Decentralization of Forest Administration in Indonesia, Implications ...

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John McCarthy, Christopher Barr, Ida Aju Pradnja Resosudarmo, and Ahmad Dermawan 47 formulating short-term (i.e. 1-year) management plans is assigned to the Provincial Forestry Service, with authority for approving these plans vested in the Governor. The MoF is given authority to issue the guidelines that are to be used in formulating these forest management plans. Far more significantly from the perspective of revenue generation, Regulation 34/2002 assigns the national government far-reaching authority to control timber extraction in areas designated as Production Forest. Specifically, the regulation gives the Minister of Forestry sole authority to issue a ‘Commercial Timber Utilization Permit’ (Izin Usaha Pemanfaatan Hasil Hutan Kayu, IUPHHK), a new license which replaces the Right of Forest Exploitation (Hak Pengusahaan Hutan, HPH) permit introduced by the Basic Forestry Law of 1967. This new license will be used to regulate all activities related to the harvesting, processing, marketing, planting, and management of timber species in areas classified as Production Forest (Art. 3). The Minister may allocate these permits to individuals, cooperatives, private sector companies, or state-owned enterprises associated with the national or regional governments. The permits have a maximum duration of 55 years for concession areas where logging will occur in natural forest and 100 years for areas where timber will be harvested from plantations. In effect, the Commercial Timber Utilization Permit has been structured to reaffirm the administrative authority that the MoF held through the New Order period, when commercial timber extraction was organized around HPH timber concession licenses issued in Jakarta. In a nod to Indonesia’s regional autonomy process, however, the Minister is required to take into consideration recommendations from the Bupati (or Mayor) of the district (or municipality) and the Governor of the province, respectively, in which the relevant forest area is located when issuing these permits (Art. 42). In theory, this arrangement should give the Bupati some leverage over the Minister’s decision, but it remains to be seen how this plays out in practice. Regulation 34/2002 also defines five additional, and arguably ‘lesser’, types of permits that Indonesian government agencies at the district, provincial, and national level can issue for activities associated with areas classified as Production Forest (see Table 3.1). As a group, these ‘lesser’ permits are structured to cover activities that are far less lucrative than large-scale commercial timber extraction; that occur on much smaller areas; and that have far more stringent limitations in terms of duration and maximal harvest levels than those prescribed for the Ministry’s Commercial Timber Utilization Permit. These additional permits include the following: • Commercial Non-Timber Forest Product Utilization Permit (Izin Usaha Pemanfaatan Hasil Hutan Bukan Kayu): covers activities related to the harvesting, processing, marketing, planting, and management of Non Timber Forest Products (NTFP) for up to 10 years in natural forests and 100 years in plantation forest. • Environmental Services Utilization Permit (Izin Pemanfaatan Jasa Lingkungan): covers use of an area’s environmental services without damaging its natural ecosystem or environment (i.e. ecotourism, carbon trading, etc.) for up to 10 years on areas up to 1,000 ha. • Commercial Forest Estate Utilization Permit (Izin Usaha Pemanfaatan Kawasan): covers use of a forest area’s living space (i.e. for cultivation of medicinal plants,
48 Origins and Scope of Indonesia’s Decentralization Laws understory crops, etc.) without disrupting the area’s principal function, for up to 5 years on areas up to 50 ha. • Timber Extraction Permit (Izin Pemungutan Hasil Hutan Kayu): covers timber harvesting to meet needs of individuals or forest communities, for up to 1 year with a maximal volume of 20 m 3 for noncommercial purposes. • Non-Timber Forest Product Extraction Permit (Izin Pemungutan Hasil Hutan Bukan Kayu): covers NTFP harvesting to meet needs of individuals or forest communities, for up to 1 year with a maximal volume of 20 tonnes. In each case, Regulation 34/2002 gives district (or municipality) governments authority for issuing these ‘lesser’ permits for forest areas that fall fully within a district’s (or municipality’s) boundaries. It gives provincial governments authority for issuing permits for areas that cross district boundaries but lie within a single province. Authority to issue permits for areas that cross provincial boundaries is assigned to the MoF. In addition to reaffirming the MoF’s authority over large-scale timber extraction, Regulation 34/2002 also extends the Ministry’s administrative control over Indonesia’s wood processing industries. In the past, the Ministry of Industry and Trade held the authority to issue commercial operating licenses for sawmills, plywood mills, and facilities producing other processed wood products such as chipboard, veneer, and laminated veneer lumber. This frequently led to inefficient resource utilization, as the MoF and Trade often approved applications for new or expanded wood processing units without first communicating with the MoF to ensure these facilities had a secure and sustainable supply of raw materials. This, in turn, led to the large imbalance that currently exists between the demand for logs on the part of Indonesia’s domestic wood processing industries and the volumes of timber that can be sustainably harvested from the nation’s forests, as discussed in Chapter 2. Under Regulation 34/2002, the MoF is given authority to allocate commercial operating licenses and to approve the expansion of existing mills in each of these industries for processing units with a capacity above 6,000 m 3 per year (Art. 4). 21 Authority to allocate operating licenses and to approve expansions for mills with a capacity up to 6,000 m 3 per year is assigned to the Governor of the province in which a particular mill is located. In exercising such authority, however, the Governor is required to “take into account the recommendations or technical evaluation of the authority responsible for the forestry sector at the district/municipality level and to obtain the agreement of the Minister” [emphasis added]. Another important area where Regulation 34/2002 reaffirms the authority of the national government is in the distribution and trade of forest products (Art. 7). The regulation gives the MoF full authority to regulate the transport and marketing of both timber and non-timber forest products in Indonesia’s domestic market. Authority to regulate the export of timber and non-timber forest products is assigned to the Ministry of Industry and Trade. Provincial and district governments are given no specific authority in this area. In its final sections, Regulation 34/2002 states that HPH timber concessions and HPHH timber extraction permits, as well as wood processing industry licenses, issued prior to this regulation will remain in effect until their existing terms expire
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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
Page 11 and 12: Abbreviations AAC ACIAR ADEKSI APBD
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98 Decentralization’s Effects on
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Chapter 6 The Impacts of Decentrali
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110 The Impacts of Decentralization
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122 Decentralization and Recentrali
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References Agrawal, A., Ostrom, E.
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136 References Casson, A. 2001a. De
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138 References GFW/FWI. 2002. The S
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140 References Manurung, E. G. T.,
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142 References Ribot, J. C. 2002. L
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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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148 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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156 Annex 3. Distribution of Shared
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Since the collapse of Soeharto’s
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