Decentralization of Forest Administration in Indonesia, Implications ...

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Christopher Barr, Ida Aju Resosudarmo, John McCarthy, and Ahmad Dermawan 11 Law 22/1999 uses the term ‘decentralization’ to refer to “the delegation of governance authority” by the central government to ‘Autonomous Regions’ (Daerah Otonom). These are defined to include provinces (propinsi), districts (kabupaten), and municipalities (kota), which are deemed to be related to one another in a nonhierarchical fashion. The law vests these autonomous regions with authority “to govern and administer the interests (kepentingan) of the local people according to their own initiatives, based on the people’s aspirations, and in accordance with the prevailing laws and regulations.” In particular, Law 22/1999 assigns district and municipal governments authority to exercise principal governance functions in a wide range of fields, including public works, health, education and culture, agriculture, communication, industry and trade, capital investment, environment, land, and cooperative and manpower affairs. By contrast, provincial governments are given relatively little new authority, other than vaguely worded responsibility to help manage relations among districts and municipalities. Law 25/1999 on Fiscal Balancing provides a framework for the redistribution of revenues among Indonesia’s national and regional governments. In particular, the law gives district and provincial governments considerably greater authority and responsibility to manage their own budgets, and to raise their own revenues to help offset the added costs associated with decentralization. Significantly, it also authorizes a redistribution of royalties from timber production and most other types of natural resource extraction among the country’s national, provincial, and district governments. In the forestry sector, the fiscal balancing law stipulates that provincial and district governments would now receive a combined 80% of the Forest Resource Rent Provision (Provisi Sumber Daya Hutan, PSDH) (up from a combined 45% prior to regional autonomy) and that district governments would receive 40% of the highly lucrative Reforestation Fund (Dana Reboisasi, DR) (which the central government had retained entirely prior to regional autonomy). Indonesia’s regional autonomy and decentralization initiatives generated an extremely enthusiastic response among stakeholders at the provincial and district levels. Although the two laws were scheduled to take effect on January 1, 2001, many provincial and district governments began issuing their own regulations and asserting their administrative authority in key areas almost immediately after the regional autonomy law was issued. In this way, de facto decentralization initially occurred much more rapidly, and in some areas extended much further, than the formal reform process prescribed by the new legislation. This was particularly the case in the forestry sector. As noted earlier, Law 22/1999 made little mention of decentralized forest administration per se. However, the law’s broad endorsement of regional autonomy in a wide range of other sectors left considerable space for district officials to interpret it as applying to forestry, as well. Their case for doing so was bolstered by the fact that forestry reforms adopted in 1998 and early-1999 in response to calls for reformasi in the sector also supported an expanded role for district governments and local communities. Citing those sectoral reforms together with the regional autonomy law, district officials in most forested regions moved quickly in mid-1999 to assert control over forest resources within their jurisdictions. Many distributed large numbers of 100-ha
12 Forests and Decentralization in Indonesia: an Overview logging and forest conversion permits, something they had not been able to do since the early years of the New Order regime. These permits were often issued in areas that directly overlapped with timber concessions that had earlier been allocated by the central government, or within the boundaries of national parks and protected areas. District governments – and, to a lesser extent, provincial governments – also adopted regulations requiring timber companies and wood processing industries to pay a variety of new taxes and fees, in addition to those required by the national government. Many districts and provinces also entered into a very public and often acrimonious dialogue with national policymakers over how the country’s Reforestation Fund and other forestry-related fees should be shared among the different levels of government. In part, these efforts were driven by the fact that Indonesia’s new laws on regional governance and fiscal balancing created expectations (perhaps overstated) that district governments would need to generate a larger share of their own revenues in order to replace fiscal allocations that had previously come from the center. More significantly, perhaps, many district governments were motivated by a desire to establish district revenue flows that are independent of Jakarta (World Bank 2003). This desire was particularly strong in relation to timber and other natural resources. As the fervor of regional autonomy spread, district officials expressed indignation over the fact that most of the benefits from Indonesia’s forests had been appropriated by national stakeholders during the Soeharto era; and they argued that their own efforts to redirect those benefits to district stakeholders was simply a long-overdue effort to rectify this historical injustice. On a more personal level, many district officials also clearly seized the opportunity to secure substantial informal profits from forestry and plantation companies – an opportunity that was largely denied to them during the New Order period. The assertion of administrative control over forests by district governments has been accompanied by a sharp resurgence of tenure claims by people living in and around forested areas. Such claims have been made by a wide variety of actors, ranging from single households and farmer cooperatives to whole villages and, in some cases, individuals or organizations claiming to represent entire ethnic groups. The types of claims, and the basis on which they have been articulated, has been equally varied. In most cases, however, they have involved some reference to adat, or customary law. Since 1999, many claims of this sort have been made by local actors, with varying degrees of legitimacy, in order to secure logging and/or forest conversion permits issued by district governments. Indeed, district regulations have frequently required timber companies to collaborate with local communities (or, at the very least, with actors claiming to represent those communities) in order to obtain such permits. In many parts of the country, forest communities have also asserted tenure claims by taking direct action against timber or plantation companies operating in their areas. Most often they have done so by blocking logging roads and seizing heavy equipment, although at times such actions have led to violent conflicts. Through their involvement in small-scale logging and forest conversion activities carried out under district permits, many local communities have obtained substantial benefits from forests that were never available to them during the Soeharto
Page 1 and 2: Decentralization of Forest Administ
Page 3 and 4: National Library of Indonesia Catal
Page 5 and 6: iv 4.5 Forest Revenue Sharing 69 4.
Page 7 and 8: Preface Indonesia is currently ente
Page 9 and 10: Acknowledgements This study is base
Page 11 and 12: Abbreviations AAC ACIAR ADEKSI APBD
Page 13 and 14: IPHHBK IPHHK IPJL IPK IPKR IPKMA IP
Page 15 and 16: Glossary Adat, customary or traditi
Page 17 and 18: Forests and Decentralization in Ind
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62 Fiscal Balancing and the Redistr
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Chapter 6 The Impacts of Decentrali
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References Agrawal, A., Ostrom, E.
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144 References Van Zorge Report. 20
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146 Annex 1. Timeline of events tha
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Annex 2 Indonesian Laws and Regulat
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152 Annex 2. Indonesian Legislation
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154 Annex 2. Indonesian Legislation
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Since the collapse of Soeharto’s
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