Plantations

Down to Earth No 60  February 2004

Forestry minister Prakosa has announced measures to promote the development of forest plantations, despite national and international concerns about forest destruction.

The government's industrial timber estate (HTI) policy has failed in many respects. By 2002, the government had issued licences to 167 industrial timber estates (HTI) covering a total area of 7.76 million hectares, but only around 50 companies were operating anything like normally. Concessions have been over-logged by companies; raided for timber by communities and logging entrepreurs; and affected by fires and droughts. Many companies claim that economic problems have delayed their plans to establish fast-growing tree plantations of species - mainly acacia. Only about 2.7 million ha of HTI schemes have been established.

The controversial new package of policies is intended to attract more investors to the industry. Ministerial Decree No. 44 simplifies procedures to get licenses to clear fell forest; No. 46 allows private companies to inject more capital into joint ventures with state-owned companies; No. 47 allows mergers and acquisitions in the HTI sector; No. 43 allows rescheduling payments of reforestation funds. Governors and businessmen from Kalimantan had, earlier this year, demanded that Prakosa drop the obligation for logging companies to contribute to the central government's Reforestation Fund. They also rejected the logging quota for 2004 imposed by central government.

The forestry department states that annual production from industrial timber estates is 15.6 million cubic metres. However, a reliable source estimates that only around 9 million m3 of timber is supplied from plantations. Another 1 million m3 or so comes from community plantations set up on privately owned land. The majority of the rest comes from natural forests, zoned for clear felling to create tree plantations. The Department of Forestry has no reliable way of knowing how much forest is still being cleared for plantations since the provincial forestry offices which issue these licenses do not supply information regularly to Jakarta and it takes the central office over a year to process the data.

Most of the 'fast-wood' from HTIs is consumed by Indonesia's paper pulp industry. Rough calculations indicate that APP's Indah Kiat and Lontar Papyrus mills use 3 million m3 of timber annually; RGM's Riau Andalan and Toba Pulp Lestari 3 million m3; PT Tanjung Enim Lestari 2 million m3 and Kiani Kertas under 1million m3. Nevertheless, in January, the head of Inhutani III urged the government to its log export ban, especially from industrial plantation estates. President Director, Soejoto Wongsoredjo, wants to secure Indonesia's place as a supplier to overseas pulp producers but fears plantations in China and Australia will flood international markets in the near future.

Indonesian environmentalists say that the pulp industry is a major contributor to forest destruction in Indonesia and that 70-80% of the timber used by these factories comes from illegal sources. Industry denials were further undermined by the collapse of an agreement between WWF and paper giant APP in mid-February.

The deal signed by Asia Pulp & Paper and WWF in August 2003 was an attempt by the company to improve its perilous financial position and its bad environmental record. If the heavily-indebted company met WWF's conditions, it would have been able to avoid NGO calls for international consumer boycotts of its paper products. In its plan, APP promised to create a 165,000 ha protected area (only part of which was in its concession); establish new procedures to prevent illegally felled wood from entering its mills; and to use only timber from plantations by 2007. WWF rejected the plan as it wants strong commitments to protect so-called high value conservation forest, whereas APP still intends to continue clear felling forests without biodiversity assessments.

In response to growing public concern about the loss of lives, property and livelihoods due to flooding, the government announced a National Forest and Land Rehabilitation Movement in March 2003. This Rp 1.3 trillion programme is intended to restore forest cover to 300,000 ha watersheds in 21 provinces by 2007(see forthcoming DTE).

(Sources: Asia Pulse 12/Jul/02, 12/Jan/04, 18/Feb/04; Jakarta Post 30/Dec/03, 8/Jan/04; 11/Jan/04; Financial Times 20/Feb/04; Department of Forestry presentation, London, Feb 2004)