Decentralization of Forest Administration in Indonesia, Implications ...

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Decentralization’s Effects on Forest Concessions and Timber Production
In many parts of Indonesia, the challenges that decentralization posed for large-scale
concessionaires were even more direct. Indeed, some district governments allocated
HPHH and IPPK permits in areas that fell within the concession boundaries of
existing HPH-holders (Nugraha 2001). State-owned forest enterprises (PT Inhutani)
were frequent targets of such actions. In Malinau, for instance, the district government
by early-2001 had issued at least three IPPKs in areas that overlapped with Inhutani
II’s 48,300 ha concession area (Barr et al. 2001). Similarly, in Bulungan the district
government issued numerous IPPK permits for areas that fell within the boundaries
of concessions managed by Inhutani I (Suramanggela et al. 2001). By mid-2000, the
district of Kutai Induk (now Kutai Kertanegara) also had reportedly issued several
dozen small-scale timber extraction permits in areas previously allocated by the
national government to private sector HPH concessionaires.
In each case, the district government’s actions were apparently part of a broader
strategy to establish an expanded role for itself in controlling timber exploitation
within its jurisdiction. As one district official in Malinau explained in September
2000:
The national and provincial governments are struggling with each other over
how to redistribute the HPH royalties. They think that the kabupatens will
accept whatever portion the central government and the province decide to
give them. But actually, the kabupatens are implementing regional autonomy
in a purer form (‘dalam bentuk yang lebih murni’). Just like in Kutai, the
Bupatis in Malinau and Bulungan are showing that they can control forests
being managed by HPH-holders. They’re not just looking for a share of the
HPH revenues – they want to decide who gets the permits, who gets to operate
there (Barr et al. 2001).
A Malinau-based timber broker suggested that the Bupati’s actions against
Inhutani II’s concession site during the early stages of Indonesia’s decentralization
process were meant to send a political message to other HPH-holders operating in
that district. As cited in Barr et al. (2001), the broker argued that
the Bupati [has] sought to make it clear to large-scale concessionaires that
their continued access to timber profits is now dependent upon the support
of the kabupaten government and cannot be guaranteed, as in the past, by
political backing from Jakarta. The informant implied that this show-offorce
on the part of the Bupati was necessary to ensure that HPH-holders are
responsive both to the district government’s new regulations and to periodic
requests on the part of local officials for informal payments.
Inhutani officials and other concession-holders interviewed during 2000 and
2001 claimed that the allocation of IPPK conversion permits within the boundaries
of HPH timber concessions posed a vital threat to the future of sustainable forest
management in the region (Barr et al. 2001). They emphasized that under the terms
of the HPH contract with MoF, their companies were obliged to practice selective