Indonesia's forests may become history

Indonesia's forests may become history

The Jakarta Post, Jakarta

The flaw in the government's forestry policy dates back to the
1960s when the New Order government designated logging industries
as the second foreign exchange earner after the oil/gas sector
whose market was continuing to decline.

Like Julius Caesar to his loyalists, Soeharto -- who had just
been entrusted with the presidency for his success in leading a
military operation to foil a communist coup in 1965 -- granted
forest concessions to his military chums as part of his thank-you
policy.

Lacking management skill and capital, the military officers
invited foreign investors to be their counterparts. The era of
commercial logging had begun.

The government enacted a law on forestry management in 1967 on
forest concessions, which was in fact a violation of a 1960
agrarian law because it sidelined the rights of local communities
to manage their land.

The agrarian law guarantees people's rights to land ownership
and to cultivating it for their own benefit. It also protects the
economically-weak against those with large capital to prevent
exploitation of the poor in the agrarian sector, including in
forest exploitation and management.

The law also stipulates that the government manages the
forests for the benefit of the people. The law on forestry, while
preserving the rights of the people, in reality transfers the
rights to forest exploitation and management to capital owners,
who have failed to benefit the people.

Data available at Forest Watch Indonesia (FWI) and Global
Forest Watch reveal that in 1967, only four million hectares of
forests had been allocated for commercial logging. However, in
1977, the area had become seven times larger.

In the 1980s, the nationalization of logging companies led to
the establishment of forest-based conglomerates led by Soeharto's
cronies. A new regulation was issued in 1985, requiring
businesses to integrate all upstream and downstream sectors. That
was the time when forest concessionaires formed an alliance with
forest-based industries.

Among the big ten were the Kalimanis Group owned by Soeharto's
golfing-buddy Mohamad "Bob" Hasan, the Barito Pacific Group
belonging to Prajogo Pangestu and the Djajanti Group of Burhan
Uray.

In a bid to increase foreign exchange earnings, the government
imposed a log export ban in 1984. This policy marked the
beginning of the forest-based industrialization era. The boom in
forest-based industries in turn propelled log extraction to an
out-of-control proportion.

The damage that ensued is nearly inconceivable. According to a
2001 report by FWI and Global Forest Watch, between 1985 and
1997, Indonesia's forests, around 60 percent of the lowland
forests in Sumatra, Kalimantan and Sulawesi, had been devastated
by tree felling for the industry.

The boom did not last long. By the 1990s, after leading the
plywood industry for a decade, Indonesia faced tough competition
from Taiwan, Malaysia and China.

The government then established the industrial timber estates
(HTI) and large-scale plantations to support the pulp and paper
industry that has become an alternative for the plywood industry.

Demands for the industry were increasing but not compatible
with supply in raw materials. However, instead of planting trees
on their estates, the factories took their raw materials from
natural forests, including protected forests, in a bid to skip
the financially-draining procedures.

Moreover, as the country was hit by the economic crisis in
1997, conglomerates who had invested large amounts of money in
the industry failed to settle their debts. A total of 128
companies in the forestry sector have amassed Rp 21.9 trillion
(US$2.47 billion) in foreign debt, 32 percent of which is owed by
Bob Hasan's group and another 15 percent by the Djajanti Group.

However, most of the companies have continued operation
without having any concessions. They do so by buying the raw
materials from HPH owners.

Java's exploding population also forced the government to move
the people to greener, virgin regions in other islands under the
transmigration program. These settlers opened up forests and
transformed them into cultivated land.

Irresponsible and illegal logging, aggravated by uncontrolled
opening up of forests for farm land, have destroyed the
environment. The devastating annual floods, drought and forest
fires that follow have drawn criticism from the international
community, who accuse Indonesia of being the culprit in global
warming and placed the government in an unpleasant position
before the donors.

Bowing to pressure from the International Monetary Fund, the
government lifted the log-export ban in 1998. Apparently a wrong
move, since it simply encouraged illegal logging.

After the fall of Soeharto, under the pressure of the World
Bank-led Consultative Group on Indonesia (CGI), the government
established in 2000 the Interdepartmental Committee on Forestry
(IFDC) which focuses on eradicating illegal logging and forest
fires, restructuring the debt-laden forestry industries and
mapping the forest.

Environmentalists, however, maintain that the policy was
misplaced, saying the real problem lies in the overblown capacity
of the forest-based industry and the unclear policy on the rights
of tenure of the concessionaires to sustain their estates.

According to 2002 data at the Ministry of Forestry, the
official log supply was only 12 million cubic meters per year,
but the market -- for forest-based industries and domestic use --
could reach up to 51 million cubic meters per year, not including
the smuggled logs which could reach eight to 10 million cubic
meters.

Other unconfirmed data revealed that log extraction within the
last three years had reached a total of 100 million cubic meters.

Due to a lack of authority to supervise the forests, the
government has launched raids on illegal loggers, but it is
difficult to identify which logs are legal or illegal considering
that all are covered by the necessary documents.

Who then should be held responsible to the deforestation?

The Indonesian Forum for the Environment (Walhi) executive
director Longgena Ginting points the finger at businesspeople for
their lack of awareness as well as the government for issuing
policies which are vulnerable to unhealthy competition.

"The government is guilty of not providing incentives for the
businesses to promote sustainable forest-based industries," he
said. -- Tertiani Z.B. Simanjuntak