NATURAL FOREST DEPLETION (Q&Q) = FOREST & BIODIVERSITY LOSSESS OR DECREASE

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2 NATURAL FOREST DEPLETION (Q&Q) = FOREST & BIODIVERSITY LOSSESS OR DECREASE

3 Changes in forest cover - Sumatra Montane forest Wetland forest Low land peneplain forest Hectares (million) Non-Forest area

4 MAGNITUDE & IMPORTANCE OF IMPACT TO FOREST & BIODIVERSITY BY SPACE AND TIME HUMAN ACTIVITIES, AS ECONOMIC ANIMAL & SOCIAL ANIMAL Most Human Perception, In Facts: Woods are profitable Lands are valuable Biodiversity are Forgettable

5 Between Known Problems & Causes: Complex institution & policy problems Bureaucracy Problems Weak Synergy of political Agendas, local-national and national-international Weak socio-cultural-based management Conflict of Interests Lack of knowledge Weak incentive Weak law enforcement

6 Between Causes & Expected Outcomes: Unknown magnitude and importance of impacts create difficulties in awareness campaign No generic measures can be applied to protect forests and biodiversity Need a process approaches at site specific scale Time constrain may lead to unexpected outcomes Need adaptive management at site level

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9 Inter-Departmental Committee on Forestry (IDCF) set up by CGI has already had a comprehensive framework and action plans to control forest degradation, but so far the agenda has not been implemented effectively. Some activities, by all means, have been carried out by the Ministry of Forestry, but, actually, the high priority action plans such as guardian against illegal logging, restructuring of wood industry, and reformation of forest management system in line with decentralization in which the implementation needs inter departmental coordination have not resulted significant progress yet.

10 The complexity of forest degradation management arisen in Indonesia is caused by structural problems: (1) imbalances in allocation of forest resources utilization rights (2) conflicts due to difference in claim, (3) conflicts of interest among government bureaucrats, including law officers

11 Description of Land Right Conflicts Conflict Area Number of Conflict Number of Village Extent of Involved Land (Ha) Cases of Army Involved Estate Crops , Forest (HPH & HTI) ,684 4 Mining ,102 3 Housing Estate , Tourism/Hotel/ Resort ,971 5 Industrial Estate ,866 3 Dam/Irrigation ,619 8 Forest (mangrove) ,899 3 Forest (Conservation) ,751 4

12 In such situation, the gainers (privates) have ability to pay high cost economy because they get opportunity to do illegal logging or over cutting as the compensation. The high cost economy resists because it related to rent seeking opportunity of government official. Previous research indicates that concessionaires must pay between 26% and 48% of their operational costs in dealing with the government.

13 In the context of efforts to save the forest, therefore, the reform of government institutions and the bureaucracy can be considered the real issue, while the other matters are only symptoms.

14 Due to the inter-linkage of the above problems, law enforcement measure if it can be done will just temporally dim social conflict, because: imbalance allocation of rights on forest resources utilization still embedded in the reality. The weaknesses of forestry law have been evaluated by ICEL (2001) as having centralistic spirit, which does not match with the era of autonomy. Similar spirit also can be found in other laws related to forestland. It seem that many forestry officers and other government officers responsible for forestry law enforcement are involved in timber-related and forestland business.

15 Therefore, strengthening the capacity of law enforcement without improvement of forest-related laws, bureaucracy and forestry institutions will never focus on better solution, but may trigger greater conflict between central, province and regency (Kabupaten) governments and between government and communities in the future.

16 With different and diverse stakeholder perception and interest in the field, instructional approach from the Center such as the release of president decree or instruction would not get support and positive result. The weakness implementation of President Instruction and Ministry of Forestry Decree on moratorium of ramin (Gonystylus bancanus) cutting and trading has already shown the reality.

17 The questions are: How the international agenda and national commitment have to be linked, How the linkage can trigger the presence of local government commitment, and then how the bureaucracy can be reformed. The implementation failure of the last year multi-sector/idcf agenda and other previous forestry international agendas are due to the absence of process and intensive communication to link those international commitments and national, as well as local, concerns.

18 Governance and bureaucracy problems are the most importance causes/mechanism of forest degradation. The international initiative, therefore, just performed as a trigger and cannot be more. Experiences in the last two years showed that the forest reform agendas which are really workable in the field were just the agendas resulted and agreed through intensive communication process among the central and local government as well as other stakeholders, followed by bureaucracy reforming and strengthening as prime mover. Other agendas could be right and better normatively, but they may be unable to be implemented because of lack of commitment and institutional capacity.

19 CONTROL & PERMIT Ministry of Trade & Sucofindo (2001): 21 kinds of controll and guidance activities: The role of BPK (Directorate General of Forestry Production Management) is dominant. Supporting cost for control and guidance: Rp ,- per year. Completion of permit: Man Days per year

20 TRANSACTION COSTS COST COMPONENTS: Rp/Year Rp/Ha Rp/m3 1. COORDINATION COST : a. Permit Arrangement b. Control and Guidance c. Reporting INFORMATION COSTS STRATEGY COSTS TOTAL

21 TRANSACTION vs PRODUCTION COST TRANS COST 30% PROD COSTS 70%