Indonesia has the broadest area of tropical peatland in the world—about 47% of tropical peatlands in the world exists within Inonesian territory. However, in recent years, the development of oil palm and acacia plantations accompanied with large scale drainages have changed peat swamps into degraded and dried peatlands. The degraded and dried peatland is extremely vulnerable to fire. The Indonesian Government has sought to develop policies to curb the peatland fires and rehabilitate the degraded peatland, but these policies have been challenged by various stakeholders such as companies, NGOs and local politicians.The main purpose of this research is to explore the development process of the public policies and institutions that can accommodate these challenges while accomplishing the target to rehabilitate the peatlands along with the development of local economies. For this purpose, I try to identify the problems that have arisen through the implementation of national policies and then analyze the problems from the perspective of local government based on field experience in Bengkalis district comparing them with ones in other countries. This study is also expected to be a reference for various groups to understand peatland management in Indonesia.

Keywords: 1. Peatland Management 2. Public Policy 3. Rehabilitation 4. Peatland Fire 5. Rural Development