Winds of change blowing to RI forests

Winds of change blowing to RI forests

By Hidayat Jati

JAKARTA (JP): Indonesia's much-exploited rain forests, after
one month of being punished with raging fires, and years of
heated criticism, may soon experience a wind of change. Special
interests, an impoverished population and lack of resources might
stand in the way.

Change is needed now more than ever. More than 80,000 hectares
of forests in Kalimantan and Sumatra have been burned this year,
sending air pollution and a thick haze to neighboring Malaysia
and Singapore as well as costing Indonesia Rp 34 billion (US$15.4
million) in financial losses.

The fires are probably just a symptom of Indonesia's abused
forests.

Blunt criticisms, aired by environmentalists and donor
agencies, have persistently followed the country's forestry
development program, which began in the late 1960's.

The World Bank, contributing 10 percent of the Indonesian
government's foreign borrowing, stated in its July report that
the "current logging activity is above sustainable levels."

The bank's report also cited that Indonesia has destroyed 35
million hectares of its forests, currently estimated at 109
million hectares.

This proportion becomes more worrisome if one bears in mind
that only 60 million hectares of forests are considered as having
some production potential, 20 million hectares of which are
expected to be converted for other uses over the next two or
three decades.

Alastair Fraser, a senior official of the United Kingdom-
Indonesia Tropical Forest Management Project, illustrated what
the bank meant by revealing Indonesia annually cuts down 40
million cubic meters of its forests, 10 million cubic meters more
than officially allowed, and replants only five million cubic
meters each year.

"This shows it is the time for a change, now," he said to The
Jakarta Post in a recent interview.

Many environment groups doubt whether any changes in the
forestry policy can be carried out, due to the powerful lobbying
of timber industry businessmen, who have close political ties
with either the military or bureaucracy.

More important than the lobbying factor, the timber industry
does contribute significantly to the nation's economy. Indonesia
last year exported wood products worth US$5.5 billion, 15 percent
of the country's total exports.

Doubt

An activist from the Network of Forest Conversion of Indonesia
(Skephi) expressed his doubt by reflecting on the disjointed
official reactions to the recent forest fire: "Look at this, it
was only the Minister of Environment and the NGOs (non-
governmental organizations), who refused to blame small farmers
for the recent forest fires and, instead, pointed to the
concessionaires as the culprits.

"The forestry ministry, on the other hand, chose to adopt data
which stated otherwise," he said, adding that forestry officials
often lack real power to implement regulations.

"The government always blames either nature or the poor
farmers and indigenous tribes, who do not have alternative
incomes, for starting the fires by slashing and burning forests,"
he added.

Even the activist was prepared to acknowledge the wind of
change might finally be coming.

Minister of Forestry Djamaludin Suryohadikusumo showed his
might by announcing last month that the government, which plans
to change the forest-concessions system, has passed tougher laws
and enforcement on illegal logging and promised to adopt a better
forestry-accounting method to boost government levies from the
industry.

Proving his seriousness, Djamaludin even went as far as taking
over a 49 percent stake in 28 concessions to guarantee forest
management, and canceling a few others.

The concessions taken over included two controlled by
influential tycoon Prajogo Pangestu who, besides controlling one
of the biggest listed companies in Indonesia, also has business
interests with politically related parties.

The minister also said last month, for the first time ever,
that the Ministry of Forestry will include non-governmental
organizations to resolve disputes arising from timber companies'
takeovers of logging areas occupied by farmers.

Ambition

Djamaludin's bravest and most ambitious move is, of course,
his target to merge 195 timber concessions, presently organized
under the HPH system, (old concession system) into a smaller
number in the coming five years under a new management system
aimed at assuring the sustainability of Indonesian forests.

Djamaludin stated last month that he plans to change the soon-
to-expire 195 HPH concessions into the new, larger units called
KPHP (new concession system) by 1999.

"In 25 years, we expect that all HPH concessions on islands
other than Java will be converted into KPHPs," the minister said.

There are currently 500 HPH concessions, ranging in size from
20,000 hectares to two million hectares, which operate under 20-
year licenses. In theory, all concessionaires are subject to
strict rules on selective cutting and reforestation. Total
government levies on the concessionaires are about $23 per cubic
meter.

Fraser, who always speaks with diplomatic tact, said the HPHs
face several inherent problems. First, the license is only valid
for 20 years while the ideal, sustainable timber production cycle
is about 35 years. Second, the HPH system lacks both precision
and the consensus (between timber firms and indigenous
communities) on the actual boundaries of forest land.

Fraser, who helped the government design the new plan, is
confident that the KPHP system -- he calls it a "win-win scheme"
-- will be able to cure most of those ills.

"It is now time to change. I'm confident that Indonesia will
have a sustainable timber industry as well as sustainable natural
forests," he said.

A KPHP concession, in contrast to the HPH, is designed to be a
permanent production forest with an average area of 100,000
hectares and will be managed on a long-term basis by a permanent
manager. No part of the KPHP might be cleared for other
businesses.

The new system aims to facilitate a more predictable degree of
forest sustainability by keeping the total growing stock constant
and by maintaining a fixed concession area.

This means that previously logged areas can recover without
being interrupted by premature secondary logging, which often
happens now, Fraser said.

He indicated, for example, that this has not been done under
the HPH system, especially in the case of the plywood industry,
which usually uses Meranti trees in the production but replants
other tree species which are more relevant for the pulp and paper
industry.

"This is not what we mean by sustainable forest management,"
he said, adding that the plywood industry has been "most
cooperative" in the development of the new scheme.

He also explained because KPHP is territorial-based, its
implementation will practically force mergers among neighboring
concessions.

The mergers, although their procedures are yet to be decided,
are meant to maintain timber companies' concessions they have
gained under the HPH system.

Fraser also said KPHP will mobilize the local community to
help guard boundaries, although how this is to be conducted is
still unclear.

Basically, the entire KPHP plan rests on when specific
boundaries between concessions can be determined.

Two KPHP pilot projects, one in Central Kalimantan and the
other in Jambi, have been carried out since 1992.

The concessionaires have welcomed the new idea, but with
caution.

"It is a good idea but a lot things are still unclear. The
KPHP must elaborate on the merger procedures and its possible
implications on risk, revenue and profit sharing," said Tjipto
Wignjoprajitno, the secretary general of the Indonesian Forestry
Society (MPI).

The concessionaires are involved in the steering committee of
the Ministry of Forestry's program to set the boundaries between
the concessions, as a preparation for the KPHP system, Fraser
said.

Accounting

The other significant change that will most likely take place
next year in the forestry industry is the new accounting method
presently being developed by the United Kingdom-Indonesia
Tropical Forest Management Project and the Association of
Indonesian Accountants.

Fraser said the method will help the government raise its
economic rents (levies) from the timber industry
without harming it too much.

The biggest problem in achieving the new system concerns the
abnormal domestic log market which is isolated from the world
market, Fraser said.

Indonesia has effectively banned log exports by placing
prohibitive export taxes since 1985, a move resulting in low
domestic prices which directly benefited the plywood industry.

The log protection has encouraged wasteful log use and
abnormally low government revenues from the timber industry,
Fraser said.

In addition, he said, the absence of a large domestic log
market makes the estimation of the real value of round wood
"contentious".

The planned accounting system, said Fraser, will encourage
transparent and uniform book keeping of timber companies from
which the government can infer to increase its levies as well as
the reforestation efforts of the companies.

Fraser is realistic in noting that the planned accounting
system, or any other new regulations for that matter, will
guarantee better enforcement and an end of the collusion between
timber firms and officials.

Vested interest, poor infrastructure, human resource problems
and the sheer size of the country tend to hinder effective
enforcement of forestry regulations, he said.

"We all know enforcement is a big problem here," he said with
a knowing smile.