Challenges in Improving Governance of Indonesia’s Dwindling Forests

April 18, 2012

By Blair Palmer

In February, Indonesia’s Constitutional Court struck down a controversial clause of the Forestry Law which had enabled the national government to declare the boundaries of the state forest zone without a proper mapping process. The Ministry of Forestry controls a state forest zone of 133 million hectares (which includes almost all forested land in the country) and designates which areas are to be protected, which can be used for logging, mining, or other activities, and which can be clear cut. This zoning provides the basis for law enforcement activities targeting improper uses of forest land, including illegal deforestation.

Indonesia has the world’s third largest expanse of tropical forests, but they are being cut down at an alarming rate. Most estimates put Indonesia’s average deforestation over the past two decades at over one million hectares per year.

However, only 12 percent of the 133 million hectares has been adequately mapped. The court’s decision means that the other 88 percent cannot legally be considered forest zone until it is properly mapped. While in the long term this may lead to better mapping and improved forest protection, in the short term it may have far-reaching implications for efforts to prevent deforestation.

Indonesia has the world’s third largest expanse of tropical forests, but they are being cut down at an alarming rate. Most estimates put Indonesia’s average deforestation over the past two decades at over one million hectares per year, largely due to wood extraction, cropland expansion, mining, and the establishment of palm oil and pulpwood plantations. Aside from the losses in biodiversity, wholesale destruction of forests also threatens the livelihoods of an estimated 50 million forest-dependent people in Indonesia.

Fortunately, the intensified global focus on climate change has brought renewed attention to deforestation in Indonesia. The country has been ranked as the world’s third highest emitter of greenhouse gasses, behind only the United States and China. An estimated 80 percent of Indonesia’s emissions come from the Land Use, Land-Use Change and Forestry (LULUCF) sector which includes deforestation and forest degradation, as well as peat land drainage and peat fires.

Not only does burning or cutting down forests release tremendous amounts of carbon dioxide (CO2) into the atmosphere, as does drying and burning peat lands, but the problem is compounded because the forests then no longer remain to act as “carbon sinks” that sequester the CO2 that already exists in the atmosphere.

Improving the way Indonesia’s forests are managed has thus become a critical global priority. In 2009, Indonesian President Susilo Bambang Yudhoyono made ambitious and praiseworthy commitments to reduce emissions by 26 percent from “business as usual” levels by 2020, and by 41 percent with international assistance. Doing so will require improving the governance of Indonesia’s forests, and the challenges in achieving this are significant.

First, there is a lack of clarity over which areas need to be protected. Within the 133 million hectares of official forest zone, it’s been estimated that there are 26 million hectares of non-forested land. A further 15 million hectares of forested land lies outside of the forest zone and as such, is vulnerable to exploitation. Areas outside the forest zone, if not privately owned, are managed by provincial and district governments, which can authorize economic activities such as building pulpwood or palm oil plantations. Any forest land outside the forest zone is vulnerable to being cut down to make way for plantations. On the other hand, huge areas that should not be inside the forest zone are, including the 26 million hectares of unforested land as well as many towns and an estimated 33,000 villages. Villagers in the forest zone are hindered from establishing livelihoods since many potential economic activities are illegal and leaders who issue permits for plantations on land that is actually in the forest zone can be subject to criminal sanctions. All of this is linked to the fact that the forest zone boundaries were declared without adequate mapping.

This ambiguity is what led a group of local leaders to challenge the Forestry Law in the Constitutional Court. While this is a victory for addressing necessary mapping requirements, in the short term it could also seriously complicate efforts to punish forest crimes, improve forest management, and protect the livelihoods of forest-dependent people. A further concern is that Indonesian laws only weakly recognize indigenous land tenure, meaning that indigenous people’s land is often licensed for industrial use without their consent.

A second and equally challenging factor is the prevalence of corruption and collusion in Indonesia’s forestry sector. The political and administrative decentralization process that followed Indonesia’s transition to democracy in 1998 also led to the proliferation of regional networks of patronage and corruption connecting political and economic elites, and this pattern persists today. Reports from the field continue to indicate that the process of issuing permits for plantation or mining activities can be highly lucrative for corrupt government figures. Local elections require huge outlays of campaign funds, and it is a known public “secret” that the issuing of permits to investors is used to raise funds for political campaigns. Unfortunately, democratic reforms have not led to rapid improvements in environmental protection.

Finally, forest governance is inextricably linked to other ongoing challenges in Indonesia’s reform process, including weak rule of law, the need for bureaucratic reform, and the poor accountability of leaders to their constituents. These factors mean that companies are able to obtain permits and cut forests down, and avoid sanctions if they do so without permits. In the face of aggressive land acquisition efforts by plantation and mining industries, environmental regulations and the rights of local people can be ignored.

Attempts to improve forest governance must face these considerable challenges head-on. Technical solutions aimed at improving government capacity, for instance in forest mapping or spatial planning policies, will not be sufficient. Market pressures are being brought to bear in various ways, including through the Reducing Emissions from Deforestation and Forest Degradation (REDD+) scheme, which seeks to reward countries for preserving forests, providing them with credits that can then be sold on an international carbon market. Yet international financing for REDD+ initiatives remains unclear, and so it will be some time before REDD+ will act as a strong incentive for forest protection on the ground.

Improving forest governance will require strengthening the role played by civil society in demanding better governance and holding governments accountable for failures. Underlying tenure issues must be faced and dealt with through a broadly inclusive process. It will also require an accelerated effort to combat corruption in forest management.

As world leaders come together in June for the Rio +20 UN conference to explore ways to build “greener” economies to achieve sustainable development, Indonesia’s emissions reductions commitments stand as a bold example of leadership, and the challenges in achieving those commitments are worthy of sustained attention.

Blair Palmer is the director of The Asia Foundation’s Environmental Governance Program in Indonesia. He can be reached at [email protected]. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

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