Since the reform of Indonesia's Forestry Law in 1999, newly empowered forest- dependent communities have been allowed to negotiate directly with logging companies for access to financial and social benefits. Fieldwork undertaken in May and June 2003 attempted to assess the impacts of this decentralization reform on communities in the subdistrict of Sekatak in Bulungan, East Kalimantan. Results suggest that the process of negotiations influenced the benefits that accrued to these communities. It seems that the most important factors were increased collective action and co-operation among the communities situated in and sharing forest areas, prior experience of dealing and conflicts with logging companies, plus strong and relatively transparent local leadership. Taken together these factors enabled communities to obtain benefits at the higher end of the scale for the area as a whole and provided a mechanism by which to deal with problems as they arose. These results suggest that in the absence of other means by which to protect the interests of local communities and to enforce the law, local capacities for collective action may be a potential and effective substitute for future development.