Illegal Logging – History and Lessons from Indonesia

Yuichi Sato

         

Illegal logging is now a common environmental issue which is debated internationally. It is said that the problem in Indonesia, Cambodia, Russia, Brazil, and certain African countries has become quite severe, with Indonesia experiencing massive deforestation between 1998 and 2001. This was also a time when Indonesian politics underwent a paradigm shift and the Asian region experienced a severe economic crisis, both of which brought significant change, or at least the appearance of change, to many areas of public life. Several significant forest issues emerged which became the subject of intense discussion among specialists, government officials, and environmental activists —forest and land fires, natural forest conversion, the heavy debt and restructuring of wood related industries, illegal logging, the recalculation of real forest value, reforestation, decentralization, the national forest program, land tenure conflict, and national park management are some examples. There were also discussions about consolidating these into a forest and wood industry policy. All of these issues are significant to the conservation of tropical forests, as well as to the environmental policy in general.

This paper reviews the issue of illegal logging in Indonesia, looking at its history, examining various countermeasures taken against it, and offering some lessons drawn from the experience of central level practices.

Shocking Reports of Illegal Logging

First, several significant reports have established the severity of the problem in recent years by addressing the magnitude of illegal logging and its impact on the natural environment, natural resources management, society, and the economy.

EIA-TELAPAK’s “The Final Cut” (1999) was the first report to alert the public about the extent of illegal logging. The affected areas reported on were two famous national parks which are representative habitats of orangutans, the very symbol of tropical forests and a species in danger of extinction in the near future. The well-organized and large-scale illegal logging conducted in these areas was documented and internationally publicized with a shocking video and printed report. The report also criticized a famous businessman cum local politician for his direct participation in the logging. Government, donor countries, and NGOs picked up on this case as of the highest priority in tackling illegal logging. The following year saw the appearance of “Illegal Logging in Tanjung Puting National Park, An Update on the Final Cut Report.” The results of the EIA-TELAPAK campaign were significant, quickening progress in several areas, including the Indonesian government’s re-measuring of the log export ban in 2002 and the listing of an endangered tropical tree species, ramin, in Appendix III of CITES in 2001. (The Convention on International Trade in Endangered Species of Wild Fauna and Flora includes in Appendix I to III lists of endangered species agreed upon by member countries, with trade restrictions increasing from Appendix I through III.)

While the increase in illegal logging was reported in various publications, the documentation was mainly of individual and discrete cases. It seemed that an overall and detailed picture of illegal logging would be extremely difficult to sketch. It is in this context that one can appreciate Neil Scotland et al.’s “Roundwood Supply and Demand in the Forest Sector in Indonesia,” which boldly analyzed government statistics and unpublished data to estimate the total quantity of timber logged. The report estimated that 21 million cubic meters of timber was legally logged in Indonesia in 1998, 2 million was provided from domestic wastepaper, and 20 million was imported, producing a total supply of 43 million cubic meters. Total demand, on the other hand, was 100 million cubic meters, of which 49 million was exported and 51 million domestically consumed. Therefore, the difference of 57 million cubic meters was the suspected volume of illegal logging or legally unreported logging in 1998. The year before, the estimated volume of legally logged timber was 30 million cubic meters and the suspected volume of illegal logging was 41 million cubic meters. This would indicate that legal logging decreased and illegal logging increased from 1997 to 1998. According to the authors, this was a high-end estimation, and the accuracy of the individual data sets was variable. Nevertheless, the reported estimation was the first and has become the standard for quantifying the volume of illegal logging.

At the same time, research by Mubariq Ahmad bolstered the common notion that organized illegal exports were growing more intensely in the border areas between Indonesia and Malaysia. “Illegal Logging: Extent, Patterns and Roots of the Problem” introduced the information that 50-80 percent of timber brought to the roughly 1000 wood processing factories in Sarawak, Malaysia, could be illegally logged timber from Kalimantan, Indonesia.

One more important estimation is of the rate of deforestation. Derek Holmes, a consultant of the World Bank, analyzed and forecast the deforestation rate in Indonesian tropical forests and prospects for the future based on study materials from the 1980s and satellite information data in the 1990s. According to his research, deforestation on average was 0.8 million hectares/year in the 1980s, 1.2 million hectares/year from 1990 to 1996, and 2.0 million hectares/year in 1997 and 1998, the dramatic increase accounted for by large-scale forest fires. (Incidentally, the latest figure from the Ministry of Forestry, announced at its forest policy workshop in 2001, was ±2.7 million hectares/year.)

Especially shocking was the realistic prediction that the lowland forest, the crucial part of the tropical forest for maintaining the precious forest ecosystem, would nearly disappear from Sulawesi in 2000, Sumatra in 2005, and Kalimantan in 2010. Regrettably, Mr. Holmes died in Indonesia before completing the report, but Thomas Walton, coordinator of the World Bank, summarized its important points in “Coordination and Implementation of Forest Strategy in Indonesia.”

A second area of concern is logging’s influence on society and the economy, which has been analyzed by Agus Purnomo et al. of the World Wildlife Fund Indonesia and the organizations that cooperated in “Corporate Debt and the Fate of Our Forests.” The debt carried by wood-related industries increased greatly under the Soeharto administration and was estimated by the WWF report at USD 2.6-3.6 billion. The opportunity loss, which includes trade barriers like the log export ban and the government’s expenditure of Afforestation Funds for illegitimate purposes, was estimated at about USD 2.0 billion. The total amount nearly equaled the approximately USD 6.0 billion donated to Indonesia by developed countries, including Japan, in fiscal year 1999/2000. In the future, this enormous sum will have to be borne by Indonesian and donor country taxpayers.

I would also like to touch upon the indirect linkage between the development of the pulp and paper industries and illegal logging. In the 1990s, national policy promoted industrial plantations. The intention was to rehabilitate large areas of devastated forest land throughout the country, provide labor opportunities in local areas, avoid industrial logging in conservation forests, and construct a new national economy by providing material for pulp and paper industries. However, the nationwide imbalance between supply and demand for wood, combined with the corporate debt problem in wood-related industries, encouraged overlogging outside of the industrial plantation areas to supply these industries. Christopher Barr’s “Profits on Paper: The Political Economy of Fiber, Finance, and Debt in Indonesia’s Pulp and Paper Iindustries” researched this point in detail. He also discussed the linkage between corporate debt and illegal logging in “Corporate Debt and the Indonesian Forestry Sector.”

Finally, logging is related to Indonesia’s unemployment rate. The wood industry is high in employment absorption because it is labor-intensive. According to the presentation of Zain Masyhur of the Djajanti Group at the forest policy workshop of 2001, direct employees of the wood industry amounted to 2.5 million people, indirect employees another 1.5 million, and their families 16.0 million, totaling 20 million people. Investment in the industry has risen to USD 28 billion. If the government were to enact compulsory measures reducing the amount of logging in the current conditions of economic crisis, unemployment would increase, threatening a rise in social instability.

A Short History of the Political and Economic Context

I will now provide a chronological account of the growing awareness of the problem and how it was debated from the latter half of 1997 through the first half of 2001. I will include in this chronicle the major political and economic developments of the period. Readers should feel free to find connections between these events.

Latter half of 1997: The Asian monetary crisis hit Indonesia, initiating a long economic downturn.
January 1998: A Letter of Intent was exchanged between the Indonesian government and the International Monetary Fund that became the basis of structural economic and fiscal reform. Forestry issues linked to the reform program were specified.
May: Student demonstrations demanding reform and democracy intensified. Riots took place in many cities.
July: Soeharto’s long regime came to an end and Habibi’s provisional political administration began.
Latter half of 1998: Frequent riots in small towns coincided with the collapsing authority of local military, police, and government. Protests included anti-government demonstrators throwing stones at local forest offices.
January 1999: The Minister of Forestry announced the rapid increase nationwide in illegal logging.
June: The General election saw the triumph of Megawati’s faction, the enactment of two decentralization laws, and the beginning of the process of decentralization.
July: The issue of illegal logging was raised at the eighth meeting of the Consultative Group on Indonesia (CGI) in Paris.
August: The release of EIA-TELAPAK’s “The Final Cut” began an international campaign against illegal logging in national parks. The residents of East Timor voted for independence from Indonesia.
October: The Presidential election brought Abdul Rachman Wahid to the presidency.
November: Criticism began of the Soeharto family’s corruption, including forest exploitation.
January 2000: “Removing the Constraints: Post-CGI Seminar on Indonesian Forestry” was held in Jakarta. Typical cases were presented.
February: The ninth CGI meeting was held in Jakarta. The Indonesian government committed itself to forest sector reform.
March: The Donor Forum on Forest (DFF) was formed under the CGI.
May: Newspaper reports began to appear reporting large-scale illegal logging along the Indonesia-Malaysia border.
July: The Interdepartmental Committee on Forest (IDCF) was formed by the Indonesian government. The Kyushu-Okinawa G8 meeting in Japan discussed international illegal logging.
August-October: A series of forest policy workshops was held in Jakarta, including one entitled “Control of Illegal Logging in East Asia.”
October: The tenth CGI meeting was held in Tokyo. Discussion included illegal logging.
January 2001: Decentralization was legally established. Many local areas lacked sufficient preparation.
March: A preparation meeting for the East Asia Ministerial Conference on Forest Law Enforcement and Governance (FLEG) was held in Jakarta.
July: President Wahid’s administration ended and Megawati’s began.
September: The East Asia Ministerial Conference on Forest Law Enforcement and Governance (FLEG) was held in Denpasar, Bali 

log-in-forest

Lessons

What can we learn from this short history? I actually feel that the growth of illegal logging has been closely related to the following: the worsening national economy and regional standard of living, the abuse of long-term political power and socially fixed customs, an unstable political situation, rapidly introduced democracy, and hasty and ill-prepared decentralization.

It may seem strange to cite “democracy” and “decentralization” here. These are basic government policies in the wake of a long period of undemocratic and highly centralized administration. But the success of these policies may depend on their gradual implementation. For in the current rapid transition, many questions have been raised as to whether the forest can be sustainably managed with the present level of legal preparation and personnel resources for efficient planning and implementation, not to mention the lack of confidence and good communication between central and local governments.

A series of forest policy workshops in 2000 discussed natural forest conversion, the indebtedness of wood-related industries and their restructuring, illegal logging, the recalculation of real forest value, reforestation, decentralization, the national forest program, and the consolidation of forest and wood industry policy as mutually related issues. Japan also shared its experience in consolidation practice. This series of workshops, as well as other studies and discussions, helped to crystallize the following views, some of which represent the collective common sense of my colleagues and some of which are my own:

We should recognize that illegal logging is not a single problem, but an issue related to many others. We should also realize that while illegal logging in Indonesia is quite significant, it is not a problem unique to Indonesia. The WB and WWF-sponsored workshop “Control of Illegal Logging in East Asia” featured discussions among experts throughout the region, including China. The Cambodian case was also addressed. And further afield, Russia, Brazil, and Africa face the same situation. Indonesia’s case may be exemplary of the problems in these countries.

Essentially, illegal logging is a criminal act that occurs in remote areas that are difficult to supervise and control. If we, who are not familiar with the local situation, try to investigate in that field, we would be unable to grasp the real situation. Moreover, it would be very dangerous to pursue on-site investigation. Because of the circumstances surrounding this problem, an accurate and completely detailed picture of illegal logging is extremely difficult to realize.

On the other hand, it is often said that behavior which we usually define as “illegal logging” is not in fact always “criminal.” For example, if a forestry concession is granted on land that had long been used by local people, under existing laws their customary logging suddenly becomes “criminal.” There is an inconsistency here between statute law and customary use and law. Mubariq Ahmad uses the Robin Hood analogy, saying that “Robin Hood stole national property and distributed it to the poor people. Is it criminal?” Still, it is also a fact that the magnitude of current “illegal logging” is not acceptable.

While the magnitude and depth of the problem are significant, I would like to point out that we have learned positive lessons from our short history. For example, at the WB and WWF-sponsored workshop, a list of over fifty countermeasures was agreed upon by stakeholders, including the need for strong political will, public awareness, aerial and ground surveys, log tracking systems, reliable documentation and verification, information reporting systems, the creation of a third inspection body, judicial system improvement, log export ban, and so on.

So far we can cite the strong political will declared by the President of Indonesia, the listing of a precious tropical tree species in CITES, and the re-measuring of the log export ban. The feasibility of the log tracking system and information reporting system on a broad basis is also being explored. Various stakeholders have prepared concrete counter-proposals.

Further, the decision-making process has obviously utilized research and study reports, including studies on the decreasing number of orangutans and on flood control and agriculture irrigation, such as “Illegal logging and ecological damage to the Leuser Ecosystem.” This point is important, because scientific information usually tends to target academics, but is not often reflected in actual policy. Effective utilization of scientific information in policy-making is therefore a significant accomplishment.

In addition, the problem has quickly progressed from the field level to the central level, where it is being addressed by the Consultative Group on Indonesia (CGI), Indonesia’s international platform on economic and financial assistance, and the Interdepartmental Committee on Forest (IDCF), led by the government’s financial coordination minister. Internationally, the problem has been taken up at the Kyushu-Okinawa G8 meeting, the East Asia Ministerial Conference on Forest Law Enforcement and Governance (FLEG), and the World Summit on Sustainable Development (WSSD). From the first “appearance” of the problem in 1998, it has taken only two to three years for a lot of progress to occur. For example, the Asia Forest Partnership (AFP) on illegal logging, forest and land fires, and reforestation was agreed to between Indonesia and Japan in May 2002. We should also note that the effective linking of the problem to economic, financial, and monetary subjects has become standard.

Energetic and friendly cooperation among experts in government, donor agencies, NGOs, and other concerned people has been a powerful engine for this process. I think this cooperation was cultivated in the Consultative Group on Indonesian Forestry (CGIF), which had been actively serving as a platform for information exchange among related agencies under the Ministry of Forestry from 1993. As many separate technical projects were established or renewed in the years 1998 to 2001, it became clear that greater coordination was required. Fortunately, with the assistance of colleagues in donor country governments and agencies and in NGOs, the Donor Forum on Forest (DFF) emerged as the key coordinating body in 2000.

The views expressed in this paper, “Lessons” in particular, are based on my own experience. I would appreciate hearing views from different experiences or standpoints. The problem is certainly still serious, and therefore, constructive and concrete counter-proposals and processes are required. Whether this problem can be solved or not is a touchstone for all of us.

Yuichi Sato
Mr. Yuichi Sato worked for Indonesia’s Ministry of Forestry as a coordinator for forest planning, based in Jakarta, from 1998 to 2001. He participated in the formulation of the Donor Forum on Forest (DFF) under the Consultative Group of Indonesia (CGI). He is now a government official in Japan; however, this paper reflects his personal opinion, not that of the Japanese government.

Kyoto Review of Southeast Asia. Issue 2 (October 2002). Disaster and Rehabilitation

References

Agus Purnomo et al. 2000. Corporate debt and the fate of our forests. Presentation at Removing the Constraints: Post-CGI Seminar on Indonesian Forestry, held in Jakarta, 26 January 2000.
Barr, Christopher. 2000. Profits on paper: The political economy of fiber, finance, and debt in Indonesia’s pulp and paper industries. WWF Macroeconomic Program Office and Center for International Forestry Research (CIFOR). Bogor, Indonesia.
EIA-TELAPAK. 1999. The Final Cut, Illegal Logging in Indonesia’s Orangutan Parks. 44-page booklet in English and Indonesian and a short video with the same title. Environmental Investigation Agency (www.eia-international.org) and Telapak Indonesia (http://www.telapak.org).
EIA-TELAPAK. 2000. Illegal Logging in Tanjung Puting National Park, An Update on the Final Cut Report. Environmental Investigation Agency and Telapak Indonesia. Report can be read online at www.eia-international.org under Forests for the World Campaign.
Jamal Gawai, Leuser Management Unit. 2000. Illegal logging and ecological damage to the Leuser Ecosystem. Presentation at Removing the Constraints: Post-CGI Seminar on Indonesian Forestry, held in Jakarta, 26 January 2000.
Mubariq Ahmad. 2000. Illegal logging: Extent, patterns and roots of the problem. Presentation at WB-WWF workshop, Control of Illegal Logging in East Asia, held in Jakarta, August 2000.
Scotland, Neil et al. 1999. Roundwood supply and demand in the forest sector in Indonesia. Indonesia-UK Tropical Forest Management Programme Report number: PFM/EC/99/08. Jakarta.
Walton, Thomas. 2000. Coordination and implementation of forest strategy in Indonesia: Ten years of history and some directions for the future. Paper presented at the World Bank workshop, Forest Strategy: Coordination and Implementation at Country Level, held in Jakarta, 16-18 May 2000.

issue_2_banner_small