marine conservation are both factors which appearto increase the ability of the private sector to exercise influence in terms of the promotion ofmarine conservation though an EMPA. A combination of the two, like in Gili Trawangan,appears to be the more durable solution as the organized nature of the private sector ensuresfuture, as well as current, cooperation.5.3.2 Relations with initial resource ownersThe analysis of the EMPA in Gili Trawangan illustrates that high quality relations with originalresource owners is not a prerequisite for cooperation; a relationship based on trust andfriendship between original resource owners and the private sector is not a condition forcompliance. On this island the private sector functions very separately from the fishermen,rarely having contact with them and the relationship which does exist is based on mistrustand sometimes even hostility. The fishermen question the legitimacy of the fishing agreementthey have with these actors, but comply because they are compensated and bound by alegalized contract supported by a central government agency and the regency government.This suggests the power that the state can have in inducing compliance, even when they arenot enormously present in an EMPA. The government can provide the legal groundingnecessary to induce cooperation.Alternatively, in Pemuteran, the private sector has received no government support in theimplementation of the EMPA. Here, the dive industry has done a lot to establish trust andsupport from the fishermen by investing in financial incentives as well as non-financial assetslike religion. Consequentially the relations between these two stakeholder groups aregenerally quite good, and the agreement set between the two is legitimate in the eyes of thefishermen. This is a situation where the private sector has had to overcome the lack ofgovernment presence themselves, and have found that tools like compensation, non-financialgifts can really enhance the legitimacy needed to induce compliance when there is no legalincentive to do so.It is often argued that resource owners have to understand why they need to change theirbehavior before they will actually do so and an MPA will actually function (personalcommunication: leader Coral Triangle Program WWF 12/3/2010). This suggests that, incommon pool resource management issues, a condition for the private sector would be to97

invest in good relations with original resource owners in order to create a high level of socialcapital and create understanding amongst the original resource owners. However, thesecases suggest that the importance of investment into relations with original resource ownersto induce compliance is context-dependent and heavily depends on the existence ofgovernment support. With strong government support the establishment of good relationswith fishermen is not necessary per se. However, without government support, the privatesector can do a number of things to create legitimacy, without which there would be littleincentive for the fishermen to cooperate.5.3.3 The social value of BiorockBiorock brings an important theme from the ecological modernization debate into thisresearch: ecological modernization theory argues that technologies picked up byentrepreneurs can be an important contribution to environmental conservation, and suggeststhat a problem such as the one in Pemuteran and Gili Trawangan should be seen as achallenge to technological innovation, and as an opportunity to reconcile economy andecology. Accordingly, Biorock was applied in both cases to „heal‟ the coral after an increase indestructive fishing practices and severe coral bleaching events. However, the wider fisheriesand ecological relevance of Biorock is questioned for both case study locations. Biorock canrejuvenate certain areas and provide linkages between healthy reefs which makes it aconsiderable restoration technique for small-scale local restoration, but arguably it is not asolution applicable to solve the global coral reef crisis (personal communication: senioradvisor Indonesia Marine Program TNC 18/3/2010).Comparison of the two cases suggests the high social relevance that this technology hasdisplayed in both EMPAs. In fact, the direct technical, or ecological, benefits of thistechnology which was introduced by the private sector appear to be outweighed by theindirect social benefits it has brought with it. Biorock has contributed significantly to buildingup support and legitimacy for the private sector.The physical presence of the structures holds power in itself as it presents a tangible symbolfor marine conservation at both case study sites. The local community can see what it is theprivate sector has contributed to marine conservation in a physical shape and form. Theprivate sector may have invested in projects which contribute to marine conservation, butBiorock actually visualizes these efforts. This is very likely to have contributed to buildinglegitimacy amongst the local community, assuming they have been involved and understandwhat Biorock is. The same counts for the state, and tourists, for whom Biorock characterizesthe two places as eco-tourism destinations.Not only does Biorock build support, it also has positive consequences on the relations withinthe EMPA in that it appears to hold the dive community together, because the dive operatorsare required to work together in placing Biorock structures. It also binds the local communitythrough the community-wide involvement in Biorock workshops, and the employment of localsto operate the structures. This creates a community-wide marine conservation movement.Furthermore, Biorock has also provided a way to generate income for the local communities(personal communication: Leader Coral Triangle Program WWF 12/3/2010).5.3.4 The role of funding in EMPAsFunding is an interesting theme in this thesis because EMPAs are based on the idea that theprivate sector has something to offer which other actors do not, namely financial resources,and that this is why they should become involved in marine conservation. This links directly towhat it is that makes certain entrepreneurs capable of exploiting opportunities: their ability torecognize and value opportunities but more importantly their availability of resources toexploit them. However, this characterizing feature of the private sector‟s role in marineconservation appears to bring two issues with it which can affect relations with other actors inthe network of an EMPA.Firstly, compensation alone is argued to be quite a tenuous solution to problems ofdestructive fishing. The village head in Gili Trawangan stated his belief that if payments to thefishermen there stopped, they would simply continue fishing because the agreement is notlegitimate in the eyes of the fishermen. As mentioned previously, in this case this is not98

elevant because the fishermen have legal incentive to comply, but let us assume, forargument‟s sake, that this was not the case. If we were to then compare the situation withPemuteran, where the fishermen are paid an undefined, very small and neglectable amount,but relations between the dive industry and fishermen are good and the fishing agreementappears to be legitimate in the eyes of the fishermen, Pemuteran appears to present a moredurable situation. If payments were to stop, it is more likely that fishermen in Pemuteranwould keep to the existing agreements, than those in Gili Trawangan. Hence, creating morelegitimacy amongst the original resource owners is a stronger, more durable, solution thatcompensation alone.The second issue stemming from funding an EMPA comes forward in the legitimacy of theenforcers of an EMPA. The research in Gili Trawangan suggests that the payment ofenforcers by the private sector results in jealousy and distrust amongst the fishermenbecause these enforcers are believed to act in the interest of the private sector. It is for thisvery reason that the Pecalan Laut has not been privatized in Pemuteran. Thus, this suggeststhat the funding of enforcers in an EMPA actually undercuts the legitimacy of the enforcingbodies.It is interesting to note that again an inherent quality of entrepreneurs, namely their ability tofund conservation, brings with it limitations in their ability to promote marine conservation.This highlights skepticism of the private sector‟s ability to exercise conservation broughtforward in the earliest classification of EMPAs by Colwell (1999) where he argues that thenature of commercial entities in EMPAs results in high potential for their abuse of power. Tehet al. (2008) take this further and claim that in EMPAs business should be separated fromconservation and external bodies should be responsible for implementing conservation. It isinteresting to note that Gili Trawangan have to some extent applied this idea as the GET isbecoming more of an independent management body, separate from the (commercial) diveindustry. Whether this will increase legitimacy for the GET in the future cannot be said at thispoint in time. What this research does show is that indeed the commercial nature ofentrepreneurs undermines their legitimacy in the eyes of other actors in an EMPA. Also, thisresearch suggests that in these types of conservation agreements, compensation alone is notenough; it needs to be backed up by legitimacy or a fixed state-supported agreement.5.3.5 Evaluating the concept of social capitalThe use of the concept of social capital to analyze the way that the private sector usedrelations to induce collective action in two EMPAs has been an interesting new application ofthe concept, and veers off from prior uses of the concept.The concept has traditionally been applied to show the benefits which can accrue to theparticipation of an individual within in a network, and mostly focused on relations betweenactors, or an individual and a group i.e. how an individual builds up social capital amongstothers in order to induce social change. Putnam (1993) then introduced a community notionof social capital, and introduced the concept as an asset of a group or community. Using thisnotion, the concept of social capital has previously already been applied to problems aroundcommon property resources such as coral reefs by researchers. Hence, the application of thisconcept to study the problem such as the one in this thesis is not a novel one.What sets the research in this thesis apart is that it uses Putnam‟s notion of social capital inthe context of a private sector constructing social relations, and hence social capital, withinestablished kinship networks; within existing common property institutions and institutionsbased on culture and tradition. Social capital as brought forward by Putnam was studied as acommunity concept; how the social capital of a whole community can be strengthened inorder to induce collective action within that group i.e. how community-based natural resourcemanagement can be enhanced when trust is built between different resource users. In thisresearch, the concept of social capital was used to study the challenge that an entrepreneuris faced with in seeking opportunities, and then working through a process of establishing orcementing these opportunities within an existing social context. The concept is used tomeasure the strength of the relations which the private sector, sometimes as a group andsometimes as individuals, has built with other actors within the network of the EMPA. Hence,the aggregate of this social capital is not what is important, it is the nature and dynamic of99

different relations between the private sector and the different stakeholders in these networkswhich are important because they enable us to determine what relations and under whichconditions these relations can make an EMPA more durable.Thus, this alternative use of the concept of social capital made it necessary to allow for somepersonal interpretation in how certain definitions were used for analysis. The threedimensions of social capital brought forward by Nahapiet and Goshal (1998) were very usefulin unveiling different ways that actors can build up support and legitimacy for themselves, butthe differing organization of the private sector in the two case studies made it necessary to beflexible in the application of these definitions, sometimes looking at relations between groups,sometimes between an individual and groups, and sometimes between individuals.5.4 Institutionalization5.4.1 Combining new institutions with existing traditional institutionsIn both cases studies the private sector entered into situations featuring existing commonproperty institutions based on culture and tradition. The private sector was faced with theissue of being faced with potentially conflicting institutions, and had to design a new set ofmanagement institutions which could deal with the complexities of the ecological status of thereefs as well as the traditional fishermen. They needed to find a way to overcome whatColwell (1999) referred to as the conflicting uses of the same marine resource by otherstakeholders. In Pemuteran the private sector succeeded in inducing cooperation from anexisting traditional organization working under the village religious authority. This existingbody, already legitimate in the eyes of the entire village, including the fishermen, wasappointed to enforce the agreement with the fishermen. Furthermore, the private sector wascareful to win over the support of the village religious leader which has contributedsignificantly to social control over the agreement.The private sector in Gili Trawangan took a different approach. The fishing agreementbetween the private sector and the fishing community made in Gili Trawangan is officiallyAwig-awig, or traditional community-based reef management, a concept with historicallegitimacy in the islands. However, the fishermen do not view the agreement as such since itis funded and led by the private sector. They question the legitimacy of the agreement despiteits status as Awig-awig, and consequentially the enforcers, also funded by the private sector,struggle with legitimacy as they are believed to be biased and act in the interest of the privatesector. This illustrates a situation in which the private sector was not successful in using anexisting institution to create legitimacy for themselves.A comparison of the two cases in this theme very simply illustrates that there is truth inColwell‟s claim that existing institutions around marine management in an EMPA places anextra challenge for the private sector, and that the lack of conflicting institutions would makeEMPA development easier. The case of Pemuteran shows how the collaboration withexisting, traditional institutions can be an effective tool for the private sector in thereproduction of rules around marine conservation in an EMPA. Both cases illustrate hybridarrangements in the EMPAs, in which the private sector collaborates with local institutions.Pemuteran illustrates a clear example of the modernization of politics in which hybridarrangements sometimes more effectively deal with environmental problems. However, againthe case of Gili Trawangan shows that funding limits the ability of the private sector tolegitimize themselves in the eyes of existing institutions, and in their ability to collaborate withthese. At the same time, this case shows that yet again the collaboration with existinginstitutions is not a prerequisite for the promotion for marine conservation. Despite creating anagreement which is not legitimate in the eyes of the fishermen, this agreement has beensufficiently institutionalized, partially through state support, to change behavior. This brings usback to the never-ending debate as to the role of the state in these types of institutionalarrangements.5.4.2 State support: also important in EMPAs?Despite efforts in Pemuteran to combine with local institutions, and to gain the support of thefishermen and local community, it clearly lags behind Gili Trawangan in one very apparentway: the level of institutionalization the private sector has reached. Gili Trawangan can100

arguably partially attribute their level of institutionalization to the fact that the dive sector wasable to organize itself: the private sector has institutionalized their own industry through theGET which requires all members to tax their customers. However, the support of thegovernment is essentially why they have stronger and more fixed agreements. This supportsclaims made by Riedmiller and Carter (2000) that the definitions and boundaries and theimplementation of certain legislation is beyond the capacity of private actors and requires acommitted governmental and institutional framework, highlighting the remaining role of thestate in EMPAs.Government support was used to institutionalize the ecological aims of the entrepreneurs inthe economy of Gili Trawangan. Not only are the fishermen bound by the legalized agreementsigned by the BKSDA and the regency government, but the area is also still a designatedMTP by national law. Hence, this EMPA is nested legally within the larger framework ofgovernment MPAs. This in itself, even though it has been referred to as a paper park, gives itsome grounding legally. This EMPA is a prime example of how Colwell (1999) initiallyclassified EMPAs: situations where the government is unable to manage local marineresource and dive operators take over primary stewardship of these areas, thus the EMPA islayered over an existing MPA.Pemuteran lacks institutionalization, and therefore durability. There was already a NTZ andan agreement with the fishers established in the early nineties but these efforts toward marineconservation fell apart due to the Asian economic crisis. This crisis had very large effects onfisheries all over Indonesia and destructive fishing practices such as bomb fishing got out ofcontrol. The private sector and the community lost „control‟ in Pemuteran. This brings forwarda recurring theme in the thesis, namely the limitation in the temporary nature of the privatesector. As mentioned previously, individual entrepreneurs can potentially leave at any time.Furthermore, the private sector as a whole, being a commercial entity, brings with it the risk offailure as soon as the economy turns bad. Rules in Pemuteran were re-established after theAsian economic crisis, but the rules around marine conservation are still far frominstitutionalized, placing the EMPA at risk from any comparable extraneous factors in thefuture.What is it then that can remove this risk? This research suggests that state support, throughinstitutionalization of norms and standards, has the potential to do this. This is slightlycontradictory to how Colwell presented EMPAs: as management regimes which can beinstituted more easily than large-scale MPAs, due to existing infrastructure and managementstructures. In fact, this displays the opposite since the government is in fact needed toinstitute these MPAs. It can be argued that the support of the government will always makethese types of agreements more durable (personal communication: Leader Coral TriangleProgram WWF 12/3/2010). This suggests a direct relation between state involvement andinstitutionalization of the aims of the private sector in an EMPA, and essentially the durabilityof such agreements. Ecological modernization puts forward the value of private actors inenvironmental reform, sometimes in light of the state‟s failure to do so. However, thisresearch suggests that, despite some very relevant opportunities private sector carries with it,they lack the capacity to institutionalize EMPAs.The research also suggests the multiple roles for the private sector in EMPAs in differentcircumstances; in a case where a state-established marine park exists, but lacks the fundingto be effective, the role of the private sector appears to be to get marine conservationimplemented and institutionalized. In a case where there is no existing park, the private sectorappears to play a larger role in starting off the process of change, but not necessarilyinstitutionalizing these changes. What leads on from this is that the role of the state in EMPAsis multiple, and differs per situation. This in turn also affects the degree of state intervention inEMPAs.5.4.3 The institutional role of BiorockThe role of Biorock in building up social capital for the private sector has been mentionedprior. It is important to add to this discussion the role which this technology has had ininstitutionalizing the EMPAs and how it has resulted in changes in the management of thecommon property resource, coral reefs, at both study sites. In Pemuteran the existence of a101

Biorock coral nursery directly contributed to the creation of a NTZ, as the Biorock coralnursery needed protection. In Gili Trawangan the effects of Biorock in terms of managementof the reefs can mainly be found in local use; it has taught the locals not to use anchorsexcept in the harbor.On a wider scale, Biorock promotes the islands as eco-tourism destinations. Despite the factthat the ecological value of the technology is questioned, its presence may indirectlycontribute to ecological benefits elsewhere, simply due to the awareness it creates. Everysnorkeling tourist comes into contact with the technology and will consequentially askquestions. The emergence of new actors in environmental reform is not just limited to themarket, or private sector, which we study in this thesis. Civil society is also playing anincreasing role in environmental reform, and trends like individualization place more power inthe hands of individual consumers. Thus, Biorock may increase awareness amongst thesepotential future actors in marine conservation, thereby adding to the wider movement againstcoral reef destruction.Hence, Biorock cannot be used by the private sector to solve the coral reef crisis on its own,and the technology has made only arguably small contributions to actually changinginstitutions in the two case study sites. However, this technology institutionalizes the aims ofthe private sector simply in tourists‟ observations of the structure. This has the potential toinspire future action of other actors in other locations. Huber (1982) emphasized thecontributions that technology could have in creating a more sustainable organization ofproduction and consumption. In effect, that is what Biorock has done in the two case studysites: it has induced the creation of institutions for the sustainable use of the coral reefs, andarguably has lead to the increasing marine conservation awareness of other actors whichpotentially could have positive environmental effects elsewhere.5.4.4 Territorialization of the coral reefsA common argument against MPAs is that they often ignore local institutions and excludepeople through a process of territorialization. Hence, it is important to determine whether thepresence of the private sector in an EMPA can overcome this problem, or whether it actuallyenhances it.In Pemuteran the reefs have essentially remained a common property, with divers andfishermen alike using the same reefs. This distribution is determined by personal relationsbetween the dive operators and fishermen with some reefs used more by certain divers, whoin return offer the fishermen benefits for fishing on other reefs. There is only minimalterritorialization of the reefs in the classic sense of a marine park with only about 40 Biorockstructures covering about half a kilometer, designated as a NTZ. Furthermore, this zone isunderstood to be a nursery and therefore provides benefits for fishers who fish just outsidethe NTZ. This particular case shows that, as introduced by De Groot and Bush (2010), marineconservation does not have to be highly areal and limited to a particular delineated area, butremains highly spatial since in nature since it is about the management over a physicalresource.Gili Trawangan on the other hand presents an entirely different picture; the sea around theisland can no longer be used by the muroami fishermen, with the exception of two areaswhich have been designated to these fishermen. The rest of the areas may be used only byanglers and divers. Hence, these areas actually only limit the muroami fishermen. In GiliTrawangan the fishermen feel like they have been marginalized as they have lost a large areaof their initial fishing grounds since the involvement of the private sector in marineconservation. Hence, the sense of territorialization is much more present in Gili Trawangan.Thus we are presented with two dissimilar cases which say very different things about thepotential of the private sector in overcoming problems of territorialization, and whetherecological modernization and common pool resource management oppose each other or areable to complement each other. In one case only a small area is somewhat territorialized anddelineated by the presence of Biorock, and the fishermen believe this area is a coral nurseryand therefore believe in their own benefit obtained from refraining from fishing. This illustratesa situation in which the private sector arguably does not exclude local common property102

institutions and are able to exercise marine conservation without being highly territorial; thepresence of this new set of actors compliments common pool resource management anddoes not marginalize original resource owners. The second case in contrast presents asituation in which marine conservation is highly areal and a large section of reef has beenterritorialized by the private sector, and has hence excluded local institutions in doing so. Thepresence of these new actors opposes traditional common pool resource management andarguably marginalizes original resource owners. This suggests, as presented by Colwell(1999), and supported by Teh et al. (2008), that perhaps EMPAs do need external review toensure that they do not abuse their power in EMPAs.5.4.5 Evaluating the concept of institutionalizationEcological modernization frames our understanding of the institutionalization of environmentalrationalities in this thesis, and the role that different institutions, such as the market or privatesector, have in this process. EMPAs are presented in this thesis as a new area of ecologicalmodernization. This is not a well theorized idea, and this research essentially contributes bylooking at marine conservation using an ecological modernization approach, and to determinewhether and how ecological modernization and common pool resource management co-exist.The concept of institutionalization is a widely applied concept. Its main function for thisresearch was essentially to observe the process of political modernization taking place inmarine conservation and understand how this translates to EMPAs; to study how shifts inresponsibilities and tasks from the state to the private sector in marine conservation havebrought changes in the institutions which guide interactions in problems of coral degradation.Furthermore, looking at the case studies in view of the different institutions in place, and howthese conflict and coexist helps understand the dynamic between traditional (community)control, state control and private control of resources. As brought forward in the politicalmodernization debate, shifting relations from traditional politics to novel hybrid arrangementsbetween the state, market and civil society has consequences on the governance ofenvironmental problems such as this one. We can observe the creation of new relations andnetworks of power which emerge around these problems and the consequential roles of theprivate sector vis-à-vis the state.Studying the new institutional arrangements which arise as a result of the involvement of theprivate sector in MPAs enables one to determine the way that the private sector is able toembed itself in novel institutional arrangements in marine conservation, and what limitationsand challenges they face. By analyzing the level of institutionalization reached by the privatesector in the cases we can determine how, and under what conditions the private sectorshould be involved in an EMPA. This approach unravels how the private sector can make acontribution in an EMPA, and whether and to what extent public sector involvement remainsnecessary: what benefits and consequences there are of public sector involvement, but alsowhat the private sector can do to overcome the lack of state involvement. In essence, thisresearch aims to determine whether this wider horizontal shift in marine governance and theemerging presence of the private sector actually adds value to marine conservation andpresents itself as an effective approach.5.5 Analyzing EMPAs through the eyes of ecological modernizationThe governance of privately-managed MPAs is still insufficiently researched, and in theabsence of a defined framework to approach this type of analysis an analytical frameworkwas built. The three main concepts which comprise this framework; entrepreneurship, socialcapital and institutionalization, have lead the analysis of the potential role of the private sectorin creating durable conservation and restoration agreements through EMPAs in a logicalmanner. They have proved to be a useful tool to assess the role of the private sector inmarine conservation.Together, the three concepts provided a coherent evaluation of this role, beginning with anassessment of how entrepreneurship opportunities can contribute to marine conservation.This brought forward several characteristics of the nature of entrepreneurial involvement inEMPAs, and some different approaches which may be taken to exploit entrepreneurial103

opportunities. This was followed by a review of what the private sector can and must do to beable to exploit these opportunities and successfully induce collective action, illustrating someinherent limitations which the private sector holds in their ability to induce social change, butalso presenting some tools which they can use to overcome these. The final step in theevaluation of this role using the framework proposed was studying how, and to what extent,the private sector has the potential to institutionalize their ecological aims and create durablesolutions to coral reef degradation in EMPAs. This resulted in the surfacing of some limitingfactors of the potential for the private sector to institutionalize restoration and conservationagreements, as well as some possible measures for the private sector to strengthen suchagreements.In essence, this research studies the ecological modernization of marine conservation. It aimsto determine the potential for the wider horizontal shift we observe in marine governance andthe emerging presence of the private sector to actually add value to marine conservation andpresent itself as an effective approach. The main conclusions as to the potential role of theprivate sector in creating durable conservation and restoration agreements through EMPAs,and in the wider concept of marine conservation will be presented in the following and finalchapter of this thesis.104

6 Conclusions and RecommendationsThis thesis studies the role of the private sector in creating durable conservation andrestoration agreements for the protection of coral reefs, by investigating the formation of twoEMPAs in Indonesia. Three main research questions were formulated to lead theinvestigation of these EMPAs. A red thread throughout the results of this research is thenotion that government involvement very much increases the potential for the private sectorto create durable conservation solutions. Both the EMPAs investigated present situations inwhich we observe a shift to hybrid governance arrangements, in which there is an increasingpresence of the private sector. The private sector has taken on tasks and responsibilities andthey clearly steer the development of the EMPAs, but the private sector is faced with certainlimitations, and the most significant limitation is presented in their lack of capacity toinstitutionalize and thereby create durable agreements. The state has this capacity andappears to be a vital factor for creating durable EMPAs. At the same time the results haveprovided insight into what the private sector can do to overcome the lack of such governmentsupport in EMPAs, and other opportunities for effective steering of marine conservation whichthe private sector holds. Furthermore, the research has unveiled several inherent limitationsto the role of the private sector in marine conservation, and challenges which must beconsidered.The results show there are different approaches possible toward exploiting entrepreneurialopportunities which work toward the promotion of marine conservation in an EMPA. Aneffective approach applied in Gili Trawangan is one in which entrepreneurs work collectivelyand charge a dive tax which goes toward enforcing an agreement with the original resourceowners, the fishermen. A second approach, applied in Pemuteran, is one whereentrepreneurs exploit entrepreneurship opportunities in separate projects, but still worktoward a common goal of marine conservation within these projects. Both these approachesseem to work within the contexts in which the two researched EMPAs are embedded. Theway that entrepreneurial opportunities are exploited appears to stem from the nature of theorganization of the private sector in the EMPA; whether they are formally and collectivelyorganized or whether they communicate informally and operate separately. This suggeststhat the organization and communication of the private sector in an EMPA has a direct effecton the way that they exploit opportunities; separately or collectively; and that both approachesappear to work.The case studies suggest that a common factor in the exploitation and development ofentrepreneurship opportunities in EMPAs is the reliance on individual entrepreneurs.Individual entrepreneurs appear to be an important factor in driving the development in theseEMPAs. This leads to an interesting topic for further research; the inherent dependency ofindividuals in EMPAs. If future research finds this to be true of EMPAs in general, this raises avery important question as to the durability of an EMPA as solution to environmentalproblems. Furthermore, if it is known what exactly it is in these individuals that these EMPAsdepend on perhaps future EMPAs could be constructed in a manner which could address thisdependency in their design and construction, and prevent this reliance on individuals.The private sector can legitimize themselves toward other actors in an EMPA in a number ofways. Results show that the good inter-relations within the private sector are an importantcriterion for effective marine conservation efforts: it is important the members of the privatesector support and trust each other, even if they do not work together, in order to reachcommon goals toward marine conservation. Results from both case studies have shown thatthe removal of competition within the dive sector can very much contribute to mutual goodrelations within the private sector, and contribute toward the legitimacy and support for eachother. Furthermore, organized cooperation within the private sector is another factor whichwill strengthen this intra-sector legitimacy because cooperation or coordination enables theprivate sector to ensure equal contributions toward marine conservation from all members ofthe private sector.The building of legitimacy for the private sector amongst other actors in EMPAs is aninteresting issue, and brings state involvement into the discussion. When a private sector105

manages to gain the government support needed to legalize and construct mandatoryagreements with the fishermen in an EMPA, then the quality of the relations which the privatesector is able to establish with the original resource owners, and the legitimacy they build updoes not appear to be important to induce compliance. Results from the case in GiliTrawangan show that if an agreement is mandatory and supported by the government,fishermen will comply regardless of the legitimacy of the private sector in their eyes.Alternatively, results from the case in Pemuteran show that in cases where governmentsupport is lacking in an EMPA, building support of the fishermen is more important to inducecompliance. The case of Pemuteran presents some tools which the private sector uses toestablish legitimacy amongst these stakeholders such as education of fishermen,employment of local communities, establishing relations with local religious authorities andinvesting in non-financial benefits.Biorock technology too has shown itself to be a source of building legitimacy amongst thelocal community and the tourists, and also to bind the private sector together in the EMPAsstudied. This suggests that perhaps the private sector can make use of this type oftechnology in EMPAs, not so much for its ecological benefits as for its social benefits. Thistechnology is another area in which further research is recommended. Results in both casesshow that the ecological value of this technology for coral reefs at the two case study sites, aswell as in other cases where it has been utilized, has not been researched sufficiently. This isclearly a necessity in order for Biorock to gain legitimacy in the academic world. At the sametime however a social perspective could be applied and the technology‟s social benefits forcommunities and the private sector could be researched.When determining the way that the private sector was able to legitimize themselves in theEMPAs studied, the ability to fund agreements has shown itself to be a strength, but at thesame time a limitation of the private sector. The primary value which the private sector canbring to marine conservation, financial resources, are also a limiting factor for them in termsof legitimacy and the private sector must be cautious in how they approach this issue inEMPAs. The two case studies suggest that the funding of enforcers by a commercialenterprise undercuts their legitimacy. Additionally, the simple fact that an agreement isbacked by private sector funding raises questions amongst the original resource owners. Partof this is the issue of the use of compensation in agreements around common propertyresources. This is an ongoing debate, and NGO representatives interviewed for this researchhad varying opinions on the use of compensation as a tool in marine conservationagreements with fishermen, and the effect this can have on the legitimacy of the privatesector. This issue was not approached in detail within the scope of this research, but is animportant question to address in future research on EMPAs; is compensation of originalresource owners a durable solution in conservation agreements?The extent to which members of the private sector were able to institutionalize their ecologicalaims and actually alter institutions around marine conservation differs in the two case studies,and this again is in large part attributable to the degree of government support in the twoareas. The EMPA in Gili Trawangan is far more institutionalized than the one in Pemuteran,with a fishing agreement which is legalized in a contract supported by the government.Furthermore, this island is officially a MTP and therefore nested legally within the largerframework of government MPAs. The agreement in Pemuteran is based on a semi-voluntaryagreement with the fishermen, and rules around fishing are therefore far less fixed than therules in Gili Trawangan. This alone indicates a large difference in the durability between thetwo EMPAs, which is directly attributable to the level of government support.Results from Pemuteran suggest that in cases of a lack of government involvement in anEMPA, the private sector can do several things to reach a certain level of legitimacy andchange behavior to some extent. In Pemuteran, the private sector was able to reach a certainlevel of legitimacy and create a, though perhaps not so durable, NTZ and an agreement withthe fishermen, and effectively enforce this agreement. The enforcers of the agreement inPemuteran appear to be a far more legitimate and arguably a much more durableorganization, than the enforcers in Gili Trawangan. This is because these enforcers stemfrom an existing traditional legitimate organization of village security guards. Hence, we canconclude that the use of existing traditional and cultural institutions is an effective way for the106

private sector to overcome the gap created in cases where there is a lack of governmentsupport. Both cases show that Biorock technology too can play a role in pushing forward theinstitutionalization of an EMPA. The application of this technology has, particularly inPemuteran, lead to the need to create a NTZ and thus changed fishing rules. Hence Biorockcan arguably be seen as another tool used by the private sector in response to the lack ofgovernment support.This brings us onto a last but interesting point in which the two cases differ significantly: thedegree of territiorialization in the EMPAs. Pemuteran presents an EMPA in which the privatesector does not exercise a large degree of territorialization, and marine conservation is nothighly areal in nature. Only a small area is designated as a NTZ, and the fishermen recognizetheir own benefit in conserving this area of Biorock restoration. The reefs in Pemuteran haveremained common property because there has only been minimal territorialization of thereefs. In Gili Trawangan however, marine conservation is highly areal and the entire seaaround the island is off-limits for the traditional fishermen, apart from two designated areas,and this is considered to be very unfair to the original resource owners. These newinstitutions conflict highly with existing common property institutions and the original resourceowners feel that they have been marginalized. It is impossible, based on the research done,to conclude what is a more effective approach to marine conservation due to the differentcontexts in which the two case studies operate. However, what can be concluded from thecase of Pemuteran is that there is potential for the private sector to exercise marineconservation with minimal territorialization, and prevent marginalization of original resourceusers.If we step back and review what has been concluded about the role of the private sector increating durable conservation and restoration agreements to protect coral reefs, what can besaid about the broader subject of the application of ecological modernization to marineconservation issues? The private sector in both cases has attempted to institutionalize theirecological goals in the economic practices in the locations. They have created hybridgovernance arrangements with traditional common property institutions and the state. Themodernization of politics needed to deal with problems around coral reefs is however not asimple handover of tasks from the government to the private sector. It appears that thedurability of such an arrangement is very much dependent on state support of the EMPA.With state support, the private sector has much more room to exploit entrepreneurialopportunities and to use the advantages that they bring to marine conservation, becausestate support provides them with the capacity to institutionalize their ecological orenvironmental rationalities. Without this, the private sector has the potential to induce somelevel of social change and increase marine conservation awareness, but will face morechallenges in terms of the institutionalization of their goals, which will consequentially limit thedurability of the arrangements they are able to create.What then is an ideal solution? As brought forward in the ecological modernization debate,there is a growing importance of non-state actors in environmental problems, and this thesis,as well as preceding research, has shown that the private sector has the potential tocontribute some very beneficial things to marine conservation: they have the potential toexercise marine conservation without the marginalization of original resource owners, theycan reach a large amount of people through tourism activities thereby increasing globalawareness of marine conservation issues, they can contribute to increasing localunderstanding of marine environmental problems in developing countries particularly as wellas provide new income alternatives for these communities, and most importantly, due to theircommercial nature they have the financial capacity to support marine conservation. They donot however appear to have the capacity to create durable, institutionalized arrangementswithout state support. In cases such as Gili Trawangan, where a marine environment ispreviously established as a conservation area by the state, the state should continue toprovide the legal support and authority necessary for the implementation and enforcement ofthe EMPA, like they did previously through appointing a BKSDA officer and thereby providinggovernment presence. In cases such as Pemuteran, which have no official status in terms ofconservation, the state should, provided proven ecological effectiveness and propermanagement of the EMPA, consider legalizing their status as a conservation area, enablingthe private sector to legitimize themselves and exercise the authority necessary to107

institutionalize their aims. That said, it is important that, despite the potential which can beseen in a collaboration between the private sector and state in exercising marineconservation through EMPAs, it is kept in mind that the private sector remains a commercialentity. Their actions, especially if strengthened by state support, have the potential tomarginalize original resource owners in problems around common pool resources, and it istherefore, as introduced by Colwell (1999) in his initial classification of EMPAs important thatexternal reviews of the social and ecological effects of EMPAs, as well as their management,are carried out.This thesis presents the ecological modernization of marine conservation, with a specificfocus on EMPAs. This novel tool for marine conservation has the potential to institutionalizeecological aims in economic practices. EMPAs present an innovative approach to reachingecological goals through the reflexive use of institutions and technology, suitable to beapplied on a local scale. In summary, and spoken from an ecological modernizationperspective, EMPAs can be characterized as hybrid governance arrangements in which theprivate sector carries a central role for funding and management, and carries asupplementary function for contributing to local economies and creating global as well aslocal marine conservation awareness. The state remains to be an important actor in thesearrangements and holds an integral function for supporting the private sector in theinstitutionalization of their ecological aims. Lastly, coral restoration technology such asBiorock, though not a requisite for creating durable agreements, can also contribute tobuilding legitimacy for the private sector and aid the private sector in embedding themselvesand their goals in marine conservation.108

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AppendixAppendix 1: Interview List1. Pemuteran# Function and Organization Date1. Co-founder[1]: Yayasan Karang Lestari 24/1/20102. Village Secretary 25/1/20103. Kepala Adat (Village Religious Leader) 25/1/20104. Manager: Biorock Centre 26/1/20105. Dive Instructor: Werner Lau 27/1/20106. Owner: Easy Divers 27/1/20107. Manager: Bali Diving Academy 27/1/20108. Owner: Kokak Dive28/1/2010Leader: Lembaga Perkreditan Desa (Organization managing communityresources)9. Operator: Biorock Centre28/1/2010Assistant Leader: Pecalan10. Chief: Fishermen 28/1/201011. Manager: Yos Dive Shop 30/1/201012. Part-Owner: Sea Rovers 30/1/201013. Operator: Biorock Centre 30/1/201014. Dive Guide: K&K 31/1/201015. Owner: Reef Seen Aquatics 3/2/201016. Co-founder[2]: Yayasan Karang Lestari 3/2/201017. Owner: Taman SariCo-founder: Yayasan Karang Lestari5/2/20102. Gili Trawangan# Function and Organization Date18. Manager: GET 11/2/201019. Owner: Sama Sama Restaurant12/2/2010Member: SATGAS20. Local Government Conservation Experts 12/1/201021. Volunteer: GET 13/2/201022. Patrol Guard: SATGAS 14/2/201023. Manager: Trawangan Dive 15/2/201024. Manager: Bali Dive Academy 15/2/201025. Manager: Dream Divers 15/2/201026. Manager: Buddha Dive 16/2/201027. Leader: SATGAS17/2/2010Owner: Windy‟s Cafe28. Owner: Trawangan Dive, Blue Marlin Dive. Kelapa Villas 17/2/201029. Kepala Desa (Village Head for Gili Mantra) 17/2/201030. Part-owner: Manta Dive 19/2/201031. Founder: Marine Foundation20/2/2010Designer of Biorock structures in Pemuteran and Gili Trawangan32. Manager:GET 22/2/201033. Researcher for Bsc Resource Economics thesis, „Underwater Coase: Candiving protect the coral reefs?‟, University of Sydney21/2/2010115

3. Southern Bali# Function and Organization Date34. Director: Reef Check Indonesia 26/2/201035. Leader Coral Triangle Program: World Wildlife Fund 12/3/201036. Senior Advisor Indonesia Marine Program: The Nature Conservancy andNon-exec Director: Chumbe Island Coral Park18/3/2010116