Jakarta Globe, Berni Moestafa, November 10, 2013
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| A picture made available on May 10, 2013 shows logs on a tugboat on Kampar River in Teluk Meranti, Riau province, Indonesia, on May 2013. (EPA Photo/ Bagus Indahono) |
Illegal
logging and mismanagement of Indonesia’s forestry industry may have prevented
more than $7 billion flowing to state coffers from 2007 to 2011, costing the
government more than its health budget, Human Rights Watch said.
In
contrast, the Indonesian government’s 2011 revenue from timber royalties and
reforestation fees was $300 million, said Emily Harwell, the lead author of a
report released by Human Rights Watch.
“This is a very
conservative estimate,” Harwell, a partner at Natural Capital Advisors, said at
a briefing in Jakarta on Nov. 8 of lost revenue. “The calculation doesn’t
include any wood that’s smuggled.”
The report
indicates weak governance is chipping away at revenues in the world’s
fourth-most populous nation, as budget and current-account deficits this year
hurt the rupiah. In 2011, revenue missed from forestry totaled more than $2
billion, exceeding the government’s health spending for that year, New
York-based Human Rights Watch said in the report.
The report
calculated how much wood was used by industries such as pulp, furniture and saw
mills, and compared it with the available legal supply of timber, Harwell said.
The supply of legal timber was “considerably smaller than what you need to
produce that amount of products,” Harwell said, adding that from the missing
supply she was able to calculate the lost fees.
Indonesia
ranked 118 among 176 countries on Transparency International’s 2012 corruption
perceptions index, undermining the investment appeal of Southeast Asia’s
largest economy. Facing slowing growth, the government is trying to narrow
budget and trade gaps by curbing state spending and easing restrictions on
investment in some industries.
Most
corrupt
Out of 20
central government institutions, the Ministry of Forestry was the only one
scoring below the minimum standard for integrity in providing public services,
according to a 2012 survey by the Corruption Eradication Commission, or KPK.
Johan Budi, a spokesman at the anti-graft agency, couldn’t be reached when
called on his mobile phone, and two calls to his office weren’t answered.
“We do have
an illegal logging problem,” Sumarto Suharno, a spokesman at the Ministry of
Forestry, said by telephone on Nov. 8. “The case with the policeman in Papua is
being investigated and we’re looking whether anyone in the forestry ministry is
involved.”
A
Papua-based policeman allegedly made almost $1 million in transfers to senior
police officials to protect illegal logging and fuel smuggling businesses, an
investigation by a Jakarta-based non-government organization Indonesia Police
Watch found. The policeman has been named a suspect, according to a statement
on the website of the Attorney General’s office. The police force is perceived
as the most corrupt institution in Indonesia, according to Transparency
International.
Plantation
pressure
State
losses from illegal logging have narrowed to less than 1 trillion rupiah ($87.6
million) a year, from about 30.7 trillion rupiah in 2002, because of
certification requirements for timber sold, Suharno said. He declined to
comment on the Human Rights Watch report, saying he has yet to see it.
Expansion
of oil palm and pulp plantations to support economic growth is occurring in
existing natural forests and on land claimed by local communities, Human Rights
Watch said. Indonesia has become the world’s largest producer of palm oil, used
to make cooking oil, biscuits and other processed foods.
Palm oil
output may increase to 26.7 million tons to 27 million tons this year from 25.7
million tons in 2012, according to Indonesia’s Palm Oil Board. The paper
industry plans to nearly double its current mill capacity by 2015, Human Rights
Watch said, citing a report by the Center for International Forestry Research.
Forest
dependence
“The
impacts of this demand-led plantation expansion on communities and forests are
profound and long lasting,” Human Rights Watch said, pointing to significant
impact on local economies, subsistence patterns and forest biodiversity.
In 2010
more than 9,000 villages were located within state forests, with 71 percent
depending on them for their livelihood, it said, citing government statistics.
Twelve percent of people in Indonesia live in poverty, according to data
compiled by the World Bank.
Human
Rights Watch called for greater assessment of government and corporate
compliance with laws protecting local land rights and compensation agreements.
Forest and plantation businesses, including their supply chains, should engage
with local non-government organizations to build transparent grievance
procedures, it said in the report.
Bloomberg
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