Why independent funding is critical for effective conflict resolution at the local level?

Land and natural resource conflicts continue to emerge across Indonesia. Their negative impacts are felt not only by communities who lose access and living space, but also by businesses and government. The cost of conflict—from direct losses and asset damage to missed economic opportunities—often far exceeds the cost of preventing and resolving it.

This is why the presence of a neutral, professional, and trusted conflict-resolution mechanism is urgently needed. Yet realities on the ground reveal a major challenge: where should conflict-resolution financing come from?

Conflict resolution—through mediation, among other approaches—does not operate like a development project with fixed timelines, measurable outputs, and a predetermined budget. Each conflict has its own rhythm, dynamics, and sensitivities. Some processes move quickly, but many are lengthy and winding.

Project-based funding models—commonly used by donors and the government—often fail to accommodate this uncertainty. As a result, the sustainability of conflict-resolution efforts depends on proposal cycles and budget approvals, rather than on the needs of parties who have agreed to end their conflict.

At the same time, trust is the core currency of mediation. When a funding source is perceived as biased, the integrity of the institution is inevitably questioned.

Logically, the parties in conflict are the direct beneficiaries of mediation. However, when companies are able to contribute significantly more than communities, perceptions of partiality are almost unavoidable.

Financing conflict resolution through the State or Regional Budget (APBN/APBD) is also challenging. Bureaucratic rules, spending category restrictions, and limited flexibility make it difficult for many mediation processes to proceed according to on-the-ground needs.

These experiences show that the issue of financing is not merely about the adequacy of funds—but whether the source of funding can safeguard an institution’s independence, impartiality, and agility.

To move beyond project-dependent funding, several countries have developed trust funds, including endowment funds, managed independently, transparently, and with public oversight.

Similar models are not new to Indonesia. Examples include the Kehati Foundation’s Ananta Fund, Dompet Dhuafa, and the Pangkai Meurunoe Aneuk Nelayan Foundation (YPMAN) in Aceh. All demonstrate that accountable public fund management is possible.

Funding sources can come from high-net-worth individuals, companies without conflicts of interest, and donors willing to contribute under a blind trust arrangement.

Through long-term investment mechanisms, accumulated funds can support mediation financing without relying on projects or pressure from any particular party.

Ultimately, the success of a conflict-resolution institution is closely tied to the integrity of its financing. Without neutral and sustainable funding sources, maintaining objectivity and trust among stakeholders becomes difficult.

With an independent, conflict-free financing mechanism, conflict-resolution institutions can work with greater calm, fairness, and effectiveness—helping communities, government, and businesses break free from destructive cycles of conflict.

Photo by rahmad himawan