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.