Decentralization of Forest Administration in Indonesia, Implications ...

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Barr, C. et al. 123 of the New Order period. Stakeholders at both the provincial and district levels were extremely enthused that Indonesia’s decentralization laws defined provincial and district governments (and municipalities) to be autonomous regions. During a period of rapid economic and political transition, the central government’s power to enforce its policies and regulations at the local level sharply weakened during the first years of the post- Soeharto period. This left it in a poor position to use policy instruments provided in the law for the supervision and monitoring of district initiatives. Many district governments and local stakeholders liberally interpreted regional autonomy to mean that they now had full authority to control the resources within their domain. The slow and uneven pace of legal reform was a second factor that encouraged district officials to act beyond the authority formally assigned to them. Although Law 22/1999 delineated the broad parameters of regional autonomy and decentralization, it offered few details for how these should be implemented in the forestry sector. The main implementing regulation for Law 22 − Regulation 25/2000 − was only issued a full year later, in May 2000; and it, too, delineated the authority of district governments in the forestry sector in only general terms. It was not until June 2002 that Regulation 34/2002 provided a detailed description of how administrative authority should be shared among the central, provincial, and district governments with respect to the Forest Estate. During the years prior to the issuance of Regulation 34/2002, district officials often took advantage of the legal-regulatory ambiguity that existed in the forestry sector by interpreting sectoral regulations and the decentralization laws in ways that provided district stakeholders with the greatest immediate economic advantage. While in many respects there were inconsistencies between these two regulations, the MoF was able to use Regulation 34/2002 to significantly reduce the power of districts in the forestry sector. Indonesia’s decentralization process has also been hindered by significant ambiguities and contradictions that have existed among the multitude of laws and regulations introduced over the last several years. Decentralized administration of forests, in particular, has been complicated by the fundamental contradictions that exist between Law 22/1999 on Regional Governance and Law 41/1999 on Forestry. Although the two laws were issued within four months of each other, they convey profoundly different assumptions about the manner in which legal and regulatory authority should be shared among the central, provincial, and district governments. In sharp contrast to the regional autonomy law, Law 41/1999 is highly centrist in tone and largely focuses on reaffirming the central government’s primary authority in most major aspects of forest administration. This contradiction reflects the fact that the Indonesian state did not take a ‘whole of government’ approach to developing decentralization related policy and implementing it. Indeed, the substance and tone of Law 41/1999 is indicative of the sharp resistance that decentralization has encountered within the MoF. The 1999 forestry law, moreover, has provided the legal basis for the Ministry’s subsequent efforts to recentralize key elements of administrative authority in the sector. Beyond the legal ambiguities and contradictions that have existed among laws issued by the central government, Indonesia’s decentralization process has also been undermined by a general lack of legal-regulatory coordination among government agencies, both
124 Decentralization and Recentralization in Indonesia’s Forestry Sector agencies at the same level and between different levels of government. The national government has introduced most of its decentralization (and recentralization) legislation with minimal input from and/or consultation with stakeholders at the provincial and district levels. Conversely, regional governments have acted largely autonomously in issuing district regulations through much of the decentralization period, generally conducting little consultation with national government officials during this process. This lack of coordination has been especially problematic for district governments, as most have very limited legal expertise to ensure that the laws and regulations they issue are fully legitimate, are consistent with higher laws, and can be implemented effectively. This situation was further complicated, particularly during the initial phase of decentralization, by the absence of an effective institutional mechanism for resolving contradictions that exist among laws and regulations issued by governments at the central, provincial, and district levels. Through 2000, for instance, many district governments argued that there was no legal basis for the central government’s claim that decrees issued by the MoF carried greater legal weight than decrees issued by a Bupati. And while the Minister of Justice and Human Rights subsequently issued an opinion in early 2001 indicating that a ministerial decree does carry greater weight than a Bupati decree, many districts refused to rescind district regulations and decrees that were in question. More recently, Indonesia’s revised regional autonomy law – Law 32/2004 on Regional Governance, adopted in October 2004 – assigned authority to the Minister of Home Affairs to review draft regulations before they are passed by provincial governments; and to Governors to review draft regulations before they are passed by district governments. It is intended that this will encourage increased coordination among the levels of government, and lead to improved legislation by reducing the numbers of legal-regulatory contradictions and ambiguities. While some system of checks and balances is indeed necessary, clearly this system will mean that the consent of higher levels of government is required for all policy initiatives in the regions. Arguably this may reduce the autonomy of districts to pass laws, which are based on the aspirations of local communities, but which may work against vested interests in the centre. An alternative approach would be to set up a governance system that more effectively allows for the autonomy of regional decision making but at the same time (by effective monitoring and supervision and with an effective legal umpire (i.e. the courts)) ensures that this autonomy is carried out within the broad policy guidelines set by the central government. 7.3 Fiscal Balancing and the Redistribution of Forest Revenues Indonesia’s fiscal decentralization process has led to a substantial redistribution of forestry sector revenues, with increased revenue flows particularly to district governments. Under Law 25/1999 and its implementing regulations, the Forest Resource Rent Provision (PSDH) and the HPH License Fee (IHPH) have been classified as shared revenues, with 64 percent earmarked for district governments, 16 percent for provincial governments and 20 percent for the central government. Prior to 1999, district governments received only 15 percent of the PSDH and none of the IHPH; provincial governments received 30
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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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Chapter 4 Fiscal Balancing and the
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60 Fiscal Balancing and the Redistr
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Since the collapse of Soeharto’s
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