IESR was established deriving from the concerns of a number of NGOs about the structural adjustment program. After the economic crisis hit in 1998, the Indonesian government signed a Letter of Intent (LoI) with the IMF in 1999. One of its programs was the restructuring of the electricity sector (or power sector restructuring program), which was then funded by the ADB, KfW and USAID.
The Power Sector Restructuring Program aims to introduce the electricity competition and market, further sets of liberalization in the electricity industry, along with the unbundling and privatization of the State Electricity company (PLN). The restructuring had started with the drafting of the Electricity Law in 1999. The draft was then approved and legalized as Law in 2002.
The quite radical power sector restructuring had triggered strong reactions from a number of civil society organization that have concerns for the economic, environmental and social impact, as well as implementing good governance in the ongoing process. A number of NGOs (Yayasan Geni, debtWATCH, INFID, LBH Jakarta, ICW, YLKI and PIRAC) subsequently established the Working Group on Power Sector Restructuring (WGPSR). The working group then monitored and did interventions in the drafting process of the Electricity Law, as well as getting involved in the test material of the Law in the Constitutional Court in 2004. Furthermore, WGPSR had actively conducted policy advocacy and the regulations related to the energy and electricity sector.
When the mandate of WGPSR ended, the external evaluation carried out by South Research in Belgium in 2007 recommended that the work of WGPSR should be carried on in a more permanent institutional form. The evaluation had pointed out that there had been very few NGOs in Indonesia that were focusing on the policy advocacy of the energy sector. Based on the recommendation, in 2007, the Institute for Essential Services Reform (IESR) was born, in the form of “Perkumpulan” or association, with the same members as the previous WGPSR. The idiom “Essential Services” in the name IESR refers to “energy and water services” which we believe to be the ‘essential’ needs in this modern era.
IESR was designed to shape as a Think Tank for civil society, to support those who actively inspire, push, and support changes towards a just utilization of natural resources to support human development.
For the year 2008-2013, four essential programs are set: Access to Energy, Electricity Governance, Climate Justice, and Extractive Industry Reform.
IESR activities cover policy advocacy, public campaigns, action research and development, and capacity building for the civil society.