Supported by the Ocean Risk and Resilience Action Alliance (ORRAA) through the UK’s Blue Planet Fund, the United Nations Development Programme’s (UNDP) Insurance & Risk Finance Facility (IRFF) is partnering with Swiss Re and the Indonesian government to develop a long-term insurance solution that protects and restores coral reefs.
UNDP explained that it supported the development of Ministerial Regulation No. 27, which governs the implementation of funding for sustainable programs in the marine and fisheries sector.
Under this regulation, the Marine Biodiversity Trust will be managed by the Indonesian Environmental Fund Management Agency (BPDLH), the official national mechanism for administering environmental and climate-related funds.
“The establishment of this Marine Biodiversity Trust is central to advancing joint efforts by the Government of Indonesia, UNDP and Swiss Re to create insurance solutions for coral reef protection and restoration,” UNDP said.
The Trust will serve as a key governance tool for financing coral reef insurance coverage for the Gili Islands.
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UNDP noted that coral ecosystems across Indonesia harbour the world’s richest diversity of coral species, accounting for 72% of global varieties.
These reef systems also support the livelihoods of millions across the country through tourism, agriculture, seaweed cultivation, fishing, and aquaculture.
“Indonesia’s coral reefs contribute over $3 billion annually to the economy, but are increasingly degraded by fishing and tourism activities. Indonesia is also ranked as the world’s second most vulnerable nation to natural hazards, with coastal regions being home to many low-income communities who bear the brunt of the impacts of disasters. Healthy coral reefs, however, are natural buffers against waves, storms, and floods, helping to prevent loss of life, property damage and erosion,” UNDP added.
The new regulation will optimise government budget allocations for marine and fishery programs by enabling third-party contributions to address the risk of damage to marine resources. These contributions will come directly from entities that utilise marine space and resources and will be transferred to BPDLH.
UNDP continued, “Local government and communities will be consulted to ensure that approaches used are appropriate and responsive to their needs. Swiss Re has now completed its collection of data from the Gili Islands, and the design of the parametric coral-reef insurance product is underway.”
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