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THE STATE OF THE FOREST

INDONESIA PERIOD OF 2009 - 2013

Forest Watch Indonesia

THE STATE OF THE FOREST INDONESIA, PERIOD OF 2009-2013

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INDONESIAPERIOD OF 2009-2013

Forest Watch IndonesiaJl. Sempur Kaler No. 62 Bogor INDONESIA Tel: +62 251 8333308, Fax: +62 251 8317926 Email: [email protected] : @fwindonesiaFacebook: Pemantau HutanWebsite: www.fwi.or.id


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INDONESIAPERIOD OF 2009-2013

Writer team: Christian P.P Purba,Soelthon Gussetya Nanggara,Markus Ratriyono,Isnenti Apriani,Linda Rosalina,Nike Arya Sari,Abu Hasan Meridian

Reviewer: Hariadi Kartodihardjo, Belinda Arunarwati Margono, Ridzki Rinanto Sigit

Data Collector, Data Analyzer, and Cartographer: Gamin Lampor, Isnenti Apriani, Markus Ratriyono, Soelthon Gussetya Nanggara

Editor: Ambrosius Ruwindrijarto, Markus Ratriyono

Layout: Wishnu Tirta Setiadi

©Forest Watch Indonesia All rights reserved published in 2014

ISBN 978-979-96730-2-2 Published by: Forest Watch Indonesia [email protected]+62 251 8333308www.fwi.or.id

Acknowledgement:The views in this publication are not representing the views of UK AID, the United Kingdom Government, and The Asia Foundation


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Table of Contents List of Figures List of Tables List of BoxesList of Appendix Thank-You NoteForewordThe Main Points of Findings1. Preface2. The State of Indonesia’ Forests

2.1. Natural Forest Cover2.1.1. The Condition of Natural Forest Cover in Forest Function Area2.1.2. The Condition of Natural Forest Cover in Concession Area2.1.3. The Condition of Natural Forest Cover in Peatlands Area

2.2. The Loss of Natural Forest Cover (Deforestation) 2.2.1. The Loss of Natural Forest Cover in Forest Function Area2.2.2. The Loss of Natural Forest Cover in Concession Area2.2.3. The Loss of Natural Forest Cover in Peatlands Area2.2.4. The Loss of Natural Forest Cover in Moratorium on New License (PIPIB) Area

3. The State of Forest Governance3.1. Land Clearing and Harvesting the Natural Forest Timber3.2. Policies of the Government of Indonesia and Abuse of Authority3.3. Tackling Deforestation3.4. Impact of Deforestation

4. Save the Indonesia’s Forest4.1. Rate and Projections of Forest Loss4.2. Recommendation on Forest Management in the Future

GlossaryBibliographyAppendix

Table of Contents

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Figure 1. Map of Natural Forest Cover Distribution across Indonesia in 2013

Figure 2. Percentage of Total Area of Natural Forest Compared to Land Area in 2013

Figure 3. Percentage of Total Area of Natural Forest in Each Island Compared to Natural Forest in Indonesia in 2013

Figure 4. Distribution of State Forest Area Based on the Function on 2013

Figure 5. Total of Forest Cover based on the Forest Function and Forest for Other Land Use in 2011 (thousands of hectares)

Figure 6. Total of Natural Forest Cover based on Forest Function and Forest for Other Land Use in 2013 (millions of hectares)

Figure 7. The Condition of Natural Forest Cover in State Forest and Forest for Other Land Use in 2013

Figure 8. Distribution of Natural Forest Cover Inside and Outside the Concession Area

Figure 9. Total Area of Peatlands and Natural Forest CoverFigure 10. Deforestation in Indonesia during the Period of 1990-2012Figure 11. Total Area Comparison of Natural Forest Cover in 2009 and

2013Figure 12. Deforestation Caused by the Development of Plantation and

Industrial Forest Plantation in East Kalimantan during the Period of 2009-2013

Figure 13. Forest Cover in Peatlands Area with Management LicenseFigure 14. The Condition of Forest and Peatlands Area inside the Indicative

Area of PIPIB the Third Revision VersionFigure 15. Linkages between the Forest Governance Index and

Deforestation in Five DistrictsFigure 16. Development of Total Unit and IUPHHK-HA Concession Areas

during 1999 – 2013Figure 17. Development of Total Units and Plantation Forest Timber

Production Permit (IUPHHK-HT) Concession in 1990-2013Figure 18. Forestry Benefit Sharing Fund Compared to Regional Income in

Three Districts Period of 2010-2013Figure 19. Distribution Map of Industrial Plantation Forest Concession in

2013

List of Figures

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Figure 20. Development of Palm Oil Plantation Total Areas in Indonesia during 2004-2013

Figure 21. Forest Area Release in the Period of 2010-2013 in each of the Main Island

Figure 22. The Cause of Illegal Logging, A Study Case in IndonesiaFigure 23. Timber Smuggling Inside the Containers Figure 24. Harbor of Nickel Ore Storage PT Gema Ripah Pratama in Tomori

Bay, inside the Morowali Conservation Areas, Central SulawesiFigure 25. Abandoned Mining Holes of PT Gema Ripah Pratama in

Morowali Conservation AreasFigure 26. Permit to Borrow, Utilize and Exploitation Mining and Non-

Mining in the Period of 2008-2012Figure 27. Change on Forest Function in the Period of 2008-2012Figure 28. Correlation between Deforestation Rate and Corruption Year in

2006Figure 29. Trend of Pulp and Paper Export in the Period of 2009-2013Figure 30. Map of Moratorium Fifth Revision in Aru Archipelago DistrictFigure 31. Total of Agrarian Conflict in 2013Figure 32. Total of Cases of Stakeholders Involved in Conflicts in the Period

of 1990-2010Figure 33. Frequency of Natural Disaster Each Year in the Period of 2000-

2014Figure 34. Frequency of Natural Disaster based on the Types From 2000 to

2013Figure 35. Projections of Natural Forest Cover in Indonesia for the Next

Three Decades

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65707879

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Table 1. The Condition of Indonesia’s Natural Forest Cover in 2009 and 2013

Table 2. Natural Forest Cover inside the Forest Utilization and Use Area in 2013

Table 3. Deforestation based on Forest Function and Forest for Other Land Use in Indonesia in 2011-2012

Table 4. Deforestation in Indonesia Period of 2009-2013

Table 5. The State of Natural Forest in Merauke District in 2013

Table 6. Changes and Loss of Natural Forest Cover in State Forest Area and Forest for Other Land Use in 2009 -2013

Table 7. Loss of Natural Forest in Peatlands Area

Table 8. The Condition of Natural Forest Cover Inside and Outside the Moratorium on New Licenses Area in 2013

Table 9. Total of Natural Forest Cover in 2009, Natural Forest Cover in 2013, and Deforestation in 2009-2013 inside the Concession Area

Table 10. Plan and Realization of Industrial Plantation Forest (HTI) Harvest in 2010-2013

Table 11. Total of HTI Working Units, Total of HTI Working Areas, and Total of Certified HTI (SVLK) in 2012

Table 12. Recapitulation of Log Production across Indonesia based on Production Source in 2004-2012

Table 13. Data of Timber Production Realization from Land Clearing as Preparation of HTI Cultivation in 2010-2013

Table 14. Total of HTI Cultivation Areas and Accumulative Cultivation in 2003-2013

Table 15. Total Areas and Total Plantation Concessions inside the State Forest in 2009

Table 16. Results of Sustainable Forest Operation in 2001-2010

List of Tables

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Table 17. Area Release for Plantation and Transmigration during the Period of 2010-2013

Table 18. Corruption and Forestry Crime Cases in Indonesia

Table 19. Development of Investment, and Total of Downstream Industry of Forest Product in Indonesia during the Period of 2010-2012

Table 20. Development of Capacity, Production, and Export of Forest Product Downstream Industry in Indonesia during the Period of 2010-2012

Table 21. Investment Plan of Pulp Industry Development

Table 22. Percentage of Conflict based on the Type of Activities during the Period of 1990-2010

Table 23. Frequency Comparison of Landslide, Flood, and Drought in 2009-2013 with the Natural Forest Cover in 2009-2013

Table 24. Projections of the State of Natural Forest Cover based on the Island up until 2043

Table 25. Projections of Natural Forest Cover outside the Protected Forest and Conservation Areas in 2028

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Box 1. Generation of Natural Forest Cover Data in 2013

Box 2. Diversity of Initiatives to Renew the Forest Cover Data and the Difficulties Encountered

Box 3. Deforestation in Merauke District, Papua

Box 4. Encroachment and Fire that Rife in Tesso Nilo National Park

Box 5. Exposing the Practices of the Forestry Mafia

Box 6. Moratorium on New Permits in Central Kalimantan Province

Box 7. Linkages between the Loss of Natural Forest with the Forestry Governance Index

Box 8. Industrial Plantation Forest in Riau

Box 9. Labora Sitorus Case

Box 10. Nickel Mining in Morowali Conservation Area

Box 11. Regulations on Fire Prevention in the Plantation Sector

Box 12. Lease of Forest Area for Mining

Box 13. Bribe in Forest Conversion

Box 14. Pulp and Paper Industry in Indonesia

Box 15. The President Must Intervene to Protect the Forest Ecosystem of Aru Archipelago

Box 16. Species that Heavily Affected by the Mining Activities

Box 17. The Threshold of Forest Loss

List of Boxes

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Appendix 1. Natural Forest Cover and Deforestation in Each Province

Appendix 2. Natural Forest Cover and Deforestation outside the Protected Areas

Appendix 3. Natural Forest Cover and Deforestation in PIPIB Area

Appendix 4. Natural Forest Cover, Deforestation, Concession and Peatlands in PIPIB Area

Appendix 5. Natural Forest Cover in Concession Area

Appendix 6. Deforestation inside the Concession Area

Appendix 7. Natural Forest Cover in Peatlands and Concession Area

Appendix 8. Natural Forest Cover in Each Forest Function Area

Appendix 9. Natural Forest with and without Management Permits

Appendix 10. Natural Forest outside the Conservation Area with and without Management Permits

Appendix 11. Projections of Natural Forest Cover Loss in Indonesia

Appendix 12. Indicative Map of PPIB Revision and Distribution of Natural Forest in 2013

Appendix 13. Map of Distribution of Natural Forest Loss during the Period of 2009-2013

List of Appendix

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Forest Watch Indonesia would like to thank the ladies and gentlemen, and partners who gave much support, contributions, and inputs in the whole of the writing processes of this The State of the Forest Indonesia: Period of 2009-2013 book. The long process of writing this book, including a series of discussions

and writing workshop, internal review, external review, expert review, and the finalization process.

We would like to express our appreciation and gratitude for the inputs, data and information supports given in the external review meeting to: Directorate of Inventory and Forest Resources Monitoring: Gitri Prawidjiwuri; the Association of Indonesian Forest Concessionaires (APHI): Herman Prayudi; Directorate General of Plantation: Arifin Pangaribuan; Directorate General of Mineral and Coal: Antonius A.S.; National Development Planning Agency: Basah Hernowo; and the Forest Policy and Climate Change Center: Sudarmalik.

Our appreciation and gratitude for the article contributors, Mining Advocacy Network: Andrie Wijaya; Faculty of Forestry Bogor Agricultural University: Bramasto Nugroho and Gamin Gessa; Indigenous Peoples Alliance of the Archipelago: Farid Wadji; Greenpeace Indonesia: Wirendro Sumargo; Indonesian Center for Environmental Law (ICEL): Citra Hartati; Association for Legal Reform, Community, and Ecology: Andiko Sutan Mancayo; Indonesian Forum for Budget Transparency (Seknas FITRA): Hadi Prayitno; South Sumatera :Deddy Permana; and Rainforest Norway: Giorgio Budi Indrarto.

Thank you for the active participation, thoughts, and input from Mongabay Indonesia: Ridzki Rinanto Sigit; Greenpeace Indonesia: Yuyun Indradi; Faculty of Forestry Bogor Agricultural University: Togu Manurung; Indigenous Peoples Alliance of the Archipelago: Abdon Nababan; West Kalimantan Sampan Foundation: Baruni Hendri; East Kalimantan Mining Advocacy Network: Sarah Agustio; The Asia Foundation: Ridwan; Bambang Tetuka; Martin Hardiono; and Lisken Situmorang.

Thank you for the support from The Asia Foundation in publishing this book. In the end, thank you to all those of you who have helped the processes of making of this book that we could not mention one by one.

Thank You Note


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Indonesia has the largest tropical forest in the world, rich forest resources, and biodiversity. For all of this time, the rich and diverse tropical forests have been utilized directly and indirectly, to fulfill the human needs, society and Indonesia as a state. Utilization of Indonesia’s forest, especially to meet the market demand,

has caused the loss of total forest cover (deforestation). During the period of 2009-2013, the average rate of deforestation is 1, 13 million hectares per year. This high rate of deforestation had affected the increase of greenhouse gases (GHG), prone to disaster, extinction of endangered animals and their habitats, and conflict between several stakeholders.

This report is a mean to get figure of state and changes on forest cover in Indonesia during the period of 2009-2013, rate and projections of forest loss in the future, and performance of the actors in the forestry sector in forest management and its impact on forest loss. This report is the third State of Indonesia’s Forests after the second edition have been published in 2011, and the first one in 2001.

We are looking forward for you, our reader’s suggestions and critics, in order to refine this State of Indonesia’s Forest in the future.

Christian P.P. Purba

Executive Director, Forest Watch Indonesia

Foreword


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1. In 2013, total of land in Indonesia that still covered by natural forest is 82 million hectares. Seventy five percent of it is located in Papua and Kalimantan.

2. In 2013, the total of natural forest cover sequentially are: Papua 29,4 million hectares, Kalimantan 26,6 million hectares, Sumatera 11, 4 million hectares, Sulawesi 8,9 million hectares, Maluku 4,3 million hectares, Bali and Nusa Tenggara 1,1 million hectares, and Java 675 thousand hectares.

3. In 2013, from a total of Maluku land, 57 percent of it is still natural forest. A total of Maluku’s forest only contribute 5 percent of total of Indonesia’s forest. It turns out that the geographic condition and the vulnerability of the area due to the conversion activities in one island, especially in small islands, is not an important consideration in determining the projections on forest management policies.

4. In 2013, around 78 million hectares or 63 percent of total of State Forest Area still in the form of natural forest.

5. The largest forest cover is in the Protected Forest Areas, with a total of 22, 9 million hectares or 28 percent of total natural forest covers in Indonesia.

6. Up until 2013, around 44 million hectares or 25 percent of total land in Indonesia had been have land management permits in the forms of Natural Forest Timber Production Permit (IUPHHK-HA), Plantation Forest Timber Production Permit (IUPHHK-HT), palm oil plantation, and also mining.

7. The condition of natural forest cover inside the concession of IUPHHK-HA is 11 million hectares, 1,5 million hectares for IUPHHK-HT, plantation concession in total of 1,5 million hectares, and 10 million hectares for mining.

8. We found that 14, 7 million hectares of overlapping land utilization area between IUPHHK-HA, IUPHHK-HT, palm oil plantation, and mining.

9. We found that around 7 million hectares of natural forest cover are located in that overlapping land utilization area between IUPHHK-HA, IUPHHK-HT, palm oil plantation, and mining.

10. In 2013, based on its function the State Forest and Forest for Other Land Use, we found that from 51 million hectares of natural forest cover without any permits on it, around 37 percent of it located in the Protected Area, 19 percent located in Conservation Area, 15 percent in the Production Forest Area, 12 percent in Limited Production Forest Area, and 5 percent in Forest for Other Land Use.

11. Up until 2013, there are 41 million hectares of natural forest cover located in Protected Forest, Production Forest, and Forest for Other Land Use areas that haven’t have the institutions as the responsible authorities to manage the area at the site.

The Main Points of Findings


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12. Around 73 million hectares of natural forest cover in Indonesia are threatened by the bigger destruction in the future caused by logging activities and planned land conversion, open access to land, and the absence of authority as the manager in the field.

13. Based on FWI’ analyses, the loss of natural forest cover (deforestation) in Indonesia in the period of 2009-2013 is around 4,50 million hectares and the rate of deforestation in Indonesia is 1,13 million hectares per year.

14. The biggest loss of natural forest cover (deforestation) during the period of 2009-2013 based on the province, sequentially are as follows: Riau Province 690 thousand hectares, Central Kalimantan 619 thousand hectares, Papua 490 thousand hectares, East Kalimantan 448 thousand hectares, and West Kalimantan 426 thousand hectares.

15 The biggest loss of natural forest cover (deforestation) during the period of 2009-2013 based on the function of State Forest Area and Forest for Other Land Use, sequentially are as follows: Production Forest Area with total deforestation of 1,28 million hectares, Forest for Other Land Use 1,12 million hectares, Production Forest Area that Can Be Converted 0,78 million hectares, Limited Production Forest Area 0,7 million hectares, Protected Forest Area 0,48 million hectares and Conservation Area 0,23 million hectares.

16 Based on FWI’s analyses on the interpretation of satellite images in Indonesia showed that the loss of natural forest cover (deforestation) in the peatlands during the period of 2009-2013 is 1,1 million hectares. This figure is more than a quarter of total loss of natural forest cover throughout Indonesia.

17 The biggest loss of natural forest cover (deforestation) in peatlands during the period of 2009-2013 is in Riau Province with a total of 500 thousand hectares.

18 The loss of natural forest cover (deforestation) during the period of 2009-2013 based on the area with permits on forest and land management (Forest Management Permit/ HPH, Industrial Plantation Forest/ HTI, Plantation, and Mining) is 2, 3 million hectares. While the deforestation that happened in the area without permits is 2, 2 million hectares.

19 The loss of natural forest cover (deforestation) during the period of 2009-2013 in the HPH concession is 276, 9 thousand hectares, where 152, 8 thousand hectares among it is the loss of natural forest cover inside the HPH concessions in Kalimantan Island.

20 Up until 2013, there are 22, 8 million hectares of Production Forest Area that utilized by 272 management units of IUPHHK-HA or HPH that have definitive permit. From all those IUPHHK-HA management units, only 115 that are still active.

21 Since the Timber Legality Assurance System (SVLK) implemented in 2009, up until June 2014, there are 112 IUPHHK-HA management units that have submitted a request for Sustainable Production Forest Management (PHPL) certification, and only 92 management units that managed total area of 10 million hectares already got the Certificate of Sustainable Production Forest Management (S-PHPL). While for the certification of Timber Legality, there are 25 IUPHHK-HA management units that submitted request, and only 22 units that already got the Timber Legality Certificate (S-LK).


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22 The loss of natural forest cover (deforestation) during the period of 2009-2013 inside the IUPHHK-HT or HTI concession is 453, 1 thousand hectares, with the 366,2 thousand hectares of it are located inside the HTI concessions in Sumatera Island.

23 From around 10 million hectares total of IUPHHK-HT or HTI in Indonesia, 4, 5 million hectares of it is located in Sumatera Island (110 management units) and 4, 5 million hectares in Kalimantan Island (105 management units).

24 Up until 2012, from 234 definitive IUPHHK-HT management units, only 53 management units or only 23 percent that already got the Timber Legality Certificate (S-LK).

25 Up until June 2013, from a total of 234 IUPHHK-HT management units, only 44 units that already PHPL certified, and 58 units already Timber Legality certified.

26 The timber supply from the plantation forest in 2012 is 26, 12 million m3 or around 53 percent of total national timber production in that same year.

27 The loss of natural forest cover (deforestation) during the period of 2009-2013 in the palm oil concession is 515,9 thousand hectares, with 327,5 thousand hectares of it are located in the palm oil concessions in Kalimantan Island.

28 West Kalimantan is the province with the biggest loss of natural forest cover (deforestation) in the palm oil concessions, with a total area of 147, 6 thousand hectares.

29 There are around 44,3 million hectares area with natural forest in the Conservation Area, Protected Forest, Peatlands, and Primary Forests that are included in the policy of moratorium on new license (PPIB).

30 The case of the Aru Archipelago in Maluku Province is a mirror of the weakness of moratorium on new license policy. The permit for sugarcane plantation with total of 67 thousand hectares area given above the area with natural forest in Aru Archipelago that included in the PPIB area.

31 There are 14 IUPHHK-HT (HTI) companies that involved in corruption cases, three of it is the companies that have Sustainable Production Forest Management Certificate and the other eight are companies that have Timber Legality Certificate.

32 During the period of 1990-2010 there are 2.585 conflict cases in 27 provinces in Indonesia that involving indigenous/local communities. From the total of those conflict cases, 1.065 cases are conflict cases in the forestry sector and 563 cases in the plantation sector.

33 With the same rate of loss of natural forest cover (deforestation), then it is estimated that in 2023, the natural forest in several provinces, including in Sumatera such as Riau, Riau Archipelago, Jambi, and South Sumatera, will be gone.


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1 PREFACE

Based on the United Nations Development Programme (UNDP) report in 2008, Indonesia ranks in 14th as highest greenhouse gases (GHG) emitter countries in the world. In that report, it is also stated that in the forestry sector, carbon

emission released caused by deforestation reach 80%, while the rest of 20% caused by forest degradation.

In the study by the Ministry of Environment (2009), it is also predicted that the GHG in Indonesia will still increase from 1,72 gig tons of CO2e in 2000 to 2,95 gig tons of CO2e in 2020.

Facing the world’s attention on GHG from the forestry sector and the geographic position of Indonesia that is vulnerable to climate change impact, the Government of Indonesia (GoI) issues a Presidential Regulation (Perpres) no. 61/ 2011 on National Action Plan to Reduce Greenhouse Gases Emission (RAN-GRK) 2010-2020. This regulation is a follow up action from the GoI’ commitment at the G-20 meeting in Pittsburg to reduce Indonesia’ GHG in total of 26-41 percent. In the action plan, it is stated that 88 percent of total GHG emissions that will be decreased by the GoI is from the forestry sector.1

The estimation of the increase of GHG emissions can be understood if we refer to the trend of high deforestation rates. In The State of The Forest Indonesia: Period of 1996-2000, it is stated that the rates of deforestation in Indonesia reached 2 million hectares per year (FWI & GFW, 2001). In the next ten years, the rates of deforestation reach 1,5 million hectares per year (FWI, 2011), and in this The State of The Forest Indonesia Period of 2009-2013, it is found that the rates of deforestation reach 1,1 million hectares per year (FWI, 2014).

The high rate of deforestation is caused by the governance that is not improving (FWI, 2014).2 Four indirect causes of deforestation and forest degradation in Indonesia are: (a) ineffective spatial planning, (b) problems related to land tenure; (c) inefficient and ineffective governance in the forestry sector; and (d) weak law enforcement and rampant corruption cases in forestry and land sectors (UNDP, 2013).3 In The State of The Forest Indonesia 2001, it is stated that the high deforestation caused by the government’s policies, especially on national timber production. On the other hand, the high rates of deforestation remain high because of corrupt political and economic system. It considers the natural resources, especially forests, as an income

1 Academic Paper National Action Plan on Greenhouse Gases Emissions Reduction 2010-20202 FWI, Fact Sheet. Deforestation: Bad Portrait of Forest Governance in South Sumatera, West and East Kalimantan, 20143 UNDP, 2013. Index of Forest, Land, and REDD+ Governance in Indonesia.


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resource that can be exploited for the political and personal interest.4 The same thing also presented by National Development Planning Agency (BAPPENAS) in 2010. It is stated in the analyses that bad governance, the spatial planning between national and local government that is not in line, uncertainty on right to tenure, and the lack of capacity (including weak law enforcement) on forest management, is the fundamental problems in forestry governance in Indonesia.5

Good forests governance characterized by transparency that can fulfill the public’s needs on proper and accurate information, substantial and significant communities’ participation in planning to monitor the processes, high accountability , and efficient and effective coordination among stakeholders in each decision making process. Good forests governance is sustainable, inclusive, and transparent forest management. Forests governance will determine the success of the government’s efforts to reduce the GHG emissions from the forestry sector.

The availability of accurate forestry data and information is one of the important factors as a prove of the government’s accountability. Information and data not only needed by the policymakers to make decision in forest management, but also as the link of communities’ interest in their control and monitoring function.

Forest management as a part of forest governance is dynamic and recur processes. Through this process, every management policy and its implementation, always must receive input if the direction of the forest management deviates from the initial objective. Inputs and evaluation only would be received if the accurate and proper forestry information and data are available, in order to have continuous monitoring.

FWI at A Glance and the Need for Alternative Forestry Information Package

Forest Watch Indonesia (FWI) founded because there is a need to change the provision of a system of information on forest status in Indonesia. Therefore, the communities can be actively participating in the monitoring and management processes. Fair and sustainable forest management could only be achieved if the communities actively and constructively involved in the monitoring processes and forest management. Sufficient and available information is the precondition of participation process.

Though the Law no. 14 year 2008 on Public Information Transparency already passed and several institutions of data/information custodian already relatively open by developing a system and division on information services, but in reality, FWI still found that even when the data/information is available, it doesn’t meet the quality standards and more often the communities still difficult or even impossible to access the data/information.

As an organization that monitors forest, FWI has visions towards the inclusive management process of forestry information and data in Indonesia that can ensure the fair and sustainable forest resources management.

FWI as a civil society organization, has a mission to encourage the acceleration process of democratization of forest resources management in Indonesia. This

4 FWI&GFW, The State of Indonesia’s Forest, 20005 Indonesian Climate Change Sectoral Roadmap (ICCSR) Summary Report Forestry Sector, page. 2 (BAPPENAS, 2010)


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mission will be achieved through a transparent process of data/information on recent forest condition, and independent and decentralized forest monitoring across the areas in Indonesia. FWI provides an alternative platform for forestry data/information exchange that useful in the planning and decision making processes. This alternative space is expected to encourage the public, especially the civil society organizations to be actively involved in a constructive way in political processes that related to the forest resources management.

In order to provide this alternative platform for forestry/data information, as the pioneer in the effort to accelerate the transparency of forestry data/information in Indonesia, FWI published this The State of The Forest Indonesia book. The important function of this book is as the reference and consideration materials in decision-making processes related to the forest management in Indonesia.

The State of The Forest Indonesia Period of 2009-2013: An Alternative Forestry Data and Information

This book contains alternative forestry data and information that was being developed based on the comprehensive analyses and review, in relation to:

1. The State of Indonesia’s Forest, consist of review of data and analyses by FWI related to the natural forest cover in 2013 and the change on forest cover during the period of 2009-2013. Data and information presented based on the island, Administrative Area, Function of Forest Area, Utilization and Usage of Forest Area and Peatlands.

2. The State of Indonesia’s Forest, consist of more in-depth analyses related to the cause of the loss of natural forest cover (deforestation): land clearing and logging, inconsistency of government’s policies, and the misuse of authorities related to the forest utilization. The effort or policies intended to face defor-estation threat and impact of deforestation in Indonesia are presented in this chapter..

3. Save Indonesia’s Forest, consist of review on projections of the conditions of natural forest cover in Indonesia in the future and recommendation on fair and sustainable forest management in Indonesia.


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Forest is strategic natural resources, therefore forest must be managed in a sustainable way in order to give as much as advantages to the Indonesian, just as stated in the 1945 Constitution. Preconditions for the green and sustainable

forest management are not apart from the needs of complete, trustworthy, and recent data and information. One of the information needed is the condition of forest cover and land use. This information is the foundation to plan, use, and evaluate the forest management, which can ensure the forest sustainability and increase the people’s welfare.

The Ministry of Forestry as the institution who provide official forestry data stated that the weakness in governance has caused the forest cover in Indonesia decreased. In 2004, the total forest cover is estimated around 94 million hectares or 50% of the total land in Indonesia6 and keep decreasing into 90 million hectares in 2012.7 While in 2007, the Ministry of Environment conducted interpretation of Landsat-7 ETM+ satellite images, and showed that the forest cover in all islands in Indonesia decreased into around 83 million hectares.8

Through mapping of forest/land cover in Indonesia started in 1990s by at that time, the Ministry of Transmigration through the Regional Physical Planning Program for Transmigration (RePPProT). The data that used to map the forest cover obtained from various sources, started from the aerial photos to satellite image (Landsat MSS) the initial recording from 1980s to 1985. This mapping product is considered as some-thing phenomenal because for the first time, the whole islands Indonesia mapped consistently. The next national mapping was done by at that time the Ministry of Forestry through the National Forest Inventory (NFI) project, and were using the sat-ellite image period of 1980 to 1990s. After that period, several stakeholders started to develop mapping to get the figure of forest condition in Indonesia. Started from the government institutions, international agencies, academic institution, and civil society organization (CSO) produce analyses and calculation based on the available data that they have, and often use the different methodology as well (Box 2).

It turns out that the availability of forest/land cover map that portray the condition of land/forest from year to year, is not simplifying the process of data comparison. As an individual product, the map of land/forest cover can be visually impressive. 6 Ministry of Forestry: Statistic of Indonesia’s Forestry, 20047 Ministry of Forestry: Statistic of Indonesia’s Forestry 2011, 20128 Ministry of Environment, Total of Land Cover Result of Landsat-7 ETM+ Satellite Image Interpretation 2004-2006, 2007

2 The State of The Forest Indonesia


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However, if that series of data being juxtaposed, there are technical issues, such as the inconsistency on boundary of land/forest cover, differences in accuracy (scale), and the usage of basis map. This condition is the factor that makes it difficult to track the changes on forest cover from time to time in order to get the quantitative value.

Analyses of forest cover changes needs series of data, which are several data on forest cover condition that recorded within a different period of time. In this The State of The Forest Indonesiabook, FWI presents series of natural forest cover data and the changes happened during the period of 2009-2013. The natural forest cover data obtained through the interpretation of satellite image (Landsat 7 and Landsat 8) recording year 2013. A dataset of forest cover 2009 and 2013 developed by FWI using the method of image interpretation visually with two groups of forest cover, “forest” and “non-forest”. This is done because though there are policies on public information transparency, but the spatial digital data from the Ministry of Forestry still cannot be accessed by the map user groups.9

Box 1. Generating Natural Forest Cover Data 2013

Interpretation of satellite imageries 2013

Natural forest cover data 2013 obtained from the interpretation of Landsat ETM 7 images interpretation and also Landsat 8 with coverage time between 2012 and 2013. The span of this coverage time is intended to get the image data that are net of clouds. The satellite images were downloaded from the www.glovis.usgs.gov site.

The satellite images that have been downloaded, then extracted and composited. The channel used for the Landsat ETM 7 images is channel 1 to 5, while for Landsat 8, using channel 4 to 6. The image interpretation conducted with the combination of channel 543 for Landsat 7 and combination of 654 for Landsat 8.

The image interpretation done visually on the computer screen (on screen digitizing) to delineate the covers that are still natural forests. The interpretation results of images covered in 2009 were used as the initial reference for interpretation of images covered in 2013. The minimum digitizing scale used is 1:50.000.

The accuracy of the final result of forest cover interpretation tested using the method of contingency matrix accuracy test (confusion matrix) and kappa coefficient. Total of sampling point of field test used in the accuracy test is 6.086 points. From the resulf ot contigency matrix, the accuracy score is 82 percent and the kappa coefficient score is 0,614.

Analyses of natural forest cover data 2013 and the forest loss (deforestation)

Indonesia’s natural forest is assumed as the forests that grows naturally and not from the planting process. Therefore, plantation forest is not categorized as forest. Another

9 Minutes of Information Consequency Test No.: S.410.1/PHM-2/2014 attached in the response letter from the Ministry of Forestry related to the request of public information by FWI, dated at October 16, 2014, map data in shapefile (.shp) format including the exempt information.


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assumption is that there is no forest cover from the reforestation process during the period of 2009-2013. Based on those assumptions, the result of interpretation of forest cover 2013 is the result of a combination between the data on forest cover 2009 and the result of interpretation of forest cover 2013. This is also intended to improve the previous data on forest cover in 2009, which caused by the widespread of cloud appearance and error in interpretation.

The forest loss (deforestation) in 2009-2013 is the analyses of changes in natural forest cover during the period of 2009-2013 using the spatial data on forest area designation with the administrative area spatial data until the district level as the baseline. Deforestation in 2009-2013 is the condition of the area that in 2009 was still forested and in 2013 is not forest anymore, and disjoint with the designation of administrative areas.

The data on forest cover changes period of 2009-2013 combined with the spatial data of Indonesia’s Forest Area Function and spatial data of provincial and district administrative area. Both of those spatial data become the boundaries of forest cover data, so it resulted with the information on the forest cover and its changes up to the district level. This method is not used with the data series used in the previous The State of The Forest Indonesiabook, and this caused differences in the total forest cover in 2009 in this version, with the The State of The Forest Indonesia2011 version. Moreover, in order to be more comprehensive, the data result elaborated with the official data and report from the government and from environmental organizations to further analyze the condition and changes happened.

Box 2. Various Initiative on Forest Cover Data Renewal and the Encountered Difficulties

Various products of forest and land cover map mainly caused by the differences on the boundary (definition) of land/forest cover, and the usage of basis map. Another factor that also affecting the mapping result is the interpreter subjectivity (experience and knowledge of the area being mapped), the aspect of geo-reference accuracy, and the rectification processes of satelit imagery.

As an example, the difference in screen digitizer method (interpretation based on vector data) which used by the Ministry of Forestry, with the supervised classification method (interpretation based on raster data) which used by the Ministry of Environment, is one of the factors that also affecting the calculation of total forest and land cover area in Indonesia. Forest Watch Indonesia (FWI), Conservation International Indonesia (CII), Forestry Planning Agency published Papua forest cover map in 2001. The methods used were a visual interpretation of the Landsat 7 ETM+ satellite images recording year 1999 to 2000 and field verification (ground check) in 2001. While Trees Project, produced


8

Indonesia’s forest cover map year 2000 scale 1: 5.500.000, and published in 2002. The method used is multispectral classification using satellite images of SPOT Vegetation (1km resolution).

In 1989, WCMC published data and categorized forests in Indonesia into 13 classifications. Later in 2000/2001, WCMC conducted forest cover calculation in Indonesia with dividing it into three groups: forest, non forest, and no data (covered by cloud).

Food Agriculture Organization (FAO) also published data with the classification of forest cover and other land, which categorized into three groups: forest, other woodland, other land. Other land with tree cover is the subgroup of the other land. Besides those three groups, there is also what titled as inland water bodies, such as: main river, lake, and reservoir. Based on FAO analyses in 2007, Indonesia’s forest cover in 2005 is only around 88,5 million hectares or around 46,5 percent of the total area.

Hansen, et. al., 2013 published data on forest cover classification, which are based on the forest definition as the tree, cover with the vegetation height more than 5 meters and canopy cover bigger than 30 percent. The data used are landsat satellite imagery.

Margono, et. Al., 2012 published data with natural forest cover classification that divided into primary intact forest and primary degraded forest. Based on the analyses, the total forest in Indonesia in 2012 is around 92,4 million hectares.

Related to the various data sources and several technical constraints, Geospatial Information Agency (BIG, previously named National Mapping and Survey Coordination Agency/ Bakosurtanal) resolves the basis map and scale issues through the joint agreement of several ministries. However the problem of different boundary still difficult to be avoided because of the different sectoral needs from each ministry. It is often encountered that the map produced sectorally and overlap, even each institution produce map with the same theme. This situation showed the weak coordination on mapping activity and the absence of integrated information system that supported by all sectoral institutions in the government agencies. The impact is that the map user community also facing difficulties to decide reference on thematic map from the official source.

Source: The State of The Forest Indonesia, 2001; Study on Papua Land Cover Mapping, 2001; State of the World’s Forests, 2007; Summary of Workshop on Method of Calculating Deforestation in Indonesia (UKP-PPP 2014); Margono et al (2014) Primary Forest Cover Loss in Indonesia Over 2000-2012.


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2.1. Natural Forest Cover

Categorization of forest cover in this report is that all natural forest appearance, either in the lowland, hills, highland, and coastal area that yet or already showed any logging/clearing with low intensity. There is no distinction between the primary natural forest and secondary natural forest, because FWI considers that using the condition of tree stands,10 and the linkages with human activities as references to differentiate the forests, is not depriving the definition of forest cover that still natural. Besides, the available information (blocks of observation in the field as reference to decide the condition of the structure or composition of tree stands) and resources to decide the level that differentiates the primary and secondary forest cover, it’s difficult for FWI to delineate the differences between those two forest groups.

FWI found that until 2013, the natural forest cover in Indonesia is 82 million hectares or around 46 percent of the total Indonesia’s land.

In fact, the percentage of natural forest cover to the total land can’t really show the condition of the forest carrying capacity and the real land condition. The portrayal of the natural forest condition in Indonesia must consider the fact that Indonesia is an archipelago country; each large island group has different natural characteristic while the small islands also have a typical enviromental vulnerability and need specific forest carrying capacity.

Based on the Table 1, the total of forest cover to 2013, in sequence are as follows: Papua with 29,4 million hectares; Kalimantan with 26,6 million hectares; Sumatera 11,4 million hectares; Sulawesi 8,9 million hectares; Maluku 4,3 million hectares; Bali and Nusa Tenggara 1,1 million hectares; and Java 675 thousand hectares. It means that to date, Papua is still the island with widest natural forest cover in Indonesia.

10 Ministry of Forestry, Forestry Dictionary, (Jakarta, 1989), p. 108. Stand structure is the condition of stands composition based on the diameter distribution, regeneration rate (seedlings, saplings, poles, tree, canopy layer, or cavity distribution.

Island Total Land Natural Forest

Cover 2009

Natural Forest

Cover 2013

Sumatera 46.616 12.610 11.344

Java 12.743 1.002 675

Bali & Nusa Tenggara 7.137 1.350 1.188

Kalimantan 53.099 28.146 26.604

Sulawesi 18.297 9.119 8.928

Maluku 7.652 4.577 4.335

Papua 34.632 30.006 29.413

Total 180.177 87.074 82.487

Table 1. The Condition Natural Forest Cover in Indonesia in 2009 and 2013

(thousand hectares)

Source: The State of Forest Condition 2000-2009; Analyses of Satellite Image ETM+7, 2014


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Based on the province, 25 percent of total natural forest in Indonesia located in Papua Province, 15 percent in the East Kalimantan Province, 11 percent in West Papua Province, 9 percent in Central Kalimantan Province, 7 percent in West Kalimantan, 5 percent in Central Sulawesi, 4 percent in Aceh province, and 3,2 percent in Maluku Province (in detail in Appendix 1). This data showed that more than half of natural forest cover across Indonesia are located in three provinces: Papua, East Kalimantan, and West Papua.

Moreover, based on the Figure 2, the percentage of natural forest cover compared to the land area in each island up until 2013, sequentially are Papua around 85 percent land still in the form of natural forest, Maluku 57 percent, Kalimantan 50 percent, Sulawesi 49 percent, Sumatera 24 percent, Bali-Nusa Tenggara 17 percent, and Java is 5 percent. It means that up until this year, Papua also still the island with the highest ratio of forest cover compared to the total land area in Indonesia.

Based on those two analyses, it is found that there are islands that most of the land area are natural forests, but the proportion of the total forest area nationally is still very small, and vice versa. As an example, the Maluku Island. The analyses result showed that 57 percent of land in Maluku is natural forest, however the proportion of it compared to the total forest area in Indonesia is only 5 percent (Figure 3). This finding strengthen the argument that the assessment on the natural forest carrying capacity in Indonesia must be based on island per island study.

This finding is interesting to be observed. When we talk in the context of forest management, the factors of geographical condition and the vulnerability of the area caused by forest conversion activities in one island, especially small islands, must be an important consideration in order to decide the direction on forest management policies. Because even the slightest conversion happened, it would directly impact the safety of the environment and the life of the communities who live on that island.

Figure 2. Percentage of Total Area of Natural Forest Compared to Land Area in 2013

Source: Forest Watch Indonesia, 2014


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2.1.1. The Condition of Natural Forest Cover in Forest Function Area

Portraying the forest resources in Indonesia can’t be separated from the policies on forest spatial planning or forest function area. Ministry of Forestry in 2013 stated that the State Forest Area covers around 127 million hectares or 66,9 percent from the total of land area in Indonesia. This total of State Forest Area needs to be checked and corrected, considering the discrepancy of the recent numbers with the total of forest cover, and considering the recent update related to the derivation and

Figure 3. Percentage of Total Area of Natural Forest in Each Island Compared to Natu-ral Forest in Indonesia in 2013


Figure 4. Distribution of State Forest Area Based on the Function on 2013 in Million Hectares

Source: Directorate of Forest Area Gazettement, Management, Stewardship, and Tenure, data updated Sep-tember 24, 2013, in “Information and Data Directorate General of Forestry Planning 2013”


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implementation of Constitutional Court Decision No. 35/2012 on judicial review of Forestry Law no. 41/1999 that excluding the indigenous forest from the State Forest Area.

The Ministry of Forestry then categorizes the State Forest Area based on its function, which are: Conservation Area with a total of 17,2 percent; Protected Forest Area with a total of 23,6 percent; Limited Production Forest Area with a total of 22,3 percent; Permanent Production Forest Area with a total of 22,7 percent; and Convertible Production Forest Area in total of 14,2 percent (Figure 4).

State Forest with those forest functions not always have forest cover above it. Though it is understandable that the forest area is the reflection of the government’s effort to preserve the forest cover through spatial planning policies on the forestry sector.

Figure 5. Total of Forest Cover based on the Forest Function and Forest for Other Land Use in 2011 (thousands of hectares)

Source: Forestry Statistics, 2012


Figure 6. Total of Natural Forest Cover based on Forest Function and Forest for Other Land Use in 2013 (millions of hectares)


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On the contrary, Forest for Other Land Use (APL) does not always mean that the area does not have the forest cover.

Refers to the Ministry of Forestry publication published in 2012, the non-forested condition besides on the forests with function as Production Forest Area, also happened in the protected area, such as in Conservation Areas where 4,16 million hectares or 3,1 percent and in Protected Forest around 6,78 million hectares or 51, percent from the total of forest area are reported as non-forest.

Merujuk pada publikasi Kementerian Kehutanan tahun 2012, kondisi tidak berhutan selain terjadi pada kawasan hutan yang berfungsi sebagai Kawasan Hutan Produksi, juga terjadi pada kawasan perlindungan, seperti di Kawasan Konservasi dimana sekitar 4,16 juta hektare atau 3,1 persen dan pada Hutan Lindung sekitar 6,78 juta hektare atau 5,1 persen dari total luas kawasan hutan dilaporkan sebagai bukan hutan.

FWI presents alternative information on natural forest cover condition up until 2013 in five groups forest function areas that already appointed as State Forest and Forest for Other Land Use. It showed that around 78 million hectares or around 63 percent state forest areas are areas with forest cover above it. Distribution and comparison between the area that covered with natural forest cover and the areas without natural forest cover in each forest function area presented in the Figure 6. FWI showed that the percentage of natural forest cover in the Protected Forest function compared with the total of of state forest area is 6,2 percent, and the natural forest cover in the Conservation Area function is 2,7 percent.

Figure 7 showed the portrait of State Forest Area and the Forest for Other Land Use related to the condition of natural forest cover in each forest function area in 2013. Currently, the widest natural forest cover in the State Forest Area is in Protected Forest Area, around 28 percent. Followed by the natural forest cover in the Production Forest Area and Limited Production Forest, each around 21 percent, and 13 percent

Figure 7. The Condition of Natural Forest Cover in State Forest and Forest for Other Land Use in 2013



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forest cover in the Conservation Area. While there are around 6 percent of natural forest cover in the Convertible Forest Function Area.

2.1.2. The Condition of Natural Forest Cover in Concession Area

Total of Indonesia’s land with concession permits based on the spatial analyses conducted by FWI, up until 2013 is around 44 million hectares or around 25 percent of total land.11 The conditions of land and forest management related to the existence of natural forest cover in 2013 based on FWI’s analyses are as follows:

1. Total Natural Forest Timber Production Permit (IUPHHK-HA) concessions in Indonesia up until 2013 is 20.5 million hectares.12 While the condition is that the natural forest cover in those IUPHHK-HA concessions only around 11 million hectares.

2. Total of Production Forest Timber Production Permit (IUPHHK-HT) concessions in Indonesia up until 2013 is around 10 million hectares.13 While the condition is that the natural forest cover in 2013 in IUPHHK-HT concession is 7 million hectares.

3. Total of palm oil plantation concession in Indonesia up until 2013 is around 10 million hectares.14 While, the condition is that the natural forest cover inside the palm oil plantation concession is 1,5 million hectares.

4. Total of mining concessions in Indonesia up to 2013 is around 22 million hectares.15 While the condition is that the natural forest cover inside the mining concession is 10 million hectares.

5. Total of overlapping area between land use concessions (IUPHHK-HA, IUPHHK-HT, palm oil plantation and mining) is around 14, 7 million hectares.16 From those overlapping areas, 7 million hectares of it is area with natural forest cover.

Based on those analyses, the figure of natural forest cover in the land with permits up until 2013 is around 32 million hectares. If we look at the forest management system by each type of permits and its practices in the field, the natural forest cover in the permit area are potentially to decrease both in quality and quantity in drastically and systematic ways.

While the total area with natural forest cover without any permits for land use is around 51 million hectares or 62 percent from the total of natural forest cover in Indonesia (Table 2). Further analysis based on the allocation of natural forest

11 Data on distribution of IUPHHK-HA and IUPHHK-HT concessions distribution, FWI compilation 2014. Data on distribution of plantation concessions, WRI 2010. Data on distribution of the mining concession include the exploration permits, JATAM database 2014.12 Forestry Strategic Data 2013. The Development of Total Units and Area of IUPHHK-HA per Province Year of 2013, page 81. Ministry of Forestry Republic of Indonesia. 13 Forestry Strategic Data 2013. The Development of total IUPHHK HT period of 1991-2013, page 82. Ministry of Forestry Republic of Indonesia.14 Based on FWI’s spatial analyses, 2014.15 Ibid.16 Ibid.


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functions without permits in 2013, around 37 percent located in the Protected Area, 19 percent in Conservation Area, 15 percent in Production Forest Area, 12 percent in Limited Production Forest Area, 12 percent in Conversion Production Forest Area, and 5 percent in Forest for Other Land Use.

By authority, each function in State Forest Area is the national and local government’s scope of work. However, the government (and local government) tends to only work on the administration for forest utilization permits. From the total of 120, 3 million hectares of State Forest Area in the land, almost half of it (55,93 million hectares or 46,5 percent) is not properly managed. Between those State Forest Area, 30 million hectares located under the local government authority. The State Forest Area that managed intensively is 64, 37 million hectares (53,5 percent). Those forests that intensively managed mostly are Production Forest Area in the form of Timber Production Business Permit (IUPHHK) in natural forest and plantation forest and groups of conservation forest. On the contrary, though already mandated in the Forestry Law no. 41/1999, there is no strong and directed policy yet to establish government institutions with function to manage the forest in the field. The effort that already existed to strengthen the forest management at the field level is for example, with developing the Forest Management Unit/FMU as the forest managers at the field level. The absence of government unit to manage forest at the field level causing no proper information available in the forest utilization practices. Therefore, as de facto the forest owned by the permit holder. If the permits ending or ineffective, the forest in the open access condition and it’s easy for anyone to use it without any control and then massive forest degradation would happen.17

From 51 million hectares of natural forest cover without any utilization permits, around 12 percent have managed intensively as conservation areas by the Natural Resources Conservation Bureau (BKSDA). While the rest of it, around 41 million hectares located in the Protected Forest Area, Production Forest, and APL that haven’t managed yet and no management unit or institutions who responsible to manage those areas18. With this condition the potential for forest degradation is very large.

17 FMU Development Book 2011. page 19, 20.18 Spatial analyses that were conducted haven’t put FMU area as institutions at the field level, therefore there’s possibility that half or the whole areas already managed through FMU nowadays.

Table 2. Natural Forest Cover inside The Forest Utilization and Use Area in 2013



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Based on that condition, it can be concluded that around 73 million hectares of natural forest in Indonesia potentially to have bigger damage in the future, both caused by the logging activities and planned land conversion or because the absence of forest managers at the field level.

2.1.3. The Condition of Natural Forest Cover in Peatlands Area

Peatlands got special attention from the government. It isn’t half-heartedly, the utilization of this type of land specially ruled by the Ministry of Agriculture, Ministry of Forestry and Ministry of Environment.19 Moreover, for the regulation, it has Government Regulation on Peatlands Management. Apart from whether those regulations are contradictory, overlapping, or even nullifies each other, the fact is affirming that the peatlands have an important role in environmental management in Indonesia.

In 1994, Land Use, Land Use Change and Forestry (LULUCF) responsible for 63% of CO2 emission sources (Pelangi 2001), a significant increase compared to the similar condition back in 1990, 48% (Pelangi, 2000). One of the main reasons of the carbon emissions in that sector is that the forest clearing (including peat forest) for various needs, mainly for agriculture and plantation. Peatlands and peat forests were cleared and drained, then would experience subsidence (ground level decreasing) and drought, and then would be very vulnerable to land and forest fires. Another impact, the carbon released to the atmosphere and causing what’s called as greenhouse effect which trigger global climate change.20

Peat has unique physical character. Its ability to bind water can reach 13 times of its weight, so that it can become the terrific hydrology regulator for the surrounding environment. On the other side, the burning peat would be very difficult to be extinguished even in the humid condition and would cause smog. In 1997/1998, peat were suspected as the contributor of 60 percent of smokes in land and forest fire cases in Southeast Asia.

In the natural forest condition, peatlands serves as barricade or resistor of carbon, so it contributes to reduce the greenhouse gasses in the atmosphere, though the deceleration process runs very slow, 0-3 mm of peat per year (Parish et al, 2007) or equals with deceleration 0-5,4 t CO2 per hectare per year (Agus, 2009). If the peat forests cleared and drained, then the carbon saved in the peat would easily oxidize into CO2 (one of the most important greenhouse gasses). Besides, the peatlands also very easy to subside if the peat forests were cleared.21

Total area of peatlands in Indonesia is around 19,3 million hectares or more than 10 percent of the total land. Those peatlands mainly spread across three big islands, Sumatera, Papua, and Kalimantan. In Sumatera, the widest peatlands located in Riau Province with around 4 million hectares, and 1,1 million hectares of it are still covered by natural forests.

19 Since October 2014 Ministry of Environment and Ministry of Forestry merged into one ministry, Minis-try of Environment and Forestry. 20 Yus Rusila Noor and Jill J. Heyde, Community-based Peatlands Management in Indonesia, Wetlands International – Indonesia Program and Wildlife Habitat Canada, Bogor, 2007, page. 11.21 Fahmuddin Agus. and I.G. M. Subiksa, Peatlands: Potential for Agriculture and Environmental Aspect, Land Research Center and World Agroforestry Centre (ICRAF), Bogor, 2008, page. 1.


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2.2. The Loss of Natural Forest Cover (Deforestation) 22

Big scale degradation and loss of natural forest cover started to happen in Indonesia since early 1970s, when the concession companies started to operate. Based on the Ministry of Forestry data, in the period of 1985-1997 the decreased total forest areas in Indonesia is 22,46 million hectares or 1,87 million hectares per year. However, in the period of 1997-2000 the deforestation highly increased to 2,84 million hectares per year. Another data source, Vegetation SPOT, showed the decreasing number of forest cover around 1,08 million hectares per year during the period of 2000-2005. The calculation of deforestation in Indonesia during the period of 2003-2006 use the Landsat 7 ETM+ satellite images resulted on the figure 1,17 million hectares per year. Current data on deforestation calculation in Indonesia for the period of 2006-2009 resulted in the number 0,83 million hectares per year.23

The Ministry of Forestry in the document of Work Plan 2014 stated that the rate of deforestation and forest degradation for the period of 2009-2011 is 450 thousand hectares compared to the period of 1998-2002 that reached around 3,5 million hectares.24 Currently through a press conference, Ministry of Forestry stated the deforestation rate in Indonesia in the figure of 613 thousand hectares in the period of 2011-201225 (Table 3). Deforestation that happened in Indonesia in the period of 1996-2012 based on the data from the Ministry of Forestry can be seen in Figure 10.

Beside official data from the Ministry of Forestry, there are several data versions that also stated the estimation of degradation and loss of forest cover in Indonesia. Forest mapping conducted by the Government of Indonesia with the support from

22 Forest loss or deforestation definition by FWI is all types of condition changes on the land coverage from forests to non-forests that caused by the natural condition and or deforestation actors, both legal or illegal in certain period of time which are temporary or permanent.23 Indonesia’ deforestation calculation 2009 - 201124 Minister of Forestry Decree No.44/Menhut-II/2013 on Work Plan of Ministry of Forestry Year of 201425 PRESS RELEASE Nomor: S. 409 /PHM-1/2014 on DEFORESTATION IN INDONESIA IN 2011-2012 IS ONLY 24 THOUSAND HECTARES, Public Relation Center, Ministry of Forestry .

Figure 9. Total Area of Peatlands and Natural Forest Cover

Source: FWI analyses (2014); Peatlands map processed from the Wetlands Indonesia data (2005, 2006)


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the World Bank during the period of 1986-1997 showed that the rate of forest degradation during that period is around 1,7 million hectares per year, and there were significant increase up to more than 2 million hectares per year (FWI/GFW, 2001).

In 2007, Food and Agriculture Organization (FAO) through the report State of The World’s Forests stated that the forest degradation rate in Indonesia has reached 1,87 million hectares in the period of 2000-2005. This condition puts Indonesia ranked in the second out of ten countries with the highest rate of forest degradation in the world year of 2005.

In 2011, FWI through a report The State of The Forest Indonesia Period of 2000-2009 explained that the forest degradation rates remains high, around 1,5 million hectares in the period of 2000-2009.26

Matt Hansen from the University of Maryland stated that Indonesia loss the forest cover in total of 15, 8 million hectares between the year of 2000 and 2012, in the fifth orders after Russia, Brazil, United States of America, and Canada for the forest loss.27 During the same period, Margono et al in the report titled Primary Forest Cover Loss in Indonesia over 2000-2012 stated that on average the deforestation in Indonesia in the period of 2000-2012 is around 0,8 million hectares per year.28

With various versions of deforestation rates as mentioned above, this report The State of The Forest IndonesiaPeriod of 2009-2013 stated that the deforestation rates remain high, not drastically decreased as mentioned by the Ministry of Forestry29 who reasoned that since 2011 they already applied the moratorium policies on new permits.30 26 FWI: The State of Indonesia’s Forests 2000-2009, 201127 http://www.mongabay.co.id/2013/11/15/temuan-peta-hutan-google-laju-deforestation-mening-kat-di-indonesia/28 Margono et al, 2014. Primary forest cover loss in Indonesia over 2000-2012. http://www.nature.com/nclimate/journal/v4/n8/full/nclimate2277.html#author-information29 The rate of deforestation and forest degradation for the period of 2009-2011 is only 450 thousand hectares, while in period of 1998-2002 reached 3,5 million hectares (Work Plan Document of Ministry of Forestry 2014); PRESS RELEASE Nomor: S. 409 /PHM-1/2014 on DEFORESTATION IN INDONESIA IN 2011-2012 IS ONLY 24 THOUSAND HECTARES, Public Relation Center, Ministry of Forestry.30 Presidential Instruction no. 10/2011 on Moratorium for New Permits and Improvement of Primary


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Figure 10. Deforestation in Indonesia during the Period of 1990-2012

Source: Ministry of Forestry 2014. The State of Indonesia’s Forest, Presentation from the Planning Agency of Ministry of Forestry in external review of The State of Indonesia’s Forest 2014 book.

Analyses by FWI based on the interpretation of satellite images in Indonesia showed that the deforestation in the period of 2009-2013 are estimated to reach the figure more or less 4,50 million hectares or around 1,13 million hectares per year.

Sumatera and Kalimantan Island are the islands with the most severe deforestation compared to other islands (Table 4). This condition is not surprising if we look at the tendency of land expansion for the development of plantation forest, palm oil plantation, and new concessions for mining.

Riau, East Kalimantan, West Kalimantan, and Papua are five provinces with the most severe deforestation in Indonesia. Between those five provinces, Riau ranks first with

Forest and Peatlands Governance. The extension of policy on moratorium on new permits, through Presi-dential Instruction no.6/2013


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the deforestation reach 690 thousand hectares, followed by Central Kalimantan with 619 thousand hectares, Papua 490 thousand hectares, East Kalimantan 448 thousand hectares, and West Kalimantan 426 thousand hectares.

The finding that is quite surprising is the deforestation in Central Kalimantan. At the end of 2010, Central Kalimantan elected as the pilot province for the Reducing Emissions from Deforestation and Forest Degradation (REDD+) project in Indonesia. However, in the period of 2009-2013, Central Kalimantan ranks as the second province with the highest natural forest loss (Appendix 2). The REDD+ project and the moratorium policy that applied from mid-2011 seems to fail to prevent or reduce the degradation and deforestation in Central Kalimantan.

2.2.1. The Loss of Natural Forest Cover in Forest Function Area

The forest loss or deforestation doesn’t only happen in the Convertible Production Forest Area and Forest for Other Land Use (APL). Deforestation also happens in the State Forest Area which supposed to be preserved or selectively utilized, such as the Limited Production Forest, Protected Forest or Conservation Area. Based on its function, then those forest areas are places where the deforestation not supposed to happen and have to be maintained as forested areas.

Total deforestation in those three forest areas reached 1,4 million hectares of the total of deforestation (4,58 million hectares) during the period of 2009-2013. This figure is equal to 31 percent of the total forest loss that happened across Indonesia. It means that the area that’s supposed to be preserved as forest and have good forest cover, in fact are experiencing severe deforestation.

By its function, in the four year period the biggest loss of forest takes place in Production Forest, totalling 1.28 million hectares, followed by Non Forest Area with 1.12 million hectares, and Convertible Production Forest Area with 781 thousand hectares.


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Box 3. Deforestation in Merauke District, Papua

In August 2010, the Government of Indonesia launched Merauke Integrated Food and Energy Estate or also known as MIFEE. The Government provides 2,5 million hectares of land in Merauke District, Papua Province, to support that mega project of national food and energy development.

Up until 2013, there were 36 companies that would invest and get the location permits with a total of 1,5 million hectare area. Those companies consist of: 9 palm oil plantation companies with a total of 280 thousand hectares, 9 Industrial Forest with 760 thousand hectares total area, 15 companies of sugar cane plantations with 450 thousand hectares total area, and 3 crops plantation companies such as cassava, paddy, soybean, and corn with total area of 82 thousand hectares.

After three years operating, instead of giving benefit to the Malind and Yeinan communities, MIFEE become the cause of loss of forest, a place where the community went hunting, took sago, gambier and resin. MIFEE also caused conflicts between villages, between tribes or between individuals.


Kabupaten Luas Daratan

(Ha)

Tutupan Hutan

Alam 2013 (Ha)

Deforestasi(Ha)

Lahan Gambut

(Ha)

Tutupan Hutan

Alam di Lahan

Gambut (Ha)

Deforestasi di Lahan Gambut

(Ha)

Merauke 4.362.004,89 2.101.745,22 85.982,64 1.486.010,71 667.849,47 50.202,63

Source: Forest Watch Indonesia 2014

The government is not learning from the mistakes in 1995 when they developed the Mega Projects of Peatlands Development (PPLG) with total area of 1 million hectares in Central Kalimantan. The objective of PPLG was for sustainable agriculture of rice. PPLG project can be considered as a failure and caused destruction of thick peat, eviction of rattan plantation, destruction of traditional fishpond (beje)/river, loss of the communities’s livelihood, extinction of endemic protected, and caused forest fires. Recently, several government and non-government initiatives are being implemented to fix the damaged land of former PPLG areas. .

Source: Civil Society Coalition to Save Global Climate and Forest: Briefing Paper Evaluation of Three Years Moratorium Policy and Protection of Peatlands Ecosystem in Indonesia, Main Tasks of New Leader of Indonesia, Jakarta, 2012


Source: Forest Watch Indonesia 2014


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2.2.2. The Loss of Natural Forest Cover in Concession Area

In practice, the licensing schemes for timber harvesting from natural forest (IUPHHK-HA) and plantation forest (IUPHHK-HT), mining leases, and release of forest area for palm oil plantations serve as the opening for systematic conversion of natural forest. This is a by design loss of forest cover planned by the government, in the interest of big scale land-based businesses.

Box 4. Rampant Encroachments and Fire in Tesso Nilo National Park

The 167,618 hectares Tesso Nilo State Forest Area is the remaining lowland forest in Riau. It has one of the highest biodiversity forests in the world. Part of that forest area, a total of 83.068 hectares, is designated as national park by the Ministry of Forestry in 2004. The national park area was later expanded in 2009.

The previous status of the area of Tesso Nilo National Park was Limited Production Forest, so the area is logged-over forest. Encroachment happens often in this forest, including for conversion into oil palm plantations before the national park designation and even after it, by exploiting the road access built by the logging companies.

Forest degradation in this national park area caused by encroachment has reached more than 43 thousand hectares (based on the Landsat satellite images of April 2013). The remaining is 24 thousand hectares relatively good forest, and 15 thousand hect-ares of land covered with shrubs. Most of the degraded forest is already illegally con-verted into palm oil plantations, very often by big capital farmers who are able to own in average more than 50 hectares of plantation area.

In total, more than 50 percent of natural forest inside Tesso Nilo National Park has been illegally converted into other uses, mostly palm oil plantation. One of the primary causes of those encroachments was the lack of protection by forest utilization license holders that operated on the Production Forest and Plantation Forest; the existence of two corridors owned by the plantation forest company, RAPP, in the middle of the forests provides easy access to the Tesso Nilo areas.


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The bad performance of Natural Forest Timber Production Business License (IUPHHK-HA) has contributed significantly to deforestation. This condition is worsened by the fact that almost every year there are always several IUPHHK-HA companies that stop operating and thus creating forest areas without on site manager. Data in 2013 shows that 179 IUPHHK-HA companies and 139 IUPHHK-HT companies were heading towards bankruptcy (APHI, 2013).31 When that happens, there will be around 39 million hectares production forest without on site manager. De facto, those lands will be in open access situation.32 This is in addition to around 8 million hectares production forests currently free from any utilization or management licenses, which therefore have never been sufficiently monitored (Figure 5).

The development of Industrial Plantation Forest or HTI (IUPHHK-HT) to meet the demand of raw material for pulp and paper industries is also a factor that causes deforestation. The total area and number of IUPHHK-HT licenses have significantly increased but have not been followed with plantation productivity increase in those plantation forest areas.

The conjecture that IUPHHK-HT business owners are only looking for the timber from the Timber Utilization Permit during clear cutting/land clearing is not unreasonable.33 And the fact is that natural forest conversion to palm oil plantation is one of the determinants factors of the high rate of deforestation in Indonesia. Figure 12 shows the deforestation in Industrial Plantation Forest concessions and palm oil plantations in East Kalimantan.

Other observation related to forest conversion that causes deforestation is the stipulation of forest areas in accordance to regional spatial plans, which, although according to the Spatial Planning Act this is not done as an annulment on the mistakes in land use planning, in practice it almost always accommodates those “mistake”.

31 Presentation material of Indonesian Forestry Business Association (APHI) at the discussion on forestry permits problems by the Directorat General of Forestry Bussiness Management in Surabaya, October 2013.32 Hariadi Kartodihardjo, State Forest Degradation and Conversion: Empirical and Structural Problems, 201433 FWI/GFW: The State of the Forest, Indonesia, 2001

The damage of Tesso Nilo National Park is also caused by forest fires that happen every year. Three hot spots appeared in Tesso Nilo National Park area in early 2013. The hot spots were detected from January 3 to 7, 2013 through the NASA-MODIS satellite monitoring. The hot spots detected show that forest fires still happen inside the national park area, made worse by the encroachments for palm oil plantation and settlement areas.

Source: Mongabay, 2013


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Box 5. Exposing Forestry Mafia Practices

Indonesia’s forests are destructed in systematic and organized ways by crooked officials and investors. Corrupt practices in forestry sector happen across Indonesia. This is not only illegal logging, but also corruption in licensing processes, which eventually caused deforestation. Deforestation is mainly the result of forest conversion into plantation and mining area that is violates the regulation (therefore, illegal). In Central Kalimantan, 7.8 million hectares of forest have been converted into palm oil plantations, mining areas, and other non-forest landscape (Report of Central Kalimantan Spatial Planning Revision Integrated Team, 2009)

There are a number of problems with policies and law enforcement so that forest crimes and changes of forest function are still taking place. This includes: the power to enforce policies that is still weak (law and law enforcer), the commitment from the government and business sectors is still weak, imbalance of interest in policies implementation, the government’s interest in releasing forest area for big scale plantation development, and the domination of business actors’ interest in implementation of policies on forest area release.

In addition to that, there’s overlapping authorities related to forest conversion. This is proven by the inharmonious and unsynchronized of laws and policies. Disharmony of laws (plantation, forestry, environment, spatial, regional autonomy) leads to overlapping authorities. It causes difficulties for the government to do protection, planning, management, monitoring, law enforcement, and restoration.


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2.2.3. The Loss of Natural Forest Cover in Peatlands Area

Indonesia has around 19.3 million hectares of peatlands. In 2013, around 9 million hectares of it is still covered with natural forest. Peatlands area tends to be large and relatively flat. It makes it vulnerable to large scale land clearing activities. It is noted that during the period of 2009-2013 around 1.1 million hectares of natural forests in peatlands vanished. That is more than one fourth of total natural forest loss across Indonesia.

The largest deforestation in peatlands area is in Riau Province with approximately 450 thousand hectares, followed by West Kalimantan 185 thousand hectares, Papua 149 thousand hectares, and Central Kalimantan 104 thousand hectares.

Peatland is essentially destroyed when the forest above it is cleared, all the more with intensive cultivation through canalization and drying processes. To date, a total 2.4 million hectares of concession area have been issued the licenses of, including around 295 thousand hectares for mineral and coal mining. Due to its intensity of utilization, plantation forest and oil palm plantation have big potential to destroy massive areas of peatlands, through the deforestation and the canalization and drying process. The total of peatlands area under this two types of concessions are around 984 thousand hectares. On the other hand logging concessions (HPH), which in total is the biggest concession in peatlands, are considered to have lower destructive force because of the supposedly selective logging system when harvesting timber. Mining concessions are also considered to be causing lower deforestation although it is because up until 2013 most of them is still in exploration phase. However, for the long term, mining especially for mineral and coal, will need to be closely observed because the exploitation phase will be done continuously in the concession areas.

The euphoria of regional autonomy is causing local governments excessively issue plantation and mining permits, way beyond limit if there is any. Data from Save Our Borneo and Silvagama shows that there is a violation on plantation permits and or mining permits issued by all Head of Districts in Central Kalimantan. For example, within and on top of one logging concession area of Austral Byna in North Barito District, Central Kalimantan, there are 23 plantation permits and 47 mining licenses issued by the Head of District/Bupati. In Riau 4 Heads of District issued 37 natural forest timber utilization business license (formerly Industrial Plantation Forest) which violate the law.

Source: Press Release from Coalition of Forestry Mafia Monitoring: Forest Watch Indonesia (FWI), WALHI, JIKALAHARI, JATAM, Save Our Borneo (SOB), Indonesia Corruption Watch (ICW), Sawit Watch, Kontak Rakyat Borneo, SILVAGAMA, 2010


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2.2.4. The Loss of Natural Forest Cover in the Moratorium on New Licenses (PPIB) Areas

The Moratorium on New Licenses (PPIB), also known as the Permits (Utilization) Moratorium, based on the available national spatial data, covers a total 58.2 million hectares or around 32 percent of total land area of Indonesia. A total of 44.3 million hectares of natural forest cover is covered in this PPIB policy.

The total of PPIB areas and natural forest cover in each of the main islands of Indonesia is presented in Table 8 and the detail for each province is provided in Appendix 3.

Papua, Kalimantan, and Sumatera Islands have the biggest PPIB areas in terms of land size. In terms of ratio of PPIB areas to total land area of the island, both Kalimantan and Sumatera have less than 30 percent. The highest ratio of PPIB areas are in Papua and Sulawesi Islands.

The ratio of PPIB area to total land are is used to look at how big natural forest and peatlands areas are protected inside Conservation Areas, Protection Forest Area, Peatlands, and Primary Forest through the PPIB policy. In provincial scale, the five provinces with biggest ratio are Papua, which has the highest ratio, followed by West Papua, West Sulawesi, and Southeast Sulawesi.

The establishment of PPIB through the Presidential Instruction took place in the middle of our study on changes on natural forest cover, between 2009 and 2013. During that period, the deforestation within PPIB areas is 1.1 million hectares. Of that figure of deforestation, we do not differentiate deforestation prior to or after the PPIB policy in 2011.

In reference to the Presidential Instruction no. 10 year 2011 on PPIB, although it puts moratorium on new licenses but the potential of loss of forest inside areas put under PPIB still exists. This is because if the land is needed for development projects, such as geothermal, oil and natural gas, electricity, rice fields, and sugar cane, it is exempted from the moratorium policy.


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Figure 13. Forest Cover in Peatlands Area under Utilization Licenses


Alongside the protection of areas with natural forest, PPIB is also intended for the protection of peatlands. It is recorded that around 9.5 million hectares of peatlands is located inside the PPIB areas, and almost 5.8 million hectares of it is still covered with natural forest. At the same time, there are 9.8 million hectares peatlands outside the PPIB area, of which around 3.3 million hectares is covered with natural forest.


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Box 6. Moratorium on New Licenses in Central Kalimantan Province

In the end of 2010, Central Kalimantan Province was elected as a pilot province for the Reducing Emissions from Deforestation and Forest Degradation (REDD+) project in Indonesia. By mid-2011, this effort to reduce emissions was strengthened by the issuance of the policy on Moratorium on New Licenses (PPIB), which was applied in Conservation Areas, Primary Forest and Peatlands across Indonesia.

In October 2012, Forest Watch in collaboration with Greenpeace Indonesia conducted a field check and assessed the effectiveness of the implementation of PPIB policy. This field check is based on the finding of Forest Watch Indonesia’s analyses during the period 2002-2009 that Central Kalimantan Province had lost in total 2 million hectares of natural forest cover, which was the highest in Indonesia.

The field check found inside the PPIB areas in Central Kalimantan plantation concessionaires were in active operation and engaging land clearing practices. This finding indicated that deforestation is still happening despite the fact that the moratorium is already applied by the government. In several spots in Kapuas and Sampit Districts, the peatland and forest clearing were identified to be inside palm oil plantation concessions. This condition shows that the moratorium policy is not effective to prevent forest degradation and deforestation, therefore undermining Indonesia’s commitment to the effort to reduce greenhouse gas emissions.

Source: Press Release Greenpeace-FWI: Greenpeace Urge President Yudhoyono to Focus on Forest Protection by Strengthening the Moratorium, Jakarta, 2012

Figure 14. The Condition of Forest and Peatlands Areas inside the Indicative Area of PPIB the Third Revision Version


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There are a lot of researches and case studies which show that right now Indonesia is facing big problems related to unsustainable forest management, causing forest loss or deforestation. One of the causes is the bad forest governance at all level of governments. Moreover, the expansion of district

areas into new autonomy regions makes the problems at government level more complex. 34

In 2010 the National Development Planning Agency (BAPPENAS) conducted regional consultations and analyses of the fundamental forestry problems in Indonesia. The result of that analyses shows that bad governance, unsynchronized spatial plans between national and regional level, uncertainty in tenure rights, and weakness in forest management capacity (including in law enforcement) are the fundamental problems of forest management in Indonesia.35 Those many problems eventually cause the destruction on the remaining forest resources.

Furthermore, other literature stated that the direct causes of forest degradation and deforestation in Indonesia are: (1) conversion of natural forests into annual crops, (2) conversion of natural forest into agriculture and plantation areas, (3) exploration and exploitation of extractive industries in forest areas (mineral, coal, oil and gas, geothermal), (4) land and forest fires, and (5) conversion for transmigration and other infrastructures.36 The Ministry of Forestry also stated that the weakness of forest governance is the factor that caused the forest cover in Indonesia keeps decreasing.37 All those causes have complex relations and are linked to deforestation.

Geist and Lambin, 2001 stated that the direct causes of deforestation are factors directly related to the activities of logging or land degradation. The direct causes can be categorized into different groups such as agriculture expansion, expansion of infrastructure, and wood extraction. Agriculture expansion is considered as the main driver of deforestation in tropical areas (Gibbs et al., 2010)38 and industrial activity is

34 Indonesian Climate Change Sectoral Roadmap (ICCSR) Summary Report Forestry Sector, (BAPPENAS, 2010); ICEL and SEKNAS FITRA: Regional Land and Forest Governance Index, the Performance of Regional Governments in Forest and Land Management in Indonesia (Case Study of 9 districts), 201335 Indonesian Climate Change Sectoral Roadmap (ICCSR) Summary Report Forestry Sector, hal 2 (BAPPE-NAS, 2010)36 FWI/GFW: The State of the Forest, Indonesia, 200137 Ministry of Forestry:Forestry Statistics, 200438 In the report“An assessment of deforestation and forest degradation drivers in developing countries” http://iopscience.iop.org/ accessed on March 24, 2014

3 THE STATE OF FOREST GOVERNANCE


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Box 7. Linkages between the Loss of Natural Forest with the Forest Governance Index

Good forest governance is the determinant factor of sustainable, inclusive, and transparent forest management, thus also determines the success of the government’s efforts on reducing greenhouse gas emissions (GHG) from the forestry sector. Therefore, the effort to improve forest governance to reduce deforestation rates is urgently and seriously needed.

FWI’s analyses and the result of study by ICEL-FITRA show the potential linkages between loss of forest cover with the governance index of the area. The obvious trend is the lower the governance index in the district, the higher deforestation.

As can be seen in Figure 15, Berau District has the lowest governance index, scoring just 7.6, compared to four other districts. Berau also shows the highest rates of deforestation. For the last three years, Berau District lost 111 thousand hectares of forest, more than two times of Bulungan District. Different situation is seen in Paser and Sintang District which have higher governance index compared to other district, and lower deforestation rates.

Figures 15. Linkages between the Forest Governance and Deforestation in Five Districts

Source: ICEL-FITRA 2013 ; FWI 2014


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the main driver of deforestation and forest degradation around the world.39

According to the Center for International Forestry Research (CIFOR)’s recent assessment report of 100 developing countries several factors and the contribution of each to the direct cause of deforestation and forest degradation are: agriculture 73 percent, mining 7 percent, infrastructure 10 percent, and city expansion 10 percent. It further finds that extraction and timber logging contributes as much as 52 percent of the cause of forest degradation (especially in Latin America and Asia), while firewood collection and charcoal production (especially in Africa) contributes 31 percent, accidental fires 9 percent, and cattle pasturing 7 percent.40

Forest Watch Indonesia (FWI) divides the cause of deforestation into two groups: direct causes and indirect/underlying causes. The direct causes are activities that directly resulted in changes of forest cover. They are land clearing activity and harvesting of natural forest timber. The indirect/underlying causes are the national/regional power that can trigger forest loss. They are especially causes at policy levels, made by the government and its misuse of authorities.

3.1. Land Clearing and Harvesting Natural Forest Timber

Beginning in late 1970s, Indonesia relied on natural forest as the foundation of national economic development. At that time, the government developed the Forest Concession (HPH) scheme as a form of natural forest area management. Unfortunately, the control system in harvesting under Forest Concession scheme never worked. It will be safe to say that the degradation of natural forest in Indonesia started in massive manner during this boom of Forest Concession (HPH) era.

Forest degradation expanded in 1990 when the government developed the Industrial Plantation Forest (HTI) scheme and invited private investors and luring them with various kinds of incentive. Unlike the HPH, HTI schemes allow companies to clear forest land for plantation preparation. In effect this is similar to (agriculture) plantation but the commodity is wood species, with an objective of meeting the demand of raw material for timber industry.

In essence, forest clearing directly causes destruction and is a the biggest threat to natural forest in Indonesia. This is in the context of both legal and illegal forest resources exploitation. The most dominant deforestation takes place in areas with licenses for HPH, HTI, Plantation, and Mining. (Table 9).

The Natural Forest Timber Production License

In recent years, the total number of Forest Concession (HPH) or the Timber Production License on Natural Forest (IUPHHK-HA) keeps decreasing. By 2013 only a total of 22.8 million hectares of production forest is still utilized by 272 HPH companies. It is far less than the year 1993/1994 when there were 575 licenses with a total area of 61.7 million hectares.

39 http://www.mongabay.co.id/2012/09/29/sektor-pertanian-sebabkan-80-deforestasi-di-kawasan-tro-pis/ diakses tanggal 24 Maret 201440 http://blog.cifor.org/19816/penyebab-deforestasi-menghilang-dalam-retorika-redd-analisis#.Uy-vd_mSw9Q di akses 22 Maret 2014


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This decrease is caused by several factors, such as the high production costs because of payments (official and un-official) that have to be made in the process of management and transportation of timber products.41 This is while the potentials of forest have been continuously declining both in quantity and quality.

The declining potential of forest as timber producer can also be observed in the government policy that regulates smaller standard of diameter of tree allowed to be harvested. In 1999, the smallest diameter of tree allowed to be harvested in Permanent Production Forest and Conversion Production Forest is 50 cms, and 60 cms for Limited Production Forest.42 In 2009, it is 40 cms and 50 cms, respectively.43

This policy also strengthens the conjecture that the government still wants to boost the national timber production even when the forests quality and quantity have declined. In 2013, although the total area of HPH concessions was much less but the volume of log production was still relatively stable for the last three years, at 5.1 million m3 per year on average. When the policy was issued, the volume of log production from natural forest is recorded at 4.8 million m3 for the year. The year after recorded an increased production at 5.2 million m3.

In theory, forest utilization by HPH companies will supposedly not massively clear the forest. In reality, up until 2013, more than half of HPH concession areas in Indonesia has become not forested, and only 11 million hectares remains as natural forest. It has been generally perceived that the performances of HPH or IUPHHK-HA concessions trigger forest conversion. Of the 272 HPH companies that have definitive license, less than 50 percent, only 115 units, that is still in active operation. The reasons of this are the low realization of natural forest timber production, fragmented former logged area (logged over area), uncompetitive timber price, high production costs,

41 Presentation by Hariadi Kartodihardjo and Grahat, “Study on Vulnerability of Corruption on Permits in Forestry Sector, A Case Study on IUPHHK-HA and IUPHHK-HT”. Bandung 201442 Ministry of Forestry and Plantation Regulation 309/Kpts – II/1999 on Silviculture System and Main Plants Cycle in the management of production forest.43 Ministry of Forestry Decree no 11/Menhut-II/2009, on Silviculture System in the Timber Production Pemits in Production Forest.


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Figure 16. The Growth of Total Numbers of IUPHHK-HA Concession Units and Areas during 1999 – 2013

Source: Directorate General Forestry Business Unit 2012, Department of Forestry, 2009. “Strategic Executive Forestry Data 2009”

and social conflicts.44

In relation to the performances of natural forest utilization, APHI stated that HPH companies often get their licenses on secondary forest areas, or even on non-forested areas. In several cases, there are also new HPH licenses on areas where the old license has been revoked.45

As a business, too high production costs discourage the HPH from actively operating although the license is still valid. This eventually effects the forest becoming an open access are, that is open to land grabbing and conversion for other, even illegal, activities. The fact is that of the 398 members of the Association of Indonesian Forest Concessionaires (APHI), 50 percent of them have confessed that their areas have been encroached for plantation and mining.46

From year 2009 until June 2014, only 112 IUPHHK-HA units applied for certification process, and only 91 units -totalling around 10 million hectares concessions areas- obtained the Certificate of Sustainable Production Forest Management (S-PHPL). During the same period, 2009, which was the beginning of implementation of Timber Legality Verification System (SVLK), to 2014, 25 IUPHHK-HA units applied for

44 http://rri.co.id/post/berita/77854/ekonomi/aphi_bisnis_hph_turun_terus.html accessed on November 14, 2014 “APHI: Bisnis HPH Turun Terus” and http://www.beritasatu.com/ekonomi/54103-aphi-industri-kayu-dalam-negeri-lesu.html “ APHI: Industri dalam negeri lesu” and APHI Presentation: Development of Concession and Performance of Forest Utilization and Forestry Industry and Its Implication on the Changes of the Forest Cover, during the event “External Review the Formulation of The State of The Forest IndonesiaIII Period of 2009-2013 Book” October 23, 2014 in Bogor 45 APHI presented in the External Review of Formulation The State of The Forest IndonesiaIII Period of 2009-2013, October 23, 2014 in Bogor46 http://cfta.or.id/2013/02/10/pengusaha-kehutanan-harus-berubah-paradigmanya/


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Timber Legality Certificate (LK) and only 22 units obtained the LK certificate.47 This finding is different from APHI’s which stated that the number of IUPHHK-HA units that have obtained the PHPL certificate is 101 management units (37 percent of all units) with a total area of 8, 812,531 hectares (43 percent of total areas of all units), and 19 management units (7 percent) have obtained the Timber Legality Assurance (VLK) certificate with areas totalling 1,524,319 hectares (7 percent).48 However, it is obvious that although SVLK is a mandatory certification system, the participation from the forest management units is still very low. Three possible reasons of this are: low commitment and adherence; weak law enforcement which should have been the control mechanism; or both.

The voluntary forest management certification schemes have even poorer participation from forest management units. The Indonesian Ecolabel Institute (LEI) reported only 2 management units that have obtained LEI’s sustainable forest management certificate.49 The other voluntary certification system is the Forest Stewardship Council (FSC) which reported 17 forest management units obtained the certificate.50 It is generally understood that voluntary certification schemes are aimed at bolstering market acceptance, in line with the growing demand for sustainability of the timber sources and trade processes.

In addition to the above, at the field conflicts are abound. They are mostly about access to resources and land acquisition. In most cases, conflicts indicate that principles of good forest governance are not met. The ever present conflicts in forest concession areas are yet another viewpoint from which we can characterize the roles of IUPHHK-HA concessionaires in forest degradation dan deforestation in Indonesia.

The Plantation Forest Timber Production License

The development of plantation forest or timber production license on plantation forest (IUPHHK-HT) in Indonesia is aimed to ensure sufficient and sustainable raw material supply for timber industries. This is a concept based on cultivation of timber species with a plant cycle that is shorter than one of natural forest. The Government Regulation Number 34 Year 2002 sets a limit on the area allowed for HTI, that is only on bare land and reeds or shrubs. It also asserts that a plantation forest must be able to rehabilitate critical lands. This is in line with the policy of the Ministry of Forestry that was issued previously, Minister of Forestry Decree Number 10.1/Kpts-II/2000, which insists that an HTI must be located in an unproductive Production Forest area. HTI license holder must also set aside or alienate areas within their concession, so called enclave, that is still in the form of natural forest vegetation.51

Up to 20113 total area of HTI or Timber Production License on Plantation Forest (IUPHHK-HT) concessions in Indonesia had reached more than 10 million hectares, managed by 252 management units.52 Under aforementioned concept of timber 47 Source: Ministry of Forestry, June 2014, JPIK Analyses 201448 APHI Presentation: Development of Concession and Performance of Forest Utilization and Forestry Industry and Its Implication on the Changes of the Forest Cover, during the event “External Review the Formulation of The State of The Forest IndonesiaIII Period of 2009-2013 Book” October 23, 2014 in Bogor49 Presentation of Forestry Bussiness Unit in seminar on The State of Plantation Forest Development and the Availability of Timber Raw Material for Pulp and Paper Industry Year 2014, Jakarta.50 Manurung, E.G.T., R. Kusumaningtyas and Mirwan. The State of Industrial Plantation Forest Development in Indonesia. WWF Foundation-Indonesia. 199951 The State of the Forest, Indonesia, 201152 Presentation of Forestry Bussiness Unit in seminar on The State of Plantation Forest Development and


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plantation, 85 percent of the total area has already cleared, leaving just 1.5 million hectares of natural forest cover.

When we studied the volume of timber production from the 10 million hectares total of this area we found that the 40.8 million m3 targeted production for year 2012 was not met (Table 10). As a matter of fact, not even half of that target was met. Only 19 million m3 timber was produced year by year. But, instead of urging an increase in plantation forest production, the Ministry of Forestry increased the areas targeted under land expansion plan to 15 million hectares in 2014. This land expansion plan failed to take into account the fact that the realization of production in the 2013 is very far from the target, and yet put even more ambitious expectation that the timber production will reach 100 million m3 per year in 2014. We suspect that this land expansion plan is driven by the rumour about the reopening of log export and the development of new pulp mills in South Sumatera and West Kalimantan.

Assuming that the tree annual increment for a hectare is 20-30 m3 and the plant cycle is 5 years, then 1 million hectares of HTI will produce a total harvest of 125-150 million m3.

However, up to the present, the expansion of industrial plantation forest areas is not followed by the acceleration of planting in the given areas. Manurung et al (1999) states that the development of Industrial Plantation Forest (HTI) has sacrificed the natural forest. The HTI expansion has been observed as just a mean to make profit from the Timber Utilization Permit (IPK), which is awarded together with the issuance of the IUPHHK-HT.53 A depiction of HTI is always about lacking realization of planting, low quality of plants, and maintenance that is never seriously done.54 The misuse of IPKs have been directly causing loss of natural forest. On the other hand, the slow realization of planting and low quality cultivation can not meet the growing need of raw material for sawmills. This in turn triggers the HTIs to become expansive and land greedy in order to get the timber from the natural forest. FWI analyses show that the loss of natural forest inside the HTI concession areas during the period 2009-2013 is 453,168 hectares.

Based on the observation and analysis of feasibility study documents of various industrial plantation forest companies, the forest allocated for plantation forest is usually logged-over natural forest concessions which still has a high volume of timber (≥ 20 m3 / ha) or even primary (virgin) forest. This can be seen from the high

the Availability of Timber Raw Material for Pulp and Paper Industry Year 2014, Jakarta.53 Manurung, E.G.T., R. Kusumaningtyas and Mirwan. The State of Industrial Plantation Forest Development in Indonesia. WWF Foundation-Indonesia. 199954 Manurung (2001): Manurung, E.G. Togu and Hendrikus H. Sukaria. 2000. Pulp and Paper Industry: New Threat to Indonesia’s Natural Forest, (Online) (http://www.fahutan.s5.com/Juli/industri.htm).


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rates of land clearing by HTI. The suspicion of this misuse of IPK is stronger if we look at the low numbers of realization on cultivation at the field. To date, the biggest number of Industrial Plantation Forest units are located in Sumatera Island, spread in Riau Province, South Sumatera, and Jambi, in 4.5 million hectares area. Riau Province holds the record of the biggest plantation forest concession areas with 1.7 million hectares, followed by South Sumatera with total 1.3 million hectares, and Jambi with 663 thousand hectares.55

In the context of Timber Legality Assurance System (SVLK), the performance of HTI development also does not seem satisfying enough. Table 11 shows that up to 2012, of total 234 IUPHHK-HT units with definitive licenses, only 53 management units or 23 percent that have obtained SVLK certificate. However, up to June 2014, there are already 102 IUPHHK-HT management units that have obtained the certificate. At the same time there are 44 management units with PHPL certificate and 58 management units with LK certificate. We can then assume that up to 2014, only 40 percent from the definitive HTI management units that has complied with the mandatory legality certification system. On the voluntary ecolabel certification, only 14 IUPHHK-HT management units that have obtained the certificate issued by the Indonesian Ecolabel Institute (LEI) and 3 management units through the Forest Stewardship Council (FSC).

In 2012, the national log production reached 49.25 million m3, an increase of almost 2 million m3 compared to 2011. The production surge is around 10 million meter cubic in 2007 and 2010. Although there is the trend of timber production increase

55 Forest Watch Indonesia, 2014. Fact Sheet: Neglecting the Sustainability of Natural Forest and Peatland, and the Factors that Trigger Continous Land Conflict


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from IUPHHK-HT as shown in Table 12, it still cannot be the main supplier for national timber industry. Although The Industrial Plantation Forest is already the biggest contributor with 26.12 million m3, but it is only 53 percent from the total national timber production in 2012.

Data of timber production realization from land clearing to prepare for HTI planting shows a decrease from 13.5 million m3 in 2012 to 5.6 million m3 in 2013 (Table 13). Nevertheless, Riau still ranks as the biggest timber producer from land clearing as preparation for HTI planting, followed by East Kalimantan, nationally. It is no wonder because Riau Province has the biggest number of active HTI units.

In contrast to other provinces, timber production from HTI land clearing in North Sumatra is increasing, from 276 thousand m3 in 2012 to 663 thousand m3 in 2013.

The total HTI planting areas increased from 2013 to 2014, with particularly significant


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increase from 2007 to 2010, which was followed by a decrease up to 2013. The increase of HTI planting area in 2007 corresponds to the increase of timber harvest from HTI 5 or 6 years later (2012 or 2013). The timber log production data (Table 12) of 2012 shows an increase of 31 percent from the previous year.

Loss of forest caused by HTI development has bigger implication than the benefit seemingly gained. Its contribution to regional revenue is not worth it compared to


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Box 8. Industrial Plantation Forest in Riau

During the period of 2012-2013, the total natural forest cleared by land clearing activi-ties to meet the demand of raw material for pulp mill industries is 252,172 ha.i Around 69,582 ha of it is located inside the Asia Pulp and Paper Company Ltd. (APP) and Asia Pa-cific Resources International Ltd. (APRIL) concessions. APP and its partners cleared 26,181 ha of forest, APRIL and its partners 43,401 ha.ii

Figure 18. Forestry Benefit Sharing Fund Compared to Regional Revenues of Three Districts, 2010-2013

Source: Research on Forestry Sector Budget Contribution and Its Relation with Communities Welfare, Jikalahari and

Fitra Riau, 2014

A study on regional budget by Jikalahari and FITRA Riau shows that regional revenues sourced from the Benefit Sharing Fund and Reforestation Fund is not enough to finance the region’s forestry programs. This study is conducted in three districts, Siak, Pelalawan, and Bengkalis, that have the biggest HTI concessions in Riau. A closer look found that the total non-forestry revenue in regions is bigger than revenues from the forestry sectors.

It is indeed worrying, especially when we look at the reality of the investment in forestry industry in a district which has not always made real contribution in improving the welfare of the communities in the district. The poverty rate of Pelalawan District, where 41 percent of total area has become forestry industry areas, is around 14% of the total population in 2010 . The condition of villages and the welfare of communities in HTI concessions in Pelalawan, Bengkalis, and Siak Districts tend to lag behind compared to other districts. This is shown by the state of transportation infrastructure, availability of electricity, and health care.

i Jikalahari analysis 2012-2013ii ibidiii Statistic Agency, Riau Province, 2010

Source: Forest Watch Indonesia, 2014. Fact Sheet: Neglecting the Sustainability of Natural Forest and Peatland, and the Factors that Trigger Continuous Land Conflict


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the destruction of forest resources. Ecological disaster and conflict on access to land and resources continues to harm the communities. The economic advantage is only felt by the business actors, while the communities around the forest are becoming more marginalized, less prosperous, and less healthy.

Palm Oil Plantation

The accumulative contribution from the plantation sector to Gross Domestic Product (GDP) keeps increasing enormously, from IDR 81.66 trillion in 2007 to IDR 153.731 trillion in 2011, and IDR 159.73 trillion in 2012. An average annual growth of 14.79%.56 The Ministry of Industry’s record shows that palm oil and its derivative products contribute around 20 percent of total industrial products export. In 2013 the value of processed palm oil products export is US$ 20.6 million.57 The global

market demand and the competitive price drive nonstop expansion of palm oil plantation in Indonesia. The data from the Ministry of Agriculture shows that in ten years the total plantation areas have almost doubled, from 5.2 million ha in 2004 to 9.4 million hectares in 2013.

The government’s policy to boost the expansion of palm oil plantation has been responded well by the big business players in palm oil plantation. The government and big companies tend to only use the approach of financial profit and loss, forgetting to consider that land expansion sacrifices forest. The government expects to boost foreign exchange earnings through new investments in plantation, while the companies expect the saving they will make by expanding instead of intensifying their plantation area, as the later is much more expensive. CIFOR estimated that at least four million hectares areas of productive palm oil plantation, which exist today, come from deforestation.58 In the period of 2009-2013 at least 516 thousand

56 http://ditjenbun.pertanian.go.id/berita-292-kelapa-sawit-sumbang-ekspor-terbesar-untuk-komo-ditas-perkebunan.html57 http://infopublik.kominfo.go.id/read/89529/kelapa-sawit-semakin-mendominasi-ekspor.html58 http://jurnalbumi.wordpress.com/2013/07/12/4-juta-ha-kebun-sawit-melalui-deforestation/, accessed on September 15, 2014


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hectares areas inside palm oil plantation concessions were deforested.

Expansion of plantation areas is not supposed to be conducted in areas designated to preserve the forest, especially in areas that function as protection area and permanent production forest area.

A forest are can be cleared by a plantation company after it obtains the forest release permit. That’s how the bigger potential of loss of natural forest is coming from forest release permits for large scale plantations.

Sawit Watch pointed that until 2009 there are 590 plantation licenses that overlap with forest areas. Not only on top of Production Forest Areas, but also on Protection Forest Areas and Conservation Areas, the areas of those palm oil plantation concession licenses have reached more than 3 million hectares. In North Sumatera alone, in the last five years there were 120 thousand hectares forest areas cleared for palm oil plantations. Even worse finding is that companies often cleared forest just based on location permits from local Head of District. This is dodgy because the clearing should be based on forest release permit from the Ministry of Forestry.59

Throughout year 2010-2013, there were at least 579.7 thousand hectares of forest released for plantation. The number is expected to increase in the coming years in line with the target of palm oil production in Indonesia, 30 million tons for year 2014. 60The biggest forest release for plantation was in Kalimantan, 195.2 thousand hectares.

In the period of 2009-2013, deforestation happened in palm oil plantation concessions with a total area of 817.8 thousand hectares, which is more than half of total deforestation in Kalimantan Island (1.54 million hectares). This figure also is expected to keep increasing because, in reference to the Master Plan of Acceleration and Expansion of Indonesia Economic Development (MP3EI), up until 2012 there were 113 palm oil plantation expansion projects worth IDR 62.995 trillion.61

Presently, West Kalimantan is the province with the biggest oil palm plantation expansion plan, reaching 5.02 million hectares. Related to this, the government through the Ministry of Forestry issued SK.936/Menhut-II/2013 in December 2013 to allow conversion of forest areas into non-forest areas of total 554,137 hectares

59 http://www.trp.or.id/detailberita/79/120000-Hektare-Hutan-Beralih-Fungsi-Jadi-Perkebunan.html 60 http://bisniskeuangan.kompas.com/read/2014/05/06/1434477/Target.Produksi.CPO.Tahun.2014.Naik.Jadi.30.Juta.Ton, accessed on September 16, 201461 http://rumahwarta.com/index.php/ekonomi/650-tata-ruang-kalimantan-timur-karut-marut accessed on September 16, 2014


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areas.62 In looking at this dynamics, it is no wonder that West Kalimantan is the province with highest deforestation caused by palm oil plantations in Indonesia, with a total of 240 thousand hectares.

This fact shows that the government, in this case the Ministry of Forestry, is not consistent by actually issuing plantation licenses in forested lands.63

At the other side, with the rise of the issue of palm oil plantation as not environmentally friendly, the Government then created a sustainability assessment instrument called the Indonesia Sustainable Palm Oil (ISPO). ISPO is a mandatory certification scheme of environmental friendliness and sustainability for palm oil plantation. It is to be applied no later than December 31, 2014.

Based on the data from the Ministry of Agriculture, up until January 2014, only 40 palm oil plantation companies (among thousands of companies) that have obtained ISPO certificate, covering a total areas around 372,061 hectares.

Alongside ISPO, there is also the voluntary certification scheme, the Roundtable on Sustainable Palm Oil (RSPO) that was established in 2004. Up until mid-2014, it is estimated that the total area of palm oil plantation with RSPO certificates is around 1.98 million hectares.

Based on ISPO and RSPO certificates, of around 10 million hectares of palm oil plantation in Indonesia, only around 2.4 million hectares of which the sustainability principles have been applied. While it has been known that the ISPO or RSPO certified palm oil plantations are in reality not free from deforestation and social conflict, even bigger potential of deforestation and social conflicts is to be found in palm oil plantations without ISPO or RSPO certificate, of which the total area is 7.6 62 http://www.beritasatu.com/ekonomi/168340-prospek-industri-kelapa-sawit-2014-makin-cerah.html, accessed on September 16, 201463 http://www.bumn.go.id/ptpn6/berita/1823/Kebijakan.Konversi.Hutan,.Kelapa.Sawit,.dan.Lingkungan accessed on August 20, 2014


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million hectares. All this means that the potential of deforestation and social conflict throughout palm oil plantation areas in Indonesia is still very high.

Illegal Logging

Illegal logging is defined as any activity of felling, controlling, and trading timbers that is not abide by the law, as stipulated in the Law no. 41 year 1999 on Forestry and Presidential Instruction no. 4 year 2005 on Eradication of Illegal Logging in Forest Areas and Its Distribution throughout the Republic of Indonesia.

Illegal logging has been happening massively and systematically in many areas of Indonesia. A study published in 2010 by the London-based research institution, Chatham House, stated that 40 percent of timber products in Indonesia is sourced from illegal logging.64

Wood extraction is the main intra-sectoral cause of forest degradation, which very likely leads directly or indirectly to deforestation. Timber is taken out from natural forest in the form of log, and might later be processed for pulp, firewood, and charcoal.65

Uncontrolled wood extraction that does not comply with the regulations, could easily lead degraded forest into deforestation. The construction of laden road (to transport

64 http://www.bbc.co.uk/indonesia/dunia/2010/07/100715_illegallogging.shtml

65 Kanninen, et. al. in “Apakah hutan dapat tumbuh di atas uang? Implikasi penelitian deforestation bagi kebijakan yang mendukung REDD”: CIFOR, 2009

Figure 22. The Cause of Illegal Logging, A Study Case in Indonesia

Source: UNEP/Interpol Report, ‘Green Carbon, Black Trade’, 2012


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the timber) spreads out the deforestation even further. Access to transportation for migration that is more open drives forest clearing for farming land, especially in areas where the tenurial system and regulation is not clear or not enforced (Kaimowitz, et.al. 1998).66

The illegal logging problems were never comprehensively resolved and brought to a converging point. The exposed cases are only a fraction of illegal logging practices in Indonesia that implicate communities, authorities, and companies. It seems that the government and officials tend to be silent if the one who does illegal logging is a company or corporate. The environmental degradation caused by the illegal logging have been causing endless natural and economic disasters. Although the tendency of illegal logging practices is decreasing but at the present the impacts have already accumulated and the destruction, by and large, unchecked.

As can be seen on Table 16, the number of illegal logging cases is declining from 2002 to 2010. This decline is probably because of the decline of timber quantity, the more limited types of commercial timber accessible, decreasing market demand, and the more limited funds available for the operational cost of illegal logging.

Lately, the modus of illegal logging seems to only target high value timber species such as ebony, ironwood, and merbau. The logs are extracted inside the forests and then transported out in the form of processed timber using fake transportation documents. Timber smuggling to other countries uses the modus of transporting the logs with enclosed containers, faking the export declaration documents and reporting the logs as processed timber.

Law enforcement in illegal logging crimes is the authority of several state agencies: the Police, Forestry Police, and the Civil Servant Investigator (PPNS). However, it is

66 Kaimowitz, et. al. in Kanninen 2009, (Kaimowitz D., Byron, N. And Sunderlin, W. 1998 Public policies to reduce inappropriate deforestation. In: Lutz, E. (ed.) Agriculture and the environment: perspectives on sustainable rural development, World Bank, Washington D.C. p 303-322.)


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generally acknowledged that presently law enforcement in forestry has not met public expectation.

During period 2004-2012, there are at least 2,494 illegal logging cases on record in 8 provinces. Most of it is related to illegal land clearing for plantation and illegal mining. Those illegal logging cases are estimated to cause a potential state loss of IDR 276.4 trillion.67 The illegal timber trade, currently worth between US$30-100 billion per year, is undermining the Reducing Emissions from Deforestation and Forest Degradation (REDD) initiative-one of the main tools to create positive environmental change towards emission reduction, job creation, and sustainable development. The increasing practices of illegal logging, according to a statement from the Interpol, also trigger other crimes such as murder and violence, and push the indigenous peoples who manage the forest farther into the brink of extinction. A UNEP report in 2012 stated that without collaboration and joint law enforcement among countries, the timber barons and thieves will keep reigning, moving from one forest to another forest, destroying the environment, local economy, and the lives of the native communities.

In Indonesia, the total volume of timber claimed to be sourced from production forest increased drastically from 3.7 million m3 in 2000 to more than 22 million m3 in 2008. United Nations Office on Drugs and Crime (UNODC) estimated that only half of that volume of timber actually and physically existed, which means there has been a “timber laundering” in a massive scale. In Kalimantan, the amount of bribes one has to make to obtain a forest clearing license for a 20 km2 (2,000 hectares) area is around US$25-30,000. A look at the data on cross-border timber trafficking between Kalimantan and Malaysia shows that the total volume of timber exported from Kalimantan is three times higher than the total volume of timber imported by Malaysia. This, according to UNEP and the Interpol, is a sign of a huge amount of tax fraud.

67 Rakyat Merdeka newspaper (http://www.rmol.co/read/2012/11/24/86712/41-Juta-Hektare-Hutan-Nasional-Rusak-Akibat-Pembalakan-Liar-)


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Box 9. The Case of Labora Sitorus

First Police Inspector Adjutant (Aiptu) Labora Sitorus, a member of Raja Ampat Papua Resort Police, was suspected to conduct a criminal offense that violates the Law no. 41 year 1999 on Forestry and the Law on Oil and Gas. Previously, Papua Provincial Police Commands had established Labora as a suspect on fuel stock piling, illegal logging, and suspicious financial transactions.This Labora Sitorus case was started from a communities’ report that was sent through a text message to the Head of Papua Police Commands alleging the police officer stockpiling fuel and conducting illegal logging. It turned out that the extraction of timber by this active police officer Aiptu Labora Sitorus had destroyed four sanctuary areas in Sorong, Papua. Those four sanctuaries are West Batanta, West Waigeo, East Waigeo, and North Salawati. His destructive modus involves guaranteeing ‘security’ for the communities to encroach and log in those sanctuaries, and then collect the timber and feed it to his own sawmills.From the investigation, the team from Papua Police Commands then seized three vessels which were used to transport 1,000 tons of fuel and one vessel that carried almost 1,000 cubic meter of timber in Sorong, West Papua. The National Police Headquarters later established Aiptu Labora Sitorus as suspect on May 18, 2013. He was being charged with three indictments: money laundering, illegal logging, and illegal fuel stockpiling (the case of fuel stockpiling in Sorong is under a company named PT Seno Adi Wijaya while the timber smuggling is under PT Rotua company. In the progress of investigation, Labora was also suspected as conducting money laundering related to the two companies which are owned by his wife.) Aiptu Labora Sitorus was arrested in the terrace of the National Police Commission Office, and was put in the detention of Sorong Resort Police. In addition to establishing him a suspect, the police also seized Labora’s assets including trucks, vessels, and export-ready timber. This case became a public attention after the Financial Transaction Reports and Analysis Center (PPATK) shared their findings, that is that Aiptu Labora Sitorus have conducted suspicious financial transactions for the last five years involving a total IDR 1.5 trillion.In February 2014, the Panel of Judges in Sorong District Court in West Papua sentenced Labora Sitorus two years in prison and a fine of IDR 50 million. This verdict is actually very much less from what the prosecution wanted, which is 15 years in prison and IDR 100 million fine. In their verdict, the Panel of Judges did not apply the criminal offense article on money laundering because in their opinion the proven charges were only the illegal logging in sanctuaries and fuel stockpiling. The prosecutors decided to appeal as they considered the verdict as “awkward. The processed merbau and kuku timber, owned by Sorong-based PT Rotua, in which Aiptu Labora Sitorus was the sole investor, totalling 2,056,567.8 cubic meter or 271,530 of logs, were then put into an auction by the Surabaya State Assets and Auction Service Office (KPKNL). It is recorded that those timber were sold to a Surabaya-based businessperson, Teddy Wijaya (his company is named CV Source Makmur), for IDR 6.570 billion.

In September 2014, the Supreme Court approved the cassation from the prosecutors and rejected the request from Aiptu Labora Sitorus. The verdict from the Supreme Court to Aiptu Labora Sitorus is based on the prosecutions, 15 years in jail and IDR 5 billion fine with subsidi-ary 1 year in jail.

Source:http://www.tempo.co/topik/tokoh/997/Labora-Sitorushttp://www.tempo.co/read/news/2013/05/13/063480065/Usaha-Sawmil-Labora-Sitorus-Rusak-Em-pat-Cagar-Alamhttp://nasional.kompas.com/read/2013/05/19/05291690/ini.alasan.mabes.polri.soal.penangkapan.aiptu.labora.sitorushttp://nasional.kompas.com/read/2014/09/18/06370001/Vonis.Kasasi.Aiptu.Labora.15.Tahun.Penjara.Plus.Denda.100.Kali.Lipat.Lebih.Berat.


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Mining

Mining licenses, which trigger deforestation and forest degradation inside forest areas, are blooming and acquiring bigger total areas. Mining is a process of taking minerals and metals from the earth, such as gold, diamond, and nickel. In general, mining is a choice by the government because it gives incomes and compensation to its worker. It is not surprising that the intensity and quantity of mining is getting higher from time to time. This is shown by the many Mining Business Licenses (IUP) issued by the government, which reached a staggering number of 11 thousand IUPs just until May 2013. This is peculiar as the Directorate General of Forestry Planner stated that until May 2013 it has only given official licenses for exploration activities on 2.6 million hectares of land, and on 382.5 thousand hectares for mining exploitation activities, all of which is located inside the State Forest Areas.

In addition to the easiness of getting the license and the low cost of getting forest lease, weak monitoring and law enforcement is capitalized by the mining companies to encroach State Forest Areas. For example, the case of nickel mining company PT Gema Ripah Pratama in Morowali Conservation Areas, Central Sulawesi, or the encroachment of Protection Forest Area by PT INCO in Karebbe Village, Malili Sub-District East Luwu, South Sulawesi. Many mining companies who operate without legal permits inside forest areas seem to be actually facilitated by government officials for their own personal benefit or for political cost. The beginning of this ‘opportunity’ was actually the permission for 13 mining companies to operate in Protection Forest Area through Government Regulation in Lieu of Law no. 4 year 2005 which was later converted to Law no. 19 year 2004, followed by the Government Regulation no.2 year 2008.

Basically that Government Regulation sets a very cheap compensation for forest usage for investment needs (for the sake of development) such as for open mining, underground mining, telecommunication network, telecommunication repeater, radio transmitter station, television relay station, electricity, renewable energy technology installation, water installation, and highway.

Immediately after the regulation, the period 2008 to 2013 become the ‘fertile time’ for mining activities in forest areas. What started as just a small leak of chance and was then turns out to be a “red carpet” walkway for the mining companies to enter and exploit forest areas. The real result of this error is the conflicts and destruction in almost all State Forest Area in Indonesia.

In the coming years, forest area conversion into mining will still happen. Easiness after easiness are continuously offered to the companies for the sake of development. Approaching the 2014 General Election, a very important thing happened related to the cheap cost or fee for forest area lease for commercial activities, an issue which was always used by the government to facilitate forest clearing for mining, which is the increase of the Non-Tax State Revenue (PNBP) in forestry sector. The increased fare is believed to be able to prevent massive forest areas become under the control of mining companies. That’s how the government arrived at the conclusion that there’s a need for revision of the Government Regulation no. 2 year 2008. Moreover, that year too, the phrase “geothermal mining” was changed to “geothermal utilization” in the Draft Bill on Geothermal. This very likely is because of the fact that so many geothermal exploration and exploitation activities are conducted in forest areas.


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Box 10. Nickel Mining in Morowali Conservation Area

Morowali Conservation Area is located in Morowali District, Central Sulawesi Province. Morowali Forest Conservation Area is established with the Ministry of Forestry and Plantation Decree no. 237/Kpts-II/1999 declaring the area as permanent forest area with conservation function. The total area is 209,400 hectares. The ecosystem of Morowali Forest Conservation Areas (FCA) is very complex and diverse, ranges rom mangrove forest, alluvial lowland forest, mountain forest, to forest moss. Those ecosystems are rich with the diversity of fauna, such as anoa, hog deer, primates, possum bears, weasel, wild boar, and deer. Several of the bird species are Maleo, footed birds, and many other bird species in that Conservation Areas.

Figure 24. Port of Nickel Ore Shelter PT Gema Ripah Pratama in Tomori Bay in Morowali Conservation Area, Central Sulawesi

Morowali Conservation Area has been destroyed by the operation of the nickel mining company, PT Gema Ripah Pratama (PT GRP) and its contractor PT Eny Pratama Persada (PT EPP). PT GRP obtained Mining Business Permits (IUP) Production Exploration no 540.3/SK.002/DESDM/XII/2011 with a total area of 145 hectares in the conservation area. Without any production operation IUP, since June 1, 2012, PT GRP started the excavation and produced nickel ore. They built road to transport the minerals to the port, which sweep away in the middle of residential areas. The company also piles up orb in Tambayoli Village, with a total area of one hectare.

Photo: Jatam Sulteng


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PT EPP started clearing the mangrove forest of Tomori Bay conservation area since October 2011, with 15 meters width, and 1,200 meters long, covering Tambayoli, Tamainusi, and Tandayondo Villages. Those around 1.8 hectares area were then backfilled with sand gravel. Ironwood were cut from the conservation areas, lined and then used to build the nickel (orb) loading port.

The communities who live around the area, the To Mori and Tauta Awana indigenous communities, protested on this issue because they felt they were being treated unfairly. Since Morowali became a conservation area, the surrounding communities cannot utilize the wood any more even if it is only one or two logs to build a house. The community member who violates it will be jailed by the Natural Resources Conservation Agency (BKSDA). Whereas they are the native inhabitants, indigenous peoples who live from generation to generation in the area and forest has always been their source of livelihood.

In December 2012, the Central Sulawesi Mining Advocacy Network (JATAM) reported this case to the Ministry of Forestry (MoF). The MoF promised to send a team from the national government to the location based on the report from Central Sulawesi JATAM. Meanwhile, the local authorities tends to keep their silence about it. However, the promise was just a promise. “We also have sent the names and the owner of PT Gema Ripah Pratama, it is rightly should the MoF determines them suspects based on the investigation results, and then to conduct confiscation of asset and equipment at the field. Not waiting until it’s heavily destroyed, then act about it,” said Andika, Deputy Director of Central Sulawesi Mining Advocacy Network to Mongabay, Tuesday (12/3/13).

The then Forestry Minister Zulkifli Hasan, when he was asked about the destruction of Morowali Conservation Area by the mining companies, did not give straight answer. He said that if there is a case like this then the police has to act. “It’s impossible for the Ministry of Forestry to handle all of it. We are the one who arrest, we investigate. It is impossible. It should be handled together,” he explains to Mongabay, Friday (8/3/13).

Since the end of December 2012, PT GRP stopped operating. But they already left three locations with extreme destruction. First is the location of the jetty which has destroyed the mangrove forest. Second is the site of nickel mining in the conservation area. The third is the location of ironwood logging to build the jetty.

“All of those crucial sites, we don’t know their fate in the future. This condition hap-pens in all nickel-mining sites in Morowali District, not even a single company does post-mining rehabilitation. Everyone leaves.” Even greater than that is that not one of those forest destroyer companies gets any sanction. All of them ran away.” those busi-nessmen only took the benefit of the transition period of Law on Minerals and Mining, and the authorities of Head of District to get the economy benefit,” said Andika.

The mining expansion in Morowali District in the last five years has significantly in-creased. It is recorded that the total of Mining Business Permits (IUP) issued by the Head of Morowali District is around 189 IUPs. That figure is the accumulation from many mining companies there. Only 77 IUPs are included in Clean and Clear catego-ry. The rest of it is believed to be operating without any proper control and monitoring.


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Andika said that the destruction in Morowali may need a very long restoration processes. Right now there is no clarity on the budget. Morowali Regional State Budget is already deficit in the last three years. “I think the loss due to the sporadic mining practices in Morowali District is supposed to be seriously audited by the credible state institutions such as Financial Audit Agency (BPK), Corruption Eradication Commission (KPK) and involving other sectors such as the Ministry of Environment. By doing so, we can see the effort to prevent stealing and destruction of state’s wealth by the Morowali nickel booming,” he said.

Figure 25. Abandoned Mining Holes of PT Gema Ripah Pratama in Morowali Conservation Area

Photo: Jatam Sulteng

Source: Press Release Central Sulawesi Mining Advocacy Network dated June 4 2012;http://www.jatam.org/english/index.php?option=com_content&task=view&id=208&Itemid=67;http://www.mongabay.co.id/2013/03/12/cagar-alam-morowali-diobrak-abrik-tambang-nikel-pemerintah-diam/


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Forest Fires

Land and forest fires occur more intensively and cause more and more land and forest degradation. After the El Nino disaster (ENSO) on 1997/1998 that burnt 25 million hectares of peatlands and forests around the globe, forest fires still become international attention. Initially, forest fire is considered as part of natural cycle and incident, but later on people started to consider that there is the possibility that land and forest fires are triggered deliberately by humans, for example for hunting and land clearing, hence the term forest burning. Purbawaseso (2004) stated that the high rate of forest fires in Indonesia is mostly caused by arson (deliberate burning activities) by human and only a little is caused by natural condition.

Majid (2008) said that the total area burned in forest fires up until October 1997 is 131,923 hectares, which consists of protection forest (10,561 hectares), production forest (94,443 hectares), natural preserve (7,721 hectares), tourism forest (1,774 hectares), national park (12,913 hectares), forest park (485 hectares), and research forest (34 hectares). These mostly are peat forest in Jambi Province, Riau, and South Sumatera.68 Those fires are mainly caused by land clearing for palm oil plantation and plantation concessions. In South Sumatera, the fires on wetlands are also caused by the activities of communities’ livelihood, such as farming, fishing, and logging.

In Kalimantan, the forest fires happened in Central Kalimantan where it is recorded that in 1997,69 2001,70 and 2002, repeated fires happened on peat forests at the same location, the One Million Hectares Rice Field Project sites. In 1997, in West Kalimantan there were extensive forest burning probably caused by land clearing for palm oil plantations and concessions (Potter and Lee 1999 in Tacconi 2003) and also by the livelihood activities by the communities in Sentarum Lake area (Dennis et.al. 2000 in Tacconi 2003).

Forest fires also happened in the center of Mahakam Lake area in January to April 1998, and it was suspected to be related to the livelihood activities by the communities (Chokkalingam dkk. 2001). The result of FWI study in 2003 also shows that land clearing through forest burning is not only happening in Kalimantan and Sumatera. Fires are reported to happen in 23 out of 27 provinces in Indonesia in 1997-1998. Most of the forest fires happened in those two main island is caused by plantation companies and several government projects, resulted on tens of thousands hectares of deforestation in one time.

Recently, the forest fires in Riau have caused massive and cross-country impacts. Ninety nine percent of those fires are believed to be deliberately made or intentionally to clear lands for palm oil plantation. The forest fires indicated the involvement of several commercial activities.

Although the government has issued a regulation on land clearing without burning land and forest (see Box 4), the forest fires caused by humans still often happen. In July 2013, through the satellite imagery monitoring, 1,210 hotspots were recorded, of which 1,180 hotspots or 98 percent are located in Riau, Sumatera. This will keep on happening if the law enforcement is weak towards the actors who set the forest on fires, the establishment on compensation for environmental damage is not clear 68 Tacconi, Luca. 2003. Kebakaran Hutan di Indonesia: Penyebab, Biaya, dan Implikasi Kebijakan. Bogor: CIFOR Occasional Paper No.38(i)69 Barber 2000 and Siegert 2001 in Tacconi 200370 Anderson 2001 in Tacconi 2003


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and not supported by a clear and documented calculation. A research by Akbar, et.al, 2011, shows that the efforts on law enforcement by the government especially on land and forest fires are still very weak.

Papua and Kalimantan have the biggest forest covers that are prone to land burning activities making way for new plantations. Forest fire caused by land clearing could happen in Papua and Kalimantan and it is estimated to continue along with the opening of new plantations.

Box 11. Regulations on Preventing Fires in Plantation Sector

PFires prevention in plantation sector has clear regulation. These are the related regulations:

1. Law No.18 Year 2004 on Plantation;2. Presidential Regulation No.6 Year 1995 on Plants Protection;3. Presidential Regulation No. 4 Year 2001 on Damage Control and/or environmental

pollution related to forest and/or land fires;4. Presidential Regulation No. 38 Year 2007 on Division of Government Affairs

between the government, Provincial Government, and District Government;5. Presidential Instruction No.16 Year 2011 on Control Enhancement of Forest and

Land Fires;6. Minister of Agriculture Regulation No.26/Permentan/O.T.140/2/2007 on Plantation

Business Permits Guidelines.

Source: http://ditjenbun.pertanian.go.id/perlindungan/berita-262-mencegah-pembukaan-lahan-den-gan-cara-membakar.html

3.2. Government Policies and Abuse of Authority

Changes in Function and Allocation of Forest Area

Changes in function and allocation of forest area is commonly termed conversion of forest area. Changes in allocation are made to support interests outside forestry sector, generally in the form of forest area release. Changes in function are between one function to another function in a forest area, therefore no reduction on forest area and the overall total area is stable.71

Changes of function or allocation of forest area are often considered as just implication of national development, because as a developing country Indonesia still depends very much on its natural resources, especially land resources. The main problem regarding land in Indonesia is the growing discrepancy between the needs and the availability. The growth of the population and activities is very fast and land is becoming a scarce resource. Over time, land is getting scarcer. Land availability also decreases with the increasing number and total areas of concessions for big scale economic activities.

71 Law Number 41 Year 1999 article 19.


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The policy on conversion of forest areas is one of the factors that triggers deforestation in Indonesia, especially the conversion which allows forest clearing activities for cultivation and for physical development.

Pearce and Brown (1994) stated that the changes of forest to non-forest area (forest area release) come about as the result of two conditions.72 The first is the competition to utilize forest resources between the stakeholders. As an example, forest conversion to develop infrastructure, agriculture, plantation, and mining, residential areas, industry and cities.

The second is the failure of economic system to achieve the real value of the environment. This is a consequence of the many functions of forest resources for which a market does not exist. Fiscal policies, such as input subsidies, and non-fiscal policies, such as easy procedures to obtain permits on forest area release, greatly increase the total number of decisions to convert forest.

The start of the wave of forest area release for plantation in 2010 is in Sumatera and Kalimantan Island with a total of 8,611 hectares. In the following year (2011) the forest area release for plantation has increased in those two islands, followed by other islands such as Sulawesi and Maluku.

Until June 2010, not less than 2.8 million hectares of forest area has been released for the expansion of palm oil plantations, while the realization of the cultivation is actually only 1.11 million hectares.73 In the case of development of palm oil plantation, until 2009 it is recorded that almost 18 million hectares of forest has been cut for palm oil plantations. However, only around 6 million hectares areas that has already been planted. If we look at this low realization of planting, we will be drawn to suspect that the land clearing and forest area release for palm oil plantation is only an alibi to get the huge profit from the timber harvest of those land clearings.

72 Several causes of conversion of forest areas to non-forested areas.73 Forest Watch Indonesia 2012. The State of Indonesia’s Forests: Period of 2000-2009. Bogor


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After peaking in 2011, forest area release for plantation slightly decreased in 2012 and 2013. However, what is interesting is the soaring forest area release for plantation in Papua, totalling 137 thousand hectares in those two years. The Merauke Integrated Food and Energy Estate (MIFEE), which was officially launched on August 11, 2010, is suspected to be adding up to that soaring size of forest converted. This suspicion is based on none other than the Forestry Minister Zulkifli Hasan’s own statement that the Ministry has prepared 600 thousand hectares in Papua to develop MIFEE.74

74 http://www.tempo.co/read/news/2011/05/12/090334109/Baru-80-Ribu-Hektare-Lahan-Dilepas-un-tuk-MIFEE

Box 12. Forest Area Lease for Mining

Mining industry in Indonesia is known to have irreversible destruction power, greed for land, and one of the causes of loss of forest cover.

Referring to the data from the Ministry of Forestry, from 2008 until March 2013 the realization of total forest area leases for the mining industry has reached 2.9 million hectares. Those lands consist of 2.5 million hectares of forest area lease (IPPKH) for survey/exploration and 380 thousand hectares IPPKH for exploitation/production operation.

If we look at the permits given to the mining companies, from 2010 until May 2013 there were significant increase of Mining Business Permits (IUP). From only hundreds of permits initially, it then reached 10,660 IUPs across Indonesia, where 51.96% of it is not categorized as Clean and Clear. iv

One of the triggers of the soaring IUP application is the easiness of Forest Area Lease Permit (IPPKH) for non-forestry activities, including for mining industry. This is an already well known state of affairs since the issuance of the Government Regulation in Lieu of Law (Perpu) number 1 year 2004, which added a transitional regulation into Law no. 41 year 1999, which was then passed on into law by the House of Representatives (DPR) as Law no. 19 year 2004 on Establishment of the Government Regulation in Lieu of Law no. 1 year 2004 on Changes of Law no.41 year 1999 on Forestry To Law. The Government Regulation regulates the compensation rate of forest utilization for non forestry investment activities.

Thirteen mining companies obtained permits to operate in protected forest areas through the Presidential Decree no. 41 year 2004 on Permit or Agreement in Mining Sector Located in Forest Areas. The total size of protection forest areas submitted for mining activities reached 927,684 hectares. IPPKH was then even more reinforced and made even more easier through the Government Regulation number 2 year 2008.

The rampant licensing for mining businesses is usually closely related to the political dynamics in the regions. The number of licenses issued increased nearing the regional election. Besides rampant conflicts because of the expansion of mining industries, data from the Ministry of Forestry in August 2011 shows that the state potentially lose due to forest release permits in 7 provinces in Indonesia a staggering amount of IDR 273 trillion. The state loss is caused by the opening of problematic 727 plantation units and 1,722 mining units.

iv Status IUP Sebagian Besar Belum Clean & Clear, Kajian Sistem Pengelolaan Penerimaan Negara Bukan Pajak (PNBP) Mineral dan Batubara. KPK 2013


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The areas are also released for transmigration. The forest areas released for the development of transmigration areas were big enough, especially in Sumatera and Kalimantan Islands. During the period of 2010-2013, forest area release reached 962,638 hectares nationally. The biggest release was in Sumatera Island with a total of 507 thousand hectares, and Kalimantan came second with 201 thousand hectares.

Another government’s policy related to conversion of forest is forest lease, which mainly is for mining activities. The area on which a forest lease (IPPKH) issued is a state forest area and its function is not changed. IPPKH is issued by the Minister of Forestry after considering the total of areas, period of time, and environmental sustainability. IPPKH must be obtained by any mining company before commencing survey/exploration or operation/exploration. Until December 2013 the Ministry of Forestry has issued IPPKH for mining companies covering 413 thousand hectares numbering 459 mining business units. At the same time, the permits issued for general observation/survey covered 2.9 million hectares, for 547 mining business units.

Forest area lease for mining and non-mining exploitation increased in period 2008-2012. The increase in areas or total forest area lease license holders for mining and non-mining exploitation in 2009 was big enough compared to 2008. In 2010, the total permit holders decreased, and then back to increase until 2012 (Figure 26).

The largest conversion of forest area during the period of 2008-2012 is the change of function to Conservation Area. Conservation Areas were added from 400 thousand hectares to around 1.8 million hectares, most of them became National Park (Figure 27). The new National Parks were established in Central Java, Yogyakarta, Central Kalimantan, Central Sulawesi, South Sulawesi, and North Maluku Provinces.

Meanwhile, nationally the total size of Protection Forest Area decreased from 525 thousand hectares to 249 thousand hectares. This is although in several provinces


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the total forest area is actually increased, such as in Riau Archipelago Province where Protection Forest Area grew from 6 thousand hectares to 35 thousand hectares. Similar to Protection Forest Area, Production Forest Areas (HPT, HP, and HPK) also show reduction of total areas. Looking at the tendency of forest areas reduction, it can be estimated that the change on function is towards expanded conservation areas, while forest conversion is about forest area release.

Expansion of Administrative Areas

To date, Indonesia consists of 33 provinces, 399 districts, and 98 cities. The number of autonomy regions increased significantly right after the New Order era. In the period of 1999-2013, there were 8 new provinces, 175 new districts, and 34 new cities. Increased number of autonomy region always resulted in expansion of urban areas and physical infrastructure development. But as yet, there has been no spatial analyses on the expansion of urban areas of each new autonomy region in Indonesia. However, according to Hosonuma et al (2012) based on assessment of 100 developing countries in the world, the infrastructure development and expansion of urban areas contributes 20 percent of deforestation.75

The National Development Planning Agency (Bappenas) in its Assessment Study on Impact of Administrative Areas Expansion (2008) looked at the different perspectives between the national and regional governments. The national government, when formulating the Government Regulation no. 129/2000, wanted to seek for new autonomy regions that can be independent and self-sustaining. However, on the other side, the regional governments have a different perspective, which is to look at the expansion as an effort to quickly come out from the economic downturn of the time.

It is understandable that every new autonomy region will have to catch up the parent region, therefore the need of substantial enough funding to start the development and complete the structure and infrastructure in their region. Besides from the

75 Hosonuma et al. 2012. Environmental Research Letter Vol.7 No.4 “An Assessment of deforestation and forest degradation drivers in developing countries”. IOP Publishing Ltd.


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national budget, the financing should also sourced from its Own Regional Income (PAD). The weak capability of regional governments in formulating development plan will trigger pragmatic decision-making related to the PAD. Land resource is one of the region’s assets that can be easily accessed as income source. This is through issuance of permits and related to it generating non-tax revenue. Most of the licensing authority on land-based utilization in the forestry sector is held by the national government. However, for plantation and mining, some of it is under the authority of regional government. In the plantation sectors there are cases of forest area release that make it into public awareness, but the most striking is in the mining sector, with more than 90 percent of all mining licenses is issued by the Head of District.

Corruption in Forestry Sector

In 2008, The Guinness Book of World Records put Indonesia as the country with the fastest pace to destroy the forests in the world. Meanwhile, a World Bank study in 2006 argues that deforestation rate (illegal forest activity) correlates to corruption in the country. Indonesia is on the top rank.

Forest destruction and injustice in distributing forest functions are closely related to political interests and corruption. Many regions with abundant natural resources utilize the forest resources as one of the main funding sources. The huge revenue gained from plantation and mining industry makes policymakers compete to give out concession. It is so that instead of managing natural resources in a sustainable way and taking into account environmental sustainability, which is supposed to be the main task of the government and political elites, they give out concessions and also enjoy the usury.76

76 Indonesia Corruption Watch, 2013. Policy Paper: Menguras Bumi, Merebut Kursi.


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The rampant corruption practices and crimes in the forestry sector have caused huge state loss. In Table 18, Human Rights Watch in 2009 stated that the corruption practices and mafia in Indonesia’s forestry sector have caused U$D 2 billion (or around IDR 20 trillion) of state loss each year. That finding is strengthened by the analyses from Indonesia Corruption Watch on the state loss caused by crimes in the forestry sector during the period of 2004-2007.

The more rampant forestry corruption practices is not dealt with firm and fair law enforcement processes. Obviously, this makes a huge concern about the remaining forests in Indonesia. The law enforcement process by the government and law officers is generally conducted just to arrest actors at the field level. The investigation of cases which involve main actors is often stopped, or just a few of hose cases makes it into court. Even when tried in court, the final results, the verdicts, are usually not satisfying.77

77 Indonesia Corruption Watch: Kinerja Pemberantasan Korupsi dan Pencucian Uang di Sektor Kehutan-an – Laporan Hasil Penelitian, 2012


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Industrial Expansion and Market Demand

Timber is the third biggest commodities traded in the world after crude oil and gas.78 Timber commodity is one of the long-term businesses with the potential of high profit, mainly utilized to meet the demand for building material, household furniture, paper materials, etc.

For the last few years, the demand for timber in Indonesia keeps increasing, which is in contrast with the shrinking forest. The Ministry of Forestry in 2013 stated that the national timber need is 49 million m3.79 While the global demand for timber raw material in 2014 is at least 350 million m3 for the year.80

78 http://harfam.co.id/sekilas.php?content=mengapa-kayu accessed on September 26, 201479 http://silk.dephut.go.id/index.php/article/vnews/86 accessed on October 2, 201480 http://forestryinformation.wordpress.com/2012/05/11/kebutuhan-kayu-secara-nasional-5-tahun-tera-khir/ accessed on October 2, 2014

Box 13. Bribe in Forest Conversion

The bribery scandal regarding forest function in Jonggol area, West Java Province, is a real example that shows the government’s willingness to protect forest areas is not getting any better. The government tends to have only short-term orientation in supporting the corruption practices and changed the forest areas into residential area.

The plan for forest conversion in Jonggol can be fatal. To date, the area is the ‘last fortress’ that can protect the state’s capital city from big flood. Another fortress in the Puncak area have been unreliable for so long because of the damage and encroachment by residential areas and private villas. If the expansion of residential areas in Jonggol was realized, Jakarta would need to be moved because it would be changed into a huge lake.

In early May 2014, Head of Bogor District Rachmat Yasin was arrested by the Corrup-tion Eradication Commission (KPK) on an allegation of taking bribe. The number one man in Bogor District is accused of taking IDR 3 billion bribe, as a part of “thank you souvenir” from PT Bukit Jonggol Asri, a luxury housing developer company in Bogor. In return, the Head of District then issued a recommendation to change 2,754 hectares of Protection Forest Area to Production Forest Area.

The recommendation from the Head of District is a requirement to issue the permit to convert an area from protection forest to production forest. The downgrading of func-tion of this area is suspected as serving only as the stepping-stone to make it easier for further downgrading, the conversion from and later on release of the production forest area, which can be proposed along with the change in District Spatial Planning (RTRWK). To date, the Bogor RTRWK which was decreed in 2008 still states that most of the Jonggol area is Protection Forest Area

Similar cases also happened in other areas, showing that bad natural resources governance is prevalent all across Indonesia. In Bintan Island District, Riau Archipelago Province, bribe often happens in the process to change the function of the 7,300 hectares Protection Forest Areas. In South Sumatera, bribe also happened related to the conversion of forest in mangrove areas for development of Tanjung Api-Api Harbour in Banyuasin District in 2008.


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The increase of global and national timber demand can also be seen through the tendency of the growing forestry industry. The growth is also triggered by the government’s perception related to the comparative advantage of timber business in Indonesia, which is about its abundance of timber raw material and cheap labour wage. In Table 19, the development of pulp industry in 2011-2012 is illustrated by the additional 2 units of pulp and paper mills. This growth is also followed by the increase on the production capacity and the needs of raw material for pulp production.

Timber industry in Indonesia tends to be controlled by the pulp and paper industries, while the furniture and woodworking industry tend to be stagnant as it is affected by decreasing quality and quantity of the supply of raw material. It has gotten so bad that the utility of the national wood working industry is currently only 30 percent of the installed capacity.

The rapid growth of pulp and paper industry in Indonesia is driven by the need and usage of paper per capita that keeps increasing year by year. In 1995, the paper consumption was 2.64 million tons,81 in 2006 it has reached 5.60 million tons , and 6.6 million tons in 2010.82 While the world’s demand for paper is estimated to grow at around 2.1 percent per year, it is 4.1 percent in developing countries, and 0.5 percent in developed countries.83 In 2011, the world’s demand for paper reached 370 million tons, and is estimated to increase to 490 million tons in 2020.

81 APKI (2007)82 http://economy.okezone.com/read/2011/12/15/320/542983/sekarang-momentum-kebangkitan-in-dustri-pulp-kertas-ri83 Press Release, Directorate Genderal Agro and Chemical Ministry of Industry, Jakarta, 15/12/2011 (in: www.okezone.com)


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The pulp and paper industry in Indonesia started in the late 1980s. It experienced an extremely rapid growth in the period of 1988-1999, marked by gigantic increased of pulp production capacity from 606 thousand tons to 4.9 million tons. At the same time, the annual paper production capacity increased from 1.2 million tons to 8.3 million tons (APKI 1997, Hong 1999 in Barr 2000). It can be compared to year 2012 when the pulp industry capacity also increased to 7.9 tons and paper production capacity reached 12.9 tons. The pulp and paper production capacity in Indonesia will continue to increase looking at the development of 2 new pulp and paper mills in 2012.

Pulp export during the period of 2009-2014 shows the tendency to increase while the paper export is relatively stable at 4-4.5 million tons per year. In 2013, the pulp export is in the range of 3.5-4 million tons, thus it seems that more than half of pulp production in Indonesia is used to supply foreign industries.

The fast growth of pulp and paper industry in Indonesia in the last two decades has resulted in the increasing need for raw materials. The development of industrial timber plantation concessions (HTI) to meet that demand of timber materials has not performed as expected. Hence the perpetual reliance on natural forest timber. The raw material need of pulp industry right now is around 35 million m3, while the supply from the industrial plantation forests in 2012 is only around 26 million m3, of which the gap is filled from natural timber, both from land clearing process and from other sources.

Looking at the current direction of pulp and paper industry development and the formulated scenarios to achieve the production target of 45 million tons pulp and 40 million tons paper in 2030, it is obvious that pulp and paper will be the backbone of the forestry industry in Indonesia in the future.

Related to investment in the future, a report from the Indonesian Working Group on Forest Finance (IWGFF) reveals the existence of pulp mill projects with a total capacity of 6.95 million tons from seven new factories to be operating in 2017. These projects indicate a shift of orientation in the pulp industry from Sumatera,


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where most factories currently located, to Kalimantan and Papua. The forest cover in Kalimantan and Papua still have sizeable forest cover, more than 50 percent of total land in Kalimantan and 85 percent in Papua, and this may be the main reason of this shifting of location of this industry. In business sense, the proximity of raw materials is an important factor in building an industry.

The expansion of pulp and paper industry warrants close observation. The increase of investment, both for increasing industry capacity and development of new pulp industry, in the middle of this situation of raw material deficit from HTI, will affect even greater dependence of the pulp and paper industry to supply from natural forest timber. Eventually this expansion of pulp industry will only effect greater pressure to Indonesia’s natural forest


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Box 14. Pulp and Paper Industry in Indonesia

Pulp Industry in IndonesiaPT. Riau Andalan Pulp & Paper is an integrated pulp & paper producer which has the biggest production capacity, 2 million tons per year. The pulp factory is owned by Asia Pacific Resources International Limited (APRIL), under the flag of Raja Garuda Mas Group. Located in Riau, it currently holds the record as the biggest pulp producer in Asia. PT. Indah Kiat Pulp & Paper (IKPP), a subsidiary company of Sinar Mas Group. IKPP is an integrated pulp & paper producer. It now has 3 factory units with total capacity of 1.82 million tons per year. PT. Lontar Papyrus Pulp & Paper Industry (LPPI), a subsidiary company of Sinar Mas Group. This Jambi-based company has a capacity of 665 thousand tons pulp production per year. PT. Tanjung Enim Lestari Pulp & Paper, which is located in South Sumatera is founded in 1998 and currently has 0.45 million tons pulp production capacity. PT. Toba Pulp Lestari Tbk , located in North Sumatera, previously named PT. Inti Indorayon Utama, founded in 1989 and has pulp production capacity of 0.24 million tons. PT. Kertas Nusantara, which is located in East Kalimantan, previously named PT. Kiani Kertas, was founded in 1997 and has pulp production capacity 0.53 million tons.PT. Kertas Kraft Aceh, located in Aceh and founded in 1988, has 0.14 million tons pulp produc-tion capacity.

Paper Industry in IndonesiaPT. Indah Kiat Pulp & Paper Tbk (IKPP) of Sinar Mas Group ranks the top company with installed capacity 2.111 million tons per year. IKPP has 3 factory units: Tangerang factory with 106 thousand tons capacity per year, Bengkalis factory with 700 thousand tons per year, and Serang with 1.305 million tons per year. With that capacity, IKPP is recorded as the biggest paper producer in Asia. PT. Pabrik Kertas Tjiwi Kimia Tbk, also a subsidiary of Sinar Mas Group. Tjiwi Kimia has a total 1.044 million tons installed capacity. Based on Tjiwi Kimia annual report in 2009, the company has already increased its production capacity to 1.412 million tons per year, consists of 1.014 million tons of paper, 78 thousand tons packaging paper, and 320 thousand tons paper productions (stationery) per year. The factory of this company is located in Sidoarjo, East Java, and produces various types of paper and stationery including notebook, memo, envelope, computer paper, wrapping paper, shopping bag, etc. PT. Lontar Papyrus Pulp & Paper Industry (LPPI), besides producing pulp, the company also produces paper although not in big scale. The production realization of LPPI in 2009 was pulp 608.7 thousand tons and 51.2 thousand tons tissue, marketed for local market and export. Beside the Sinar Mas Group, PT. Kertas Nusantara (Formerly PT. Kiani Kertas) is a big enough paper producer with 525 thousand tons per year. This company reinforces its position as top paper producer by increasing its capacity to 1.125 million tons per year. There was news in the past that this company was acquired at the value of US$ 220 million by the United Fibre System (UFS) from Singapore. However, according to APKI Director, the acquisition process was cancelled by UFS due to the its incompatibility with the company’s shareholders.Source:http://www.datacon.co.id/Pulp-2011Industri.html http://bataviase.co.id/node/647772Kertas Kraft Aceh Diminati 16 Investor http://nasional.kompas.com/read/2009/10/24/04451824/PT.Kertas.Nusantara.Akui.Belum.Bayar FWI Compilation, 2014.


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3.3. Tackling Deforestation

In reducing the rate of loss of forest, several efforts have been made by the government which has been framing responsive policies oriented to save the remaining natural forest. One of the government’s ‘weapons’ in tackling deforestation is the policy of moratorium on new licenses. Other policies and initiatives with similar objective (and supporting each other) are: the legal timber certification or known as Timber Legality Assurance System (SVLK), eradication of illegal logging through Presidential Instruction No 4/2005 and Law No. 18/2013 on Prevention and Eradication of Forest Demolition, and programs under the REDD+. But in general those efforts have not been considered as effective to address deforestation and forest degradation in Indonesia, because they do not deal in a substantial way with the root of forestry problem in Indonesia, which is the weakness of governance.

Another breakthrough that has been and will continue to be promoted by the government is the development of Forest Management Units (KPH) at site level. However the concept of KPH, which is actually a revitalized old concept, still needs to be assessed in regard to its effectiveness to reform forest management in Indonesia.

Moratorium on New License (PPIB)

The policy of moratorium on new license (PPIB) started off in May 2011 with the Presidential Instruction no. 10 year 2011, to be in force for two years and revised every 6 month. The Moratorium on New License was then extended for another two years with the Presidential Instruction (Inpres) no. 6 year 2013. Every revision process of the policy resulted in Indicative Map of Moratorium on New License (PIPPIB), which is based on recommendations from several stakeholders and verified by the Ministry of Forestry. Up to 2013, the PPIB area has been revised for the fifth time and established a total area of 64.7 million hectares.

PPIB coverage does not mean the area, landscape, and its supporting system is protected as natural forest. This is because in practice, not all PPIB areas are actually covered with forest, while on the other hand secondary natural forests, which also face threats of degradation and deforestation, are not categorized as areas to be protected under PPIB.

We specifically calculate natural forest areas which are covered by the PPIB policy. In addition to assess the effectiveness of PPIB policy for natural forest protection, the review will also be used to identify potential areas that will be deforested by clearing for development activities or issuance of forest utilization permits. The proportion of forest cover in areas covered under PPIB compared to the total land area is a more suitable indication to show the level of forest support for environmental stability. Papua Province, West Papua, Aceh, Gorontalo, and Central Sulawesi have the biggest portion of natural forest protected under the PPIB policy to support the ecosystem stability in the land areas. However, if we look at the percentage of forest areas not covered by the PPIB to the total land areas, West Papua, Maluku, East Kalimantan, Central Kalimantan, and Papua are the highest, indicating the least level of forest support for environmental sustainability.

The civil society groups are not really satisfied with the PPIB policy with its routine revision and limited validity period of 2 years only (although extendable as it is currently. The groups more or less call for a performance-based PPIB, in which the target is clearly measurable natural forest and peat lands saveable with the moratorium.


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The PPIB policy and the improvement of governance of primary natural forest and peatlands,84 commonly referred to as the moratorium policy, has not been able to address several fundamental forestry issues in Indonesia. There is the mandate that needs to be taken very seriously by the government, of which the government’s political will is key to success in preventing loss of natural forest and destruction of peatlands ecosystem. Eventually, the success should be measured by how much natural forest and peatlands has been saved, not by how long the moratorium policy has been officially put in force.

The moratorium policy has been in force for 3 out of 4 years plan, but the reality is that the government has not succeeded in protecting the remaining natural forest in Indonesia through the improvement on governance in the forestry sector, as this report presents data and information of many forested areas not protected through this policy, and deforestation taking place within PPIB areas. This is while noting that of all forested areas in Indonesia only around 54% is covered by the policy on Moratorium on New License.

The moratorium policy is not only about halting new licenses, but most importantly is the review of existing licenses by the government, followed by temporary suspension of company’s operational activities. However, the fact is that the government still accommodates issuance of license for change of function of forest into palm oil and sugar cane palm oil plantation, Industrial Plantation Forest, mining, and other national projects, such as the MP3EI (Master Plan for Acceleration of Economic Development Deployment in Indonesia)85.

In all honesty, the policy has been found as not reliable when it comes to promoting initiatives on sustainable forest management and protection of local/indigenous communities’ rights.86 In several locations community areas were put under the moratorium map, thus limiting the community’s rights to access the areas. On the other hand, corporations who hold concession rights can easily enter the moratorium areas, which is what is happening in Merauke District, Papua Province.87

The case of Aru Archipelago in Maluku Province is another illustration of the weakness of the moratorium policy. This is an important case to note in improving the coverage of areas and object that should be regulated by the moratorium policy. Sugar cane plantation is until today one of the commodities that is still exempted in this policy. That’s how conversion of natural forest into sugar cane plantation has not been categorized as something forbidden. The fact is that there is 67 thousand hectares primary natural forest that is under threat to be converted into plantation areas in the 190 thousand hectares moratorium areas.88

84 Presidential Instruction (Inpres) Number 10 year 2011 and extended through the issuance of Inpres Number 6 year 201385 Civil Society Coalition to Saving Forests and Global Climate. Briefing Paper Evaluation on Three Years Moratorium Policy and Protection of Peatlands Ecosystem in Indonesia, 201386 Civil Society Coalition to Saving Forests and Global Climate. Briefing Paper Evaluation on Three Years Moratorium Policy and Protection of Peatlands Ecosystem in Indonesia, 201487 Civil Society Coalition to Saving Forests and Global Climate, Comparation of PPIB third revision with forth revision in the map number: 3408 dan 330888 FWI Press Release: The President Must Step In to Protect Forest Ecosystem in Aru Archipelago, 2014


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Box 15. The President Must Step In to Protect Forest Ecosystem in Aru Archipelago

Forest ecosystem in Aru Archipelago must be preserved and protected. The Indonesian President must order the Ministry of Forestry and Ministry of Marine and Fisheries to immediately issue policies that will preserve the forest ecosystem for sustainability of small islands, such as the Aru Archipelago. This should include the implementation of policies that protect and recognize the rights of indigenous communities in managing their indigenous territories.

Figure 30. Fifth Revision Moratorium Map in Aru Archipelago District

Indonesian Minister of Forestry, Zulkifli Hasan, has stated that the plan to open a sugar cane plantation company in Aru Archipelago is cancelled. The consideration of the Minister of Forestry is that the slope is not suitable and it will be uneconomical to invest in sugar cane plantation in Aru Archipelago. The statement was presented directly by the minister in a press conference event on April 10, 2014 at Manggala Wanabhakti Building, Ministry of Forestry Office in Jakarta. The commitment must be proven with the issuance of decree to revoke the principle agreement for the sugar cane plantation and by not giving any new opportunity for other companies. But in reality, to date a promise is only a promise without being realized.


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In a letter received by FWI dated September 10, 2014 from the Center of Public Relations of the Ministry of Forestry, it is stated that there is no revoke/cancellation letter of the Principle Agreement on Forest Area Reserved to 19 companies owned by Menara Group. v

Presidential Instruction (Inpres) number 10 year 2011, followed by the extension stated by the issuance of Presidential Instruction no. 6 year 2013 stated that sugar cane is one of the exceptions of that policy, that the forestry moratorium policy is not applied for sugar cane plantation permits. FWI’ analyses on Indicative Map of Moratorium on New License (PIPPIB, moratorium area) with the sugar cane company’s concession map shows that there are 67 thousand hectares of concession areas located inside the moratorium area. The total land are of Aru Archipelago in the moratorium area is only 190 thousand hectares

“FWI’s analyses based on the Landsat image interpretation in 2013 found that 660 thousand hectares or 83% of total land area of Aru Archipelago is still covered with nature forest, of which the 478 thousand hectares of natural forest is outside of the moratorium areas. The natural forest should be included in the Indicative Map of Moratorium Area”, said Abu, a forest campaigner working for FWI. Abu also emphasize that “There must be massive changes on the indicative map of PIPPIB VI so there is no reason to issue a permit in that areas”.

Abdon Nababan, the Secretary General of indigenous Peoples’ Alliance of the Archi-pelago stated, “The Indonesian President must step in to protect the forest ecosystem in Aru Archipelago and the indigenous peoples’ rights who have been living there and managing the indigenous territories from generation to generation in a sustainable way. The President must ensure the spirit and mandate of Constitutional Court rulings 35/X/2012 are being implemented in this area,” said Abdon.

v Letter No. S.522/PHM-2/2014 on Request for Information on Evidence of Revokement or Cancellation of Reserved Principle for 19 Companies owned by Menara Group in Aru Archipelago, Center of Public Relations Ministry of Forestry, 2014

Source: Press Release FWI, April 23, 2014

Moratorium must be seen as a process to stop deforestation in Indonesia through a forest governance improvement. Moratorium is not supposed to be limited in time, but rather looked at from the clear and measurable achievement in the governance context to save the remaining forest. The success of moratorium implementation should be determined by the fulfillment of basic preconditions measured by the criteria and indicators of sustainable forest management and by protecting the local/indigenous communities rights, such as the gazettement and establishment of forest areas, certainty on tenure rights, licenses review, and law enforcement.


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Reducing Emission from Deforestation and Degradation (REDD+)

The existence of REDD+ in the middle of discourse about solutions on deforestation and forest degradation brings a new breath of fresh air for related stakeholders (indigenous peoples, Non-Government Organization, private sector, and government). The REDD+ developers actually tried to start with looking at several approaches used in the past and tried to find the middle way. The 13th Conference of Parties (COP) United Nations Framework Conventions on Climate Change (UNFCCC) in Bali in 2007 is the starting point of REDD+ development in Indonesia. Even the additional “+” on REDD is also agreed in the Bali Meeting.89 The concept itself was already prepared and developed prior to the meeting and the conference is the event to show that Indonesia is not only prepared to host the conference, but also is prepared with the concept. Indonesian Forest Climate Alliance (IFCA) initiated by the Ministry of Forestry become the platform for stakeholders to develop the initial concept of Indonesian REDD+ and produced a REDDI (REDD Indonesia Road Map. 90This concept later become the cornerstone of REDD+ decision in Bali.91

Several stakeholders (including the government) have different positions towards the REDD+ decision made in the forum, while several groups look at it as an opportunity and respond to it with optimism. Other groups, however, look at it as a constraint and firmly reject the REDD+. There are also the third groups who see the REDD+ as having a chance of opportunities and challenges at the same time, so they are more moderate. In later dynamics of REDD+ discourse in Indonesia, this moderate groups eventually initiate, albeit slowly, the development of REDD+ scheme in Indonesia. This can be understood as a result of pressures by various stakeholders from groups at both extremes, a middle way between two extreme points in the REDD+ debates.

The REDD+ development in Indonesia is moving forward with learning from the past approaches and mistakes. The agenda for forest governance improvement is the main pillar, based on the analyses by The National Development Planning Agency (Bappenas) in 2010. On the analyses, it is stated that the weakness in governance is having huge contribution to the failure in forest management in Indonesia. This is then become the start of various improvement efforts to use the REDD+ scheme momentum.

However, it must be confessed that although the paradigm and approaches have changed, this initiative still faces a long road towards the initial objective to prevent deforestation in Indonesia. The technical preparation to develop the funding instrument is still a dominant factor. While to prepare the enabling conditions for the initiative to be effectively implemented, and the certainty of the rights of forest areas, efficient regulation, and the certainty of efforts and rights and access of local/

89 In the Decision 1/CP 13 Bali Action Plan, paragraph b (iii) it is stated that “Policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation in developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries”. The plus (+) in REDD is conservation, sustainable management of forest, in addition of carbon stock.90 Before the COP 13, Indonesia through IFCA led by the Ministry of Forestry prepared the document of REDD Indonesia which containes the implementation steps of REDD+ through the phased approach. It consists of readiness, pilot/transition and full implementation. The detailed explanation can be accessed at http://www.dephut.go.id/uploads/INFORMASI/LITBANG/IFCA/IFCA%20update%2024%20Maret.pdf (accessed on March 3, 2014)91 The influence of Indonesia’s decision on REDD in Bali is huge, this is shown from the adoption of the decisions in Bali from the concept developed by IFCA.


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indigenous peoples, are not yet fully ‘touched’ as priorities that have to be addressed as soon as possible.

The Timber Legality Assurance System (SVLK)

SVLK is the main part in the partnership agreement between the Government of Indonesia and European Union and it will be implemented to ensure the legality of timber (Timber Legality Assurance System or TLAS). In it, all timber products from Indonesia must have export license (FLEGT license) in order to enter the European Union market. SVLK or TLAS is regulated by the Regulation of Forestry Minister No. P.38/Menhut-II/2009 on Standard and Guidelines of Sustainable Forest Production Performance Assessment and Verification of Timber Legality on Permits Holder or Concessions. This policy is then implemented in September 2010. It has undergone three revisions so far through the issuances of P.68/Menhut-II/2011, P.45/Menhut-II/2012 and P.42/Menhut-II/2013.

SVLK is a mechanism to assess the legality of timber being traded or transported based on its compliance to the applicable law. The SVLK implementation is mandatory for all forestry business actors and timber industries in Indonesia. The hope is that this system can reduce the trading and smuggling of timber sourced from illegal logging to European market, which has been commonly known as one of the causes of deforestation in Indonesia.

The scope of SVLK assessment is: 1) Sustainable Forest Management (PHL) performance assessment to meet the sustainable forest management; and 2) Timber Legality Verification to fulfil the timber (timber products) legality. When this system was initially developed, it is expected to be able to address the need of forest governance improvement by ensuring transparency, stakeholder representativeness, and maintaining the credibility of assessment, which is always questioned by the international market. In order to address that, one of the innovations in this system is the monitoring activities by the independent monitoring institution. The result of this independent monitoring will be used as one of the consideration factors in the whole assessment process.

Limited capacity and understanding and the non-existence of clear mechanism to resolve complaint make this system have not yet able to respond to both the demand for governance improvement and maintaining the system credibility. Moreover, the weak sanction for non-complying companies has affected the effectiveness of SVLK system in order to give deterrent effect. This system can only applies administrative sanctions, such as not providing services for business documents for the forest management unit (Logging concessions, Plantation, State Forest, and Industries) who does not comply with the system.92 The document-based assessment is also another weakness as it is not able to detect violation on permits processes or the implementation in the field. This weakness is often used by the rogue companies because this system is then not able to investigate dubious permit issuance process which is in incompliance with the procedure.

Recently, the Corruption Eradication Commission (KPK) found 14 logging concession companies in Riau Province which are involved in corruption cases in obtaining the business permits. Those cases also involved the governor of those provinces.93 92 Interview with Abu Meridian, National Coordinator of Independent Forest Monitoring Network (JPIK), June 201393 Independent Forest Monitoring Network, 2104: SVLK through the Investigator’s Eyes, Jakarta


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Based on KPK investigation, from those 14 companies involved in corruption cases, 3 companies have already obtain the PHPL certification while the other eight companies already have the timber legality certificate.94

Beside the failure to prevent corruption in the system, we must admit that the Timber Legality Assurance system have not perfectly implemented yet as an instrument that can prevent logging and trading of illegally-sourced timber. There are many companies that conducted land clearing under the Timber Utilization Permits without implementing any timber verification mechanism, which is yet another challenge to this system. This challenge still needs to be addressed by SVLK in the future because the timber from IPKs that have not been verified could be the supply of raw material for timber industry (especially the pulp and paper factories). If these conditions are not improved immediately then the credibility of SVLK will be at stake.

Besides those aforementioned arguments, there are still a lot of elements that need to be improved in order to ensure that this system is in line with the effort to improve forest governance. This system needs to ‘touch’ the issue of conversion of function of area and the violation of spatial plans, including the tenure conflict issues-especially related to the indigenous peoples rights and the forest area boundary issues, because those problems have direct implication on the forest degradation.95 One of the steps that must be done is to revise the policies used as the legal basis of SVLK and updating the recent regulations in order to respond to those problems described above.

Illegal Logging Eradication

There are at least two regulations on eradication of illegal logging. First, the Presidential Instruction number 5 year 2011 on Eradication of Illegal Logging and Trafficking of Illegal Forest Product in Leuser Ecosystem Area and Tanjung Puting National Park. Second, the Presidential Instruction number 4 2005 on the Eradication of Illegal Logging in Forest Area and Its Trafficking across Indonesia.

Presidential Instruction number 4 year 2005 instructed 18 ministries and state agencies (national and regional level) to accelerate eradication of illegal logging in forest areas and its trafficking across Indonesia, through actions against anyone or any institution that conduct logging, utilizing, accepting, selling, and transporting illegal timber. Since then, anti-illegal logging operations were conducted more intensively by regional and regional governments.

The operation was perceived as based on populist policies and actions and since the issuance of the Inpres the national and regional governments, be it the Ministry of Forestry, Forestry Agencies, and the police, were in a race to conduct raids and arrests. This operation, later known as the Sustainable Forest Operation (OHL), was regularly conducted by the government in 2005-2006. There were many illegal logging actors who were arrested through this operation, though not all of them were the right targets. Some of them were proven to be the timber barons but there were also many logging operators who worked at the field, truck drivers, captains of timber-carrier-ship, and also local/indigenous peoples who were the suspect of illegal logging cases, arrested and put in jail. The Presidential Instruction has not achieved its objective of getting the main actors (mastermind) of illegal logging.

94 Ibid.95 Press Release JPIK-FWI: JPIK Urge the Government to Improve the SVLK Regulation and Implementation, 2014


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Related to timber trafficking, until today there are still a lot of shipments that do not match the documents attached to it, or even without any document. In a way the government’s actions have rightly recognized that illegal logging is considered as not only happen at the upstream segment, which is the logging in forest areas without proper licenses, but also in the trafficking segment. The weaknesses of that Presidential Instruction were then used as arguments to issue a new regulation that is focused in combating illegal logging.

Based on Indonesia Corruption Watch (ICW) analyses, during the period of 2005-2008, of 205 main actors of massive illegal logging, only 19.51 percent was prosecuted. The rest, 80.48 percent, is the low-level actors (driver, operator, and farmer). Of the few main actors who were prosecuted, 21 percent received no sentence, 21 percent was sentenced under one year in jail, 7 percent was sentenced between 1 to 2 years, and 5 percent was sentenced above 2 years.96 This reality of law enforcement in forestry sector ultimately is the real and clear threat to the 82 million hectares remaining natural forest cover in Indonesia.

There are several conditions which hinder effective law enforcement in forestry, including the lack of personnel and fund for forest patrol and monitoring, preliminary investigation and investigation which are not optimally done to get the main actors and investors of illegal logging, but only good at getting field workers, and lastly the insufficiency of investigation resources and fund for the tasks needed to be taken against illegal logging. Investigation of illegal logging needs a relatively big amount of fund, especially for the field investigation.

The weak court decisions on illegal logging cases have not given the deterrent effect. In ideal situation, the crime rate will be reduced when the punishment given could produce the deterrent effect. The present reality is that the sentences in illegal logging cases do not produce deterrent effect, stopping others from doing the same crime.

Reflecting on all those past experiences and lessons, the later emergence of Law on Prevention and Eradication of Forest Destruction (P3H) is considered by many organizations and communities as a threat to local/indigenous people. The law potentially effects massive conflicts and human rights violations because the illegal logging eradication operations based on this law can easily be used to criminalize the communities who live in and around forest areas. Those communities are the easy target and usually are victimized because their existence and their rights as local communities or indigenous peoples are not definitively recognized by the government. This is made even worse due to the limited understanding and access to information of local/indigenous communities about policies and regulations on illegal logging.

Thus it is not surprising that the objection by local/indigenous communities and forest relation organizations and experts is getting hardened. Another view of this law is that it directly neglecting the Constitutional Court Decision on indigenous forest recognition. The Indigenous Peoples of The Archipelago Alliance (AMAN) stated that if this law is implemented then the criminalization of the indigenous peoples who live in and around the forest will be cropping up. One thing that is often ignored by policy makers and law makers is that while the law has a good

96 Indonesia Corruption Watch: Investigation and Implementation of Law on Corruption in Forest Crimes, 2012.


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enough conceptual intention, the reality of law enforcement at the field level is one of state repressiveness and ignorance of the context of the pluralism of law in forest communities and indigenous peoples.97

The Forest Management Unit (KPH)

The worsening condition of Indonesian forests is making many stakeholders think and struggle to address it from various sectors. The worsening forest condition is shown by the high rates of deforestation, illegal logging, overlapping licenses and permits, occupation and activities inside forest areas without strong legal basis, and the underperformance of forest areas gazettement program. All these show the strong distortion of preconditions for sustainable forest management (Kartodihadjo et al 2011). Absence of stakeholders who manage (absence of power) is suspected as one of the causes of occupation and illegal activities in state forest areas.

Those facts look to be taken as the arguments to go back to the Forest Management Unit organization of the past. Historically, the concept of forest management unit has existed since the Dutch colonization era in 1897. In the New Order era, this concept was realized to manage the forest areas in Java Island with the establishment of Forest Management Unit under the management of State Forest Company (Perhutani).98

Outside of Java, the development of Forest Management Unit (FMU) has actually the legal basis it needs in the Forestry Law. The FMU development is the effort to actualize the enabling conditions to achieve sustainable forest management. Therefore, there is a need to accelerate the development of the appropriate institution99 as the manager at the site level, so that forest degradation rates can be reduced (Baplan 2006). Through the Government Regulation (PP) no. 6 year 2007100 jo PP 3/2008, the Forest Management Unit (FMU) is defined as a forest management of an area based on its main function and utilization, so that the forest can be managed efficiently and in a sustainable way.

The existence of FMU have three main objectives (Firdaus, 2012) related to the area, institutional, and planning aspects. First, on the area aspect, FMU aims to protect and maintain the quality and quantity of the decreased forest resources, where there are many forest areas in the status of open access, unmanaged, and untreated. Second, on the institutional aspect, FMU aims to improve the low professionalism in forestry, to make the forestry organization effectively manage the forest at the site/field level, and to be an alternative of the failure on developing the smallest unit of forest management. Third, on the planning aspect, FMU is expected to optimize the low forest utilization, and accommodate the increasing interest of many stakeholders on forest and forest areas.

To date, the FMU is considered as one of the strategies to save the forests, as stated in Article 28 Clause (2) Government Regulation (PP) no. 44/ 2004 on Forestry Planning. Besides PP, the REDD+ National Strategy also mandates to speedily make the FMU functioning, as stated in Decision of the Head of REDD+ Task Force no. 2 year 2012. Those priorities were translated into the Ministry of Forestry Strategic Planning 2010-2014 in which the Main Performance Indicator is the Minister of Forestry

97 AMAN, Press Release: 30 Millions Indigenous Peoples Are Threatened to go to Jail, 201098 Perum Perhutani or the State Forest Company is a state-owned company that manages the production forest areas and protection forest in Java Island, except in Yogyakarta Province.99 Institution is the rules, norms, prohibitions, and regulations that manage and control the individual behavior in the community or organization (North 1990).100 Government Regulation 6/2007 jo PP 3/2008 on Forest Governance and Planning for Forest Management and Utilization


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Decree on Establishment of Forest Management Unit Areas across Indonesia. By the end of 2014 the Ministry of Forestry must meet the target of 120 operating Forest Management Units.

In its development, FMUs face many challenges especially at the regional level due to the decentralization of regional autonomy. In the regional development scheme, forestry development is categorized as under other optional program, not main program. Therefore regional governments are allowed to not make FMU development a priority. The lack of support from and hesitance of regional governments are causing impediment in FMU development. As a final point, FMU development still also needs legal reform that is fully supported by all parties of interest, from the national government, regional governments, the local/indigenous communities, and other parties.

The development of FMU is supposed to be the opportunity for conflict resolution (Srijono and Djajono 2010; Syukur 2012). It is supposed to bridge forest management and resolution of tenurial conflict at the site level through the management of areas and communities’ rights to manage forest resources. All this time forest utilization in Indonesia tends to emphasize in big investment interests and neglect the communities’ access. In this outlook the development of FMU needs to be prioritized to change that condition. FMU must be able to be the new mainstream in the context of forest governance improvement, which ensures business certainty and justice for local/indigenous communities.

3.4. The Impact of Deforestation

Loss of forest or deforestation most likely will bring harmful impact on the communities and the flora-fauna in the forest ecosystem. This destruction of economic assets also very often comes about concurrently with social and tenure conflicts.

The Natural Resource Conflicts

Tenurial and social conflicts started with the beginning of the New Order (from 1967), mostly caused by conflict on agriculture land. Those conflicts increased rapidly in the reform era, from 1997 to 1999, when there were many mining companies started to operate in several areas.101 In the period of 1990-2010, summing up from the documents in indigenous people’s organization, publications from the Civil Society Organizations (CSOs), and articles in mass media, there are 2,585 conflict cases (Table 22) in 27 provinces in Indonesia, involving local/indigenous communities. The main object of the conflicts from 1990 to 2010 is the forestry sector, 1,065 cases, followed by the plantation sector with 563 cases.

In 2012, a research by HuMa identified 232 natural and agrarian conflicts in 98 district (of 22 provinces) with a total of conflict areas 2,043,287 hectares. The conflict happened mostly in the plantation sector with 119 conflict on total area 415 thousand hectares, and then 72 cases of forestry conflict with a total area 1.3 million hectares in 17 provinces, and lastly in the mining sector with 17 conflict on total area 30 thousand hectares. In 2013, again, the conflict is mostly in the plantation sector,

101 Moeliono, M., Wollenberg, E., Limberg, G. (editor). 2009. Decentralization of Forest Governance: Pol-itic, Economy and Struggle to Own the Forest in Kalimantan, Indonesia. CIFOR, Bogor, Indonesia. Chapter 10: Sudana, Made. The Winner Takes It All: Understanding the Forestry Conflict in the Decentralization Era in Indonesia.


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followed by the forestry sector, and, after the infrastructure sector, then mining (Figure 31).

The pervasiveness of conflict cases in the plantation and forestry sectors is thought to be caused by the increasing number of license holders operating in big scale in an area, accordingly taking away communities’ access to forest. In almost every case, the big scale extractive industry justifies all means, including bribe and corruption (as described in previous chapter of this report), to meet their target of land ownership.102 This worryingly brings the communities into conflict. Through their divisive tactics, the companies ‘cleverly’ convert their conflict with the communities

102 http://www.mongabay.co.id/2014/05/18/dinilai-tertutup-rame-rame-desak-kemenhut-buka-infor-masi-tata-batas-hutan/ accessed on September 26, 2014


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into conflict between or among the communities. Several institutions and non-government organizations often seem to be fooled and trapped with this kind of devide et impera, too. A real and on-going example of this is the conflict between the palm oil plantation companies and the Muara Tae communities in West Kutai District, East Kalimantan Province. The palm oil plantation company uses the land transactions document, legality and proof of rights of which is at best dubious, and then manoeuvres persons from neighbouring village to be in confrontation with the victim of eviction, people of Muara Tae Village. So, the company is shifting the vertical conflict, community (in this case Muara Tae) against company, into horizontal conflict, community (Muara Tae) against community (other village(s)).103

Conflicts also often happen between logging companies and the local communities. The differences on point of view to the areas/boundaries between the companies (based on government licenses) and the communities (relies on history and customary) become one of the conflict triggers among local communities with companies, government, and other legal entities with rights and authorities to manage the forest areas. Changes in forest area status that bring big scale forest exploitation by companies have caused local communities to undergo injustice and resulted in the limitation of communities’ access to the forest resources.104

As presented in Figure 32, the conflicts mostly involve forestry, plantation, mining and industrial companies, a 58.03 percent during 1990-2010. It is This is construed to be caused by the differences on point of view on areas/boundary between the companies (based on license from the government) and the local communities (relies on history and customary).

103 http://fwi.or.id/warga-dayak-benuaq-pun-mengadu-kepada-leluhur/ accessed on September 26, 2014104 See for example Moeliono, M., Wollenberg, E., Limberg, G. (editor). 2009. Decentralization of Forest Governance: Politic, Economy and Struggle to Own the Forest in Kalimantan, Indonesia. CIFOR, Bogor, Indonesia. Chapter 10: Sudana, Made. The Winner Takes It All: Understanding the Forestry Conflict in the Decentralization Era in Indonesia.


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The Destruction of Forest Ecosystem and the Loss of BiodiversityThe average deforestation rate in Indonesia during 2009-2013 is 1.13 million hectares per year. The high deforestation rate destroys forest ecosystem, threatens flora and fauna species, and devastates the livelihoods of the communities. The loss of forest also affects the wildlife habitat. Deforestation, which destroys the species’ habitat, makes them disturbed and forced to come out from their habitat. The life of many wildlife species really depends on forests. The deforestation will be the source of human-animal conflict and the shrinking wildlife population. In 2002, The Red Data List IUCN showed that 772 types of flora and fauna are endangered species, including 147 mammal species, 114 bird species, 28 reptile species, 68 fish species, and 28 other species and 384 plant species.

In Sumatera, the forest destruction caused the shrinking population of Sumatran tiger, which to date only around 250 of Sumatran tigers are estimated to remain in the wild.105 The elephant-human conflict also happens in the logging concession areas in Riau due to the competition for living area. Around the Balai Raja area in Bengkali District, it is also reported that there are elephant attacks to the plantation and the communities residential areas. In Anak Talang Village, one of the buffer villages of Bukit Barisan Tigapuluh National Park, group of wild elephants enters the communities residential areas too.

105 http://beritabali.com/index.php/page/berita/dps/detail/2014/02/08/Hutan-Rusakkoma-Populasi-Satwa-Liar-Menurun/201402080004

Box 16. The Species Heavily Impacted by Logging Activi

Several wildlife species are greatly affected by change/destruction of their habitat. Bird groups that are affected by logging activities are: 1) several extreme specialist species that live in the lowland such as Black Hornbill, Anthracoceros malayanus, Salvadori’s pheasant and Lophura erythrophthalma;2) nomadic species or species that require large areas (Hornbill, Raptor); 3) species that live in primary forest and are intolerant to disturbances (the great argus, Argusianus argus; several Harpactes species, several Picidae species, several Napothera and Rhipidura species); and species that need cavities on trees as their nest.

The taxa most affected by logging are the species that live in the interior of primary forest. The insectivorous and Rhipidura species that live in the bottom and middle part of the forest vegetation are the most intolerant species to the logging activities (Johns 1989a; Lambert 1992; Thiollay 1992). Compared to other species, the population of this species decreases more after any disturbance. The insectivorous species that live in the undergrowth, both the number of species found and the proportion of sample population, decrease after moderate intensity logging activities. Lambert (1992) identified that several existing species, Harpactes spp.; Picidae; Kenopia striata and Napothera spp.; and Cyornis spp. and Ficedula spp, are the species that its population tends to decrease in logged forest.

The six species that were identified as consistently decrease after logging are: Kenopia striata, Harpactes diardii, and for species of Muscicapidae live in the undergrowth


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(Culicicapa ceylonensis, Rhipidura perlata, Philentoma philentome verlatum, and Rhinomyias umbratilis). The decreased population corresponds to loss of undergrowth vegetation, foraging level, and insect species prey of the undergrowth insectivorous (Robinson 1969).

Source: Meijaard, E., Sheil, D., Nasi, R., Augeri, D., Rosenbaum, B., Iskandar, D., Setyawati, T., Lammertink, M., Rachmatika, I., Wong, A., Soehartono, T., Stanley, S., Gunawan, T. dan O’Brien, T. 2006. Life after logging: Reconciling wildlife conservation and production forestry in Indonesian Borneo. Bogor, Indonesia: CIFOR. 384p. ISBN 979-24-4657-5h

Disturbance on Hydrology BalanceIncreasing deforestation in Indonesia is increasing the risks of disaster. Deforestation or loss of forest cover will affect hydrological balance. Some of the intangible functions of forest are water absorbing function in hydrology cycle and carbon absorber and storage. The microclimate and the biodiversity will be disturbed when the forest cover changes. The quality of forest as an ecosystem will decrease and this directly or indirectly will affect the quality of surrounding environment. According to Dr. Michael Beck, The Lead Marine Scientist of TNC, the decreasing quality of the environment will significantly affecting increased risk of a country to disaster.106

The total natural forest cover keeps decreasing from year to year, while the frequency of natural disaster keeps increasing. The increased frequency of natural disaster from 2010 to 2014 is shown in Figure 33. The Indonesian National Board for Disaster Management (BNPB) recorded that since 2000 the highest frequency of disaster occurring in Indonesia is flood, followed by windstorm, landslide, and drought.

The highest frequency of disaster is in Java Island, an island with the least natural forest percentage in 2013. Forest has roles to preserve water supply, protect the land in river basin, and minimalize the impact of flood and landslide. Analyses in Corey Bradshaw and partners’ research in 56 developing countries show the tendency of 4-28 percent increase of frequency of flood at 10 percent decrease of forest cover.107

106 http://www.mongabay.co.id/2012/10/15/penelitian-degradasi-lingkungan-peringkat-risiko-bencana-indonesia-melonjak/ accessed on March 23, 2013, 12.25 PM (GMT+7)

107 www.cifor.org. Meninjau Kembali Hubungan Antara Hutan dan Banjir. http://www.cifor.org/id/online-library/polex-cifors-blog-for-and-by-forest-policy-experts/indonesian/detil/article/1222/for-ests-and-floods-revisited/browse.html diakses tanggal 3 Juni 2014


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Impoverishment of Communities Around the Forest

The areas inside and around a forest have been crowded with economy, social, and cultural activities. The life of many communities who live in and around depends on forest resources. The result of analyses by Brown (2004) estimates total population of communities who live in state forest areas and total poor communities in Indonesia, 48.8 million and 9.5 million, respectively.

The policies of governments that support companies and businesses have taken away the opportunities for communities to manage their forests, thus their ensuing low welfare. Ironically, the ignorance of companies on the welfare of local communities, unsatisfying compensation, and unfulfilled promises are exactly the driving force pushing the communities to rely more and more to the forest resources. With the limited access for the community once a company takes over the forest, they now have to encroach the forest in order to survive. A case of example is in Makassar where most of the communities around the forest have to enter and ill-use the forest areas to get some relieve off their poverty.108

It is a direct impoverishment of communities around the forest when their access to forest is limited with the existence of company. The more people depending their lives to the forest, the more people encroaching the forest to meet their needs. Therefore, the concerns about the welfare of the communities around the forest need to be brought to fruition in order to reduce deforestation.

108 Masyarakat Sekitar Hutan Kurang Diperhatikan. 2012. Makasar. http://koran.tempo.co/kont-en/2012/04/13/270993/Masyarakat-Sekitar-Hutan-Kurang-Diperhatikan accessed on June 16, 2014


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Several forestry programs in the last decade, such as ecolabel certification and later on the certification of legal timber known as Timber Legality Assurance System (SVLK), illegal logging eradication through the Presidential Instruction no. 4/2005 and Law no. 18/2013 on Prevention and Eradication

of Deforestation, programs related to REDD+ and the Presidential Instruction on moratorium on new licenses, haven’t been able to address the problems of forest conversion and degradation in Indonesia. Generally it is because those programs do not strongly address the main issues in forestry sector, the weakness of forest governance, the list of which are: the uncertainty of forest areas, tenurial conflicts, high transaction costs, the absence of forest management institutions, the injustice in forest resources allocation, and the inefficient policies. The analyses of forestry licensing policies based on the corruption impact assessment (CIA) also show that the policies are very susceptible to bribery and corruption (KPK, 2013).109

Various programs ranging from ecolabel certification to Timber Legality Verification are largely about assessing the performance of companies and giving better market opportunities, however those programs alone will not realize sustainable forest management without all-encompassing policy improvement and law enforcement. The eradication of illegal logging have indeed been able to arrest several actors but on most of the cases missed the most important target and ill-advisedly criminalized indigenous peoples and local communities who live around the forest. There are also even cases where the authorities used this policy as the argumentation to blackmail communities and companies. Another failing is the low performance of forest management causing the forest areas abandoned by its manager, thus giving opportunities for conversion into many other forms, usually for mining and plantation or other illegal activities.

Similarly, the REDD+ implementation is still concentrated on the establishment of instruments to secure REDD+ funding, such as documents of planning, MRV, safeguard, and REDD+ agency. This initiative is not effective yet to finish the needed enabling conditions, such as the certainty of rights on forest areas, clear regulations, and certainty on business and the rights and access for local/indigenous communities. The three year experience to date of moratorium on new licenses shows that the policy is able to control the issuance of licenses temporarily in several areas. However, it has not been followed by a thorough review of the existing licenses. Therefore this

109 Coruption Eradication Comission, 2013: The study conducted by KPK division of research and development with Hariadi Kartodihardjo and Grahat Nagara as the implementation coordinator. The study linked with the implementation of government system improvement through the Memorandum of Understanding of 12 Ministries and Other Institutions

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program hasn’t been able to improve the forest and land governance in a concrete way. The moratorium then has been less meaningful as a mean to improve licensing system in Indonesia.

If we look at the information above, the weakness of forest governance can be shown by several factors, such as the capacity on implementation of forestry affairs and policies that regulate the forest resources utilization. The forestry problems are becoming more complex with the issues of institution at the field level, including the weak relations between the national and regional governments. Very often, forestry problems cannot be solved because the existing institutions do not prioritize effort to address the roots of the problems. The intensity and capacity of government to manage conservation areas and protection forests are still low in the face of the huge problems.

The weakness of forestry institutions in turn will make the system to protect the assets of forest resources by the government vulnerable. The national and regional governments tend to just implement the administration of forest utilization licenses. On the contrary, although already mandated in the Law no. 14/1999, there is no strong policy will to establish the government institutions specifically tasked and empowered to function as forest area manager at the site level. As one of the consequences, accurate, timely and adequate information is not available in regards to the forest area, and in all practicality, de facto, the forest is owned and controlled by the license holder. If the license expires or the license holder is no longer operating, then the forest will be in an open access condition, where uncontrolled destruction takes place

4.1. Rate and Projection of Loss of Forest

Indonesia is the third biggest tropical forest country in the world and the first in Asia Pacific.110 Regrettably, Indonesia is also the third biggest green house gasses emitter in the world after United States of America and the Republic of China, mostly because of loss of forest or deforestation (forest clearing or destruction).111

Deforestation in Indonesia has escalated even worse compared to the New Order era. During the New Order, deforestation reached around 0.81 million hectares per year. To date the deforestation rate is 1.13 million hectare per year (FWI, 2014).

The high rate of deforestation heavily affects water system, energy, food, health, livelihood security, and the climate. Moreover, deforestation threatens the lives and cultural integrity of the communities who depend on forest, including on its timber and non-timber stocks for the next generation. Deforestation also effects global environmental changes.

Although there are many versions of measurement of deforestation rate, but in general there is a consensus that the deforestation rate remains high. This means that without fundamental and comprehensive changes, deforestation will still continue at the same and constant rate and in the next 10 years, the natural forests in several provinces will be gone.

110 http://rainforests.mongabay.com/deforestation_forest.html accessed on March 20, 2014, 2:36 PM (GMT+7)111 http://www.greenpeace.org/seasia/id/campaigns/melindungi-hutan-alam-terakhir/hutan-dan-peru-bahan-iklim/ accessed on March 24, 2014


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With a deforestation rate at 1.13 million hectares per year, it is estimated that in 2023 the natural forest cover in Riau Province will be gone. Most of the forest in Java Island, particularly in West Java, Central Java, and East Java Provinces will also meet the same ending. Assuming that the deforestation will still be at the same rate, then in 20 years (2023) Jambi will be a province without natural forest cover. Then in 2043 South Sumatera will face the same end as Riau and Jambi Provinces (Appendix 11).

At the scale of island, the natural forest cover is predicted to be gone in the next 30 years. Java, Bali-Nusa Tenggara, and Sumatera Islands are the islands that will collapse because of the extinction of natural forest (Table 24 dan Figure 35).


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Figure 35 illustrates the projection of remaining natural forest cover in Indonesia in the future. If we assume that the Protection Forest Areas and Conservation Areas will still be maintained and their functions kept, which means they are protected from loss of forest, then the projection of the forest cover in the next 15 years is as shown in Table 25.

Table 25 shows that the natural forest in Java and Sumatera Islands outside the Protection Forest and Conservation Areas, therefore the natural forest in production forests, will be gone in 2028. In that year too, the production forests in Riau and Jambi Provinces will face the fastest and worst destruction which will be much worse compared to other provinces in Sumatera and Java Islands. This projection also considers the specifically high rate of deforestation in the two provinces.


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Box 17. The Threshold of Loss of Forest

The projection of loss of forest in Indonesia is a wake up call for all forest resources managers and relevant stakeholders. While Law no. 41/1999 Article 18 states that the minimum of forest that has to be preserved in a river basin or small island is 30 percent, its concern is the State Forest Areas which is not necessarily covered with forest. The Law does not set a minimum limit of the total forest cover that must be maintained or protected in a landscape. It has been described at length in previous parts of this report about the reality that State Forest Area is only about function management of an area and it is not always physically covered with forest. In relation to this, studies on the minimum forest cover that must be preserved in a management area, taking into account its particular landscape characteristics, must be continues and advanced.

Sugandhy (1999) concludes that in one spatial plan of an area, in order to preserve water resources, water catchment area, buffer zone for surface water resources, and areas to secure water springs, at least 30% of the total area must be cultivated with trees. It can be of various types of protection forest, production forest or hardwood/perennials, forest park, etc.. Another research by Deutsch dan Busby (2000) finds that sedimentation can drastically increase if the forest cover in the sub-river basin area decrease below 30% and there is clearing for agricultural land of more than 50%. xiv

Based on those references, FWI considers that the minimum total forest cover in one island that must be preserved is 30 percent of the island’s total land area. Thus, it can be concluded that Sumatera, Java, Bali and Nusa Tenggara islands are in critical status because their forest cover is already below 30 percent.

xiv Quoted in CIFOR 2008. Lessons from Bungo, Managing Natural Resources in the Decentralization Era.


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4.2. Recommendation for Future Forest Management

Efforts to save Indonesian forest definitely cannot be separated from solving the problems in the past, which could be problems at the field level, policy issues, or capacity of forest management institutions. Identifying the exact fundamental problems, based on accurate information, will determine the achievement of forestry performance improvement. Strategies will then have to be developed towards solving those problems. Finally, in order to optimally implement the strategies, forestry institutions and leadership, the preconditions of effective governance, become the necessity.

The unsolvable problems in forestry sectors are not apart from the weak capacity of government and its bias in formulating policies towards the dominance of businesses and corporations, deviating profoundly from justice and sustainable principles. The forestry problems become more complex with the lack of capacity of the institutions at the site level, including the weak relationship between the national and regional governments. Many forestry problems cannot be solved because the government (Ministry of Forestry112 ) does not prioritize efforts on solving the roots of problems in the forestry sector.

Problems Identification and Proposed Program

Although there are many national programs in the last decade, including the prevention of illegal logging, the communities empowerment through social forestry, implementation of sustainability certification and timber legality standard (SVLK), the programs associated with the reducing deforestation and forest degradation (REDD+), and the moratorium on new licenses, but the forests are still deforested with no sign of slowing down of the rate of degradation and destruction. Conversion of forest, decreasing performance of forestry industries, and tenurial and forestry conflicts, are still pervasive in Indonesia. Thus, it is becoming more urgent that Indonesian forestry is not driven by reactionary programs and policies, but one that is strong in addressing the main problems of forest governance.

The Constitutional Court decisions no.45/2011113 and no. 35/2012114 are a leap forward and yet they have not been followed by serious efforts to immediately resolve the uncertainty of forest boundaries and the status of rights to forest resources. Therefore we would like to offer the following main programs:

1. Resolve claims and conclude gazettement of forest areas. This program should be conducted through partnership and synergy between the national and local governments and is expected to accomplish certainty in forest management and utilization, and the living space for the indigenous and local communities.

2. Strengthen just forest management and utilization. The emphasize of this program is in giving space for forestry development, restrict conversion and change of function of forest, law enforcement, and ensuring the rights and or access to forest management for the indigenous and local communities.

3. Protection and recovery of forest resources. This program is to improve the roles of institutions at the site level, particularly the Forest Management Unit,

112 Ministry of Forestry became the Ministry of Environment and Forestry since October 2014113 Constitutional Court Decision 45/2011 judicial review on Law no.41/1999 on Forestry related to the forest area gazettement114 Constitutional Court Decision 35/2012 2011 judicial review on Law no.41/1999 on Forestry related to the status of indigenous forest and to forest areas.


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to realize effective forest management. Strengthening of this institution ensures forest and land rehabilitation, forest boundaries, and forest governance, all of which should also lead to protection of indigenous forests and the rights of the communities to manage the resource, minimize risk of the forest becoming and open access area, and to protect small islands from big and exploitative business expansion. The Forest Management Unit has to be the instrument to improve forest governance and uphold fairness and justice for all stakeholders, especially the local and indigenous communities.

The Enabling Preconditions

Those three main programs can be optimally implemented if the enabling conditions are fulfilled. The enabling conditions are good knowledge and information management system, improved governance and policies, and strong capacity of institutions managing forest resources -from planning to monitoring processes. Therefore, the immediate steps that can be done to achieve those enabling conditions are:

• First, strengthen the information and data on forest resources and the knowledge management. This has always been the critical point and has caused actual field condition information and learning not available to be used in decision making processes.

• Second, revamp various regulations which are the weak spots and the cause of high economic costs. Policies review towards good forestry governance is the precondition for the implementation of those main programs. One of the policies that needs to be revised is the Law no. 41/1999, especially related to certainty of forest areas, recognition of indigenous peoples rights, indigenous forest status, and strengthening law enforcement in forestry crimes.

• Third, create new arrangement of government’s roles in accommodating community rights and resolving land use conflicts, at all levels district level, to provincial, and national.

• Fourth, create fair and efficient business climate by reviewing policies on forest products trade and controlling transaction costs, especially in appointment, recommendation and implementation of licenses.

• Fifth, natural resource management generally needs real and active roles of the institutions that directly operate at the site, such as the regional government agency for forestry agency and the Forest Management Unit. Capacity buildings for those institutions are a preconditions for successful implementation of the main programs and therefore must be treated as a priority.

In order to enable the focus needed on those priority programs and the enabling preconditions described above, the bureaucracy must be reformed. The structure and organizational functions of the Ministry of Forestry have to transform from its current orientation of licensing administration and development of commodities approach to an orientation of strengthening forest management to live up to its function. The involvement of stakeholders in all stages of forest management (planning, utilization, and monitoring) must be improved. While the culture of isolated and secretive policy making and implementation has to be minimized.


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All this is possible to execute when there is open and innovative leadership that can improve the governance in forestry sector. This will be the leadership that can be expected to advance multi-doors approach in law enforcement and eventually regain the people’s trust in forestry sector.


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Glossary

Afforestation: the establishment of a forest in an area where there has been no forest for 50 years or more (Ministry of Forestry Regulation (P.14/Menhut-II/2004)

Non-Forest Areas (APL): areas outside State Forest Areas for non-forestry development.

Bappenas: National Development Planning Agency

BIG: Geospatial Information Agency (previously National Survey and Mapping Coordination Agency/ Bakosurtanal)

CIFOR: Centre for International Forestry Research

Satellite imagery: result of photos/records of sensors installed on space satellite orbiting at more than 400 kms from the earth surface.

Spatial data: georeferenced data where several attribute data located in several spatial units.

Deforestation: all form of condition changes of land cover from forest into non-forest, which caused by the natural condition and/or deforestation actors, both legal and illegal during some period of time temporary or permanent.

Forest Degradation: the decrease of trees density and/or the increase of forest destruction, causing loss of forest products and various ecological services.

Forest Cover Delineation: the establishment of boundary separating area with forest cover and area without forest cover.

FAO: Food Agriculture Organization

Intangible function : the function of forest of which the benefit can not be touched or grasped due its lacking of physical or visual presence.

Forest Concession (HPH) or Natural Forest Timber Production License (IUPHHK-HA): License issued for selective logging activities in natural forest for some period of time, generally 20 years and can be renewed for another 20 years. This is initially as a mean to maintain a forest as Permanent Production Forest.

Convertible Production Forest (HPK): State Forest Area that is reserved to be converted for other use such as the development of transmigration, residential areas, agriculture, and plantation.

Industrial Plantation Forest (HTI) or Plantation Forest Timber Production License (IUPHHK-HT): Plantation forest in Production Forest developed by forestry industry groups to increase the potential and quality of Production Forest through the implementation of silviculture system in order to fulfil the need of raw materials for forestry industry.


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Forest: an ecosystem unity of an expanse of land with natural resources, dominated by trees in its union with the environment, inseparable one to the other.

Natural Forest: forest that mainly consists of native trees not planted by human. Natural forests do not include plantation and plantation forest.

Protection Forest: State Forest Area with main function to protect life support system, regulate water system, prevent flood, control erosion, prevent ocean water intrusion, and maintain soil fertility.

Production Forest: State Forest Area with main function to produce forest products; categorized into: Permanent Production Forest, Limited Production Forest, and Convertible Production Forest

Permanent Forest: State Forest Area which will be maintained as forest areas (can not be converted into non-forest area), consists of Conservation Forest, Protection Forest, Limited Production Forest, and Permanent Production Forest.

Illegal Logging: illegal logging is the activities of logging, transporting, and selling timber illegally or without permits from any authorities.

National Forest Inventory (NFI): Information resulted from inventory issued in 1996, conducted by the Government of Indonesia (Forestry Department) with funding support from the World Bank and technical support from United Nation Food and Agriculture Organization (FAO).

Timber Utilization License (IPK): license from the Ministry of Forestry to clear forest area and utilize the timber for development of Industrial Plantation Forest or any non-forestry development, as the continuation of forest release process. The objective of IPK is actually to develop plantation, but more often it is jus to enable legal harvesting of logs, which has high value and quick turn-over, from the cleared land.

Forest Area: certain area which is still forested, appointed or established by the government to be protected as permanent forest.

Forest Management Unit (KPH): is area of forest management based on its main functions and designation, which can be managed efficiently and in a sustainable way. (Government Regulation no.6/2007)

Concession: a permit given to a legal entity to manage a certain area.

Mining authority: authority given to institution/individual to conduct mining business.

Cruising Result Report: result of trees data processing from the timber cruising at the felling plot, which contains trees number, types, diameter, and height of the tree and estimation of wood volume.

LULUCF: abbreviation of Land use, Land Use Change, and Forestry

MRV: Measurement, reporting and verification for REDD+ scheme

OHL: Operasi Hutan Lestari or Sustainable Forest Operation, law enforcement operation on illegal logging and illegal timber trading activities.

Open Access: area that is not managed or not put under any management license given to an individual, community, company, or government institution.


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PAD: Pendapatan Asli Daerah or Regional Revenue, the income collected based on Regional Regulation. PAD is usually sourced from the Regional Tax, Regional Retribution, results of regional separated wealth management, and other valid sources (including the result of regional unseparated wealth sales; giro services; interest; profit from currency exchanges; and the commission, deduction, or any other forms as caused from the sales and/or procurement of goods and/or services by the Regional Government).

PIPPIB: Indicative Map of Moratorium on New License

Gross Domestic Product (PDB): the total value of goods produced and services provided in a country during one year.

Forest Area Release: the conversion or change of designation of Convertible Production Forest Area into non-forest area.

Plantation Forest: tree stands resulted from cultivation and/or seeding in a reforestation process. Plantation and plantation forest are cultivated with introduced species, or native species with intensive management. The Plantation Forest is developed to provide timber products (logs, pulp), while the plantation developed for perennials such as palm oil and coconut.

Non-Tax State Income (PNBP): the revenue of national government sourced from non-tax income.

REDD: Reducing Emissions from Deforestation and Forest Degradation

RePPProT (The Regional Physical Planning Programme for Transmigration): the national mapping survey conducted by the Government of Indonesia (Transmigration Department) with technical and funding support from the Government of United Kingdom.

Industrial Raw Material Supply Plan (RPBBI): a yearly plan that contains information on raw materials need and supply from legal source based on the capacity of forest product primary industries and the availability of raw material, as a system to control raw material supply for the industry.

SVLK: Sistem Verifikasi Legalitas Kayu or Timber Legality Assurance System, a tracking system developed participatively by stakeholders to ensure the legality of timber circulated and traded in Indonesia. The timber legality assurance system is developed to encourage the implementation of government regulations related to the trading and circulation of legal forest products in Indonesia.

UNDP: The United Nations Development Programme

UNEP: The United Nations Environment Programme

UNODC: The United Nation Office on Drugs and Crime

Forest Cover: areas where trees dominated the vegetation types. FAO defines forest as area with the canopy cover more than 10 percent of unity areas, and total areas more than 0,5 ha. Besides that, the trees have to reach minimum height of 5 meters when it is fully grown.

WCMC: World Conservation Monitoring Centre


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THE STATE OF THE FOREST INDONESIA - Home - Setapak · Morowali Conservation Areas Figure 26. Permit...

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