Published by: The Jakarta Post, 9 July 2008
According to a recently unveiled assessment by independent bodies, approximately two-thirds of concessionaires in Papua are poorly managing the region's forests. This heightens the widespread perception of failure on the part of Indonesia's forest management services. Even as some forests have been exploited at a far greater rate than they can regenerate, many of the forests that remain face further pressure from logging.
One therefore has to wonder about the effectiveness of existing forest stewardship programs, of both the regulatory and market-based variety. With respect to the former, Indonesia's government has promulgated various laws and regulations, supposedly to ensure the wise use of forest resources. The government has also prescribed standards and guidelines for use in managing forests as well as sanctions and penalties for noncompliance.
Unfortunately, such a regulatory approach requires both resources and enforcement capacity, both of which are argued to be clearly lacking in this country.
Various policies introduced have been under heavy criticism, the strongest claim being that the governmental regulatory approach remains a "paper tiger".
As a result, a market-based approach involving forest certification -- often nicknamed "green labeling" -- has gained global momentum with its promise of market incentives for price premiums. The idea is that as global awareness around forest loss and degradation grows, contemporary society -- principally wood product consumers -- will begin to buy products only from (certified) sustainably managed forests. More importantly, green labeling assumes that consumers will eventually accede to paying premium prices for their wood products.
Unfortunately, certification has not yet gained a strong foothold, even in regions where green markets are thought to have been developed, such as Europe. As a result, it has yet to contribute significantly to forest stewardship, for the following reasons.
First, although studies of consumers' perceptions consistently reveal that wood consumers are very conscious of the environmental issues associated with such products, they would nevertheless refuse to pay higher prices for products from certified forests. A price attribute is clearly more attractive to consumers than an environmental attribute.
It is difficult to provide quantitative data on certified wood consumption as a proportion of total global wood consumption. Nonetheless, according to a report by the UN Economic Commission for Europe and the UN Food and Agricultural Organization, in 2007 the estimated industrial roundwood from certified forests accounted for only 25 percent of the total global wood production of nearly 400 million cubic meters. The report also stated that growth rates in certified forest areas are declining.
Second, even if certification gained strong support from consumers by providing real incentives for paying premium prices, it is unlikely Indonesian forest companies will adopt the program. Only a few have been certified, with the majority remaining uninterested in the program.
To date, only three out of the more than 300 companies that manage Indonesia's national forests have done so. And these certified companies only cover an area of less than 1 million hectares of forest, compared to the more than 50 million hectares set aside for production.
Even though the government has offered forest companies a softer annual work plan policy, which allows certified companies to independently determine their annual allowable cut, it has so far failed to attract much interest.
Experience has taught us that most forestry companies are unlikely to remain in the forestry business for very long. Some analysts even describe them as "one-cycle" companies: They "mine" the timber and then switch their business. Thus, even if such companies refrain from certification, little impact would be felt across the industry -- unless mechanisms existed to punish their subsequent business activities for failure to meet certification standards.
The market-based certification approach is therefore unlikely to do more than promote the wise use of Indonesia's forests. Contrary to the claims made by some environmental activists, the regulatory approach, involving government intervention, therefore remains an important alternative.
However, if governmental regulations are truly to contribute to forest stewardship, preconditions should be set. A strong dedication to "forest welfare" (the greatest benefit going to the forests) remains an important ingredient of solid governmental policy.
Experiance has also shown that many of Indonesia's forest regulations favor big business. Moreover, very few policies have been introduced out of genuine concern for forest welfare, favoring instead rather different political, economic and social goals, such as economic development.
For instance, to attract forest investments and thus boost economic goals, a number of policies have been introduced, such as subsidies for forest processing services.
Unfortunately, these and other policies have created market distortions that have led to increased pressure on forest resources.
In addition, forest royalties and levies in Indonesia are set very low, so that forest companies can capture "superprofits". This clearly encourages rapid deforestation.
Furthermore, the royalty and levies system does not provide incentives to reforest logged areas. Instead, by paying royalties, companies can shift responsibility for reforestation onto the government. Yet, forestry companies should bear the responsibility of leaving forests in the same condition in which they were originally leased.
To sum up: Given increased promotion of market-based approaches to certification, it is clear that a strong forest-dedicated regulatory approach is needed -- if anyone is still interested in seeing the limited remaining "majesty" of Indonesia's forests.
The writer is a lecturer at Gadjah Mada University in Yogyakarta and a PhD candidate at Goettingen University, Germany. He can be reached at amaryud@gwdg.de
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