Decentralization of Forest Administration in Indonesia, Implications ...

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Barr, C. et al. 97 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).
98 Decentralization’s Effects on Forest Concessions and Timber Production In East Kalimantan and perhaps other parts of the Outer Islands, the widespread distribution of HPHH and IPPK permits and other types of small-scale logging licenses issued by district governments during 1999-2002 was accompanied by a significant influx of heavy equipment. Some industry sources speculated that the numbers of bulldozers, logging trucks, log loaders, skidders, and graders that were brought into these regions during the early years of decentralization were much larger than what would be needed to operate the areas covered by the district timber and forest conversion permits. There was speculation at the time that HPHH and IPPK permit-holders would use this equipment to expand their operations well beyond the boundaries of the areas allocated to them. As described in Barr et al. (2001), Inhutani I officials reported in September 2000 that IPPK-holders had brought over 370 pieces of new heavy equipment into Bulungan, Malinau, and Nunukan districts over the preceding year. At that time, they described the situation as follows: A year ago, there were probably 200 pieces of heavy equipment in the region. These were formally registered, so that petrol could be allocated [through the government’s fuel rationing system]…. The flood of heavy equipment coming in now from Malaysia is mostly unregistered and of questionable legal status…. Now [the head of the region’s main illegal logging syndicate] is planning to bring in 400 more pieces of heavy equipment. This influx of heavy equipment was reportedly facilitated by decentralization not only in the forestry sector but also in the government’s procedures for regulating imports. Whereas imports of this sort had previously required permits from national government agencies in Jakarta, since the onset of decentralization they have been processed through regional customs offices. In many parts of Kalimantan, district governments also issued regulations that effectively legitimized the transport and trade of illegally harvested timber. In April 2000, for instance, the district government in Kotawaringin Timur in Central Kalimantan imposed a charge of Rp 160,000 per m 3 on illegally harvested logs or illegal sawnwood passing through the district (Casson 2001b). Once this tariff had been paid, those in possession of the illegal timber received a formal receipt from the district government. While this scheme generated considerable revenues for the district government, critics have charged that it allowed illegal loggers to obtain documentation for their contraband timber which, in turn, allowed it to be transported and traded with a semblance of legality. In fact, the Kotawaringin Timur district government actively lobbied regulatory agencies in other districts to permit the sale and purchase of illegally harvested timber from that district as long as the abovementioned tariff had been paid. Casson (2001b) notes that in July 2000, Kotawaringin’s Bupati sent a special team to various ports in Java to ‘socialize’ the scheme and to secure agreements that illegally harvested timber accompanied by a receipt from the Kotawaringin Timur district government would be permitted to enter that island’s major commercial centers. The MoF voiced concerns that district regulations of this sort were complicating efforts to curtail illegal logging by making it difficult for regulatory authorities and
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Decentralization of Forest Administ
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National Library of Indonesia Catal
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iv 4.5 Forest Revenue Sharing 69 4.
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Preface Indonesia is currently ente
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Acknowledgements This study is base
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Abbreviations AAC ACIAR ADEKSI APBD
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IPHHBK IPHHK IPJL IPK IPKR IPKMA IP
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Glossary Adat, customary or traditi
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Forests and Decentralization in Ind
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10 Forests and Decentralization in
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Chapter 2 Forest Administration and
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20 Forest Administration and Forest
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32 Origins and Scope of Indonesia
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148 Annex 1. Timeline of events tha
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152 Annex 2. Indonesian Legislation
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154 Annex 2. Indonesian Legislation
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156 Annex 3. Distribution of Shared
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Since the collapse of Soeharto’s
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