Prepared for the Project by: Dr. Hiras Sidabutar, Project National Expert and Mr. Jimmy Chandra, Project Coordinator

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2 Prepared for the Project by: Dr. Hiras Sidabutar, Project National Expert and Mr. Jimmy Chandra, Project Coordinator Executed by : Directorate General of Forestry Enterprise Development (BUK), The Ministry of Forestry of Indonesia In collaboration with : The Indonesian Sawmill and Woodworking Association (ISWA) With the assistance of: The International Tropical Timber Organization (ITTO) Jakarta, July 2013

3 Project Title : Operational Strategies for the Promotion of Efficient Utilization of Rubberwood from Sustainable Sources in Indonesia Serial Number : PD 523/08 Rev. 1 (I) Executing Agency : Directorate General of Forestry Enterprise Development (BUK), The Ministry of Forestry of Indonesia Manggala Wanabakti Forestry Center, Block I, Floor 5 Jl. Gatot Soebroto, Senayan, Jakarta Phone: Collaborating Agency : Indonesian Sawmill & Woodworking Association (ISWA) Manggala Wanabakti Forestry Center, Block IV, Floor 8, Wing C Jl. Gatot Soebroto, Senayan, Jakarta Phone: Starting date : May 2010 Duration : 36 months Budget : ITTO US$ 605,094 Disbursed amount US$ 449,040 GOI/ISWA US$ 302,700 Total US$ 907,794 Project Key Personnel: Mr. Jimmy Chandra, Project Coordinator Dr. Hiras P. Sidabutar, National Expert Ms. Diah Herlinawati, Project Secretary Ms. Herlina Lesmana, Project Finance Mr. Josef Dwinanta, Project Technician Published by : BUK, ISWA and ITTO Place & date : Jakarta, July 2013 Copyright ITTO Project PD 523/08 Rev. 1 (I) This report is the product of the BUK, ISWA and ITTO; interested parties may reproduce the report in whole or in part solely for own use by acknowledging its source, otherwise requires prior written permission of the copyright owner if used for commercial purposes. Completion Report July 2013 ii

4 List of abbreviation BUK BRIK CEA DG FORDA GOI Inpres IPB ISWA ITTO JPFA MOF MOU MDF NGO NOL PCA PFA PMT PTC PTPN PSC R & D SKAU UGM YPO : Bina Usaha Kehutanan/Forestry Enterprise Development : Forest Industry Revitalization Body : Crop Estate Agency : Directorate General : Forestry Research and Development Agency : Government of Indonesia : Presidential Instruction : Bogor Agriculture University/Insitut Pertanian Bogor : Indonesian Sawmill & Woodworking Association : International Tropical Timber Organization : Jambi Provincial Forestry Agency : Ministry of Forestry : Memorandum of Understanding : Medium Density Fibreboard : Non government Organization : No Objection Letter : Provincial Crop estate Agency : Provincial Forestry Agency : Project Management Team : Project Technical Committee : Perkebunan Nusantara Co. Ltd. : Project Steering Committee : Research & Development : Surat Keterangan Asal Usul/Certificate of Origin : Gajah Mada University : Yearly Plan of Operation Completion Report July 2013 iii

5 Table of contents List of abbreviations.... iii Table of contents.... iv Executive summary PROJECT IDENTIFICATION 1.1. Context Origin and problem PROJECT OBJECTIVES AND IMPLEMENTATION STRATEGY 2.1. Project objectives Project implementation strategy Assumptions and risks PROJECT PERFORMANCE 3.1. Planned vs realized performance Time schedule Inputs applied PROJECT OUTCOME AND INVOLMENT OF TARGET BENEFICIARIES 4.1. Achievement of the specific objective Pre Project s vs at project completion s situations Involvement of the target beneficiaries Project sustainability ASSESMENT AND ANALYSIS 5.1. Project rationale and identification process The problems addressed, project design and implementation strategy Critical differences between planned and actual implementation Adequacy of projects inputs External influences Project beneficiaries Project sustainability The institutions involved in project implementation LESSONS LEARNED 6.1. Project identification and design Project implementation CONCLUSIONS AND ROCOMMENDATIONS 7.1. Conclusions Recommendations Selected references v Completion Report July 2013 iv

6 Executive summary Project identification and design 1. The Indonesian wood industry had been facing raw material supply problem since early 1990s as evident by the decreasing capacity utilization rates of installed capacity in the primary wood industries and declining production of both sawn timber and plywood. 2. Completed ITTO pre project documented in 2005 that the total area of rubber plantations in Indonesia was around 3.4 million hectares; replacement of old, unproductive plantations could yield about 13.5 m 3 of logs in a sustainable basis but only around 22 percent of this potential had been utilized by the primary forest industries. 3. The full utilization of the log potential would be a significant contribution to lessening the raw material supply problem facing the national wood industry. Accordingly, the key problem addressed by the project was very low utilization rate of rubberwood from old rubber plantations. 4. The key problem was adequately analyzed in order to clearly reveal its direct as well as indirect causes and consequences; the clear cause effect relationship had facilitated construction of a sound project design having the elements that were relevant to solving the problems at hand. 5. Correspond to the key problem addressed, the specific objective of the project was defined as to promote the utilization of rubberwood from sustainable sources which was expected to be achieved through delivery of five outputs and execution of twentytwo activities. Project implementation and strategy 6. The project was executed by the Directorate General of Forestry Enterprise Development (BUK) of the Ministry of Forestry in collaboration with the Indonesian Sawmill and Woodworking Association (ISWA) for thirty six months starting May The strategy pursued comprised three major elements namely to motivate and convince the rubber growers, improve enabling conditions and demonstrate appropriate technologies for action. The strategy was operationalized in a collaborative manner involving the primary beneficiaries, concerned government authorities and partners. 8. The project had been implemented in a smooth fashion without major difficulties and with only minor adjustments to planned activities and budget which was attributable Completion Report July 2013 v

7 mainly to the sound project design, appropriate implementation strategy, supportive main stakeholders and able project management team. 9. The project was implemented in full observance of the project agreement, existing ITTO rules and procedures as well as GOI s regulations governing international cooperation. During the course of project implementation, three yearly plans of operation, five bi annual progress reports and three financial audit reports had been submitted to ITTO while fourteen no objection letters had been issued by ITTO at the request of the executing agency. 10. The assumptions made were valid during the project duration; the potential risks identified during the project formulation stage had been successfully kept from occurring through execution of pre specified mitigating measures in a consistent manner. Project performance 11. All planned project activities had been fully executed with minor adjustments to timing of execution of three activities and to the scope of two activities while two new activities had been identified and implemented with the prior endorsement of the Project Steering Committee (PSC). 12. All planned and additional activities had been completed within the sanctioned time and financial budget; the activities were completed within thirty six months with ITTO funds expended in a total amount of US$ 439,819 or US$ 9,221 unspent funds by end of June Project outcome and involvement of target beneficiaries 13. Achievement of the project has been assessed using the revised indicators; five defined outputs had been achieved or delivered noting that Output 1 was achieved partially while Outputs 2 and 5 were slightly short of the targets. The specific objective has been declared as nearly achieved due mainly to the partial achievement of Output 1 and the short of targets performance of Outputs 2 and Among the tangible project results are the proceedings of the workshops, technical reports on the implementation of pertinent activities of individual outputs, manuals on appropriate technologies, several technical documents of various topics, and 398 trained farmers on skills for rubber tree harvesting, agro forestry model development, rubberwood preservation, charcoal making and logs sawing operations. 15. The policy implication that worth mentioning is the announcement of Permenhut No. 30 of 2012; formulation of this ministerial decree took into account the comments and observations on the requirement of SKAU for shipment of forest products made by the main stakeholders during the occasions of the workshops organized under the project. Completion Report July 2013 vi

8 16. The primary beneficiaries were actively involved in the project implementation: rubber farmers were involved in the training programs, dialogues and workshops; the rubber companies were involved in the conduct of feasibility study, organized dialogues and workshops; the wood industries were involved in the procurement, installment and testing of sawing machineries and in organized dialogues and workshops. Lesson learned 17. Among the important lessons learned from the project formulation process are: The key problem addressed by the project was identified under the completed pre project and adequately analyzed involving the main stakeholders; the problem analysis identified direct and indirect causes as well as consequences of the key problem that the cause effect relationship was definitely clear and easy to digest. The clear cause effect relationship had facilitated construction of a sound project design having strong vertical logic, relevant elements and well defined interventions. The sound project design had eased the operational planning and facilitated the smooth project implementation with only minor adjustments to planned activities. The implementation strategy adopted that comprised elements of motivating and convincing of rubber plantations owners, improvement of enabling conditions and introduction of appropriate technologies was proved applicable and effective in achieving the specific objective. The variations between planned and actual implementation had occured due mainly to the lack of information on specific matters and the Project Coordinator s concern over operational efficiency; the variations could have been avoided by conducting an ex ante evaluation prior to commencing with the project operations. The critical determining factors of project sustainability include applicability of the technologies and skills learned by farmers from the project, continued political support by the governments at different levels and enhanced cooperation between rubber and wood processing companies in the utilization of rubberwood from replanting areas. 18. Among the important lessons learned from the project implementation process are: The Executing Agency of the project was the Directorate General of BUK that had mandated ISWA to fully implement the project based on a Memorandum of Understanding signed by both parties establishing roles and responsibilities of each in a clear manner which had avoided any confusion during the course of project implementation. Completion Report July 2013 vii

9 To implement the project, ISWA had established a small Project Management Team (PMT) comprising four project key personnel, one national expert and two DG BUK counterparts; the small PMT proved able to adequately perform project management tasks in an efficient manner. The monitoring and evaluation of progress in implementation had been performed through two Project Technical Committee (PTC) meetings, four PSC meetings and monthly technical meetings of the PMT; such meetings had greatly contributed to the smooth project operations. The strategy pursued in implementing the project was defined during the project formulation stage consistent with the project elements specified and operationalized in a collaborative manner by working closely with the primary beneficiaries, relevant institutions and national consultants; the strategy proved effective in achieving the specific objective. The project was managed in full compliance with existing ITTO rules and procedures; all the documents required by ITTO including (Yearly Plans of Operation) YPOs, bi annual progress reports, financial audit reports and documents of particular had been timely submitted to ITTO and facilitated immediate issuance of any approvals requested by ISWA. The roles and responsibilities of ISWA and the national consultants were well elaborated in the respective terms of reference which had facilitated accomplishment of assigned tasks in an effective fashion. The project had been successfuly completed within the sanctioned financial and time budget due mainly to the adequate project design, supportive primary beneficiaries and partners, strong coordination with ITTO and DG of BUK as well as the cooperative and competent national consultants. The active participation of rubber farmers in the implementation of relevant activities was realized without any major difficulties because the farmers were convinced that the activities would greatly contribute to their livelihood. The original indicators of achievement defined in the Logical Framework Matrix (LFM) was exclusively based on the project design constructed during the formulation stage; appropriateness of the indicators as a tool for measuring achievement was evaluated regularly at the beginnings of current years of operation and adjusments made as necessary based on actual progress in implementation. Conclusions and recommendations 19. The conclusions drawn from the entire process on formulation and implementation stages are: Completion Report July 2013 viii

10 The key problem addressed by the project very low rate of utilization of rubberwood from sustainable sources was identified under the completed ITTOassisted pre project involving the main stakeholders based on the preliminary estimate of existing rubberwood growing stock and its state of utilization; successful removal of the key problem would greatly contribute to lessening the wood supply problem facing the national wood industry. The key problem was adequately analyzed, its causes and sub causes as well as consequence were clearly specified; the project design was constructed based on a clear and logical cause effect relationship that its vertical logic was strong and its elements were consistent with the problems to be resolved. The project was implemented by ISWA on behalf of Directorate General of Forestry Enterprise Development (BUK) with close supervision by the Directorate of Forest Product Processing and Marketing (BPPHH) of BUK without any major administrative or operational difficulties. The project had been smoothly implemented and successfully completed to achieve its defined specific objective; the smooth implementation and successful completion of the project were made possible by, among others : The sound project design that eased operational planning; The effectiveness and appropriateness of the implementation strategy; The adequate resources in terms of manpower, funds and time; The generally strong support of the primary beneficiaries and partners, and The able project management team. The project operations were managed by a small management team comprising the project coordinator, a secretary, a finance staff, a technician, a national expert and two BUK counterparts that was able to complete the project within the sanctioned financial and time budget. The specific objective defined was nearly achieved through the full execution of twenty two planned as well as two additional activities pertaining to five outputs and delivery of the outputs noting that three outputs were fully achieved and two outputs were slightly short of targets. The assumptions made were valid throughout the project duration and the mitigating measures defined were effective in preventing the potential risks from happening. The indicators of achievement originally defined had been revisited at the beginnings of current years of operations and necessary adjustments made based on progress in implementation to ensure applicability and appropriateness of the indicators as the tool for measuring project achievements. Completion Report July 2013 ix

11 The primary beneficiaries of the project had demonstrated their cooperative and supportive attitude towards the project implementation noting that the rubber companies were less cooperative for business policy, technical and administrative reasons. 20. The following recommendations have been made based on above lessons learned and conclusions: It is strongly recommended that any ITTO project proponent to perform an adequate analysis of the problem to be addressed in accordance with existing ITTO manual on project formulation to ensure clarity of cause effect relationship. To be sound, a project design must be constructed based on a clear cause effect relationship to ensure relevance and effectiveness of project interventions to solving the problems at hand. Any collaboration in project implementation should be based on a memorandum of understanding that clearly defines roles and responsibilities of the parties involved in order to avoid unnecessary confusion and disharmony of institutional relation during the project implementation. To ensure a smooth implementation and successful completion of a project, appropriateness of strategy for implementation, adequacy of inputs as well as support of primary beneficiaries and partners are among the enabling conditions that are required to prevail. It is best to employ a small but able project management team in order to minimize cost of personnel, ensure effectiveness of coordination and increase adaptability to changing project environment. Achievements of a project must be assessed using the pre specified indicators; to be realistic as a tool for measuring achievements, such indicators need to be occasionally revisited and adjusted as necessary based on progress in implementation. The potential risks associated with the project implementation should be defined correspond to the assumptions made; relevant mitigating measures identified during the project formulation stage must be exercised and modified as necessary during the course of project implementation. It is strongly recommended for BUK and ISWA to continue exploring the possibility of establishing cooperation between the rubber companies with wood industries in rubber logs supply through organized dialogues between high rank officials of the Ministries of Forestry, Agriculture and State owned Companies, in view of increasing value added of the rubberwood harvested from replanting areas. Completion Report July 2013 x

12 1. PROJECT IDENTIFICATION 1.1 Context The utilization rate of installed production capacity in sawmilling industry increased from 86% in 1980 to 97% in 1989 but went down to only 41% in 2005; in the plymilling industry the rates increased from 51% in 1980 to 99% in 1997 but decreased sharply to 42% in The main reason was the timber domestic supply problem due to scarcity of wood raw material, dwindling supply capacity of natural forest, in-efficiency in processing, low quality of products brought about by the use of inappropriate, relatively old technologies, lack of professionalism at both management and operation levels and sluggish adjustment of mentality to the increasing scarcity of wood situation. Realizing the fact that the national wood industry was weakening which certainly entailed undesirable far reaching implications, then the government had embarked in five priority programs, one of which was revitalization of the forestry sector focusing on the wood industry. The annual harvestable, volume of rubber logs was estimated by PPD 80/03 Rev. 2 (I) at around 13.5 million m 3 of which only a tiny part had been utilized by the processing mills mainly in Sumatra Island. This sustainable resource when fully utilized could significantly reduce the raw material supply problem facing the national wood industry and increase exports of rubberwood products especially furniture parts and chip wood. Among the main activities of the wood industry revitalization program that had been implemented by the time this project was formulated were: To speed up the establishment of forest plantations through identification of suitable lands; To improve productivity of natural forest through enrichment planting of logged over areas using genetically improved planting materials of dipterocarps species in collaboration with forest concession holders; To continue reviewing and enhancing existing rules and regulations on wood industry development in collaboration with the Ministries of Industry and Trade and with the national timber associations; and To form BRIK (Forest Industry Revitalization Body) in 2003 mandated to oversee exportation of wood products; export permits are to be granted only to those companies that consume wood originating from legal and verifiable sources. included: In addition, the activities that had been initiated to overcome the raw material supply problem On the supply side: - Forest plantation development and introduction of genetically improved fast growing species as mentioned above - Practice of reduced impact logging Completion Report July

13 - Rehabilitation of degraded forests using fast growing species On the demand side: - Improved processing efficiency and product quality - Product diversification - Promotion of lesser used species 1.2 Origin and problem Project PD 523/08 Rev. 1 (I) was built on the findings of completed pre-project PPD 80/03 Rev. 2 (I) entitled Promoting the utilization of rubberwood from sustainable sources in Indonesia ; the findings are summarized below: i. The total area of rubber plantation in Indonesia in 2005 was around 3.37 million ha, distributed in Sumatra Island 2.38 million ha (71 %), Kalimantan Island 0.83 million ha (25 %) and other islands 0.16 million ha (4 %). ii. In terms of ownership, bulk of plantations, 2.88 million ha or 86%, were owned by smallholders or farmers and 0.49 million ha or 14% by state-owned and private companies. iii. The smallholding plantations were normally not well managed, highly fragmented with area less than 5 ha per owner, poor accessibility, low production of latex and limited replacement of old trees thus harvesting of wood. In contrast, the large scale plantations owned by the companies were well managed with high accessibility, area of individual blocks averaging well above 500 ha, with high yield of latex and well scheduled replacement of old plantations. iv. The rubber companies commonly replace plantations at 25 years of age; applying this replacement age nation-wide, the rate of replacement or replanting would be around 134,892 ha per year, 116,000 ha by smallholders and 18,892 ha by companies. v. Based on the preliminary growing stock surveys conducted in Sumatra and Kalimantan, it was found that the average volume of wood biomass was 240 m 3 and 200 m 3 per hectare, respectively. Therefore, around million m 3 of wood biomass is harvestable per year in Indonesia of which around 13.5 million m 3 were saw logs having average diameter of 20 cm and up. vi. Out of the 13.5 million m 3 of saw logs, only about 2.96 million m 3 or 22 % had been utilized so far, mostly originating from large scale plantations owned by rubber companies, for sawn wood and veneer and only a tiny amount of biomass was used in Medium Density Fibreboard (MDF) making in Sumatra Island. vii. The extremely low rate of rubberwood utilization were caused mainly by: i) lack of interest in the utilization of rubberwood owned by companies; ii) lack of incentive and capacity to replace and utilize old trees by smallholders; iii) weak government policy on rubberwood utilization; iv) lack of investment in rubberwood utilization mainly due to poor accessibility and unavailability Completion Report July

14 of reliable information in terms of quantity, quality and distribution of resource; and iv) unavailability of appropriate technology for commercial utilization of rubberwood on smallholding plantations. The key problem addressed by the project was very low rate of utilization of rubberwood. The corresponding specific objective was defined as to promote the utilization of rubberwood from sustainable sources, i.e. from replanting areas. This objective was certainly relevant to overcoming or lessening the raw material supply problem facing the national wood industry. oooooooo Completion Report July

15 2. PROJECT OBJECTIVES AND IMPLEMENTATION STRATEGY 2.1 Project objectives One of the main problems facing the wood industry in Indonesia was insufficient supply of wood raw materials. While vast rubberwood biomass was available from rubber plantations to feed the industry thus potentially could lessen the problem, only a tiny portion of the resource had been utilized by the industry. Estimated total extractable volume of saw logs in 2005 was around 13.5 million m 3 of which only around 2.96 million m 3 or 22% had been used mainly in the production of sawn wood and veneer. The very low rate of utilization was indeed a waste of rubberwood resource in light of the shortage of wood raw material supply thus had to be increased to the extent possible considering the potential harvest from replacement of old rubber plantations. Therefore, it was thought imperative to promote the utilization of rubberwood resource in the near future in light of resource availability and the problem facing the national wood industry. Consistent with the wood industry situation and potential growing stock of rubberwood on old rubber plantations, the project objectives were defined as follows: Development Objective: To contribute to the lessening of wood raw material supply problem facing the national forest industry by utilizing the vast rubberwood available from sustainable sources. Specific Objective: To promote the utilization of rubberwood from sustainable sources. 2.2 Project implementation strategy In order to deliver planned outputs and achieve the specific objective and contribute to achieving the development objective of the project, the basic strategy adopted is as summarized below: Motivating and convincing There was a compelling need to first motivate and convince the primary stakeholders to utilize available rubberwood from replanting areas. The main targets were rubber growers, both companies and smallholders, concerned government authorities at the central, provincial and district levels, wood processors and potential investors. To this end, reliable and updated information on potential benefits of utilizing rubberwood resource; quantity, quality and distribution of the resource as well as on product markets and processing technologies must be made available. The said information would bring about clear understanding on the rationale for rubberwood utilization which in turn would motivate and convince target groups to take part in rubberwood utilization undertakings. Expected main outcomes of motivating and convincing activities were increased interest amongst rubber growers to replace old plantations and utilize available rubberwood in a proper manner. Completion Report July

16 Improving the enabling conditions Existing policies governing rubberwood utilization appeared less supportive to perform an efficient utilization of rubberwood resource thus had to be reviewed and enhanced. Adoption of enhanced policy on rubberwood utilization that takes into account the natural properties of rubberwood, the plantation settings, efficiency as well as quality of processing was argued as prerequisite to improving enabling conditions for investment and to building up competitiveness of investors. Therefore, reviewing of existing policies and improving coordination amongst authorities concerned were thought indispensable for improvement of the enabling conditions which would motivate and convince stakeholders to invest in rubberwood resource utilization. Equipping for action Considering the natural properties of rubberwood and the environment of its utilization, there was a compelling need to introduce appropriate technologies. These technologies had to be pilot tested prior to disseminating to interested parties through various means. Without these technologies it was hard to imagine how rubberwood from farmers plantations could be efficiently utilized. It should be emphasized that utilization of wood from large plantations and that from smallholding plantations had to be carried out using different strategies and activities due to the fact that features of these two groups of plantation are considerably different from each other in terms of accessibility, wood quality and perception of owners towards utilization. To be successfully implemented, the project would have to work closely with government authorities at all levels, with local universities and NGOs, with ISWA members companies taking advantage of their established network at the project sites and with other forestry associations. Provinces of Jambi and South Sumatra had been selected as the location of the project as these two provinces alone contain around thirty-six percent of smallholding plantations in Indonesia. Two districts in each province were selected as the project sites in close consultation with the respective provincial governments, namely Batanghari and Muaro Jambi districts in Jambi provinces; Ogan Ilir and Banyuasin districts in South Sumatra province. In addition, North Sumatra province was also selected as the project site to implement the activities relating to rubber companies as most rubber plantations owned by companies were located in this province. 2.3 Assumptions and risks The major assumptions made to ensure a successful implementation of the project were: i) competent consultants are available in time, ii) rubber companies are cooperative, iii) rubber farmers are supportive, iv) political support of the governments continues, and v) appropriate technologies are adopted by forest beneficiaries. To avoid the risks associated with each of the assumptions, planned mitigating measures are as described in Table 1: Completion Report July

17 Table 1. Assumptions, potential risks and mitigating measures Assumptions Potential risks Mitigating measures Competent consultants are available in time Rubber companies are cooperative Rubber farmers are supportive Political commitment of the government continues Appropriate technologies adopted Competent consultants not available in time Rubber companies not cooperative Rubber farmers not supportive of the project Commitment to increasing rubberwood utilization weakening Target beneficiaries not keen to adopt new technologies To solicit needed consultants well in advance and sign MOUs with qualified consultants at the early stage ISWA executives are to make early contacts with selected companies in North Sumatra explaining the objectives of the project To conduct intensive dialogue with farmers in collaboration with concerned local governments and local NGO elucidating the project objectives To continuously communicate and coordinate with concerned government authorities especially the Ministries of Forestry, Agriculture and Interior through organization of consultative meetings and workshops To undertake technology transfer through conduct of relevant training programs by experienced trainers; such programs are to be designed taking into account the interest of target beneficiaries, educational as well as occupational background of participants oooooooo Completion Report July

18 3. PROJECT PERFORMANCE 3.1 Planned vs realized performance a. Specific objective The specific objective was defined during the project formulation stage as to promote the utilization of rubberwood from sustainable sources, corresponded to the key problem addressed. There was no change made to this defined specific objective during the project implementation. b. Outputs and activities Table 2. Progress in implementation and summarized findings Output/Activity Completion status/change made to activity Summarized findings Output 1: Interest in the utilization of rubber wood owned by big companies increased Act. 1.1 To provide reliable information on potential benefits of utilizing rubber wood owned by big companies Act. 1.2 To facilitate intensive dialogue between large-scale rubber tree growers and the wood industry for adjustment of replanting schedule by big companies to ensure steady supply of wood to processing mills Act. 1.3 To organize one national workshop on rubber wood utilization involving main stakeholders Act. 1.4 To facilitate establishment of joint investment between rubber growers and wood processors in rubberwood utilization 100 %, YPO 1 No change 100 %, YPO 3 No change 100 %, YPO 1 No change 100 %, YPO 3 No change Investment in rubberwood processing by PTPN II not feasible, insufficient log supply App. 1,000 ha harvest is required to support investment in economic scale of sawmilling and woodworking Findings presented to the workshop in Medan Consultations conducted with the Executives of PTPN II, PTPN III, Bridgestone SRE and London Sumatera companies Discouraging result, adjustment to replanting schedule not in the interest of rubber companies The national workshop on Promoting the Utilization of Rubberwood from Replanting Areas of Companies and Farmers conducted in Medan on January participants discussed on 5 professional papers Problems on rubberwood utilization identified Establishment of joint investment not feasible due to bussiness policy of rubber companies PTPN III looks reluctant to cooperate with ISWA member companies in favor of its subsidiary company Output 2: Incentives for and capacity in the utilization of wood from farmers plantations improved Act. 2.1 To provide reliable information on potential benefits of utilizing rubber wood owned by farmers 100 %, YPO 2 No change Potential use of rubberwood identified Potential revenue of farmers from rubberwood utilization estimated and communicated Completion Report July

19 Act. 2.2 To carry out intensive consultation with farmers regarding requirements for and impacts of rubber wood utilization on farmers livelihood 100 %, YPO 2 No change Constraints to and requirements for rubberwood utilization by farmers identified through dialogues Farmers are in need of incentive and assistance to replace old plantations Act. 2.3 To establish models plantation with cash-crops inter-planting for demonstration and training of farmers (4 sites, total 20 Ha) Act. 2.4 To train farmers on efficient techniques for replanting and harvesting of old trees (4 trainings, 80 trainees) Act.2.5 To identify feasible options for adoption by local governments to assist farmers in replanting of rubber 100 %, YPO 2 No change 100 %, YPO 2 Adjusted, see Section %, YPO 2 No change Agro-forestry model for rubber replanting established at four sites totalling 14 ha in size The rubber planted under agro-forestry model developed well Yield of cash-crops less satisfactory particularly in Jambi province due to poor experience and treatments 87 farmers trained on agro-forestry techniques 80 farmers trained on harvesting techniques Farmers found interested in agro-forestry model for replanting Support of seedlings, fertilizers, pesticide, etc. (saprodi) using central and local government funds Development of access road to plantation sites to increase economic value of rubberwood Deregulation of procedures and requirements for obtaining bank credit and transporting of rubberwood products Output 3: Government policy governing rubber wood resource utilization revised and enhanced Act. 3.1 To review the existing laws, rules and regulations on rubber wood utilization Act 3.2 To formulate a new policy that encourages efficient utilization of rubber wood resource Act. 3.3 To organize one national workshop on the new policy involving main stakeholders Act. 3.4 To establish coordinating mechanisms of rubber wood resource utilization at different levels of government Act. 3.5 To submit the new policy to the government for adoption 100 %, YPO 2 No change 100 %, YPO 2 No change 100 %, YPO 2 Adjusted, see Section %, YPO 2 No change 100 %, YPO 3 Adjusted, see Section 5.3 Only Ministry of Forestry (MOF) decrees on shipment of rubberwood were found effected Other local regulations (Perda) had been abolished Inputs to enhance policy on SKAU provided during the workshops The inputs were used in the formulation of Permenhut No. P 30 of 2012 The workshop conducted in Jakarta on December participants discussed on 5 professional papers The workshop proposed to formulate a presidential instruction (Inpres) to accelerate rubberwood utilization nation-wide Establishment of the mechanism discussed with concerned provincial and district authorities and wood industries in 4 provinces Operation of a new mechanism was not supported by consulted stakeholders Need to activate existing institutions by assisting in operational funding and skills Draft Inpres prepared and discussed with Forestry Research and Development Agency (FORDA) and academicians Completion Report July

20 Output 4: Investment in rubber wood utilization increased Lack of support on Inpres formulation due mainly to questionable accuracy of growing stock data on farmers plantations Need to do inventory survey to collect reliable growing stock data to justify formulation of an Inpres Act. 4.1 To provide and disseminate updated information on rubber wood growing stock, product markets and processing technologies from primary and secondary sources Act. 4.2 To conduct field surveys on growing stock of farmers rubber plantations at four selected sites and produce update map of plantations in Sumatra island Act. 4.3 To organize two regional workshops on investment in rubber wood resource utilization and its potential role in economic development Act. 4.4 To install and operate a publicly accessible rubber wood information system 100 %, YPO 3 No change 100 %, YPO 2 No change 100 %, YPO 2 Adjusted, see Section %, YPO 3 No change Information on growing stock, markets and processing technologies obtained from primary and secondary sources searched and uploaded to installed website The website is located at Data on growing stock collected from 36 sample plots in 4 districts; average volume of saw logs varied from 16 to 58 m 3 /ha Map of rubber plantations in Sumatra updated in collaboration with DG of Crop-estates of the Ministry of Agriculture Two planned workshops were combined with prior approval of PSC and conducted in the City of Jambi on 4-5 October participants discussed on 8 professional papers Collaboration between farmers, wood industries and government is prerequisite to increasing investment A publically accesible website on rubberwood utilization installed and operational since year 2 The address of the website is Main content of the website comprises about the project, source of rubberwood supply, processing technologies and products markets Output 5: Appropriate technologies are available for the utilization of rubber wood from smallholding plantations Act. 5.1 To identify alternative technologies and select most promising alternative Act. 5.2 To procure, install and pilot test equipment and facilities for sawing, peeling, chipping and kiln-drying Act. 5.3 To publish and disseminate information on pilot-tested technologies and conduct two trainings for rubber growers, investors and local government staffs 100 %, YPO 1 Adjusted, see Section %, YPO 2 Adjusted, see Section %, YPO 3 No change Promising technologies identified using prespecified criteria including suitability and availability of equipment as well as simplicity and sustainability of operation On ground of investment magnitude, farmers are recommended to focus on producing sawn timber, wood chip, wood pellet and charcoal Multi-ripper sawing machineries purchased, installed and tested at PT Jaya Cemerlang Industry in Tangerang Procurement of equipment for peeling, chipping and kiln-drying was cancelled with approval of PSC due primarily to poor access road 2 training sessions on operation of multi-ripper sawing machineries completed with 37 participants 80 farmers trained on preservation of rubber logs using simple techniques and locally available materials and tools 114 farmers trained on charcoal making 28 charcoal kilns distributed to farmers in 12 villages Act %, YPO 3 Draft R & D program prepared and reviewed involving the main stakeholders including FORDA, Completion Report July

21 To develop a R&D program on rubber wood resource utilization in collaboration with main stakeholders No change Centers for R & D on rubber of the Ministry of Agriculture, rubber companies, universities and wood processors Final draft R & D program will be submitted to FORDA for use in R & D planning Notes: The trainings on techniques for wood preservation and charcoal making were supplementary to the original project activities endorsed by the PSC. 3.2 Time schedule The project actually commenced in May 2010 Planned duration of the project was 36 months; planned project activities were all completed within the sanctioned time, i.e from May 2010 to April 2013 In accordance with the project agreement, the Executing Agency is to submit a completion report and relevant technical reports by end of July 2013 and a final financial audit report by end of August 2013 The Executing and Collaborating Agencies are currently striving to finish up the reporting work 3.3 Inputs applied a. Manpower i. Project Key Personnel The key personnel employed by the project based on the no-objection-letter (NOL) of ITTO No. F of 10 May 2010 were: - Project Coordinator : Mr. Jimmy Chandra, ISWA - Project Secretary : Ms. Diah Herlinawati, ISWA - Finance : Ms. Herlina Lesmana, ISWA - IT : Mr. Josef Dwinanta, ISWA In addition, a national expert, Dr. Hiras P. Sidabutar, was also hired by the project at the request and financial burden of ISWA. Two BUK counterparts, Ms. Aryani S. Hut. and Mr. Agus Rahmat S. Hut. had been appointed by BUK through the executive decision of the Director General No. SK 38/VI-BPPHH/2010 of 16 April ii. National Consultants Nine (9) National Consultants had been employed by the project with the prior expressed approval of ITTO to assist in the execution of Activities 1.1; 2.1; 2.2; 2.3; 2.4; 2.5; 3.1; 3.2; 3.4; 4.1; 4.2; 4.4; 5.1; 5.2; 5.3 and 5.4 Completion Report July

22 iii. Provincial Jambi Forestry Agency had been appointed as the organizer of the implementation of Activity 4.3 based on the executive decision of the Directorate of Forest Products Processing and Marketing No. S.231/BPPHH-3/2011 of 19 July iv. NGO Komunitas Anak Kampung was employed by the project to assist in the implementation of Activities 2.1 and 2.2 as a follow-up to the concern over assuring the smooth project operations raised by the ITTO Forest Industry Projects Manager at the first meeting of the PSC on 29 April b. Expenditures Realized expenditures as of 30 June 2013 are as follows: a. Funds received by ISWA : US $ 449,040 b. Funds expended : US $ 439,819 c. Unspent funds retained by ISWA : US $ 9,221 d. Undisbursed funds by ITTO : US $ - Financial audit reports on the fiscal years of 2010 and 2011 had been timely submitted to ITTO and endorsed; with the endorsement of ITTO, the audit report on fiscal year of 2012 will be combined with the final report scheduled for submission by end of July oooooooo Completion Report July

23 4. PROJECT OUTCOME AND INVOLVEMENT OF TARGET BENEFICIARIES 4.1 Achievement of the specific objective a. Original vs revised indicators Table 3. The original and revised indicators of achievement Project elements Original indicators Adjusted indicators Development Objective To contribute to the lessening of wood raw material supply problem facing the national wood industry Specific objective To promote the utilization of rubberwood from sustainable sources 3 years after project completion Reduced gap between supply of and demand for wood raw materials By end of project: Production of rubber wood products increased by 10% by end of year 3 3 years after project completion: - Production of rubber logs increased by 5% in North Sumatra, South Sumatra and Jambi provinces, in total or by province compared to 2009 By end of project: - Total production of rubber logs from replanting areas in project sites increased by 2.5% compared to 2009 Outputs Output 1: Interest in the utilization of rubberwood owned by big companies increased 5 to 10 investors apply for investment permit by end of year 3 Reliable information on rubberwood utilization available Adjusted replanting schedule ensuring steady supply of wood to processors adopted by big companies One national workshop organized Exchange of information took place through meetings and discussions with big companies - Interest of rubber farmers in replacing old plantations strongly stimulated through training of at least 300 farmers in 4 districts on appropriate technologies, participation in organized dialogues at 12 villages and 3 workshops - At least one rubber company signed MoU on cooperation with wood processing mill (s) Feasibility study on rubberwood utilization by rubber companies completed in year 1 Consultation with rubber companies on feasibility of adjusting replanting schedule conducted One national workshop organized in year 1 in Medan, North Sumatra At least one rubber company indicates interest in cooperating with the wood industries in the utilization of rubberwood from Completion Report July

24 Output 2: Incentives for and interest in the utilization of wood from farmers plantations increased Reliable information on utilization of farmers rubberwood available Intensive consultation with rubber farmers conducted Models of plantation with cashcrops inter-planting established at 4 sites totaling 20 ha replanting areas in year 3 Feasibility of utilizing farmers rubberwood in 4 districts collaboratively assessed with owning farmers in years 1 & 2 Needed incentives for replacing old rubber plantations by farmers identified in 4 districts in years 1 & 2 Models of rubber replanting with agro-forestry system established at 4 sites totaling 20 ha At least 80 farmers trained on planting and harvesting skills at 4 sites At least 80 farmers trained on techniques for harvesting of old trees and agro-forestry system, respectively, in 4 districts in years 1 & 2 Output 3: Government policy governing rubberwood resource utilization revised and enhanced Revised policy document formulated and disseminated One national workshop on policy enhancement organized Existing policy on rubberwood utilization reviewed and recommendations for enhancement made in year 2 Draft Presidential Instruction (Inpres) completed in year 3 One national workshop on policy enhancement organized in year 2 Output 4: Investment in rubberwood utilization increased Updated and reliable information on rubber resource, product markets and technologies available Growing stock surveys carried out at 4 sites in Sumatra 5 to 10 investors apply for investment permit by end of year 3 Rubberwood data base system operational Two regional workshops Updated and reliable information on resource, products markets and technologies available Growing stock surveys carried out at 4 sites in Sumatra At least 2 wood companies in the project sites submitted to concerned authority letters of interest in rubberwood utilization Rubber wood data base system operational and publicly accessible since year 2 One combined regional workshop Completion Report July

25 Output 5 Appropriate technologies are available for the utilization of rubberwood from smallholding plantations organized One set of equipment and facilities for sawing, peeling, chipping and drying procured and pilot tested at one site in Sumatra Information on tested technologies published and disseminated Two training workshops on appropriate technologies with 40 participants conducted at two sites organized in the City of Jambi in year 2 One set of equipment and facilities for sawing procured and pilot tested in Tangerang, West Java 3 technical manuals on rubberwood processing published and disseminated by end of project Two training workshops on appropriate technologies with 40 participants conducted at one site in Tangerang in years 2 & 3 b. The outputs achieved and delivered Table 4. Achievement of outputs based on adjusted indicators Outputs Adjusted indicators Achievement assesed Outputs Output 1: Interest in the utilization of rubberwood owned by big companies increased Feasibility study on rubberwood utilization by rubber companies completed in year 1 Consultation with rubber companies on feasibility of adjusting replanting schedule conducted Feasibility study on rubberwood utilization by rubber companies completed in year 1 PTPN III expressed interest in such cooperation during the meeting on 6 June 2012 Two wood industries indicated strong interest in cooperation with PTPN III in year 3 One national workshop organized in year 1 in Medan, North Sumatra The national workshop conducted in year 1 At least one rubber company indicates interest in cooperating with the wood industries in the utilization of rubberwood from replanting areas in year 3 Consultation with 4 rubber companies on adjustment of replanting schedule accomplished Conclusion: Output 1 is partially achieved; rubber companies were not interested in adjusting their replanting schedules or in making investment in rubberwood utilization Output 2: Incentives for and interest in the utilization of wood from farmers plantations increased Feasibility of utilizing farmers rubberwood in 4 districts collaboratively assessed with owning farmers in years 1 & 2 Feasibility of utilizing rubberwood assessed in close consultation with farmers Completion Report July

26 Needed incentives for replacing old rubber plantations by farmers identified in 4 districts in years 1 & 2 Models of rubber replanting with agro-forestry system established at 4 sites totaling 20 ha Selected farmers at 12 villages interviewed regarding needed incentives for replacement of old rubber plantations Agro-forestry models for rubber replanting established at 4 sites totalling 14 ha in size At least 80 farmers trained on techniques for harvesting of old trees and agro-forestry system, respectively, in 4 districts in years 1 & 2 80 farmers trained on harvesting techniques 87 farmers trained on agroforestry techniques Conclusion: Output 2 is fully achieved noting that the size of agro-forestry model is 6 ha short of target for technical reasons Output 3: Government policy governing rubberwood resource utilization revised and enhanced Existing policy on rubberwood utilization reviewed and recommendations for enhancement made in year 2 Existing policies on rubberwood utilization reviewed and recommendations for policy enhancement provided Draft Presidential Instruction (Inpres) completed in year 3 Draft Inpres prepared and reviewed with the main stakeholders One national workshop on policy enhancement organized in year 2 National workshop on policy enhancement conducted as planned Conclusion: Output 3 is fully achieved noting that further process of Inpres is pending for technical reason Output 4: Investment in rubberwood utilization increased Updated and reliable information on resource, products markets and technologies available Relevant information collected and uploaded to website since year 2 Conclusion: Output 4 is fully achieved Growing stock surveys carried out at 4 sites in Sumatra At least 2 wood companies in the project sites submitted to concerned authority letters of interest in rubberwood utilization Rubber wood data base system operational and publicly accessible since year 2 One combined regional workshop organized in the City of Jambi in year 2 Growing stock data collected from 36 sample plots 2 wood industries indicated intention to cooperate with PTPN III in rubberwood utilization Website of rubberwood operational since year 2 The workshop conducted as planned Completion Report July

27 Output 5 Appropriate technologies are available for the utilization of rubber wood from smallholding plantations One set of equipment and facilities for sawing procured and pilot tested in Tangerang, West Java 3 technical manuals on rubberwood processing published and disseminated by end of project One set of multi-ripper sawing machineries procured and tested at PT Jaya Cemerlang Industry in Tangerang 3 technical manuals published and disseminated Two training workshops on appropriate technologies with 40 participants conducted at one site in Tangerang in years 2 & 3 2 training sessions on appropriate technologies conducted with 37 partipants Conclusion: Output 5 is fully achieved noting that training participants on sawing techniques were 3 persons short of target c. The specific objective achieved Table 5. Achievement of the specific objective based on adjusted indicators Specific Objective Adjusted indicators Achievement assesed Specific objective To promote the utilization of rubberwood from sustainable sources By end of project: - Total production of rubber logs from replanting areas in project sites increased by 2.5% compared to 2009 Total production of logs in North Sumatra increased from 173,704 m 3 in 2009 to 233,720 m 3 in 2012; in Jambi decreased from 63,612 m 3 in 2009 to 51,603 m 3 in Interest of rubber farmers in replacing old plantations strongly stimulated through training of at least 300 farmers in 4 districts on appropriate technologies, participation in organized dialogues at 12 villages and 3 workshops - At least one rubber company signed MoU on cooperation with wood processing mill (s) 398 farmers trained on appropriate technologies, dialogues with farmers at 12 villages conducted and farmers participated in 2 workshops No MoU signed by rubber companies and wood industries; PTPN III expressed readiness to cooperate and 2 wood industries indicated intention to cooperate with this company Conclusion: The specific objective is best to be declared as nearly achieved due to the partial achievement of Output 1 and incomplete fulfillment of Indicator No. 1 Completion Report July

28 As described in the previous section, all defined project outputs had been achieved and delivered, noting that Outputs 1 and 2 were somewhat short of targets for reasons beyond control of the project (see Table 4). Conceptually, the specific objective must have also been achieved with delivery of all defined outputs. This must be so because the outputs had been defined fully consistent with the main causes of the key problem addressed. Hence, delivery of these outputs must have resolved the main causes (problems) of the key problem addressed thus achieved the specific objective, the mirror of the key problem. In light of the indicators defined in the LFM, achievement of the specific objective is assessed below: - Indicator 1 : Total production of rubber logs from replanting areas in project sites at project completion increased by 2.5% compared to 2009 The data collected from the wood industries in Jambi province through the Provincial Forestry Agency indicated that total rubber logs volume entering the industries decreased from 63,612 m 3 in 2009 to only 51,603 m 3 in 2011 In North Sumatra province, total volume of rubber logs sold by rubber companies to wood industries increased from 173,704 m 3 in 2009 to 233,720 m 3 in 2012 Data on production of rubber logs in South Sumatra province was not available It is worth commenting on the occurence of different trends on rubber logs production in North Sumatra and Jambi. In North Sumatra, the logs producers are rubber companies practically without accessibility problem but lack of interest in efficient rubberwood utilization. The interest might have been somehow improved through dissemination of relevant information on potential benefits of rubberwood utilization accruable to rubber companies. The dissemination was acccomplised through the trainings and workshops organized under the project and through direct dialogues with the companies. Improved interest might have become the driving force of the increase in total rubber logs production. Contrary to the situation in North Sumatra, logs owners in Jambi province were farmers and the problems on rubberwood utilization were mainly the lack of interest and poor accessibility of plantation sites. While interest might have been improved through the trainings and information sharing during the workshops and dialogues, accessibility problem remains. Indeed, it is unrealistic to expect an increase on logs production under the present condition of access road to farmers plantations. This might be part of the force behind the decreasing production of rubber logs in Jambi province. Other forces might include the lack of incentives for farmers to replace old plantations, attractive latex price, etc. It is worth noting that latex is the important source of income for most farmer households. Price of latex strongly influences decision on replacement of old rubber plantations. During the period, price of latex was peaking, reached IDR 30-40,000/kg, higher nearly twice as the normal price at IDR 15-20,000/kg. The lucrative price could have refrained farmers from replacing old plantations; how unproductive the old trees might be, the trees still produced latex Completion Report July

29 thus generated additional income for the owners. This might be another reason for the low rubber logs production in Jambi province. - Indicator 2 : Interest of rubber farmers in replacing old plantations strongly stimulated through training of at least 300 farmers in 4 districts on appropriate technologies, participation in organized dialogues at 12 villages and 3 workshops Indeed, the interest of rubber farmers in replacing old rubber plantations has been intensified through implementation of the project activities. The trainings on techniques for harvesting of old trees, rubber replanting under agro-forestry system, rubberwood preservation, charcoal making and logs sawing have changed favorably the attitude of farmers towards utilization of rubber resource. In addition, the dialogues with farmers at 12 villages and with other stakeholders during the occasions of the workshops have also stimulated interest in rubberwood utilization. This growing interest, however, is difficult to materialize, at least in the near future, if the fundamental problem on rubberwood resource utilization, i.e. poor accessibility of plantation sites, is not removed. The authors concern is that by the time the fundamental problem is removed, the farmers interest is already in a weakening or fading out stage that the project might be unsustainable. - Indicator 3 : At least one rubber company signed MoU on cooperation with wood processing mill (s) Towards end of the project no MoU on cooperation had been signed by any rubber company and wood processor. PTPN III, owner of largest rubber plantation in North Sumatra, had indicated its readiness to cooperate with wood industries in the utilization of rubberwood from its replanting areas during the occasion of consultative meeting on 6 June Two ISWA member companies, wood processors in North Sumatra, had expressed their strong intention to cooperate with PTPN III but unfavorably responded by the latter in favor of its subsidiary company, PT Tiga Mutiara Nusantara. Using a signed MoU as the indicator, the specific objective is obviously not achieved, noting that two wood processors had indicated intention to cooperate with PTPN III although this latter company had once expressed its readiness to cooperate; using total volume of logs production as the indicator, the specific objective has been only achieved partially while using the interest of rubber farmers as the indicator, the specific objective is obviously fully achieved. Overall then, the specific objective may be declared as partially achieved as only one indicator is fully achieved, one indicator is partially fulfilled and one indicator is nearly met. Conceptually, however, with delivery of all pertinent outputs, the specific objective may be categorically declared as almost fully achieved noting that Output 1 was short of targets. Completion Report July

30 4.2 Pre-project s vs at project completion s situations a. Tangible project outputs The tangible results of individual activities under each output which did not exist prior to implementing the project are listed below: Output 1 Information on feasibility of rubberwood utilization is now available for use by interested investors One national workshop on rubberwood utilization was organized in Medan, North Sumatra, on January 2011 with 64 participants and its proceedings produced A technical report on Output 1 Strengthening the Interest of Rubber Companies in the Utilization of Rubberwood on Replanting Areas in North Sumatra is now ready for publication and dissemination Reps. of DGs of BUK, Crop-estates and ITTO adressed the national workhsop in Medan Output 2 Reliable information on potential benefits of and requirements for rubberwood utilization by farmers had been collected through consultation with rubber farmer communities and is now available for use by interested parties Agro-forestry models for rubber replanting have been established in collaboration with rubber farmers and can be replicated to other districts with appropriate adjustment for improvement 80 farmers have been trained on harvesting techniques 87 farmers have been trained on agro-forestry techniques Completion Report July

31 The incentives needed by farmers to replace old plantations had been identified for local governments to follow-up A technical report on Output 2 Improving the Incentives and Capacity for the Utilization of Farmers Rubberwood on Replanting Areas in Jambi and South Sumatra Provinces is now ready for publication and dissemination Training of farmers on felling Training of farmers on bucking Newly planted rubber clones with cash-crops inter-planting Completion Report July

32 2 years old rubber trees on agro-forestry sites in Jambi province 18 months old rubber trees on agro-forestry sites in Ogan Ilir and Banyuasin districts Output 3 One national workshop on enhancement of policy on rubberwood utilization had been organized with 65 participants and its proceedings produced Information on coordinating mechanism and feasibility of its formation is now available for use by concerned government authorities as well as rubber and wood industry associations Draft Presidential Instruction (Inpres) had been prepared in close consultation with the main stakeholders and is now ready for submission to DG of BUK for use or for further process A technical report on Output 3 Enhancing Government Policy on the Utilization of Farmers Rubberwood on Unproductive Rubber Plantations in Jambi and South Sumatra Provinces is now ready for publication and dissemination Completion Report July

33 DG of BUK, Rep. of ITTO and Rep. of DG Crop-estates addressed the national workshop in Jakarta Output 4 Information on growing stock, rubberwood markets and processing technologies had been collected and uploaded to the publically accessible website installed under the project Information on rubber growing stock had been collected from 36 purposive sample plots One regional workshop on investment in rubberwood utilization had been organized in the City of Jambi with 71 participants and its proceedings produced A technical report on Output 4 Promoting Investment for the Utilization of Rubberwood on Unproductive Rubber Plantations is now ready for publication and dissemination Reps. of DG BUK and Jambi Government addressed the regional workshop in Jambi Completion Report July

34 Output 5 One set of multi-ripper sawing machineries had been procured, installed and tested at the factory site of PT Jaya Cemerlang Industry in Tangerang 37 representatives of rubber farmers, wood industries and governments institutions had been trained on use of the multi-ripper sawing machineries 114 farmers had been trained on charcoal production techniques 80 farmers had been trained on simple and inexpensive wood preservation techniques Draft Mid-term R & D program on rubberwood resource utilization had been developed in collaboration with main stakeholders A technical report on Output 5 Developing Appropriate Technologies for the Utilization of Farmers Rubberwood Plantations in Jambi and South Sumatra Provinces is now ready for publication and dissemination Rubber logs to be sawn Multi-ripper sawing machine Multi-ripper sawing in progress First and second batches of training participants on the use of multi-ripper sawing machines from Jambi, Banten and West Java Provinces at PT. Jaya Cemerlang Industry in Tangerang Completion Report July

35 Participants of training on rubberwood preservation Materials and tools for preservation treatment Coating log-end using paint brush Coated logs covered with plastic sheet to prevent rain washing Completion Report July

36 Outdoor lecturing on charcoal making The complete structure of a charcoal drum kiln Piling of chopped wood inside drum kiln Wood-burnt residual smoke channeled to bamboo pipe and liquefied smoke collected in a container In addition, a number of technical documents containing technical information on relevant specific topics or implementation of selected activities are produced in Bahasa Indonesia under the project; these include: Rekayasa Kayu Karet Rakyat untuk Mendukung Pembangunan Rumah Murah Petunjuk Teknis Pembuatan Arang Kayu Karet Petunjuk Teknis Pengawetan Kayu Karet Draft Mid-term R & D Program on Rubberwood Resource Utilization Draft Inpres on Accelerating Rubberwood Utilization from Sustainable Sources Pelatihan Pengenalan dan Penggunaan Mesin serta Peralatan Pengolah Kayu Karet b. Sectoral policy and program During the occasions of the national workshops, participants had repeatedly expressed their concern over the problems associated with the use of SKAU for shipping of rubberwood products. DG of BUK had taken into account the experience of and comments made by the wood industries in the revision of existing ministerial decrees on the requirement for using SKAU for shipment of wood products originating from private/community forests including rubberwood. The inputs provided by the Completion Report July

37 project were acknowledged by DG of BUK as evident by the statement made on the communication letter of the Director of Forest Charges and Forest Products Distribution Management No. S.957/BIKPHH-2/2012 of 4 April c. Physical environment In terms of physical environment, during the 3-year period, the project had created the environment wherein the primary beneficiaries, i.e. rubber farmers, rubber companies and the wood industries are now more aware of the potential benefits of utilizing rubberwood resource; the problems facing the efficient utilization of rubberwood from replanting areas are now well perceived and understood, and; farmers have acquired the skills that enable them to actively participate in the activities on rubberwood resource utilization. As regards accessibility problem, it requires strong commitment of the government to invest in access road construction program. Such a program will certainly create more jobs, augment income and promote local economies yet the process is not harmful to the environment because rubberwood is only harvested from replanting areas. 4.3 Involvement of the target beneficiaries The primary beneficiaries of the project are the wood industry and rubber growers, both farmers and companies. The project will benefit these beneficiaries directly or indirectly as follows: Larger volume of rubber wood available for processing will reduce the idle installed production capacity, promote processing activities and contribute to local and national economic development; Availability of up-to-date and reliable information on rubber wood resource, product markets and processing technologies will induce stronger interest in investment on rubberwood processing; Training of farmers on replanting and harvesting skills is an invaluable social capital and shall benefit the farmers in the long run; Harvesting of rubber old trees and replanting with cash-crops inter-planting by farmers shall improve their income through selling of wood and cash-crops; Appropriate processing technologies developed under the project can be easily duplicated by smallholders and big companies owning rubber plantations; Cooperation between wood industry with large-scale rubber growers will secure supply of wood raw materials and augment income of both parties; and Enhanced and favorable government policy will allow efficient utilization of rubber wood thus stronger competitiveness of the wood industry in global market. The smallholders or farmers, owners of over 80 percent of removable rubber growing stock, shall be benefited in the future in various ways including: i) harvesting of old trees and selling of wood Completion Report July

38 to local processors will generate additional income; ii) technical skills acquired through trainings create self confidence and capacity to carry out activities on replanting and harvesting; and iii) cash crop inter-planting model plantation generates additional income when properly undertaken and managed. The big companies can enhance their financial performance through sale of efficiently harvested rubberwood. Market for raw harvested wood is strong indeed provided that schedule for harvesting can assure continuous flow of wood to local processors. Processing of rubberwood can be accomplished either by using own resources or by collaborating with existing wood processors. Selling of rubber logs will certainly generate revenue accruable to the companies thus enhance their financial performance. The secondary beneficiaries of the project include the Ministries of Forestry, Agriculture, Trade and Industry, local governments, universities and local NGOs. Information on rubber wood resource, product markets and technologies generated by the project to be publicly made available is of utmost important for the Ministries in raising their appreciation on the role the rubber wood resource can play in revitalizing the national wood industry and in decision making concerning efficient rubberwood utilization. The benefits accruable to local governments include availability of information on the dynamics of rubberwood resource base and use of the information in local policy making and economic development planning. The government institutions were involved in: The organization of the workshops, the PCAs and PFAs as the participants of all workshops, Jambi Provincial Forestry Agency (JPFA) as the organizer of the Jambi workshop and North Sumatra Provincial Forestry Agency (PFA) as the expert panel member in the Medan workshop; The compilation of relevant information: the Sei Putih and Sembawa RRCs compiled relevant information on rubberwood resource status and utilization as presented to the workshops in Medan and Jakarta; and the FORDA organized the review of draft Inpres and seconded its experts to assist in project implementation; The meetings of the PSC as members (DG of BUK, Center for International Cooperation of MOF, Center for R & D on Forest Products of FORDA, Bureau for Forestry Planning, and Embassies of the Republics of Japan and Korea in Jakarta); and The monitoring of project operation from time to time by DG of BUK. The universities have had the opportunity to take part in implementation of the project by assigning capable experts to attend the workshops and discussions organized under the project and in decision making by advising concerned local and central governments. Local NGO has had and will have the chance to assist local farmers and governments in the implementation of activities designed to improve livelihood of local communities. Completion Report July

39 Involvement of the primary beneficiaries is highlighted below: The rubber farmers were involved in: The establishment of the agro-forestry models by giving their lands to be used by the project as the sites of the models; The physical construction and maintenance of the models; The trainings on harvesting and agro-forestry development techniques as trainees; The workshops in Jambi and Jakarta as participants; The trainings on wood preservation and charcoal making techniques as trainees; The consultations on rubberwood utilization as respondents; and The training on sawing techniques using the multi-ripper machineries as trainees. The rubber companies were involved in: Hosting meetings and dialogues with the project consultants and ISWA Executives; The workshops, as speakers in Medan and Jambi and as attendants of all workshops; and The high-rank officials consultative meeting on cooperation organized on 6 June The wood industries were involved in: The workshops, as attendants of all workshops and as speakers in Medan and Jambi workshops; Hosting dialogues; The installment and operational testing of multi-ripper sawing machineries; The training on sawing techniques using multi-ripper machineries; and The high-rank officials consultative meeting on cooperation organized on 6 June The rubber farmers are now able to using their skills for producing charcoal and liquefied smoke of rubberwood; for generating income in land clearing using chain saw and in nearby logging operations. In addition, trained farmers in Ogan Ilir and Banyuasin districts have indicated their plan to develop better agro-forestry model for rubber replanting on their own lands. Indeed, the project has directly benefited farmers by providing daily wages for the establishment of the agro-forestry models, by granting rubber clone and the yield of cash-crops, by teaching the farmers free of charge on appropriate techniques for harvesting, rubber replanting under agro-forestry model, preserving rubberwood, charcoal making and logs sawing using multi-ripper machineries. The skills acquired are probably the most valuable benefit the farmers have gotten from the project as the skills are long lasting income generating means. The replanted rubbers will be handed over to the farmers owning the lands shortly after the project completion; the rubber will be producing latex in about two years time for about two decades to come which is also a great contribution of the project to the farmers. 4.4 Project sustainability Sustainability of the project after its completion is expected to be growing through the prevailing situations that had been developed as follows: Completion Report July

40 The information on potential benefits of utilizing rubberwood of old plantations accruable to rubber farmers, rubber companies and local economies will certainly intensify the attention of stakeholders to the resource and its utilization (see Technical Reports No. 1 and 2); The interest of farmers in practicing agro-forestry system for rubber replanting is now growing due to its potential for generating income and developing trees; it is very likely that the system is sustainable; The skills acquired by the farmers on tree harvesting and charcoal making are long lasting income generating means that their use are very likely sustainable; The encouraging performance of the multi-ripper sawing machineries is expected to catch the attention of small to medium scale wood industries as well as farmer groups to invest in and operate similar machineries; and The operation of the publically accessible website of rubberwood is expected to help interested beneficiaries make decision on business initiatives relating to rubberwood resource utilization. The arrangements for project sustainability that have been made with the primary beneficiaries are outlined below: The offices of ISWA in Jambi and South Sumatra provinces will continue assisting the primary beneficiaries in technical matters relating to rubberwood utilization at the latter s own costs; The provincial crop-estate and forestry agencies of Jambi and South Sumatra are planning to define a mechanism suitable for collection and dissemination of detailed information on harvesting of old rubber plantations; FORDA is committed to doing research works relating to efficient rubberwood processing technologies; and The Crop Estate Agency (CEA) of Batanghari district in Jambi province has convincingly indicated its intention to boost up its efforts on providing incentives for farmers to replace old rubber plantations in the forms of quality rubber clone, fertilizer, etc. oooooooo Completion Report July

41 5. ASSESMENT AND ANALYSIS 5.1 Project rationale and identification process Indonesia s total production of sawn wood increased from 4.8 million m 3 in 1980 to 10.4 million m 3 in 1984 but decreased to only 4.3 million m 3 in 2005; likewise, total production of plywood increased sharply from 1.0 million m 3 in 1980 to 9.7 million m 3 in 1997 then went down to 4.7 million m 3 in 2005 (FAO, 2006). The trend was obvious, increasing quantity of primary wood products during the first two decades but decreasing thereafter. The primary cause of the undesirable trends was insufficient wood raw material due mainly to the dwindling supply of natural timbers, inefficient operations and low quality of wood products. In light of the shortage of raw materials, the ITTO Technical Mission in 2001 had recommended the wood industries to utilize raw materials of differing quality and properties such as timber from non-forest sources including rubberwood, by adopting appropriate processing technologies. Completed ITTO-assisted pre-project PPD 80/03 Rev. 2 (I) estimated that 13.5 million m 3 of rubber logs were available for harvest every year on a sustainable basis. Out of this volume, however, only about 2.96 million m 3 or 22 percent that had been utilized by the wood industries, mostly originating from replanting areas of rubber companies; contrary to the fact that has been touched upon in the previous section, that around 85 percent of rubber plantations in Indonesia were owned by farmers. The key problem addressed by the project very low rate of utilization of rubberwood identified under the completed pre-project was consistent with the raw material supply problem then facing the wood industries. If the logs available at rubber replanting areas could be tapped fully or at higher rate, it would be a significant contribution to the wood industries. The key problem was identified involving main stakeholders, especially the wood industries and concerned government authorities, during the occasions of the workshops organized under the pre-project. 5.2 The problems addressed, project design and implementation strategy The key problem addressed was thoroughly analyzed involving main stakeholders; its consequence and direct causes as well as indirect causes were properly identified, using a problem tree technique. The problem tree, which summarized the consequences and the causes as well as sub-causes, was used as the basis for constructing a solution tree, the mirror of the problem tree, which was then used as the basis for defining the project elements. By reading the solution tree presented in the project document, it is very clear that i) the specific objective was defined correspond to the key problem addressed; ii) the outputs were defined correspond to the direct causes; iii) the activities were defined correspond to the indirect causes, and iv) the development objective was defined correspond to the consequence of the key problem addressed. In this manner, the project interventions defined, the outputs and activities, should be the Completion Report July

42 relevant ones to solving the problems identified at different levels namely the indirect, direct and key problems. The implementation strategy pursued was arguably appropriate. The motivating and convincing activities played critical role in ensuring successful project operations. Farmers for instance, are owners of around 85 percent of rubber plantations. These people had to be motivated to utilize the rubberwood they own by harvesting old trees of poor latex productivity and replanting the harvestedover areas with young plantations. Motivating the farmers were best accomplished through dialogues and consultations. To this end, reliable information on potential benefits of utilizing wood of old trees had to be made available and directly communicated with farmers. Convincing farmers was most effectively carried out through demonstration or training; presenting only materials and information, how attractive they might be, is usually insufficient to convince farmers because the farmers mostly are convinced only after seeing. Therefore, a number of activities were appropriately defined to deal with motivating and convincing farmers. The improving the enabling conditions element of the strategy was argued as indispensable if the problems at hand are ever to be resolved. The underlying notions of this element are that to promote rubberwood utilization, investment is definitely required; that to promote investment, favorable environment must be prevailing; that favorable environment is, to a larger extent, shaped by government policies. It is, therefore, essential for the governments at different levels to develop and implement policies that favor investment. Such policies must take into account efficiency of production process, features of product markets and competitiveness of investors. Therefore, any policies on rubberwood utilization effected by the government should encourage investment. Existing policies had to be reviewed and enhanced in view of promoting investment which had been satisfactorily accomplished. The equipping element of the strategy referred to procurement and testing of different appropriate technologies for the utilization of rubberwood. Such technologies should be suitable for processing of rubberwood endowed with particular such properties as sticky latex element, blue stain prone, etc. Any technologies had to be introduced through demonstration and training in order to assess applicability and productivity and convince farmers and wood processors for their adoption. 5.3 Critical differences between planned and actual implementation A number of variations were incorporated into the original plans due to unforeseen circumstances, some of them intentionally while others unintentionally, as listed below: i. Activity 2.4: To train farmers on efficient techniques for replanting and harvesting of old trees Implementation of the training on harvesting techniques was moved from the second and third years to the first and second years with the prior approval of ITTO solely for reason of efficiency. Upon close consultation with appointed national consultants on Activity 2.3 to establish models plantations with cash-crops inter-planting for demonstration and training, it would be more Completion Report July

43 efficient to implement Activities 2.3 and 2.4 simultaneously yet consecutively. The efficient sequence of works on both activities should be: to identify old rubber plantations to be replaced, to fell down old tress and train farmers on harvesting techniques at the same time, and to establish agro-forestry replanting models for demonstration and training. The proposed time rescheduling for implementation of Activity 2.4 was duly endorsed by the ITTO. ii. Activity 3.3: To organize one national workshop on the new policy involving main stakeholders This activity was originally planned for implementation in the first year thus was included in the First YPO. It was considered more fruitful to implement Activity 3.3 after completion of Activity 4.3, the regional workshops, in order to make use outcomes of the latter activity as inputs to the former activity noting the generally perceived scopes and objectives of the regional and national workshops. The postponement of Activity 3.3 to year 2 was duly approved by the ITTO. iii. Activity 3.5: To submit the new policy to the government for adoption The recommendation of the national workshop held in Jakarta on December 2011 on the need to formulate a Presidential Instruction (Inpres) to accelerate rubberwood utilization had been followed-up by the project. A draft of Inpres had been prepared and reviewed involving the main stakeholders. The review meeting strongly recommended to put process of Inpres on pending until reliable data on growing stock of ruberwood is available to strongly justify formulation of such Inpres. iv. Activity 4.3: To organize two regional workshops on investment in rubber wood resource utilization and its potential role in economic development The planned regional workshops dealt with the same theme: investment and regional economic development. Combining two workshops to only one was thought more efficient without jeopardizing achievement of the workshops objectives. In addition, a combined workshop would allow for wider participation from the two provinces thus facilitate more comprehensive discussions. The PSC and ITTO duly endorsed the proposal to combine two regional workshops into one event. v. Activities 5.1 and 5.2 : To identify alternative technologies and select most promising alternative and To procure, install and pilot test equipment and facilities for sawing, peeling, chipping and kiln-drying. It was initially planned to hire an international consultant to assist in implementation of these activities. Upon consultation with competent experts and the wood industry practitioners it was found that these activities could be well accomplished by national experts available with FORDA. Inputs of an international consultant could then be significantly reduced. The proposal on increasing inputs of national experts and reducing inputs of an international consultant was duly endorsed by the ITTO. Completion Report July

44 vi. Activity 5.2 : To procure, install and pilot test equipment and facilities for sawing, peeling, chipping and kiln-drying It was initially planned to include mobile wood chipper and peeler as well as dry-kiln chamber in the procurement of processing machineries and facilities. In the absence of access roads to most farmers plantations sites and limited project funds, the Project Coordinator proposed to the PSC during its second meeting to cancel this procurement. The PSC approved the proposal and proposed to use balance of funds to finance capacity building of farmers on charcoal making. The proposal was also duly endorsed by the ITTO. vii. To follow up the recommendation of the PSC on farmers capacity building, the project had implemented two additional, unplanned activities, namely training on charcoal making and on rubberwood preservation techniques using simple and inexpensive methods viii. Budget revision With the escalating domestic travel costs in terms of US dollar and significant reduction in inputs of international consultant, the Project Coordinator had proposed to make budget reallocation. The amount of US $ 23,750 sourced from budget item 15 was proposed to be put into budget items 21, 35 and 51; this proposal was dully endorsed by the ITTO. Above listed adjustments to activities and budget did not compromise project operations in any respects; instead, the adjustments had facilitated the smooth implementation of the project. 5.4 Adequacy of project inputs In terms of manpower, project inputs can be judged as adequate. Appointed project key personnel and the national expert had been able to properly handle the overall operational management of the project. The national consultants hired were generally able to accomplish the assigned tasks satisfactorily within the sanctioned time and financial budget. It is worth mentioning the support accorded by the wood industries, particularly Mr. Jimmy Chandra and his technicians at PT Jaya Cemerlang Industry to the national consultants in the execution of such activities relating to output 5 as selection, procurement, installation and operational testing of the machineries. The practical experience of these people in dealing with wood processing technologies greatly helped the national consultants in accomplishing their tasks. In terms of funds, the sanctioned budget was sufficient to fully finance the project operations. No problem had occurred with respect to financing of activities or purchasing of capital items as well as other needed materials. The project funds were disbursed timely to ISWA on behalf of the executing agency in four installments. The planned GOI s contribution was somewhat under-spent; the amount of unspent funds at the end of the project would be around US $ 65,365 due mainly to reduced expenses on vehicle and equipment & facilities items. Completion Report July

45 Disbursed funds had been used in accordance with the provisions of the project agreement. Appropriateness of expenditures had been audited by an independent, registered accountant and yearly reported to ITTO. Indeed, proper use of previously disbursed funds was the prerequisite to realizing the next disbursement by ITTO. 5.5 External influences The assumptions made with regard to the implementation of the project were generally valid throughout the project duration. Rubber farmers were cooperative and enthusiastically participated in the dialogues and training programs organized under the project. The cooperative attitude of the farmers was closely related to the nature of project activities which were useful for the farmers in augmenting their income. In fact, the farmers had indicated interest in practicing the agro-forestry and charcoal making techniques they learned from the project. The government authorities had also demonstrated political support to the project through their active participation in the discussion meetings and workshops organized under the project. In fact, the crop-estate agencies of Ogan Ilir and Banyuasin districts had indicated their intention to step up efforts for introducing the appropriate incentives identified under the project. The wood industries had been supportive throughout the project implementation process; they had been actively involved in the group discussions and workshops, even acted as the presenters of professional papers as requested by the workshop organizers. The wood industries also helped the procurement, installment and operational testing of the multi-ripper sawing machineries and selected processors sent their technicians to attend the trainings on rubberwood processing techniques. Transfer and adoption of the technologies went on smoothly due mainly to the strong interest of farmers in the technologies introduced by the project. The exception noted was the attitude of the rubber companies which was less cooperative particularly with respect to making adjustment to replanting schedule and investment in rubberwood utilization for the reasons elaborated in the Technical Report No. 1. Overall, the mitigating measures were effective in minimizing occurrence of the potential risks that had been identified during the project formulation stage. 5.6 Project beneficiaries The primary beneficiaries have gained benefits from the project in one way or another. The rubber farmers are now aware of the potential benefits of utilizing their rubberwood; they have been equipped with the skills needed for the utilization of the rubberwood they own, the skills which are long-lasting in nature and applicable for earning income in other such jobs not directly related to rubberwood as land clearing and charcoal making. The wood industries have gained useful information on feasibility of investment in rubberwood utilization, on the operation of multi-ripper sawing machineries and on the potential of rubber logs in the provinces of North Sumatra, Jambi and South Sumatra. The rubber companies have obtained information on the potential benefits of utilizing rubberwood from their replanting areas which may affect their future business policy and attitude Completion Report July

46 towards implementation of replanting program in a more efficient manner through competitive bidding. The other beneficiary, the government authorities, has been exposed to the potential of rubber logs in the supply of raw material to the wood industries; more importantly, the authorities are now also aware of the institutional and technical problems that must be overcome if the potential of rubber logs is ever to be actually made available for the wood industries. Indeed the primary beneficiaries will continue gaining benefits from the project outputs: the farmers by applying the skills they learned from the project; the rubber companies by utilizing the information on potential revenues from rubber wood utilization and by employing trained farmers in harvesting of old trees and clearing of the lands for replanting, and; the wood processors will be in a better position to make business decision by making use of relevant information available with the rubberwood website. In addition, the government authorities will be able to develop more realistic policies on efficient rubberwood utilization. 5.7 Project sustainability This project generated great interest in the utilization of rubberwood from sustainable sources, i.e. from replanting areas, that the prospects for its sustainability are excellent as highlighted below: Rubber farmers were supportive of the project and enthusiastically involved in implementation of the project activities affecting their livelihood. The skills the farmers have learned are long-lasting in nature and applicable to generate income; this is particularly true with the skills on tree harvesting, agro-forestry model development and charcoal making. The provincial and local governments have indicated their intention to provide appropriate incentives for farmers to replace old rubber plantations and utilize the rubberwood thereof. It is worth emphasizing that farmers are the owners of around 85 percent of rubber plantations and many project activities were devoted to dealing with rubber farmers. Consequently, project sustainability is, to a larger extent, dependent on farmers attitude towards the project and interest in using the skills and technologies transferred by the project. 5.8 The institutions involved in project implementation The Directorate General of BUK, Directorate of Forest Products Processing and Marketing in particular, had been involved in the project implementation by chairing the PSC and exercising close monitoring of project operations through its staffs appointed as the counterparts. The DG of BUK had also addressed and attended the workshops organized under the project. FORDA of MOF had involved in the project implementation by temporarily assigning two of its experts to assist in the implementation of selected activities. Completion Report July

47 The universities, particularly the Bogor Agricultural University (IPB) and University of Gajah Mada (UGM) had participated in the workshops and focused group discussions organized under the project. The Directorate General of Crop-estates of the Ministry of Agriculture had involved by addressing the workshops in Medan and Jakarta and by taking part in the consultative meeting in Jakarta. In addition, the Rubber Research Centers of Sei Putih, Medan and Sembawa, Palembang, had contributed to the project by presenting invaluable information on rubberwood resource status and utilization to the workshops organized by the project. The Provincial Forestry Agency (PFA) of Jambi had been appointed as the organizer of the regional workshop held in the City of Jambi while the Forestry Agencies of four district governments had involved in the implementation of activities relating to government policies and identification of incentives for farmers. The crop-estates agencies at the provincial and local levels had provided information on existing rubber plantations and assisted in organizing the dialgoues with rubber farmers. Indeed, the ITTO had greatly contributed to the successful completion of the project by closely monitoring progress in implementation through its participation in the meetings of PSC, addressing the workshops, responding quickly to any requests or proposals made by the Project Coordinator, maintaining effective communication and timely disbursing project funds. It is worth mentioning that the Embassies of the Republics of Japan and Korea in Jakarta had participated in the PSC meetings by sending their representatives whom had provided comments and insights fruitful for improving the project implementation operations. Last but not least, the wood industries and rubber companies were also involved in the project implementation by consistently attending the workshops and discussions organized under the project and assisting in implementation of selected activities. oooooooo Completion Report July

48 6. LESSONS LEARNED 6.1 Project identification and design The key problem addressed by the project was identified under the completed pre-project and adequately analyzed involving the main stakeholders; the problem analysis identified direct and indirect causes as well as consequences of the key problem that the cause-effect relationship was definitely clear and easy to digest. The clear cause-effect relationship had facilitated construction of a sound project design having strong vertical logic, relevant elements and well defined interventions. The sound project design had eased the operational planning and facilitated the smooth project implementation with only minor adjustments to planned activities. The implementation strategy adopted that comprised elements of motivating and convincing of rubber plantations owners, improvement of enabling conditions and introduction of appropriate technologies was proved applicable and effective in achieving the specific objective. The variations between planned and actual implementation had occured due mainly to the lack of information on specific matters and the Project Coordinator s concern over operational efficiency; the variations could have been avoided by conducting an ex-ante evaluation prior to commencing with the project operations. The critical determining factors of project sustainability include applicability of the technologies and skills learned by farmers from the project, continued political support by the governments at different levels and enhanced cooperation between rubber and wood processing companies in the utilization of rubberwood from replanting areas. 6.2 Project implementation The Executing Agency of the project was the Directorate General of BUK that had mandated ISWA to fully implement the project based on a Memorandum of Understanding signed by both parties establishing roles and responsibilities of each in a clear manner which had avoided any confusion during the course of project implementation. To implement the project, ISWA had established a small Project Management Team (PMT) comprising four project key personnel, one national expert and two DG BUK counterparts; the small PMT proved able to adequately perform project management tasks in an efficient manner. The monitoring and evaluation of progress in implementation had been performed through two PTC meetings, four PSC meetings and monthly technical meetings of the PMT; such meetings had greatly contributed to the smooth project operations. The strategy pursued in implementing the project was defined during the project formulation stage consistent with the project elements specified and operationalized in a collaborative Completion Report July

49 manner by working closely with the primary beneficiaries, relevant institutions and national consultants; the strategy proved effective in achieving the specific objectives. The project was managed in full compliance with existing ITTO rules and procedures; all the documents required by ITTO including YPOs, bi-annual progress reports, financial audit reports and documents of particular had been timely submitted to ITTO and facilitated immediate issuance of any approvals requested by ISWA. The roles and responsibilities of ISWA and the national consultants were well elaborated in the respective terms of reference which had facilitated accomplishment of assigned tasks in an effective fashion. The project had been successfuly completed within the sanctioned financial and time budget due mainly to the adequate project design, supportive primary beneficiaries and partners, strong coordination with ITTO and DG of BUK as well as the cooperative and competent national consultants. The active participation of rubber farmers in the implementation of relevant activities was realized without any major difficulties because the farmers were convinced that the activities would greatly contribute to their livelihood. The original indicators of achievement defined in the Logical Framework Matrix (LFM) was exclusively based on the project design constructed during the formulation stage; appropriateness of the indicators as a tool for measuring achievement was evaluated regularly at the beginnings of current years of operation and adjusments made as necessary based on actual progress in implementation. oooooooo Completion Report July

50 7. CONCLUSIONS AND RECOMMENDATIONS 7.1 Conclusions i. The key problem addressed by the project very low rate of utilization of rubberwood from sustainable sources was identified under the completed ITTO-assisted pre-project involving the main stakeholders based on the preliminary estimate of existing rubberwood growing stock and its state of utilization; successful removal of the key problem would greatly contribute to lessening the wood supply problem facing the national wood industry. ii. The key problem was adequately analyzed, its causes and sub-causes as well as consequence were clearly specified; the project design was constructed based on a clear and logical causeeffect relationship that its vertical logic was strong and its elements were consistent with the problems to be resolved. iii. The project was implemented by ISWA on behalf of Directorate General of Forestry Enterprise Development (BUK) with close supervision by the Directorate of Forest Product Processing and Marketing (BPPHH) of BUK without any major administrative or operational difficulties. iv. The project had been smoothly implemented and successfully completed to achieve its defined specific objective; the smooth implementation and successful completion of the project were made possible by, among others: The sound project design that eased operational planning; The effectiveness and appropriateness of the implementation strategy; The adequate resources in terms of manpower, funds and time; The generally strong support of the primary beneficiaries and partners; and The able project management team. v. The project operations were managed by a small management team comprising the project coordinator, a secretary, a finance staff, a technician, a national expert and two BUK counterparts that was able to complete the project within the sanctioned financial and time budget. vi. The specific objective defined was nearly achieved through the full execution of twenty-two planned as well as two additional activities pertaining to five outputs and delivery of the outputs noting that three outputs were fully achieved and two outputs were slightly short of targets. vii. The assumptions made were valid throughout the project duration and the mitigating measures defined were effective in preventing the potential risks from happening. viii. The indicators of achievement originally defined had been revisited at the beginnings of current years of operations and necessary adjustments made based on progress in implementation to ensure applicability and appropriateness of the indicators as the tool for measuring project achievements. ix. The primary beneficiaries of the project had demonstrated their cooperative and supportive attitude towards the project implementation noting that the rubber companies were less cooperative for business policy, technical and administrative reasons. Completion Report July

51 7.2 Recommendations i. It is strongly recommended that any ITTO project proponent to perform an adequate analysis of the problem to be addressed in accordance with existing ITTO manual on project formulation to ensure clarity of cause-effect relationship. ii. To be sound, a project design must be constructed based on a clear cause-effect relationship to ensure relevance and effectiveness of project interventions to solving the problems at hand. iii. Any collaboration in project implementation should be based on a memorandum of understanding that clearly defines roles and responsibilities of the parties involved in order to avoid unnecessary confusion and disharmony of institutional relation during the project implementation. iv. To ensure a smooth implementation and successful completion of a project, appropriateness of strategy for implementation, adequacy of inputs as well as support of primary beneficiaries and partners are among the enabling conditions that are required to prevail. v. It is best to employ a small but able project management team in order to minimize cost of personnel, ensure effectiveness of coordination and increase adaptability to changing project environment. vi. Achievements of a project must be assessed using the pre-specified indicators; to be realistic as a tool for measuring achievements, such indicators need to be occasionally revisited and adjusted as necessary based on progress in implementation. vii. The potential risks associated with the project implementation should be defined correspond to the assumptions made; relevant mitigating measures identified during the project formulation stage must be exercised and modified as necessary during the course of project implementation. viii. It is strongly recommended for BUK and ISWA to continue exploring the possibility of establishing cooperation between the rubber companies with wood industries in rubber logs supply through organized dialogues between high-rank officials of the Ministries of Forestry, Agriculture and State-owned Companies, in view of increasing value-added of the rubberwood harvested from replanting areas. Responsible for the Report Project Coordinator Project National Expert Mr. Jimmy Chandra Date: July 2013 Dr. Hiras P. Sidabutar Completion Report July

52 Selected references FAO FAOSTAT Database home page ( Food and Agriculture Organization of the United Nations, Rome. ITTO Pre-project PPD 80/03 Rev. 2 (I). 2005: Promoting the utilization of rubberwood from sustainable sources in Indonesia. Completion Report, prepared by PHJ. Nainggolan, Published by ITTO and ISWA, Jakarta. Sidabutar, Hiras and Chandra, Jimmy. 2013: Strengthening the Interest of Rubber Companies in the Utilization of Rubberwood on Replanting Areas in North Sumatra. Technical Report No. 1 of Project PD 523/08 Rev. 1 (I). Published by BUK, ITTO and ISWA. Sidabutar, Hiras and Chandra, Jimmy. 2013: Improving the Incentives and Capacity for the Utilization of Farmers Rubberwood on Replanting Areas in Jambi and South Sumatra Provinces. Technical Report No. 2 of Project PD 523/08 Rev. 1 (I). Published by BUK, ITTO and ISWA. Sidabutar, Hiras and Chandra, Jimmy. 2013: Enhancing Government Policy on the Utilization of Farmers Rubberwood on Unproductive Rubber Plantations in Jambi and South Sumatra Provinces. Technical Report No. 3 of Project PD 523/08 Rev. 1 (I). Published by BUK, ITTO and ISWA. Sidabutar, Hiras and Chandra, Jimmy. 2013: Promoting Investment for the Utilization of Rubberwood on Unproductive Rubber Plantations. Technical Report No. 4 of Project PD 523/08 Rev. 1 (I). Published by BUK, ITTO and ISWA. Sidabutar, Hiras and Chandra, Jimmy. 2013: Developing Appropriate Technologies for the Utilization of Farmers Rubberwood in Jambi and South Sumatra Provinces. Technical Report No. 5 of Project PD 523/08 Rev. 1 (I). Published by BUK, ITTO and ISWA. oooooooo Completion Report July

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