Decentralization of Forest Administration in Indonesia, Implications ...

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John McCarthy, Christopher Barr, Ida Aju Pradnja Resosudarmo, and Ahmad Dermawan 57 23 The explanatory notes for Law 32/2004 explain that co-administration functions “basically represent the involvement of Regions or Villages, including their people, in delegated tasks or authority from the [central] Government or regional governments to implement a governmental matter in a specific area.” 24 Article 30 states that the President can temporarily remove the Head of Region from office if he/she is accused of committing a criminal act carrying a penalty of at least five years in prison. The President can permanently dismiss the Head of Region if he/she is convicted of such a crime in a court of law. 25 Article 31 states that the President can temporarily remove the Head of Region from office if he/she is accused of engaging in such acts.
Chapter 4 Fiscal Balancing and the Redistribution of Forest Revenues Ida Aju Pradnja Resosudarmo, Christopher Barr, Ahmad Dermawan, and John McCarthy 4.1 Introduction To a very significant degree, Indonesia’s decentralization process was driven by the demands of regional stakeholders for a greater share of the fiscal revenues associated with natural resource extraction activities in their jurisdictions. Through the New Order period, a substantial majority of the taxes and royalties generated by timber extraction, mining, and oil and gas production in Indonesia flowed to the national government in Jakarta. However, since the fall of Soeharto in 1998, officials at both the provincial and district levels have engaged in a tug-of-war with national policymakers to secure a greater portion of these revenues. They have argued, in many cases, that their regions remained underdeveloped during the New Order period while providing the central government with a steady stream of fiscal resources. A general framework for the redistribution of revenues between Indonesia’s national and regional governments was provided by Law 25/1999 on Fiscal Balancing, which was enacted together with Law 22/1999 on Regional Governance in May 1999. Significantly, Law 25/1999 delineated how petroleum, timber, and mining royalties are to be re-divided among Indonesia’s national, provincial, and district governments under regional autonomy. As significantly, Law 25/1999 specified how district governments are to obtain the fiscal resources needed to pay for the large number of new administrative responsibilities assigned to them by Law 22/1999. Indeed, the fiscal balancing law appears to give district governments significant responsibility to raise their own funds to cover the added costs passed on to them by the central government in the context of decentralization. On the other hand, the law opened up opportunities for district governments not only to identify new sources of potential revenues, but also to spend the income generated according to local development needs and priorities. This chapter briefly outlines the fiscal system framing regional government finance during the New Order period, including the mechanisms for distributing forestry sector revenues. It then examines how Indonesia’s fiscal system was restructured under decentralization with the enactment of Law 25/1999 – and, more recently, with the adoption of Law 33/2004 on Fiscal Balancing between the Central Government and Regional Governments (which was ratified in October 2004 together with Law 32/2004, the revised regional autonomy law). In particular, the chapter describes how forestry revenues have been redistributed under the new fiscal balancing arrangements, and assesses what this has meant in terms of both forest administration
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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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Forests and Decentralization in Ind
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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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