7ENDNOTES1DFID, 1999. Indonesia: TowardsSustainable <strong>Forest</strong> Management, Final Reportof the Senior Management Advisory Teamand the Provincial Level <strong>Forest</strong> ManagementProject, 2 Vols., Departement for InternationalDevelopment (UK) and Departement of<strong>Forest</strong>ry, Jakarta.2Explicitly, Article 7 (1) of Law 22/1999states that the authority of the districtgovernment covers all aspects of governmentexcept with regard to national security anddefence, the judiciary, national fiscal andmonetary policies and religious affairs.3For example, some districts in theProvince of Jambi have made complaints aboutGovernment Regulation No. 34/2002 on <strong>Forest</strong>Allocation, <strong>Forest</strong> Management Planning,<strong>Forest</strong> Extraction and <strong>Forest</strong> Area Use (see alsoMinister of <strong>Forest</strong>ry Decree No. 171/Menhut-II/03 dated 24 March 2003, which is addressedto all the governors and district heads). TheDistrict Heads of Tanjung Jabung Timur andMuaro Jambi have openly and categoricallyrefused to implement this regulation in theirdistricts. These two districts have not revisedtheir local forestry regulations, which they claimhave been formulated according to MPR DecreeNo. III/2000, Law No. 22/1999 and Law No.41/1999 (details can be found in ‘Report fromBusiness and Production Division of the JambiProvincial <strong>Forest</strong>ry Office: Response from theDistrict Secretary of Tanjung Jabung Timur toGovernment Regulation No. 34/2002’. See alsoletter from the District Head of Muaro JambiNo. 503/053/Dishutbun, dated 23 January2003, addressed to the Director General ofProduction, Department of <strong>Forest</strong>ry).4The Chair of the Indonesian Chamber ofCommerce (Kadin), Aburizal Bakrie, has hintedthat more than 1000 regional regulations havehindered investment in the regions becausebusiness owners are now forced to pay variousdistrict taxes in addition to their central taxliabilities (for more detail see Haris 2003, p4).5During informal discussions with PSHK-ODA at his residence and at his office (22March and 25 June 2003 respectively), theGovernor of Jambi, Zulkifli Nurdin, describedhow coordination between the province andthe district heads has weakened followingdecentralization. This can be seen throughthe joint agreement between the provincialgovernment (and provincial parliament) andthe Tanjabbar District Government (and districtparliament) on Regionally Generated RevenueAllocations in the <strong>Forest</strong>ry, Plantation andFisheries Sector, signed on 25 April 2002. Atthat time, all the district governments agreedto cancel their district regulations on <strong>Forest</strong>Utilisation Permits (IPH) and revise theirregulations on <strong>Forest</strong> Product Taxation (RHH).In practice, some districts (such as Batanghari,Muaro Jambi, Tebo, Bungo and Sarolangun)are still implementing IPH <strong>policy</strong>. However,Tanjabbar District Government did not issueIPH regulations.6Zainal, a well known community leaderin Penyabungan village, Merlung, Tanjabbar,stated that the community had not experiencedsignificant economic change and justice in38
Sudirman, Dede Wiliam and Nely Herlinathis era. A similar statement was made by theTungkal Ulu Farmer Group/Kelompok TaniTungkal Ulu (Kotalu), Merlung Subdistrict, ina Focus Group Discussion.7From the draft regulation introductorynote presented by the District Head of Tanjabbarto the District Parliament on 16 October 2002and from the introductory considerations ofTanjabbar forestry regulations, we can see thatthe Tanjabbar District Government is persistentin trying to increase its regional income throughthe forestry sector by providing facilitation inacquiring permits. As a consequence, permitapplications can be approved without havingto go through strict procedures.8Clarification of Article 53 of theDraft Law on Legislation approved by theParliament on 6 June 2004 provides room forpublic participation, either in written or verbalform, in the deliberations of draft regulationsin accordance with the Parliament’s StandingOrders.9The creation of this new administrativearea was regulated by Law No. 54/1999 on theFormation of the Districts of Sarolangun, Tebo,Muaro Jambi, and Tanjabtim; see also Law No.14/ 2000 on the amendment of Law No. 54/1999on the Formation of the Districts of Sarolangun,Tebo, Muaro Jambi and Tanjabtim.10See Article 5 of Law No. 54/1999.11See Tanjung Jabung Barat District<strong>Forest</strong>ry and Estate Crops Office (2002 p: 4)12Anonymous (1999)13Active concession holders are recordedas HPH PT. Hatma Hutani, HPH PT. RimbaHutani, HTI PT. Wirakarya Sakti and HTI PT.Wana Teladan.14In 2000 oil palm plantations covered40 467 ha of land, increasing to 42 125 ha by2002.15See the Minister of Home Affairs DecreeNo. 119/1998 on Types and Coverage of <strong>Local</strong>Taxation for the Provincial Level and the DistrictLevel, Government Regulation No. 62/1998 onthe Transfer of Central Government Authorityon <strong>Forest</strong>ry to the Regional Governments,and Government Regulation No. 25/2000on Provincial Authority as an AutonomousRegion.16In its introductory consideration this lawstipulates that: ‘through the enactment of theMinister for Home Affairs Decree No. 119/1998 on Types and Coverage of <strong>Local</strong> Taxationfor the Provincial Level and the DistrictLevel, the taxation of by-products from forestutilization is considered as district taxation’.17The implementation of district regulationsdepends on the decree of the District Head: thishas been stated by the District <strong>Forest</strong>ry andEstate Crops Office and clarified by the LegalBureau at the District Secretariat. Accordingto the Head of the Legal Division, DistrictRegulation on IPHHI and RHH cannot beimplemented because they contradict other,higher level regulations such as the MinisterialDecree No. 05.1/Kpts-II/2000 and GovernmentRegulation No. 34/2002 (Hidayat personalcommunication).18As prescribed by MPR Decree No. III/MPR/2000.19According to the explanation of Article73 (1) of Law 22/1999.20See Article 72 of Law 22/1999.21Law No. 32/2000: on the Amendment ofLaw No. 18/1997 on Regional Taxation.22This regulation implements <strong>Forest</strong>ry LawNo. 5/1967.23See Article 2 (3) point 4g of GovernmentRegulation No. 25/2000.24The central government’s authority isupheld under the following laws: (1) Law No.20/1997 on Non-Tax State Revenue; (2) LawNo. 25/1999 on Fiscal Balancing; (3) LawNo. 41/1999 on <strong>Forest</strong>ry; and (4) GovernmentRegulation No. 22/1999 on the Types andDeposit of Non-Tax State Revenue.25Based on Government RegulationNo. 25/2000, the authority of the provincialgovernment in the forestry sector includes 18authorities that cover the establishment of forestareas, permit issuance, forest preservation, etc.26See Article 3 (5) point 4j of GovernmentRegulation No. 25/2000.27See District Head’s Decree No. 77/2000on the Natural Resources Rent Provision(Provisi Sumber Daya Alam, PSDA) on Timber39
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