Posted on March 27th, 2009 in Brief Notes

According to the Constitution of 1945, forests are a renewable resource and should be sustainably managed so as to provide their maximum benefit to the people of Indonesia. Regarding this objective, comprehensive, trusted and up-to-date data and information constitute the basic requirements of sustainable forest management.

The most recent forest cover and land use data is a primary requirement. Because forest cover change takes place so quickly Indonesia, up-to-date information is fundamental to forest resource management, and a prerequisite to sustainable forest-use and enhancement of people’s prosperity. Forest cover is the basic barometer of forest degradation, displaying on-the-ground conversions and exploitations, regardless of land-use allocations or data. Unfortunately, such accurate and timely data is not widely available for Indonesia.

In 2003, the Ministry of Forestry (MoF), as the provider institution of forest data, reported that forest cover was approximately 94 million hectares, or roughly half the total land area of Indonesia. In 2007, the Ministry of Environment (MoE) interpreted the Landsat 7 ETM+ images from 2004-2006 (generalized as 2005 data) and reported the forest cover declined to 83 million ha. It should be noted, however, that due to cloud interference nearly 33 million ha are obscured and not accurately recognized. UN Food and Agricultural Organization (FAO) analysis shows Indonesian forest cover in 2005 was 88.5 million hectares or 48.8% of total land area, 46.5% of total region area.

Forest cover in Kalimantan and Papua continues to degrade and disappear each year, while other regions experience both deforestation and forest degradation and, in some cases, extension of forest area. However, cloud interference and differing methods of analysis plague these calculations. Even currently, the data of 2003 satellite image interpretation is still referenced when calculating forest cover and remains legitimate data used by the MoF. Data is revised once every three years, the span of time it takes the MoF to publish official statistics from satellite images. Under these circumstances, data accuracy is somewhat outdated and questionable at a map scale of 1:250.000, using 23 types of forest cover and land use. The numerous data sources, methods and classifications result in an inconsistent calculation of annual forest cover changes. What is consistent is that deforestation rates are underestimated until it is already too late.

Changes in Indonesian Forest Cover

Large scale deforestation began in the early 1970s when timber companies were first granted concessions and began their operations. From 1970 to 1990, the rate of deforestation was estimated at 0.6 to 1.2 million ha annually. According to official government mapping projects in collaboration with the World Bank, deforestation in the period 1986 – 1997 was approximately 1.7 million ha per year. Our research, however, shows the deforestation rate to be 2 million ha per year over the same period (FWI/GFW, 2001). From 2000 to 2006, different publications report varying rates of deforestation and forest degradation. The MoF reported that 2.83 million ha per year were deforested during the period 1997 – 2000 (2005). In 2007, in the FAO State of the World’s Forests, Indonesia’s natural forest area was ranked 8th in the world and, with 1.87 million ha of forest lost from 2000-2005, the country with the 2nd fastest rate of deforestation in the world. Due to the conflicting statistics, FWI is attempting to calculate the rate of deforestation from 1989 to 2003. Provisional analysis shows that Indonesian land cover has experienced 4.6 million ha of forest degradation and deforestation each year during this period. Of that, 1.99 million ha was deforestation. The development of timber industries, natural forest and plantation forests concessions, timber harvesting (IPK), industrial plantations, mining and illegal logging continue to influence Indonesia’s remaining forest cover. The corrupt, non-transparent legal and political system and a view of forests merely as a source of income and profit have also contributed much to deforestation in Indonesia. This info sheet now briefly discusses the performance of forestry stakeholders: timber industries, natural forest concessions (IUPHHK-HA), forest plantation concessions (IUPHHK-HA), oil palm plantation, mining, and timber harvesting (IPK) on the forests of Indonesia. Further details will be provided in our upcoming State of the Forest Report-Indonesia Volume II, to be published next year.

Timber Industry (Industrial Forest Products)

Timber industries in Indonesia have experienced rapid growth and structural changes over the period 1980-2005. This industrial growth has directly and indirectly impacted the remaining forests. According to timber industry statistics for the period 2000-2005, production of sawn timber decreased from 6.5 to 4.33 million cubic meters, as did ply wood + veneer production, from 8.27 to 4.67 million cubic meters. Production in this period is lower than during peak production years; 10.4 million m3 for sawn timber in 1989 and 9.6 million m3 for ply wood + veneer in 1997. The production of pulp, however, increased from 4.09 million tons in 2000 to 5.47 million tons in 2005, making the pulp and paper industry the largest consumer of timber for the period 2000-2005. Realization of mill capacity for sawn timber and ply wood + veneer industry decreased significantly in the period 2000 to 2005, from 58.8% to 41.3% for sawn timber and 87.7% to 42.1% for plywood + veneer. This trend shows the deficit of logs as raw material which these two industries are facing, although this lack of timber has become apparent since 1997 (Simangunsong 2004). Conversely, in the pulp industry realization of mill capacity in the period of 2000-2005 rose from 78.2% to 84.8%.

Natural Forest Concession (IUPHHK-HA)

The MoF reported that in 1993 there were 575 active natural forest concession permits (IUPHHK-HA), covering an area of 61.70 million ha. This number decreased to 303 permits and an area of 28.10 million ha by August 2006. This means there are now about 33.60 million ha of logging concession area classified as natural forest which have undergone or are undergoing degradation and deforestation. The decrease in IUPHHK-HA was caused by degradation of existing forests, the 1997 economic crisis, political transition, and the early period of regional autonomy, the effects of which are still taking shape. Up to August 2006, there were 154 non-active IUPHHK-HA areas totaling 17.38 million ha. There are numerous direct causes for this decline in active permits: ‘sick’ companies, unprofessional human resources, low commitment to forest management and license holders waiting for more favorable economic conditions. Indirect factors include poorly integrated and inconsistently enforced regulations between federal and regional authorities, illegal logging activity, and an uncertain business climate.

Forest Plantation Concession (IUPHHK-HT)

Despite much land allocated for timber plantation concessions (IUPHHK-HT) by the government, the actual area replanted remains much lower. Perum Perhutani itself has the authority of 1.78 million ha of production forest area on Java. At this time, not less than 10.2 million ha of state forest area, particularly in Sumatra and Kalimantan, has been allocated for timber plantation development and authorized by 248 private and joint venture companies. Starting in 1996, the number and area of timber plantation concessions has risen significantly. However, these increases on paper have not always resulted in plantations on the ground. In 1996 only 50% of allocated timber plantation area was actually replanted, followed by 43% in 1997 and then 32% in 1998. In 2006, actual planted forest area was 2.88 million ha. According to the government licenses issued, this number should have been 10.2 million ha.

Development of Oil Palm Plantation

Crude Oil Palm (CPO) is currently one of the largest export commodities in Indonesia. Consequently, the conversion of forest land for oil palm plantations is carried out on a massive scale. From 105,808 ha in 1967, oil palm plantation area increased to 5.59 million ha in 2005. It is currently estimated that continued expansion of oil palm plantations will cover 13.8 million ha by 2020. Sumatra and Kalimantan – two areas with the largest extent of forest cover – are the main targets. Less than 5.25 million ha was allocated for oil palm plantation in 2003, approximately 19% in Kalimantan and 72% in Sumatra. However, palm oil plantation area was expanded by over 1 million ha in Kalimantan from 1990 to 2003, an increase of approximately 1056 %. The meteoric rise of the oil palm sector began in 1990 and shows little sign of stopping. Plantations are usually licensed as conversion of natural or production forest, allowing the concessionaire to benefit twice; from the initial clearing and selling of timber and then future oil palm revenue. However, many companies with natural forest conversion permits harvest the timber first, reaping huge profits, and then fail to develop the plantation. By not reinvesting timber revenue into developing a plantation, local communities, who have now lost their forest resources, are left with a barren landscape and little prospect of employment.

Forest Conversion for Mining

How much does mining contribute to deforestation in Indonesia? To find out, we have to look at both mineral and coal mining and oil and gas extraction. Up to now, the Ministry of Mining and Minerals (ESDM) has issued 1,830s licenses (KK, KP & PKP2B) with a total of concession area of 28.27 million ha. Of this concession area, 150 licenses are located in preservation and conservation forest, or about 11 million ha (JATAM, 2006). The impact of mining activity causes degradation which is difficult, if not impossible, to be restore. Environmental destruction, local conflicts, and poverty are consistent factors in mining areas. State income from the mining sector, large in GDP terms, is far less significant if environmental reparation costs are factored in.

The threat of conversion to preservation and conservation forest area which comes from Oil and Natural Gas (MIGAS) extraction also poses a serious threat to forests, one that typically results in the irreversible environmental damage. Up to 2006, the Department of ESDM has issued 202 MIGAS block licenses (offshore and onshore). Of those, 68 blocks (approximately 1.8 million ha) overlap with 45 conservation areas, including National Parks, Natural Conservation Areas, Animal Preservation Areas, Ecotourism Parks, and Royal Forest Gardens.

Politics and Forest Governance

Forestry issues began when the budget decree on natural forest resources for national development was issued in 1969 without appropriate preparation. Here, at least three main issues exist:

1. Forest assignment was not based on accurate social facts. Legally, forest allocation was based on central government planning (TGHK) with little reference to conditions on the ground. Central government land allocation was then combined with provincial land use planning (RTRWP). Due to overlap between central and provincial land allocation, less than 10% of forests were gazetted. Additionally, local communities were largely ignored and many lost their traditional rights to forest land, which resulted in social conflicts. This was seen as a management failure by central, provincial and district authorities.

2. Weak state capacity in forest management and lack of development funds at that time encouraged a national policy centered on natural forest enterprises. As a result, community rights were ignored, high transaction costs were incurred and much technical intervention from the state was necessary.

3. Preservation and conservation forests were assigned without appropriate management capacity at the grassroots level. As these forests were without management or enforcement and lacked local legitimacy they experienced much degradation and destruction.

These problems have led to low performance in forest management and a technocentris system which favors large scale resource extraction and development. State bureaucracy, regulation and conflicting policies have not proven able to control forest stakeholder performance, nor manage forests in a sustainable manner. Forest stakeholders, in turn, interpret forest regulations in different ways. Clashing land use allocations by central, provincial and district authorities, forest laws seen as illegitimate and rarely enforced, timber companies operating in destructive, unsustainable ways and social conflicts are all results and clear indications of weak forest governance.

Inadequate forest data and a government uninterested in transparency are the next priorities in Indonesian forest management. There is a rising demand for forest policy revision and increased transparency to provide comprehensive, trusted and current information. Information regarding forest boundaries and the rights surrounding them are essential to forest stakeholders and should be a priority for the government as the authority of forest management. Essentially, this is the purpose of FWI and the meaning of our slogan “good forest governance needs good forest information”.