Decentralization of Forest Administration in Indonesia, Implications ...

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customary (adat) leaders; the sub-district head (camat); and the head CDK before
being signed by the Bupati on behalf of the district government. Some timber brokers
indicated that they had paid up to Rp 50 million (or about US$ 5,850 at the average
exchange rate of year 2000 of Rp 8,500 per US$) for individual signatures on their
IPPK applications (Barr et al. 2001). In many cases, the brokers apparently planned
to recoup these expenditures by subtracting them from payments later made to the
forest communities in the areas being logged.
5.4 ‘Legalization’ of Illegal Logging
Through the 1990s, illegal logging was widespread in most of Indonesia’s timberrich
regions. High levels of illegal timber extraction were driven by the structural
imbalance that existed between timber demand on the part of Indonesia’s wood
processing industries and the volumes of logs that were legally harvestable under the
national government’s forestry regulations (Scotland 1999). In 1997, for instance, it
was estimated that the nation’s major wood-based industries collectively consumed
some 61 million m 3 of roundwood, while only 25 million m 3 of logs were legally
harvested under the government’s HPH and IPK permits (Barr 2001). Much, if not
all, of the balance was covered by illegally harvested wood.
Organized timber syndicates, which often involve the Army, Police, and other
branches of the state regulatory apparatus, are known to have long been active in
most regions with commercially valuable timber (Barr 2001; Brown 1999). Anecdotal
evidence suggests that in many provinces, the volumes of illegally harvested logs
rose sharply following the collapse of the Soeharto regime, as larger numbers of
actors became involved and the enforcement capacity of the New Order state was
drastically curtailed (Smith et al. 2003; Soetarto et al. 2003; Casson and Obidzinski
2002). Moreover, the removal of Indonesia’s log export ban in 1998 encouraged an
expansion in the flow of logs across the nation’s borders with Malaysia (Obidzinski
2005).
National level policymakers and large-scale industry actors have contended
that Indonesia’s decentralization process has further undermined governance in the
forestry sector by effectively ‘legalizing’ illegal logging. Indeed, several aspects of
the district timber regimes that emerged under decentralization appear to have been
structured to legitimize the informal timber economies that had theretofore operated
in those regions. In many parts in East Kalimantan, for instance, many of the HPHH
and IPPK permits issued by kabupaten governments during 1999-2002 covered areas
much larger than the district regulatory apparatuses could effectively monitor. In
Malinau District, for instance, the Bupati allocated some 56,000 ha in small-scale
forest conversion permits between April 2000 and February 2001, well before the
district government even had its own forestry service. There are reports that some
IPPK-holders sought to gain informal access to areas outside those delineated in
their permit. As one Malinau-based timber company official explained, “There is no
agency to regulate IPPKs. The area to be cut by the [IPPK permit-holder] depends
on the company’s arrangement with the local communities (masyarakat)” (Barr et
al. 2001).