In the Sixth Five-Year Plan (1994-1999) the Government of Indonesia is starting to decentralize the management of natural resources to lower level authorities. This devolvement of management is seen in the case of forestry and irrigation but may not in fisheries. The successful system of ideal level resource management is mostly adopted from the traditional system, such as: subak irrigation in Bali, tumpangsari system in forestry, and sasi system in Mollucas for fisheries, etc. However, in fisheries the traditional system of community-based resource management is hardly legalized at the national level by the government. In fact, this community-based management system may result in better participation of local people to maintain the resource. Co- management as an approach for managing the common property resource like fisheries has been paid much attention by researchers, institutional donor and policy makers, but implementation at the national level will depend on the extent to which local laws and policies facilitate this management approach. The objectives of this study are 1) To review the legal arrangement for managing the natural resources of Indonesia (comparing forestry, irrigation, and fisheries resources), 2) To describe the traditional and existing system of community-b&sed resource: management, 3) To examine the potential for fisheries co-management under existing legal structure and policies.