Conceptualizing legal categorization of blue projects as a safeguard against bluewashing in the blue bond framework
DOI:
https://doi.org/10.61511/gg.v3i2.2026.3278Keywords:
blue bond regulation, bluewashing, legal accountabilityAbstract
Background: Indonesia has a huge potential for the marine economy, but its management has not been fully supported by adequate legal instruments, especially in the implementation of blue bonds as a blue economy financing instrument. This study aims to analyze the weaknesses of Indonesia's legal framework in the supervision and accountability of blue bond issuance and formulate an ideal regulatory design to prevent bluewashing practices. Methods: By using normative legal research methods and conceptual, legislative, and comparative approaches. The study examined some of the national regulations relevant to the study and compared them to best practices in Seychelles, Belize, and the Philippines. Findings: The results show that Indonesia does not yet have a strict blue project categorization, independent verification mechanism, and a mandatory impact reporting system, thus opening up space for sustainability claims without a clear scientific basis. In contrast, countries such as Seychelles and Belize implement trust fund and ring fenced fund mechanisms, while the Philippines regulates third-party verification and public reporting obligations through SEC Circular No. 15/2023. Conclusion: Based on these findings, the study recommends the design of a hybrid legal framework that combines a transparent trust fund system by strengthening fiscal accountability, enhancing market credibility, and ensuring that blue bonds in Indonesia truly contribute to marine conservation and sustainable blue economy development. Novelty/Originality of this article: The novelty of this research lies in the proposal of an integrated regulatory model that adapts international standards to the legal, fiscal, and ecological characteristics of Indonesia as the largest archipelagic country in the world.
References
Alauddin, R., Arsad, J. H., Azis, A., Faisal, Ratnaningsih, M., & Rustam, M. (2024). The Challenges and Opportunities of Environmental Law Enforcement: A Systematic Review. WSEAS Transasctions on Environment and Development, 20. https://doi.org/10.37394/232015.2024.20.19
Asian Development Bank. (2021b). Green and Blue Bond Framework. Asian Development Bank. https://www.adb.org/sites/default/files/publication/731026/adb-green-blue-bond-framework.pdf
Beckert, J. (2013). Imagined futures: Fictional expectations in the economy. Theor Soc, 42, 219–240. https://doi.org/10.1007/s11186-013-9191-2
Benzaken, D., Adam, J. P., Virdin, J., & Voyer, M. (2024). From concept to practice: Financing sustainable blue economy in Small Island Developing States, lessons learnt from the Seychelles experience. Marine Policy, 163. https://doi.org/10.1016/j.marpol.2024.106072
Bhagat, S., Klasa, S., & Litov, L. P. (2022). The use of escrow contracts in acquisition agreements. Bayes Business School. https://www.bayes.citystgeorges.ac.uk/__data/assets/pdf_file/0006/735594/Litov_Escrow-Accounts.pdf
Booth, M., & Brooks, C. M. (2023). Financing marine conservation from restructured debt: A case study of the Seychelles. Marine Science. https://doi.org/10.3389/fmars.2023.899256
Bosmans, P., & Mariz, F. de. (2023). The Blue Bond Market: A Catalyst for Ocean and Water Financing. Journal of Risk and Financial Management, 16(3). https://doi.org/10.3390/jrfm16030184
Bovino, R., & Niesten, E. (2021, February). Production of a Baseline Inventory of Existing and Potential SustainableBlue Finance Investors to Support the CLME+ Vision EcoAdvisors, Technical Report. EcoAdvisors. https://clmeplus.org/app/uploads/2021/04/CLME-Baseline-Assessment-of-Blue-Economy-Investors.pdf
Budi Endarto, Dwi Elok Indriastuty, & Fitra Mardiana. (2024). Legal transplantation of blue bond regulation in Indonesia. Environmental Development, 53(101118). https://doi.org/10.1016/j.envdev.2024.101118
Ebbesson, J. (2010). The rule of law in governance of complex socio-ecological changes. Global Environmental Change, 20(3), 414–422. https://doi.org/10.1016/j.gloenvcha.2009.10.009
Edi. (2025, September 13). The Lobster Cultivation Controversy in Indonesia: Between Economic Potential and Environmental Threat. Blue Sea of the Archipelago. https://lautnusantara.com/detail/artikel/1559/the-lobster-cultivation-controversy-in-indonesia-between-economic-potential-and-environmental-threats
Endarto, B., Taufiqurrahman, & Mardiana, F. (2024). The Urgent Need for Blue Bond Regulation in Indonesia. Juridical Tribune – Review of Comparative and International Law, 14(4), 530–546. https://doi.org/10.62768/TBJ/2024/14/4/01
European Commission. European Climate, Infrastructure and Environment Executive Agency., ECORYS., Deltares., & Pescares Italia. (2021). Sustainability criteria for the blue economy: Main report. Office Publications. https://data.europa.eu/doi/10.2826/399476
Flammer, C. (2021). Corporate green bonds. Journal of Financial Economics, 142(2), 499–516. https://doi.org/10.1016/j.jfineco.2021.01.010
Gambetta, G. (2021, September 10). Japanese Insurers Buy ADB's First Blue Bonds. Responsible Investor. https://www.responsible-investor.com/japanese-insurers-buy-adb-s-first-blue-bonds/
Ghouma, H. H., & Ouni, Z. (2022). The sovereign wealth funds risk premium: Evidence from the cost of debt financing. Journal of Corporate Finance, 76. https://doi.org/10.1016/j.jcorpfin.2022.102255
Hamidi, U. S., & Puspita, D. (2021). Two Decades of Fiscal Decentralization Implementation in Indonesia. Fiscal Policy Agency. https://fiskal.kemenkeu.go.id/files/buku/file/1670915701_2_dekade_desentralisasi_fiskal_letter_-_eng.pdf
Hunt, A., & Hilborn, R. (2025). Seychelles' blue finance: A blueprint for marine conservation? Marine Policy, 179, 106717. https://doi.org/10.1016/j.marpol.2025.106717
IFC. (2025, September 15). Guidelines for Blue Finance. International Finance Corporation Reports. https://www.ifc.org/en/insights-reports/2025/guidelines-for-blue-finance
Indonesia Ocean Justice Initiative. (2024, November). Legal Analysis of Sea Sand Extraction and Export Policy. Indonesia Ocean Justice Initiative. https://oceanjusticeinitiative.org/main/wp-content/uploads/2024/12/ANALISIS-KEBIJAKAN-PASIR-LAUT-IOJI-NOV-2024.pdf
International Capital Market Association (ICMA). (2023). Bonds to Finance the Sustainable Blue Economy (A Practitioners's Guide). Asian Development Bank / International Finance Corporation. https://www.icmagroup.org/assets/documents/Sustainable-finance/Bonds-to-Finance-the-Sustainable-Blue-Economy-a-Practitioners-Guide-September-2023.pdf
Jiang, X., & Cao, H. (2024). Implementing the debt-for-nature swaps for marine protected areas: Case studies from Seychelles and Belize. Humanities and Social Sciences Communications, 11(1), 331. https://doi.org/10.1057/s41599-024-02855-3
Jouffray, J.-B., Blasiak, R., Nyström, M., Österblom, H., Tokunaga, K., Wabnitz, C. C. C., & Norström, A. V. (2021). Blue Acceleration: An ocean of risks and opportunities. Ocean Risk and Resilience Action Alliance (ORRAA) Report, 42. https://oceanrisk.earth/wp-content/uploads/2022/12/ORRAA-Blue-acceleration.pdf
Karpf, A., & Mandel, A. (2017). Does it Pay to Be Green? SSRN Electronic Journal. https://dx.doi.org/10.2139/ssrn.2923484
Karso, A. J. (2022). The Realization of Indonesia as a Strong Maritime Nation in the World (First Edition). Eureka Media Script.
Kılıç, A. O. (2024). Beyond bluewashing: A critical examination of labeling blue bonds. Marine Policy, 163. https://doi.org/10.1016/j.marpol.2024.106152
Kılıç, A. O. (2025). A socio-legal examination of Belize's debt swap from a human rights perspective. Journal Of International Economic Law, 28(2), 224–241. https://doi.org/10.1093/jiel/jgaf015
Maynilad Water Services. (2025, April). 2024 SEC Form 17-A: Annual Report. Maynilad Water Services. Maynilad Water Services, Inc. https://www.mayniladwater.com.ph/wp-content/uploads/2025/04/2024-MWSI-SEC-Form-17-A_Full-Report.pdf
Mueller, F., Rieber, D., & Tank, A. (2019). Legal Bases and Implementation of Clawback Clauses: A Comparison Between US and Germany. KoR – Zeitschrift für internationale und kapitalmarktorientierte Rechnungslegung, 20, 132–137. http://dx.doi.org/10.2139/ssrn.3473896
Muthahhar, M. D. A. (2024, November 17). Criticizing the Policy of Revoking the Sea Sand Export Ban. Online Law. https://www.hukumonline.com/berita/a/mengkritisi-kebijakan-pencabutan-larangan-ekspor-pasir-laut-lt6738d4985744f/
Olsen, L., & De Mariz, F. (2025). Attracting More Capital for Biodiversity Finance: The Case of Debt-for-Nature Instruments. Commodities, 4(2), 7. https://doi.org/10.3390/commodities4020007
Oral, E. (2024). The environmental rule of law and the protection of human rights defenders: Law, society, technology, and markets. Int Environ Agreements, 24, 393–421. https://doi.org/10.1007/s10784-024-09645-x
Pinhão, D. B. (2023, November 12). An Overview of the Blue Economy of the Philippines – A Brief Assessment and Recommendations. Economic Research Institute for ASEAN and East Asia. https://www.eria.org/uploads/Overview-Blue-Economy-the-Philippines.pdf
Pusparini, N. (2024, September 19). What is Bluewashing? A term that emerged after the controversy over the export of sand sediments from environmental activists. East Java Network. https://www.jatimnetwork.com/trending/4313572032/apa-itu-bluewashing-istilah-yang-muncul-usai-kontroversi-ekspor-sedimen-pasir-dari-aktivis-lingkungan-hidup
Putri, F. S., Aryani, Y. A., & Setiawan, D. (2025). Sustainable Bonds in Indonesia: A Systematic Literature Review and Future Prospects. Journal of Accounting and Business Dynamics, 12(1), 111–132. https://doi.org/10.24815/jdab.v12i1.43737
Remmer, S., & Achmad, I. (2018). Tourism impacts in Labuan Bajo, Flores, Indonesia: Impact assessment. Swisscontact WISATA. https://tourism4sdgs.org/wp-content/uploads/2018/08/Labuan_Bajo_Impact_Assessment.pdf
Republic of the Philippines – Department of Finance. (2022). Sustainable Finance Framework. Bureau of the Treasury. https://www.treasury.gov.ph/wp-content/uploads/2022/01/Republic-of-Philippines-Sustainable-Finance-Framework-vF-with-disclaimer.pdf
Rogge, E. (2025). Blue bonds: Sustainable financing for the Blue Economy around the Indian Ocean. Jindal Global Law Review, 16, 155–177. https://doi.org/10.1007/s41020-025-00263-5
Securities and Exchange Commission. (2023). Guidelines on Eligible Blue Projects and Activities for the Issuance of Blue Bonds in the Philippines. Securities and Exchange Commission Philippines. https://www.grantthornton.com.ph/contentassets/0c1f93836aba41d38426247da802aab8/sec-mc-no.-15-series-of-2023.pdf
Senate Economic Planning Office. (2024, September). Blue economy policy: Harnessing ocean wealth for sustainable growth. Senate of the Philippines. https://web.senate.gov.ph/publications/SEPO/SEPO_Policy%20Brief_Blue%20Economy_final.pdf
Sugihartono, S. (2024, September 23). Uncovering Indonesia's marine energy potential and its challenges. Modern Diplomacy. https://moderndiplomacy.eu/2024/09/23/uncovering-indonesias-marine-energy-potential-and-its-challenges/
Suharsono, A, Mustofa, A, Nuraini, L, Hizbulloh, L, Bellmann, C, Irschlinger, T, & Tolvanen, S. (2021). Supporting marine fishing sustainably: A review of central and provincial government support for marine fisheries in Indonesia. International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-07/sustainable-marine-fisheries-indonesia-en.pdf
Sumaila, U. R., Walsh, M., Hoareau, K., Cox, A., Teh, L., Abdallah, P., Akpalu, W., Anna, Z., Benzaken, D., Crona, B., Fitzgerald, T., Heaps, L., Issifu, I., Karousakis, K., Lange, G. M., Leland, A., Miller, D., Sack, K., Shahnaz, D., ... Zhang, J. (2021). Financing a sustainable ocean economy. Nature Communications, 12(1), 3259. https://doi.org/10.1038/s41467-021-23168-y
Tang, D. Y., & Zhang, Y. (2020). Do shareholders benefit from green bonds? Journal of Corporate Finance, 61. https://doi.org/10.1016/j.jcorpfin.2018.12.001
The Nature Conservancy. (2021). Case Study Belize Blue Bonds for Ocean Conservation. The Nature Conservancy. https://www.nature.org/content/dam/tnc/nature/en/documents/TNC-Belize-Debt-Conversion-Case-Study.pdf
Thompson, B. S. (2022). Blue bonds for marine conservation and a sustainable ocean economy: Status, trends, and insights from green bonds. Marine Policy, 144. https://doi.org/10.1016/j.marpol.2022.105219
U. Rashid Sumaila. (n.d.). Financing a sustainable ocean economy.
UN Environment Programme. (2022, December 19). Decision Adopted by the conference of the Parties to the Convention on Biological Diversity. UN Environment Programme. https://www.cbd.int/doc/decisions/cop-15/cop-15-dec-04-en.pdf
UND-Ais Forum. (2023, June 25). Indonesia Launches the World's First Publicly Offered Sovereign Blue Bond – with UNDP's Support. UNDP Indonesia. https://www.undp.org/indonesia/blog/indonesia-launches-worlds-first-publicly-offered-sovereign-blue-bond-undps-support
UNEPFI. (2021b). Turning the Tide: How to Finance a Sustainable Ocean Recovery. UNEPFI. https://www.unepfi.org/publications/turning-the-tide/
United Nations Development Programme. (2023, August). Blue Finance in Seychelles August 2023. UNDP Adaptation. https://www.adaptation-undp.org/sites/default/files/uploaded-images/seyccat_presentation.undp.pdf
United Nations Global Compact. (2020a). Practical Guidance to Issue a Blue Bond. UN Global Compact. https://unglobalcompact.org/library/5798
United Nations Sustainable Development Group. (2023, August 24). Riding the waves to a blue future in Indonesia. United Nations Sustainable Development Group. https://unsdg.un.org/latest/blog/riding-waves-blue-future-indonesia?
World Bank. (2018, October 29). Sovereign Blue Bond Issuance: Frequently Asked Questions [World Bank Group]. https://www.worldbank.org/en/news/feature/2018/10/29/sovereign-blue-bond-issuance-frequently-asked-questions
World Bank. (2025). Seychelles: Introducing the World's First Sovereign Blue Bond. World Bank Group. https://thedocs.worldbank.org/en/doc/cbaf1cefc5164a7f340716ef0af6fd7e-0340012025/original/Case-Study-Blue-Bond-Seychelles.pdf
Yamamoto, Y. (2023). Living under ecosystem degradation: Evidence from the mangrove–fishery linkage in Indonesia. Journal of Environmental Economics and Management, 118, 102788. https://doi.org/10.1016/j.jeem.2023.102788
Yifan Wang & Rachel Karasik. (2022). Plastic pollution policy country profile: Indonesia. Nicholas Institute for Environmental Policy Solutions. https://nicholasinstitute.duke.edu/sites/default/files/projects/Plastic-Pollution-Policy-Country-Profile-Indonesia.pdf
Published
How to Cite
Issue
Section
Citation Check
License
Copyright (c) 2026 Gladys Azalia Christi, Nada Amira
This work is licensed under a Creative Commons Attribution 4.0 International License.
