Decentralization of Forest Administration in Indonesia, Implications ...

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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