Forestry Ministry Revises Multi-Business Regulation to Boost Economic Benefits

The Ministry of Forestry (Kemenhut) is refining the regulation on Multi-Business Forestry (MUK) through a revision of Ministerial Regulation P.8/2021, aiming to sharpen its implementation and boost economic benefits. Director General of Sustainable Forest Management Laksmi Wijayanti stated that the revision is part of an effort to fine-tune the MUK concept to increase its success rate. “This revision also carries out fine-tuning to sharpen the MUK concept so that its level of success can be increased,” Laksmi said in a statement in Jakarta on Friday. She emphasised that forest management must deliver tangible benefits to communities to motivate all parties to preserve forest areas. Success, she noted, can be measured by reduced forest degradation, increased income from forest utilisation, and lower poverty rates around forest areas. P.8 is a derivative regulation of the Job Creation Law, further elaborated through Government Regulation Number 23 of 2021. The regulation is designed to ensure natural resource utilisation can drive economic growth, create jobs, and improve community welfare. After five years of implementation, the government considers an evaluation necessary to ensure the regulation has met its original objectives. Beyond assessing its execution, the revision is directed at addressing challenges in the forestry sector amid increasingly complex global dynamics and geopolitical changes. Laksmi explained that the revision will examine cross-cutting issues, including area boundaries, overlapping claims, distribution of benefits to communities, operational activities, investment ease, licensing, and market access. She stressed that the revision is not merely an administrative change but part of a transformation in forestry governance. “The revision of P.8 is not just revising a regulation, but changing the paradigm of forestry governance from controlling activities through procedures and bureaucracy to governance based on trust, simplification, digitalisation, and shared responsibility between the government, communities, and permit holders,” she said. Purwadi Soeprihanto, Secretary General of the Association of Indonesian Forest Concessionaires (APHI), said the spirit of P.8 aligns with the global consumer shift towards regenerative products. However, he noted that the implementation of regenerative multi-business forestry on the ground remains partial and fragmented. “Utilisation of non-timber forest products by permit holders and communities is still small-scale and not economically viable. Distribution and logistics are also problematic because products are fragmented across vast areas, resulting in high economic costs and uncompetitive products,” he explained. He proposed a landscape approach as a solution, integrating various permit holders, social forestry groups, village forests, and small industries within a single landscape to aggregate products, attract financing, and facilitate downstream processing.