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