Indonesia’s forest and peatlands loss challenge

Globally, and in Indonesia, it is recognized that weaknesses in forest and land governance contribute to forest loss and degradation, damage to biodiversity and sensitive landscapes such as peatlands, and increased risk of natural disasters such as floods. These weaknesses also reduce state revenues, increase the incidence of land conflict, and affect livelihoods detrimentally.

It is also recognized that activities associated with land use, land use change and forestry, or LULUCF, are responsible for 80 percent of Indonesia’s greenhouse gas emissions, which are the third highest in the world. This is largely a result of legal and illegal logging, the conversion of forests for plantations (mainly timber for the pulp and paper industry, and palm oil), encroachment by small scale farmers, forest fires, and the exploitation of mineral resources, particularly coal.

Indonesia hosts the world’s third largest area of tropical rainforest, which is reducing at an annual rate of 840,000 hectares (ha). The country’s peatlands are also one of the most important carbon stores in the world. Most are located in lowland areas, few are protected, and many are threatened with conversion to small scale agriculture or large scale plantations. Of Indonesia’s 20.6 million ha of peatland, it is estimated that about 12 million ha have been disturbed.

This degradation has significant impacts beyond global climate change. Forest resources are important to the livelihoods of many of the 36 million Indonesians living in poverty, including women who are often dependent on common property resources. Economically, forest resources worth US$3 billion annually to the national budget are lost as timber is logged illegally, including from protected areas.

These issues are recognized domestically and internationally. In 2009, the Indonesian government committed to a 26 percent reduction in emissions from LULUCF activities by 2020. Development agencies and international climate funds have also recognized the importance of Indonesia’s forests in mitigating global climate change. To ensure that these funds and initiatives are strategic, efficient and coordinated, good forest and land governance must be promoted and institutionalized.

What is forest and land governance?

Forest and land governance refers to the processes, mechanisms, rules and institutions for deciding how forests and land are managed. Mechanisms can be top-down, government-led legislation, policies or programs designed to regulate forest and land use, or bottom-up approaches, such as community-administrated advisory, monitoring or decision making bodies. Stakeholders include governments, local communities, customary (adat) groups, non-government organizations, and the private sector.

Indonesia’s current forest and land governance system allocates various responsibilities to district, provincial and national governments. These include varying aspects of spatial planning, land concession licensing, budgeting for environmental management, and environment safeguards. However, compliance with existing regulations and procedures is often low, and law enforcement is weak. Commonly identified reasons for weak governance include overlapping or unclear regulations, lack of accurate maps and technical capabilities, unclear land tenure, poor transparency and public participation, and corruption.

Good governance is vital for sustainable land and forest management. It is characterized by policy making that is based on transparent and predictable processes, competent and accountable public officials, enforcement of legal elements such as property rights, and civil society participation. Active, informed and engaged stakeholders from all sectors – government, civil society and business – are essential in managing natural resources efficiently.

Unfortunately, good governance has not fully been achieved in Indonesia. Land and forest policies have not been implemented in a transparent and participative way, and accountability is also low, with poor coordination. Poor forest and land governance is a contributing factor to Indonesia’s deforestation rates – the highest of any country in the world.

The SETAPAK program is focused on six priority forest and land governance areas

Spatial planning involves allocating land into separate areas designated for protection and for development. It is a foundational element in ensuring that land use activities are appropriate to their allocated land type, and that different activities are coordinated. In Indonesia, the legal framework for spatial planning includes a requirement for community participation, as well as the recognition of community-owned land. Enhancing spatial planning involves improving mapping, increasing civil society engagement, integrating information about adat land into spatial plans, and making more information available to the public.

Licensing and permits ensure that all activities are in accordance with spatial planning designations, and adhere to all environmental laws, regulations and obligations. They also regulate activities to mitigate adverse impacts on the environment and local communities, and generate government revenue. Streamlining bureaucracy and enhancing enforcement would improve the licensing system. More accurate maps, better coordination between government departments, increased transparency and public participation, and greater clarity over land use policies are also required.

Environmental impact assessment (AMDAL) is a formal set of processes for evaluating the environmental and social impacts of land based developments. They aim to ensure that licenses and permits minimize damage and degradation, and they are one of the few formal processes in Indonesia’s governance system that have a statutory public participation requirement. AMDAL are required by law, but in practice legally determined processes are often not adhered to. Specifically, social impacts are often under-represented, processes can lack transparency, and results are not always made public.

Transparent financial management primarily relates to public oversight of budget allocations, but includes the collection of revenues as well as the disbursement of funds. Poorly managed budgets and non-transparent budgeting and allocation processes can result in funds not being allocated to priority aspects of environmental management, such as law enforcement, or improving the technical capacity of forest agency staff. Increased transparency would improve accountability procedures and public scrutiny of budget allocations for environmental management.

Monitoring is the practice of evaluating the effects of land based activities. It ensures that laws and regulations that protect the environment and communities are adhered to and are enforced, and that revenues are collected and distributed equitably. Improving environmental monitoring mechanisms, by means such as increasing public access to information and increasing participation, are effective ways to use systems mandated by law to support good governance and reduce the incidence of violations of environmental laws and regulations.

Law enforcement ensures that legal sanctions are administered when laws and regulations are violated. Effective and accessible grievance procedures support law enforcement, allowing affected communities and other stakeholders to report environmental and social law breaking. Informal justice mechanisms work to promote compliance with land use and forestry laws, and to ensure that local and indigenous communities’ rights are recognized. The free, prior and informed consent principle is an important informal justice mechanism to ensure that land tenure rights are recognized.

Read Key Components of Indonesia’s Forest and Land Governance for more information.