Final Version
ENABLING FOREST USERS TO EXERCISE THEIR RIGHTS:
RETHINKING BARRIERS TO COMMUNITIES AND
SMALLHOLDERS EARNING THEIR LIVING FROM TIMBER IN
INDONESIA
Ahmad Maryudi
Prepared for
RECOFTC
The Center for People and Forests
Yogyakarta
February 2013
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ENABLING FOREST USERS TO EXERCISE THEIR RIGHTS:
RETHINKING BARRIERS TO COMMUNITIES AND SMALLHOLDERS
EARNING THEIR LIVING FROM TIMBER IN INDONESIA
1. Introduction
Indonesia has undergone gradual changes in the administration and management of
its forest resources. Being typified as a reference for a centralistic forest tradition and
exclusionary policy (Peluso 1992), the country began to devolve a certain degree of
authorities and management responsibilities to local communities and indigenous
groups through a number of community forestry schemes. Numerous official forest
documents, notably the 1999 Forest Law, political commitments from Forest
Ministry (e.g. Rusli 2003, Wardojo 2003) mention that the community forestry aims
to integrate socio-economic community development in forest management, that
local communities can obtain economic benefits for improving the welfare and
quality of life. Looking at the chronic poverty in forest regions in Indonesia, the
implementation of community forestry generates enthusiasms that the program can
contribute meaningfully to the efforts on poverty alleviation.
The policy changes favouring the rights and responsibilities of local communities
might not necessarily benefit them; particularly those directly depend on the forest
resources for their life (Larsson et al. 2010). Experience in some regions in Indonesia,
the implementation of particular community forestry schemes partially/
sporadically achieve the intended goals (Maryudi and Krott 2012). It is often argued
that the rights and responsibilities alone might not be sufficient for achieving
improved livelihood of forest users as well as sustainability of the resources (Dahal
et al. 2011). There are a set of enabling factors, such as regulatory frameworks,
governance systems and supportive institutions, that allow the community forestry
policy to optimally work in practice (ibid.). It is however indicated that community
forestry users in Indonesia face with numerous legal requirements, administrative
and technical barriers to meaningfully benefits from the resources (for instance see
Maryudi 2012). The people are often constrained in exercising their rights as
formally promised by the community forestry.
This study aims to identify, analyze and address key constraints of rural
communities in exercising their rights which are considered as key factor to
improve their livelihood and alleviate rural poverty. The key constrains here
include both formal regulatory frameworks and informal environments (e.g.
corruption). It is argued here that the regulatory barriers reduce the viability of
community forestry and smallholder forestry. This study assumes that the more
benefits that communities and smallholders obtain from forest management and
utilization, the more incentives for them to improve and sustain their productive
base leading to improved forest condition and environmental services. The study
proposes uses rights and tenure as the entry point for generating sharing improved
knowledge on the scale of the current impacts, with particular reference to costs of
missed opportunities through restricting rights, governance and market access
issues. It is mainly based on literature review and policy analysis on forest
administration and management as well as community forestry development in
Indonesia.
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2. Overview on forest resources, forest-dependent people and tenure
arrangement
Forest resources
Indonesia adopts clear separation of forestland from non-forest areas (e.g.
agriculture), reflecting the tenurial separation of state domain from private
property. Particularly since the end of 1960s, the government gazetted
approximately three quarters of the country’s landmass as “Forest Zone” (Kawasan
Hutan), which is under the state domain (McCarthy 2000, Barr et al. 2006).
According to recent official data, the Indonesia’s forest area spans about 131 million
hectares, approximately 100 million hectares of which are indicated as forested
(Ministry of Forestry 2012).The forests are now designated into three main
categories accordingly to the biophysical characteristics and the usages, as follow:
1) Conservation Forest: the forest that accordingly to its characteristics is
designated for biological and ecosystem conservation. The forest includes
Strict Nature Reserve and Wildlife Sanctuary, National Park, Grand Forest
Park, Nature Recreation Park, and Hunting Resort.
2) Protection Forest: the forest with main function to protect life buffer system
to arrange water management, prevent flood, erosion, prevent brine water
intrusion and maintain land fertility.
3) Production Forest: The forest with main function to yield forest products.
Production forest is further classified as permanent production forest,
limited production forest, and convertible production forest.
Table 1. Indonesia’s forestland, year 2011
Forest categories
Million hectares
1. Conservation forest
21.23
2. Protection forest
32.21
3. Production forest
34.14
- Permanent
22.82
- Limited
20.88
- Convertible
Total forest area
131.29
Source: Forestry statistics of Indonesia 2011 (Ministry of Forestry 2012)
In the national economy, forestry and the wood-based industries have long ranked
second only to petroleum and natural gas industry in terms of the contribution to
Gross National Product. The sector generates approximately USD 6-7 billion in
formal revenues annually, with further USD 1 billion from informal revenues
associated with illegal logging and unreported exports (Barr et al. 2006). The annual
share of wood products to the total export earnings is estimated about 15%
(APKINDO 1998). In addition, forestry and the forest industry provide direct
employment of more than a million people and many more are in indirect
employment (Hasan 1991, Massijaya and Kartodihardjo 1999).
The significant contribution of forests and forest-related industries is due to the
commercial exploitation of the forest resources and the establishment of vertically
integrated processing industries. As a result, Indonesia has become a major player
in the global markets. As an illustration, of the total world tropical plywood exports,
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Indonesia’s share increased dramatically from around 7% in the early 1980s to more
than 75% in the early 1990s (Lyons 1995). Despite, the massive depletion of the
resources, forestry sector and the industries are still regarded as a major contributor
to the national economy.
Forest-dependent people and smallholding forest owners
The dependence on forest resources for the livelihood of local people in Indonesia
has been documented (Vayda 1997). However, data on the number of forest
dependent people remain rough estimations. This is because the uncertainties about
who constitutes forest dependent people and where they can be found (Byron and
Arnold 1997). Some studies refer to the number of people who are totally dependent
on forests deriving their entire subsistence from forests, while others include anyone
who ever makes any opportunistic uses of forest resources (ibid). Other analysts
point to those dwelling in the close proximities to the forests (Lynch 2006), while the
close proximity is not synonymous to forest dependence (Byron and Arnold 1997).
Nonetheless, estimations are still valuable for analysing the impacts of forest
management practices on the livelihood of rural communities. Estimates of the
number of forest dwelling people in the Outer Islands reach as high as 70 million
(Sunderlin et al. 2005, Lynch 2006), living in more than 30 thousand villages
(Rahmina et al. 2011). In Java, the most densely populated island in Indonesia, high
estimations on the number of forest dependent people are also expected. A large
fraction of the island’s total population of about 140 million people, live in rural
villages and depend their on agriculture-related activities for their livelihood (Badan
Pusat Statistik 2010). In addition, there are approximately 6 thousands forest
villages in the island (Peluso 1992). Bearing in mind the high estimation of forest
dependent people, tenurial stability is important for forest dwellers to secure their
livelihood (Lynch 2006).
Forest tenure and administration
Forest tenure and administration represent the overwhelming hegemony of the state
over the forest resources; the state claims the custodian the forest and controls its
allocation and management. Such is based on the legacy of centralistic control laid
in the colonial era, during which the Dutch controlled over “all land that could not
be proven to be owned (individually or communally) by villagers” (Peluso 1992).
The state’s control over the forest resources is drawn in the 1945 National
Constitution, principally the Article 33, which stipulates that the natural resources
are to be controlled (dikuasai) by the state.
In the early independence, the government created Forestry Bureau (Djawatan
Kehutanan) to assume the control over (initially) the forestland of Java that have
been demarcated and clearly separated from private land by the Dutch (Barr et al.
2006). The administration of the forests was later handed over to the state forest
company Perhutani (hereafter referred to as Perhutani) in 1972. 1 Meanwhile, the
1
Initially only the forests in Central and East Java, but later in 1978 the forest of West Java
was added into the administration of Perhutani
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vast majority of forested areas in Outer Islands2 were used and managed by local
communities, many of whom have implemented customary rules, locally referred to
as Adat3 (Barr et al. 2006).
Adat systems remain complicated in the Indonesian land and forest tenure
arrangements. Article 18 of the Indonesian Constitution implicitly recognized adat
rights and institutions. To a certain degree, the systems are also acknowledged in
the 1960 Basic Agrarian Law, which states “indigenous law shall be recognized,
providing this does not contradict national and state interest.” Later, the absurd clause of
“national and state interests” appeared being used by the government to assume
control and ownerships of the whole country’s forests including the vast natural
forest resources in the Outer Islands (Contreras-Hermosilla and Fay 2005). The
Basic Forestry Law was enacted in 1967 to secure the state’s legal-regulatory control
over the nation’s forests (Barr et al. 2006). The Law appeared to supersede the 1960
Agrarian Law; it defined that all forestland that is un-owned (unencumbered by
private rights/ titles, tidak dibebani hak atas tanah) automatically designated as Forest
Zone (state forestland). This includes the forestland used by Adat communities.
The significance of the classification of the “Forest Zone” is central to the public
versus private legal debate over management priorities for these lands (ContrerasHermosilla and Fay 2005). The “Forest Zone” is eventually managed under a set of
restrictions usurping local rights and uses (ibid.). Webb (2008: 26) argues that “the
immediate or short-term impact of centralization policies was the that traditional
forest users were labelled as illegal and their activities were deemed to the contrary
to the objectives of state management, regardless of the state’s objectives”. The
centralistic control to a large extent impacted the livelihood of the forest dependent
people4. At best, their collective tenures were treated as weak rights of usufruct
(Colchester 2002).
The period of reform around the end of 1990s, following the economic crisis that led
to the step-down of New Order Regime- generated hopes on the changes in the
constelation of power in forest governance. Initially, the central state started to
devolved several rights and responsibilities to the lower governments through a
pair of Laws, No Law 22/1999 on regional governments and Law 25/1999 on fiscal
balance between the central and local governments (provincial and district). Both
laws were expected to be implemented in the forestry sector. However, the
enactment of the 1999 Forest Law a a couple months later dashed hopes on
decentralized forest management and utilization as it reaffirms the dominant role of
the Ministry of Forestry (Barr et al. 2006). Government Regulation No. 34/2002, the
principal implementing regulation of the Forest Law, further enhanced the position
2
3
4
Refers to all islands outside the densely populated islands of Java and Madura.
Adat refers to “the cultural beliefs, rights and responsibilities, customary laws and courts,
customary practice and self -governance institutions shared by an indigenous group prior
to incorporation into a colonial or post-colonial state.” (Contreras-Hermosilla and Fay
2005)
The concept of ‘forest dependency’ is highly problematic as those live in urban areas
can be considered to being forest dependent people. Nonetheless, the focus on those
directly reliant on forests for livelihood purposes is the more popular use.
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of the ministry since it recentralized regulatory control over the harvesting,
processing, and marketing of forest products, particularly timber (ibid.). With the
Forest Law, the central state resumes the ownership of the forestland at their
domain.
Nonetheless, post-New Order era has seen emerging articulation of how forest
communities, instead of local governments, can access the forest resources. As
earlier said, the government has formally launched community forestry program
with the implementation a number of different schemes. This is a major step
forward compared to the “experimental”5 community forestry practices between
1970s-mid of 1990s. The trajectory of community forestry in Indonesia will be
discussed in the following section.
3. Community forestry in Indonesia: From experiments to formal policy
Since the 1978 World Forestry Congress themed Forest for People, there has been a
gradual shift in perspectives regarding the role of communities and forest
management including Indonesia. However, it was until the 1990s that the
government formally launched policy on community forestry. Prior, access on the
state forest resources was limited to, at best, usufruct rights.
This was particularly practiced by Perhutani in the management of Java’s forests
(community forestry practices by large-scale forest concessionaires in Outer Islands
is presented in Box 1). A
number of forest access
Box 1. Community forestry practices by large-scale forest
schemes
were
concessionaires in Outer Islands
experimented, but most
Community forestry in state forestland in Outer Islands managed
of them centered on the
by forest concessionaries also represented limited articulation of
temporal uses of forest
genuine pro-people practices. In 1991, Program Pembinaan
floor for agricultural
Masyarakat Desa Hutan (PMDH/ Forest Communities Development
cropping
(Lindayati
Program) was introduced to provide platforms for the
2000,
Mayers
and
implementation of community forestry in the forests. The program
aimed to create self-reliant, prosperous, and environmentally aware
Vermuelen
2002,
forest village communities (Lindayati 2000). It obliged companies to
Bratamihardja et al. 2005,
support activities which contribute to the socio-economic
Maryudi
2011).
The
development of forest communities and required them to allocate
experimental
schemes
some of their annual budget to prompt village economic activities
and infrastructure development.
received
strong
criticisms
due
the
lack
of
This program only provided the communities with minor and
short-term assistance since the companies only focused on
genuine involvement of
particular villages within their annual working compartments
rural people in decision
(Wollenberg et al. 2004). This means when they moved to another
making procedures and
annual logging compartment, the activities in the previous
for the limited schemes
compartments were abandoned. In addition, there was apparently
no genuine willingness of forest companies to implement the
to
improve
the
program. Some argue that they adopted PMDH only to avoid
livelihood of the people
penalties of not obtaining government’s approval for logging
(Sunderlin et al. 1990,
operations. Due the limited continuity, the program can thus be
Peluso 1992, Lindayati
argued has virtually faded away.
5
Not formally legislated
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2000).
In 2001 Perhutani introduced its new community forestry program under the
scheme of collaborative forest management of Pengelolaan Hutan Bersama Masyarakat/
PHBM6. The scheme serves as a generic model implemented for all forests under
the administration of the state forest company. It rests on (supposedly) joint forest
management between Perhutani and local community institutions — usually at the
village level — that formally encourages both parties and other interested
stakeholders to share roles in decision making processes, the implementation of
forest activities and eventually the benefits from the forests.
In PHBM, the management rights over the state forestland remain at the possession
of Perhutani. It also maintains the main feature of access on the forestland for
agricultural cropping for forest users. The major advance is the schemes of benefit
sharing, i.e. shares from the sales of main forest products, for the groups of local
people. The benefit sharing mechanism was initially lauded as one of the major
improvements in community forestry practices in Indonesia (Kusumanto & Sirait
2002, Lindayati 2000), and is expected to provide major boasts for efforts on
alleviating the poverty of local people.
Table 2 Ministerial Decrees and Regulations on HKm
Ministerial Decrees
Key Features
& Regulations
No. 622/ 1995
No. 677/ 1998
Long-term community empowerment and rights in forest
management; access to harvest only non-timber products
The farmers as a group granted Utilization Permits, lasting for 35
years; farmers allowed to harvest forest products (including
timber); prescribing establishment of a single community
institution; never been implemented
No. 865 / 1999
Aimed to improve some practical weaknesses of the previous
decree but apparently no fundamental changes; elaborating
Forestry Law No.41/1999
No. 31 /2001
Elaborating decentralization law; Local governments authority to
grant CF licenses; Prescribed that CF to be implemented in
protection and production forests, and prohibited in conservation
forests; Reduced the duration of CF rights to 25 years
No.1 /2004
Utilization rights, instead of ownerships; in practice, the promises
have yet to be realized
More progressive schemes occurred in a small fraction of state forestland
unencumbered by any other rights or concessions; local communities are handed
with long-term management rights as of the utilization rights granted to large scale
companies. The handing over of such rights involved long advocacy and
uncertainties. The first formal arrangement was the introduction of Hutan
Kemasyarakatan/ HKm (Community Forestry) in 1995 through Ministerial Decree No.
622. This program is generally aimed to rehabilitate degraded land and/ or to
protect conservation areas while providing locals with economic opportunities.
6
Can be literally translated as “managing the forest with the people”
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Following the aforementioned downfall of President Suharto, community forestry
appeared to gain momentum as the Minister of Forestry and Estate Crops brought
the popular rethoric of “Forest for People”. The Ministry then took a concrete
initiative by issuing Decree No.677/1998, which conferred on target beneficiaries
long-term usufruct rights for subsistence and income generation. However, the
ensuing events have seen the back and forth process due to a serial of HKm
regulatory changes (Table 2), centering on the contestation between central and
local government over the authority to issue forest licenses, and over the rights of
customary communities in forest resources (Colchester 2002, Maryudi 2011).
In 2007, Government Regulation PP No.6/ 2007 was issued to provide a platform
for community forestry. This regulation was used as the principal implementing
regulation under the Forestry Law 41/1999. PP6/2007 introduced the current set of
formal community forestry arrangement, including three new schemes in addition
to HKm, i.e. Village Forests (Hutan Desa), People’s Timber Plantations (Hutan
Tanaman Rakyat – HTR), and Company-community Partnerships (Kemitraan). HKm
scheme, which has been started in 1995 is added to the schemes, so that community
forestry in unencumberred state forestland include HKm, HD, HTR and Kemitraan.
The scope and conditonalities of HKM, HD and HTR are tabulated below (Table 3),
while Kemitraan scheme is regulated accordingly to individual agreements between
company and community.
Table 3. Arrangements for HKm, HTR and HD community forestry schemes
HKm
HD
HTR
Scope
Group or cooperative
use rights over:
 Timber from
planted trees only,
in Production
Forest
 Non-timber forest
products.
 Environmental
services.
Village management
rights over:
 Timber from both
natural and planted
forest, in
Production Forest
areas.
 Non-timber forest
products.
 Environmental
services.
Conditionality
Use subject to
separate business
license. Not alienable,
cannot be
collateralized.
35 years
Use subject to separate
business license.
Individual or cooperative
use rights in Production
Forest, under three
different models:
 Independent,
established at own
initiative and cost.
 Partnership or joint
venture with plantation
company.
 Led by a company
under an outgrower
scheme.
Use rights granted at
outset. Not alienable, only
planted trees can use be
used for collateral.
Duration
100 years
60 years
Source: Adapted from Royo and Wells, 2012
There are major differences on the objectives and the targets of the three schemes
that will have implication on how local people/ communities access the forest
resources. HKm principally aims to empower local communities (individuals), to
improve their ability to sustain their livelihood through improved access and
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optimal uses of forest resources. HKm community forest is expected to become as
the main source of livelihood of the communities. The target of the scheme is
individuals who are considered as dependent on the forests, although in obtaining
the HKm license the people have to organize themselves in a community forestry
group (This is discussed in the next section). The individuals do not neccessarily
come from the same village. Unlike, the targeted beneficiaries of HD scheme is the
village institution. HD is implemented in state forest within village boundaries, to
foster the village development and to improve the prosperity of the people within
the village. It remains unclear how the benefits from the forests are eventually
distributed.
While HKm and HD focus on the livelihood of local people, HTR schemes aim to
encourage local people to engage in more financial-oriented forest practices to
accelerate the development of timber plantations. This scheme was principally
driven by the slow progress of large-scale/ industrial plantation forests (Hutan
Tanaman Industri). HTR is expected to increase the domestic timber supply for the
national forest industries. HTR has a range of targets, i.e. individuals, households/
families, groups of local people, cooperatives and local government-owned
enterprises.
The community forestry schemes allow communities access to forest resources, and
give them the right to exploit and benefit from timber and non-timber resources. In
addition, communities can exclude others from using their forest resources. The
long-term rights granted means that the forests are effectively held by the
communities, close to close to ownership rights.7.
However, securing the rights do not neccessarily mean the community forestry
grantees have the actual access and the ability to use and benefit the forest
resources. Ribot and Peluso (2003) distinguish access as “a bundle of power”, from
property as “a bundle of rights”. Therefore, the actual ability to use the forests is
they key whether the existing community forestry schemes in Indonesia enable
smallholders and local people earning their livelihood from the forests. Some
studies (e.g. Maryudi and Krott 2012) reveal that in some regions local communities
are experiencing with difficulties in accessing the forests despite being granted with
community forestry rights; details discussed in the next two sections.
4. What prevents the progress of community forestry?
The previous section reveals the clear regulatory frameworks on community
forestry in Indonesia. However, progress in in implementing community forestry,
particularly in unencumbered state forest land has been slow and falls short of the
targets. Overall by the end 2011, the total area of forest land has been transferred to
local communities is less that 30,000 hectares, while the land that has been approved
to be designated for the communities is less than a million hectares. Such represents
a tiny fraction of the state forestland. Even for the communities already securing
community forestry rights, there is limited evidence on the improved access to the
forests local people can have. As the arguments to follow, applicants of community
7
According to the definition by Right and Resource Initiatives
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forestry face a number of legal and technical barriers, such as tenurial uncertainties
and complex licensing procedures. In addition, there are external environments, e.g.
markets and informal institutional environment that reduce the the access to and
therefore limit the benefits from the forest resources.
4.1 Legal and technical barriers
Tenurial uncertainties As outlined in the section of forest administration, there is
an ambiguous tenurial system is Indonesia, principally in regard to indigenous
rights. While the Basic Agrarian Law recognises traditional practices as a form of
tenurial system, the new Forestry Law continues to consider the forest areas where
indigenous groups dwell as (state) Forest Zones. Royo and Wells (2012) argue that
the definition of state forests in Forest Law – which is the land without any titles
attached, contradicts with the fact that the land registration system does not
explicitly exclude titling of collective rights.
Obidzinski and Dermawan (2010) argue that the land tenure issues will have a
significant consequence given the magnitude of the targeted expansions of
community forestry. The implementation of the community forestry schemes under
Government Regulation PP No.6/ 2007 (HKm, HTR, HD) particularly rely on the
availability of state forest areas that are not under any other licences. It is said that
the state forest land that are potentially designated for the community forestry
reaches as much as 40 million hectares (Hindra 2006).
However, such sites are extremely hard to find (Kartodihardjo et al. 2011). A study
on the HTR-designated areas in North Sumatra indicates the discrepancies between
the actual land conditions and official qualifying criteria for indicated HTR sites
(Noordwijk et al. 2007). Only a small fraction of HTR-designated land is considered
as clear (Obidzinski and Dermawan 2010). Although the allocated land is resulted
from so-called Forest Land Use Consensus Plan (Tata Guna Hutan Kesepakatan), there
are often other activities on the land, such as residential areas and agricultural sites.
Without proper and transparent delineation process, the community forestry is
vulnerable to land and resource conflict and poses significant risk of instability
(Royo and Wells 2012). Even the clear sites are available; they are often too far,
scattered and fragmented, making it less attractive financially because the likely
increased transportation costs (Obidzinski and Dermawan 2010, Kartodihardjo et al.
2011). That leads to the limited interests on the scheme (Kartodihardjo et al. 2011).
In terms of tenurial arrangements, the existing schemes under Government
Regulation PP No.6/ 2007, principally HTR, arguably offer tenurial security, quite
close to the ownership rights as defined by Rights and Resources Initiative
(Sunderlin et al. 2008). However, uncertainties remain.
According to the
implementing regulation (Permenhut 23/2007 art. 15), HTR permits cannot be
traded, transferred or inherited, therefore limiting household management options
(Obidzinski and Dermawan 2010). HTR is a risky investment due its long-term
nature and uncertainties in the future markets. Thus, the uncertainties over the
future tenurial rights might dampen the enthusiasm of local communities to engage
in HTR plantation (Schneck 2009).
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Complex licensing procedures Another account associated with the slow progress
of community forestry is the complex licensing process. For the three community
forestry programs under Government Regulation PP No.6/ 2007, a number of
Ministerial Decrees have since been issued for establishing licensing procedures for
the community forestry arrangements, including processes for prior determination
of suitable sites for HKm, HD and HTR.8 Licensing is said neccessary for ensuring
the tenurial rights the people that they can exclude non-grantees from accessing and
using the forests once being granted with the licences (Muttaqin 2010).
It is argued that the legal frameworks community forestry licensing processes are
designed to be simpler than those for large-scale industrial forestry (Kartodihardjo
et al. 2011). Two General Directorate regulations (Perdirjen No.10/2010 and
Perdirjen No.11/2010) promise to proceed the application for licenses of the three
community forestry schemes under Government Regulation PP No.6/ 2007 within
60 days (for HKm initially 90 years).
Figure 1 Procedures of IUPHKm licenses
Application, with the following documents:
- Approval from village administration
- Sketch of the forest
Step 1
User groups
Step 4
Approval for
IUPHKm
Step 6
District major/
Governor
Step 3
Step 2
Approval for
IUPHH
HKm
Step
4
Application with
digital map of
designated forest
(Function, total area,
slopes, ground cover,
dependence of the
people)
Forest Minister
Application for IUPHH HKm, with the
following documents: Formal business unit,
management plans
In fact, the process takes longer time. The average time needed is about a year, with
a case in Jambi even needed approximately three years (Partnership Program 2011).
This is because the processess are technically demanding, and involves transaction
costs. The lengthy processes were in part to the examination on whether the groups
are of the competences for managing the forests (Maryudi 2011). In addition, local
8
No. P.37/Menhut– II/2007 and No.P.18 /Menhut-II/2008 on HKm; Permenhut
No.P.49/Mehut-II/2008 on Hutan Desa; Permenhut No.P.23/Menhut-II/2007, Permenhut
No.P.5/Menhut-II/2008 and P.55/Menhut-II/2011 on HTR.
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communities in rural areas have to deal with a number of different governmental
institutions at sub-district, district and provincial levels as well as the different
directorates at the Ministry of Forestry, which are often beyond the reach of people
in rural communities (Figure 1 gives an example of the complex procedures for
HKm application). A particular concern is when community forestry is not the
policy priorities of the institutions. Andriyanto et al. (2006) found that a number
of district governments have yet to place poverty alleviation and community
forestry as their top priority.
Regarding the transaction costs, formally no costs are involved in the licensing
processes. However, informal fees and payments are indicated to occur during the
processes (see Noer 2011). In addition, significant costs are involved in the
preparation of the application. Experience from HKm grantees in Yogyakarta
suggest that, despite the assistance and facilitation from an NGO, it took nearly a
year to prepare the management plan. The process involved the development of the
group constitution and internal rules, forest delineation and mapping, forest
inventory, and documentation & reporting.
It is suggested that a facilitator used to assist three HKm groups with the total HKm
area of around 15 hectares per group (Exwan Novianto, an HKm facilitator,
personal communication 25 February 2013). A facilitator was paid around two
million IDR9, so assisting three groups cost around 24 million IDR (8 million IDR/ a
group of 15 hectares). In addition, conducting inventory and mapping of 15 hectares
HKm cost roughly 10 million IDR. Data processing, documentation and reporting
further cost 2 million IDR (ibid.). Overall, preparing a management plan for a group
of 15 hectares cost roughly 20 million IDR.
The licensing process is further complicated by two-layered processes; management
rights and (timber) utilization rights are distingusihed, meaning that the people
have to deal with two sets of application procedures before before being able to cut
timber from the forests. This regulation applies for HKm and HD schemes. Before
secure the utilization rights, HKm and HD grantees are only permitted to use the
forestland and harvest non-timber products. The problem the people face is that
there is only few non-timber products in the forests, as the case of HKm in
Yogyakarta. This in part suggests the schemes, which both are focusing on people’s
livelihood is less-prioritized than HTR, which is more financial oriented. In fact, in
HTR scheme the right to timber is bundled with the principal permit. In addition,
the government has allocated more financial support for the HTR grantees (see
Section 4.2). Even so, as regulated in Ministerial Regulation P.55/Menhut-II/2011,
HTR has set the maximum size to 900 hectares, meaning that communities seeking
to manage larger areas will need to apply for multiple permits (Royo and Wells
2012).
Management & business plans as technical barriers Of the existing schemes under
Government Regulation PP No.6/ 2007 require the development of management
plans, for both management and utilization rights. The plans usually cover both
9
1 USD is roughly equivalent to 9500 IDR
Page | 11
strategic and tactical activities to be implemented in the respective community
forestry schemes. It is suggested in Article 27 of the Forest Ministerial Decree
No.37/ Menhut-II/ 2007 on HKm that the management plans will be used for the
reference for the HKm grantees in conducting the forest activities and as a means of
control by both central and local (provincial and district) governments. In addition,
the people have to carry out forestland gazzettement and mapping as well as
preparing reports of forest activities to the government. Further, before being able to
make use of timber and other products, communities are also required to business
licenses - in addition to the permits granting them rights in an area (Royo and Wells
2012).
Looking at the limited capacity of forest users (in most cases possess limited
education) and poor documentation, the requirement pose a great deal of
challenges. Here, costs of producing management and business plans are a
bottleneck (the estimation has been discussed in the previous section). The
communities already securing HKm and HD licenses were assisted by NGOs
through donor-funded projects (Maryudi 2011). Kartodihardjo et al. (2011) point to
the nearly non-existent assistance from the forest service/ officials to the local
communities in obtaining the permits. For HKm scheme, Ministerial Regulation
P.37/ 2007 stipulates that facilitation on developing groups, creating management
plans and empowerment must be carried out by district and provincial
governments.
However, local governments are yet to show meaningful roles in accelerating the
implementation of the community forestry scheme. The limited human resources
and budgets is often cited as the main reason (Partnership Program 2011). Local
governments often see the schemes as the program implemented by the central
government (Ministry of Forestry), to which they have no structural
responsibilities.10 Further, the community forest schemes are perceived to offer
limited investment opportunities to boast the incomes for local governments (ibid.).
Limited access rights The current implementation of most of community forestry
schemes in state forestland (both Perhutani-PHBM and the three schemes under
Government Regulation PP No.6/ 2007) has yet to enjoy major forest products
(notably timber). In PHBM-scheme, instead of cutting trees, the farmers are given a
share from sales of timber and/ or main forest products.
In teak forest, the participating groups are given 25% of timber sales, while in pine
forests the group are given 25% of timber sales and 5% of pine resin sales11. Whether
the forest users enjoy the share depends on the current potential of the forests and
the distribution of the money within the group. In most cases, community forest
activities focus on rehabilitating the forests (reforesting the land) and improving the
security of the forests. Harvests are rare, if not non-existent, given the generally
10
Local governments are responsible to the Ministry of Intern Affairs
The share is corrected with a coefficient of rotation of harvested compartment divided by
the running year of the agreement. For example: an 80 year old compartment harvested in
the 5th year of the agreement, the share received amount to = (5: 80) x the sales.
11
Page | 12
young forest structure, meaning limited money has been splashed out. The limited
inflow funds are usually used for constructing community forest related building
and facilities such as group offices (Maryudi and Krott 2012). Of few cases on large
amount of money given to the communities, due to rich and mature forests, only a
small fraction is given to the people. Most of the money is used for buildings,
committed to associations at sub-district and district levels, or even returned to
Perhutani’s officers for forest management activities, including forest patrols (ibid.).
In the other schemes, timber cuts are theoretically allowed (Maryudi 2011, Royo and
Wells 2012). In HD scheme implemented in production forests, timber cuts are
permitted although a 50 m3 limit is set, regardless the size of the forests and the
member households. The limited allowable cut cannot make up the long and
complex harvest permits that might involve high transaction costs12.
In HKm, farmers are only allowed to cut planted trees. However, up to date, the
farmers are yet to be able to cut trees. Even the farmers have met the requirement
and have applied for cutting licenses; the government has yet allowed the farmers
to cut trees that they have planted. The government is still exercising how the sales
are distributed to the government and the people (see Djamhuri 2008). It is quite
remarkable as the trees were fully planted and nurtured by the people. The
government argues that it contributes in the tree planting in the form of forestland
(Djamhuri 2008).
Only HKm communities in Yogyakarta (a total of approximately 1,200 hectares)
have recently been granted cutting rights, only for one year. This was made possible
through long dialogues and advocacy culminated in the end of 2012 when the
Forest Minister visited the forests, checking the forest conditions and the people’s
competence. Rumours circulate that such is political move by the Minister, a
politician, to raise the votes for his political party in the national election, held in
2014. Such a visit is unlikely to be made in all community forestry grantees across
the country. The cuts in the following years remain in doubts. It is thought that the
ministry of forestry will require the farmers to submit an annual application each
year (Exwan Novianto, HKm facilitator, personal communication 25 February 2013).
Institutional simplication As earlier outlined, customary communities and
practices remain unacknowledged in the national forest policy. This can serve as
barriers in the implementation of Hutan Desa scheme. Since the enactment of Law
on Village Government No. 5 in 1979, the government has imposed uniform
administrative systems across the country, dismantling customary systems in the
forested areas. Particularly in many regions of Outer Islands, spatial planning and
models of village administration s remain under developed. Therefore, the
implementation of HD can encourage micro political tensions between formal
villages (as the representation of the government at the micro level) and the
customary rules. In addition, it is important to ensure the distribution of benefits to
12
Formally no costs involved, but preparation of the application certaintly does. As there is
yet harvest cases from HD, the costs cannot be presented. Nonetheless, estimations have
been presented in obtaining management rights/ licenses in the section of complex licensing
processes
Page | 13
the whole population in the villages. Unclear rules on the distribution of benefits
can encourage the captures of most of benefits by elites in the village administration.
4.2 Financial barriers
Local communities are also experiencing with financial burden in implementing the
community forestry schemes. As previously described, before being permitted to
cut trees, community forestry grantees have to prepare the management plans,
conducting forest gazettement and mapping, and reporting. The problem is the
limited financial support from the government. For instance, only USD 5.7 million
(in the form of grants) had been allocated for assisting HKm and HD grantees in
preparing the management plans whereas the actual cost may be in the region of
USD 27.8 million for total of 500,000 hectares, as targetted (Royo and Wells 2012).
More financial support is provided for HTR. As previously said, this scheme is
preferred by the government due the objectives of fullfilling demand for the
national timber industries, and also involves large business entities. The Ministry of
Forestry has established the Forest Development Funding Agency (Badan Layanan
Umum Badan Pembiayaan Pembangunan Hutan) to support the development of HTR
plantations. The HTR grantees can access the government HTR fund of around
USD5 billion derived from the Reforestation Fund (Dana Reboisasi, DR) from 2007
through 2016. Loans are provided with the interest rate will follow the rate set by
the Indonesian Deposit Insurance Corporation (Lembaga Penjamin Simpanan, LPS),
which is generally lower than the commercial interest rate (Obidzinski and
Dermawan 2010).
However, few HTR grantees have been able to access the financial support. One of
the reasons is the complicated procedures in accessing the funds. In fact, the
funding agency does not have regional offices, meaning that the grantees must
apply directly to Jakarta office (Kartodihardjo et al. 2011). There is an absence of an
intermediary institution (the funding agency does not have offices at the regional
levels) with the capacity to nurture and aggregate HTR groups at a scale capable of
absorbing the financing schemes (Royo and Wells 2012). It is argued it is unlikely
that applicants particularly under the independent scheme will be able to access the
subsidized funding from the Ministry of Forestry due to complicated application
procedures (Kartodihardjo et al. 2011).
There are also concerns on the financial feasibility, particularly for HTR scheme,
whether the financing schemes are enough to meet the true cost of set-up and
maintenance (Schneck 2009, Obidzinski and Dermawan 2010, Royo and Wells 2012).
Schneck’s study (2009) on 22 proposed HTR sites reveals the negative Net Present
Values under the predicted base-case prices. This means that HTR is unattrative as
the HTR will basically costs more than the fiancial benefits.
As for smallholding tree planting in private lands (Hutan Rakyat), despite its
significant contribution to the national timber industries, financial support is rarely
provided. Indeed, there a number of financing schemes (from commercial banks) for
micro, small and medium-sized enterprises. However, the financing schemes are
rarely accessible to them because commercial banks are rarely convinced with long
nature of tree growing. In addition, the tree growers are usually required to provide
their land title for the collateral bond before accessing any loans/ credits. Although
Page | 14
their ownership over land is widely acknowledged, smallholding tree growers
rarely posses the land title13. The absence of land title is a key constraint to people’s
access to financial credits.
5. Constraints in timber harvests, transports and marketing: Regulatory
and informal environments
To date there is yet harvests of timber from the community forestry schemes in
unencumbered state forestland (HKm, HD and HTR). Harvests from community
forestry in Indonesia are all from smallholding private tree farming. Therefore, this
section only analyzes smallholding private tree farming, although the associated
regulations also apply other community forestry schemes when they start to
produce timber.
Outside the Forest Zone, tree planting has been practiced spontaneously by rural
households in Indonesia. Principally in the country’s most densely populated island
of Java, rural people have been practicing agro-forestry, planting trees mixed with
seasonal crops in their home garden and farmland -locally referred to as Hutan
Rakyat. The land on which small scale tree farming is outside the juridiction of the
Ministry of Forestry as it is outside the Forest Zone (state forests). Instead, it is
under the domain of the National Land Agency (Badan Pertanahan Nasional, BPN).
The administration of the land is by district governments, whose forest service
(Dinas Kehutanan Kabupaten) usually deals with private tree farming. However, the
Ministry of Forestry also regulates the practice. The Indonesian Basic Forest Law
(UU No. 41/ 1999) recognises the forest practice, which classified as Hutan Hak
(private forests).
Recent figures indicate the huge potentials of small-scale tree planting. Principally
in Java Island, it is indicatively estimated that there are more than 2.5 million
hectares of smallholding tree growing in private lands (Suprapto 2012). The annual
timber production from the forests is estimated more than 5 million cubic meter,
accounting to more than a half of timber supply for the processing industries in the
island (Javlec 2012). Wood from the forests is increasingly regarded as a “salvage
valve” for the national timber industries, including for export markets (Suryanto
2011).
Rarely tree growers in Indonesia fully devote their time for tree farming activities;
instead, the practices are usually side-job of agricultural cropping. Planting trees is
preferred as it requires intensive cares. They usually collect the tree seedlings from
the nature or from their neighbour, although buying tree seedling is also a recent
trend. Few people nurture the trees (thinning and tending) after planting the
seedlings, as the people devote most of their times in agricultural crops. Planting is
done upon the availability of the seedlings and spaces between the existing tree and
agricultural crops. At this stage, government regulations are rarely imposed. Few
(government) institutions directly engage in the forest activities.
In many districts, even the forest services, which are formally tasked to foster smallscale tree planting through providing technical assistance and extensions, are
13
In many cases, the land ownership is only registered at the village office
Page | 15
sporadically engaged, particularly when the government implements reforestation
and land rehabilitation activities. Limited budgets and personnels are the common
explanation. For example, within a District Forest Officer, there are usually twothree officers having forestry background. The large coverage of area under a forest
office makes difficult for the office to provide technical assistance to all tree growers.
This is further complicated by the nearly non-existent travel budgets for the officers.
Trees are usually treated by small growers as their savings/ safety nets; daily
livelihoods are from the agricultural crops and other earnings from casual works
(Maryudi 2006). Trees are harvested when the growers need emergency (big)
spending such as for wedding ceremony and paying their children’s school fees and
other expenses - locally referred to as Tebang Butuh (Widayanti et al. 2005).
Although the land is not under its domain, the Ministry of Forestry controls and
regulates the harvests of the trees and the transportation. The regulation applies to
all trees, including from the home-gardens (backyards). In many cases, people
rarely apply for harvest permits for own use. The detailed procedures and
regulations are explained below.
5.1 The existing systems
Forestry Ministerial Decree No. 126/Kpts-II/2003 on Forest Product Management
requires that prior to any harvest, tree growers have to apply for a harvest permit, to
be issued by the district forest service. The idea of the harvest permit is to ensure
that the trees are really at the ownership of the applicants, and to prevent illegal
cutting in state forests. The process of getting the harvest permit is often
complicated, and involves a number of institutions and costs, shown below.
Figure 2. Procedures on obtaining harvest permits
Applicants
Checking on
documents of
application in
Forest Service
In-complete
Field checking
(Commission Team)
Investigation/
Validation Document
- List of species
- Number of trees to
be harvested
Completed
Issuance of Harvest
Permit
District Forest Service
(Finalization process on
harvest Permit)
Page | 16
Before applying the harvest permits to the District Forest Service, applicants have to
bring a number of documents, including ID card, a letter from the village chief
(Kepala Desa) indicating that the trees to be harvested are at the possession of the
applicants, and other related documents. At this stage, either formal or informal
payment for the village chief usually occurs, depending on the number of the
proposed harvested trees. A field check by a team of 5-7 persons from District Forest
Service, a sub-district officer, Perhutani officer, police and military personnel, is
conducted when all of the neccessary documents has been provided. The multibackground team is employed to ensure the legality of the trees and the land are of
the possession of the applicant; approval from a number of related institutions is
said neccessary.
Formally, a harvest permit costs nothing, but the applicants should provide cordial
services for the team (including transport expenses). In many cases, a applicant
spend a minimum of 200 thousand IDR for covering the expenses of the team
(Rahmanta Setiahadi, personal communication 21 February 2013). A validation
sheet/ document must be handed back to the district forest office before the
issuance of the permit. A number of local/ district governments also see harvests of
trees in smallholding tree farming as an opportunity to generate regional revenues.
In addition, through issuing a local regulation, the district governments also charge
fees for the harvest permits, variably from 100 thousand-200 thousand IDR/ permit
(Rahmanta Setiahadi, personal communication 21 February 2013).
Complex and expensive processes also occured in the transport of the timber. The
Ministry of Forestry requires that the transport of timber14 from the land must be
accompanied with a certificate of origin (Surat Keterangan Asal Usul)15, which is often
perceived to ensure that the timber not originating from the (state) Forest Zones.
District forest service is in charge of issuing the certificate. Prior to issuing the
certificate, the forest service requires the tree farmers to provide a note from the
village chief that states the harvested trees originating from the farmers’ own land.
Based on Ministry of Forestry Regulation No.P.51/Menhut-II/2006, no costs are
involved to obtain the document. However fees are charged on the harvest of trees
by the village chief and the district government (through the forest service). In
addition, the process of obtaining the certificate of origin are often cumbersome, in
some cases the document is unavailable at the district forest service. It is often
alleged that the document has been sold as blank documents to timber traders
(Rahmanta Setiahadi, personal communication 21 February 2013). Further, informal
fees also occurred during the transport of timber, charged by polices and the district
transportation agency (Mayrowani 2006). It is suggested that in one single
transports (a container of 4-6 m3), the drivers can experience with multiple
payments up to500,000 IDR (Rahmanta Setiahadi, personal communication 21
February 2013).
14
The Ministry had a long list of species whose harvest must be accompanied with a
certificate of origin
15
Regulated in the following ministerial regulations: No.P.51/Menhut-II/2006,
No.P.62/Menhut-II/2006, Regulation No. P.33/Menhut-II/2007
Page | 17
The complex process of obtaining harvest permits and the certificate of origin,
coupled with the limited knowledge on the timber markets, has encouraged
individual tree farmers to rely on either small or large or timber traders/ collectors.
All of the informal fees are usually paid by the traders who in turn offer lower
timber prices to the farmers. In the timber transactions, tree growers remain the price
takers, accepting the price set by the traders (Andayani 2003). In most cases, the
people receive the least market shares, which are instead mostly enjoyed by the
traders (Awang et al. 2002). It is suggested that tree farmers only enjoy less than
50% of the actual timber prices (National Geographic Indonesia 2012). In the market
chains, particularly timber traders become powerful informal actors. In some
regions, they are well connected to district forest officers, or even the influential
figures in the district government, who might issue local regulations favoring them
vis-a-vis tree growers (Rahmanta Setiahadi, personal communication 21 February
2013).
5.2 The upcoming systems
The government of Indonesia c.q. Ministry of Forestry has welcomed the EU’s
FLEGT Action Plan dedicated to tackle illegal logging and its associated trade. In
2011, Indonesia and the EU have agreed to put initial signatory on a Voluntary
Partnership Agreement, to be formally signed in this year. Anticipating the
conclusions of VPA negotiations with the EU, the government of Indonesia had
made a “jump start” by implementing the mandatory legal verification applied to
all forest management units, in both state and private forests, and processing
industries swiftly after the legislations of Sistem Verifikasi Legalitas Kayu/ SVLK
(Indonesian Version of Timber Legality Assurance System).
However, analysts (e.g. Kaimowitz 2003, Elson 2008) are cautious that the
implementation VPA and the eventual legal verification may turn out to increase
poverty of vulnerable groups, including smallholding tree growers. Others (e.g.
Dharmawan et al. 2012) suggest that tackling illegal logging in small-scale tree
farming to some extent miss the targets as the practice rarely occurs, if not nonexistence. Small-scale private forests are said to be least prepared in the mandatory
legal verification (MFP 2012).
For most, the costs of legal verification and the surveillance are beyond the reach.
This is because of the artisanal nature of tree planting, which is treated as a source of
additional incomes. Legal verification of group management units is advocated as a
strategy to deal with the cost-associated problem (MFP 2012). Group certification
nonetheless appears not solving the problem of the farmers’ inability to pay the
costs of SVLK. For example, of the existing groups have been legally verified, the
costs of verification were fully borne by donors. Looking at the vast area of
smallholding tree farming in Indonesia, it is highly unlikely that the SVLK
certification will be paid by donors.
In addition, SVLK involves complex procedures and requires tree growers to meet a
set of criteria and indicators. Although the standards are said to be remarkably
simple (van Heeswijk 2010), farmers face huge challenges in preparing the
verification. Experience suggests that it took months or even more than a year
before the group became ready for the verification (Arupa 2013). This means that
Page | 18
the farmers are bound to spare time and energy used to be devoted for farming and
other activities for the daily livelihood. Problems can also arise during the process of
obtaining land titles. The farmers have to deals with both formal and informal
payments collected by the village chief and BPN officers.
To be fair, the Ministry of Forestry has simplified the procedures of obtaining tree
harvests and the certificate of origins. In SVLK, the certificate can be issued by the
village chief or an appointed member of the group. Even, purchase notes – instead
of SKAU – are seen as an adequate document for timber transport.16 Such is
expected to minimize or even remove the informal SKAU payments, but concerns
on the persistent occurrence of illegal payment, particularly to the village chief
remains. A set of mitigation measures is indeed needed to eradicate the practices, so
SVLK will do no harm or even enhance the viability of smallholding tree growing.
6. Conclusions
Forest policy and management in Indonesia is long characterized by the state’s
centralistic control and the exclusion of forest dependent people from having
meaningful involvement in the decision making and the uses of the resources. The
recent policy shift toward community forestry in Indonesia shows an emerging
signal on acknowledgement on the ability of local forest users to manage forest
resources sustainably, and gives the people opportunities to benefit from the
resources and eventually improve their daily life.
Nonetheless, challenges remain before the policy achieved the intended objectives
of improved forest resources, empowered forest communities and their better
quality of life. Local forest users and smallholding tree growers face a number of
regulatory and technical barriers as well as limited financial support from the
government. That the government-initiated community forestry schemes fall short
of the initial targets in terms of the extent of state forestland areas managed by to
forest communities to a large extent is explained by the regulatory barriers of
tenurial uncertainties and the complex licensing procedures. Those coupled by the
limited capacity as technical assistance rarely provided by government institutions
appear to impede local people to secure the community forestry licences.
Those securing the community forestry licenses are yet to obtain meaningful benefit
from the forests, particularly timber. The fact that the trees are planted by the
communities, as of HKm cases in Yogyakarta, is yet to suggest the government to
permit full harvests. Further, the government rarely provides technical and financial
assistances to the community forest people. Only HTR grantees appear to receive
better support, but concerns remains as some assumptions used for the financial
subsidies/loans does not encourage viable business.
Similarly, smallholding tree growers, despite their contribution to improving the
environment and supporting the national timber industries, still lack of government
support. One of their main challenges is their reliance to timber traders, which in
turn enjoy large shares in the distribution chains. Loans for the people can help, but
commercial banks and micro financing institutions are rarely convinced to the tree
16
Forestry Ministerial Decree No. 30/ 2012
Page | 19
growing business. Some government regulations, principally on the harvests and
marketing of timber from private forests put more financial burden for the growers
due both formal and informal fees and payments, and even enhance the power of
timber traders in the market chains. The new policy on mandatory legal verification
could have unintended impacts on the livelihood of the people.
The government should make concrete efforts to remove both regulatory and
technical barriers which prevent local communities and smallholding growers to
benefit from the forests. That can include removal/ revision of unfavorable policies,
providing technical facilitation and financial support to encourage the
competitiveness of community forestry business.
For community forestry schemes in the state forests, simplified licensing procedures
(for both management and harvest rights) is one of the foremost supports. If
possible, both licenses can be secured in one single application. This will reduce the
costs of the preparations of the neccessary documents. Regarding the numerous
institutions involved in the process, establishing a single and integrated task force/
desk closer to the people will also reduce the time, and also will minimize informal
fees/ payments. The integrated desk can also be tasked to provide services for
community forestry grantees in accessing the current financial support provided by
the government (BLU scheme). This means that the people will have easier access to
the financial support.
Technical assistance and capacity building for the people in dealing with the
complex managerial requirements are also crucial. Local people, due either the lack
of knowledge on community forestry regulations & managerial skills or lack of
time, need external support to swiftly engage in the community forestry. The
government can collaborate with other institutions, e.g. universities, NGOs and
local governments in providing the people with technical assistance. This
consequently requires more financial commitments from the governments. While
subtantial fund has been allocated, the challenge is how to ensure that BLU scheme
can be equally accessible for all community forestry schemes.
Financial supports are also needed by smallholding tree growing in private land.
Establishing micro finance institutions with simpler requirements in providing
loans will reduce the dependence of the tree growers to timber traders, that might
consequently improve their bagaining positions in regards to the price negotiations.
Their benefits from the forests will also improve when the government simplify/
deregulate harvest permits and certificates of origins. Technical assistance for the
farmers, particularly on improving the silvicultural practices, can also improve the
quality of the timber products that can eventually improve the financial benefits.
For community forestry in both state and private land, mainstreaming community
forestry among related institutions and stakeholders should be further improved.
The Ministry of Forestry is unlikely to single-handedly remove the regulatory and
technical barriers as well as informal environments disadvataging smallholders/
community forestry grantees. The ministry of forestry can build intersectoral
cooperations with for instance the Ministry of Home Affairs (the patron of local
governments), National Police and Highway Service and other related institutions.
First, this can minimize additional payment charged by local governments (village,
Page | 20
sub-district and district) upon the harvests, and informal payment along the road.
Second, this can reduce the dependence of tree growers on timber traders, which
currently deals with the complex procedures involving a number of institutions.
There are also a number of windows of opportunity smallholders and community
forestry grantees might also get improved financial/ economic benefits. This
includes payment for environmental service schemes and recently carbon trading.
Both promise financial reward the good forest practices. The government should
make necessary steps to help the people to benefit from the new opportunities.
Page | 21
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