Transcript WRI’s Mission

Indonesia: Transparency in the
Forestry sector
Fred Stolle
World Resources Institute
Forest Team
Overview
• Indonesia's Forests
• New Incentives for Good Forest Governance
and Transparency
• Forest Governance in Indonesia
• Steps towards better Forest Governance and
Transparency
Overview
• Indonesia’s forests
• Forest Governance in Indonesia
• Steps towards better Forest Governance and
transparency
• New Incentives for Good Forest Governance
and Transparency
The Indonesian situation
Indonesia Area: 200 million ha
(compared to USA 900
2005 Export values
in US$ million ha)
Paper and Paperboard + 2.09 billion
Wood-Based Panels +
1.47 billion
210 Million
Plywood
1.37 Population:
billion
Fibreboard +
0.06 billion
(compared to USA 300
Sawnwood +
0.64 billion million)
Industrial Roundwood +
0.16 billion
Forest Products +
5.37 biliion
Forest land: approx 200 M ha
Forest Cover: approx 100 M ha
Revenue collected from forest concessions
around 200 millionDeforestation
US$ rate 1 - 2 million
ha /yr
4
Global forest cover
Source FAO-FRA 2005
Southeast /Asia Forest Cover Change
Source FAO-FRA 2005
1980-1990
Status of
Indonesia’s Forests
1980-1990
Annual Conversion of Forest in Indonesia
800,000
The total volume of roundwood exports
reported by the Indonesia Ministry of
3
Forestry
in
2000
was
only
10,700
m
400,000
Hectaress
600,000
However, reported imports by trade partners
200,000 was 1,445,400 m3
0
2001 to
2002
2002 to
2003
2003 to
2004
2004 to
2005
2005 to
2006
1990-now
Overview
• Indonesia’s forests
• Forest Governance in Indonesia
• Steps towards better Forest Governance and
transparency
• New Incentives for Good Forest Governance
and Transparency
Figure 1: Global greenhouse gas emissions in 2000, by source
%
MtCO2
Sector
60.6
24,722.3
Energy
25.2
10,276.9
Electricity & Heat
10.6
4,317.7
Manufacturing & Construction
11.9
4,841.9
Transportation
9.0
3,656.5
Other Fuel Combustion
4.0
1,629.3
Fugitive Emissions
Industrial Processes
Agriculture
Land-Use Change & Forestry
Waste
Total
1,406.3
5,603.2
7,618.6
1,465.7
40,816.2
3.4
13.7
18.7
3.6
Global greenhouse gas emissions by country (WRI)
Data for 2000
Country
1. United States of America
2. European Union (25)
3. China
4. Indonesia
5. Brazil
6. Russian Federation
7. India
8. Japan
9. Germany
10. Malaysia
MtC
% of World
1,805.50
1,356.60
1,345.60
837.7
609.4
545.1
506.6
379.9
284.4
235
15.69%
11.78%
11.69%
7.285
5.30%
4.74%
4.40%
3.30%
2.47%
2.04%
Total tons
carbon per
person
6.4
3
1.1
4.1
3.5
3.7
0.5
3
3.5
10.2
Figure 2: Greenhouse gas emissions
Sector
Energy
Electricity & Heat
Manufacturing & Construction
Transportation
Other Fuel Combustion
Fugitive Emissions [1]
in Indonesia, by source
MtCO2
%
312.5
10.2
94.9
3.1
74.9
2.4
65.0
2.1
59.8
1.9
17.8
0.6
Industrial Processes [2]
Agriculture
Land-Use Change & Forestry
Waste
Total
14.4
123.0
2,563.1
59.8
3,072.8
0.5
4.0
83.4
1.9
800,000
700,000
500,000
400,000
300,000
200,000
100,000
Pa
pu
a
N
bi
a
om
Co
l
Ne
pa
l
ue
la
Ve
ne
z
ew
G
ui
ne
a
Pe
ru
er
ia
Ni
g
bi
a
ep
ub
l
De
m
.R
Za
m
ic
ar
ya
nm
M
Co
ng
o,
al
ay
sia
M
Br
az
i
l
0
In
do
ne
sia
Tons of Carbon
600,000
East-Kalimantan
Indonesia New Incentives
Protected area
Apar Besar
t CO2e emitted
t CO2e emitted
Total t CO2e emitted
2003-2008
2008-2013
2003-2013
8,081,550
9,798,400
17,879,950
97,420
97,420
194,840
1,195,640
588,970
For the Province606,680
of East-Kalimantan:
Apo Kayan NR/BR
Batu Kristal
At a price of carbon0 around 10
U$ per 0
0
Bukit Batikap I,II & III
0
0
0
Bukit Batutenobang
metric ton, reducing
deforestation
105,180
0
105,180
Bukit Soeharto
6,707,760
5,715,410
Gunung Berau
inside National
Parks
would 12,423,170
2,653,190
1,383,770
1,269,420
Gunung Lumut
generate
36
million
dollars
/yr
5,684,390
3,415,280
2,269,110
Hutan Kapur Sangkulirang
0
0
0
292,430
1,892,950
2,185,380
Kutai
9,329,500
10,570,900
19,900,400
Long Bangun
5,001,940
8,027,390
13,029,330
Bentuang Karimun
Kayan Mentarang
In 2006 the total
budget 627,700
for National
1,452,670
824,970
8,464,070
2,672,430
5,791,640
Parks
for
East-Kalimantan
of
3,794,390
2,812,450
981,940
Muara Sebuku
449,350
423,720 5 million
Pantai Samarinda
approximately
US$ 873,070
1,741,580
869,860
871,720
Perairan Sungai Mahakam
province
13,985,090
8,153,030
5,832,060
Sesulu
0
0
0
Sungai Berambai
2,921,560
5,111,660
8,033,220
Sungai Kayan Sungai Mentarang
9,312,300
12,138,190
21,450,490
59,728,540
75,317,500
135,046,040
Meratus Hulu Barabai
Muara Kaman Sedulang
Muara Kayan
Grand Total
Petrova, Stolle, & Brown 2006
Indonesia New Incentives
What are the challenges?
• Permanence
• Leakage
• Baseline data
• Check of status (monitoring)
• Incentives
• Missed targets
• Payment distribution
• Institutional set-up
Overview
• Indonesia’s forests
• Forest Governance in Indonesia
• Steps towards better Forest Governance and
transparency
• New Incentives for Good Forest Governance
and Transparency
Forest Governance issues
Outside Forestry
Forestry

Industrial Forest Crime

Over-Regulation and Rent-Seeking

Resource Availability is
Declining


Debt and Overcapacity
Impede Competitiveness
Technology Trends Present
Opportunities and Hamper
Efficiency

Rights and Access

Balancing Supply and
Demand

Conflict, and Inequity

Decentralization and Management

Distribution of Forests and 
Poverty
Community Livelihood Promotion
and poverty alleviation

Plantations

Employment Possibilities

Forest Loss

Land Use Rationalization
Derived from : WB 2006
Problems don’t stop in the forest
• Losses in rural livelihoods and ecosystem
goods and services.
• Losses in public revenues from illegal
logging. More than a billion US$ in revenue was
lost to illegal logging practices in 2004
• Losses in access to profitable timber markets
and investment in the sector. Poor governance
in the forest sector has deterred
Why work on forest governance?
• Forest are an important resource in Indonesia: 70% of
land; poverty reduction; economic growth; environmental
services;
• Establishing forest sector governance sets a precedent
for other sectors. Forestry is a microcosm of governance
issues, and if governance is delivered in the forestry sector,
this demonstrates that it is possible to establish.
• Establishing good governance and curbing corruption are
among the top priorities set forth by President SBY and
are emphasized in recent instructions to his new team of
economic ministers.
Overview
• Indonesia’s forests
• Forest Governance in Indonesia
• Steps towards better Forest Governance and
transparency
• New Incentives for Good Forest Governance
and Transparency
FOMAS
Work with the Ministry of Forestry in
cooperation with the World Bank
FOMAS
Forest Monitoring and Assessment
System
Not a system but a process
“If you can’t measure it, you can’t manage it”
Forest Governance and Transparency
FOMAS focuses on developing a decision-making
environment where reliable, accurate and current
information on forest and timber resources and
related decisions are continuously and publicly
available to the general public (Transparency),
take actions to combat illegal logging and
strengthen law enforcement.
+
Accurate timely forest cover
change maps
All Forest Management
units Polygons (Logging
concessions, Plantations,
National Parks etc)
Accountability
Decisions
support
Governance
Transparency
FOMAS
Transparent National
yearly updated Database
Law
enforcement
This is not a data exercise but the use of data to improve governance
With, and in the Ministry, and in cooperation
with NGO’s
MoF Commitment to Transparency
Digitize official data
Provide decision making tools
Atlas of Fires in Indonesia in 2006
Draft Disclosure Policy Plans
The disclosure policy will provide the foundation
for public access to forest information, and for
public scrutiny of MoF decisions and policies.
The policy will divide forest sector information
into three categories:
1. Confidential
2. Official Use Only
3. Publicly Available
Status of Indonesia’s Forests
Maps and data are the result of preliminary analysis carried out by the Indonesian
Ministry of Forestry in cooperation with: SDSU, UMD, NASA, USGS, ESF, WB and WRI.
Forest Landscape Objective
Legal
Illegal ?
New revenue distribution
Concessions permit Tax: (IHPH, IUHPH)
•
This is a one time concessions rights tax
•
The Regions gets 80% of the Tax while the Central government gets
20%
•
The tax to the regions (the 80%) is split in 16% go to province and 64% to
producing district
Royalty right to regional level (PSDH) (so again 80%):
•
This is a yearly tax
•
Regional gets 80% and 20% to central government
•
16% to province, 32%to producing district, and 32 % to other districts in
the province.
The Dana Rebosisasi fund (DR):
•
This is a yearly tax
•
40% go to National and 60% to producing district
These taxes together would earn in 2006 (in million US$):
0.6 (IHPH) + 86.8 (PSDH) + 110.4 (DR) = 197
Berau District
in million of US$
Forest Operation Types
Logging/plantations
Royalty
district tax
Reforestation tax
District logging
national tax
district tax
Small-scale logging teams
informal tax
national tax
district tax
Sawmills and moulding
district tax
informal tax
Timber kiosks and ship building
informal tax
Pulp and Paper
Water tax etc
Total
Revenue collected
collected
lost
1.5
1.2
0.7
1.2
0
0
0
1
3
0
0.36
0
0
0
6.5
0.08
0.03
0.2
0.9
0
0.02
0
0.04
10.4
0
10.9
Lost Revenue
110 Billion Rp
Or
11 million US$
On a population
of 200,000
Policy Options
•Accuracy, Availability and Transparency
•Curb over-capacity
•Ensure legal supply
Comparison of Log Production and Consumption
•Monitoring
YEAR
Accurate
timely
maps
LOG CONSUMPTION
•Planning and incentives
(including timber and pulp)
Total
•Law enforcement
1985
23.5
40.4
•Social1989
forestry
1990
37.9
47.4
•Land 1997
tenure
issues
1998
45.3
1999
44.9
•Fire prevention
2000
47.8
2001
49.1
•Certification
2002
50.5
OFFICIAL LOG
PRODUCTION (including
timber and pulp)
Total
14.6
24.4
25.3
29.5
19
20.6
13.8
10.1
8.1
Source: World Bank 2006
Forest Management
Units