Down to Earth No. 50, August 2001

The fight against illegal logging

The campaign to stop illegal logging has become a key focus for Indonesia's new forestry minister, but the problem is immense and can only be properly tackled, say NGOs, by a complete overhaul of forest management in Indonesia.

Illegal logging has reached unprecedented levels in post-Suharto Indonesia, with up to 56.6 million cubic metres of logs being felled without permits each year. Under pressure from Indonesia's creditors, grouped in the CGI, the Jakarta government has announced some measures to contain the problem. These include:

  1. a temporary ban on the felling and trade in the endangered hardwood ramin (127/Kpts-V/2001); this was replaced by another decree in May (Kpts-IV/2001) to allow exceptions including certified forestry operations;

  2. the proposal that ramin should be listed on CITES Appendix III;

  3. a presidential instruction, calling for a clamp-down on illegal logging especially in Gunung Leuser and Tanjung Puting national parks (Inpres 5/2001/19-April);

  4. a declaration signed by President Wahid to fight against illegal logging (April 24th).

Legal action is also being stepped up, especially against companies caught logging illegally in national parks. In May it was announced that action was being taken against 8 illegal loggers - including the businessman and politician Abdul Rasyid, whose companies have devastated parts of Tanjung Puting National Park in Central Kalimantan. The previous month, police announced that 41 people involved in illegal logging had been arrested. Corruption cases are being pursued against top timber tycoons, including Barito Pacific boss Pangestu Prayogo, and Raja Garuda Mas' Sukanto Tanoto.

Just how effective these measures will be is doubtful, however, as powerful political and economic forces come into play. The new forestry minister, Marzuki Usman, is being put under great pressure by the logging industry to reverse the decision on ramin, with companies complaining that they will be forced out of business, causing heavy job losses. In Central Kalimantan, companies pushed local and central government officials to delay the implementation of the ramin decree, then threatened to take Marzuki to court over the issue. In Kapuas district of the province, the local assembly refused to accept the decree and allowed illegal logging to continue. In June ramin was still being felled and sold at high prices in Central Kalimantan.

The timber industry is also vehemently opposed to a proposed new regulation obliging companies to pay reforestation fund deposits 3 years in advance. According to Marzuki, the measure is aimed at cracking down on illegal logging by "unscrupulous forest concession holders". The Indonesian Wood Panel Association, APHI, said investors were losing interest in Indonesia because of this and other new regulations.

Marzuki has also announced that 32 task forces within the forestry department, including one set up to combat illegal logging, are to be dissolved. The reason given was that these task forces had not proven effective in dealing with the country's forestry problems. The minister said the police had sufficient authority to deal with the investigations. However, legal action, in the few successful cases, has resulted only in light punishments so far. The police say they lack the funds and staff to get evidence and the courts say they have insufficient funds to process the cases.

Meanwhile both Prayogo and Sukanto Tanoto have evaded legal action. Tanoto was thought to have fled to Singapore in April, and, shortly after being questioned for five hours by the Attorney General, Prayogo too left the country. Both he and another tycoon, Gajah Tunggal group owner, Sjamsul Nursalim, were reported to have gone abroad 'for medical treatment'. Prayogo has now been named as a suspect and has had his passport revoked - all to little effect if he stays out of the country. So far, Bob Hasan remains the only big timber tycoon that has received a jail sentence (see DTE 49. Prayogo is known to have close connections to the husband of vice-president Megawati, so if she takes over from Wahid, as many expect her to do soon, the case against him may be dropped altogether.

Illegal logging focus obscures need for fundamental reform
The governor of Jambi province, H Zulkifli Nurdin recently suggested that the death penalty be imposed on people caught logging in national parks and protected forests. This is the same governor who wants to develop a million hectares of oil palm plantations in Jambi by the year 2005. Local NGOs say this will mean the destruction of forests and wipe out the sustainable livelihoods of people living near forests (see DTE 49). The double standard highlights the way that the focus on illegal logging is overshadowing the need for total reform in the way forests are managed. As well as illegal logging, urgent attention needs to be paid to the problems caused by legal logging including the policy of converting natural forests into monoculture tree and cash crop plantations. Last year, under pressure from the CGI, Jakarta did issue a decree suspending further conversion of natural forests, but this did not stop the government from approving applications for conversion permits submitted before the May 2000 deadline.

There has been some acknowledgement of the need for deeper-reaching reform on the part of the new minister Marzuki Usman. He has talked about the need to change the logging concession (HPH) system and called for a presidential decree limiting the powers of the forestry minister. But these pronouncements have yet to be translated into action.

The leading environmental NGO, WALHI, has reiterated its call for a moratorium on all logging. This is not only to combat illegal logging, but also to give the forests a "breathing space" while forest management policies are subjected to the thorough rethink they need (see DTE 49). In May, the NGO called for fresh CGI loans to be made conditional on the introduction of a logging moratorium. WALHI says that at least nine CGI countries support illegal logging through their financial assistance to the pulp and paper industry. In February, NGOs Bioforum and Environmental Defense released a report showing how export credit lending agencies of northern countries have bankrolled destructive projects in the sector (see DTE 49).

Certification dispute

Indonesian and international NGOs are calling for a halt to certification of timber concessions in the country until fundamental reforms are in place. The two organisations that run certification schemes which include social criteria in Indonesia are the Forest Stewardship Council (FSC) and the Indonesian Ecolabelling Institute (LEI). They are going ahead with certification of natural forests, despite NGO opposition. The first certification of a natural forest concession, carried out by international certifiers SGS, was issued in April this year for PT Diamond Raya Timber's concession in Riau province, Sumatra. NGOs are preparing to use the FSC formal complaints procedure to challenge this and future certifications on the grounds that the FSC's principles and criteria cannot be implemented in Indonesia under current conditions. They are challenging the certification of the PT Diamond Raya concession in particular because the operation has appropriated community forests, depriving local people of a livelihood. This appears to be a clear violation of FSC Principles 2 & 3 on the recognition of tenure and indigenous peoples' rights.

(See also DTE/Rainforest Foundation report Certification in Indonesia, June 2001.)

The autonomy factor
How far any measures can be imposed by central government has become all the more questionable since the implementation of regional autonomy began in January this year. The refusal of Kapuas district to impose the ramin logging ban is a sign of the unwillingness of local governments to take orders from Jakarta. So far the decentralisation process has been chaotic and confused and, in many areas, has resulted in yet more deforestation. Since district heads (Bupatis) were given the right to issue small forest exploitation permits (IPPK), hundreds of logging permits have been issued in forest-rich areas like East Kalimantan (see DTE 49) and many hundreds more are in the pipeline. The companies or co-operatives that receive the permits are supposed to be local community initiatives, but are often controlled by firms backed by powerful local businessmen. (See also report on the impact of decentralisation on the island of Siberut)

As far as illegal logging is concerned, the situation remains just as confused. When, in May this year, a national parliamentarian complained that local people were illegally logging in 174 inactive timber concessions, Marzuki said it was up to the Bupatis to sort it out, since they will be the ones responsible for issuing licences. This would appear to conflict starkly with announcements aimed to please international donors that the government is committed to clamping down on illegal logging. According to a ministerial decree issued in November last year, Bupatis are limited to issuing permits of up to 50,000 ha, and governors up to 100,000 ha. Governors are responsible for any concessions which cover one or more districts and central government retains control over concessions which overlap more than one province. The status of ministerial decrees itself is now being questioned by some local authorities.

(Jakarta Post 19/May/01, 29/Jun/01; Antara 28/Jun/01; Kompas 18/May/01, 28/Jun/01; Tempo 17May/01, 27/Jun/01)

Note: A sign-on letter supporting the proposal to include Ramin on Cites Appendix III has been circulated by the Environmental Investigation Agency. Contact or

The Meratus case
In South Kalimantan a dispute is reported to have broken out between the governor, Sjachriel Darham, and the district heads of Hulu Sungai Utara and Kota Baru over the issuing of logging licences to a Korean company PT Kodeco Timber (40,000 ha) and PT Karimer Inti Mulia (43,000 ha). The proposed concessions are in an area designated protected forest in the Meratus mountains. In 1999, the status of 46,000 hectares of the Meratus forests was changed from protection to production forest by outgoing forestry minister Muslimin Nasution. The change was made specifically to allow Kodeco to log the area in replacement for another concession in Batulicin district (see DTE 44:16 for more background). Local Dayak communities rejected the change of status of the forests and have organised a campaign to stop logging in the mountains. Through their organisation, the Lembaga Musyawarah Masyarakat Dayak Kalsel, (South Kalimantan Dayak Consultative Council) the Dayaks have threatened to take action to defend their forests if the logging companies try to move in. Offering support is a group of local NGOs, called the Meratus Alliance. The Alliance has become embroiled in a dispute with the governor, who has accused them of manipulating Dayak opinion and acting as the stooges of illegal logging entrepreneurs operating in the area. The Alliance has strongly refuted these accusations.

The Bupatis (district heads) are said to be against issuing logging recommendations for these concessions because of the likely impact on the forests and previous experiences with logging companies. But head of the South Kalimantan forestry service Sonny Partono said this was no problem since the governor could issue the licences without the Bupatis' agreement if the concessions covered more than one district. He said the licences were needed so that local people could be involved in the logging, instead of engaging in illegal logging as they are doing now. In June, a local paper, the Banjarmasin Post reported that the governor had quietly issued recommendations for concessions covering 35,000 hectares in the districts of Hulu Sungai Utara, Hulu Sungai Tengah and Hulu Sungai Selatan, without first informing the districts.

(Kompas 29/6/01; Banjarmasin Post [no date] forwarded by LMPA, 28/Jun/01; Radar Banjar 18/Jun/0; Pernyataan Sikap Aliansi Meratus 19/Jun/01)

Dayak court action to stop Perhutani

Forty seven representatives of the West Kalimantan Dayak community have filed a suit at Pontianak state court, demanding the withdrawal of PT Perum Perhutani's logging concession licence in the province. In 1999 the forestry minister issued a decree transferring logging rights along the Malaysian-Indonesian border from the former military controlled PT Yamaker to the state-owned company PT Perhutani.

The class action, filed in May, accuses the company of illegally selling timber across the border and causing losses of Rp 10 billion. The Dayaks, who claim the area as their adat (customary-owned) forest, want the concession area returned to local people through co-operatives, farmers' groups or village-owned agencies. (Pontianak Post 5/May/01)

In Java some of Perhutani's timber plantations have received FSC certification (see DTE/RF certification briefing, June 2001).

Indebted companies still not closed down
One of the points agreed with the Indonesia's creditors in the CGI meeting last year was action to close down heavily indebted companies under the control of the Indonesian Bank Restructuring agency (IBRA). In March this year, economics minister Rizal Ramli said that half of the 128 companies under IBRA would be shut down and that the closures would be used to secure 'debt-for-nature' deals with foreign banks (see DTE 49). The companies owe around US$2.2 bn in debts - almost half of which is owed by huge conglomerates like Bob Hasan's Kalimanis Group and Burhan Uray's Djajanti Group.

There appears to have been little progress on this initiative. Two months later, Marzuki could only report that the 128 companies "may be closed due to their inability to pay their debts, operating without permits or their failure to protect forests."

In West Papua companies are being penalised for not logging in their concessions as well as not paying taxes. The head of the timber industry association (MPI) in West Papua said in May that sixteen of the fifty companies with concessions in West Papua will have their licences withdrawn, because they had failed to pay hundreds of billions of Rupiah in taxes. The sixteen are under IBRA control. Some had failed to carry out logging operations because of the remoteness of their concessions or because of demands for compensation payments from customary land-owners. Some had quietly left West Papua, leaving debts owed to central and regional government. They had not fulfilled the local requirements of opening offices and bank accounts in West Papua. (Jakarta Post 19/May/01; Kompas 31/May/01)

British banks financing rainforest destruction in Indonesia

Paper Tiger, Hidden Dragon, a new report by Friends of the Earth UK, looks at the environmental and social impacts of the highly-indebted Asia Pulp and Paper group and names over 300 major international financial institutions who have financed the company. The report is on FoE's website at or go to and click on rainforest destruction in the 'News' section. Contact for a hard copy.

Fires spread haze over borders
Dry weather conditions are increasing concern about the likelihood of severe forest fires in Indonesia this year. Thick choking smog has already been reported in the West Kalimantan provincial capital Pontianak, and haze-filled skies have covered other locations in Borneo as well as Sumatra. In early July, officials in Pontianak suggested that people refrain from outdoor activities and use masks: air pollution levels had reached between 1,067 and 1,494 micrograms of dust per cubic metre. According to international standards, the tolerable level of dust content in the air is under 50 micrograms. Anything over 300 is very hazardous. Around the same date, smoke from fires in Indonesia was reported to be causing hazy conditions over the Malaysian capital, Kuala Lumpur, and as far north as southern Thailand. Singapore was expecting to feel the impact soon.

The haze reports come at a time when Indonesia's forests are being destroyed at an unprecedented rate both by legal and illegal logging, conversion for oil palm plantations, mines and other industries. With so much more of the forests damaged, a prolonged dry season, forecast by some experts, could mean more fires on the scale of the 1997-8 disaster. An estimated 5-10 million hectares of forests, plantations and other lands are thought to have been destroyed in those fires, with an estimated $8 - $10 billion in health costs. Whether or not there is a long dry season this year, the fires are in any case an annual event, and sooner or later the next El Niņo climatic effect will hit Indonesia again, making them much worse. (See DTE 43 and 45 for reports of fires in 1999 and 2000).

Satellite imagery helped show that the 1997/8 fires were mostly located in the concessions of plantation and timber companies. But almost no action has been taken against them. Of five companies reported to the Attorney General for starting fires last year, only one company has been successfully processed, according to Environment Minister Sonny Keraf. The other cases were dropped because of an apparent lack of evidence. In May last year four companies were publicly identified by Keraf. They were PT Adei Plantation & Industri ( a joint venture between Malaysian and Indonesian companies) and PT Inti Indo Sawit Subur, PT Musim Mas and PT Jatim (or Jalin) Jaya Perkasa. These were identified in one report as being Malaysian and Singaporean controlled companies, and in others, Indonesian-owned (see DTE 45 and New Straits Times 4/5/00). A further five companies were named by the head of Riau province's environment agency as PT Essa Indah, PT Surya Dumai Group, Sinar Mas Group, PT Riau Andalan Pulp and Paper (RGM Group), and PT Torganda ( 19/Jul/00). At the time, Keraf said the companies would be charged within the following three months.

Over a year later only one case, PT Adei, has made it to court. Proceedings against the company's Malaysian manager, C. Gobi, opened in Bangkinang, Riau, for incidents of burning from November 1999 through to March 2000 in Pangkalan Kuras subdistrict. Other employees are being charged in separate cases. According to a report circulated by the Indonesian NGO network monitoring the oil palm plantation industry, Sawitwatch, PT Adei has been caught burning on its land no less than ten times since September 1998. (11/Aug/00)

It is doubtful, however, whether this case will act as a deterrent to other companies. They can rely on political turmoil and the continuing economic crisis taking up the attention of Jakarta-based politicians. Forestry minister Marzuki Usman has already said that there are insufficient funds and personnel to deal with the fires this year. And the prevailing winds ensure that these politicians do not directly experience the fires' choking impact.

(Source: Riau Pos 29/Jun/01; Jakarta Post 10/Jul/01; AFP 10/Jul/01; Pontianak Pos 8/Jul/01; Kompas 6/Jul/01; AP 5,8 & 11/Jul/01; Borneo Bulletin 5/Jul/01, Reuters 9/Jul/0; Straits Times 16/May/01) A chronology of this year's fires will be posted on our website at

The Indonesian NGO, Forest Watch Indonesia, is compiling data on forest fires including maps showing NOAA satellite images of hot spots and logging concessions, timber estates and agricultural plantations. Contact

See DTE 35 - 38 for background on the 1997/8 forest fires, and

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