'Illegal logging' - defining legality, undermining rights

Down to Earth No 62 August 2004

Efforts to secure protection for local communities under a new timber trade standard may be undermined by an emergency decree on illegal logging.

In 2002, the Indonesian and British governments signed a Memorandum of Understanding (MoU) to combat illegal logging and the illegal timber trade. Two years on, after a stop-start, lengthy and somewhat patchy process of consultation, the two governments are getting closer to agreeing what they mean by 'legal' and 'illegal'.

Lobbying by civil society organisations led the UK government's Department for International Development (DFID) to conclude that it was necessary to spell out what 'legal' and 'illegal' mean in a confusing and contradictory Indonesian legal context. A response was required to the demands of indigenous peoples' organisations, grouped in AMAN (the Alliance of Indigenous Peoples of the Archipelago), and supported by many NGOs, that the definition of legality required a radical rethink. According to AMAN, the narrow definition applied by the Indonesian government denies the rights of indigenous peoples since their customary rights are not adequately recognised under existing forestry and other laws. Indigenous peoples in Indonesia have long demanded restoration of their rights to control lands and resources in their customary areas. Their own definition of 'illegal' covers most of the timber operations considered as 'legal' by the government. This is because, in the majority of cases, indigenous communities never gave their consent to the industrial logging of their forests.

The Indonesian government has refused to consider any change to the status quo. It insists that any discussions on forest use and tenure take place within the framework of the 1999 Forestry Law. However, it has become increasingly concerned that international buyers are refusing to accept Indonesian timber due to protests and direct action by environmental campaigning groups in Europe and the USA. So, last year there were two multi-stakeholder regional meetings (in Pelalawan, Riau and Berau, East Kalimantan) followed by a national workshop to clarify what 'legal' timber is. Forestry department officials kept a tight rein on these consultations and the drafting process.

The result is a draft 'Legality Standard', which was made public in May 2004. The standard is aimed at "making it easier for buyers to differentiate between legally and illegally produced Indonesian timber products". Its goal is to promote the legal timber trade and discourage illegal trading. It consists of seven broad principles of legality, accompanied by criteria and indicators and guidance notes to help auditors verify compliance with each indicator.

However, as all the principles, criteria and indicators are specifically aimed at Forest Concession Holders (HPH), the legality status of timber which comes from community forests (hutan rakyat/hutan adat) still remains unresolved, where these also need to access the timber market.

Field testing in Kalimantan

The Legality Standard is due to be field-tested in July by the US-based conservation organisation, The Nature Conservancy, in the East Kalimantan timber concession of PT Sumalindo, where SGS/URS will carry out the legal verification. An independent assessment of the social aspects of this pilot verification will then be carried out by Dr Marcus Colchester, director of the UK-based NGO, Forest Peoples Programme, during August and September. The findings are then to be discussed in a national workshop involving NGOs and other interested parties.

An emerging issue in the discussion between TNC, civil society organisations (CSOs) and the MoU team is the involvement of CSOs in the process of carrying out the MoU's Plan of Action as an independent monitor.

Language on adat

AMAN, plus a number of Indonesian CSOs, have been involved in the legality discussions, but largely on an ad hoc and informal basis. Their inputs have ensured that some wording onadat (customary) rights and the principle of free, prior informed consent has been included in the draft criteria and indicators.

For example, on Principle 1, land and tenure rights, criterion 1.2.1 states that a company must hold a valid timber harvesting licence (HPH, HPHTI, IUPHHK) "that has been approved by the Department of Forestry and that has been issued only with the free and prior informed consent of all affected communities."

On Principle 3, community relations and workers rights, criterion 3.1 states that the company "has identified all communities affected by its activities in the Forest Management Unit and has obtained their free and prior informed consent to carry out those activities". Criterion 3.2. states that the company "has identified and documented the traditional rights of communities affected by its activities in the Forest Management Unit and can demonstrate that it respects those rights."

This language is to be welcomed in that it does offer the hope of some protection for indigenous and local communities in forest areas, and offers better prospects than the Indonesian government's BRIK approach (see DTE 60). Nevertheless, civil society organisations remain very concerned that the draft standard does not go nearly far enough in protecting indigenous peoples' rights to land and resources. The standard is, after all, aimed at promoting the timber trade, rather than protecting Indonesia's fast-dwindling forests or promoting the rights of indigenous and local communities. CSOs argue that substantial changes to Indonesian laws and policies are needed if the roots, rather then just the symptoms, of the deforestation crisis are to be addressed.

The illegal logging Perpu

The limited gains achieved under the draft Legality Standard could be wiped out if a new emergency law on illegal logging comes into effect.

Plans for a government regulation in lieu of a law (Perpu) to tackle illegal logging were announced by forestry minister Prakosa in March this year (see DTE 61). The latest draft of this regulation, circulated in June, covers felling, transporting, storing, possessing and distributing illegal timber. It sets out a system of penalties for people (defined as individuals, groups or corporations) involved in illegal logging. These include the death penalty or life imprisonment for financing illegal logging; 5-15 year jail terms for ordering, encouraging or carrying out illegal logging and fines of Rp10-100bn (approx USD1-10 million); and 5-7 years plus fines of Rp100-500 million for officials who ignore cases of illegal logging.

Crucially, for indigenous peoples, the Perpu reverts to the narrow definition of legality contained in the 1999 forestry law (No 41). This excludes the respect for adat rights and the requirement for free, prior informed consent which appear in the draft Legality Standard. Clause 50 (3) of the 1999 law merely states that "all people are forbidden to fell trees or harvest or collect forest products within forests without rights or permission from the officials responsible." Since indigenous rights in forest areas are extremely weak under prevailing Indonesian laws, including law 41/1999, this means that members of indigenous communities could be treated as criminals in their own customary forests.

NGOs have criticised the Perpu for its narrow definition of legality. There have been no consultations with civil society groups on its content. The Indonesian Center for Environmental Law (ICEL) questions whether the regulation, if passed, would have any impact on illegal logging when other attempts to control the runaway destruction have failed. ICEL argues that the two main reasons existing law enforcement initiatives have failed are the lack of sufficient investment in law enforcement and the "lack of integrity" in local authorities, the police and judiciary. In 2001, of the 1,031 cases where someone was caught in anti-illegal logging operations, not one resulted in court action, says ICEL. In 2002, none of the 971 cases resulted in prosecutions and in 2003, only one out of 15 cases has gone to court.

ICEL proposes that what is needed is a 'one-roof enforcement system' under the Department of Forestry in Jakarta. It argues that the Perpu is justified because the rate of deforestation is so high and the social and environmental impacts are so serious that the situation is "an emergency...which requires immediate action" or an "extraordinary crime" as set down in the Indonesian Constitution. However, it urges the government to guard against misuse of emergency funding. It also wants the regulation to be strengthened in several ways, including broadening the definition of criminality; legal penalties; burden of proof; witness protection and legal formulation for action against companies. 

As DTE went to press, Indonesian NGO discussions over the merits and dangers of the Perpu were ongoing. The regulation was still in draft form, and had not been signed by the President. It remains to be seen whether the regulation will be pushed through in this period of presidential transition and political uncertainty.

(Source: A Legality Standard for Timber Products from Indonesia, Draft Number 1.0; 26/May/04; ICEL press statement 12/May/04; Rancangan Peraturan Pemerintah Pengganti Undang-Undang nomor _ Tahun 2004 tentang Pemberantasan Tindak Pidana Penebangan Pohon di Dalam Hutan Secara Ilegal)

DTE's summary of the draft Perpu with notes 
2002 Indonesia - UK agreement (MoU)
For NGO statements and DTE's press release on this, see campaigns page.

Chronic over-capacity drives forest destruction

Indonesia has the world's fastest rate of deforestation at 3.8 million hectares per year - the official figure is around 2 million per year. One of the biggest drivers of forest destruction is over-capacity in the country's wood-based industries, which include sawmills, plymills and pulp and paper mills. The industry puts current capacity at 30-40 million cubic metres per year - a 1999 independent set it at over 100 million m3 per year. Some companies have gone bankrupt and closed down since then, but the current annual capacity is still thought to be more than 80 million m3.

In July, Jakarta's forestry department announced a 5% cut in the legal allowable cut in natural forests for next year to 5.45 million m3 down from 5.74 million m3 this year. The medium term aim is to get the quota down to 2 million m3 per year, with companies sourcing raw materials from timber plantations or log imports. The government wants wood processing capacity reduced to 20 million cubic metres per year. It has also set up a forest rehabilitation scheme and is trying to stimulate the expansion of Indonesia's 2 million hectares of industrial tree plantations through new regulations intended to attract private investment. But with plantations still yielding only minimal amounts of wood, the companies are turning to illegal supplies to maintain production instead of cutting it. Many companies are being encouraged to keep up production in order to service huge foreign and domestic debts amassed during the last years of the Suharto era. At the same time, regional governments are promoting new projects (pulp mills in South and Central Kalimantan for example) which will only worsen the chronic over-capacity problem. (Asia Pulse/Antara 18/Jun/04; Jakarta Post 2/Jul/04; Asia Times 7/Jul/04)

New Social Forestry regulation

Indonesia's forestry ministry has issued a new regulation to back up the social forestry policy launched by the President in July last year. The new regulation - P.01/Menhut-II/2004 on Empowering Local Communities in and/or around Forests through Social Forestry - was issued on July 12, 2004. A ministry press release says that Social Forestry is intended to "create a sustainable forest resource and increase local peoples' prosperity". It is described as a forest management system in which local people are the implementers and/or main partners. 'Empowering local people' is defined as increasing people's capacity and autonomy (kemandirian), while 'local people' are "communities living in and/or around forests based on their dependence on forests for livelihood, and based on their history, ties to the place where they live, and the arrangement of their social rules in an organisation/institution". Social forestry, according to the ministry, does not change the status or function of a forest area or give ownership rights over forests.

(Forestry ministry press release S.406/II/PIK-1/2004)