Illegal logging is not just about smuggling timber

Opinion: Krystof Obidzinski, Researcher, CIFOR

Stories about the smuggling of illegal timber have dominated Indonesia’s media in recent weeks. While the smuggling of illegal timber is a major area of concern, it would be wrong of the public to think that illegal logging can be overcome by stopping the smugglers.

Stopping smugglers is only part of the solution. Measures to combat other illegalities in the forestry sector are as equally important. The media can help fight illegal logging by also reminding the public that widespread abuse in the forestry sector is happening daily through licensed and unlicensed forestry operations.

These activities are wide-spread. Their impacts can be devastating for Indonesia’s forests and those who live in or near them. This is evidenced in recent research in the Berau and East Kutai Districts, East Kalimantan, by the Center for International Forestry Research and the Nature Conservancy (TNC).

Forestry illegalities in Berau and East Kutai occur mainly in the following forms:

  1. logging operations cutting out of block
  2. logging companies pretending to be stagnant while in fact they extract timber
  3. land-clearing (IPK) permits issued for dubious plantation schemes
  4. log/sawn timber production is under-reported and shipping documents are illegally altered
  5. logging and woodworking enterprises in both districts routinely evade taxation
  6. Small scale, unauthorized logging

Economic impact of illegal forestry activities in Berau and East Kutai

Illegal forestry activities cause large budgetary losses in Berau and East Kutai. In 2003, Berau district lost about Rp 103 billion in Reforestation Funds (Dana Reboisasi or DR), Forest Resource Rent Provision (Provisi Sumber Daya Hutan or PSDH) and district timber taxes (Retribusi Produksi, Retribusi Pengelolaan). In the same year, East Kutai lost about Rp 126 billion. This revenue finds its way into the pockets of individuals or government institutions in the form of bribes.

Illegal forestry and local livelihoods

While illegal forest activities in Berau and East Kutai are a drain on district government budgets, it must be admitted they generate employment opportunities, particularly for the unskilled labor force. In 2003, unlicensed forestry operations in Berau generated 4,000 jobs, while licensed operations created 2,000 jobs. In East Kutai, the licensed forestry sector supported 5,500 jobs in the district due to disproportionately high number of IPK land-clearing jobs that will be available for a very short time only. The unlicensed forestry activities created 2,500 employment opportunities.

The impact of illegal forest activities on the environment

Illegal forestry activities in Berau and East Kutai are having an increasingly negative impact on forest, soil and water resources in both districts. For example, river sedimentation has become a serious transportation problem in both districts, while declining ability of the watersheds to absorb the rainfall is causing increasingly devastating flooding. In Berau, licensed and unlicensed logging annually affects between 58,713 and 61,713 ha of forest (2.7-2.8 percent of the total forest cover). In 2002, East Kutai had nearly 1 million ha of degraded forest.

Why do illegalities occur?

The single most important reason illegal forest activities occur in Berau and East Kutai is, obviously, the simple fact that they generate so much money. The amount is over Rp 100 billion annually in each district. The desire to get rich quickly far outweighs the fear of getting prosecuted.

What can be done?

Making illegal forest activities in both districts more costly and less profitable by supplementing law enforcement measures with other initiatives, including:

  1. reducing the overcapacity of Indonesia’s woodworking industries
  2. implementing bilateral timber trade agreements
  3. creating incentives for Indonesian timber producers through certification schemes
  4. supporting grass-root pressure for greater accountability and transparency in the district forestry sector

Illegal logging is a major problem in Indonesia. And it reuqires a major solution – one that is comprehensive and focuses on more than just the sensational issues covered in the media.

Further information, please contact:


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