Table 1. Flood and Landslide in 2000 – 2006
The flood and landslide were also causing indirect impact toward the local economy. The road being broken off has made thousand of people in the farm area were not able to market their crops and that leads to the level that retailers were also lose their income.
Other than the loss caused by flood and landslide, the inequitable direction of forestry policies was also causing unsettled conflicts up until today. Since 2000 until 2007 for example, more than 300 conflicts in the forestry sector took place.
Grafic 1. Frequency of horizontal conflict in forestry sector
Government’s policy with inequitable direction in the era of new ordo was also failed to be realisticly responsed by new goverment post now ordo. Various outcome policies were infact not able to heal the wound in the forestry and the industry itself. Each year, Indonesian forest was hit by the practice of illegal logging as a result of large capacity of production in the forestry sector. It was assumed that in the last five years that wood produced from illegal logging has reached 23,323 million of meter cubic per year. It has created the loss of state in the amount of 27 quintillion of rupiah per year. As in the phenomenon of gunung es, the real number was of course way bigger than that. In 2003, Department of Forestry itself has assumed that in the same year approximately 36,4 million of meter cubic were illegally log.
Although the Operation of Preserved Forest was able to repress the urge on doing illegal logging, however it was still considered a failure. Approximately each year, only 8 percent of wood as a production of illegal logging were succesfully detained.
Grafic 2. Comparison between illegal logging and haul
In the economy sector, the companies in the forestry sector with billions of dollar investment were not only causing misery for Indonesian people. Paradigm that put foreign and domestic investation in the front, has forced the people to subsidize productive areas they owned to the elites in the forestry sector. The improve of welfare hoped to occur from the trickledown effect, was in fact has turned its direction. People subsidize the state/entepreuneur. Flood, landslide, the emerged of new pest, conflicts of human– animals and the cut to access of forest as natural resources were parts of the impact of development in the forestry sector.
In 1998, more than ten conglomerates in the forestry sector were failed on paying their debts and that condition has urged the government to take over the debts, through National Banking Recovery Agency (NBRA), and considered them as state’s responsibility. Once again, Indonesian people have to bear the debt that weren’t theirs. Unfortunately, approaching the end of BPPN’s working period and in the effort of delivering any number of income for State Budget, NBRA further issued a policy of selling the non performing loan. Including non performing loan in the forestry sector. The value of selling the non performing loan at the moment was only 20 percent from total debt.
Table 2. The big ten of company’s debt in forestry sector
Thus, the government has given subsidy in the amount of 80% to the forestry debtor who bought the relevant non performing loan with a price of 20 percent of total debt. If the debt was Rp.100, then the debtor was only has to pay Rp.20. The remaining debt was bear by the Indonesian people. Unfortunately, at that moment the government has full authority in decreasing the capacity of production of companies that no longer owned the relevant HPH. However, it was never be done. Again, for a reason of the drastic reduction of foreign exchange of the state from forestry sector
All stories of the industry extraction based on abovementioned areas, have their relationship with the necessity of world market. Quite high demand from world market has urged Indonesia and the world markets to shut their eyes on what was happening in Indonesia.
Grafic 3. Export of Indonesian Gergajian Wood and Plywood, 2002
It was such a waste giving opportunities to the government to hold various initiatives in the framework of repairing the Indonesian forestry sector. The government’s initiative was never touched three fundamental issue faced by forestry sector: (1) lack of acknowledgement of people’s right, (2) corruption on every level and (3) the large gap between supply and demand.
1. LACK OF ACKNOWLEDGEMENT OF PEOPLE’S RIGHT
Since ages ago, in whatever history book in Archipelago, interaction between the people and forest as natural resources was always existed. Indonesian people in the beginning of their civilization has specific relationship with the forest, both as hunters or as collectors of ingredients gained form natural forest.
In the eldest record, fourth century, the first kingdom in Indonesia, Mulawarman, tribes in Kalimantan were living and forming an equilibirium relationship with natural forest suuround them. The large amount of ingredients and food mostly gained from the forest was basicaly the indication of the relevant correlation.
In 2000, CIFOR has predicted that around 48,8 million of Indonesian people were living inside and around the forest. Most of those people were practicing usahatani, both subsistence and comercial between gogo rice and yearly plant. Various forest products were also collected to be sold and consumed at home, including rattan, honey, resin, leaves and fruits that could be consumed, including wild animals and fish.
It was assumed that approximately 7 million of people in Sumatera and Kalimantan are depending on natural rubber plantation spreading in the area of 2,5 million of hectares. Only in Sumatera, almost 4 million of hectares areas were managed by local people in the form of various natural fruit plantation (that is plantation with various species of fruits merged with natural forest plants) without any help from the outside.
In spite of not having written certificate of the land, the indigeneous people understood the traditional form of managment as an inherited traditional right that was recognized specificaly in article 18 of Indonesian Constitution.
Although the government has recognized the existence of the society along with its control system of areas (regulated in Act No 5/60 regarding Agragrian matters and Act on Forestry Principal Regulation No 5/67 that further renewed with Act on Forestry Principal Regulation No 41/99), however it was also strictly stated that the opportunity in demanding the right of forest concession and ulayat right on the areas exceeding national interest was never permitted.
This could be understood. It was of course impossible to put one’s interest in the front of state’s interest. That was the logical issue. However, the “logic” issue became absurd when the paradigm of forestry development has emphasized it on the speed of foreign and domestic investment. The government has invited investors from almost everywhere to invest their money on Indonesian natural forest areas. Whatever logic was considered, of course it would never find the existence of local people who lived their simple lives around the forest and on the other hand still owned sufficiently large financial sources that could be benefited to managed the forest. The people were used to live and build the equilibirium with forest as their surrounding. Taking only what they really need. There was no intention in capitalising the profit from natural forest that has supported their lives.
Although the government was kind of hoping on the existence of trickledown effect of each activity made by the investor in the area, however this was never happened. In short time, people did feel it (despite the fact that one group of people has lost their land and its supporting economy). Tens of people were further able to run economical activities in the area. For example, distributing food or other needs, and gained an opportunity to get a job – despite the fact of educational issue, the people were only became labours. But still they gained economical profits. In short term, while the exploitation process was performing, the village has shown its heart beat. In long term, while the concession was ended, the forest shall lose its land vertility, the people shall lose their access to the forest comodity existed before the concession and it was often closed by horizontal conflicts, and new pest were emerging added by threat of flood and landslide.
Up until this moment, the government never at once corrected its background of thinking. Claim by the government was strictly regulated in the relevant regulation where traditional forest is state’s forest that happened to be located in the territory of traditional law society. Meaning, if there was a society who authorized and managed the forest long before the state was born and further intended to manage and take advantage of it, they should first ask for permission to its new ”owner” – the state – the government.
Once again, the mistake was that regarding status determination, the government has acted similarly with back then in the era of Netherland, without any due process or without any meaningful compensation. Hundred of hectares of forest were further claimed as state’s forest, and that lead to the condition that state (read: government) has all the right to transfer the hak guna atas lahan to the parties considered would give direct economical impact. Even though the determination process of state’s forest obligated limitation system of the areas in term of avoiding the possibility of overlapping with people’s areas. Although up until this very moment, the limitation system was only applicated to only less than 20% of the entire natural forest.
With such method of forced expropriation of natural forest resources from the society, it has led to the activity of extraction and creating various dimension of conflicts. The extraction of forest, that first was aiming to increase the people’s welfare along woth giving an extra value to economy development in Indonesia, finaly showed its failure for not achieving its firs aim, which was to increase people’s welfare. Basicaly, development in Indonesian forestry sector would be stated as successful if it was able to maintain its existence and the ecological support. And it would stated as a failure if its existence was not able to increase people’s welfare as one of its main goals. Don’t put the blame on anything if the jealous society further taking the last pieces of cake in group.
Law enforcement if forestry sector in Indonesia was not smoothly running. Although all the aspects related with forestry criminal acts were available: the institution of legal officers, officers and the regulations. The prime reason were colution and corruption, including the legal officers themselves. Corruption has spread in almost all levels of beucracy and the institution of court/police department. Since the era of Soeharto, corruption has got into the beaucracy system of this country and has become the leading authority of all illegal activities and political decisions. Nowadays, corruption has become the first reason of the lack of kaw enforcement in the forestry sector.
Decentralization of authority that was first hoped to eliminate the seed of separatism and decrease the jealousy of central – regional, turned into a place where corruption propagated. War against corruption was not as simple as it may sound, although it was very required. Corruption has given lot of people advantages and there were so many important actors involved.
Corruption was indeed has losen the trust of society toward state and has increase people’s opinion that the government has failed on bearing its role. Minister of Forestry in 2000 has stated:
”The spreading of corruption has urged many parties who has connection to hold illegal practices in forestry sector without any anxiety at all. The people who were involved including companies, civil government, legal officers and member of House of Representatives”
Corruption took place in the region has found its form when decentralization given the regent a full authority in managing its natural resources. The forms were various. It was mutualism relationship between regional government and company. The government has made the company an ATM regarding the necessity that could not be covered by Regional Budget, including personal interest. The company fulfilled the goverment’s interest and received repayment in the form of ease of licensing and security matter.
The relationship between company in forestry sector with other sectors (oftenly the ones who have connection with regional mass media) was far more complicated. The relevant company given a contract of wood distribution to the company experting in the field of mass media. As a substitution, mass media would be an effective media for the campaign on ”The Sustainable Development” conducted by the company. Including various social activities held by the relevant company. A party where Minister of Forestry in the era of SBY-JK came from was in fact had placed someone in the key position from one of the largest pulp and paper company in Riau, as a treasury. Was there any advantage taken from the position? The thing was that the relevant company was responsible for a large amount of debt and that condition has concerned the creditors of a possibility of losing their money if the company was stated bankrupt. The only way to make it pay the debt in credit was the access to the forest so that the enterprise would always have raw materials in term of delivering dollars. It might be predictable of how far this mutualism shall prevailed.
All forms of corruption and colution in the national level in the era of Soeharto, could be found in the smaller but wider scale in each region with forest as its natural resource. It was public’s secret that regent has given an amount of forest concession to guarantee the loyalty of his supporters, to fund his party’s activities and as a reward for hispolitical friends on the help he received so that he could sit in the top position. Corruption has also made the company capable in fulfilling its own necessity. In whatever forms. They were also able in hiring police and military department to repress the conflict they gained with society. The state’s officers that should have acted as a mediator in settling the conflicts, right now they are starting to help the company saving the company. Although if it means to violate human rights.
The involve of military and police department in the wood bussines was long intertwined. This scheme was the scheme played by Soeharto to guarantee their loyalty. It was also since the era of Soeharto that military and police department with private sector were mutualy influenced each other for doing jungle extraction. Military and police department has taken advantage with the presence of entepreuneur in the form of donation to buy a number of extraction tools that were indeed expensive at the moment. The entepreuneur taken advantage of the military presence for they were able to press regional government to ease on all matters along with assuring their access to the forest. Including acted as bodyguard if any conflicts occured with the people.
Police and military department in the level of soldiers has faced one issue related with the low salary they had received and the welfare level that was way below standard since ages. And the amount has reached hundred of thousand. It was obvious that they will not abandoned the opportunity when the company offered them what they couldn’t get from the state, even though it means of becoming company’s bodyguard. And when there was sufficient amount of capital, they would look for civilians to hold any logging activities in natural forest. Regardless the location. Nobody were brave enough to forbid it. The figures of military/police officers in the era of Soeharto were feared off for they did not want to be dealing with the institution that put muscle in front of brain, not for they being obedient to the regulation or government.
CHARACTERISTICS OF CORRUPTION PRACTICE OF BUSSINES
ON THE HOLDER OF IUPHHK ON NATURAL FOREST :
- Not holding the limitation system and arrangement of conservation areas,
- Not considering the importance of local society’s agreement regarding the implementation of limitation system
- Unseriously holding the activities on protecting the conservation areas in the concession areas
- The capitalization was not re-applied on the forest managment
- Not conducting financial audit by public accountant or financial report was not sufficient enough to be the basis on valuing the fund alocation regarding the natural forest managment
- Conducting capitalization and re-investment but never touched the issue of increasing the capital in the form of tegakan hutan
- Suspend the Reforestation Fund and the Provision of Forest as Natural Resources
- No longer proportionaly providing fund for the activities of forest managment
- Not holding any investment for the activities on the improvement of human resources and the managment of conservation areas
- Not making any work plan within certain period of time, both for long term plan and a five years plan.
- Various bussines corruption related with the measurement of growth, riap and Petak Ukur Pemanenan
- There was no compatibility between the plan of crop managment and the realization.
- Committment on the increasing role of the society and the provisioning of work opportunities were just a plan and a written committment
- Implementation on the role mechanism of the society applied unilateraly by the managment unit
- The working opportunity and training were only directed to the fulfillment of workers/labours and field operators.
CHARACTERISTICS OF CORRUPTION PRACTICE OF BUSSINES
ON THE HOLDER OF IUPHHK ON FOREST OF PLANT :
- Not arranging and settling the system of area limitation,
- Quantity and quality of installed pal batas, was not sufficient enough to guard limitation of right
- Ignoring the possibility of the existence of areas belong to local society or traditional society in the conservation area.
- Working areas system was only conducted unilateraly on paper.
- Leaving the local society behind and ignoring the potensial conflict with people’s areas in the system of areas in the field works
- Not settling the system of working areas up to the level of affirmation
- Not holding the marking of ineffective areas limitation and only holding the marking of effective areas limitation (block of yearly working plan).
Corruption was finaly had weakened the legal officers themselves. Cases that put regional government and large companies as suspects often dissapeared. Attorney General, police department and judges involved have used this situation to improve their welfare. Direct involvement of military/police department and indirect support from the government and other legal officers regarding this situation has succedeed in delivering the company to a position with very powerful influence to influence local politics and its jurisdiction. A senior forestry officer has admitted in 2001 that there were only less than 10 percent of forestry crimes could make their ways to court. Whether they were settled or not, it was another number.
In such condition, it would be hard for us to rely on the regulation to repair the forestry sector. Instead of makin an improvement, forestry sector was still attracted many parties to be exploited, from military, police officers, government authorities, member of House of Representatives and even the legal enforcing officers.
3. GAP BETWEEN SUPPLY AND DEMAND
Since the beginning, Indonesia has been designed to fulfill the necessity of raw materials and became a commidity to northern countries. The Letter of March 11th was not only given full authority to Soeharto, it was also a turning point where Indonesian economy was participated by the foreign. The northern countries were suddenly ordering on whatever activities that should be hold by Indonesia. Entering the 21st century, Indonesia was not only had to fulfill the necessity of northern countries, it was alos had to fulfill the necessity of China, Japan and India. Million of hectares of forest were opened and replaced with exotic plats and further extracted and had CPO, paper, plywood and gergajian wood as the outcomes to fulfill thier necessity. The reason of this situation was not only the abovementioned issue, but also the paradigm of economy development in Indonesia, based on the economical effort based on the areas and foreign exchange as the outcome of continuous extraction of natural resources that was maed as the indicator of economical development.
Post decentralization, the issue was getting more complicated. Policy of IPK in the amount of one hundred hectares was then used by the regional government not only for filling regional treasury but also to fill the cash of parties and as “remembrance” for its supporters. The issuance of Government Regulation No 32/2002, was not only being disobeyed but also being understood as one way of slipping off the regional authorities. It was soon that regional sentiment was put in front. Slipping off licences issued by the central government by giving larger license from the requirement and even on the areas that were previously burdened by rights.
Post decentralization was also marked by debt of forestry industry that has to be borne by Indonesian people. The burden that further urged the speed of extraction on Indonesian natural forest and conversion process from wood to money, has ease the increase of process of production capacity, expansion of concession and even became a star of the forestry industry itself.
Post decentralization was also provoked new issue regarding the coordination between central and regional. There were so many informations and changes in the uppercourse and downstream of the industry that were forgotten to be informed to central and that has led to the condition where the department related with the industry in forestry sector has issue a very large number, with large gap with the reality. Let alone the Department, even the province dinas has difficulty in knowing the Plan of Raw Materials Fulfillment existed in the level of regency.
Meanwhile, regarding the micro industry with wood as raw material, it was also not perfectly coordinate between the Department of Industral Affairs with Dinas in the region. There were so many reports regarding the industrial development that could not reached Jakarta and there were so many distortion of information between the Department of Forestry and the Department of Industrial Affairs, where the latter also had the authority in increasing the production capacity of industry even if it was relate to forestry sector.
With the chaos coordination, the forestry industry in the regions were keep on struggling. Part of it went into the regional cash and some other went into the pockets of the winning parties of the election.
Along with that, the damage in the Indonesian natural forest was increasing each year. In 1950 up to 1985, the number of damage has reached 32,9 million of hectares or equal with 942 thousand of hectares per year. The authorization of 70 percent of world plywood market in the 80s, has urged the loss of forest in the area of 45,6 million of hectares or with average deforestation of 5,7 million of hectares fores per year (1985 – 1993). This was the highest number of deforestation ever in Indonesia. As in the phenomena of gunung es, this number could be higher than what it may seem. Up to 2004, the critical land in the forest has reached 59,17 million of hectares and critical land outside the forest area has reached 41,47 million f hectares. Most of the damaged areas were spread along in 282 river basins .
Table 3. Gap Between Supply and Demand
Grafic 5. Comparison between capacity of production and demand in wood industry