New hope for Indonesia's forests

By John Keating

JAKARTA (JP): The recent meeting of the Consultative Group on Indonesia (CGI) promises to usher in a new era for the numerous, often diverse forests of Indonesia. On Tuesday, Feb. 1, the government committed itself to a new approach to managing its vast -- but rapidly dwindling -- tropical forest resource.

Like most changes in the "New Indonesia", the origin of this new approach can be traced back to the downfall of ex-president Soeharto in May 1998.

During his 32 year authoritarian rule, forest policy was aimed at maximizing the output of timber to earn as much revenue as possible. Much of this income was generated by a small group of well-connected businessmen who influenced policy and blithely ignored or sidestepped management rules and regulations.

This left the forests in a dire state and threatened to reduce Indonesia to the status of a net importer of timber within the first 15 years of the new millennium.

The transition government under ex-president B.J. Habibie began to practice a more open policy, creating the possibility of addressing many serious problems in the forestry sector. Most sector analysts were agreed that only a broad-based approach, involving all relevant government departments, industry operators, law enforcement agencies, local communities and international donors could succeed in halting the decline and building a new future for Indonesian forests.

The question was how to raise the profile of the complex sectoral challenges to a government beset by myriad difficulties in a society on the verge of national disintegration and in the grip of a devastating economic crisis.

At the same time, there was genuine international concern about the state of Indonesia's forests. This was particularly so in the European Union. European development cooperation programs in forestry make up approximately 60 percent of grant aid to the sector, representing a commitment of almost 112 million euro in grants to Indonesia.

In light of this concern, the forestry issue was raised by a number of donors at the CGI meeting in Paris in July 1999. A Memorandum on the sector, prepared jointly by the EC, Germany and the United Kingdom, was tabled at the meeting. The outcome was a proposal by the Head of the Indonesian Delegation for a high level seminar on forestry, with a report to be submitted to the next CGI meeting.

That seminar, entitled "Removing the Constraints: Post-CGI Seminar on the Forestry Sector" took place on Jan. 26, just six days before the full CGI meeting. The objective was to inform participants of the realities of the sector based on the most accurate data gained from current research. It also highlighted some promising new initiatives that show potential for addressing major problems and, most importantly, to prompt a commensurate response from the government.

Almost 200 people attended the seminar, which was opened by the Coordinating Minister for the Economy, Finance and Industry, Kwik Kian Gie. The keynote address was delivered by the Minister of Forestry and Plantation Nur Mahmudi Ismail.

Donor participation included a number of envoys from the European Union and both the Asian and Islamic Development Banks. The main sponsorship came from the World Bank.

A series of illustrations on the problems of the sector showed, among others, that:

* The rate of deforestation is increasing and has averaged 1.6 million hectares per year over the last decade;

* Recent assessments show that more than 5 million hectares of forest were damaged during the 1997/1998 fires with subsequent total costs to the region of approximately US$9 billion;

* Illegal logging continues unabated even in the "protected" national parks areas;

* some of the effects of this logging include erosion, reduced stream flows, dried-up irrigation schemes and reduced numbers of mammals;

* Forest industries consume at least twice the sustainable harvest each year; the balance is made up by illegal logging.

* The amount of corporate debt related to the forestry sector currently managed by the Indonesian Bank Restructuring Agency (IBRA) is more than US$4 billion; debt write-offs would amount to subsidies for poorly-managed companies.

* Mismanagement of forests under the current concession system has been a major factor in deforestation;

* Conflicts between local communities and forest concessionaires and estate crop plantations are widespread;

The government response to this bleak picture has been refreshingly direct and positive. According to its statement delivered at the CGI meeting on Feb. 1, a new National Forest Program (NFP) is to be formulated in a transparent and consultative manner. It will build on the results of working groups already active within the Ministry of Forestry and Plantation.

The NFP is to be developed by a new statutory body to be established within 60 days by a Presidential Decree. An Interdepartmental Committee on Forests, to be established by the Coordinating Ministry for the Economy, Finance and Industry, will overview this process.

The government also committed itself to a number of short-term actions to demonstrate its willingness to immediately tackle the most urgent issues. These include:

* Closure of illegal sawmills and coordinated action against illegal loggers, especially within national parks.

* Accelerated forest resource assessment as a basis for NFP formulation.

* Reevaluation of conversion forest policy and a moratorium on all natural forest conversion until NFP has agreed.

* Downsizing and restructuring of wood based industry to balance supply with demand for raw materials, and to increase the competitiveness of wood based industry.

* Closure of heavily-indebted wood industries under control of IBRA and linking proposed debt write-off to capacity reduction.

* Linking the reforestation program to the needs of forest industries.

* Recalculation of the real value of timber.

* Using the decentralization process as a tool to enhance sustainable forest management.

The donors, in their subsequent statements, welcomed the government initiative and expressed strong support. The EU request for a small donor forum to assist the government to implement and monitor the initiatives was endorsed by other speakers and by the Head of the Indonesian delegation, as was a suggestion for a timetable on proposed actions.

As a result of the CGI initiatives, the government, the main stakeholders and the international donor community are now united on the broad details of reform required in the forestry sector, in a way never before achieved in Indonesia. This is reflected in the strong support for the actions proposed at the CGI meeting.

A high-level political commitment now exists for a new approach to the management of Indonesia's forest resources, within the context of a new National Forest Program.

Progress on this and on the promised short-term actions will test the government's willingness and its capacity to tackle the complex problems involved. Further, the views of the many stakeholders in the sector, especially those of local communities and the outputs of donor-assisted development cooperation projects can finally begin to have a tangible impact on the sector and to reach the decision makers who will formulate future forestry policy in Indonesia.

The author is Director of the EU-Indonesia Forest Liaison Bureau and was a core member of the organizing committee for the forestry seminar. The views expressed in this article are his own and do not necessarily reflect those of the European Commission or the Indonesian government.