Key Success Factors on Capacity Development in RBO:

1. Key Success Factors on Capacity Development in RBO: • Case of Brantas River Basin, East Java, Indonesia Session: Assesment of Capacity Development Progress in IWRM 30 May 2013 By Tjoek Walujo Subijanto Former President Director, Jasa Tirta I Public Corporation The Brantas and Bengawan Solo River Basin Management Agency Indonesia

2. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia I. The Brantas RB (WRD era 1960s – 1990s) (1/4) • The BrantasRB is located in Java Island, Indonesia. It runs through the western section of the East Java Province, traverses 9 regencies and 5 municipalities • Covers a catchment area of 12,000 km2 (25% Eat Java Area); • Brantas RB is one of the most strategic RB in Indonesia; • The Brantas RB Dev. Project (BRBDP), established in 1965, has a mandate: • to develop Brantas RB in effective, efficient and sustainable manner; and • to produce well-trained engineers, planners and technicians to build dams in other RB in Indonesia.

3. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia I. The Brantas RB (WRD era 1960s – 1990s) (2/4) • The GoI has given a big authority to BRBDP to develop our-owned project and HR management systems to realize its missions; • BRBDP was the only WR project in Indonesia who has such big authority; • WRD in the basin resulted into 8 dams, 4 river-improvement-schemes, 4 barrages, and 3 rubber dams etc. • Direct benefit: • flood control (60,000 ha); • irrigation (121,000 ha); • Hydropower generation (910 million kWh/year), • MDI water supply (240 million m3/year);

4. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia I. The Brantas RB (WRD era 1960s – 1990s) (3/4) • Indirect benefits: • Producing about 7,000 qualified, well-trained and dedicated engineers, planners, and technicians through OJT in the Project sites (1970s – 1990s); • BRBDP staffs were also spread out in other government bodies and private sectors entities; • Establishment Engineering Faculty collaboration with Brawijaya Univ. Malang (1963). Brantas Engineers first as the lecturers ….… later….. the Faculty upgrade education level of Brantas Staffs; • Quite number graduates had spread out all over the country and duplicated the Brantas projects successfully in different locations of the country

5. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia I. The Brantas RB (WRD era 1960s – 1990s) (4/4) • 3 organizations were formed: PT. IK (Consultant Corp, 1980), PT. BAP (Contracting Corp, 1980), PJT1 (WRM Corp, 1990) absorbing about 1,460 staffs of BRBDP. • Appropriate CD program driven by challenges had been implemented, supported by high government political support, strong leadership and Brantas Spirit: “a creative, cooperative and confident spirit to achieve the goal successfully” • The Brantas RB Development is said to be the flag symbol of the successful cooperation between Japan and Indonesia on water resources development.

6. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia I. The Brantas RB (WRM era 1990s – now) (1/3) PLANNING (2-5 YEARS) CONSTRUCTION (5-10 YEARS) • JasaTirta I Public Corporation (PJT1) established in 1990 based on GR 5/1990 to manage WR and its infrastructures in Brantas RB based on the principle of Cost Recovery from WRM Service Fee paid by the commercial users; • Quality assurance System of ISO 9001 has been adopted since 1997 to have a continual improvement of the WRM System to gain government trust and costumer’s satisfaction. • Responsive actions on stakeholders’ complaints as reflection of PJT1’s motto “Identity by Quality”. EVALUATION O&M (10-100 YEARS) As a pilot of corporatization in WRM i.e. WR that be managed by a neutral and professional institution who applies in balance between prime services principles and accountable and healthy corporate norms supported by stakeholders. • Permanent & Neutral Institution • Professional Staff • Adequate Budget DEVELOPMENT OBJECTIVES

7. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia I. The Brantas RB (WRM era 1990s – now) (2/3) Water business revenue increased by 8.8 times from IDR. 29.1 B (2001) to IDR. 256.1 B (2012). Degree of O&M C/R (WRMSFportion)achieve about 75% other than Gov. Portion for social, welfare and public safety purposes Getting the highest score of NARBO – RBO Performance Benchmarking resulted from the Pier Review assesmentby other RBO in 2009. PJT I becomes one of the benchmarked RBO in the country

8. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia I. The Brantas RB (WRM era 1990s – now) (3/3) After a long period and wide-span of experiences , the GoI got the intention to scaling-up JasaTirta Corporation to be national wide WRM body to manage national strategic river basins. Commitment to implement better Good Corporate Governance principles resulting better performance of corporation in term of health performance as well as Key Performance Indicators

9. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia II. The Basic Concepts and Principles of CD (1/2) • Capacity has been defined as the ability of individuals and organisations or organisational units to perform functions effectively, efficiently and sustainably. This implies that capacity is not a passive state but part of a continuing process and that human resources are central to capacity development. (UNDP, 1998) • CB consists of 3 basic elements (Alaerts et.al., 1991): • Creation of an enabling environment with appropriate policy and legal frameworks; • Institutional development, including community participation; and • Human resources development and the strengthening of managerial systems. • Capacity is individuals and organizational and societal abilities to perform their functions effectively, efficiently and sustainably; • CD is a continuous process of transformative changes through a process approach guided by long term perspectives; • CD program is more successful and sustainable when they respond to an internal initiative driven by dynamic challenges of individuals, organizations and societies.

10. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia II. The Basic Concepts and Principles of CD (2/2) • The key areas of CD (with appropriate methods): • Human resources development; • Institutional development including the management systems. • The enabling environment as driving factors of the successful CD program: • External factors: • High political supports as well as adequate legislations and financial frameofCDwork (central and local government); • Internal factors: • Strong leaderships to build the ownership of CD program; • Dynamic challenges (internal and external); • Appropriate incentive schemes; and • Spirit of innovation, willingness to learn and eagerness to have a new challenge.

11. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia III. CD in Brantas River Basin (BRBDP, 1960s – 1990s) (1/4) • Dynamic Challenges and Long term perspectives:CD Programs was guided by MP reviewed periodically to suit dynamic basin’s emerging challenges & national dev. requirements. 2. Appropriate Method: a. Contracting systems and Direct Force System: (JBIC Research Paper No. 36-2, 2008) • Former MPW, 1960’s, Ir. Sutami request: • “The BrantasProject to be the home of the dam builders” • Period of “to see” the work (1961 – 1964): a “full contract basis”; • Period of “to try” to do the work (1965 – 1969}: ”assistance and guidance engineer concept”; • Period of “to do” the works (1970 – 1990): “direct force or force account”; and • Period of “to oversee” the work (1991 – now): “full contract basis” supervised by BRDP.

12. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia III. CD in Brantas River Basin (BRBDP, 1960s – 1990s) (2/4) By this manner, the BRBDP became independent from foreign assistance by adopting the contracting system. This is “learning –by-doing” process. b. Manpower Training for Transfer of Knowledge • The “On the Job Training” (OJT): The Japanese consultants and engineers transferred their knowledge to Indonesian counterparts by “a man-to-man” approach. They “work-together, discuss-together, eat-together and relax-together” contributed not only to accelerate transfer of knowledge, but also to create a strong trust between them; • The “force account” system: We did the design and construction work by ourselves. It produced a large scale of well-trained engineers, planners and technicians (about 7,000 personels); c. Effective Management system: • Management By Objectives (MBO), an effective participatory management encouraged all level of management and staffs to participate in discussions and be involved in DM processes. MBO increases staff’s motivation & commitment, clarity of objectives, team building & ownership of the programs; and better communication & coordination. • Performance based salaries (merit system) to encourage better staff’s performances.

13. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia III. CD in Brantas River Basin (BRBDP, 1960s – 1990s) (3/4) 3. Driving factors: a. Political Commitment and Challenges • GoI provided the BRBDP with substantial authority in the implementation of the WRD Project based on a consistent policy of “One River, One Plan, and One Management”. • BRBDP was the only WR Project that has independent authority: • To select appropriate Project and HR management system to accumulate our knowledge; • To implement the “Force Account” system, meaning that we could directly recruit, hire, train and supervise the workforce and governed the wages and salaries. • Former President of Indonesia, Mr. Suharto, in the inauguration of SutamiDam (1973) asked: • “BrantasEngineers to build dams in the country” b. Leadership • The first GM of BRBDP (Prof. Ir. Suryono, 1961 – 1975) has a leadership in uniting minds and mobilizing efforts of all employees towards the successful realization of the Brantas Project; • He introduced innovative management system through trial-and-error process. One of the millstones was introduction of the “One River, One Plan and One Management” philosophy which guided the fundamental direction and execution of the Brantas Project; • He has political leverage to got the MPW approval for independent and exclusive authority in the development and implementation of our own project and HR management system.

14. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia III. CD in Brantas River Basin (BRBDP, 1960s – 1990s) (4/4) c. Brantas Spirit • The espirit du corps of the Brantas Project was later nicked as the Brantas Spirit. The spirit of ambition and desire to achieve the goals, spirit of not give up easily, spirit of openness to accept new things, varied, and challenging, to accept, give and share opinion and experiences, spirit to learn, spirit of responsibility, ethics, integrity, initiative, pioneering, and solid team work; • This spirit was becoming one of the strongest culture of Brantas people, a culture of creativeness, cooperative and confident to achieve the goals successfully. d. Incentives schemes • Having an authority to determine our wages and salaries system, we paid much higher salaries based on a job evaluation and merit system than those of other project offices in the country; • Performance based salary (merit system) for better staffs , units and organizational performances. Salary was divided into 3parts: • “gajipokok” (basic salary): based on the educational background, year of experiences and job scale and be reviewed based on the job performance evaluation); • “gajikebolehan” (performance salary): based on the performance of the organization, unit and individual for the past period.

15. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia III. CD in Brantas River Basin (PJT1, 1990s – now) (1/6) • Dynamic Challenges and Long term perspectives: • We have to gain government trust and costumer satisfaction to sustain our organization life”. • We need to change our culture from bureaucrat to entrepreneur, from being spending money to looking money for implementing the tasks and responsibilities and … to pay our salaries; • We have to be competent and accountable RBO supported by professional and dedicated staffs and solid team works; • We formulate our vision to build internal driven and ownership of CD program to do better the missions and move forward to realize our visions. In term of WRM: Vision 2025 (2010): “to be one of the best RBO in Asia Pacific by 2025 In term of corporation: Vision 2020 (1993): “to be national wide WR Corporation by 2020”.

16. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia III. CD in Brantas River Basin (PJT1, 1990s – now) (2/6) • Appropriate Strategies: a. Knowledge Driven Organization The knowledge-driven RBO: • is a learning organization; • has a knowledge-based corporate culture; and • Invest knowledge in business processes and service delivery. b. Dynamic Teams PJT I's motto: BerpaduDaya, BersatuKarsa, GapaiCitaBersama” (Unity of our forces and strong eagerness to achieve our goals) c. Conducive Working Conditions Transformational Leaders: • capacity to institutionalize changes over time; • use innovation and creativity to solve problems; • facilitate adequate policies and resources for better implementation. • clear and documented policies; • a code of conduct; • open management; and • Performance based salary and other appropriate incentives schemes.

17. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia III. CD in Brantas River Basin (PJT1, 1990s – now) (3/6) 3. Appropriate Method: b.Networking and knowledge sharing • Networks of professional associations is an effective tools for CD to strengthen the capacity and effectiveness in promoting IWRM and improving water governance, through exchange of information and experiences with the Network’s members; • PJT I is a member of NARBO, INBO, ICID, ICOLD , HATHI, INACOLD, MHI etc. PJT1 is one of NARBO Constitutional Bodies and support CRBOM – Center of RBO & Management. a. Quality Management System (QMS) • PJT I introduced ISO-9001 based QMS (1997) for continues improvement on WR and corporate management to gain government trust and stakeholders satisfaction. The benefits are: • operational of the company not affected by change of employed workforce; • stakeholders’ complaints are better handled and anticipated; • main tasks are undertaken more efficient and effectively; • better relationship between stakeholders and beneficiaries, and • easier to implement Good Corporate Governance (GCG) principles. Identity by Quality

18. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia III. CD in Brantas River Basin (PJT1, 1990s – now) (4/6) c. Focus Group Discussions • Periodical knowledge sharing to share opinions on a specific issues (after attending knowledge events, we have to share and recommend on what lesson learn could be adopted or what kind of initiatives to be developed and implemented); • To discuss specifics issues deeply, PJT I form Focus Group of Discussions (FGD). A series of FGD’s meeting have been held to improve manuals, SOPs, applied technologies etc; • In Management Review Meeting (every week, every unit), we discuss the progress and problems of the activities. We formulate corrective actions to eliminate recurrent problems and implement the solutions acceptable to stakeholders. 4. Driving factors: a. Political Commitment and Challenges • GoI support continuously the successful of PJT1 as a pilot on corporatization of WRM; • The GR No. 5/1990 of PJT1 was reviewed and replaced to suit the emerging issues: • GR No. 93/1999: to strengthen organization and permit the extension to other basins; • GR No. 46/2010: to suit the implementationof Law No 7/2004 on WR and to support development of businesses on drinking water supply and electric power generation.

19. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia III. CD in Brantas River Basin (PJT1, 1990s – now) (5/6) MPW keynote address , NARBO Leadership Retreat, attended by 30 water leader in Asia, June 2011, Malang, Indonesia b. Leadership • CD is a continuous process of transformative changes (individuals and organizations); • Generating change requires transformational leaders who has ability to: • develop a new charismatic and great vision described in specific terms and focus areas; • gather support from individuals and teams and inspire the staff by empathetic communication; • promote ownership, motivation and confidence: we can do it, we can solve it, we can achieve it; • generate new challenges to promote innovative measures for better performances • guide the organization through a transformative phase. Indonesia may share its experience in dealing with the two-types of river basin organization, public typed and corporate typed RBO. We are embarking on a process to move the public type of RBO into quasi-corporate RBO. If in the future, the financial aspect of the quasi-corporate RBO improves, they will be transformed into corporate-type of RBO”. • (President Director PJT1 in panel discusion, NARBO Leadership Retreat, June 2001, Malang, Indonesia) • “If you like to bring your organization to a better position, you should try to have new challenges. I always give my staff new challenges. It requires changes of mind set, and I have to change myself.”

20. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia III. CD in Brantas River Basin (PJT1, 1990s – now) (6/6) c. Inclusion “Brantas Spirit” in Corporate Culture • The appropriate organization behaviors that support the organization challenges had to be explored, developed and embedded in the Corporate Culture; • We have embodied the notion of the “Brantas Spirit” in the corporate culture: “Pintu Air” (Water Gate). The PINTU AIR (water gate) P - Professionalism I - Innovation N - Neutrality T - Tanggap (responsiveness) U - Uswah/Keteladanan(to be referred to) A - Adil (fair and equitable services) I - Ikhlas (sincerity, honesty) R - Rasa memiliki (ownership) d. Incentives schemes • Appropriate incentive schemes to promote CD initiatives for better performances; • to promote applied technologies in WRM; • to get more revenue (new business diversification, reservoir operation optimization, better handling of NCP and customer’s complaint etc.); • to increase cost efficiency (improve management control and workmanship etc).

21. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia • Conclusions (1/2) • Achievements to do their roles & functions, tasks & responsibilities depend on ability the organization to develop & manage their CD; • CD programs more successful & sustainable if as responds to internal initiative, driven by organization challenges; • Creating internal and external enabling environment conditions are essential to support successful of CD programs; • The “force account system” & “sequentialcontracting system” played importance role in producing qualified & well-trained engineers, planners, and technicians; • 3 (three) key success areas adopted by PJT1: • becoming knowledge driven organization; • having dynamic team; and • maintaining the conducive working environment conditions • supported by strong leadership & corporate culture;

22. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia • IV. Conclusions (2/2) • The key success factors on the CD of the RBOs includes: • political support from the Government; • appropriate strategies and method; • leadership; • demand driven and dynamic challenges; • appropriate incentive schemes; and • organizational culture and the “spirit” of the people within.

23. Key Success Factors on Capacity Development in RBO: Case of Brantas River Basin, East Java, Indonesia Thankyouforyourattention. Contact details: Tjoek Walujo Subijanto Senior Advisor on Water Resources and Corporate Management Jasa Tirta I Public Corporation The Brantas and Bengawan Solo River Basins Management Agency tjoekws@gmail.com or tjoekwalujo@jasatirta1.net