Efforts to Eradicate the Forestry Legal Mafia in Indonesia

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1 Efforts to Eradicate the Forestry Legal Mafia in Indonesia Diah Raharjo Member of the Indonesian Working Group on the Legal Mafia in Forestry

2 HOW CONFLICT IS USED TO GET ILLEGAL LOGS TO THE INDUSTRY CUKONG AS BUYER LOGS WITHOUT LEGAL S DOCUMENT AT DISTRICT LEVEL : The illegal logging team (TPIL) confiscates logs and sends them to AUCTION PROCESS HPH STOP, CAUSE CONFLICT S REASONS - Land dispute - Customary Forest - Small Scale concession 100 ha) AREAL HPH PEOPLE GO IN TO AREA WITH SUPPORT EQUIPMENT FROM HPH & IHPHH (100 ha) INDUSTRY BUYS LOGS FROM CUKONG INDUSTRY PAYS FOREST PROVISION FUND (PSDH) AND FOREST REHABILITATION TAX (DR) HPH suspected of provoking conflict to avoid production costs and taxes CUKONG AS THE WINNER IN AUCTION AND SELL LOGS TO INDUSTRY WITH A TRANSPORT PERMIT (SKSHH) LOGS WITH LEGAL DOCUMENTS INDUSTRY By Diah Raharjo, 2003

3 Working Group Responsibilities 1. To prepare discussion materials on eradicating the legal mafia that support deforestation and degradation problems. 2. To propose regulations and decision making process (Forestry, Agriculture, Mining, Domestic Affairs, Land Property, Police office, Supreme Justice, and Commission of Eradicating Corruption (KPK)) related to forestry, environment, agriculture, mining and local regulations, including data and information on forest zone, estates and mining areas and including forest status and condition; 3. To draw up a concept note/position paper to Strategize the Eradication of the Legal Mafia and so reduce the rate of deforestation and degradation; 4. To prepare a Ministerial Level Meeting to eradicate the legal mafia in the context of reducing the rate of deforestation and degradation.

4 Urgency Problems have been accumulating for several decades, and as a result large scale area changes have happened across Indonesia; Obstacles for forestry development include economic and social aspects that involve land property rights for utilization; It is indicated that 15.6 m Has of forest has been allocated (by accident?) through illegal power (2011). Sunk cost effect: underground long time operationalization as a strong reference and justification to avoid return to the right direction. It is strongly indicated that positive legal power has failed to be effective.

5 Forest Zone Statistics Total Forest, conservation & wetlands: ± m Has: Conservation Forest ± 25.2 m Has Protected forest ± 30.9 m Has Limited Production Forest ± 25.9 m Has Permanent Production Forest ± 33.9 m Has Convertable Production Forest ± 20.6 m Has Forest area stated on October 2009 as ± 14.2 m Has (10,4 %) Low intensity managed logged forest ± m Has (32,1%) m Has dispute (claim) village (19,420 villages in 32 provinces)

Forest Utilization Statistics 400 350 300 250 200 150 100 50 0 387 362 351 270 267 Unit HPH 287 285 Juta Ha 322 324 308 304 41.8 39.2 36.4 28.1 27.8 27.8 27.7 28.8 28.8 26.16 25.

160 families, in 29 Provinces (58 villages) Community empowerment (PHBM/Joint Forest Management) within the area of IUPHHK-HA that covers 16.015 Families and in IUPHHK-HTI areas involved 30.

6 Forest Utilization Statistics Unit HPH Juta Ha The Increasing of HPH/IUPHHK-HA licence issuance Building community s business skills in production forest for families, in 29 Provinces (58 villages) Community empowerment (PHBM/Joint Forest Management) within the area of IUPHHK-HA that covers Families and in IUPHHK-HTI areas involved families Social Forestry involves 54 Farmers group covering total Has Estate Forest (HTR) Partnership Pattern, Ha involved families Planting Movement Program (GERHAN ) involve families covering Has during period of Levelling up Community economic s scale on Conservation area for families in villages. 0 Unit Luas (Juta Ha) The increasing of HTI/IUPHHK-HT licence issuance 227

7 What does this mean? 1. Few state forest areas are allocated legitimately both from the perspective of legality and community. Majority of the land status is de facto open access; 2. Imbalanced policy making allocating forest between large scale business and small-scale (community/traditional level); 3. Forest condition changes rapidly once it has been identified following informal procedures. There is still an expectation that the formal procedures will be follow the existing policy. 4. Unplanned forest area changes: the access has reallocated forest function and benefit redistribution. Weaknesses of forest & land governance

8 COMMON PROBLEMS IN CENTRAL KALIMANTAN DATA * MoF DATA Total Areas Total Areas (Unit) (Has) (Unit) (Has) 1 Total licence for estates within the Forest Areas 352 (1) , Active 143 (1) ,064,740 Inactive yet 209 (1) ,462,653 Violate the TGHK only 118 (1) ± Violate the TGHK and RTRWP 225 (1) ± Active, violate the TGHK and RTRWP and without 54 (1),(3) IPKH Active, violate the TGHK and RTRWP, without IPKH, 38 (1), (3) and within the area of HP (production forest) and HPT (limited production forest) 2 Granted Governor s recommendation 13 (2) , Agreement of the Principal of Forest Areas 95 (2) , Acquisition Principles 4 Decision Letter to release Forestry area for the 67 (3) other purpose 783,191 5 Right of Business Use (HGU) 65 (2) , *Data Source: (1) Matrix of the forest area use for mining activities in Central Kalimantan Province (Follow up of Menhut letter No. S.95/Menhut-IV/2010 dated 3/02/2010, Central Kalimantan Government letter No. 522/337/EK tgl. 27/03/2010, and Central Kalimantan Kadishut province letter No /596/Dishut dated. 27 Maret 2010 (2) Report of Harmonization and Integrated team of TGHK and RTRWP Central Kalimantan (3) Licence data of releasing forest area for another purpose issued by Ditjen Baplan MoF.

9 General Condition of Mining Activities in Central Kalimantan Forest Area * Total mining concession licence 615 units Covers : ,68 Has a. PKP2B 18 units b. Kontrak Karya 7 units c. Authorized Mining licence 590 units Step of activities a. General investigation 30 Units, covers: Has b. Exploration 31 Units, covers: ,27 Has c. Feasibility study 7 Units, covers: ,80 Has d. Construction 10 Units, covers: Has e. Exploitation 137 Units, covers: , 80 Hat Leasing of forest area a. Permission for the use of forest area s : 1 Units b. Principal Permission for the use of forest areas leasing : 6 Units c. Leasing Licence for the use of forest areas: 9 Unit s(31.747,86 Has) d. Unlicenced yet : 606 unit s( ,82 Has) e. Mining licence in forest areas according to TGHK (National Forest Inventory ) and RTRWP : 497 units f. Mining licence in the area of protection forest according to TGHK and RTRWP: 14 units (One has been issued IPKH) * ) Source: the Matrix of Forest Use for Mining activities in Central Kalimantan Province (Follow up of Minister of Forestry Decree No. S.95/Menhut-IV/2010 tgl. 3/02/2010, Central Kalimantan Governor letter No. 522/337/EK tgl. 27/03/2010, and Kadishut of Central Kalimantan Province letter No /596/Dishut tgl. 27 Maret 2010

10 Real Cases Typology 1. Non licence mining use in forest area Mining in forest according to Forest Land Used Plan (TGHK) and Provincial Spatial Planning (RTRWP) Mining in protection forest area based on TGHK and RTRWP 2. Mining in protection forest with an open pit methodology Cases 606 Cases( ,82 Has) 497 Cases 13 Cases Examples, 3. Mining activities within conservation area Example 4. Overlapping mining licence with other typical business licences 5. Mining activities are executed outside the agreed coverage area (out of licence) Example - 6. Licence issuance does not match with the procedures Examples: Recommendation without location map)

11 TYPOLOGY OF VIOLATIONS in Forest 1) Estate is developed without a complete Decision Letter of amendment to take out the forest area for other purposes. 2) Extraction of timber does not use a licence letter (Where potential loss of state s finances from the value of tree standing stock). 3) Working on estate business with the areas 25 Ha, without completing an forest concession licence (IUP). 4) Provincial Spatial Plan (RTRW) violation. The use of space does not compliance with RTRW design. Business permit does not compliance with RTRW design. 5) Procedural of Licence issuance breaks the rules. IUP grants or Land Used Right (HGU) without preliminary action of taking out forest area in legal procedures. Issuance of IUP without the determination of location permission. IUP is issued without initiated with Environment Impact Analysis. The licence s period of operation is over (especially the permit to use the location itself) 6) IUP overlaps with other businesses permits.

12 Typology of violations in Mining 1. Mining activities in forest area without a licence to use the forest area. (Financial loss potentiality from the state side through the non existence of forest provision fund (PSDH) and forest rehabilitation tax (DR), standing stock value compensation loss and Tax Income of state loss) 2. Activities of mining in protection and conservation forest area characterized by opening the area of forest cover and overlap with other license of businesses. 3. Activities of mining within the forest area without mining licence and using the temporary lending and use licence. 4. Licence procedures violation: a. Mining Licence is only proceeding with the head of district s authorization b. Recommendation of the district leader s authority (in proceeding the usage leasing) without a complete map. c. The issue of Mining operation letter is characterized by not following the procedure as stipulated in the national regulation

13 What s The Mafia business on Forestry? 1. Driving the licensing making process of land forest areas and land forest conversion with illegal procedures to legalize deforestation in practices. 2. Manipulating the forest provision fund (PSDH), forest rehabilitation tax (DR), standing stock value compensation and Tax Income of State. 3. Practicing the illegal market through illegal timber documents at each level of administration procedures and offices. 4. Provoking conflict between communities, private and government to avoid production costs and taxes.

14 RECOMENDATIONS Minister of Forestry appeals for a moratorium to effect all licences in Central Kalimantan until the final forest area has been determined and the improvement of related regulations. Minister of Forestry to coordinate legal framework improvements are as follows: Compilation of permits on the use of land with agrarian regulations and forestry, and strengthening mechanism of sanctions, incentives and disincentives in the process of licencing; Related with forest area definition by considering the growing problems at field level and multiple assumptions as a result of the effective lack of harmony between regulations; Develop clear procedures on evaluation of supervision missions and law enforcement by local government to be linked to a mechanism of incentives and disincentives, in line with recommendations by the Corruption Eradication Commission (KPK) in their matrix of findings and advice to improve the Planning System Study and Forest Management in Directorate General of Planology in the Ministry of Forestry. Integrate good governance principles with transparency principles during the licencing process and completing the land delineation.

15 Related to law enforcement, Task Force of Legal Mafia and Ministry of Forestry will work together with Police Department, Justice and Corruption Eradication Commission to: Stimulating law enforcement where there is clear evidence and infringement cases that have violated the forest area according to TGHK and RTRWP. Draw up an action plan of systemic improvement in the process of law enforcement of forestry sector. Develop indicators for sorting out the cases, inventory and tidying up the forest area uses for other purposes in the other cases. Developing investigation and litigation to reclaim the state s loss. Implementing the Timber Legality Assurance System (Indo- TLAS) and VPA as a system in the improvement of Forestry Governance Process with three pillars are transparency, governance and representativeness.

16 Thank You

LESTARI PAPER NO. 03 THE ROLE OF TIMBER CONCESSION COMPANIES IN PROMOTING SUSTAINABLE FORESTRY. Nana Suparna

LESTARI PAPER NO. 03 THE ROLE OF TIMBER CONCESSION COMPANIES IN PROMOTING SUSTAINABLE FORESTRY Nana Suparna Content: 1. Introduction 2. The Prospect of Production Forest 3. Business Development of IUPH