Indonesian Forest Plan Angers Environmental Groups

JAKARTA, Indonesia, February 23, 2007 (ENS) - Conservation groups from Indonesia and the United States are criticizing World Bank support for an expansion of industrial forest plantations in Indonesia. The bank's report, issued Wednesday in Jakarta, identifies as "among the highest priorities," support for the Indonesian Department of Forestry's plan for accelerated plantation development.

"In Indonesia, plantation establishment has traditionally been linked to extraordinary deforestation, uncontrolled forest fires impacting local communities and neighboring countries and significant human rights violations," said Rivani Noor of CAPPA, the Community Alliance for PUlp and Paper Advocacy, on the Indonesian island of Sumatra.

The World Bank report, "Sustaining Economic Growth, Rural Livelihoods, and Environmental Benefits: Strategic Options for Forest Assistance in Indonesia," explores what the bank calls "the challenge of harnessing the country's significant forest resources to better contribute to growth, rural livelihoods and environmental protection."


Logging operations on Halmahera island North Maluku province of Indonesia, are focused on lowland forest, the most important habitat for many bird species. (Photo by P. Jepson courtesy BirdLife)
While the bank says "poor governance has led to considerable environmental degradation: over 25 million hectares of the forest estate - an area the size of Great Britain - no longer has trees," the Indonesian plan would establish five million hectares of industrial timber plantations and two million hectares of so-called "community forests."

Neither of these forest management types would be good for Indonesia, the environmental groups warn.

"The push to establish between five to seven million hectares of industrial plantations will cause tremendous harm to our forests and the women and men whose livelihoods depend on them," said Farah Sofa of WALHI, Friends of the Earth Indonesia, Indonesia's largest environmental group.

"So-called plantation - community "partnership" programs have generated conflicts, impoverishment, and environmental degradation for decades, said Rukaiyah Rofiq of Yayasan Keadilan Rakyat, a local group based in Jambi Province of Indonesia.

"Lack of recognition of adat and community land and forest rights, the use of military security forces on behalf of plantation companies, the loss of lands due the vastly unequal power of the partners are all tremendous problems with community plantation programs," Rofiq said.

"We oppose the application of plantation partnership programs in the continued absence of full prior recognition of indigenous forest and land tenure rights," said W. Koesnadi, who represents the group Yayasan PADI of East Kalimantan.

Country Director of the World Bank Indonesia Andrew Steer views the plan as a way to save Indonesia's forests and assist local communities to develop.

"Now is the time when Indonesia is in a dynamic governance transition, for decentralized governments and forest sector stakeholders to implement policy actions to save Indonesia's unique forests," said Steer.


Logs cut illegally from Sumatran forests. (Photo courtesy Japan Tropical Forest Action Network)
"In fact," he said, "it is time for a comprehensive framework that integrates sustainable forest management into the global strategy for mitigating climate change and preserving biodiversity."

The report focuses on land and people, not forests and trees, said Steer. He says that change shifts the balance toward improving community livelihoods, while maintaining environmental services and biodiversity values.

Between 1985 and 2004, "donor" funding for Indonesia's forestry sector totaled over US$1 billion, with the bank providing approximately one third of these funds, many of which must now be paid back by the Indonesian people.

During this period, massive overcapacity was established in the forestry sector, illegal logging grew to astonishing proportions, the land and forest rights of indigenous communities were increasingly violated as entire areas were subject to military intervention on behalf of forestry companies, said Titi Soentoro, policy coordinator for the Indonesian group NADI.

"It is important to remember that the bank withdrew from Indonesia's forestry sector after disastrous projects with irreversible impacts on forests and indigenous peoples," said Dr. Stephanie Fried of the U.S. nonprofit group Environmental Defense. "We do not see substantial positive change in terms of illegal logging, corruption, and human rights in Indonesia's forestry sector."

In the new plan, the bank admits that the Indonesian forestry sector suffers from tremendous overcapacity, including large bankrupt paper and pulp mills operating without a legal supply of timber.

The report mentions "corrupt practices" apparently involved in the sale and debt restructuring efforts of major forestry companies and cites as a "moral hazard" inappropriate debt write-offs and settlement agreements which plague the sector.


Teak plantation in Java, Indonesia (Photo courtesy FAO)
Rather than recommending a downsizing of the industry in line with bankruptcy proceedings, however, the bank calls for a vast increase plantation establishment which would keep these companies and, apparently, new companies planning on constructing additional mills afloat.

The bank suggests as a "policy of convenience" that "on conversion forest land, it may be appropriate to allow some added timber harvest in the short run to balance industrial timber demand and supply."

"Reducing overcapacity in the forestry sector, through the downsizing of bankrupt companies and preventing the establishment of additional industrial capacity including new paper and pulp mills is one of the key first steps which must be undertaken to bring demand into line with legal timber supply," said Berry Nahdian Forqan, director of WALHI South Kalimantan.

"The troubled United Fiber System and Kiani Kertas mills are the perfect example of financially unstable companies without access to sufficient legal timber," said Forqan.

"The bank claims to have followed a process of consultation during the development of this plan," said Noor, facilitator of CAPPA. "Despite our repeated requests, they have refused to provide copies of their draft strategy and plan in Indonesian language, making it impossible to carry out proper consultation with affected peoples. It is as if nothing has changed."