Decentralization of Forest Administration in Indonesia, Implications ...

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Forest Administration and Forestry Sector Development Prior to 1998
for the clearing of large forested areas slated for conversion to oil palm and other
estate crops. The government’s stated rationale for doing so has been to provide a
temporary ‘bridging supply’ of wood to pulp producers until their plantations are
fully operational (Manurung and Kusumaningtyas 1999).
2.7 Indonesia’s Forestry Crisis
Well before the country’s ongoing decentralization process began in late-1998,
Indonesia entered what some observers have called a ‘forestry crisis’. By the early-
1990s, it had become apparent that the country was experiencing unprecedented rates
of deforestation and forest degradation (Sunderlin and Resosudarmo 1996). Although
estimates vary, it is now widely acknowledged that approximately 1.6 million ha of
forest cover were lost annually during the period from the mid-1980s to 1999 (Toha
2000). During 1985-1997, the islands of Sumatra, Kalimantan, and Sulawesi each
lost between 25% and 30% of their forest cover (GFW/FWI 2002). On a national
scale, the MoF estimated that total forest cover stood at 95.8 million ha in 1997,
although other studies have suggested that this figure may, in fact, have been an
underestimate (MoF, cited in Holmes 2001). In any case, it appears likely that by the
end of the New Order period, Indonesia had lost roughly one-third of the forest cover
that existed when the Soeharto regime initially assumed control over the nation’s
forests in 1967.
Overcapacity in the nation’s wood processing sector has been a major factor
driving these high levels of deforestation and associated forest degradation. Through
the mid-1990s, Indonesia’s sawnwood, plywood, and pulp industries collectively
consumed between 60 million and 80 million m 3 of wood per year (Barr 2001;
Scotland 1999). Log consumption on this scale stood well above the Indonesian
government’s own widely-cited sustainable timber harvest threshold of 22-25
million m 3 per year – a figure the MoF has subsequently revised sharply downward.
Moreover, with the government exerting little effective regulation, domestic demand
for timber resulted in large volumes of wood being harvested illegally (ITFMP 1999).
Through the New Order period, undocumented harvesting was often carried out by
licensed concession-holders who extracted logs above their annual allowable cut or
by logging in areas that had not been approved by the MoF (Kartodihardjo 1999).
Organized syndicates of illegal loggers have also long been active in most timberproducing
provinces (Telapak Indonesia and EIA 1999).
By the late New Order period, there were also growing signs that the nation’s
HPH timber concession system had begun to decline. Through the 1990s, there was
a sharp drop in log production levels from selective harvesting at multiple-rotation
timber concessions (Barr 2001). This was partially offset by an increase in the volumes
of wood obtained through the clearing of natural forests, often in conjunction with
the development of oil palm estates and other forms of agroindustrial plantations. In
2001, the World Bank projected that these pressures would result in the exhaustion
of Sumatra’s remaining lowland natural forests by 2005 and those of Kalimantan by
2010 (World Bank 2001). While these projections may not be entirely precise for
all areas of Sumatra and Kalimantan, they highlight the undeniably rapid pace of