Our FGD revealed that there are unresolved fundamental differences among regulatory stakeholders, in terms of whether CB should be perceived as a temporary “approach” with the overall intention to integrate it to the PDAM or “institutional” system in the future or whether it stands equally to the existing “institutional” system.[152] This difference has created tensions and confusion in practice, but more importantly, brings negative impact to policy and regulatory reform.

According to a government official some PDAM consider that CB Watsan is a temporary solution in their business plan – thus Community watsan network is regarded as parts which can be co-opted and taken over, since PDAM considers that the only one who is entitled to provide services are PDAM and the rest can only provide services through concession with PDAM.[153]

In addition, community watsan projects may, to some extent, contravene the exclusive natural-legal-local monopoly granted to PDAM. Furthermore, there is indication that some successful community watsan intitiative have grown large in a way that could match or even surpass existing PDAM.[154] How these community watsan initiatives could coexist with existing PDAMs or – to maintain the economies of scale – be merged with or acquire existing PDAMs is a problem yet to be solved. 

The importance of modeling behaviors and future development in order to develop understanding of the relationship between PDAM and CB was a common response across the FGD. Two fragment-scenarios may be a suitable approach to be able to foresee regulatory developments. The first is to view community watsan as a “temporary” entity which exist only for a certain period and can be “annexed” by PDAM for certain reason such as economic scale or environmental conditions such as surface water quality in which CB model would no longer be compatible and larger scale investment would be required for treatment. The temporary approach is consistent with existing regulation -- since existing laws considers that the only one who is entitled to provide services are State or Regional Owned Enterprises -- whilst the other may only provide services in concession with PDAM. If this scenario is to be taken, then regulatory reform should focus on short term solutions with the overall objective of integrating the whole system to PDAM.

The second scenario is to perceive CB as a completely different model that can develop, expand and supersede PDAM or other “institutional” system. CB is thus treated equally with “institution”. As, at present, there is no CB model above district [Kecamatan] level, this model would be quite speculative. In this model, the regulatory framework should acknowledge the diversity of models in services provision and allow either CB or institutional model to acquire each other. FGD participants challenge the conceptual distinction of CB/”institution” based on assets size, coverage or natural monopoly. Thus, in this scenario, the regulatory framework should be able to foresee the CB model transformed into large scale water utility. 

The  government  aims  to  achieve  universal  access  to  water  supply  and  sanitation by 2019. According to some calculations, this ambitious target cannot be fulfilled by relying on  regional  water  utilities  (Perusahaan  Daerah  Air  Minum  or  “PDAM”) alone.  It  is estimated that PDAM can only contribute around 40% of the total target, whereas the other 60% would be expected to come from community‐based systems.  The policy framework for CB Watsan was introduced by the government in 2003. The 2003 National Policy on The Development of Community‐Based Water and Sanitation introduced a duality in Indonesian national water policy: one being “institution‐based” and  the  other  being  “community‐based”.  O 

The  conceptual  problem  surrounding  “community‐based” watsan is on the  definition and delineation between CB watsan and institutional watsan. In the policy framework, the  term  “institution‐based” is  used  to  denote water  services  operated  by  corporate water utilities including PDAM, whereas “community‐based” is used to describe services provided by local communities for their own needs. How communities and institutions are defined,  at  least  in  the  academic  sense,  might  not  be  compatible  with what  is intended by the policy framework.  

There are also inconsistencies and discrepancies in the regulatory framework from the national down to regional and village levels, with regards to the role of CB watsan. The legal framework at the national level appears to favour “institution” based watsan, such as PDAM. Community based Watsan’s role are considered to be residual – in providing access only where “institutional” system cannot serve.  

Within  the community based watsan itself,  there is a major issue with regards  to  the clarity of assets ownership. Our Focus Group Discussion reveals that in some large scale projects,  the  assets  still  belong  to  the  ministry  of  public  works  as  it  has  not  been transferred and thus, is accounted as liability and subsidy. FGD participants agreed that “Assets transfer is Indeed a big homework. The legal frameworks need to be completed.”

Some  community  watsan  activist  considered  that  assets  should  be owned  by  the “communities” whereas according  to another, it should be owned by  the village. The national policy on community‐based watsan on the other hand, advocates “community” ownership  and  suggests  that  a legal  framework  be  conceived  by  the  government  to smoothen  the transfer  of  assets  from  the  government  to  the  “community”.  On  the Pamsimas  program  technical  manual  it  is  suggested  that  it  is  the operation  that  is transferred, but not the asset owenership. 

We also found that there are cases where PDAM systems overlap and compete with CB Watsan.  This  is  caused,  partly  by  the  introduction  of  the  dualist  system  of  watsan services in the 2003 framework. How these community watsan initiatives could coexist with existing PDAMs or – to maintain the economies of scale – be merged with or acquire existing PDAMs is a problem which yet to be solved, let alone, researched.  

The FGD reveals that there are unresolved fundamental differences among regulatory stakeholders, in terms of whether CB should be perceived as a temporary “approach” with  the overall intention to integrate it  to the PDAM or “institutional” system in  the future, or whether is stands equally to the existing “institutional” system.   

There are also problems with respect to service standards and how the government can foster monitoring, supervision and enforcement of such standards through regulatory frameworks.  Community  initiative  and demand‐driven  approach  is  central  to  the community watsan movement. However, this approach is at odds with existing national legal  frameworks requiring  water  and  sanitation  services  to  comply  with  minimum service standards enacted by local government.   

Whether or not similar standards should apply to both government owned water utilities and  community  watsan  is  a  matter  of  debate.  Some interpret  “universal  water provision” in the sense that similar quality, quantity, continuity, affordability should be applicable  to  everyone  and every  service  providers.  However,  such  ideal  standard  is difficult to achieve in Indonesian rural water provision, especially in the remote regions such  as  Nusa  Tenggara  and  Papua.