Firms’ Collective Adaptation Orientate Towards Resistance (with the Danger of Collapse), Resilience and Rarely Towards Signs of Transformation

The interviews reveal that particularly large firms engage in collective adaptation. While the majority of the firms claim that is the duty of the authorities to solve the flood exposure at a broader scale. Moreover the firms engage in soft adaptation activities, e.g. donating money, offer their plant as a shelter or support their employees during floods. As the majority of the firms are not engaging in collective adaptation it endangers that the flood risk is not tackled at a broader scale. The firms persist in their behavior which can increase the danger of a collapse outcome and are not showing signs of prosper adaptive regional development. The socioeconomic conditions deteriorate slowly and it is likely that soon the conditions are so worse that a relief strategy will be very costly or perhaps unfeasible. However, some firms attempt to adapt at least to the consequences by soft adaptation. The firms donate money to the authorities or supplies to affected communities and offer their plant as a shelter. These activities show characteristics of a resistance paradigm as the consequences of the inundation are addressed by spending financial and material resources but not attempt to change the causing factors. The commitment in community service can be seen as resilience. The firms engage by financial funding or deploying employees to clean the clogged canals or rivers to increase their water capacity. Signs of transformation are shown by large firms who attempt to change the existing institutional setting of flood governance and drove forward a new scheme of collective adaptation by building a shared canal for drainage (see Fig. 11.3). However, the example has shown that the realization is hampered by the bureaucratic burdens. Overall, the firms’ collective adaptations also show that IARD is hardly to perceive. Although, the promising case in Cakung-Cilincing reveal that firms’ engagement can lead to adaptive regional development. The future will show whether the scheme will have positive effects on the socioeconomic conditions in this area.

The non-occurrence of a sophisticated adaptive regional development can be explained as the weak institutional setting leads to an inadequate governance arrangement. The weak institutional setting causes that firms have the opinion that it is the responsibility of the authorities to prevent the community and businesses from the flood risk. The interviews show that firms do not trust the authorities sufficiently and are tired of the rigid, fragmented governmental system. Thus, firms do not experience and expect effective governmental flood risk reduction. As they do not perceive any benefits of possible engagement in collective adaptation and particularly the small firms are not willing to invest the coordination costs by organizing joint activities.

The results show clearly a typical social dilemma. The actors rather maximize their own benefit (individual adaptation) instead of perceive the overall benefits (collective adaptation). This non-cooperative behavior makes it unlikely that effective risk reduction strategies are realized. According to Ostrom (1990, 2000) successful governance systems have to implement monitoring and sanction principles to restrict free riding and achieve long-term self-interest for each member. The research suggests that such principles in order to strengthen cooperative behavior are difficult to implement in Jakarta, where law enforcement is typically discussed as a major policy problem. Moreover, the authorities are reluctant to simplify regulations and acknowledge firms’ motivation to address risk-causing factors also at a broader scale. Rather adaptation is hindered by overregulation and unreliability of authorities. Similar findings provide von Luebke (2009) within his analysis of an

Indonesian business survey and in-depth interviews. He shows that particularly small firms have to face corruption and ignorance by local authorities. Furthermore they are more risk-averse. All these lead that firms do not see any incentives to collaborate. A crucial reason of these insufficiencies is that Jakarta’s leadership is still lacking to develop transparency and true partnership between authorities, firms and residents (Steinberg 2007). Rather, the authorities still force firms paying compensation or overtaxing to contribute to regional economic development. All these weaknesses appear to be a crucial barrier of adaptation, particularly collective ones. Fuchs et al. (2011) argue in a similar way and outline that constraints on governance may one of the main reason of effective adaptation. The lack of proactive efforts by the authorities and the territorial and sectoral fragmentation of responsibilities as well as sometimes conflicting responsibilities hamper effective risk reduction to natural hazards. More integrative risk reduction may also reduce the expenses of the city budget and may streamline DRR activities amongst different government agencies.

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