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Watersheds has essential functions in human life and other living things that include hydrological and ecological functions. However, the number of critical watershed conditions are increasing and resulting in the degradation of the watershed function. The number of critical watersheds according to the 2009 forestry ministerial decree is 108 watersheds including Garang watershed. The landscape degradation of the upper areas will significantly affect hydrological conditions in downstream areas. Payment for environmental services (PES) is one of the alternatives of watershed management that combines interests in the upstream - downstream watersheds, especially in the form of water distribution. This study aims to identify important factors or criteria needed, especially related to the water environment services as a part of the integrated watershed management. The qualitative and quantitative method was used in this study with descriptive and CVM analysis used through the review literature, interview and survey. The analysis identifies important factors for PES in a sustainable watershed management which include its context, actors, financing systems, operations, and monitoring evaluation. The study also shows that some factors need improvement such as context (local regulation), actors (public understanding of the PES mechanism), operation (planning design), and low willingness to pay for PES implementation in Garang watershed. By properly defining the criteria of PES, watershed management can be managed in a way that the upper and downstream areas can be linked in an integrated way.

Factors affecting payments for environmental services (PES) implementation in the Garang watershed management