Indonesian Forests-Update 2/1/2000 Fri, 11 Feb 2000 21:20:58 -0500 Via NY Transfer News * All the News That Doesn't Fit *********************************************** WORLDWIDE FOREST/BIODIVERSITY CAMPAIGN NEWS Logging Jeopardizes Indonesian Aid *********************************************** Forest Networking a Project of Forests.org, Inc. http://forests.org/ -- Forest Conservation Archives http://forests.org/web/ -- Discuss Forest Conservation 2/4/00 OVERVIEW & COMMENTARY The deteriorating situation in Indonesia's forests, where both legal and illegal unsustainable logging is in full boom period, appears to have finally caught up with the government. New data from European donors show that "wood-processing industries now rely on illegal logging for more than half of their raw materials, as the forest of 120 million hectares shrinks 1.5 million hectares a year." The International donor community is increasingly voicing concerns over this liquidation of Indonesia's precious rainforests, and there appears to be unprecedented consensus that the second-largest expanse of tropical forest must be preserved--and that this is important enough to be linked to economic consultations. Forest sustainability will require real protection for National Parks which are being illegally logged in some cases, and clamping down on illegal logging and sawmilling in general. The excesses of the "legal" timber industry that is too large, and practices overly intensive management of forest concessions, must also be addressed. Over-capacity in the forest industries sector will require canceling existing non-compliant concessions. If the Indonesian government does not strengthen its commitment to forest sustainability, they may be unable to get over $4 billion in desperately needed new loans. In my opinion this is justified, and the donor community is correct on insisting that economic aid hinge upon forest sustainability. If the forests are lost--as current trends indicate will occur in important lowland forests by 2010--any short-term economic gains based upon donor aid will be far outweighed by immediate declines in both environmental quality, and the potential for sustainable economic activity based upon forest resources. This situation has garnered a lot of press, the two best of which are attached here. g.b. ******************************* RELAYED TEXT STARTS HERE: ITEM #1 Title: Indonesia Faces Forest Dilemma Donors Seek Curbs on Logging, but Powerful Interests Are Involved Source: International Herald Tribune Byline: Michael Richardson International Herald Tribune JAKARTA - When representatives of Indonesia's principal aid and financial donors meet here Tuesday and Wednesday, they will not be simply seeking evidence of progress in returning the country's administration, finances, banks and companies to health. For the first time, the 33 members of the Consultative Group on Indonesia will seek firm assurances that the government will take action to stem an alarming increase in the rate at which the country's tropical forests - second in size only to those of Brazil - are disappearing, mainly because of illegal logging. The issue appears to be of critical importance to the group, which is composed of representatives of donor countries and international financial institutions that provide Indonesia with billions of dollars a year in loans to help the nation recover from recession. ''I've never seen the donors, especially those from Europe, steamed up on an issue like this,'' a senior World Bank official said. Saying that if there is no commitment from the government on forest reform, it will be difficult to continue aid programs for the Indonesian forests. But if there is a real commitment, they would be willing to provide more.'' At the heart of the forest destruction in recent years, officials and environmentalists say, is the expansion of the forest products industry, which previous governments encouraged as a way to increase exports and provide jobs in the world's fourth most populous nation. ''The wood-processing industry has been allowed to expand without reference to the available supply of timber, resulting in vast overcapacity,'' said Muljadi, a senior official in the Ministry of Forestry and Estate Crops. ''The shortfall in the official timber supply is being met largely by illegal logging, which has reached epidemic proportions.'' Fires in 1997 and 1998 burned nearly 10 million hectares (24.7 million acres) of Indonesian forest, an area similar in size to Hungary or South Korea. The fires, coupled with the rapid conversion of forest to plantations and agriculture, have hastened the permanent disappearance of Indonesia's natural forest to the point where some analysts are warning that there may soon be no commercially significant lowland forests left to exploit in Indonesia. In 1994, when Suharto was president, the government said Indonesia had 140 million hectares of land under forest, with 49 million hectares in protected status and 63 million hectares managed for sustainable production of timber. But recent forestry ministry studies using satellite photographs show that on Kalimantan, Sulawesi and Sumatra - three of the largest forested islands of Indonesia - more than 17 million hectares of forests disappeared in 12 years, from 1986 to 1997. The ministry now estimates that the nationwide annual deforestation rate is at least 1.5 million hectares, nearly twice the estimate published by the World Bank in 1994. A World Bank analysis shows that lowland dry forest, the most valuable type for logging and biodiversity conservation, is disappearing fastest, said Thomas Walton, senior environmental specialist in the bank's Jakarta office. ''Such forest is essentially defunct as a viable resource in Sulawesi,'' Mr. Walton said. ''It is likely to be gone in Sumatra by 2005 and in Kalimantan by 2010.'' This is serious news for a country that last year earned about $8 billion from exports of forest products, including logs, sawn timber, plywood, pulp and paper. A 1999 report by the Indonesia-U.K. Tropical Forest Management Program, a British-funded aid project, warned that unless action was taken immediately, the Indonesian natural forest would ''disappear forever, taking with it the myriad benefits that it provides to the Indonesian people and the Indonesian economy.'' Mr. Walton said illegal logging had become rampant, even in national parks, and was now taking place on a scale that exceeded the volume of legal logging. ''Authorities look the other way,'' he added, ''while the government loses tax revenue at the rate of roughly $500 million each year.'' Mr. Muljadi, the ministry official, said that according to the most recent estimates available, legal log production in 1998 was just over 21 million cubic meters (27.3 million cubic yards), down from 30 million cubic meters in 1997, while illegal logging jumped to 57 million cubic meters to account for 70 percent of total wood consumption for the year. Agus Purnomo, executive director of the Indonesian branch of the World Wide Fund for Nature, said that the problem of overcapacity was especially troublesome in the pulp and paper industry, which invested $8 billion in the past 13 years to expand output. ''While Indonesia's largest producers are now working to establish pulpwood plantations,'' he said, ''it is extremely doubtful that the limited areas being planted will yield the volumes of wood needed to satisfy the industry's growing processing capacity at any point during the next decade. Ultimately, overcapacity will require a substantial downsizing of the country's wood-based industries.'' Poverty, greed, the breakdown in law and order across Indonesia over the past few years and the loss of central government power in the regions, are fueling the increase in illegal cutting of forests. Under Mr. Suharto, who ruled Indonesia with military backing for 32 years until forced to resign in 1998, huge tracts of state-owned forest were given as production concessions to members of his family, business associates and those with the right political connections, including senior military officers. ''For too many years, our forests have been managed for the benefit of the well-connected few,'' said Kwik Kian Gie, the coordinating minister of the economy, finance and industry. ''They must now be managed to serve the nation at large, including those individuals who depend directly on the forests for their livelihood.'' But analysts say the government of President Abdurrahman Wahid, the first to be democratically elected in Indonesia in more than 40 years, will have to make and enforce some very painful decisions if it is to achieve sustainable and equitable management of the country's forests. But some powerful interests are involved. Logging, both legal and illegal, has created timber barons who buy protection from government and military officials. ''Illegal logging is not simply about destruction of the forests,'' said A. Ruwindrijarto, director of Telapak Indonesia, an environmental group. ''It's also about the system of corruption and wealth it creates.'' ITEM #2 Title: Indonesia -- Wood Cuts: Illegal logging could stem the flow of aid to Indonesia Source: Far Eastern Economic Review Byline: Margot Cohen in Jakarta and Pecu Lembang, Aceh On a dirt road in southern Aceh, fresh tyre tracks mark a thriving trade that threatens foreign aid to Indonesia. Rumbling back and forth to a desolate clearing, a convoy of trucks hauls timber stolen from the Gunung Leuser National Park -- a once-pristine tropical forest where the European Union has spent 8 million euros ($8.2 million) in an unsuccessful attempt to halt the illegal logging. At the clearing, no one seems too concerned. But Indonesia's donors are fed up with watching the nation's precious forests dwindle. The donors are consumed by the urgency of preserving the planet's second- largest expanse of tropical forest, which for Indonesia is a prime source of foreign exchange. They persuaded the Indonesian government to host an unprecedented crisis meeting on January 26, drawing together ministers, activists and industry representatives to discuss the devastation of Indonesia's rainforests, which has worsened sharply since the fall of former President Suharto in 1998. New data from European donors show the country's wood-processing industries now rely on illegal logging for more than half of their raw materials, as the forest of 120 million hectares shrinks 1.5 million hectares a year. Will the crisis meeting produce fresh strategies for the future? If not, it might be difficult for Indonesia to obtain the $4 billion to $4.5 billion in new loans its economy urgently needs. The donors' consortium issued its first warning at a Paris meeting in July, slamming Indonesia for failing to take prompt action to halt illegal logging. Jakarta also must heed domestic demands to reverse the dismal environmental legacy that resulted from the political corruption of the past three decades. Under former President Suharto, timber resources were concentrated in the hands of a few cronies, and managed by a graft-ridden bureaucracy that allowed the military to dive into illegal logging. Some donors, environmental activists and business leaders say only substantial reforms will ensure the viability of the industry and salvage the new government's credibility. But if Indonesians and foreign-aid officials are hoping that the new minister of forestry and estate crops, Nur Mahmudi Isma'il, will chart a bold new direction, they might be disappointed. So far, Nur hasn't tried to extricate the military from the illegal logging business. Nor does he hide his view that foreign-aid officials are overdramatizing the forestry crisis. "I think it's a little over the top," he says in an interview with the REVIEW. "We need to make an effort to preserve our natural resources, but we shouldn't make any hasty decisions. We don't need drastic change in our policy orientation." The caution extends to his approach to the proliferation of thousands of illegal sawmills, which consume far more than the legal timber supply. Rather than shut them down promptly, Nur says, "we need to warn them that what they are doing is illegal. If we remind them once, then twice, and they still insist on operating, only then should we take action against them." Nur continues to learn on the job, which isn't unusual in Abdurrahman Wahid's National Unity cabinet. Power-sharing pressures forced the new president to appoint more politicians than skilled technocrats. Nur, for instance, was propelled by his position as president of the small, Muslim-oriented Justice Party, and can point only to an academic background in food science. Still, change doesn't depend entirely on Nur. Incipient reform efforts will corral all the related ministries to tackle the forestry problem together. The military is an integral part of the problem, so the late January brainstorming was to include Defence Minister Juwono Sudarsono. Another key issue is regional autonomy. Far-reaching decentralization planned for 2001 runs the risk of even more rapid depletion of the forests. They could disappear chunk by chunk if governors and district chiefs take advantage of new regulations allowing them to issue permits for logging concessions of as much as 10,000 hectares. Local moves to convert forestlands to oil-palm plantations and other crops also are causing alarm. The International Monetary Fund is insisting that conversion permits be subject to public scrutiny. The government is maintaining a moratorium on converting any more forestlands, but Nur says his ministry can't always control insistent local officials. He expects the moratorium to last another year, while his ministry completes a remapping of the forest that could alter the boundaries of logging areas and protected areas. The fevered pace of forest destruction dismays Indonesian planners, but they don't want to turn their backs on business. Wood-processing industries remain a vital component of the local economy and critical to debt repayment. Indonesia is the world's largest plywood producer, and the plywood industry serves as the country's second-largest earner of non-oil-and-gas foreign exchange, after the textile industry. Last year, foreign-exchange earnings derived from wood products were estimated at $8.5 billion. Moreover, wood-processing industries provide a crucial source of employment, with nearly 5 million workers. And Indonesia is still trying to become a major world supplier of pulp and paper, though the Asian economic crisis curbed expansion somewhat. Official figures cite six pulp-and-paper plants, 107 plywood factories and 1,701 sawmills. The industry's voracious appetite for new wood far exceeds the legal cut, which hovers at 25 million cubic metres, a level considered environmentally sustainable. Illegal logging fills the gap. According to European donors, illegally harvested wood has reached more than 30 million cubic metres a year. It's hard to say who should be blamed. The wood-processing industries developed helter-skelter without proper coordination among ministries, say analysts. They add that Indonesia failed to collect adequate taxes and royalties from timber tycoons in the Suharto years. University of Washington researcher David Brown estimates the government missed out on $14.3 billion from 1973 to 1998. Further, the government extended millions of dollars in interest-free loans to wood-processing companies and pulp-and-paper mills to establish industrial-forest plantations. That programme proved to be a failure. Just 1.9 million hectares were planted out of more than 7.6 million hectares allocated for such efforts. Meanwhile, forestry officials accuse trade officials and provincial governments of handing out too many industry permits. For their part, trade officials blame forestry officials for arbitrarily changing limits on legal cutting, and refusing to share vital forestry statistics that would have aided planning. Still, some industry figures are starting to argue that closing some mills will be crucial to ensuring long-term wood supplies. "The government must find some means of rationalizing the industry," says Soetono Pratomo, director of Timberdana, which manages a forest concession in East Kalimantan. "There should be sacrifice." Trade officials remain resolutely opposed. "We have already issued the licences. We can't suddenly withdraw them. Investors would get scared," argues Hariyanto Ekowaluyo, director-general of forest products at the Trade Ministry. As for the illegal sawmills that don't have licences, or cling to licences wrongly issued, Hariyanto is equally pessimistic. He says the government has no data on the location and the number of illegal sawmills, and adds that conducting a wide-ranging survey would be far too costly. But the most potent argument advanced by both Hariyanto and like- minded officials is the social cost of getting rid of such mills. "That would create unemployment and trigger provincial instability," Hariyanto says. There is no denying that many villagers are increasingly dependent on illegal logging to survive. "If the government wants to forbid the cutting and succeeds in creating new jobs, that's good. But if not, I'm going to keep on cutting," says a 32-year-old chainsaw operator at Gunung Leuser National Park. Nonetheless, other alternatives are available that would keep the timber factories running and still preserve the forest. Some experts say small farmers should be allowed to plant more trees and market them to industry. "They could certainly diversify the source of supply, if they have the option to manage their own systems," says Jim Tarrant, team leader of the U.S.-funded Natural Resources Management Programme in Jakarta. Such efforts will require both creativity and flexibility on the part of the public and private sectors. So will attempts to encourage local communities to guard against illegal logging. Clearly, the police and forest rangers aren't up to the job of keeping 120 million hectares of forest safe from intruders, and Indonesia's legal system offers few deterrents. Just ask the managers of the Gunung Leuser National Park, where 76 people are responsible for guarding an area spanning 795,000 hectares. In Aceh, the European Union funded 17 government raids against illegal loggers; despite ample evidence, not a single case was prosecuted. If Indonesia continues to rely on the law of the jungle, there won't be any jungle left. ================================================================= NY Transfer News Collective * A Service of Blythe Systems Since 1985 - Information for the Rest of Us 339 Lafayette St., New York, NY 10012 http://www.blythe.org e-mail: nyt@blythe.org ================================================================= nytpac-02.11.00-21:20:50-19986