Principal-Agent Relation in Conserving the Kali Putih Area in the Reconstruction and Mitigation Zone of Merapi Mountain National Park

This article aims to observe the dynamics of policy implementation involving various stakeholders in the effort of conserving one of the National Parks in Indonesia, particularly Merapi Mountain National Park (Taman Nasional Gunung Merapi – TNGM). Following the Zoning Policy implemented in the TNGM area, there is a zone that should have been protected from mining activities, namely the reconstruction and mitigation zone. However, in its implementation, the conservation collaboration agreement of one of the areas in the zone, namely the Kali Putih Area, is instead used by some parties to engage in sand mining activities. The principal-agent theory is, thus, employed in this study to examine the extent of the relationship of every party in the zoning policy implementation process of an area designated as a Reconstruction and Mitigation Zone. The qualitative approach is used to gain direct insights pertaining to the implementation of efforts conducted by several relevant parties in conserving the Kali Putih Area in TNGM’s Reconstruction and Mitigation Zone. Study results ultimately show that moral hazard in the principal-agent theory should not only be understood as deviant behaviors enacted by the agent, but the moral hazard performed by the agent may also in luence the principal’s decision making process. This research is expected to provide an outlook to the government, which functions as the principal in a policy, to make several considerations prior to entering into any collaborative agreement or making any decision, so that the implementation process of policies can align with what has been previously planned.


Introduction
The complexity of issues confronted by the government is no longer manageable by the government alone, as it ultimately requires collaboration with various existing components to satisfy public affairs by eliminating sectoral and organizational restrictions (Getha-Taylor, 2007). In the case of public policy, for instance, the government as the decision maker often involves various non-governmental parties to deal with public policy implementation and formulation processes (Bergman & Lane, 1990;Coats, 2002;Zubayr, Darusman, Nugroho, & Nurrochmat, 2014). The principal-agent approach is eventually employed in public policy studies to avoid any issues in both policy implementation and formulation processes involving various other parties or delegations (Braun & Guston, 2003).
The policy pertaining to the conservation of the Merapi Mountain National Park (Taman Nasional Gunung Merapi -TNGM) area is one of the examples of a policy that continually involves various parties throughout both its implementation and formulation processes (Daru & Hudayana, 2015) The abundance of sand material in the TNGM area presents potential interests from various parties, hence requiring due considerations and thorough attention by the government in making a policy regulating the area's conservation in order to avoid any potential con lict and illegal mining (Santoso & Wibawa, 2015;Daru & Hudayana, 2015). and that any mining activity is prohibited in the area.
In the reconstruction and mitigation zone there is a block called Jurang Jero in the Kali Putih area which is a lahar pathway abundant in sand and rock materials from prior eruptions. The output of the deliberations when drafting the TNGM zoning policy agreed that all activities pertaining to extracting and dredging sand in the area are prohibited, the area should, therefore, be free of any mining activities.
However, in its implementation, mining activities have in fact been occurring in the Kali Putih area. Since 2015, before the TNGM zoning policy, manual sand mining operations have been carried out by 1122  (Zubayr, Darusman, Nugroho, & Nurrochmat, 2014), and accordingly this study also aims to examine whether possibility of information asymmetry is also present in the Kali Putih area conservation case. In its development, the principal-agent model eventually becomes a theory that is frequently used in public policy studies, and it is utilized to examine the formulation or implementation process of a policy (Bergman & Lane, 1990;Coats, 2002;Lane, 2013;Zubayr, Darusman, Nugroho, & Nurrochmat, 2014). The principal-agent theory in public policy studies is considered most appropriate to examine policy formulation and implementation processes involving a number of actors, be it from the government side or other parties (Lane, 2013).

Literature
Factually speaking, applying the principalagent theory in the public sector is indeed very likely since the public sector has various delegations in the process of decision-making and ful illing public needs (Coats, 2002;Braun & Guston, 2003). In general, the principal-agent model is used in the public sector to examine the relationship between the government and the administrator, or the relationship between levels of government/administrator . The principal-agent model can also be applied in the chain of delegation which involves the relationship of various actors in policy implementation, starting from the community, the government, and even the private sector (Braun & Guston, 2003;Imbeau, 2003). In other words, the principal-agent model does not only examine the relationship between two actors, it can also involve various actors as either principals or agents (Imbeau, 2003;Zubayr, Darusman, Nugroho, & Nurrochmat, 2014). In the public policy sector at the regional level, the principal-agent model can also be used to examine the relationship between the regional community as the principal and the local government as the agent . Therefore, the principal-agent model in public policy may accordingly be employed to examine the relationship of various actors given that the issues pertain to public needs.
Essentially, the principal-agent model used in public policy approach does not have any signi icant differences with economic studies, wherein the model is employed to examine the information asymmetry occurring among several actors (as principal and agent) in a policy (Lane, 2013). Information asymmetry occurs when the agent has better information than the principal does, or the agent has objectives that are unknown by the principal so that in the policy implementation the agent will pursue any means to achieve their objective without the principal having any knowledge or capacity over the matter (Gracia, Rodriguez-sánchez, & Fdez-Valdivia, 2015). Hence, according to Lane Aside from moral hazard, the possibility of adverse selection is also another issue that should be avoided in the principal-agent model.
Adverse selection is de ined as the principal's error in selecting the agent (Lane, 2013). The error occurs when the principal has no capacity to identify the agent's expertise, or the principal fails to thoroughly verify the agent's capacity prior to making any decision (Zubayr, Darusman, Nugroho, & Nurrochmat, 2014). The principal's error in selecting the agent ultimately impacts the policy implementation process in achieving the preplanned objectives because the selected agents have no capacity or they have other agendas that disrupt the policy implementation process itself (Lane, 2013). Ultimately, the agent selection process conducted by the principal is the most important part in the policy implementation process because it will determine how the policy implementation process will operate in the future.

Multiple Principal-Agent
The issue in implementing the principalagent model in public policy is the large amount of delegations in both the policy formulation and policy implementation processes, resulting in multiple actors playing the role as principal or agent (Imbeau, 2003). The presence of several principals and agents increases the potential for greater information asymmetry. This is on account of the fact that several principals are present with differing and unaligned objectives and interests, which leads to a decision making process that is at times not necessarily in accordance with the public's needs, and provides opportunities for other considerably bene icial group interests instead (Zubayr, Darusman, Nugroho, & Nurrochmat, 2014). Accordingly, Zubayr et al. (2014) state that the concept of principal-agent can be used to analyze public policy commitment in both formulation and implementation processes.
The principal-agent model is considered feasible to explain the key issues in interactions between principals and agents within the policy formulation and implementation processes that relate to performance and service provision (Zubayr, Darusman, Nugroho, & Nurrochmat, 2014). In addition to paying close attention to the moral hazard and adverse selection aspects, Zubayr et al. (2014) also supplemented components of inter-principal relationship (P-P problems) and inter-agent relationship (A-A problems) within the principal-agent framework for public policy studies. Previous studies indicate that problems of inter-principal relationship may occur due to incompatible objectives that respective principals have (Su, Xu, & Phan, 2008). As

Methods
The study employed the descriptive qualitative method in collecting data, and it presents a detailed and thorough description of an issue or context of a situation (Neuman, 2014).
By using the qualitative method, a research is considered capable of carrying out in-depth and detailed exploration of behavioral phenomenon (Patton, 2002). To provide further detail, a case study approach was used to emphasize the exploratory process of a limited system in one case or several cases (Creswell, 2007). The case study approached was used to investigate a social condition, situation, or certain event, so that it may provide greater insight describing the process of how such an event or situation unfolds (Yin, 2011). Case study is considered to be advantageous in showcasing essential things that are subject to the social process of the community in a concrete event, based on the experience of the stakeholders (Hodgetts & Stolte, 2012).

Participant observation is used in studies that
involve the researcher directly throughout every process, requiring the researcher to experience the existing conditions on the ield, and be involved in the daily events of the study objects (Sugiyono, 2008). The researcher, as one of the parties involved in the TNGM Zoning policy implementation process, was ultimately able to obtain information from various other parties involved, as well as information about the daily issues occurring in the policy implementation process in TNGM's reconstruction and mitigation zone in the Kali Putih Area.

Principal-Agent Relation in the Reconstruction and Mitigation Zone
Based on the previous explanation, the application of the principal-agent model in policy implementation process can be observed through a chain of delegation involving several parties from varying circles (Braun & Guston, 2003;Imbeau, 2003

Conservation of the Kali Putih Area
According to prior studies, the occurrence of information asymmetry in a principal-agent relationship directly correlates with potential incidence of moral hazard and adverse selection (Lane, 2013;Zubayr, Darusman, Nugroho, & Nurrochmat, 2014). Moral hazard is de ined as opportunistic behaviors to achieve a group's objective that is outside of the collaboration contract or policy interest, whereas adverse selection is error made by the principal in identifying the selected agent's ability and capacity (Lane, 2013). The acquired data indings have reinforced a new hypothesis that moral hazard is not only able to intervene in the policy implementation process as observed in previous studies (Lane, 2013;Zubayr, Darusman, Nugroho, & Nurrochmat, 2014  Initiation of mining activity operation by ASKS in the Kali Putih Area, which is a reconstruction and mitigation zone of TNGM. ASKS has an interest to conduct mining activities for company pro it, while PLHK aims to conserve the TNGM area.

Moral Hazard (ASKS)
• Heavy machinery activities in the National Park Area • Intervention to APMH's sand extraction activities • Providing incentive to obtain recommendation from PESDM • Intervention by using the name of a political igure to obtain collaboration agreement with PLHK Adverse Selection • PLHK's lack of knowledge/ understanding as to the extent of ASKS' relation with the political igure • Extension of the collaboration agreement between PLHK and ASKS P-P Problem We a k c o o rd i n a t i o n b e t w e e n PESDM and PLHK in relation to the maintenance and implementation of TNGM zoning policy A-A Problem Lack of willingness from ASKS to engage in collaboration with APMH in order to maintain and manage the Kali Putih Area Source: Lane (2013); Zubayr, Darusman, Nugroho, & Nurrochmat (2014).