Decentralization of Forest Administration in Indonesia, Implications ...

Ida Aju Pradnja Resosudarmo, Christopher Barr, Ahmad Dermawan, and John McCarthy 83
the district’s forests. 31 Likewise in Kapuas Hulu, the district government collected
Rp 50,000 or about US$ 5.8 per vehicle from each truck that transported timber
from the district to the neighboring country of Malaysia (Dermawan 2004). District
authorities acknowledged that the border between the two countries is supposed to
be under the central government’s authority. However, they argued that since the
central government does little to monitor or regulate the cross-border timber trade,
district officials could not do much in terms of dealing with the problems associated
with Indonesian logs being transported out to Malaysia, unless they imposed such a
charge on timber being taken out of the district. The amount of Rp 50,000 per truck
was a result of negotiations between the district government and those transporting
the timber (Dermawan 2004).
In addition to imposing new taxes and fees on timber production, some district
and provincial governments have sought to generate PAD by establishing regional
government-owned forestry enterprises (BUMD). In Berau, for instance, the district
government formed a BUMD called PT Hutan Sanggam Labanan Lestari in 2002
(Obidzinski and Barr 2003). District officials have used this company to secure
equity shares in several existing HPH timber concessions. The most notable example
to date has been Berau district’s acquisition (through PT Hutan Sanggam Labanan
Lestari) of majority shares in an 83,250 ha block of the HPH concession held by the
state-owned forestry enterprise PT Inhutani I.
To expand PAD levels, many district and provincial governments have actively
sought to attract new investment to their regions. They have done so, in many cases,
by making areas of previously unexploited forest available for timber extraction,
and demarcating large areas for plantation development. Districts in both East and
West Kalimantan, in particular, have taken advantage of their proximity to the east
Malaysian states of Sabah and Sarawak by issuing large numbers of HPHH and IPPK
permits to ventures involving Malaysian investors (Samsu et al. 2004; Obidzinski
and Barr 2003; Alqadrie et al. 2001; Barr et al. 2001).
Some districts have also sought to identify ways to obtain new forest-based
revenues through the promotion of eco-tourism or through participation in schemes
providing financial compensation for forest protection and the provision of
environmental services. Malinau district, for example, has sought to identify ways
that the district can draw on the unique cultural and ecological features of Kayan
Mentarang National Park to generate tourism revenues (Barr et al. 2001). Similarly,
some districts have sought to secure payments for environmental services associated
with forests in their jurisdictions, including the maintenance of conservation areas
which continue to be administered by the central government. For instance, the Kapuas
Hulu district government in West Kalimantan declared itself to be a ‘conservation
district’ in October 2003, and announced that it was seeking compensation for the
fact that 55% of its territory is classified as protected areas (Dermawan 2004). To
date, however, these efforts have apparently yielded very little, if anything, in terms
of new revenues for the district budget.