Contribution of Forestry to Poverty Alleviation - APFNet

that the development of the Kalimantan region is directed at maintaining areas that have a conservation
function, rehabilitating environmentally degraded areas in the context of supporting the sustainability
of the utilization of forest, mining, agricultural, marine, coastal and small islands resources, reducing
the risks of natural disasters, and developing sustainable marine, agriculture, estate, mining, and
forestry-based processing industries (BAPPENAS 2010a).
Forestry Policy
Indonesia’s forest policy and management framework during the New Order Regime (1967–1998) was
mainly oriented toward large-scale commercial timber production and processing to support national
economic growth. Although there have been some shifts in forestry policy over the last decade with
the issuance of new laws and regulations that allow for more space for local communities to play a
role in state forest management, forestry policies and management in Indonesia continue to prioritize
large-scale exploitation activities as contributing to economic development, with less consideration
for sustainability and ecological and social values (Leimona et. al. 2009). Forest policies encompass
numerous laws and regulations that are complicated, not well-integrated and—as some analysts noted—
“not in the best interest of the people” (MoF 2006).
In the 1960s, the government of Indonesia consolidated state authority over the country’s forests
through the Basic Agrarian Law (1960) and the Basic Forestry Law (1967). Under these laws, the
government assumed control and management of the country’s forests. Subsequent laws—Law 1/1967
on Foreign Investment, Law 6/1968 on Domestic Investment and Government Regulation (GR)
No.21/1970 on Forest Logging Concessions and Rights of Collecting Forest Produces—served as the
legal foundation of the New Order regime (1967–1998) for large-scale timber exploitation and forestry
investment (Safriti 2010). The laws catered to the timber industry as a source of revenue for economic
growth. Concession rights were granted to state-owned and private companies (domestic or foreign) for
timber and plantations, without concern for the sustainability of forests or fair sharing of benefits with
communities living in and near the forests and with very limited participation from these communities
(Simorangkir and Sardjono 2006).
Act No 5/1960 recognized the claims of indigenous communities living in forest areas, but their rights
were generally ignored, overruled or granted minimal recognition. The Law on Forest Planning (PP
33/1970) failed to include community participation in the setting of forest boundaries and to ensure
compensation for communities for lands lost to concessionaires, thus weakening policies that gave
some recognition to traditional management of customary forest lands (Poffenberger et. al. 2005).
During the New Order regime, a lot of conflicts over land tenure emerged but the people could not
openly complain or protest. Further, during the 1970s and 80s, forest communities were stigmatized
as illegal practitioners of “slash and burn” agriculture and primary causes of deforestation. This was
in part adopted to draw attention away from the culpability of the commercial timber industry (Ibid.).
The disregard for the people’s customary ownership and rights to forest lands and resources led to rural
poverty and conflicts.
Laws favorable to commercial logging and processing operations spurred large-scale forest exploitation
from the 1960s to the present, which contributed to the country’s economic growth but had limited
impacts on local communities’ welfare and livelihoods. Although MoF policies upheld centralized
control and timber production throughout the Soeharto regime, some efforts explored community
forestry as an option for managing the forests with the support of development agencies. During the mid-
1990s, the MoF passed policies related to community forestry, including the Community Development
Program (CDP or Pembinaan Masyarakat Desa Hutan or PMDH) that obliged timber concessions to
address some of the negative impact of their operations to local villages and a Ministerial Decree issued
in 1995 on Community Forestry granting limited user rights to rural villages in state production and
protection forests as part of the objective of regenerating degraded forest lands.
During the reformasi, the Decentralization Policy (Regional Autonomy Law No. 22/1999) and the
Revised Forestry Law (Act No. 41/1999) were passed. Act Number 22/1999 on Regional Autonomy
146