Aulia L.P. Aruan
The development of forest-based sawmills and plywood mills (1980s-1990s) and pulp and paper industries (mid 1990s) plays an important role in forest resource management. Wood supply from plantation forests will have to provide an increasingly larger share of the supply in the near future, particularly of pulplogs. Technology and marketing problems are emerging in processing logs from those plantations. The development of industrial forest plantations is focused on meeting the pulp and paper industries needs for raw materials, and therefore the tree species are dominated by fast growers such as Acacia spp.
Indonesia's forest-based industry comprises a mix of non-panel forest-based industry of pulp and paper mills, and panel-based industry of sawmills, plywood mills, block board mills, chip mills and medium-density fibreboard mills. The rapidly expanding Indonesian forest-based industries were not well supported by a long-term sustainable log supply. There were only minor efforts to increase efficiency and competitiveness. The annual log shortage is estimated to be more than 35 million cum. The technological aspects of the forest-based industry are also neglected.
Master plans are needed both for plantation forest development and for forest-based industries. In addition, plantation forests and forest-based industries are currently under initial restructuring processes.
The purpose of this paper is to share the progress of the development of plantation forests and forest-based industries in the context of "forests for people" and decentralization.
Forest undoubtedly important in providing extensive benefits at local, national, regional and global levels. These benefits depend on the forest being subject to full production for wood and non-wood products (FAO, 1993). Furthermore, forests are still at the center of a problem of conflicting stakeholders interests.
Before the 1970s, Indonesia forests, mainly in natural forests, were in great abundance. The effects of their utilization were relevantly insignificant and were substantial only regionally. Twenty years or so ago, utilization reached certain limits that changed this pattern. This limitation to forests can be as a global consequence of (ADB, 1987; FAO, 1993; ITTO, 1990): (i) nature; (ii) recent policy and regulation changes; and (iii) incremental growth of land-use pattern other than forestland-use.
The development of sawmills and plywood mills (1980s-1990s) including pulp and paper mills (since mid 1990s) lays important role in the forest management. Indonesias growth oriented development over the last thirty years has led to the exploitation of mainly natural forest resources beyond their capacity, which ends up with enormous forest degradation. The plantation forest development started in mid 1980s is not effectively implemented and far behind the target (NMFP, 1993).
The Ministry of Forestry has launched 5 (five) priority programmes for forestry development period of 2001 - 2004, namely (i) combating illegal logging; (ii) controlling forest fire; (iii) restructuring forestry sector; (iv) establishment of plantation forest and reforestation; and (v) decentralisation of forestry activities.
International commitments such as National Forestry Programme (NFP) creates new era of proactive dialogue amongst relevant stakeholders in managing forests sustainably. Efforts are for identifying and promoting sustainable forest management in ways of maximising the role of plantation forests and their forest-based industries and markets. Future trends in resource ownership and management would determine the future role of plantation forests.
The purpose of this paper is to share the progress of the development of plantation forests and forest-based industries.
Most problems in plantation forest development are policy-related and institutional in nature - caused by human actions (ITTO, 2001). Relevant stakeholders critically examine the following problems such as:
a. Lack of updated statistical data and information about existing types of plantation forest resources in Indonesia covering: (i) amount; (ii) age; (iii) species; (iv) location; (v) site quality; (vi) schemes; (vii) present protection condition; (viii) existence and nature of claims/conflicts, community interest and involvement. These important basic data and information are needed for better long-term policy analysis in the forestry sector including management plans.
b. Inadequate capability at decentralised level is apparent, among others, in (i) poor state of forest management, (ii) low status of human resource development, and (iii) lack of planning capability. Moreover, change over to a decentralised management system is a challenge and simultaneously an opportunity for potential improvement. This depends on appropriate capacity building and clear role and accountability. The findings on appropriate policy analysis and long-term management plans are applicable to a large range of countries such as New Zealand and Chile.
c. Other constraining factors are (i) lack of adequate access to financial sources for potential plantation investors and revenue sources for local governments; (ii) lack of dialogues between relevant stakeholders, i.e. local and central governments, private sector, public sector, local communities, NGOs. More than 20 years after the IX World Forestry Congress 1978 in Jakarta this "forest for people" philosophy finally being promoted (1999) in the decentralisation context.
Those problems have particular possible solutions such as practical supports and development of regional innovative mechanisms and relevant legislative frameworks. Plantation forest development is one of the central agenda for degraded production forest areas. This urgently needs applicable incentives or removal of disincentives.
Recent regulations are direct set of the management of plantation forests through various planning levels, initial steps of NFP, and preliminary joint works between the central and local governments.
Government policy promoted forest-based industry for utilising mainly natural forests through added value and infrastructure (Nasendi, 1984).
Indonesia's forest-based industry comprises a mix of:
i. Non-panel forest-based industry consists of 81 pulp and paper mills (of 12 integrated pulp and paper mills; 66 paper mills; 3 pulp mills).
ii. Panel-based industry consists of 4,400 sawmills, 120 plywood mills, 39 block board mills, 13 chip mills, and 2 MDF mills.
The volume of logs harvested from natural forests has declined significantly over the past years as shown by Figure 1. This decline is due to unsustainable forest management practices in common with lacking in appropriate techniques on silviculture, forest fires, illegal logging including encroachment and natural forest conversion. The existing natural virgin forest is ± 18.8 million ha (± 46% of total natural forest concessions).
Current annual log supply shortage is ± 35 million cum, i.e. between log supply from natural and plantation forests (± 15 million cum) and the log demand (± 50 million cum). This log supply from natural forests maybe much less if recent tentative policy is to be implemented by "soft landing" or the reduction of the annual allowable cut (AAC) in order to give period to natural forests to renew.
Indonesia has progressively planned and developed forest plantation since mid-1980s. There are currently ± 3 million ha of pulp plantations have been granted. The establishment rate is more than 40% (or ± 1.2 million excluding ± 1 million of Teak plantations). The main species is Acacias spp composing of ± 80% of the pulp plantation establishment. The pulp log production in 2000 was ± 4 million cum or ± 23% of total pulp logs demand from pulp mills (Aruan, 2000; 2001). Its future pulp log production is estimated to increase while its establishment rate is slowing down.
Figure 1. Indonesia's Log Supply
Following multi-dimensional crisis in 1997-1998, GoI has realised that forestry issues should be addressed in the background of the global forest mechanisms and sustainable forest management principles (external and internal factors).
The technological aspects of the panel forest-based industry are partly neglected. Most of the forest-based industries built in the 1980s. The technology is now inefficient. Competitiveness in the global market is low, and the out of date machineries. Those machineries can only process higher grades, larger log sizes but limited machineries are well equipped.
The development of forest-based industry follows the dynamic of entrepreneurship. It is in itself has distinctive periods of growth, decline and restructuring (Le Heron, 1997). The panel forest-based industries face the restructuring period whereas the non-panel forest-based industry enters its growth period.
A natural follow-up to the review and evaluation is to develop and implement a master plan for restructuring the forest-based industries. This master plan should be based on strategic, transparent, and well-defined criteria (ITTO, 2001). Furthermore, this master plan should be consistent with the NFP.
The global plantation forests have increased by nearly 12 million ha/year in 1990s, compared to less than 4 million ha/year in 1980s (FAO, 2001; ITTO, 2001). This increase of plantation forest establishment indicates that steadily increased investment in forestry. Therefore, the main current problem is not only the availability of the investment but also the ability to plan, manage, control and sell the plantation forest products successfully.
The current significant changes are in (i) forestry policies such as NFP, priority forestry programmes, gradual shift from public sector to private sector in managing forests, and proactive in global scenes such as UNCED, UNFF, etc; (ii) social and economic consequences, e.g. through partnership for better community welfare; and (iii) research and development/technological improvement, e.g. several fast and slow growing commercial species.
Acacias spp will continue to dominate the plantation forests because of its adaptability to various sites. On the other hand, slow growing species from Dipterocarpaceae family will be slowly established in part by a perceived commercial advantage.
The challenge for plantation forest development will be to become better integrated into the local community. Initial steps have been conducted including a share of ownership. Other challenges are to expose and identify various possibilities in the development of plantation forests in terms of matching species, appropriate and environmentally sound technology, incentives (Guizol and Aruan, 2002), and potential markets.
Innovative technologies in the panel forest-based industries must concern about their current restructuring process and their research budget. Research is necessary to provide innovation to lead forest-based into better future. Small and medium scales forest-based industries can be created, for example, to process bark waste from Acacias logs in the MDF mill. This lead to a potential linkage between social responsibility and private sector responsibility.
Non-panel forest-based industry consists of pulp and paper mills will increasingly need more better quality and uniformity from established plantation forests. On the other hand, panel-based industry consists of sawmills, plywood mills, block board mills need to be restructured in terms of their installed and production capacities, log requirements, machinery capabilities, and markets.
The recent significant forest and forestry issues and changes have implications of the future of dialogue, ownership/partnership, incentives, resource and market structures. This needs a transparent planning system. It does not contain any political or other kinds of discretion in which decision makers need to strengthen their own minds out (Leslie, 1995; personal communication).
Based on the above discussion, the overall future plantation forest and forest-based industries can be shown by Figure 2. External and internal factors such as criteria and indicator of sustainable forest management (SFM), policy analysis, proposed incentives, schemes, periodicity, equity share, integration, tax, performance, macro economic and other sectors determine the overall plans to adjusted plans. Proposed regional planning methodology has been proposed (Aruan, 1996; Aruan et al, 1997; Aruan, 1998; 1999).
Figure 2. Future Direction of Indonesian Plantation Forest and Forest-based Industries Development
This effort is the Government responsibility to convey such plans following the different planning levels, i.e. NFP, national plans, sector plans, priority programmes. NFP is the forum of dialogue with other relevant stakeholders. They are traditional communities, central and local authorities, and associations. Both master plans for plantation forest development and forest-based industries are developed simultaneously. The restructuring of plantation forests and forest-based industries can also be included in those master plans.
The existing and future plantation forests will increasingly play important role not only for the wood production but also in non-wood production such as soil and water protection, carbon sequestration (carbon trade), and conservation.
Firstly, it seems that despite initial uncertainty regarding the declining wood supply from natural forests, the future possible wood supply will complement from fast and slow growing plantation forests.
Secondly, Conservation and social issues through small and medium business scales ("forest for people") will gradually direct the business opportunities. Forestry policies and regulations have to in line with these trends.
Finally, the future role of plantation forests and forest-based industries in Indonesia will be obvious and is good prospect. Then, sharing and adapting the successful overseas experiences should be an effective way to promote better contribution of future plantation forests and their forest-based industries.
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