Down to Earth No. 43, November 1999

New act thwarts reformers

Important new forestry legislation was forced through parliament in the final weeks of Habibie's interim regime. According to forest campaigners and indigenous rights activists, the Forestry Act (No. 41 1999) is no advance in terms of protecting Indonesia's forests or forest peoples over the 1967 Basic Forestry Law it replaces.

Indonesian academics, forestry researchers, NGOs and indigenous peoples' groups lobbied government officials and parliament intensively during the six months before the new Forestry Act was passed. They opposed both the content and the drafting process of this legislation, (see DTE 42) arguing that it should be scrapped and replaced in a more open, democratic way once the new government took its place in November. Minor changes were made to the version presented to parliament by the Forestry Department's internal drafting committee, but these fell a long way short of the Natural Resources Bill which opponents called for. The main concession was to tack on clauses devolving some government forestry responsibilities from Jakarta to local government in line with recent local autonomy legislation.

President Habibie gave his consent to the Forestry Act during his last week in office after parliament approved it on September 14th. Economics minister Ginanjar Kartasasmita had assured the international donor community at the July CGI meeting that the interim government would not press ahead with new forestry legislation. Consultation on forestry reform was one of the conditionalities of the IMF/World Bank's structural adjustment lending.

The interim government (including Forestry Minister, Muslimin Nasution) made much of its reform agenda, but the new Forestry Act largely reinforces the paradigms of the 1967 Act. The new law is based firmly on state control of forest lands with the emphasis on increasing and sustaining large-scale commercial exploitation. The Department of Forestry claims the law ushers in a new model of 'forest ecosystem management' which promotes multiple uses of forests, not just timber extraction, although it does not make clear how this will operate.

Forest peoples' rights not recognised

The 1999 Forestry Act does recognise the presence of forest peoples (referring to them throughout as "communities with customary laws" rather than indigenous peoples) but does not recognise their rights or protect their interests in the vast tracts of forest lands which are still designated concession areas. Phrases about sustainability and equity, liberally sprinkled throughout the new law, have little practical meaning. The new legislation goes much further than the (still current) 1960 Basic Agrarian Law. The latter recognises three categories of land: state land, customary land and privately owned land; the new act explicitly includes customary land within state forests.

The official classification of forest into Production, Protection, Conservation and Conversion Forest still prevails. Licences will be issued to individuals, co-operatives, Indonesian private companies and state-owned or local government owned companies for the exploitation of timber and non-timber products in Production Forest. Communities living in and around forests have the right to receive compensation for the lack of access to forests caused by the demarcation of forest lands "so that they can find alternative livelihoods." With no land or relevant skills for life outside forests, they are doomed to poverty and marginalisation: tantamount to genocide in some cases. Forest peoples will be allowed limited use of Protection and Conservation Forest for which they will have to pay fees or taxes on forest products. However, licensed exploitation of these products will also be open to other individuals or co-operatives, who may well be urban-based entrepreneurs.

The wording of the 1999 Act reveals that the official view of forest peoples as ignorant and the main agents of forest destruction still prevails. The legislation refers frequently to accountability and community participation while confirming the state's right to determine all aspects of forestry in Indonesia. Although communities have the right to express their opinion on forest developments, there is no obligation on the government to listen. Participation is limited to guarding forests and reforestation programmes, not decision-making. Clearing forests is forbidden, unless the land has been officially designated for 'conversion' to large scale plantation or other uses. Companies and land owners will be held responsible for fires on their land. The list of restrictions on forest uses is so great that the only way most indigenous communities can continue traditional land-use practices is to apply for their forest to be granted 'Special Purposes' status. But this is by no means a straightforward matter.

Decisions about large-scale mining projects or other developments which affect forest lands must now be approved by parliament. There is nothing in the Act to prevent 'post hoc' project approval as is current practice with the legal requirement for Environmental Impact Assessments. It could also be used to ban small-scale traditional mining in forests.

Controls and penalties

All licensed forest users are now to be held responsible for protecting the forests where they operate. Some forestry officials will be given police powers to investigate and take legal action in forestry cases. Their powers will extend to inspecting identity cards of anyone in the forest and confiscating equipment which could be used for illegal logging or collection of forest products. There is no mention of penalties for corrupt forestry officials or police nor any obligation on the government to take legal action against companies burning to clear plantation land.

The new law does specify penalties for forest destruction, burning and other illegal actions. For example, the crime of deliberately causing forest fires carries a maximum prison term of 15 years or a Rp5 billion fine (currently around US$700,000). Illegal logging, clearing forests or occupying forest land can incur 10 years in prison or a maximum fine of Rp5 billion. Since the maximum penalties are the same for a company or an individual, the new system is weighted in favour of rich companies. The maximum fines for forest destruction are risibly low compared with the timber companies' annual profits. On the other hand, fines for grazing livestock or carrying collecting equipment without a forest products licence are high compared with local communities' incomes, so traditional practices are more likely to result in prison sentences.

On the positive side, the 1999 Act acknowledges the role of NGOs in monitoring forest developments, community 'education' and public information, reforestation and advising local and central government. Furthermore, the NGO movement could assume more rights and responsibilities though a broad interpretation of the term 'community' as used throughout the Act for example in taking legal action against illegal forestry practices.

The way the new Forestry Act will be implemented depends greatly on government 'operating regulations'. Some of these were issued in advance of the new Act, under pressure from the World Bank, such as PP6/1999 on the requirement of performance bonds for logging companies. Attempts to force through approval for another 19 operating regulations in the final days of the Habibie regime failed. In effect, this delays implementation of the new legislation and allows campaigners some opportunity for further albeit limited negotiations.

Muslimin's legacy

In addition to the 1999 Forestry Act, Forestry Minister Muslimin introduced various measures to bring about the redistribution of forest resources. The most significant were:

These look like a step in the right direction: diminishing the power of forestry tycoons and increasing opportunities for local communities to gain access to forest resources. Yet, they do not tackle many fundamental issues. Moreover, Indonesian forestry policy remains centralised and closed to outside influences.

Indonesia's forest resource is being destroyed and degraded far faster than official sources admit. According to two independent reports, timber supply from the natural forest will be exhausted in the early part of next century, if the current exploitation rates continue. The Indonesian media and some forestry officials continue to perpetuate the 'magic number' of 143 million hectares of forests. In fact, under 40 million hectares of 'production forest' remain and much of this has been logged over once or more.

A World Bank paper on forestry prepared for the donors at the July CGI meeting in Paris estimated an annual forest loss of 1.5 million ha over the last twelve years. By the year 2000 only 40 million ha of productive forests will be left in Indonesia. The figure is provisional but well-based. It comes from the mapping of current forest cover done under the conditionality of the Second Policy Reform Support Loan. The maps for Sumatra and Kalimantan are now on the Department of Forestry website at Data from other regions is due to follow shortly.

Corroborating evidence is provided by an analysis of figures on forest areas in two earlier studies: the UK government-funded 1984 Regional Physical Planning Programme for Transmigration (RePPProT) and FAO's 1996 National Forest Inventory of Indonesia (NFI). As these studies were carried out through different government departments using different methods, it is impossible to tell exactly how much forest was lost in the intervening period. The new study re-examines these figures assuming that a rate of deforestation equivalent to 1 percent per annum across the entire forest area and all logging activity has been concentrated in the three forest types with a high commercial value peat forest, swamp forest and evergreen forest.

This analysis reveals very similar figures to the World Bank paper. By 1996 Indonesia had approximately 47 million ha of forest in these commercially important forest types outside protected areas; 15 million ha of this were classified as conversion forest. Only 19.5 million ha remained unlogged, with 6 million hectares (30 percent) of this area earmarked for clearance. Illegal logging in logged-over areas is so serious a problem that most areas will not recover sufficiently to allow a second cutting cycle. The draft report concludes that the only natural forest remaining to feed the timber processing industry in Indonesia is just under 20 million hectares of peat, swamp and evergreen forest. It is due to be published next year as a working paper on deforestation.

The challenge facing Nur Mahmudi Isma'il

It is clear that Indonesian forests and forest peoples are facing a grave crisis (see box). The new government must take urgent and decisive action to address the underlying structural causes of deforestation and forest degradation: the huge imbalance between the capacity of the wood processing industry and sustainability of the remaining forests; the corruption which underpins massive illegal logging operations; an official policy which allocates 30 million ha of Indonesia's forests for conversion to plantations.

It is equally clear that the way forward must be based on greater democracy, not the power of the free market. An important first step would be for the government to acknowledge officially the extent of the destruction of Indonesia's forests. A second would be for the Department of Forestry to publish promptly and regularly all income and expenditure at local and central levels and for officials to have to declare publicly their interests in any forestry businesses. Improved exchange of information and communication between Jakarta and regional or district forestry officials becomes even more important to safeguard against the creation of new empires of corruption at local level rather than amongst Jakarta's elite.

Furthermore, local officials will be responsible for decision-making instead of simply following (or ignoring) orders from Jakarta. This enormous culture change will require thorough, widespread training. A bureaucracy used to drawing up proposals, taking decisions and enshrining them in legislation with no more than token consultation is no longer acceptable. Not only is this process undemocratic, it leaves huge opportunities for mismanagement and corruption. New policies must be grounded in genuine consultation with all stakeholders and greater transparency.

Most importantly, Indonesia's new government needs to listen to the forest people the indigenous peoples, the transmigrants, the settlers as well as forest researchers, NGOs and forestry companies and give control of forests to the people who can demonstrate that they are managing forest resources sustainably. To provide incentives for people to take greater care of forest and agricultural land it must also redefine Indonesian law on land ownership and access to resources.

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