Total land area (thousand ha)
Total forest area 1995 (thousand ha)/% of total land
Natural forest 1995 (thousand ha)
Total change in forest cover 1990-95 (thousand ha)/Annual
Totally protected areas (million ha)
Population total 1997 (million)/annual rate of change
Rural population 1997 in %
GNP per person total 1995 in US$
Source of data: FAO - State of the World's Forest 1999
Indonesia, the world's largest archipelago, is one of the most diverse countries in the world. The population is very unevenly distributed, with over 100 million people living in Java, which accounts for only 7% of the total land area. Indonesia is still an agricultural country but the agriculture sector's contribution to the GDP has declined due to the increased activity of the industrial and service sectors.
Forestry is the largest export earner within the agriculture sector, with plywood and sawn timber as the main commodities. In 1999, the forestry sector contributed less than 3% of the GDP in current prices, but the sector is much more important in export trade. In terms of national export earnings, forestry ranked second only to the oil and gas sector, and accounted for about 14% of the country's total export revenue for the last five years.
Wood-based panels are presently the major export commodities. Secondary processing products and the pulp and paper industry have been promoted so that rough sawn-wood exports will be limited in the near future.
To get a long-term perspective of the forestry sector, the Government, with assistance from FAO and WB launched a comprehensive analysis of the sector in 1989. The results were used to formulate the Indonesian Forestry Action Plan (IFAP) - a planning exercise. Some important results have been used as preconditions for the IMF loan for the restructuring of the Indonesian economy during the economic and financial crisis that started in Thailand 1997.
Indonesia has a rich in species composition. It occupies only 1.3% of the earth's land surface, but 10% of the world's plant species can be found in its territory, as well as 12% of all mammal species, 16% of all reptiles and amphibians, and 17% of all species of birds.
Traditionally, Indonesian households in rural areas have relied on fuel wood from home gardens or from agricultural estate crops. It is estimated that home gardens provide about 80-85% of the households' wood energy needs and timber for local construction.
Forestry is a strategic sector in creating job opportunities. According to Government statistics, during 1990-1995, it was estimated that about 2.5 million citizens were directly employed in the resources development and industries, and about 2 million workers in forestry-related industries and indirect activities. It was also reported that the forests and forestry in Indonesia have benefited at least one thousand expatriate workers and consultants, and also broadened the knowledge of young expatriate consultants and volunteers. With respect to unemployment caused by closing down some factories in urban areas as the direct impact of the 1977 economic and financial crises, forests and forestry have become like shock absorbers. However, due to several unforeseen reasons, encroachment and illegal felling have been taking place that are beyond the capability of the existing management system to control. This situation has had serious affects on the degradation and deforestation of some forest resources, including protected areas and conservation forests.
In addition, according to the report of a study carried out by the Economy and Environment Programme for South East Asia (EEPSEA) and the World Wide Fund for Nature (WWF), in May 1998, the economic toll of the fire and haze in 1997 amounted to US$ 3.073 billion. The loss for Indonesia was US$ 2.787 billion, which was more than double the total foreign aid received annually. The fires affected about 5 million ha, of which 20% was in the forest areas.
Since August 1997, the Region's financial and economic turmoil has badly affected the financial and economic situation in Indonesia, including the forestry sector. A number of socio-economic reforms were institutionalised by the new Government in 1998, 1999, and 2000, including decentralisation. However, pulp production and the furniture industries were only slightly affected by the Region's economic turmoil. It was reported that in 1999, the exports of furniture were double compared to 1998.
Since 1992, the Spatial Plan has been used at the provincial level. It is the follow up action of Government Act No. 24 of 1992 concerning Spatial Arrangement. The forestland use has also been harmonised in line with this arrangement, and as of April 1999, 121.1 million ha are recorded as forest areas. According to the recent satellite imagery interpretation, 92.4 million ha are covered by forest and 28.7 million ha are non-productive land, abandoned areas or secondary forests.
The functions of the permanent forestlands are as follows: conservation forests (20.6 million ha); protection forest (33,9 million ha); and production forest (58.5 million ha). Non permanent forestlands cover an area of 8.1 million ha.
By May 1995, aerial photography of forests and forest vegetation maps has been made for 81.0 million ha and 40.8 million ha respectively. For various purposes, the interpretation of satellite imagery was updated to cover 167.9 million ha (target for the year 2000 is to cover all country's land area of 193 million ha). The permanent natural forests have been demarcated in the field. As of September 1999, 273,160 km of boundaries had been established, of which 191,398 km were outer boundaries and 81,762 km were concession boundaries. As of 1990, the demarcated outer forest boundary was l51,019 km.
In the past ten years 3,870,520 ha of plantation forests were established, of which 1,258,391 ha were community forests and private owned forests covered 843,704 ha. These plantation activities provide substantial job opportunities, especially for the local people. Indirectly, it decreases their dependence on natural forests for their livelihood and income, and conserve biodiversity of the natural forests.
It is planned that within 10 years, 4.0 million ha of plantations will be established by the private sector, Government enterprises, nucleo-estate smallholders, and other institutions. To support the plantation programmes, the government established 8 modern nurseries and some seed centres, capable of producing 80 million seedlings per year.
Policy, legislation and institutional
Forests are owned and administered by the State, and responsibility for forestry development and management rests with the Ministry of Forestry. There are six Government State Enterprises and a number of private sector associations dealing with forest activities. Presently, there are about 700 NGOs active in the forestry and environmental sectors.
Since the economic and financial crises, which were started in 1997 in Thailand, it appears that small and medium businesses are capable of facing market upheavals. Therefore, the reform process in the field of forestry would be toward the strengthening the small, medium and village industries. These will become the second-force in national economic development. The strategy will be to give a role to small and medium sized businesses and co-operatives. Under the reform era several new policy and regulations have been made to restructure forest management and utilisation, and to adopt new paradigms, e.g. from timber based management to resource based management, from sectoral to regional development, from conglomerates to community-based management, and towards sustainable security environmental management. In the same spirit, the Forest Act No. 5 of 1967 was revised, and a new Forest Act No. 41 of 1999 was adopted, which has the principles of utility and sustainability, is people oriented, and stresses justice, partnership, transparency and integration.
The Government recognises that not everything that has been done in the past was mistake. There are many acts that are good and need to be developed and followed up. However, the Government also admits that many matters have to be changed and improved.
Under the Local Government Act No. 22 of 1999, many forestry affairs will be delegated to local governments. Under the decentralisation schemes, the authority for the management of production forests would be partly handed over to provincial governments, district governments, state enterprises, and communities. The distribution of authority in details is still under process at the moment.
Forestry extension is an important subject in the Ministry of Forestry, for which around 6,000 extension workers have been recruited. Extension for forest industries is well served by the sector's associations, particularly with respect to market intelligence and new products. In line with the industrialisation programme, intensive deregulation in forestry and related aspects like revenue, incentives, processing, marketing, and trade, has been carried out in recent years.
In 1991, a Village Development Scheme (HPH Bina Desa) was introduced aimed at increasing the contribution of concessionaires to the welfare of the people living in and in the vicinity of forest areas. This scheme consists of five programmes: sedentary agriculture, income generation, infrastructure provision, socio-cultural activities, and forest resource development. By August 1995, 392 concessionaires had participated in this scheme, involving 37,378 households in 878 villages.
At the end of 1995, 49.5 million ha had been gazetted (about 25% of the land area) as totally protected areas (TPA) in order to conserve wildlife and ecosystem richness. The TPA consists of protection forests (30.8 million ha) and conservation areas (18.8 million ha), which include national parks, nature reserves, game reserves, hunting parks, recreation parks, and forest parks. During 1990-1995, 9 nature reserves were upgraded to national parks. To enrich the biodiversity within the conservation area, a minimum of 700 ha within each concession's area should be protected by the company as a biogenetic conservation area.
As a member of ITTO, the Government is committed to implementing sustainable forest management by the year 2000. The modalities are under preparation, supported by bilateral and multilateral agencies and institutional NGOs.
In 1993, the Ministry of Forestry declared Decrees No. 252 and No. 576 of 1993, concerning the Criteria and Indicators for Natural Production Forest Sustainability at National Level. These Decrees were followed by the promulgation of the Minister of Forestry Decree, No. 610 of 1993, concerning Sustainable Management of Natural Production Forests at Management Unit Level. Further, the Director General of Forest Utilisation proclaimed Decree No. 208 of 1993 concerning the Technical Guidance on Criteria and Indicators for Management Unit Level. The basic structure of these decrees is consistent with the ITTO criteria and indicators. These criteria and indicators have been used as a tool to assess the concession permits. In addition, the Timber Concession Guidance Committee was established by the Concessionaires' Association in 1994 to supervise the concessionaires on the application of the criteria and indicators of sustainable forest management in the field. In the last five years, 125 concessionaires' licenses were revoked due to unsatisfactory performance.
The policy concerning the log exports ban, which was imposed in 1985, was in non-compliance with the GATT principles. In 1992, the ban was revoked, and replaced by a high export tax on log exports, which would be gradually reduced in accordance with the GATT scheme.
In March 1998, the task of the Ministry of Forestry was enlarged to include the Estate Crops, and it was renamed as the Ministry of Forestry and Estate Crops. However, it was changed back to the Ministry of Forestry in the late 2000.
Several changes in policy have been undertaken in 1998 in line with the reform policy made under pressure from the International Monetary Fund (IMF), including the following important forestry policy reforms:
· Reduced export taxes on logs and rattan;
· Eliminating the Indonesian Plywood Association's monopoly over plywood export;
· Transfering control of the Government-owned Commercial Forestry from the Ministry of Finance to the Special Ministry of Government Commercial Companies.
· Charging the Reforestation Fund in local currency instead of in US$; and
· Creation of a new resource (or land) rent tax on timber resources.
The Indonesian Forestry Action Plan (IFAP)
The Government initiated the IFAP process in December 1987. A Forestry Studies project supported by FAO/World Bank, initiated in early 1989, formed the basis of the IFAP process. The IFAP document was finalised in November 1991, and an International Round Table meeting was organised in February 1992. It predicted that Indonesia would need an investment of approximately US$ 20 billion in forestry development over the next ten years, of which less than 10% would come from donor support.
In line with the National Development Plan for Forestry in the Sixth Five-Year Development Plan 1994/95-1999/2000 (Repelita VI) and taking into consideration the progress of development, constraints, issues, and opportunities, the IFAP document had to be revised and updated. In addition, the First IFAP needed to be reviewed and revised due to the following:
· The Earth SUMMIT, Rio, 1992 and it's follow up;
· New Global initiatives and international conventions relating to forests and forestry including:* CITES, Convention on Biological Diversity, Convention on Climate Change, RAMSAR;
* ITTO Guidelines on Sustainable Forest Management;
* WTO of GATT;
* APEC and AFTA;
* Anti Tropical Timber Campaign;
* Tariff and Non-tariff Barriers;
* The Government Second Long-term National Development Plan and international, regional, and national commitments.
A team was established in late 1994, and a draft IFAP Updating document consisting of two parts, i.e. Country Brief and Project Profiles, was made available in the middle of 1995. After a long process of discussion and revisions, the final draft was adopted in November 1997. The programme structure of the First and the Second IFAP is presented in Table 1.
Notable important results of the IFAP exercise toward the forestry sector development include:
· Institutionalisation and strengthening of the IFAP implementation co-ordination;
· More NGO involvement in forestry sector development;
· Efforts and development activities have been made by some forest concessionaires through the establishment of concessionaire forestry village development (HPH bina desa hutan) within the context of people's participation, people's welfare, etc.;
· More efforts and resource allocations for plantations, critical land rehabilitation, watershed development, and forest conservation;
Table 1: Programme structure of the First and the Second IFAP
1. Institutional and human resource development;
1. Forest Resource Inventory and Land Use Planning
· Recognition of the importance of gender analysis in forestry development planning, and identification of gender issues in forestry;
· More transparency in information and management;
· Introduction of environmental impact assessments (EIA) for forestry activities;
· Strengthening of inter-sectoral linkages and a programme-oriented approach through transmigration programmes in plantation development;
· Promotion of GIS and remote sensing technology for forestry planning and operation by the private sector;
· Decentralisation of forestry management and planning;
· Linkages between the IFAP, the Environmental Action Plan, and the Biodiversity Action Plan;
· Indonesia was chosen as the location for the Headquarters of the Centre for International Forest Research (CIFOR);
· Rationalisation of forest industries development, marketing incentives, and trade deregulation;
· Establishment of the Biodiversity Conservation and Management Action Plan (BCMAP), complementary to the IFAP, to be supported by the Global Environment Facility (GEF). Some bilateral donors and international agencies have indicated their interest in participating in the BCMAP;
· Establishment of a Research Council to promote meaningful interaction with the users of the research findings;
· Sustainable forest management of the concessions through the implementation of the accreditation and assessor approach; and
· The Spatial Arrangement, Act No. 24 of 1992, has strengthened the legal status of forest area. It is also strengthened the Forestland Use by Consensus programme launched in 1984.
Consultative Group on Indonesian Forestry (CGIF)
In addressing the challenges by the forestry sector, Indonesia has been assisted by various bilateral donors and international agencies. During 1987-1992, there were about 70 donor-assisted projects with a total support of US$ 342 million. It was beyond the capacities of the Ministry to manage the projects. The biggest problems faced in implementing the projects were the following:
· Lack of co-ordination in sector planning and lack of information on projects;
· Little integration of foreign assistance projects into national forest development planning;
· Overlapping and duplication of efforts;
· Conflicting and contradictory approaches; and
· Lack of internalisation of innovations to a larger scale for the benefit of the sector and the population.
At the Donor Round Table Meeting in February 1992, it was recommended that a forum of consultation among the main actors should be created. The Ministry welcomed the recommendation, and established a Consultative Group on Indonesia Forestry (CGIF) in May 1993.
Initially, CGIF was established as a means to facilitate the IFAP implementation and to be a forum for the exchange of information between the Ministry and the representatives of the international partners, with limited involvement of other partners, such as the private sector, NGOs and scientists. Later, CGIF responded to the increasing need to discuss technical issues. Therefore, permanent CGIF Working Groups were formed. These Groups were separate from the initial CGIF forum, which is now called the CGIF Assembly meeting.
CGIF was formalised by a Ministerial Decree in October 1994. The objective of the CGIF is to strengthen the communication, co-ordination and co-operation among all parties involved in the planning, implementation and evaluation of the forestry sector development efforts, thereby contributing to increased effectiveness, efficiency and sustainability of the forestry sector development in Indonesia. It is envisaged to cover all forestry development activities carried out by the private sector, NGOs and the projects assisted by international partners.
Four permanent technical working groups have been established, as follows:
· Sustainable forest management;
· Social forestry and people's participation;
· Conservation; and
· Policy and institutional development.
In addition to the above technical working groups, a number of small teams were established in 1997 to discuss the following subjects:
· Formal recognition of traditional land use rights;
· Setting-up permanent production forests;
· Supply and demand of timber and timber products;
· Social forestry; and
· Forest fires.
The CGIF Working Groups are designed to be a forum for the exchange of information among Indonesian and foreign professionals concerned with technical, organisational and scientific matters of forestry development. The rationale behind the need to promote the exchange of information between forestry experts is the observation that the know-how acquired through foreign co-operation projects seems to be insufficiently utilised for other projects and for the development of the forestry sector as a whole.
The following are among the important outcomes of the CGIF:
· CGIF has become an important tool for strategic planning in the Ministry of Forestry;
· CGIF is a multi-stakeholders forum to bring together representatives of the Ministry of Forestry, NGOs, donors, universities, researchers, and the private sector;
· CGIF has become a model for a national dialogue between the donor community and national partners;
· CGIF is fully in line with the idea of partnership as recommended in the IPF/CSD, 1997.
In the future, a number of actions need to be taken, including the following: a) strengthening the management of the overall process; b) updating the database and guaranteeing the accuracy of the data; c) standardisation of the format, terms and items used; d) improving the manpower skills; e) accommodating the increasing consequences of the many international commitments and initiatives as the follow up to Agenda 21 of UNCED on forestry.
It was reported that during the exercise to carry out a case study in implementing the IPF Proposals for Action, CGIF served as the forum for the execution of the case study. About 100 stakeholders from various disciplines participated in the case study, including: planners, decision makers, scientists, researchers, other concerned sectoral institutions, NGOs and donors. Six Working Groups based on the organisational structure of CGIF were set up.
Indonesia's development strategies and policies are incorporated in three plans: the long-term plan (covering a period of 25 years), the medium or five-year development plan (the Repelita) and the annual plan. The long-term plan provides broad development goals and guidelines, while most policy packages are associated with the five-year development plan. The second long-term development plan began in 1994/1995. The National Development Guidelines (GBHN) indicate in broad terms the national development plans, including the management of forest resources.
Inter-sectoral linkages for sectoral planning were developed by a Central Planning Board (BAPPENAS) at the central level and by the Provincial Planning Agency at the provincial level (BAPPEDA). Some State and Co-ordination Ministers were assigned to co-ordinate certain aspects of development, such as the State Ministry of Population, and Environment, and the State Ministry of Economics, Finance, and Industries.
The Sixth Five Year Development Plan (1994/95 - 1999/2000), as the first medium-term plan under the Second Long-term Development Plan (25-year plan - from 1994/95 to 2018/19), sets its priorities on: sustainability, conservation of biodiversity and people's participation, poverty alleviation, and economic and political stability. However, the plan could not be completed due to the change in the Government in 1998. Starting in 2001, the budget calendar will start on 1 January 2001; it previously ran from 1 April through 31 March of the following year.
Six-country initiative of the IPF/CSD's proposals for action
Indonesia is participating in the Putting the IPF Proposals for Action into Practice at the National Level Government-led Initiative in Support to IFF Work Programme Category I(a). Six countries are participating in the exercise (three each from developing and developed countries), i.e. United Kingdom, Finland, Germany, Indonesia, Uganda, and Honduras. The purpose of the Initiative is to support the implementation of the Proposals for Action of the IPF at the national level (as endorsed by UNGASS in June 1997), including development of guidance derived from country experiences for consideration by IFF.
The preparatory meeting was held in Bonn/Germany, on 3-5 February 1998. Indonesia is using its Five Year Plan (the First up to the Seventh Plan) as the basis to assess the implementation of the IPF Proposals for Action. Five categories of relevance of the IPF Proposals for Action have been adopted to assess the progress of its implementation for Indonesia, i.e.: not relevant, low importance, important, very important, and priority.
Notable achievements have been reported; however, actions that have been carried out by the private sector, people's groups, NGOs, and other relevant institutions might not have been included in the exercise.
Indonesia has adopted three silvicultural systems to manage its forests as follows: a) Indonesian Selective Cutting and Replanting System (TPTI); b) Clear Cutting with Artificial Regeneration.
The TPTI system has been applied for natural forests since 1989. The purpose of the system is as follows: to regulate the utilisation of the natural forest production; to increase the forest value in respect to the quantity and quality of residual stands for the next cutting cycle; and to ensure the continual supply of timber as a raw material for the wood processing industry. The TPTI system is a modification of the previous system, which was called the Indonesian Selective Cutting. Since more fieldwork is needed, the new system needs a well-trained team with effective control to ensure implementation of the system toward sustainable forest management. The modification aims at a more efficient time frame in the implementation of activities of each step of the system.
Harvesting, marketing and trade
Log production had constantly increased from 24.0 million m3 to 29.5 million m3 during 1995/96 - 1997/98 period. But, it decreased to 19.2 million m3 in 1998/99 due to the economic and financial crises. Rattan, resin gum, turpentine, raw silk, and cayuput oil are among the important commodities of non-wood forest products.
As of the end 1999, the main export destinations of timber and wood products were Japan, China PR, USA, Korea Republic, Norway, Singapore, India, Italy, the Netherlands, Iran, Saudi Arabia, Australia, and England. The export of wood products, which comprise mostly plywood, sawn timber, and wood based products, was around 8-9 million m3 during the last ten years; the revenue generated was around US$ 4 billion, except in 1998 during which it was US$ 2.5 billion.
Indonesia has published a practical Guide Book entitled Principles and Practices of Forest Harvesting in Indonesia which could be considered as the Indonesian Code of Practice for Forest Harvesting. The principles and practices are being socialised among the private concessionaires and states enterprises. In support of the implementation of the Code, some studies on Reduced Impact Logging (RIL) have been conducted involving some foreign co-operation projects and forest concessionaires. Some activities related to the promotion of RIL and sustainable forest management aspects include the following:
· Information collection and dissemination;
· Implementation of RIL training;
· Publication of technical procedures, manual, and training materials; and
· Co-operation with CIFOR in conducting research on RIL practices in Bulungan area of East Kalimantan.
A handy guidebook for tree harvesting in tropical forests, especially for the operators at the field level, has been published. The guidebook contains many illustrations that can help the operators in the field easily understand the instructions on how to harvest timber properly. It is printed with a plastic cover for waterproofing to make it last longer.
The Government is committed to taking measures against illegal logging. It was reported that illegal logging is likely to be more damaging to forests. This aspect has been reflected in the Letter of Intent to the IMF recently. Efforts have been made to strengthen the administrative and security control, including the application of fines for violations against logging operations. However, the issuing of permits for forest processing industries is under the authority of the Ministry of Industry and Trade. The installed capacity of the wood industries has been greater than the wood supply under sustainable forest management from forests, which could lead to an informal supply through illegal logging.
With regard to the implementation of sustainable forest management, the Government is expediting the rehabilitation of degraded forests. However, it needs huge funds that the Government expects to have support from global partnership. In addition, incentive mechanisms are being formulated for the involvement of the private sector in the forest rehabilitation and development, including providing a reward to well disciplined forest concessionaires to implement sustainable forest management.
The Indonesian Ecolabelling Institute (LEI) has been established to look into the adoption of the timber certification scheme. The Institute has developed Criteria and Indicators for Sustainable Forest Management in Indonesia, in total 57 indicators, which consist of criteria on production, on environmental and on social aspects. LEI signed an MOU and Join Certification with the Forest Stewardship Council (FSC) in September 1999.
As regard to CGIF, the Ministry of Forestry has established a web site e.g. http://www.cgif.com/
The two great movers of the human mind are the desire of
and the fear of evil.
Such is the state of life that none are happy but by the
anticipation of change.
The change itself is nothing;
when we have made it, the next wish is to change again.
The test of wanting is doing.