Decentralization of Forest Administration in Indonesia, Implications ...

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.