Alongside their global value, forests are a vital resource for Indonesia. Forests generate foreign exchange for the state economy and subsistence support for local communities for whom they also hold substantial sociocultural value. It has been estimated that the timber industry has contributed 20 percent of national revenue over the last few decades (Kartodihardjo 1999) and provided widespread employment opportunities. Forests generate an average of US$ 6 billion in revenue per year and 20 to 30 million people are directly or indirectly employed in forestry (Sunderlin et al. 2000). On a smaller scale, forests play an important role as a...

Following the fall of President Soekarno’s Old Order regime in 1967, a new regime came to power in Indonesia. Under the command of President Soeharto, the New Order government implemented a highly centralized system of governance areas across all sectors, including the forestry sector. As in the rest of Indonesia, forestry in Sintang was managed by the central administration in Jakarta.

Forest resources were managed in accordance with Law No. 5/1967 on Basic Forestry Provisions. In the same year Law No. 1/1967 on Foreign Investment opened up opportunities for foreign investors in Indonesia. The forestry sector provided them with lucrative...

The objectives behind the ministerial decrees governing 100-ha HPHHs were ostensibly to ensure that forest resource management could provide direct benefits to communities living in and around forests. These decrees regulated procedures for harvesting timber in line with the capacity of the local communities. For example, they stipulated a relatively small area of forest land, and prohibited the use of heavy machinery.

Regional governments justified their issuance of 100-ha HPHH permits as a means of increasing the districts’ locally generated revenue (PAD) – a reasonable argument in light of the fact that the districts now had to find their own...

Village forests in Sayan Subdistrict are divided into the following three categories⁷. These categories of tenure are recognized and upheld by local communities, but they are not officially recognized by the state.

1. Ulayat forests⁸, often referred to as village or community forests, are communal forest areas covering whole village areas including protected areas. These forests are recognized as being collectively owned, and this ownership extends to the land itself.

2. Customary forests are forest areas in which villagers have rights over the possession, management and inheritance of certain trees. Ownership does not extend to the land itself. Ownership is based on...

As described in earlier sections, the complexities of forest resource management under decentralization are manifold. One root cause is the legal and political situation. Legal ambiguities continue to cause struggles between the central and regional governments. Low levels of trust between Jakarta and the regions have also led to problems in central and regional government relations.

One very interesting case is that of the Sintang District Head’s decision to withhold timber taxes and Reforestation Funds. Instead of depositing them with the Ministry of Forestry in Jakarta, timber taxes and Reforestation Funds were deposited in the Sintang District Government’s treasury account....

Decentralization has provided new space for regional governments to organize and manage their own forest resources. The number of local actors involved in forest resources management has also increased. However, many district governments correctly feared that the Ministry of Forestry would quickly move to recentralize the forestry sector and that their authority might be short-lived. In this climate of suspicion, forest resources were targeted for regional own-source revenues (PAD). This was driven partly by their need to meet the shortfall caused by the reduction in development subsidies from central government.

Local policies have followed the longstanding national tendency to prioritize...