in Indonesia

What’s the point paying the Indonesian government for REDD when it’s losing billions to corruption in the forest sector?

Between 2007 and 2011, Indonesia lost more than US$7 billion to illegal logging and mismanagement in the forestry sector. That’s the shocking finding of a new report by Human Rights Watch: “The Dark Side of Green Growth: Human Rights Impacts of Weak Governance in Indonesia’s Forestry Sector”.

It puts Norway’s offer of US$1 billion for REDD in perspective. As does the fact that palm oil exports from Indonesia last year totalled US$17.9 billion. To make matters worse, at least from a climate perspective, Indonesia’s top export was coal.

In June this year, the fires burning in Sumatra set new records for the amount of smoke in Singapore, highlighting the problem of deforestation and greenhouse gas emissions from peatlands. Corruption is part of the problem driving the destruction. On 14 June 2013, just before the fires in Sumatra hit the headlines, Rusli Zainal, the governor of Riau province for the past decade, was arrested. Among the charges against him was handing out illegal logging permits to finance a re-election campaign.

In a press release about the new report, Joe Saunders, deputy program director at Human Rights Watch, links the fires to corruption:

“The return of the smog is only the most tangible evidence of the damage from Indonesia’s continuing failure to effectively manage its forests. Weak law enforcement, mismanagement, and corruption are to blame not only for the smog but also for the loss of billions of dollars a year in desperately needed public funds.”

Human Rights Watch’s report raises serious issues regarding REDD, particularly the plans under the “Economic Masterplan” (MP3EI) to expand the pulp and oil palm industries. Asia Pulp and Paper, for example, is going ahead with its plans to build the world’s biggest pulp line, with a capacity of 2 million tonnes per year. Indonesia is already the world’s number one producer of palm oil. Industrial tree plantations and oil palm plantations have led to massive deforestation, greenhouse emissions, land disputes and human rights abuses. Ironically, the expansion of oil palm plantations is partly to meet demand for biofuels – a supposedly “green” energy supply.

Human Rights Watch points out that the Indonesian government attempts to address these issues have “not gone far enough”.

Here’s Human Rights Watch’s Joe Saunders again:

“The Indonesian government has been selling the expansion of its forestry sector as an example of sustainable ‘green growth’ and an antidote to climate change and poverty, but the evidence suggests otherwise. Funds that could be used to improve public welfare are being siphoned off to enrich a handful of people or needlessly lost through mismanagement. And the regional smog crisis suggests the environment and rural livelihoods are the victims, not the beneficiaries, of the government’s forest policies.”

The summary from Human Rights Watch’s report is posted below:

The Dark Side of Green Growth: Human Rights Impacts of Weak Governance in Indonesia’s Forestry Sector

Human Rights Watch, July 2013


Even as Indonesia promotes its forestry sector as a model of equitable and environmentally sustainable economic development, or green growth, corruption and mismanagement continue to plague the sector, with serious consequences for human rights.

This report, an update of the 2009 Human Rights Watch report Wild Money, documents the persistence of illegal logging, weak governance, and lack of accountability in Indonesia’s forestry sector, and provides a new estimate of the costs. Using government and industry data, and applying industry standard methodology, we estimate that illegal logging and forest sector mismanagement resulted in losses to state coffers of more than US$7 billion between 2007 and 2011.

While Indonesia has recently introduced important reforms to address some of these concerns, the realization of these efforts continues to fall short. Significantly, we found that losses have increased, not declined, in recent years. In 2011 alone, losses totaled more than $2 billion — a figure that exceeds the government’s entire health budget for that year, undermining the state’s ability to provide basic services to its population. The losses are a graphic illustration of how governance failures undermine fundamental human rights and jeopardize the sustainability of forest use and global efforts to combat climate change.

Indonesian authorities have routinely violated the rights of forest-dependent communities in allocating land use and setting forest industry concession boundaries. These rights include community rights under domestic law to meaningful consultation and fair compensation for loss of access to land and forests; the rights of indigenous peoples under international law to control communal land and natural resources; and internationally recognized rights to security of person, non-interference with privacy, family, and home, and the peaceful enjoyment of possessions. Mismanagement and corruption associated with forestry and agricultural concessions also fuel land conflicts, sometimes violent, between companies and local communities.

Rather than address the underlying causes of these disputes, the government has instead recently passed a flurry of legal instruments—laws, ministerial regulations, presidential decrees, and Memorandums of Understanding (MOUs) that focus on broadening the scope of military involvement to address conflicts and contain vaguely defined “national security threats.” The return to a “security approach” to social conflict is a step backward for Indonesia, which had been making progress weaning its military from the pervasive internal security role it played under former President Suharto’s New Order government. The timing of these retrograde measures is particularly worrying asthe 2014 elections approach. Pressure on candidates and political parties to raise money for campaigns through natural resource extraction may further increase land conflicts.

Failures of governance relevant to the forest sector also include: unwarranted restrictions on access to information about forest concessions and land claims, with only rare accountability for those who threaten or intimidate civil society activists; and inadequate oversight of the police and military, which in several documented cases have been implicated in violence and abuses against local communities.

The impact of weak governance on human rights is likely to be compounded by plans to dramatically expand pulp (for paper production) and oil palm plantations, as laid out in Indonesia’s “Economic Masterplan” (known locally as MP3EI). While the government promotes the expansion of these sectors as an essential element of its green growth strategy, the establishment of such plantations to date has in fact led to the clearing of natural forest and has increased both greenhouse gas emissions and pressures on land. Until governance issues are addressed, such pressures can be expected to lead to new violent land disputes and new abuses.

Indonesia’s problems in the forestry sector also have international implications. Donors should ensure that weaknesses in the implementation of reforms and the rule of law are addressed. In particular, Indonesia is a key player in global climate change mitigation strategies because it has vast natural wealth in forests that act as carbon sinks for the global climate, and because it suffers from rampant deforestation, particularly of forests on carbon-rich peat soils. These high-emission land use practices have made Indonesia one of the world’s leaders in greenhouse gas emissions.

Another key role Indonesia plays in the global climate is as the largest producer of palm oil, a major source of biofuel. Demand for biofuels has spiked in recent years as governments around the world seek to reduce their carbonemissions by decreasing their use of high carbon fossil fuels. Although aimed at reducing emissions, the clearing of natural forests to make way for oil palm plantations—ironically to produce these ‘low carbon’ biofuels — is actually one of Indonesia’s largest sources of emissions. The smog produced when these forests are burned to make way for plantations drifts regularly to Indonesia’s neighbors’ air space, threatening health, interrupting air travel, and straining diplomatic ties. Regardless of how much the international community invests, if weak governance in the forestry and plantation sectors is not adequately addressed, Indonesia risks failing to deliver on its ambitious public commitments to reduce carbon emissions while also exacerbating human rights problems.

Recent government reforms havebegun to address some of these issues, but they have not gone far enough. Since 2009, Indonesia has passed a Freedom of Information Law and established an audit system to verify the legality of harvested timber. However, the effectiveness of these reforms has been hampered by persistent weaknesses in the implementation and enforcement of regulations and the contradictory nature of other laws.

A prime example of the inadequacy of the government’s reforms is its weak enforcement of Indonesian law affecting community rights to land and forests. The new timber legality verification system does not adequately protect communities from abuses in the forestry sector. Further, a lack of transparency continues to hamper the effectiveness of reforms. Although civil society has a legal mandate to conduct oversight of the Ministry of Forestry’s timber verification system, lack of government compliance with transparency regulations undermines this role. Two years after freedom ofinformation legislation entered into force, implementation by government institutions is still poor and police frequently fail to enforce court rulings requiring information disclosures. In addition, the State Intelligence Law passed in October 2011 increased opacity by classifying important information from the natural resource sectors as exempt from disclosure requirements in order to protect the country’s “national economic interest.”

Citizen oversight is under threat from Indonesia’s criminal defamation laws and a new regulation that can be used to exert undue control over the funding and activities of civil society. Together, these laws impose criminal penalties for undefined “misuse” of public information, and provide the government with broad powers to interfere with groups deemed to pose a danger to the “national interest.” They impose restrictions on civil society and freedom of association in violation of international law. They also threaten freedom of speech by enabling the government to intimidate and silence those individuals or organizations who attempt to scrutinize government officials and corporations benefitting from the country’s natural assets.

A vibrant civil society with access to information on the government’s use of public assets such as natural resources is crucial for an accountable government that protects human rights as well as the environment. Addressing governance weaknesses that inhibit civic participation is essential for reforms to be effective. These steps are also necessary for Indonesia to address unsustainable land uses, increase the collection of state revenues for public welfare, and meet its international human rights obligations. Improving transparency and accountability is critical to stem the toll of agrarian violence plaguing the nation’s rural poor and to ensure that citizens can speak out without fear of reprisal.

Addendum: While this report was in press, a landmark ruling by the constitutional court found that the provision of the 1999 Forestry Law that includes customary territories within state forest to be unconstitutional. The court’s decision, in response to a petition by the National Alliance of Indigenous Communities (AMAN), explicitly rebuked the Ministry of Forestry for its disenfranchisement of customary communities by allocating their lands as concessions to logging and plantation companies. This ruling represents a significant and laudable shift toward the correction of decades of injustice. However, this ruling’s implementation requires the mapping and registering these lands and the negotiation of their removal from existing concessions, steps that in the current context of weak governance represent a minefield of opportunities for continued corruption and disenfranchisement that could lead to increased conflicts. The need for participation, transparency, oversight, and accountability is more critical than ever to ensure the implementation of this long-awaited step toward fulfillment of human rights in the forest sector.


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  1. What do you expect from a government that allocates Rp 41.7 trillion (2012) for their Religious Affairs Ministry budget and considers scrapping natural and social sciences from the primary school curriculum?

    Indonesia’s government ranks 118 out of 174 in the Corruptions and Perceptions index.

    Unfortunately, conservation, the environment, human rights, and individual property rights are a total joke in Indonesia.