This is a talk that was given by Liz Chidley of DTE at the Forest Movement Europe meeting in Antwerp in April 2000.


Since last year there have been changes of great historical significance:

  1. General elections (June) won by Megawati's opposition party (PDI-P). Presidential selection (Oct) saw Suharto's former deputy, Habibie, replaces by "Gus Dur", head of the Islamic movement NU with Megawati as his deputy. The elections were relatively free and fair. This is Indonesia's first democratic government since the 1950s. The military still have a powerful position in politics and society, especially in the Outer islands.

  2. The economic crisis continues. The Indonesian economy has been much slower to recover that other S.E. Asian countries. Indonesia has a massive $150 bn foreign debt. Around 50% of GDP is currently spent on debt servicing. This is due to increase. The banking system is in tatters. The central bank is, in effect, insolvent. Many banks have gone bankrupt and there have been a number of corruption cases.

  3. East Timor has gained its independence after a UN supervised referendum and extensive violence by the Indonesian military and its militias. Demands for independence in Aceh and West Papua continue to be ignored by the central government. The huge scale of murders evidence and human rights violations in Aceh over the past year is alarming, but largely ignored by the outside world. There has been violence in other regions notably the Moluccas. Over 2,000 have dies in N. Moluccas since November 99.

  4. Donors are more prepared to lend money to Indonesia since the East Timor issue has been settled and Gus Dur has been on a worldwide fund raising tour since he became president. The IMF signed a new loan agreement in January the CGI pledged up to $4.7 bn + for this year in February's meeting.

  5. New local autonomy laws were among important legislation passed in the final days of Habibie's interim regime. These give much greater political power to district councils, present opportunities for local democracy (& corrupt fiefdoms) and give the regions a greater share of tax revenues.


All donors are re-evaluating their forestry aid programmes in the light of

  1. Indonesia's new government
  2. Indonesia's dramatic deforestation rates
  3. Indonesia's forthcoming Nation Forestry Programme

A World Bank Forestry Sectoral Adjustment Load (ForSAL) is a distinct possibility, despite the scathing critique of past World Bank projects and their impacts on forests and forest peoples in Indonesia in the recent OED review.

New World Bank maps showing forest cover (or lack of it) have revised deforestation rates to 1.5 m ha/yr. Sulawesi is virtually logged out for commercial operations and Sumatra and Kalimantan are due to go the same way within a decade or so. The focus will be on West Papuan forests.

A study by DFID has drawn attention to the gross imbalance between supply and demand for timber in Indonesia. Sustainable production is estimated at 20 million cu m/yr. Official current supply is around 22 million cu m/yr, but consumption is around 70 million cu m/yr. The 41 million cu m gap between recorded supply and estimated consumption (after imports have been accounted for) is met by illegal logging. There is vast over capacity in Indonesia's timber processing industry (saw mills, ply mills and pulp mills - 117 million cu m/yr).

Illegal logging is rife throughout Indonesia, even in Protected Areas. Gunung Levser (Sumatra), Tanjung Putting and Kutai (Kalimantan) National Parks have all featured prominently in the news.

The new Forestry Act was pushed through parliament in the last days of the old regime. The Department of Forestry ignored all input from consultations with donors, academics and NGOs (imposed on it by World Bank conditionalities). The new Act does not give any greater recognition to forest peoples' customary rights. The all important operating regulations are due to be presented to the new parliament this month.

The new Forestry Minister, Nur Ismail, is an unknown quantity. He has not been responsive to donors or NGOs. He has brought in an unpopular right hand man, Suripto, to curb corruption. Almost all the first 3 tiers of forestry officials have been replaced since November. Former Trade & Industry Minister and ex-timber tycoon Bob Hasan has been arrested and questioned for corrupt use of Reforestation Funds.

Progress towards the National Forestry Programme for Indonesia has been slow. It is due to be in place by mid-2000. Donors are putting increasing pressure on the Indonesian government to take decisive action to protect forests and make the forestry industry more economically and environmentally sustainable. Donors held a big meeting on forestry before the February CGI meeting. As a result, a GoI Interdepartmental Committee has been set up to make sure that recommendations are met before the next CGI meeting in the autumn.

The forest fires started early this year (beginning of March). Smoke pollution was above danger levels in parts of Sumatra and Kalimantan. The Indonesian authorities were caught completely unprepared. Rains have put most of these fires out for the moment, buy more serious fires problems are expected during the dry season (May - Sept). The government has promised to take action and may prosecute a handful of companies identified as burning to clear land for plantations - including at least one Malaysian owned company in Riau.

Approx 10 m ha of land fire damaged 1997/8, 5mha in E. Kalimantan. 3-5 m ha of this was forest. Much will be cleared for plantations instead of being rehabilitated or allowed to recover. US$12bn costs. 70m people's health affected.

Social conflict over forests is increasingly common. Many cases centre around oil palm plantations e.g. Lonsum in E. Kalimantan.

Oil palm plantations are one of the biggest threats to Indonesia's forests. (The third GoI forestry policy 'blunder' after HPHs and HTI according to Indonesian NGOs.) See handout for figures on large areas allocated for clearance. Also 2 new policies allow clear felling to establish oil palm plantations within Production (not Conversion) Forest. Pressure from IMF. Contribution to forest fires. Future impact on Kalimantan and West Papau. Companies often motivated by access to commercially valuable timber rather than setting up oil palm plantations.

Important not to forget that plywood and paper pulp industries are also v. important in Indonesia as causes of forest destruction. Major driving force behind illegal logging. See handout on forest statistics for huge disparity between timber industry capacity and sustainable logging.

Paper pulp continues to be particularly problematic (but much less 'sexy' as an issue than palm oil). There is great public pressure to close the Indorayon pulp plant in N. Sumatra - due to its notorious pollution record, but the local and central governments are resisting this for fear of putting off potential foreign investors in Indonesia.

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