Decentralization of Forest Administration in Indonesia, Implications ...

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Barr, C. et al. 101 harvesting according to the Indonesian Selective Cutting System (Tebang Pilih Tanam Indonesia, TPTI). By contrast, district governments allowed companies operating under IPPK permits to clear all standing forests in the areas being logged. They pointed out that the overlap between IPPKs and HPHs means that areas previously classified as permanent Production Forest were being slated for conversion under the permits issued by the district government. In many instances, the IPPKs were apparently assigned for areas that correspond to some of the most valuable stands of commercial timber within a HPH’s concessionary boundaries 6 . During 1999-2002, when district governments were issuing large numbers of small-scale logging permits, timber industry sources indicated that further investments in sustainable forest management on the part of HPH-holders would likely not be forthcoming if district governments did not provide a secure legal environment (kepastian hukum) and a secure business environment (kepastian usaha). According to one industry official interviewed in East Kalimantan in early 2001, as cited in Barr et al. (2001): A significant portion of our firm’s revenues each year are spent on selective felling, enrichment planting, and managing the concession area in accordance with the criteria stated in the HPH contract – not to mention RIL [Reduced Impact Logging]. Why should we continue bearing such costs if Pemda [the district government] is going to allow IPPK-holders to cut whatever wood we leave standing? 7 Another informant stated that unless HPH boundaries were recognized by the district government, HPH-holders would be forced (terpaksa) to abandon the TPTI selective cutting guidelines. To do otherwise, he asserted, would effectively mean that the HPH concessionaires were simply leaving commercially valuable timber “to be taken by other parties” (untuk diambil oleh pihak lain) (Barr et al. 2001). 8 Not all district governments have behaved contentiously towards HPH timber concession-holders. In some cases, kabupaten officials have recognized significant benefits that could be had by actively engaging large-scale timber companies in their districts’ forestry development plans. In Kapuas (Central Kalimantan), for instance, the district government has sought to foster partnerships between local communities and large concession-holders by allocating areas adjacent to HPH concessions for community logging under HPHH permits (McCarthy 2001b). Specifically, the district government introduced a plan in mid-2000 to establish areas of 10,000 ha adjacent to each HPH, within which it would allocate blocks of 100 ha HPHH timber extraction permits to local communities on an annual basis. The district government’s plan stipulated that the HPHH areas would be managed under a selective logging system, with minimum diameter limits, replanting, and a 15-year cutting rotation. Under this scheme, “HPHH-holders could work in collaboration with larger concessionaires – who could supply capital, heavy machinery, and a ready market [for the logs harvested]. Alternately, members of the local community holding HPHH concessions could enter into a partnership with a sawmill (bansaw) owner who would provide the capital and also buy the timber” (McCarthy 2001b).
102 Decentralization’s Effects on Forest Concessions and Timber Production In many districts, large-scale concession-holders have also actively sought out partnerships with local communities and district governments in order to maintain their access to timber within the rapidly changing political environment. In Berau (East Kalimantan), for instance, several large HPH holders have transferred equity shares in their logging concessions to the district government, apparently to secure political and bureaucratic support for their operations in the face of decentralized forest administration and growing tenure claims from forest communities (Obidzinski and Barr 2003). One example of this occurred in 2001 when the district government established a joint venture among a district-owned forestry enterprise (controlling 50% of total equity); PT Inhutani I (30%); and the provincial government (20%) to manage an 83,250 ha block of the HPH concession previously held by PT Inhutani I (Obidzinski and Barr 2003). In some districts, large-scale HPH concession-holders have also reportedly entered into partnerships with the recipients of HPHH and IPPK permits operating in and around their concession sites. In some districts, timber concessionaires have been pressured into establishing such partnerships when HPHH and IPPK holders have had the backing of district elites and institutional power-holders (Barr et al. 2001). However, in many cases, these partnerships have also apparently been motivated by opportunism on the part of the HPH-holders, as they seem to have recognized that the district permits would give them access to new areas and/or allow them to operate outside of their existing cutting blocks with some semblance of legitimacy. As one forestry official in East Kalimantan’s Kutai Barat district explained: Small timber kings (raja kayu kecil) can organize the community to apply for large sections of land. The partner (mitra) provides the tools, chainsaws, etc. There’s lots of different ways that the system can work and many opportunities for the [partner] to take advantage of the situation. If the area is near a HPH, it’s more than likely that the HPH will become the [partner]. This is obviously a way for the HPHs to expand their territory (Casson 2001a). As McCarthy (2004) explains, many HPH-holders have used partnerships with small-scale permit-holders to decentralize their own production activities. This has allowed them both to reduce their operational risks and to avoid conflicts. In some cases, timber concessionaires have purchased logs from cooperatives and farmers group which obtained HPHH and IPPK licenses from district governments. In other cases, HPH-holders have set up cooperatives to make ‘arms length’ sales of timber to them without paying the PSDH forest royalty. If those involved were caught, the company could often wash it hands of the matter. HPH holders have also sometimes encouraged their own workers to set up cooperatives and/or to obtain district logging permits to supply them. Alternately, they have supplied working capital to local timber brokers who then sold logs to them. This was a way to meet production targets when their concession areas were insufficiently productive and/or were in areas being contested by local communities. Other HPH holders waited downstream and bought the timber from those working with HPHH and IPPK permits, thereby minimizing their own risks. They could use their concession licenses as a means of obtaining documents for transporting and selling the logs to make it appear legal.
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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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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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