W O R L D R E S O U R C E S I N S T I T U T E

- • " ! ! # - ' ' : '

BREAKING THE LOGJAM:Obstacles to Forest Policy Reform in

Indonesia and the United States

CHARLES VICTOR BARBERNELS C.JOHNSONEMMY HAFILD

BREAKING THE LOGJAM:Obstacles to Forest Policy Reform inIndonesia and the United States

Charles Victor BarberNels C. JohnsonEmmy Hafild

W O R L D R E S O U R C E S I N S T I T U T E

March 1994

Kathleen CourrierPublications Director

Brooks BelfordMarketing Manager

Hyacinth BillingsProduction Manager

Cover Photo by Daniel DancerThis photo shows the dramatic boundary between a roadless natural forest area in Washington state'sGifford Pinchot National Forest on the left and the clearcut landscape owned by a large industrial forestcorporation on the right.

Each World Resources Institute Report represents a timely, scholarly treatment of a subject of public concern. WRItakes responsibility for choosing the study topics and guaranteeing its authors and researchers freedom of inquiry. Italso solicits and responds to the guidance of advisory panels and expert reviewers. Unless otherwise stated, how-ever, all the interpretation and findings set forth in WRI publications are those of the authors.

Copyright © 1994 World Resources Institute. All rights reserved.ISBN 0-915825-39-2Library of Congress Catalog Card No. 94-60225

Printed on recycled paper

Contents

Acknowledgments v

Foreword vii

I. Introduction 1Elements of Sustainable Forest

Management 2Indonesia's Forests: Context, Conditions

and Trends 4U.S. Forests: Context, Conditions and

Trends 8

II. Ownership, Access, and Control overForest Lands 13

Forest Tenure in Indonesia 13The National Tenure System for Forest

Lands 14A Profile of Customary Forest-Tenure

Systems 16The Impacts of Indonesia's Forest-Tenure

System 17Unbalanced Rights and Responsibilities

in Production Forests 20Directions and Strategies for Change 22

Forest Tenure in the United States 24Forest Ownership, Rights and

Responsibilities in the PacificNorthwest 26

Private Forest Lands 26Public Forest Lands 33Balancing Rights and Responsibilities ... 35

III. Economic Development and ForestUtilization 41

The Economics of Indonesia's ForestrySector 41Transitions in Indonesia's Timber

Economy 43

The Distribution of Costs andBenefits 44

Continuing Dependencies on HeavyTimber Harvests 47

The Economics of the Pacific NorthwestForestry Sector 48The Changing Timber Economy 52Concentrated Benefits and Diffuse

Costs 53Dependencies and Transition 55

Toward Sustainable and Equitable ForestEconomies 62

IV. The Political Economy of Forest PolicyReform 67

Forest Policy-making in Indonesia 67Who are the Dominant

Stakeholders? 70Public Participation and Access to

Information 73Structural Ignorance 77

Forest Policy-making in the UnitedStates £-Who Benefits From High Harvest

Levels? 83A Forest Policy Process Divided Against

Itself 86Influencing the Political Process 88Public Participation 89Structural Ignorance 93

Toward Effective Forest Policy-making 95

V. Conclusions and Recommendations 99Reforming Forest Policy-making 99Toward Sustainable Forest Economies 102Revamping Forest-Tenure Regimes 105

References 109

in

Acknowledgments

This publication is the result of a long andwinding trail of research and writing. Wewish to thank the many who helped us

along the way. In particular, Walt Reid, BobRepetto, Kenton Miller, Tom Fox, and Nigel Sizerat WRI offered helpful research guidance andgenerously detailed comments on earlier drafts.Steve Lanou provided invaluable assistance withresearch, fact-checking, and graphics.

Outside of WRI, we benefitted from reviewsby Suraya Afiff, Jim Britell, Jim Douglas, BrockEvans, Abdon Jeff Olson, Al Sample, Roger Sedjo,and Professor Achmad Sumitro. In Indonesia,Suraya Afiff, Sandra Moniaga, Abdon Nababan,and Tri Nugroho provided key information. Wealso wish to thank the many other people, too nu-merous to mention here, in the U.S. PacificNorthwest and Indonesia who shared informa-tion and otherwise contributed to our researchalong the way. Emmy Hafild thanks the Institute

of Environmental Studies at the University ofWisconsin/Madison for its support of herresearch.

Kathleen Courrier's editing made this publica-tion much more concise and readable than it oth-erwise would have been. Thanks also go toHyacinth Billings for coordinating production ofthe report. Finally, recognition goes to DonnaDwiggins and Ann Klofkorn for their efforts tohelp with revisions and otherwise get a long-delayed publication out the door.

The authors each wish to acknowledge the for-bearance of their spouses during the research andwriting of this publication.

C.V.B.N.C.J.

E.H.

Foreword

E ven cultures that long ago turned theirforests into whatever seemed more imme-diately useful still celebrate the forest

primeval in religions and myths passed downover millennia. From ancient Athens to theBritish empire, seagoing powers turned forestsinto sailing ships. During the Industrial Revolu-tion, European countries used their forests—andtheir colonies' forests—to feed the growth ofmanufacturing and commerce. In its nineteenth-century push westward, the United States con-verted forests into farms and cities and railroadties, even as Brazil is now fueling its steel indus-try with rainforest charcoal and Indonesia is ex-porting plywood to stoke its rapid economicgrowth.

Once let alone, damaged forests can recover aslong as the assaults leveled at them haven't over-whelmed nature's regenerative powers. But inmany parts of the world, forests are now under avirtual death sentence. At least 15 millionhectares of tropical forest are vanishing each year,taking with them plant and animal species andindigenous peoples and leaving the world apoorer place, both biologically and culturally. Inthe temperate zones, forests are being fragmentedby commercial logging, injured by pollution, con-verted to tree plantations or farmland, or fallingvictim to urban and suburban sprawl.

In Breaking the Logjam: Obstacles to Forest PolicyReform in Indonesia and the United States, CharlesBarber and Nels Johnson of WRI and EmmyHafild of Indonesia's Sejati Foundation examine

the origins and impacts of current forest policiesand recommend ways to make forest manage-ment more sustainable in two of the most impor-tant forested countries. The two countries differin many ways, but both have forestry policies es-tablished in an earlier era and increasingly out ofstep with evolving perceptions of forests' trueworth. As a result, many forests are under siegein both countries, and powerful forces arearrayed against the policy changes needed tomaintain forests' health and productivity.

The authors of this report chose to focus on theUnited States and Indonesia to underscore theemerging scientific consensus that forests are introuble everywhere—and the emerging politicalconsensus that the North cannot deplore tropicaldeforestation while turning a blind eye to its owntroubled woodlands. The authors demonstratethat overcoming the obstacles to more sustainableforest management in both countries will requiregrappling with three sets of issues: forest prop-erty rights regimes, the distribution of the costsand benefits of forest exploitation, and the politi-cal process for determining forest policies. Allforested countries can learn from the experienceof these two, since all face similar problems.

Specifically, Breaking the Logjam spells out howthese two particular countries could deal withproperty rights, forest economics, and the forestpolicy-making process. But at its heart is a moregeneral point: preserving and using the world'sforests wisely depends as much on how a na-tion's political economy and political process

vu

works as on whether new technologies areadopted or particular forest-sector policiesreformed.

Indeed, the report argues that in bothIndonesia and the United States, the technical andpolicy changes needed to sustain forests are al-ready well-known. Neither national governmentlacks knowledge, but the political will to remaketheir forest policies in the face of fierce oppositionfrom powerful entrenched interests that benefitfrom current arrangements is missing. In this con-text, the authors maintain, forest policy reformmust be broadened to encompass the structuralelements of national economies, legal systems,and policy-making processes.

Breaking the Logjam extends the analyses andpolicy recommendations put forth in such WRIstudies as Surviving the Cut: Natural Forest Man-agement in the Humid Tropics and The Forest for theTrees: Government Policies and the Misuse of ForestResources. To carry the work forward, WRI re-searchers are now beginning regional and local

research on issues of sustainable forest manage-ment policy in East Africa, Amazonia, Mexico,mainland Southeast Asia, and New Guinea. Inthe United States, WRI is looking at the role offorests in a sustainable society under the aegis ofits new "U.S. Sustainability Project."

We would like to express our appreciation tothe Dutch Ministry of Foreign Affairs, theNorwegian Royal Ministry of Foreign Affairs, theSwedish International Development Authority,the United Nations Development Programme, theCanadian International Development Agency,The Surdna Foundation, the Sasakawa PeaceFoundation, and the W. Alton Jones Foundationfor their generous support of WRI's general re-search on forest and biodiversity conservation is-sues. For their foresight and support, we aredeeply grateful.

Jonathan LashPresidentWorld Resources Institute

vm

I. Introduction

When Foreign Affairs published an articleon tropical deforestation in 1984(Guppy, 1984), more than a few eye-

brows were raised. What, many readers won-dered, do forests have to do with diplomacy andnational security? Eight years later, more than 100Heads of State and Government and some 30,000other participants in the "Earth Summit" and re-lated meetings in Brazil took it as a matter ofcourse that the fate of the forests—both temperateand tropical—deserved the international attentionit was beginning to get. In a political twinkling, thecontentious issue of accelerating forest destructionin the tropics had government agencies, the massmedia, corporations, and a growing number of en-vironmental organizations in its grip.

Tropical forests have become a political issuefor a number of reasons. They contain 50 to 90percent of the planet's species diversity. (Reidand Miller, 1989) They are home to many millionsof the world's indigenous, tribal, and other tradi-tional peoples who depend on them for liveli-hood—and in some cases, cultural survival.(Durning, 1992; Myers, 1989) And in gross area,tropical forests are shrinking far faster than tem-perate forests. (Dudley, 1992; WRI, 1992)

The fate of temperate and boreal forests likethose in the U.S. Pacific Northwest has arousedconcern for somewhat different reasons. Roughlyhalf of the world's forests lie in temperate regions,nearly one quarter in the former USSR alone andnearly one fifth in North America. (UN-ECE/FAO, 1992) While total temperate forest area

grew between 1980 and 1990 (WRI, 1992), threatsfrom airborne pollutants, the loss of biodiversity(as diverse natural forests give way to monocul-tural tree farms), and the conversion of forestlands to other uses are growing. In 1988, an esti-mated 40 percent of Europe's forests showedsigns of damage from ozone, sulfur dioxide, andother gasses emitted in various economic activi-ties. (Bundestag, 1990) A 1990 International Insti-tute for Applied Systems Analysis (IIASA) studyconcluded that in 75 percent of Europe's forestssulfur deposition has reached damaging levels, ata cost of some $30 billion annually.1 (IIASA, 1990)

In the United States, primary forests have beenreduced to mere islands compared to their origi-nal expanse. Decades of intensive forest manage-ment and fire-fighting in the western UnitedStates have transformed forest ecosystems and in-creased the risk of catastrophic fires and the out-break of introduced pathogens. (Norse, 1990;Perry, 1988; Showaiter and Means, 1988; Ageeand Huff, 1987) In the mixed mesophytic forestsof the Cumberland Plateau west of the Appala-chians, mounting evidence testifies to spreadingforest decline. (Little, 1991) Like the losses docu-mented at high elevations in the Appalachians(Bruck, 1989; Johnson and Siccama, 1989), thesesigns of stress may stem from decades of pollu-tion that acidifies the soil, damages root systems,and makes trees more vulnerable to diseases andpests. In Canada, where far more trees are loggedthan planted, some 200,000 hectares are now losteach year. (Postel and Ryan, 1993) And easternRussia's relatively unexploited forests appear to

be on the brink of a massive logging boom. (Dud-ley, 1992; Levin, 1992)

Official responses to worsening forest condi-tions in the past decade include international ef-forts—such as the creation of the Tropical Fores-try Action Plan (TFAP) and the InternationalTropical Timber Organization (ITTO)—and anexplosion of national action plans, strategies, pro-grams, and projects. Still, the health of theworld's forests continues to wane, and narrowmanagement approaches based on forestry can-not make headway against the economic, politi-cal, and social forces that largely determine theforests' future.

Taking a broader view of the forest crisis andunderstanding the key structural obstacles tomaking forest management and use more sus-tainable in the 21st century requires wrestlingwith three sets of issues: forest property rightsregimes, the distribution of the costs and benefitsof forest management and use, and the politicalprocess for determining forest policies. In this re-port, the cases of Indonesia and the United Statesare analyzed to reflect the emerging scientificconsensus that forests in all parts of the world aremore or less in trouble and the emerging politicalconsensus that the North can no longer point afinger at the declining forests of the tropics with-out also looking to its own threatened backyards,and that protecting the global climate system willrequire southern countries to take an interest innorthern forests. Considering these two impor-tant forest countries together also makes it clearthat all nations with forests face some of the sameproblems.

Of course, Indonesia and the United States arenot in exactly the same boat. Per capita Gross Na-tional Product (GNP) is $21,000 in the UnitedStates and $490 in Indonesia (WRI, 1992), and ingeneral these two countries' historical, cultural,ecological, political, and economic profiles differgreatly. Certainly, the forest policies and prac-tices of one country should not be embracedwholesale by the other, and little is to be gainedby trying to decide which has the best forest poli-cies. On the other hand, the countries may have

more in common than is usually supposed. Com-pare, for instance, the rapid clearing of forests inIndonesia over the past several decades of robusteconomic growth with what happened in theUnited States in the 19th and early 20th centuries.In any case, the issues addressed in Breaking theLogjam lie at the root of the forest challenges fac-ing each country.

The international dimensions of the forest cri-sis in these two countries, such as trade or inter-national agreements are not discussed here. Sincethe clear message of the United Nations Confer-ence on Environment and Development(UNCED) from all governments was that forestsare a sovereign national resource, the onus is nowon governments and their citizens to take stock oflocal and national social and economic pressureson this resource. Indeed, these are some of themost fundamental forces harming forests, and lit-tle or no international agreement or assistance isrequired to defuse them. Property rights regimes,for example, have enormous impacts on forests,and efforts to put forest management on a moresustainable footing are unlikely to be effective ifthese and other such "structural" forces aren'tunderstood and reconfigured.

Elements of Sustainable ForestManagement

The basic arguments put forth in this reportare that forests are under siege in both Indonesiaand the United States, that forest policies in bothcountries need to be changed, and that powerfulobstacles outside the forestry sector will makethat change extremely difficult. But a positive vi-sion of what good forest management would looklike in any country underlies the analysis. Thatvision rests on four pillars:

1. Ecological Integrity and Sustainability: Thecountry's forest estate contains effectively pro-tected representative samples of all major foresttypes in areas large and connected enough to sup-port the many environmental functions and ser-vices that forests provide—among them, themaintenance of forest-based biological diversity;

the protection of watersheds and the preservationof other aspects of hydrological systems; themaintenance of key nutrient-recycling functions;the protection of local climates and microclimates;and the sequestration and storage of carbon.

2. Sustainable and Equitable Human Uses of ForestProducts and Services: Parts of the forest estate arestrictly protected or utilized only for scientific re-search, limited traditional harvesting of flora andfauna, or low-impact nature tourism. Other areasare kept in permanent forest cover, but producediverse economic goods and services, rangingfrom timber and other forest products to naturetourism benefits and genetic resources for agri-cultural, pharmaceutical, and biotechnology in-dustrial activity—without compromising ecologi-cal services. Exactly how forest lands get useddepends on an inventory of ecological character-istics, social and demographic factors, and eco-nomic potential. The economic costs and benefitsof both forest conservation and production areequitably shared among local communities, theprivate sector, and the government.

3. Integrated Management at the Right Scale: For-ests are managed within a regional framework ofplanning, decision-making, and management thattakes into account surrounding human settle-ments, agricultural lands, and diverse economicactivities. Ecological and social considerations de-termine the size of the management region. It islarge enough to maintain the integrity of the re-gion's ecological processes and to encompass thecommunities that understand, manage, and usethe forest and related resources. But it is smallenough for its people to call it home. Within thisframework, governmental, community, corpo-rate, and other interests together define develop-ment options for meeting human needs sustain-ably for both public and private land and decideland-use issues. (Foresters and a "forestry sector"still play a key role, but they are part of a team,not isolated specialists with a monopoly on deci-sions about the forest.)

4. Equitable and Informed Participation by allStakeholders: In forest policy and management de-cisions—whether at regional or other levels—all

stakeholders have the capacity and the right to in-formation and participation. Decisions are madethrough an ongoing dialogue. Full informationabout the issues at hand gets to all participants ina timely manner and in forms all can understand.The inherent inequality of access to informationand bargaining strength among participants—large corporations compared to local farmers, forexample—is acknowledged, and government andintermediary non-governmental organizationswork to strengthen the capacity of weak and mar-ginalized groups to defend their own interests.The special situations and long-term claims of in-digenous, traditional forest-dwelling, or forest-dependent communities are considered explicitlyin law and in decision-making.

Is management that reflects these four goals aUtopian dream? However difficult, moving forestmanagement in this direction is not unrealistic.Indeed, a wide range of analysts have recentlyadvocated similar goals (e.g., Cleaver et al., 1992;Dudley, 1992; Ramakrishna and Woodwell, 1992;Sharma, 1992; Aplet et al., 1993; Johnson andCabarle, 1993). Their shared conclusion is that nottaking steps toward more sustainable and equi-table forest management is unrealistic. A recentcomprehensive review organized by the WorldBank concluded that "destructive exploitation offorests has caused serious economic, social, andenvironmental losses." (Sharma 1992) A 1992United Nations review noted that the costs of wa-tershed deforestation in the Asia-Pacific regionreach many millions of dollars and that "urgentaction is needed to develop preventive and reme-dial measures" to deal with the growing tracts ofcritically degraded forest lands. (ESCAP 1992)Dozens of similar reports on all parts of the worldcould be cited as well. While the exact formula-tion of what sustainable and equitable forestmanagement would look like will vary somewhatby proponent and place—certainly the one putforth here is neither novel nor unique—the timeis past when policy-makers and citizens need toask whether change is needed.

In this report, we make the case for the typesof changes needed in two countries, and examinethe structural obstacles that stand in the way.

Indonesia's Forests: Context,Conditions, and Trends

With 185 million citizens, Indonesia is theworld's fourth most populous country and one ofthe most culturally diverse. Emerging as an inde-pendent nation in 1945 after centuries under colo-nial rule, Indonesia has developed rapidly overthe past several decades and boasts numerouseconomic and social successes. Among otherachievements, it has boosted agricultural produc-tion, developed industry, lessened poverty, up-graded health care and education, and developedimpressive transportation and communicationsnetworks. While Indonesia numbered among thepoorest countries in the world in 1967, with a percapita GNP of only $50, and by 1970 some 60 per-cent of the population lived in absolute poverty,by 1987, that figure had dropped to 17 percent,despite an overall population increase and inter-national economic stagnation from 1983 to 1987.(World Bank 1990)

Much of this growth and development has beenfueled by the exploitation of Indonesia's rich nat-ural resources, primarily petroleum but also tim-ber, minerals, and agricultural commodities. Untilthe late 1970s, attention to the environmental im-pacts of resource exploitation was scant, but sincethen both government and non-governmental or-ganizations have tried to strike a balance betweeneconomic growth and environmental sustainabil-ity. So far, the long-term health, diversity, andproductivity of the nation's forests have not beenensured, but this judgment must be put in context:

• Virtually every country on earth has fueledits economic and social development by ex-ploiting its natural resources at some pointin its history.

• Unlike many developing countries, Indo-nesia has not squandered all its patrimony:a good share of the proceeds of natural re-sources exploitation have been plowed backinto economic and social development.

• While environmental degradation and asso-ciated human problems still take a terrible

toll in Indonesia—and are in some casesgrowing worse—the government at thehighest levels is taking these problems seri-ously and has in the past decade begun toaddress them head on.

For Indonesia, geography has been destiny.The country comprises more than 13,000 islandsthat span the equator and stretch upwards of5,000 km from east to west. These far-flung is-lands are home to the world's second largest ex-panse of tropical rain forest, covering about 109million hectares or 56 percent of the land area.(GOI/FAO, 1990) Of the 19 distinct forest typesidentified so far, (Dick, 1991), lowland evergreenforest predominates, accounting for some 55 per-cent of the total in the Outer Islands.2 Borneoalone boasts an estimated 1,800 to 2,300 treespecies larger than 10 cm in diameter, and some40 plant genera and many more species are en-demic to this lush island. Of the 650 bird speciesknown or presumed to breed on the Sunda shelf(which includes Peninsular Malaysia, Sumatra,Borneo and Java), 291 inhabit inland lowlandforests. (Wells, 1971) Dipterocarpaceae, with some386 species in western Indonesia, dominate theseforests and yield the most commercial hardwood.Peat swamp forests blanket stretches of Sumatraand some parts of Kalimantan, while smallerareas of sub-montane and montane forests arescattered throughout the country. Heathlikeforests in sandy soils dot Kalimantan, while Aus-tralian flora occurs in some eastern parts of thecountry (RePPProT 1990).

While Indonesia occupies only 1.3 percent of theworld's land area, it possesses up to 17 percent ofthe planet's species. Roughly and conservatively,Indonesia houses about 11 percent of the world'sflowering plant species, 12 percent of the world'smammals, 17 percent of all birds, and at least 37percent of the world's fish. (KLH, 1992) Much ofthis astounding diversity owes its existence to thecountry's extensive and diverse forests.

Some of the biologically richest in the world,Indonesian forests are also among the most ex-ploited. While on paper 14 percent (16 millionhectares) of remaining forest is protected in parks

and reserves, many such areas are scarred by log-ging, mining, agriculture, and new human settle-ments (See Figure 1.1.)

Forest cover in 1950 (when the last comprehen-sive forest inventory was completed) was esti-mated at about 152 million hectares. (IIED/GOI,1985) Data collected around 1985 suggest a cur-rent forest cover of 119 million hectares(RePPProT 1990) Thus, losses averaged 914,000hectares annually for 35 years. Deforestation wasespecially intense during the second half of theperiod, when large-scale commercial timber ex-traction accelerated dramatically. When the 1985and subsequent data were reinterpreted in 1991,analysts concluded effective forest cover in late1989 totalled 109 million hectares and that the an-

nual deforestation rate was then 1.3 million hec-tares. (GOI, 1991b) These remaining 109 millionhectares contain substantial logged-over areas invarying states of degradation. (All of these fig-ures are tentative, but are the best currently avail-able.) (See Figure 1.2.)

Deforestation in Indonesia has five main causes:

• Forest clearing by growing numbers of mi-grant farmers who cultivate both subsis-tence and cash crops;

• Large-scale commercial logging operations;

• Conversion of natural forests to large-scalecommercial agriculture and timber plantations;

Figure 1.1. Current Primary Forest Cover in Indonesia

KJ

| I Current Primary Tropical Rain Forest

[ . l l Former Primary Monsoon and Rain Forest

^ ^ ^ Non-Forest Cover

Source: Tropical Forests of Asia and the Pacific Rim, IUCN & WCMC1990

Figure 1.2. Area of Lost Forest Cover in Indonesia Compared to Selected Country Land Areas

10 Million Hectares of Forest Area Lost

10 Million Hectares of Land Area

54 54

-1

b'l

33

24

i

MillionHectares

Forest Area LostSince 1950in Indonesia

Kalimantan, Colorado Vietnam UnitedIndonesia and Kingdom

Wyoming

Total Land Area

Source: IIED/GOI1985 and Rand McNally & Co., 1982. The Great Geographical Atlas, Rand McNally, Chicago.

• The government's official transmigrationprogram, which resettles people from thecrowded islands of Java and Bali ontocleared forest lands on the less densely pop-ulated islands of Kalimantan, Sumatra, Su-lawesi, and Irian Jaya; and

• The expansion of mining, oil explorationand production, and other forms of indus-trial development into forested areas.

These factors interact synergistically. Logging,mining, and transmigration open forest lands tocultivators and spontaneous settlement. As the for-est is degraded, it becomes a target for conversionto timber plantations or perennial crops. These ac-tivities in turn attract more migrants, even though

the agricultural potential of much cleared landdrops rapidly. The aggregate effect is to slow orstop the forest's regrowth. (See Figure 1.3.)

Although Indonesia's government is beefingup reforestation programs (GOI, 1991a), the em-phasis is on fast-growing softwood species grownon monocultural tree farms. Unfortunately, suchplantations do little to reduce pressure on tropicalmoist forests (World Bank 1991b), and for localcommunities, tree farms do not provide the in-come and products the natural forests do.(Friends of the Earth 1992; WALHI/LBH, 1992)

Indonesian law places control and manage-ment of all forest lands in the hands of the Min-istry of Forestry and its regional offices. (See

Figure 1.3. Sources and Evolution of Deforestation in IndonesiaRelative size of arrow indicates magnitude of deforestation

Time-

EflS Logging

HUH Transmigration

[ I Encroachment andTraditional Agriculture

Source: Dick, 1991

v/\ Forest Fires

1 I Estate Cropsi -—]K . 1 Swampland Development

Chapter II.) A parallel structure of provincialforestry services operated by provincial govern-ments supplies most technical services. Variousdonor organizations and multilateral develop-ment banks—most notably, the World Bank andthe Asian Development Bank—fund forestry pro-jects and programs and advise government onforest policy. Because the forest products indus-try is an important economic actor and comprisesa relatively small number of firms, it too greatly

influences forest policy. (See Chapter HI.) In gen-eral, forest policy-making in Indonesia is a rela-tively insular, top-down process: other sectoralagencies of government outside the forestry de-partment, provincial-level forestry officials, non-governmental organizations, and the generalpublic have a limited voice. (See Chapter IV.)

Policy studies carried out over the past decade,some commissioned by the Ministry of Forestry,

have identified the key reforms needed to slowdeforestation and make forest management moresustainable. The proposals include reforms oftenurial arrangements on forest lands (Moniaga,1991; Zerner, 1990; Barber and Churchill, 1987),changes in the timber-concession system(WALHI, 1991; Gray and Hadi, 1989; Repetto etal., 1989; Boulter, 1988; Gillis, 1988); new forest-resource pricing (World Bank, 1989); the estab-lishment of policies supporting forest-manage-ment partnerships with local communities(Poffenberger, 1990; Seymour and Rutherford,1990); and the reconsideration of policies govern-ing timber plantations (WALHI/LBH, 1992; ADB,1992a; Nugroho, 1991; Sedjo, 1988) and shiftingcultivation. (GOI/FAO, 1990; Weinstock, 1989)Acknowledging many points raised in these stud-ies, current government policy statements call fora comprehensive effort to slow deforestation(IFAP, 1991), and they commit Indonesia to biodi-versity conservation. (KLH, 1992; GOI, 1991b) Ina February 1993 speech (Soeharto 1993), PresidentSoeharto noted that:

We, in Indonesia, are well aware of the im-portance of dealing with forest and forestryissues.... Forests play an important role inthe climatic condition and sustain the soiland water. Furthermore, forests also serve asdiverse biological resources and as a store-house of genetic resources.. .We are aware ofthe host of things that still must be improvedor perfected in putting into practice the prin-ciple of sustainable forest management. Forthis purpose, we will be pleased to receivecriticism and recommendations as well asassistance from experts, countries and donorinstitutions in order to support sustainableforestry development and management, asmandated by the Earth Summit.

Yet, even with such high-level political com-mitment, change within an entrenched system offorest management and exploitation is slow. Thecurrent challenge is thus not so much determin-ing what policy changes are needed as it is under-standing and addressing the basic structural is-sues that both fuel forest degradation and loss inIndonesia and frustrate reform.

U.S. Forests: Context, Conditionsand Trends

The United States, with nearly 300 millionhectares of forest and woodland, is one of theworld's most extensively forested countries, trail-ing only Russia, Brazil, and Canada. (WRI, 1992)Although less biologically diverse than Indonesia'sforests, American woodlands include temperate,boreal, and tropical forest types. (See Table 1.1.)Forests are most extensive in the eastern half of thecountry, where deciduous hardwood forestsstretch along the east coast from the Florida penin-sula to northern New England and west to theMississippi River, except where agriculture (espe-cially in the Midwest) and urban areas (especiallyalong the east coast) have replaced natural ecosys-tems. West of the Mississippi, beyond the broadsweep of the Great Plains, predominantly conifer-ous forests are found in the mountains risingabove the semi-arid grasslands and deserts. Alongthe Pacific coast from central California to south-eastern Alaska lie the world's most diverse conif-erous forests. (See Box 1.1.) They harbor trees un-equalled anywhere for size, height, and age. Vastboreal forests cover interior Alaska, while smallpatches of remnant humid tropical and dry tropi-cal forest are found in Hawaii and Puerto Rico.

Before European settlers arrived, forests cov-ered approximately 48 percent of what eventuallybecame the United States. (Postel and Ryan, 1991)Today, forests cover about 32 percent of all U.S.land. (WRI, 1992) Many of these forests have atone time or another been' heavily modified orcleared for agriculture. Although precise figuresare not available, most estimates indicate that pri-mary forests in the United States outside ofAlaska have been reduced to less than 5 percentof their original extent3—a much smaller percent-age than in Indonesia and most other tropicalcountries. (Postel and Ryan, 1991) (See Figure 1.4.)Still, the forest area in the United States has re-bounded from all-time lows in the early 1900s,and—especially along the east coast—many landsonce cleared for agriculture have reverted to for-est. The country is now the world's largest pro-ducer and consumer of wood products and ex-porter of raw logs. (FAO, 1992)

Table 1.1. Selected Forest Statistics for Indonesia and t

Total Forest AreaForest as Percent of Total Land AreaPercent of Original Primary Forest RemainingDeforestation Rate (1980-90)Production of Industrial Round wood, 1988 (mil. m3)

Share of Total World Production of Roundwood

1. From GOI/FAO, 19902. From WRI, 19923. From Postel and Ryan, 19914. From UN-ECE/FAO, 19935. Excluding Alaska6. From UN FAO, "Forest Products Yearbook 1988"7. From UN FAO, 1993, "Forest Resources Assessment

he U.S.

Indonesia

109,000,000 HA1

561

433

1.07

406

2%6

1990: Tropical Countries."

United States

226,450,000 HA2

322

53,5

O.I4

4176

25%6

Despite this impressive comeback, many U.S.forests face cumulative and growing threats frompollution, urbanization, and unsustainable or in-appropriate exploitation:

• Air pollution from automobiles and indus-trial sources kill and injure trees; they alsoleave trees more vulnerable to insects anddisease;

• Large-scale commercial logging operationsisolate biologically complex natural forests inever smaller patches surrounded by youngerincreasingly simplified forest stands;

• The conversion of diverse natural forests totree plantations leads to biological impover-ishment, especially in the South and the Pa-cific Northwest;

• Introduced exotic pests and diseases (e.g.,Gypsy moth, Chestnut blight, and Dutchelm disease) threaten native species andecological relationships;

• Urban and suburban development displacessecondary forests on the fringes of mostmetropolitan areas; and

• The development of vacation homes, recre-ational facilities, mining, oil drilling, androad construction fragments and diminishesforests in rural areas.

Although these factors are chipping away atforest cover,4 their principal effect is to narrowthe range of forest products and services. For ex-ample, water quality and fisheries productionhave been seriously damaged by intensive log-ging and road-building in U.S. forest areas.(Anderson and Gerhke, 1988) From sugar maplesand red spruce in northern New England to pon-derosa pines in southern California, evidence oftree injury, mortality, and decreased growth insome areas has been at least partially attributedto pollution. (Bruck, 1989; Johnson and Siccama,1989; Miller, 1989; MacKenzie and El-Ashry,1989) Moreover, the lengthening list of speciesthreatened and endangered as their habitats dis-appear indicates serious forest managementproblems.5

Unlike in Indonesia, in the United States, legaland management authority over forests is largelydecentralized. Just under two thirds of the coun-try's forests are owned by corporations or indi-viduals. (USDA, 1989) Small individual land

Box I.I. Old-Cirowth Forests in tlif L niled States I'.u il'ic Northwest

Tin- bailie over wli.it remains of the North-west's old-growth (>r "ancienl forests" is one olAmerica's mosl emotional political issues. Old-growth loresl.s defined in varying ways—,ia'mon1 than 2M) years old. Tlu-y contain largotrees, big lallen logs, ,ind large standing snagsidead Invs). With ,1 mixed and multi-layeredcanopy broken b\ occasional lighl-lilled gaps,lives niiiv grow up lo 100 meters high and over2 meters in diameter.

: since ll>7ft. tin- National Forest Mjn.igi'iiuMHAil liii>- !(.•(.] u iivd t ho L .S. loiv>l <-<iir\ict' lo

iin \idbli1 popul,ilion> ol '.ill VLTli-brdti1

s throughout their mngi.\ Although lln-| nurllu'rn "-putti-d owl (s.'.n.v I'cdiiniliili- i,ii<ri>i,i)

nici\' IH1 tin1 mcvil notorious ri-sidi-nl ot oldgrowth t'oivsls, nt'w ri'stMRh indii.iti's tlu-M-lon-sts .in- llu1 [iii'li-rrod. ,ind somclinu's onl\ ,h.ibit.il lor.i growing INl ol ^pi-iii-s (Mooth.lysy'i, .ind mounling siii'iitilii.' I'videiuv indir.ili-s lh.it lontinui'd logging in old-growthlorosts will I'urthi'r i-nd.ingi.'r >-piviii>. d'.g..rhom.is, ol. ,il

Wi1 do not know i-x.utlv how cxk-nsivi.' uld-growlh lon-sts wciv bi-loiv I:uro-Anii.irif.in>-.ir-riwd on tin- SI.V1H1. but .1 riMson.ibli.11'stim.iti1 ithill Ivtwivn (i .nid 7.n million hivl.iivs bl.in-ki'ti'd uiisi-lLk-d Oti-gon .ind Washington.(\orsi1, IWH I low muih ti'm.iin^ and how t.istit is disappearing .in* qui'stioiis .it ilu> ii-nler olhciti-d deb.itf among the timber industrv1, thel.'.S. Toresl Sei"\ii'e. siientisl^, and environmen-tal groups. I I.nnes Ml>Sn) .ind t'.reene

both L SIS rosearihers, e^limateLl total old-growth in Ihe Iwo Mates in the mid l^SOs al 1.3and l.s million luvlares re-.peilivel\. I5ut morerecenl analyses have prodiuod lowerestimates.

Morrison (I')SS) examined si\ national lor-ests and identified only 4^h,i!l'() hectares o! old-growlh—siibslantialK less than the filS.Ollnheil.ues i-stimaled by I lavnes (I^Sd) ,md theI,ill)I.(HHi heitaies estimaled in drall L s lSen-vironmenlal iinji.ut assessinenls lor Ihe samenational forests. I'vlending Morrison's analy-sis, \ o r s e (\^a0) estimated thai ihe total area ofold-growth loresl now amounts toslighllvo\er I million hectares, or 13 pertenl ol whatonce was. 1)1 this, approximately 47l'.lH)(l hec-lares is prolecled in national parks, wildernessareas, or research natural areas.

It \ o r s e a n d Morrison are correct, unpro-tected old growth in the \orthwesl would dis-appear within .'il lo 40 years al recenl loggingrates (approximately ll),00ll lux lares- year).I lowever, since so much of what remains isIragmenled or otherw ise compromised bvproximity to roads and cleanuls, the eiologi-cally viable old-growth loresl area oulside otprotected areas could disappear lar taster. Ac-cording to \ o r s e 11 WO), with logging rates andharvesting patterns similar to those ol thel^SO's. an\ old growth fori>t ri'maining out-side ol protected areas would come under Ihedamaging inllueiKe of windlhrow and radicalniieroclimatic sliills within 2(1-23 wars.

owners control two thirds of those private forestlands, though corporations own comparativelymore than small individual landowners in the Pa-cific Northwest and the South. Of public "own-ers," the U.S. Forest Service ranks first with 76million hectares in 156 National Forests, most ofthem in the western states.

Not surprisingly, this pattern of forest landownership has given rise to a patchwork of leg-islative mandates, regulations, and managementjurisdictions. Federally owned forest lands aremanaged in accordance with at least two dozenmajor Acts of Congress. State and private forestlands do not come under federal law except to

10

Figure 1.4. Primary Forest Cover in the United States, 1620-1989

1620 1850

1989

Source: Adapted from M.P. Couzen, 1990. "The Making of the American Landscape", Unwin Hyman, Boston;and The Native Forest Council.

the extent that broad environmental statutesapply, such as the Endangered Species Act andthe Clean Water Act. Some states have passedforest-practices acts that affect all or some of thenon-federal forest lands, but most state forestrylaws are limited in scope, and violations are usu-ally treated as minor civil offenses or misde-meanors. Although some non-regulatory incen-tives to conserve forest resources do exist, theirinfluence on forest management decisions by pri-vate land owners is not well understood.

A growing number of analysts have examinedforest-management problems and proposed re-sponses to them. Many studies that focus on theeconomics of below-cost sales of publicly-ownedforest resources (e.g., Rice, 1989; O'Toole, 1988;Repetto, 1988) recommend ending timber saleswhere they cost more to administer than theygenerate in revenues, especially where environ-mental damage is likely. Studies of U.S. ForestService conflicts with, evasion of, or negligencein carrying out environmental legislation,

11

especially the Endangered Species Act and theNational Environmental Protection Act (e.g.,Gordon et al., 1991; Norse, 1990; Thomas et al.,1990; Anderson and Gerkhe, 1988; Wilcove,1988), recommend various reforms to protect for-est resources other than timber. In general, theconsensus is that the country's forest policies nolonger suit the problems facing America'sforests. (Aplet et al., 1993)

In response to this growing consensus, recentpolicy statements by the U.S. Forest Service andthe Bureau of Land Management commit the fed-eral government to ecosystem-management poli-cies intended to prevent the environmental dam-age caused by intensive commodity-orientedforest management, (e.g., Robertson, 1992) Sev-eral states have recently passed laws to betterprotect forest resources on state and privatelands, others are considering following suit, andsome are working to develop innovative incen-tive programs to encourage more sustainable for-est management. But the complex web of owner-ship, law, and perverse economic incentives thatgovern the use and management of U.S. forestlands impedes change. To break the policy log-jam, advocates of more sustainable approaches toforest management will have to recognize andaddress basic structural issues—tenure, econom-ics, and policy-making itself.

Notes

1. The actual breakdown is calculated byIIASA (1990) as the loss of unprocessed wood($6.3 billion); loss of value-added processing inwood industry ($7.2 billion); and other costs

including flood, erosion, and siltation damage($16.2 billion).

2. Indonesian islands are customarily cate-gorized as either fertile, intensively populatedand cultivated "Inner Islands" (Java and Bali) orthe mostly-forested, thinly populated "Outer Is-lands" (Sumatra, Kalimantan [Borneo], Sulawesi,and Irian Jaya are the largest).

3. Postel and Ryan (1991) indicate there areabout 65 million hectares of primary forest in theUnited States, or 15 percent of all forest cover.However, most of it is in Alaska (52 million hec-tares), with only 13 million hectares remainingelsewhere. Most of the 13 million hectares is high-elevation alpine and sub-alpine forests in thewestern states, which typically have limitedspecies diversity. Lower elevation primary forestsare extremely rare. Noss (1990) estimates the totalprimary forest left in the Pacific Northwest (i.e.,Douglas fir/western hemlock forests below ap-proximately 1,250 meters) comprises about 1.0million hectares. Primary forest area in the east-ern United States (east of the Mississippi River)has been reduced to no more than between100,000-200,000 hectares. (NEEN, 1992)

4. Between 1980 and 1990, the United Nations(UN-ECE/FAO, 1992) estimates that the UnitedStates lost 3.2 million hectares of forest—an aver-age deforestation rate of 0.1 percent compared toIndonesia's 0.8 percent.

5. More than 150 endangered species are found inthe National Forest System alone, and at least 1,300species found on National Forest lands are candi-dates for formal designation. (Norse et al., 1986)

12

II. Ownership, Access, and Control overForest Lands

P atterns of forest ownership, access, andcontrol—collectively termed "tenure"here—create powerful incentives for sap-

ping or saving forests. At base, forest tenure is abundle of rights to occupy, use, or benefit fromforests and forest lands under a particular systemof law and authority. In most systems, such rightsare linked—at least formally—to correspondingduties, such as that of a logging concession-holder to replant. In many, they invite poor forestmanagement, and in all they bring economic ben-efit and political influence.

Property rights are among the most difficultsocial and legal relationships to change. To evenraise the issue in the context of forestry is to stirup tensions over state versus community controlof land and resources in Indonesia, and cries ofunconstitutionality in the United States. Yet,policy-makers and others have no choice but tosystematically bring tenurial issues into the de-bate over the forest's future if there is to beprogress toward better policies.

Forest Tenure in Indonesia

In 1990, a consultant on forestry law opened adraft report for the Indonesian Ministry ofForestry on "Legal Options for the IndonesianForestry Sector" (Zerner, 1990) by saying "Theforests of Indonesia are an immense commons."The final version read: "The Government of In-donesia exercises complete jurisdiction and au-thority over designated forest lands totalling

approximately 140 million hectares." This editor-ial change illustrates the fundamental tensionsthat underlie forest tenure and the obstacles thatcurrent perceptions and policies governing forestownership, access, and control present to forest-policy reform. The government does, in fact, claimsole legal jurisdiction and authority over roughly143 million hectares of designated forest land,some 74 percent of the country's land area. Butthese forest lands are also a vast "commons" in-sofar as a wide range of actors—from large tim-ber companies to migrant cultivators and small-scale gold-panners—have loosely restrictedaccess to them.1 Such "open access" (Bromley1989) is a powerful incentive to deforest and de-grade lands since none of these actors holds a se-cure right to forest lands that might serve as anincentive for careful, long-term management, andnone possess the practical means to control or ex-clude others, especially in remote areas.

But access to Indonesia's forests is not equal.Some who stake claims, especially wealthy andtechnically sophisticated logging firms, receivethe state's imprimatur—concessionary legalrights to exploit particular forest territories andresources. Others without a shot at these conces-sions either appeal to customary law, which ishonored mainly in the breach, or defy the law inprotest or desperation.

In national parks and other protected forests,open access is the de facto law of the land too.Protected areas are legally off limits for almost alloccupations and resource uses but the forest-

13

conservation agency lacks the wherewithal to po-lice illegal logging, farming, or settlement withinpark boundaries. Many Indonesian protectedareas have thus become magnets for clandestinetimber extraction, slash-and-burn farming, andwildlife collection.

This tenurial system gives rise to two prob-lems. First, caught in a double bind, both com-mercial interests and communities are all butforced to degrade the forest, as they have doneincreasingly over the past several decades. Sec-ond, a major industry worth some $4 billion ayear—logging and forest products—is foundedon the basis of this forest-tenure system, andpowerful firms and industry associations with astake in this system exert tremendous influenceon forest policy. In recent years, the governmenthas stepped up enforcement of concession-man-agement regulations and explored ways to recon-cile local communities' land and resource rightsmore equitably with logging and other large-scaledevelopment activities in forest areas. But sincethe timber and forest products industry is so im-portant to the national economy, reformers ingovernment move cautiously.

The National Tenure System for ForestLands

Under Indonesia's Constitution, authority andresponsibility for "Branches of production whichare important for the State and which affect thelives of most people," belongs to the state. Gov-ernment controls and manages the nation'sforests under the provisions and implementingregulations of the Basic Forestry Law of 1967,which empowers the Ministry of Forestry to "de-termine and regulate legal relations between indi-viduals or corporate bodies and forests, and dealwith legal activities related to forests."

Under the Basic Forestry Law, certain landsare classified by Ministerial Decree as official"Forest Area," contingent on an inventory, sur-vey, and boundary determination. Deforestedlands may be included in a Forest Area if they areslated for reforestation. In turn, Forest Areas aresub-classified as Limited or Regular "Production

Forests;" "Protection Forests" set aside to protectwatersheds or erosion-prone slopes; "Conserva-tion Forests," including National Parks and Na-ture Reserves; and "Recreation Forests," includ-ing Hunting and Tourism Parks. In addition,some forest lands are classified as Forest Avail-able for Conversion to non-forest uses, while asmall remainder are "Unclassified Forests."Under the province-by-province Consensus For-est Land Use Planning process (TGHK) under-taken in the early 1980s, government-controlledForest Area in each province is divided into thesevarious categories and recorded on official maps.(See Table 2.1.)

Tenurial rights over forest lands are deter-mined by these categories; and, on balance, fewkinds of rights to forest lands are permitted. Cus-tomary (.adat) community rights in effect in manyareas are recognized by national law only to theextent that they do not conflict with officially au-thorized uses of the forest. (Zerner, 1990; Barberand Churchill, 1987) In effect, traditional rightshold only until the tide of officially sanctioneddevelopment reaches a particular region or re-source.

The most important forest property right is the20-year Right of Forest Exploitation (HPH),which is:

A right to exploit the forest in a DesignatedForest Area, through cutting of timber, re-generating and caring for the forest, andprocessing and marketing forest products,in accordance with a Forest ExploitationWorkplan, in line with existing regulations,and on the basis of conservation and sus-tainable production.2

As of 1991, some 580 such HPH concessionscovering about 60 million hectares—31 percent ofthe country's land area—averaged about 105,000hectares each. (Pramono, 1991; RePPProT, 1990)HPHs are granted by the Ministry of Forestry toIndonesian private or state-chartered corpora-tions, though in practice some are held by jointventures with foreign firms. Applications and re-newals are approved by the Ministry of Forestry,

14

Table 2.1. Indonesian Forest Classifications ;

TGHKForestCategories

Nature ReserveProtection

Limited Production

Normal Production

Conversion

Unclassified

PrimaryPurpose

Genetic ConservationWatershed Protection

Timber Production &Erosion PreventionNatural TimberProduction

Potentially Convertibleto Non-Forest Uses

* Official: areas as quoted on official TGHK

md Use (in million hectares)

PermittedTimberExtraction

NoneNone

Selection FellingOnlySelection orClear Fellingas Determinedby Forest TypeClear Felling

maps

OfficialTGHK

18.2529.68

30.52

31.85

30.54

38.45

Source*RePPProt

Transferred

17.3231.20

30.13

30.76

36.70

30.97

RePPProtRevised

25.1155.09

12.57

18.26

66.05**

RePPProt Transferred: data are measurements of existing TGHK categories transferred toRePPProt mapRePPProt Revisedcover

: suggested revisions reflecting more accurate assessments of existing forest

** Conversion and unclassifiedSources: RePPProt, 1990 and Dick, 1991

with a recommendation from the provincial Gov-ernor. (Barber, 1990)

In 1990, the Ministry of Forestry began grant-ing Industrial Timber Plantation Rights (HPHTI),which allow holders to plant and harvest planta-tion timber on "unproductive" areas of Perma-nent Production Forest, to private or state firmsand to officially recognized cooperatives for aterm of 35 years plus one growing cycle of thedominant species planted. Under current plans,some 4.4 million hectares of state forest lands willbe developed under these new concessions by1999. (GOI, 1991b)

While a plantation concession can cover asmuch as 300,000 hectares,3 most firms currentlyplan to plant only 60 to 70,000 hectares of thisarea and to cut natural forests in the remainder of

the concession in the initial years before the plan-tation matures. (World Bank, 1993) Access to thisresidual natural forest (and to the land it sits on,once cleared) is a large de facto subsidy, in addi-tion to a formal monetary subsidy the concession-holder4 receives.

Various other minor rights extended on In-donesia's forest lands include rattan (Palmae, sub-family Calamoidae) cultivation concessions,5 rightsto collect wild rattan,6 and a concessionary rightto exploit sago (Metroxylon spp.) and nipah (Nypafruticans) forests.7 By law, the only tenurial rightthat may be granted on Indonesia's 30 millionhectares of Protection Forests, or on its 18 millionhectares of National Parks, Nature Reserves, andRecreation Forests is that to collect wild rattan inthe Protection Forests—a comparatively minorenterprise.

15

A Profile of Customary Forest-TenureSystems

The forest-tenure regime mandated by na-tional law is relatively recent. Up until the lastfew decades, most forest lands used or inhabitedby people were governed by customary adat lawand authority (Abdurrahman 1984; Sudiyat1981). In many local forest communities, adatstill reigns and its authority—flowing not fromthe state but from the communities themselves—is often locally viewed as more legitimate, moreecologically sound, and more just.

Conceptions of tenure under adat differ radi-cally from the underlying assumptions of thestate's system. Under adat,

• Land has socio-religious significance, andit is closely connected to the identity of thegroup. Matters concerning land cannoteasily be separated from matters of kin-ship, authority and leadership, modes ofsubsistence, ritual, and the supernatural.

• In many areas, land and its resources sup-port a broad array of seasonally staggeredactivities. Rotational and shifting cultiva-tion (swidden), hunting, fishing, and thecollection of forest products generally pre-dominate over sedentary, intensive agri-culture or the intensive exploitation of afew species for the market.

• Individual, heritable rights in land exist, butmost individual "rights in land" are eitherrights of use subsidiary to a superior groupright, or rights to particular resources, suchas rubber or other trees, or to harvest a par-ticular cultivated plot. Thus land tenure andresource tenure aren't necessarily the samething, and one parcel of land is often en-cumbered with a variety of rights held bydifferent persons and groups.

• Unworked lands are, for the most part, asencumbered by rights as individual gar-den plots. Land is rarely considered"empty."

• Rights in land and its resources are rarelyrecorded in maps or written records, withthe exception of ownership marks placed ontrees and other discrete, individually ownedresources. Borders are determined on thebasis of natural features, such as rivers, andby mutual understandings.

Generally, adat rights in the forest are of threetypes: Rights to specific trees, both tended andgrowing wild and to other forest resources (e.g.game and fish); rights to use land once or nowused for long-fallow swidden cultivation; andcommunal "rights of disposal" over land consid-ered the homeland and property of a particulargroup or community.

Compared to forest rights created under theBasic Forestry Law, adat rights are weak and inse-cure under national law. The Basic Forestry Lawsays only that "The enjoyment of adat rights,whether individual or communal, to exploit for-est resources directly or indirectly... may not beallowed to disturb the attainment of the purposesof this Law." A 1970 implementing regulation8

further elaborates (and weakens) adat rights inHPH concession areas:

(1) The rights of the adat community and itsmembers to harvest forest products ... shallbe organized in such manner that they donot disturb forest production.

(2) Implementation of the above provision is[delegated to the Company] which is to ac-complish it through consensus with theadat community, with supervision from theForest Service.

(3) In the interests of public safety, adat rightsto harvest forest products in a particulararea shall be frozen while forest productionactivities are under way.

The new laws and regulations governingtimber-plantation, rattan, sago, and nipahconcessions are completely silent on adat, eventhough complex adat systems of rights andobligations throughout the Indonesian

16

archipelago govern the ownership and harvest-ing of, for example, rattan and sago. (Ngo,1991; de Beer and McDermott, 1989; Barber andChurchill, 1987; Peluso, 1986) The HPH loggingconcession precedent suggests that new rightspertaining to these species invalidate conflict-ing adat rights.

The Basic Agrarian Law of 1960 does recognizecustomary law as the basis for national land law(Moniaga, 1991; Abdurrahman, 1984; Sudiyat,1981). But three factors have made this lawlargely irrelevant to tracts classified as ForestArea under the Basic Forestry Law of 1967. First,few rural communities understand national lawsand legal procedures. Indeed, one study in a Cen-tral Kalimantan village, for example, found that87 percent of the people had never even heard ofthe Basic Agrarian Law (Moniaga, 1991), and cus-tomary rights have rarely been registered underits provisions in rural forest areas.9 Second, muchlike the Basic Forestry Law of 1967, the AgrarianLaw notes that customary law "applies to theland, water and air as long as it does not contradictnational and State interests..." (emphasis added.)Finally, in practice, government has interpretedthe Forestry Law as one that prevails over theBasic Agrarian Law in legally designated ForestAreas.

The Impacts of Indonesia's Forest-TenureSystem

Indonesia's current forest-tenure system isworking against the health of the nation's forestsand against prospects for their sustainable man-agement. By overriding traditional rights, the rel-atively new system of nationally sanctionedrights and access rules has eroded local commu-nities' incentives to manage the forest for the longterm and engendered social conflict in manyareas. At the same time, the sheer scale and, insome cases, remoteness of areas under timberconcessions, has overwhelmed government'sability to collect reliable data, set boundaries, andpolice concession-holders in the field. Then too,even if they were enforced, existing obligationsare simply too weak to ensure the forest's long-term viability.

Since the Basic Forestry Law and the Law onForeign Investment passed in 1967, and the log-ging industry subsequently boomed, forest-dwelling and forest-dependent communities inIndonesia's Outer Islands have lost rights of ac-cess, ownership, and control to the state appara-tus and to the large commercial firms that it li-censes to exploit those resources. In all, thetraditional adat tenurial rights of millions of for-est-dwelling and forest-dependent people havebeen handed over to a relatively small number ofcommercial firms and state enterprises, or, forconservation purposes, to the Ministry ofForestry.

The extent to which timber concessions andconservation areas have displaced settled adatrights in forest lands and resources remains un-certain, however. Official maps and records don'tdocument customary rights, and no one reallyknows how many people live on government-designated forest lands or earn their living fromthem, or how extensive their territorial claims are.Estimates of the number of people living in ornext to state-designated forest lands range from1.5 to 65 million, depending on which definitionis used and which policy agenda is at stake. Theextent of forest territory claimed, controlled, ormanaged by forest-dwelling peoples and commu-nities has never been surveyed systematically.Neither have overlaps between the boundaries orareas under community management and thoseof legally designated forest areas.

When development activities begin in such alegally uncharted area, local communities can dolittle to hang on to their traditional rights. Onestudy of central Sumatra's lowland forests foundthat some traditional landowners attempt to ac-quire land title certificates to legitimize their adatclaims under national law. But, the study found:

.. .for the large majority of local people, se-curing their rights through obtaining certifi-cates is not a realistic option. They have butone possibility left: to force the traditionalland tenure system to its bitter end, hopingthat at least some kind of recognition will begiven to them when the land is expropriated.

17

Thus, their strategy is to clear as much landas possible within previously uncleared for-est before somebody else does so. "We knowwe are destroying our forests, but it is a raceand whoever does not join it will lose" is thefear expressed by villagers as they move tonew forest areas. (Ostergaard, 1993)

At the heart of the issue is a perceptual con-flict over the strength and validity of adat rightsin the face of a new government-sponsoredtenure system:

... [Relationships between timber conces-sions, local land-use practices, and the eco-logical state of the forest] are determinedby the concession system because the legalright to forest resources has been trans-ferred from the traditional communities tothe concession-holders. The local use oflarge timbers to build boats, for example,is obstructed by the rights of the conces-sion-holder. Thus arises use of the term"theft" of timber owned by the concession-holder by the local people. For the localpeople, however, of course the problem isseen differently, as the "theft" of the woodby the concession-holder. (Haeruman,1992)10

An example of this clash of perceptions is thecase of the P.T. You Lim Sari (YLS) timber conces-sion in northern Irian Jaya where leaders of sev-eral clan groups hold customary ownershiprights to the forest. YLS entered the villages' for-est areas in mid-1989 and agreed to the leaders'demands for compensation in cash and in kind.But soon afterward, YLS began cutting in the vil-lage forests without paying the agreed compensa-tion. Villagers also complained that the loggingoperations were damaging rattan resources andruining hunting, an important local source ofsubsistence. One villager's story encapsulates theproblem:

"On the way to see Pedu, head of my clan,[a representative of the timber company]was surprised to find a very big Agathistree. He asked me who owned the tree and

the forest. I told him it belonged to me. Heasked how much was the tree and if Iwanted to sell it to him. I said two millionrupiah [$1000]. With a surprised look, hesaid that it was too expensive, that he couldnot afford it, but that he would cut it downin the future anyway. I told him he couldnot do it unless he paid the two million ru-piah. He replied that he had paid five billionrupiah to the governor and the head of Jaya-pura district, so he had the right to cut thetree. I said that the governor and the districthead were Sentani and Tobati people and,therefore, he could go to Sentani and Tobatiand cut their trees." (Tjitradjaja, 1991)

While some timber firms negotiate informalsettlements with adat forest landowners, many es-tablish their claim by fiat. In Central Sulawesi, forexample, a logging firm claimed local farmlandsas part of their concession area, destroyed cropsto plant timber species, and posted signs pro-hibiting tree cutting and crop cultivation andthreatening violators with 10-year prison sen-tences or fines of up to Rp. 100 million [$50,000],(WALHI, 1993)

In some cases, disputes between adat land-owners and development projects have turnedviolent. (See Boxes 2.1 and 2.2.) In Pulau Panggungin the Lampung province of Sumatra, local com-munities were informed in early 1988 that theircrops (mostly coffee) and homes were illegallysited on state forest lands slated for reforestation.They were given the choice of joining a resettle-ment program in another province or buying pri-vate land on their own outside of the designatedForest Area. While some residents willinglysigned up for the resettlement program, variousrestrictions on participation and allegations of ex-tortion by local officials soon brought the regis-tration process to a halt. Between November 1988and June 1989, according to investigations of theIndonesian Legal Aid Institute, local officials tookmatters in their own hands: over 500 homes wereransacked or burned, hundreds of coffee treeswere destroyed, coffee-hulling and other machin-ery was demolished, and tons of dried coffeebeans were confiscated or burned. The local

18

Box 2.1. l:oresl Tenure Conflict in 1 ampung, Sumatra

Lampung province is located nn I In- south-ern tip ol Sumatra, less thdii two hours hv lorryFrom Ihu western lip of Java. It owes its highrural popul.ition density ol" IZd-'kni- finI4SM —the highest in Indonesia outside of Javaand Hali— to iiiiu' decades ol 1KMvy migrationfrom lava, both planned and spontaneous. Inthe demographic shift, the native I .ampungpeople have become .1 minority, outnumberedby the Javanese population.

I .ampung is also one oi Indonesia's most de-forested provinces, with remnant forest coverof only 14 percent. Remaining forest areas aredegraded and overrun—virtually no forestareas are free of settlers. Provincial forestry of-ficials estimate lh.it some NrviHH) people live inprotected forests alone.

To go\ eminent, these forest settlers possessno legal right lo the land they occupy and de-grade. Its solution has been to resettle some4S.0i)l) of them on non-forest lands, ottenthrough use of military force, through the"local transmigration scheme." Village- havebeen burned, and recalcitrant villagers impris-oned. Some resisters, however, claim that theyhold valid rights lo the forest lands under cus-tomary law. and observers ha\ e noted that theway these villagers use the land may be ecolog-ically superior lo planting fast-growing trees ofa single specie'—the government approach.

In the heart of I .ampung liesClunung Malak,a roughh 2O.l)Oi)-hectarc watershed lhal hasbeen designated as Protection l-'orest since thecolonial era and that now feeds an irrigationproject. To provide extra catchment protectionfor a 7.000-heclare irrigation expansion down-stream, the Ministry oi horestry ga/etled an ad-ditional 4300 hectares lo the catchment area in1LW4. The government's posiLion has been thatthe settlers' land uses are degrading Ihe water-shed and hurling other conser\alion objectives,and th.it Ihev must be removed from Ihe land

so thai: it may be "regreened" as a protectionfore.-»I /one. Part ol this land was claimed undercustomary land rights by villagers in WayAbar, descendants of Javanese origin who set-tled Ihe land in ll.>32 in accordance with validlocal customary tenurial procedures.

When the provincial government instructedthe people of Way Abar lo move to a new area,they refused, partly bei.iuse neighbors whohad been relocated lo Ihe same new area hadfound it much less fertile than Way Abar,walch.-d their standard oi living erode, anilsullered near-famine condition-.. Taking theircase lo court, the villagers argued unsuccess-fully 1 lal il they had to be moved, the govern-ment should follow the land acquisition andcompensation procedures of the Basic Agra-rian Law of l%0 (which applies to tenurialmailers on non-forest lands!, not those of theMasic I-'orestrv I.aw of lltf>7 (under which theyheld no rights whatsoever^

This socially divisive resettlement schemecan't be justilied on grounds oi loresl or water-shed protection. The latchment's average slopeis less Ihan 10 percent, so depopulating the areadoesn't make sense as an erosion-control mea-sure. Moreover, almost 70 percent ol the areawas green -mostly a multi-storied agroforestrvsvsteni of toffee, annual crops., and as mam as(->?• IoCtil varieties of fruit and other trees. Vil-lagers also seemed willing lo modily their agri-cultural practices to better preserve the water-shed. In contrast, the lands left by neighboringvillagers who were resettled have been strippedof fruil trees and replanted with a monocultureof Alhhiii hlciitnriii. I'ven under optimal growingcondit.ons, these areas will need at least four toseven vears to attain Ihe same level ol \egeta-live cover that the "encroachers" of Way Abarachiewd. Cii\en population pressures in thearea, resentment of the government's policy,and I IK- limited patrol capacitv of the forestry

Ct'lllinih'il Oil lh\Xl / ' i\Y

19

service, thi» land will probably deteriorate quitequickly. Thus I IK- fnvironnifnl.il .uid si>t i.ilcosts o\ maintaining the state's lfiiuri.il claimson Wiiv A Kir have- Ixvn considerable, and thi1

government's victory, pyrrhic.

/"I"I">: Pi'lHii, July S, 1"-WI (Indonesian dailypaper): I lalild, field note?.

military commander temporarily put a stop to thedestruction, but the attacks began again severalmonths later. (YLBHI, 1989) The Pulau Panggungcase is not representative of government policy,but it illustrates what can happen when localcommunity rights are not recognized, legally des-ignated forest areas aren't effectively protected,and local government cannot easily be held ac-countable to local communities for its actions. Itmay also signal conflicts to come, as pressures forboth development and conservation increase.

To be fair, forestry law and policy are not theonly forces undermining traditional adat systemsof social organization and resource management.Increasing exposure to development programs,the commercial economy, the mass media, andexternal contacts of all types can tear communi-ties apart.

Jurisdictional problems are also compoundedby the sheer speed with which the central govern-ment has transformed the tenurial landscape overvast areas of thinly-settled and administered for-est territories. While logging concessions, for ex-ample, may by law be issued only in areas classi-fied as Production or Conversion Forest, inpractice they have overlapped Protection Forestand Nature Reserve areas. (GOI, 1991) One recentstudy concludes that "collusive agreements be-tween officials of the Forestry Department andconcessionaires, inadequate mapping, tardygazetting of nature reserves, and poor coordina-tion among authorities controlling each use cate-gory resulted in the transfer of 4.55 millionhectares of protection and conservation forests toHPHsby 1990." (WALHI/LBH, 1992)

Even where legal concessions do not overlapwith protected forests, illegal, out-of-boundarieslogging in all categories of protected forests,

including National Parks, is common. (WALHI,1993a; Callister, 1992; Dick, 1991) Small wonder:one study notes, ".. .despite many violations, fre-quently documented in the press, no logging companyhas ever been prosecuted for illegal felling of trees on areserve." [Emphasis in original] (RePPProt, 1990)Lack of reliable basic data also undermines soundmanagement. By 1984, more than 15 years afterconcession rights leasing began, less than onepercent of all concessionaires had submitted theaerial photographs required for planning andcontrolling logging operations. (Gunawan, 1991)

On balance then, national forestry law andthese other pressures have together turned whatcould have been a gradual process of adat adap-tion and cooperation with government and theprivate sector into a rapid slide toward open ac-cess, ecological degradation, and social conflict.

Unbalanced Rights and Responsibilitiesin Production Forests

Another tenurial problem in Indonesia'sforests revolves around the balance of rights andcorrelative duties transferred to logging conces-sion-holders. To enforce the obligations man-dated by law, financial, human, and technologicalresources would have to increase by at least anorder of magnitude. Even then, the resultingmanagement improvements would not guaranteethe forests' sustainability.

Concession-holders are legally bound to pre-pare and adhere to an approved managementplan, mark concession boundaries, conduct a pre-harvest inventory, develop roads and other infra-structure, provide facilities for workers, followthe approved cutting system (TPTI), and take nu-merous other actions. But the Ministry of Forestryestimated in 1990 that only about 4 percent of

20

Box 2.2. Lugging and Social Conflict on Yamdena Island

Yamdena is a small coral island of 535,000hectares, situated in Indonesia's Tanimbar Is-lands in Maluku Province. So valuable an.1 itsvaried moist, dry monsoon, and savannaforests, that in 1971 the pivcrnmiTil decreedthe whole island a protected fores! and re-search area, expressly prohibiting commercialforestry. I5ut in April 194],1 IP1 I logging rightsto exploit 164,000 of Yamdena's 172,000hectares of forest were granted lo I'.T. Alam\usa Segar (A\S) by the Ministry of Forestry.Logging began in January 14^2, raising a stormof protest from the island's people, whoclaimed thai A\S had not consulted the com-munity and that no prior notice was given thata HI'll license was to be issued. Islandersbrought their protests to the national Parlia-ment in |uly, bul logging continued.

On September <•>, 1942, some 400 local is-landers attacked A\S ' barracks and camps,one person was killed, and several people wereinjured. Some 39 people were arrested, and bysome accounts were beaten with rifle butts.The Hishop of Maluku Province sent strong let-ters of protest lo the government, assertingthai government troops "acted with iron handsand e\tra-JLidicially against the people they aresupposed to protect."

The Ministry of forestry now recognizesthe costs ol the Yamdena situation, and in late-

it froze all timber operations on the is-land for six months, pending the outcome olan environmental review. In early 1443, thenew Minister reaffirmed the freeze, sayingthat the decision on whether logging wouldcontinue al the end of the six-month morato-rium would be determined on the basis o\ thelocal communities' wishes after public consul-tations with them. A Commission of the In-dones.an Parliament returned from a late Au-gust 1943 fact-finding trip lo Yamdena torecommend that the logging freeze be lifted,as it was hurling the local economy. At thesame time, representatives oi a local \C1O, theTanimbar Intellectuals' Association (1CTM,continued lo argue that continued loggingwould spell environmental disaster. I'he Min-ister IIL'\ erlheless decided to lift the freeze, al-beit with a likely reduction in the concession'scutting area to be announced after "furthersludie-;." In addition, state-owned corpora-lions and cooperatives are to be phased intopartial ownership ot the A\S concession, amove that will make participation by local in-habitants in the company a priority, accordinglo the Minister. 1CT1 remains opposed to theresumption of logging, which would probablydamage the island's fragile environment ^ndfracture its social peace.

'V.N: l.tk.irln 1993c, lW3d, W43e;Aji

concession-holders were fully complying withapplicable regulations (Callister, 1992), thoughthe Minister in 1993 ranked only 13 percent as"mismanaged," and estimated that some 25 per-cent are "well-managed." (Suharyanto, 1993)One more recent field study of five concessions indifferent parts of the country found evidence thatin every concession, boundaries were manipu-lated, log production volume and productioncosts were falsified, undersized and riverine treeswere cut, roads were poorly built, ebony was

illegally exported, Protection Forest and otherareas outside authorized cutting blocks werelogged, and excessive damage was done to resid-ual stands during harvesting. (WALHI 1993a) A1992 Asian Development Bank team appraising aproposed biodiversity-conservation project ob-served that on the Sumatran island of Siberut:

Commercial logging concessions cover mostof the island and timber cutting has trans-gressed protected area boundaries in several

21

locations. Logging near rivers, watercoursesand steep slopes is common and no refor-estation programs on logged-over forestareas have been initiated. The soils.. .are un-suitable for commercial logging and proneto severe erosion. (ADB 1992)

In Siberut, the national government is phasingout all logging activities by 1994. But a total banis obviously not viable for the whole of Indone-sia's forests.

Beginning around 1989, the Ministry of Fores-try began to crack down on violators, and as of1991 it had revoked about 42 HPH contracts, andsuspended 53. Some 380 fines totalling more than$20 million were imposed on roughly 270 conces-sion-holders. As of March 1993, the Ministry hadcollected some $12.8 million, and was still wait-ing for the remaining $10.6 million. (Suharyanto,1993) Few outside government know, though,which concessions were fined for what violations,and which ones have paid. One of the largestfines, which was widely publicized—$5.6 millionlevied against P.T. Barito Pacific for illegal log-ging in a Kalimantan protected area and on anadjoining concession between 1985 and 1988—was subsequently reduced to $4.2 million, and asof late 1991 the firm was still disputing the allega-tions and withholding payment. (Callister, 1992)The one concession-holder who appealed revoca-tion of his license in Administrative Court wonthe case, because the Ministry did not have ade-quate data to prove the violations. (WALHI,1993a)

Given the large profits that concession-holderscan expect, they may view the current level offines and compliance with stepped-up enforce-ment as merely another cost of doing businessrather than as a strong deterrent. In any case, thecurrent grab-bag of responses to the problem—awide range of technical and bureaucratic require-ments that are difficult for the government tomonitor—isn't enough. Current concession regu-lations aren't oriented toward monitoring andmaintaining the forest's ecological functions andbiological diversity or toward improving the so-cial and economic welfare of forest communities.

Directions and Strategies for Change

Four changes are needed in Indonesia's tenur-ial system to support a more sustainable andequitable future for the nation's forests:

1. The enforcement of concession-holders' re-sponsibilities under their contracts throughintensified monitoring, higher fines, andbroader sanctions, perhaps coupled with therequirement that concession-holders postand keep replenished a stiff performancebond that the government could draw onwhen the evaluations of an independentand credible monitoring entity revealviolations;

2. The cancellation or phase-out of concessionsthat conflict with or threaten designatedprotected areas, areas ecologically unsuitedto logging, and forests that established localcommunities depend upon for a significantshare of their livelihoods;

3. The demarcation and legal recognition ofcustomary adat land and resource rights inareas where communities are willing towork with government and others to man-age forest resources sustainably; and

4. The reconfiguration of production forestareas into permanent production units withboundaries supported by all local land-users and some form of profit-sharing withlocal communities who lose access to re-sources in concession areas.

Some government policy-makers have becomemore receptive to these proposals in the past fewyears, and some innovative preliminary actionshave been taken. Besides the recent step-up in en-forcement noted above, the government is alsobeginning to correct the often vague and inaccu-rate results of the province-by-province Consen-sus Forest Land Use Planning (TGHK) processcarried out in the early 1980s.

One promising initiative, known as the KPHPsystem, is being tested by the Ministry of Forestry

22

in the provinces of Central Kalimantan and Jambi(Sumatra), with support from the British OverseasDevelopment Administration. Under a 1991 Minis-terial Decree,11 the KPHP (Production Forest Uti-lization Units) are established as the smallest unitsof forest that can be managed on sustainable prin-ciples. The hope is that KPHPs will be an ecologi-cally and economically rational unit of permanentproduction forest, bounded by natural featuresand roads whenever possible and recognized byall land-users in the vicinity. From a tenurialstandpoint, the key features are that boundaries"must be subject to a negotiation with local com-munities" and that "boundary changes will be in-evitable." (ODA 1993) The Ministry might evenchannel some percentage of revenues derivedfrom logging activities directly to communitieswho lose access to forest lands in the KPHP.

Other developments should help clarify tenur-ial status too. In the Production Forests, the Asso-ciation of Indonesian Forest Industries (APHI) isconducting a 5-year aerial mapping at 1:20,000 forall forest concessions and, as of mid-1993, some62 million hectares had been covered by remotesensing, and 35 million hectares of that area hadbeen interpreted, at a cost of $100 million. Mean-while, in a pilot effort, the Forestry Ministry hascontracted two private firms to design a new con-cession-monitoring system and to establish a newentity to audit and inspect concession operations.(WALHI, 1993a)

Government policy on the rights of traditionaladat communities in the forest may be on theverge of changing as well. The 1992 Law on Pop-ulation Development and Family Welfare recog-nizes the right of "vulnerable peoples" to "utilizea customary territorial heritage, as well as theright to preserve or develop the behavior of cul-tural life."12 The official Elucidation of this Lawleaves little doubt that a dramatic departure fromthe Basic Forestry Law and other past policies to-ward traditional forest communities' land rightsis now at least possible:

The rights to utilize local customary territor-ial heritage provide a guarantee that groupsof people who have traditionally developed

an area for generations will not be over-whelmed by newcomers. If such a local cus-tomary territorial heritage is developed fordevelopment activities, the original inhabi-tants shall be given a priority to enjoy theenhanced value of their territory, for exam-ple through new job opportunities and soforth...

The rights to preserve and develop the be-havior of cultural life covers physical as-pects (relating to land) and non-physicalaspects.. .tribes or groups which have spe-cial ways of behavior cannot be forced tochange their ways of life to conform withothers. Such changes must be in accordancewith the development which they them-selves have chosen.

How conflicts are to be resolved is not speci-fied. Still, even if read only as a statement of pol-icy-makers' changing perceptions, it paves theway for recognizing local rights in forest landsand resources and for constructing durable for-est-management partnerships between the stateand the community. Indeed, in April 1993, thenewly installed Minister of Forestry said that"adat rights should be utilized to support nationaldevelopment in the forestry sector to the maxi-mum extent possible." (Neraca, 1993)

Building on these nascent shifts in policy andlegal foundations, positive examples and pilotprojects are needed to illustrate concretely howrecognizing local forest land and resource rightscan benefit not only the community, but also thestate and the private sector. Recent research inKalimantan involving cooperation between theMinistry of Forestry and Indonesian and U.S. uni-versity researchers provides evidence that part-nerships between government and local commu-nities may be the key to regenerating disturbedrainforest. (Abdoellah et al. 1993) In the areasstudied, villagers have been unable to control ac-cess to or protect their forest and land resourcesamid well-financed government developmentprograms and commercial operations. Still, theactive involvement and support of officials fromthe Ministry in this effort is a hopeful sign.

23

Another small-scale but potentially importantinitiative is taking place in the Sanggau region ofWest Kalimantan, where a Ministry of Forestryproject combines agroforestry development with anew pilot "community forest concession." Sup-ported by a grant from the German government,the project combines fieldwork with the creation ofa policy group, the "Commission for Developmentof Community Forests," in the Ministry. The pro-ject will run at least eight to ten years—enoughtime for strong local, provincial, and national insti-tutions to develop. (Departamen Kehutanan 1991)What sets this project apart from others of its kindis the Ministry of Forestry's willingness to at leastlook at different tenurial systems in forests.

These and similar initiatives are signs that pol-icy-makers in Indonesia are taking a cautious sec-ond look at the forest tenurial regime that hasprevailed for the past several decades, with aneye to revising the concession system and at leastpartially recognizing traditional rights and man-agement systems. Getting beyond pilot projectsand well-intended policy statements, however,means making changes in the larger politicaleconomy and policy-making apparatus that hasshaped the forestry sector and constrainedchange. (See Chapters III and IV.)

Forest Tenure in the United States

In June 1992, NASA's Goddard Space FlightCenter released satellite images comparingforests in the state of Amazonas in Brazil toforests in Mt. Hood National Forest in Oregon.(Eagan, 1992) While the Amazonas forest waslargely undisturbed, except where the forestedges had been rolled back by logging and agri-culture along roads, the Oregon image showed aforest fragmented by hundreds of clearcuts. Ma-ture forest was confined almost entirely to smallblocks scattered across the landscape and to nar-row strips along highways (Potemkin forests thatcreate the illusion that motorists are drivingthrough large expanses of mature forest).

To the northwest, across the Columbia River,the forests of southwestern Washington are

almost entirely in forest-industry hands. Thelandscape there takes on a more uniform appear-ance—a green carpet of young Douglas firs—since there is no old-growth forest and little forestolder than 30 to 40 years left to fragment. The for-est still produces timber and a shrinking numberof jobs, but it no longer sustains the prodigiousruns of salmon, steelhead, and sturgeon that oncespawned in its streams. By the same token, manyother species once found in abundance in the richcoastal forests are now rare or gone. (Norse, 1990)

In the Pacific Northwest, "sustainable" forestmanagement is in trouble on federal, state, corpo-rate, and individually owned lands. In manyways, these troubles stem from economic and po-litical factors. (See Chapters III and IV.) But tenurialfactors doubtless complicate the transition tomore ecologically sound forest management.

On the one hand, the rights and responsibili-ties of forest owners in the Northwest are definedin ways that protect forest resources much betterthan less explicit tenurial systems can. For in-stance, U.S. laws guaranteeing private propertyowners the continued use of their lands into theindefinite future is one keyj:o_sustainable man-agement, and thelaws establishing national parksand wilderness areas on federal lands protect nat-ural forest ecosystems that might otherwise bedestroyed. On the other hand, the laws governingtenurial relationships, often based on traditionalapproaches to forestry, have undercut forest val-ues and functions across the Pacific Northwest.On both public and private lands, timber-domi-nated forest management reduces the average ageof forests, makes them less diverse, and takes atoll on fisheries, endangered species, water qual-ity, and recreation.

Recognizing these problems, forestry re-searchers and a small but growing band of pro-fessional foresters are seeking to develop new ap-proaches13 to forest management. (See Box 2.3.)Variously referred to as forest ecosystem manage-ment and "new forestry," these approaches seekto maintain the forest's ecological and economicdiversity by changing silvicultural practices andmaintaining late successional forests. The strong

24

Box 2.H. New Forestrv

A- chief forest ecologist lor tin.1 U.S. ForestServ iii- in tin.1 Pacific Northwest, Jerry Franklinspent over 2^ years pushing tin- frontiers olecological knowledge. During tin- 1''70s andearly NHOs, Franklin and a group of his col-leagues at thi1 agency'- research station in Cor-vallis, Oregon, characterized forest ecosystemsin tin- Northwest and studied tlioir composi-tion, structure, .ind functions to learn how theyregenerated •ind renewed themselves, espe-liiilly in response lo tire ,ind other severe nat-iir.il disturbances, (e.g., Franklin el al., NSMWhat the team discovered .lbuut old-growthforest ecosystems upset much of the conven-tional w isdom about their value. They arehighly variable and biologically diverse, andthey leave a legacy of structural diversity andorganic productivity in younger forests lordecades alter most of the old trees succumb towindstorms, fires, insects, or disease.

In the early ll)8i'-, Franklin and his col-leagues began to turn their attention lo forestmanagement. A few years later, backed by re-search at the 1 I.I. Andrews l.:.\perimental Forestin Oregon, they started to urge foresters and allother takers to re-examine conventional silvi-cultural wisdom in the \orthwest. For decades,comention lias dictated that ilearcuts, inten-sive burning ol post-ham>l woody debris("'slash"), and soil scarification (exposure) werethe be-.t technicjues for regenerating Douglas firin Ihe l'aufic Northwest. Franklin's group,howe\ er, argued lh.it forest managers mustlearn to better mimic the complexity of naturalforest Mands for the -<ake oi biodiversity, fish-eries habitats, and, ultimately, the health of thetorest. (e.g.. Franklin and Forman, I'^TlThisappro.ich to fiiri'si managi'inenl exenluallycame to be know 11 as New Forestry.

1 low New Forestry differs from conven-tional forest management in the Northwest de-pends on w ho VOLI ask. I hree general princi-ples are agreed upon, however. First, New

Forestrv means leaving cluster*, of large greentree- in harvest areas thai will -lowly age withihe younger stand around it to provide thedead snag.-and rotting logs needed toionservebiodiversity. (I low many and where providemmh of the gri-t for debate- over NewForestrv.") It also means leaving downed logs inharvested areas, sinie the rotting wood servesas nurseries for many tree seedlings thai cannotcompete with herbaceous plant- on Ihe forestfloor, and allowing substantial amount- oiwood lo collect in streams to provide habitatslor riparian organisms. Second, reversing thecurrent trend. New Forestry seeks to extend ro-tation lengths to between SO and 120 years, andperhaps more. Third, harvest patterns areplanned on a landscape scale to preserve 1011-neclicns between forest stands oi various agesand to maximize the contiguous area of olderstands.

New Forestry has critics <m both -ides of theforesl-y reform debate, ((iregg, 11WI) Thosewho believe that forestry works well as cur-rently practiced see little "new" in NewForestry and claim that many of its technique-have been used in the pa-t and found to be les.-effective than clearcutting and intensive soilpreparation, (e.g., Atkinson. I WO) At the otherextreme, -ome critics don't think New Fore-trvgoes far enough. They believ e its loose defini-tion allows foresters to leave a few -landingtree- and a snag or two in the middle of a largeclearii.it and call it New Forestry. And if rota-tion lengths aren't extended lo between 200and )00 year-, -ome suspect th.U New Forestrywill simply create slighllv cluttered, older treeplantation-. Many critics jl-o u-ar that New-Forestry will be invoked to juslil'v logging inunprotected old-growth forests.

Whatever the late oi New Forestry, it hasdrawn the spotlight to the importance ofgrounding fore.-t management in ecological

i C i l I'll Ih'.X! j ' i l ^ l ' 1

25

understanding. Along with other approachesto forest ecosystem management, it hasreceived attention from the Forest Service'scontroversial New Perspectives Program, es-tablished in the late 1980s to promote experi-mentation and the integration of non-timbervalues in forest management.1

In June 1992, the Forest Service announcedthat it will practice forest ecosystem manage-ment on most of its timberlands and willsharply reduce clearcutting. Exactly how theecosystem management policy will be imple-mented remains to be seen, but the emergence

of New Forestry (and other similar ap-proaches) and ecosystem management policiesadopted by federal and state agencies indicatethe increasing role that ecology, public partici-pation, and true long-term planning will playin American forest management.

1. Critics of New Perspectives (and the newU.S. Forest Service forest ecosystem manage-ment policy) assert it is being used as an ex-cuse to log the largest remaining unprotectedroadless primary forests in the biologically di-verse Siskiyou Mountains in Southwest Ore-gon, (e.g., Kerr, 1990)

assertion of private property rights, however,makes restructuring and coordinating forest rightsand responsibilities at an ecologically significantscale complicated. The historical evolution of pub-lic land ownership under various legal definitionsof private access and public administrative controlhas also been an obstacle. So far, the way forest re-sources are legally defined, used, and maintainedhas been out of sync with rapidly changing scien-tific and social views of forest values.

Forest Ownership, Rights andResponsibilities in the Pacific Northwest

In the United States, authority and responsibil-ity over forest resources is relatively decentral-ized. Federal, state, and local governments andprivate forest owners all have well recognizedand clearly defined authority over the use of for-est lands. The U.S. Constitution's Fifth and Four-teenth Amendments14 protect private propertyowners from government usurpation15 or com-peting private claims, while governmental regu-latory authority over private lands derives fromcommon law and legal doctrines that have estab-lished that private property owners cannot usetheir property in a way that will harm the prop-erty of others.16 Public forest lands are governedby various legislative acts.

The most important determinant of tenurialrights and responsibilities over forest lands is

ownership. Nationwide, nearly two-thirds (64percent) of forest lands are privately owned whilethe remainder (36 percent) is controlled by publicagencies. (USDA, 1989) The federal government,the largest single owner of forest lands, adminis-ters nearly 101 million hectares, or approximately35 percent of all U.S. forests, most of it located inthe Rocky Mountain and Pacific Coast states andAlaska.17 (See Figure 2.1.)

Oregon and Washington together have ap-proximately 19.9 million hectares of forest lands.(Waddell, et al., 1989) Ownership patterns onthese lands were largely determined in the latenineteenth and early twentieth centuries. (See Box2.4 and Figure 2.2.) Today, some 57 percent of allforests are on federal lands, and 7 percent are onstate and local government lands. Privately heldforests account for 36 percent of the total forestedarea; of this, 62 percent belongs to the forest in-dustry and 38 percent to small private, non-in-dustrial owners. (MacLean et al. 1992; Bassett andOswald 1983; Gedney et al. 1989; 1987; 1986a;1986b) (See Figure 2.3.)

Private Forest Lands

Private forest lands in the Pacific Northwest—most of them west of the Cascades—total 6.9 mil-lion hectares. Roughly 4.3 million hectares areowned by the forest industry while the remainderis controlled by non-industrial or small private

26

Figure 2.1. Forest Ownership in the United States(In Thousand Hectares)

^

• — Large Corporate . g M " ^

g j Private ^^^M » _ PubUc

| J """ ^ ^ ^ ^ k f 36%318

U — Small Non-Industrial / \

1 66% / \1 /• / \J / \

Total Forest Land

Source: USDA, 1989; 1987

3 — Bureau of LandH Management &Ifj National Park

• • • • j ^ B Servicei^B^H 21%IHmm^^B State Government

mi 13%

|jH US Forest Serviceffl 66%9H19p

landowners.18 (MacLean et al. 1992; Gedney et al.1989,1987,1986a, 1986b; Bassett and Oswald,1983) Forest-industry timber lands in the North-west are concentrated in the Olympic Peninsula,southwestern Washington, the Oregon CoastRange, and in the western foothills of theCascades.

Except in extremely limited circumstances,19

the constitutional basis for private property rightsin the United States—in force for over 200 yearsand unlikely to change any time soon—allowsprivate forest owners to reserve exclusive(though not necessarily absolute) rights to forestresources on their lands.20 Rather than narrowingprivate property rights to protect forest resourceson private lands, private forest owners' correla-tive duties or responsibilities have been stressed.These efforts are based on the longstanding doc-trine of waste and the common law of private

nuisance. The first implies that owners may usetheir land in any way they please as long as theydo not. damage or destroy it—generally inter-preted in the United States to mean that ownersshould do nothing to reduce property values sig-nificantly.21 (Cubbage and Siegal, 1985) The sec-ond establishes that individuals cannot use theirproperty in a way that will injure the propertyrights of others or endanger the public's health,safety, morals, and general welfare. (Roberts,1974)

No attempt was made to regulate privateforestry until the early 1900s. Most early effortsfailed, and attempts led by Gifford Pinchot in the1920s and 1930s to bring forest management prac-tices on private forest lands under federal regula-tion faltered, as did several efforts in the 1940sand 1950s. (Clary, 1986) But state governmentsdid begin to pass laws regulating forest practices

27

Box 2.4. The Involution of K>rost Ownership in I ho L niled Slates Pacific Northwest

In lS4h, tin- Unitod Stales and Croat Britainsotllod a half-cenlury territorial dispute ovorlands wost of the Rockies and north ofCalifornia. Under Iho Oregon Compromise,the federal domain of Iho Unitod States ex-panded by 722,M)0 kirT lo encompass terri-tory that would eventually become Washing-ton, Oregon, Idaho, and parts of Montana andWyoming, i Wyant, I4S2) Oi the 4()h,7.V knvLh.it eventually became Oregon and Washing-ton, at least 4(1 percent was foresLed. Most oithis forest land w.is found between the crestoi the Cascade Range and the Pacific Ocean ina 14(1,1)00 km' swaLh extending from the Cali-fornia border to the Canadian frontier. Theselands contained the most productive, diverse,M\<.\ imposing coniferous forests in the world.

Over the next 50 years, large and smallparcels of forest lands in the Pacific Northwestwere transferred from the federal domain tostale and private ownership. Most of it wastransferred through direct sales to individualsand corporations—for many years, the goingprice was S2.50 an acre—or in the form of landgrants to the slates, l.o-sor amounts woretransferred to individuals through the I lome-stoad Ad of 1M2 and the Mining Act of 1S72.The transfer of those lands convoyed absoluterights to their surface resources, includingtimber, and tew if any land-use obligationswore attached to the rights.

The largest transfers look place under leg-islation enacted in IS(->4 Lo provide incentivesfor the Northern Pacific Railroad Company tobuild a railroad from Duluth. Minnesota toTacoma. Washington and Portland, Oregon.Kor ovorv mile of line built in a stale, the rail-

road received 20 square miles ( .120 hectares)of land -and 40 square miles in U.S. territo-ries (which Washington was until IKS1').Northern Pacific was also allowed Lo select itslands from a strip that averaged a hundredmiles wide. (Wyant, NS2) Oi the roughly 2.^million hectares ol forest lands in westernWashington and Oregon that were trans-ferred to the railroad in this way, many werelater sold off by the railroad to timber compa-nies, l-or example, in I1KH) Northern Pacificsold .l(SO,l)00 hectares at SI51 hectare to I'red-erick Weyerhauser, a (lerman immigrant whohad made his fortunes in the white-pineforests oi Minnesota and Wisconsin. (Wyant,1482)

Today, at least a dozen forest-productscompanies in the region have major landholdings lhal were first owned by NorthernPacific. Hul in the IS70s and ISSOs, as the tim-ber industry firsl developed in the PacificNorthwest, there was little incentive lo ou nprivate forest lands since the use oi publicforest lands was virtually unregulated. Thedevastating results of such open access in theNorthwest and in other parts of the country-soon spawned a debate over the disposal olfederal lands. A movement began to sot asidesome public lands for future timber reservesand conservation, liventually, S..1 millionhectares of public forest lands in Washingtonand Oregon were incorporated into the Na-tional I'orest svstem administered hv the U.S.Forest Service. Most of the remaining federaltorest lands in the Northwest were eventuallyplaced under the management of Iho Bureauof Land Management (1 million hectares) andthe National Park Service (KrMl.OOO hectares).

28

Figure 2.2. Forest Ownership in the United States Pacific Northwest*(In Thousand Hectares)

National Park Service 8%850

Bureau of LandManagement 10%1,100

Federal 57%11,200

U.S. Forest Service 83%9,300

Private 35%6,900

State & N

/ Local 7% \J 1,390 \

SmallNon-Industrial 38%2,600

™j— Forest Industry 62%4,300

Total Forest Land

Source: MacLean, et al, 1992; Waddell, et al, 1989; Gedney, et al, 1986a, 1989; Basset & Oswald, 1983* States of Oregon and Washington

on private and on state and local government-owned forest lands. Between 1937 and 1955, fif-teen states passed forest practices acts with lim-ited provisions, including Oregon in 1941 andWashington in 1945. (Cubbage and Siegel, 1985)These early laws were limited in scope (usuallyrequiring steps to reduce fire hazard or to re-plant), poorly enforced, and in some cases com-pliance was voluntary. But in the early 1970s,Oregon and Washington revised their forest lawsto address a wider scope of issues with morestringent provisions. Supported by most forestland-owners concerned about overlapping andconflicting regulation by numerous state andlocal agencies (Salazar and Cubbage, 1990), theselaws (along with California's) are now consideredthe country's most comprehensive. Even so, theyare primarily intended to maximize timber

production while secondarily protecting water re-sources and endangered species.

Oregon's forest-practices legislation typifiesprivate forest-land regulation in both states. TheOregon State Forest Practices Act22 regulates for-est operations on private and state forest landsthrough the implementation of administrativerules developed by the State Forestry Board. Ad-ministered by the State Forester and the OregonDepartment of Forestry, these rules are intendedto promote reforestation, protect water quality instreams and wetlands, and conserve sensitivehabitats for endangered species. (See Box 2.5.)Harvest rates or volumes are not regulated, andthe regulations do not cover the location ofclearcuts, except in riparian and wetland areas or"special resource" sites.23

29

Figure 2.3. Forest Cover and Federal Lands in the Pacific Northwest

Forest Cover

National Forest

National Park

Bureau of Land Management(25-100% density)

Source: U.S. Department of Agriculture, Forest Service -1989; 1983 and Wilderness Society, 1991

30

Box 2.5. The Oregon State I oresl Practices Act

The Oregon Sl.iU1 Forest Pnutices Act ap-plies to all private forest Kind* in the slate that.Hi- used for "production lorestrv."1 1 'he regu-lations arc formulated for each of the forestrydepartment's lour administrative regions to ac-count for ecological differences between re-gions. 13ut all four sets of regulations requireforest owners (or operators on private forestlands) to notify the Slate Forester before opera-tions begin and prohibit clearculs larger than210 contiguous acres <% hectares').: The slateforest practice rules also require a minimallevel of replanting on clearcut lands withintwo years, and include general regulations onthe use of chemicals and the placement andconstruction of roads. (Cubbage, el al., I*W> InIWI, based on the emerging principles of" \ew Forestry" 'NV ft'.vJJl, a provision inlorce until IWi was passed requiring ownersto leave an average of live live trees or snagsand five downed logs or trees per hectare onany clearcut larger than four hectares.

More specific provisions of the Oregon StateForest Practices Act regulate forest practices inriver and stream areas, near wetlands, andnear resource sites specified by other laws orthe state forester, such as habitats for endan-gered species. (Oregon Department ofForestry, 1CWI) Within a narrow strip alongwetlands (IlKl meters), and streams, rivers, <mdlakes (30 meters), forest owners must take spe-

cific -.leps to proleil shade cover and lish andwild ile habitat. The use of herbicides and pes-ticides on these strips is also regulated, thoughnot necessarily prohibited. Mefore logging insuch areas, the owner must provide the stateforester with a management plan specifyinghow the rules will be implemented. Althoughthese are routinely approved, llie state lorestermay reject plans for logging in some cases. Pro-visions applx ing to spei ilied resource sites(among them, nesting or roosting sites lor sen-silivi birds, .sensitive habitats for threatenedand endangered wildlife, and wetlands largerthan \ 2 hectares) \ary with the sile. but ingeneral, they impose seasonal restriction*, ontores- operation** or require landowners to ire-ate small buffer /one.s. In addition, forest own-ers musL file a management plan for operationswithin 1(1(1 meters of such areas for approvalbv the stale forester.

1. Forest lands that are being converted tonon-forest uses are exempt from the OregonState Forest Practices Act.

2. If a clearcut is larger than 120 acres UNhectares), it must be more than 300 feel (l>0 me-ters) trom a previous clearcut. unless the previ-ous ilearcul has been reforested according tostandards established by the state board offorestrv.

The penalties for violating the Oregon StateForest Practices Act are minor. Criminal penaltiesare misdemeanors punishable by a maximum$1,000 fine and/or 1 year jail term, and civil penal-ties are limited to no more than $5,000. AlthoughOregon has 26 field offices and a relatively largeforest-practices section in the Oregon Departmentof Forestry, monitoring and enforcement are lim-ited. Compliance with the forest practices rules isbasically voluntary for most forest owners, and

the Oregon Department of Forestry spends mostof its funds for implementing the act on educationand extension to promote compliance.

Numerous federal laws may impose limitedresponsibilities on private forest owners. TheClean Water Act, for instance, prohibits individu-als and corporations, including forest land own-ers, from dumping certain pollutants in rivers,lakes and wetlands, and regulates the modifica-

31

tion or conversion of wetlands. But such lawshave limited effects on most forest-managementoperations.

Under the Endangered Species Act, only thefederal government and the state cooperate onspecies recovery plans. Private land owners may,however, be required to help government agen-cies with species recovery under Section 9 of theAct.24 How recovery plans for several endan-gered species (e.g., the northern spotted owl, thegrizzly bear, the marbled murrelet, and severalsalmon subspecies) will affect private forest own-ers is not yet clear. To minimize conflicts withprivate forest owners over such plans, the federalgovernment has emphasized habitat protectionon public lands and voluntary cooperative effortson private lands.

Among the few incentives or obligations thatprivate land owners have to manage forest eco-systems are those to replant logged areas and toprovide limited protection for water resourcesand endangered species. In this sense, state forestpractices legislation has worked reasonably well.Reforestation is now more successful on privatelands25 than it is on many public lands (Olson,1988; Yoho, 1985), and water quality and criticalhabitats are undoubtedly better protected thanthey were 25 years ago. But private responsibili-ties are defined mainly to protect timber, andmany incentives for maintaining other forest uses

and resources have yet to be defined. As a result,private forest owners have converted most oftheir forests to young even-aged stands, oftencomposed of only one or two tree species. Morethan 70 percent of the forest-industry lands inwestern Washington are in even-aged stands lessthan 70 years old, while mixed-aged stands coveronly 5 percent of the area. (MacLean, et. al, 1992)As natural forests give way to tree farms, speciesthat flourish only in late successional forests growrare or die out.

According to recent research (Hansen et al.,1991), even-aged forest stands—even those morethan a century old—have fewer species and lessabundant wildlife populations than uneven-agednatural forest ecosystems. Other research indi-cates that even-aged, monocultural forest standshave higher insect pest populations and fewer in-sect-eating predators than uneven-aged forestareas. (Showalter and Means, 1988) (See Table 2.2.)Researchers are also finding evidence that firescan wreak more damage in young plantationsthan in mature natural forests. (Perry, 1988; Ageeand Huff, 1987)

With the private responsibilities of forest own-ership confined largely to timber-production con-cerns, the entire burden of preserving biodiver-sity, recreational opportunities, salmon fisheriesand the like has increasingly fallen on publiclands. In many areas, however, salmon fisheries,

Table 2.2. Arthropod Biomass and Species Diversity in Douglas Fir Canopies of Old-growth Forests(400 years old) and Regenerating Monocultures (10 years old) in Western Oregon.

Feeding Groups

HerbivoresPredatorsOthers

Total

Source: Adapted from Norse (1990)

Old-growthBiomass(gr/ha)

19016030

380

Forest# o f

species

8401866

RegeneratingBiomass(gr/ha)

37050

0420

Monoculture# o f

species

3102

15

32

water quality, and the fate of some species willdepend on how private forest lands are managed.Unless the public is willing to purchase variousforest ecosystem goods and services from privateforest owners just as they purchase wood prod-ucts today, new regulations and, more impor-tantly, incentives to broaden private landownerresponsibilities will have to be devised to sustainmany forest values across the region. Meanwhile,the transformation of natural forest ecosystems tointensively managed tree farms is likely to con-tinue on the most productive private lands, whileothers are managed minimally or converted tonon-forest uses.26

Public Forest Lands

In Oregon and Washington as in most westernstates, governments, (especially the federal gov-ernment) are the largest owners of forest lands.Of the roughly 13 million hectares of publicforests in these two states, 11.8 million hectaresare owned by the federal government, and the re-maining 1.2 million hectares by state and localgovernments.27 In the western portion of the twostates, federal ownership is concentrated in anunbroken network of National Forests in the Cas-cade mountains, the Olympic mountains, scat-tered portions of the Oregon Coast Range, andthe Siskiyou mountains of southwestern Oregon.East of the Cascades, most federal forest lands arein National Forests stretching across northernWashington and parts of central and northeastOregon. State forest lands are scattered in bothstates, mostly west of the Cascades.28

The present network of federal forest lands isrooted in the Forest Reserve Act (1891), which al-lowed the President to set aside public lands inforest reserves, and the Organic Act (1897), whichset broad directions for their management. TheTransfer Act (1905) created the U.S. Forest Serviceto manage most federal forest lands in the UnitedStates, including the Pacific Northwest. Most ofthe remaining federal forest lands in the North-west were eventually placed under the manage-ment of the Bureau of Land Management (1 mil-lion hectares29) and the National Park Service(850,000 hectares30).

State agencies control approximately 1.1 mil-lion hectares of timberland in state forests or mul-tiple-use areas. Most state forest land was eitherpurchased or taken in lieu of taxes from privateowners after it had been severely degraded, aban-doned, or burned. (Perry and Perry, 1983) Stateforest lands, legislatively mandated to producemaximum revenue to support roads and schools,have been intensively managed for timber, espe-cially in Washington.

On public lands, the rights to use forest re-sources and the responsibilities for maintainingthem are more precisely defined, and more com-plicated, than they are on private lands. The fed-eral government allocates differential use rights tothe general public and to private interests in ac-cordance with federal legislation and administra-tive regulations. Responsibilities and rights areconstrued and allocated by different governmentagencies in different ways. In general, the long-term sustainability of forest resources is notthreatened on public forest lands where consump-tive rights to forest resources are restricted. In theNorthwest, these lands include designated wilder-ness areas (1.65 million hectares) and ResearchNatural Areas (less than 10,000 hectares) in Na-tional Forests, as well as National Parks (850,000hectares), and National Wildlife Refuges (less than5,000 hectares). These mostly high-elevation andlow-yielding forests are available for a variablerange of non-consumptive and limited consump-tive public uses (such as hunting or fishing), butthey cannot be logged. Responsibility for main-taining these areas as natural ecosystems withminimal human impact is specified in such legis-lation as the National Park Service Organic Act(1916), the Wilderness Act (1964), and other lawsand administrative orders. With use so limitedand strong laws in place, government has in gen-eral made good on its obligation to protect theseforest lands.

On "multiple-use" federal forest lands, whichcomprise roughly 9 million hectares of federalforest lands in Oregon and Washington, balanc-ing rights to exploit timber with legal responsibil-ities to protect the environment has been moredifficult. (See Box 2.6.) The U.S. Forest Service and

33

Box 2A\. federal I imber S.iles

lidch year, the federal government deter-mines whii h loreM areas dre to be offered intimber s.ilfs lhi"oiigh d complex pldnningprocess. I'SI'I- C'lhiplrr IV.> Mo-l sikli sdles div otmature limber stands that are no longer grow-ing rapidly. I In- amount and i|iiality of limberin (In* silo died is estimated by (IK- L.S. l;ores(Serviie or l>uri.Mii of I <ind Management beforethe timber sale. Timber sdles wiry in si/e diidvolume, though tin1 si/i' of indi\ LUuil 1ledrculswithin d sdlo driM i.-. n^iidlly Iimilod to 1^

div tondiutc-d through >i\ili'd bid>,diid llu- rights to hdivi-st tin.1 tinilvr .in1 sold totin- highlit bidder. Ik-loiv llu- bidding t.ikespldfc, pnispiHti\<.' bidders will evimini1 in\t>n-lorv ddtd and then daompdny governmi-nttimber s.ile sldff to the s.ile loidlion where theterms diul condition-' ol (he dle dre e\pI,iiiK%d,dltfr which intereslt'Ll pdrlie^ Mibmil bids. Ihetimber s.ilc tontidcl ^pell> oul LliL1 purchd^er'soperalioiidl ivspon^ibililii-s. Typicdlly, lhi>e re-spunsibilitii's specify the bounddrio of the Niledred. the Io«.dtion ol rodds, the skid trdil Idvoul,Ihi- hdi\esting systems ID be used, diid post-

lidr\esl medsures to prevent erosiiin. C om-plidiKV with timlier -«dle conlrdcts is monitoredIn the limber >dlt-< .sldl'f of the rdnger dislriil inwliiih the s.ile occmred, dlthough the I'oreslSer\ ice ddmits thdt mdny sdles die never in-specled cdrel'uliy enough to detect t'r.uid orthell. (Long, l um) linestigdlors Iroin theI louse Appropriation^ tommilti-e ch.irge thelorosl Ser\ice hd^ not ddequ.itely monitoredionli\Kt conipli.mce which lids resulted in thepublic losing millions in timber thefts, due in[Mil lo invesligdlions hdmpored by the indus-try's "undue political influence" ,ind interler-ence from llie dgency's own nidiidgers. 1S011-ner, 1LW) Still, gowrnment shoulders mdny ofthe responsibilities directly or indirectly re-ldted to timber management on lederdl lands.Tor exdinple, road construction, maintenance,rodd remowil after harvest and replanting andreforestation die usually paid for or carried outby the L-'.S. forest Service.1

I. If a limber sale contract specifies lhal thepurchaser must build needed roads or reforestafter harvesting, (hose cos(> are creditedagainst Ihe sale price.

the Bureau of Land Management have legal re-sponsibilities to ensure that all forest resources—not just timber, but also wildlife, watersheds,recreation, etc.—are sustained on these federallands. The Multiple-Use Sustained Yield Act(1960), the Endangered Species Act (1972), theForest and Rangelands Resource Planning Act(1974), and the National Forest Management Act(1976) all specify management goals, planningprocedures, and decision-making processes toensure that multiple-use areas are managed for awide variety of forest resources. (See Chapter IV.)But "multiple-use" federal forest lands have notbeen managed sustainably. If the ratio of timberharvests to net forest growth is any measure, the

U.S. Forest Service has failed to meet its tradi-tional responsibility to manage forests for sus-tained timber yield.31 In fact, harvest levels onthe National Forests in western Oregon andWashington have been larger in relation to nettimber growth than they have been on privatelands: 1986 harvest levels (15.3 million m3) on theNational Forests in the region exceeded the netannual growth levels (9 million m3) by 70 per-cent, while harvests on private lands exceedednet growth by 34 percent. (Waddell et al, 1989)Moreover, according to the U.S. Fish andWildlife Service (USFWS 1990; USFWS, 1992), anestimated 3.4 million acres, or 57 percent, of thenative old-growth forests on Forest Service lands

34

in Oregon and Washington were clearcut be-tween 1955 and 1990.

Federal forest-management failures have alsoput species at risk. Although the northern spottedowl and marbled murrelet symbolize the clashover federal forest management, many otherspecies have also borne the cumulative brunt ofinappropriate forest practices during the past sev-eral decades. For example, a scientific panel com-posed of U.S.F.S. and B.L.M. biologists convenedto consider management options for old-growthforests found that 48 species closely associatedwith old-growth forests are now at moderate orhigh risk of extinction or extirpation during thenext 100 years. (Thomas et al., 1993) If loggingproceeds as outlined in current National ForestManagement Plans, the so-called Thomas reportclaims 294 species will be in this category.

Even the most prominent symbol of the PacificNorthwest—the salmon—has had its spawningand nursery habitats in rivers and streams in Na-tional Forests throughout the region severelydamaged or destroyed, principally by loggingand related road construction.32 Between 1935and 1992, the number of large, deep pools (criti-cal habitat for salmonid species) on 412 miles ofmonitored streams in Washington and Oregon'sNational Forests declined by 60 percent.(Thomas, et al., 1993) The Thomas report de-scribes the condition of stream habitats andaquatic ecosystems in general as poor on Na-tional Forests in western Oregon and Washing-ton, and panel members consider extensiverestoration efforts necessary to maintain the via-bility of 112 major fish stocks —some of them po-tentially eligible for protection under the Endan-gered Species Act—that depend on drainages onfederal forest lands.

While most of the failure to meet legal respon-sibilities to manage public forest resources sus-tainably can be linked to economic pressures andto the policy-making process itself, weaknesses intenurial relationships on public lands are also im-portant. Well-intentioned provisions in varioustenure-related laws have led to extremely damag-ing forest-management practices. For example,

after extensive clearcuts in the Bitterroots andelsewhere during the late 1960s and early 1970s,the National Forest Management Act was passedto require clearcuts to be dispersed. But even thisstrategy's proponents now realize that is a recipefor fragmentation and diminished biodiversity.(Sample, 1993)

The federal government's lack of foresight maybe an even more important reason behind themis-management of public forests. As Congresspiled more and more responsibility over a periodof decades on the Forest Service, it failed to recog-nize that at some point, the nature and size of ac-cess rights to timber harvests would have to bereconciled with the growing need to maintainother resources. By not limiting rights to harvesttimber on federal lands, both Congress and theExecutive branch have allowed the degradationof many forest resources they have a legal obliga-tion to protect. (See Chapter IV.) Unless users'rights are balanced with users' responsibilities,the list of threatened forest resources can onlygrow. Then, warns Secretary of Interior BruceBabbitt, the political "train wreck" created by list-ing the northern spotted owl will be repeated andleave fewer forest-management options in the fu-ture. (Cohn and Williams, 1993) As more speciesend up on the endangered species list, habitatconservation plans will restrict forest manage-ment activities on larger parts of the public, andeventually the private, forest landscape.

Balancing Rights and Responsibilities

Ecological approaches to forest management inthe Pacific Northwest can't be implemented untilsound management is redefined to include prac-tices aimed at sustaining a broad array of forestresources—not simply timber. The process is be-ginning, in some cases with industry support.33

Washington state recently revised its forest prac-tices Act to more strictly control the watershedeffects of logging,34 while the Forest Service'srecent pledges to pursue forest ecosystem man-agement, as well as the follow-up to the WhiteHouse-sponsored "forest summit" held in April1993, indicate a growing recognition that forestsprovide far more than trees.

35

Perhaps more important, efforts to create eco-nomic and policy incentives to manage all forestresources responsibly are beginning to receive at-tention. (See Chapter III.) For example, a numberof West Coast organizations have developed cri-teria for assessing the relative sustainability offorest management. Using these criteria, theyseek to "certify" sustainably produced forestproducts—for which they expect consumers topay a premium. (Johnson and Cabarle, 1993)

Of course, the definition of sustainable forestmanagement will not evolve painlessly. Individu-als and institutions will try to maximize theirrights and minimize their responsibilities—wit-ness the recent surge in legal actions by private

interests claiming that land-use restrictions onprivate lands, and limitations on private access topublic resources, violate "established and inalien-able rights."35 (Gottlieb, 1989) The "Wise Use"movement seeks not only to preserve and expandprivate rights to natural resources but also to di-minish private (and public) responsibilities tomaintain them. (See Box 2.7.) Such conflicts won'tbe resolved until commodity dependencies thatcontribute to the destruction of public forest ben-efits are scaled back and mechanisms for captur-ing the diverse values of forest ecosystems arecreated. (See Chapter III.)

Meeting legal and professional responsibilitiesto sustain diverse forest values will require per-

Hox 2.7. The "Wise l.se" Movement

In IWJ, some 2H million viewers wa<in Audubon ^ociely television documentaryon tlu1 logging id old-growth lorests in llii1 l\i-ufii \orthwesl entitled "l\age Oxer "lives."I In1 pros;mm asserted 11 mL sawmill owners .indtlii1 L. .S. Forest Ser\ iiv wen.1 inlent on harvest-ing .ill remaining unprotected old-growthloivM.-v Within days of I hi1 brn.idi asi, tin1 pro-gram was attacked by timber comp.init.-s.sawmill owners, ,ind liniber-indusln emplov-ivs lor showing "distorted" images ol wistareas of ugk cloarcut forest^ to elicit sympalhvtor conservation goals. Hooding television sta-

and advertisers with thousands of letters.mil telegrams, ihese groups eventually pres-sured I'ighl m.ijor loipor.ite sponsois o|- the se-ries to withdraw their support. i.Dielrich, I1J''2)

This loordin.iteil att.uk w.is one of the firstmajor victories for the "Wise I. se'- move-ment Ilic Litest in ,i series of pro-develop-ment coalitions fighting land-use restrictions.1 he ''Wise L'<v" minement is .1 loose-knit col-leclion ot perh.ip1; sevetMl hundred groups

throughout Hie United States .ind t anad.i with,i wide \ ariety of interests «ind supporters—Irom »itt-r<>iid whiili-eiilhiisiasts and home-owners associations to mining companies andloggers. l")isp,ir.ile as [hese groups ^re, [Iieyshare the belief that pri\ale property lights arethreatened by go\ernment regulation. Somealso believe that limits on the use oi publiclands are unconstitutional.

Some elements of the "V\ ise L se" move-ment want mining ^\K\ logging allowed in Na-tional I'arks, the Endangered Speiies andWilderness Acts dismantled, regulations onwetlands use eased, private access to public re-sources Mich as ualer. minerals, and range-lands expanded but fees kept at far-below mar-ket rates, .ind the unrestricted use ol off-roadvehicles allowed. (ienerally speaking, most olthese groups want land-owners compensatedtor economii "damages" caused by environ-mental regulation and many want fewer re-slrii lions on access and use Kii publicly ownednatural resources.

36

sonal commitment by forest managers, policy-makers, and the public. Indeed, expanding publicand professional awareness of ethical responsibil-ities to protect forest diversity for future genera-tions may be the most important key to compen-sating for tenurial systems that don't alwaysbalance rights and responsibilities adequately.For example, in 1989, a federal timber-sale plan-ner in the Willamette National Forest in Oregonfounded an organization of active and retiredForest Service employees to push for institutionalreform, stricter implementation of environmentallaws, and a broader definition of forest manage-ment. Today, the Association of Forest ServiceEmployees for Environmental Ethics has 11,000members (approximately 3,000 of them current orretired Forest Service workers). The organization

represents an unprecedented attempt to reform afederal land-management agency from within.(Brown and Harris, 1992)

Notes

1. There is an important but often overlookeddistinction between "common property regimes"on the one hand, and "open access" on the other.In a common property regime, a set of clearly de-fined rights and obligations over a specific area orresource is held by a clearly defined group ofusers. In an open access situation, neither therights nor user group is clearly defined, and thesituation more or less resembles a "free for all".Confusion between the two has often led to the

In Ihi1 Northwest, where the movementbegan, timber dominate tin- "Wise Use"agenda. Main groups have funned in ruralcommunities when- local residents fc-el threat-ened by attempts to protect old-growth forestsand reform forest management, fighting thereaulhori/atioii ot the I" nd angered Species Ait,resisting attempt.-, to strengthen stale forestpractices .Acts, and challenging harvest restric-tions on public lands in court are at the lop oltheir agenda.

The "Wise I'si-" movement portrays itself a>a grassroots movement. Yet, much of itsfinancing and leadership appears to come frommining and logging corporations, off-road ve-hicle manufacturers, ,-\nd from such conserva-tive political groups as the National Rifle Asso-ciation and Kev. Sun Mvung Moon's AmericanFreedom Coalition. Nevertheless, many ofthese groups have grown rapidly during thelast four years among resource-dependentcommunities without economic alternativesand with no sense that environmentalists and

government are concerned about the commu-nity'.-, fate.

The "Wise I H1" movement ,\n<A sustainableforest management seem to be on a collisioncourse. Hut truly sustainable forest manage-ment that addresses the basic economic andsocial needs of forest communities may even-tually diminish the appeal o\ main ol themm emenl'r. more ideologically extreme anti-environmental groups. At any rale, proponentsi^i forest policy reform in the I nited Suiesmust recognize what many in tropical coun-tries have learned during the past decadeconservation doesn't stand a chance withoutsustainable community development. Diversi-fving local economies and improving access tomarkets investing in profitable and sustain-able uses ot natural re.soun.es. and increasinglocal access to economic and political decision-making processes should be on the agendas olforest poliev reformers.

37

characterizations of common property systems asinherently destructive of the resource base, whenin fact many such systems are both sustainableand productive.

2. Government Regulation No. 21/1970 con-cerning the Right of Forest Exploitation and theRight to Harvest Forest Products.

3. Government Regulation No. 7/1990 con-cerning the Right of Industrial Timber PlantationExploitation. Plantations for purposes other thanpaper-pulp production are limited to 60,000hectares.

4. If state and private corporations form jointventures to develop a timber plantation under aHPHTI right, 14 percent of the needed capital canbe obtained as a government-held equity invest-ment, taken from the "Reforestation Fund" rev-enues ($22/cubic meter) levied on extraction oftimber from logging concessions, and an addi-tional 32.5 percent can be borrowed interest-freefrom that source. Where state corporations oper-ate alone, 35 percent of capital costs can be drawnas subsidy from the Reforestation Fund, and anadditional 32.5 percent can be borrowed interest-free from that source. The government does not,however, finance the equity of the investor, be-yond the interest-free loan. (Joint Decision Letterof the Ministers of Forestry and Finance, No.421/1990/No. 931/1990)

5. Decision Letter of the Minister of ForestryNo. 148/1989 concerning the Rattan CultivationRight.

6. Decision Letter of the Minister of ForestryNo. 208/1989 concerning the Right to HarvestRattan.

7. Decision Letter of the Minister of ForestryNo. 840/1991 concerning the Right of Sago andNipah Forest Exploitation.

8. Article 6 of Government Regulation No.21/1970 concerning the Right of Forest Exploita-tion and the Right to Harvest Forest Products.

9. Indeed, a 1987 study in Irian Jaya provinceconcluded that the process for official registrationof adat tenurial rights in the central highlands wasgenerally invoked at the instigation of land spec-ulators from outside the community buying landsheld under adat, as insurance against subsequentclaims by other adat claimants to the same parcelof land. (Barber and Churchill 1987)

10. Translated by the authors from the originalIndonesian.

11. Decision Letter of the Minister of ForestryNo. 200/1991 Concerning Guidelines for Forma-tion of Production Forest Utilization Units.

12. Law No. 10 of 1992 concerning PopulationDevelopment and Family Welfare (unofficialEnglish translation).

13. Some would argue the new approaches areactually a return to older practices such as selec-tive cutting, relying on natural regeneration, etc.

14. The Fifth Amendment of the U.S. Constitu-tion states that no person shall "be deprived oflife, liberty, or property, without due process oflaw; nor shall private property be taken for publicuse, without just compensation." The FourteenthAmendment extends due process provisions tostate governments: "nor shall any State depriveany person of life, liberty, or property, withoutdue process of law."

15. The federal government does have thepower of eminent domain which gives it the rightto appropriate private property for public use,with compensation based on "fair" market valueto the owner. The exercise of eminent domain is arelatively rare event and most frequently involvesland used for transportation and utility corridorswhere some landowners have refused to sell on avoluntary basis.

16. Which provides the basis for governmentregulation of activities on private forest landsthrough state forest practices acts, etc. (See Cub-bage and Siegal, 1985)

38

17. The U.S. Forest Service administers 76.4million hectares, while the remaining 25 millionhectares is administered by various agencies in-cluding the Bureau of Land Management, Na-tional Park Service, and the U.S. Fish and WildlifeService.

18. This includes 670,000 hectares of forest landon Native American reservations, mostly in east-ern Washington.

19. The loss of ownership can take place onlythrough voluntary sale or judicial proceedings in-volving condemnation for failure to pay taxes orcreditors. Involuntary transfers to the govern-ment or public utilities under the exercise of emi-nent domain are relatively rare and owners mustbe compensated for their losses.

20. Non-owners have extremely limited rightsto the direct or indirect use of forest resources onprivate forest lands, whether for consumptiveuses (including the collection of non-timber forestproducts, hunting, or fishing) or non-consump-tive uses (e.g., recreation or free passage). Twomajor exceptions are that others may own min-eral rights to subsurface resources or water rightsto water that passes through private forest lands.Non-owners can, however, acquire temporary orlimited rights to forest resources through contrac-tual agreements to buy, lease, or exchange owner-ship rights with the owner.

21. Although the doctrine of waste was used asthe basis for some early forest practice laws, thecommon law of private nuisance is much moreoften used now as the basis for forest practiceslegislation.

22. ORS 527.610 to 527.992.

23. "Special resource" sites are determined bythe state forester's office and may include sensi-tive bird nesting or roosting sites, or sensitivehabitats for threatened and endangered species.

24. Basically, a private land owner does nothave to implement the species-recovery plan un-less he or she plans to destroy the habitat of the

endangered species in an area where an ap-proved Habitat Conservation Plan (HCP) is inplace. The destruction of habitat in areas coveredby the HCP requires an "incidental take" permitissued by the U.S. Fish and Wildlife Service. Suchpermits may require the owner to carry out cer-tain tasks associated with the recovery plan.(Irwin and Wigley, 1992) Certain activities whichare listed as threats in the recovery plan could re-sult in prosecution of the forest owner if they donot have an incidental take permit or violate theconditions of the permit.

25. Some argue that private owners wouldhave reforested without regulation because ofmarket forces. Boyd and Hyde (1989) suggest thatif this is true, then it is unlikely that state forestpractices acts in Oregon and Washington havecontributed to net social welfare, unless waterquality and other non-timber benefits can bequantified and shown to exceed the cost of ad-ministering the law, which in the mid-1980s cost$1.3 million per year ($0.35/hectare). Of course,this makes sense only if one agrees with econo-mists that net social welfare must be defined ineconomic units that can be easily measured.

26. Rapid urbanization in western Oregon andWashington has swallowed up large areas of pri-vate forest lands during the past several decades.In rural areas, many small individually-ownedforest parcels (and some commercial timberlands)are being subdivided and developed for vacationhomes and other recreational uses often incom-patible with forest ecosystem management.

27. Most of this is state land. County govern-ments own 131,000 hectares of timber land in thetwo states.

28. Washington has much more state forestland (826,000 hectares) than Oregon (308,000hectares).

29. Virtually all BLM forest lands are located inOregon, mostly in the southwest part of the state.

30. Most of this forest area is contained in fournational parks: North Cascades, Olympic, and

39

Mt. Rainier in Washington, and Crater Lake inOregon.

31. Many foresters and forest economists donot feel that timber harvests have been unsustain-able despite the large gap between net annualgrowth and annual harvest levels during the pastseveral decades. The basis for this reasoning isthat old growth forests are past optimum rotationage. This happens when the annual growth incre-ment of trees levels off. Trees past this point, suchas those commonly found in old-growth stands,are considered to be "overmature." To achieveeconomically efficient sustainable forest manage-ment, it is necessary to replace the old-growthforests (with accumulated high timber volumebut low annual growth increment) with youngerforests managed on an optimum rotation cycle(where mean annual growth increments arehigher, but accumulated volume is lower). Ac-cording to this view, it is possible to have harvestlevels exceeding annual growth rates and still bepracticing sustained-yield timber management aslong as old-growth forests are being harvested.As the old-growth disappears, there is a "knock-down" to sustained yield levels where averagetimber harvests equal average net growth levels.One problem with such arguments is that net tim-ber growth figures are based on models that fre-quently overestimate actual forest growth. Theother problem is that moving rapidly to the sus-tained yield optimum rotation situation will leavesome communities with large parts of their sur-rounding forest area in similar optimum rotationcycles. This means that people (and wildlife) willbe subject to a boom and bust logging cycle. Tocounter this, the U.S. Forest Service for years

managed under a "non-declining even flow" pol-icy that sought to regulate timber harvests suchthat no annual harvest could be larger than anysustained-yield harvest in the future.

32. Dams, urban development, and pollutionhave dealt serious blows to natural salmon stocksas well, but most of these threats are found out-side of National Forests.

33. The Georgia Pacific Company, for example,recently voluntarily agreed not to log old-growthand mature forest habitat areas of the red-cock-aded woodpecker (a threatened species) on itsforest lands in the southeastern U.S. In Washing-ton state, Weyerhauser—the largest wood prod-ucts company in the U.S.—claims to be support-ive of the goals of more comprehensive forestpractices legislation. (Weyerhauser, 1992) ThePlum Creek Timber Company is implementing"New Forestry" principles (meaning they leaveabout 15 percent of timber volume standing intimber harvest areas as well as leaving deadwood throughout operational areas) on approxi-mately 15 percent of its lands in Washington,Idaho, and Montana.

34. The new rules address the size and timingof harvest units, conservation of critical habitatsites, management of riparian and wetland areas,and the use of chemicals.

35. State forest practices acts, however, havebeen repeatedly and consistently upheld as con-stitutional and in the public interest by state andfederal courts throughout the United States.(Cubbage, 1991)

40

III. Economic Development and ForestUtilization

Forest policies and practices have notevolved with perceptions of the forest'strue worth. For decades, forests were val-

ued largely for their timber and other commodi-ties, and as a land frontier for crop productionand grazing. Today, more emphasis is beingplaced on the role of forests as a key reservoir ofbiodiversity, and as important components in theglobal carbon cycle and hydrological systems, aswell as on recreational and aesthetic values. Inmany countries, the importance of forests ashomes to indigenous traditional communities isalso receiving increased attention. But thesenew—or sometimes rediscovered—values areharder to nail down and quantify than the basiccommodity values and short-term interests thatcontinue to drive forest policy and management.

As in many other countries, the dominant eco-nomic patterns and practices in the forestry sec-tors of Indonesia and the United States were es-tablished in an earlier time on the basis ofimperfect information to serve a narrow range ofobjectives. In both countries, their reappraisalmust hinge on consideration of three key sets ofeconomic issues. First, many inevitable shifts inthe forest economies of both countries are inde-pendent of proposed policy interventions de-signed to enhance non-timber values. Second, theeconomic benefits from forest exploitation flow toa limited number of actors, while those who bearthe costs are diffuse or are politically marginal-ized. Third, current and past policies have cre-ated strong dependencies on heavy timber har-vests, and the resources needed to diversify

timber economies and make them sustainable arelarge and politically difficult to mobilize.

Underlying these issues is the pervasive mis-valuation of forest resources that is built into mostcountries' forest policy and practice. Consistently,the benefits from intact forests have been under-valued by policy-makers, ensuring that the re-source is misused. The net benefits from forest ex-ploitation have been chronically overestimated,while the costs of exploitation have been ignored,and this dual-edged misvaluation has led policy-makers to under-invest in forest conservation andmanagement. (Repetto 1988)

The Economics of Indonesia'sForestry Sector

While Indonesia's forests represent a widerange of values to the nation and its people apartfrom commodity production—watershed protec-tion, biodiversity, and locally used forest prod-ucts, to name a few—forest policy and practicemainly serve the interests of large logging andprocessing companies. This industry has grownexplosively in the past 25 years. (See Box 3.1.) Asof 1991, some 580 logging concessionaires heldclaim to lands totalling more than 60 millionhectares—nearly one third of the nation's landarea and more than 41 percent of designated for-est lands. (Djamaluddin, 1991) Approximately 25million hectares of this area had been "loggedout" by mid-1990 (WALHI/LBH, 1992), whileproduction continues at over 33 million cubic

41

Hu\ .'$. 1. I he J-Xplosive (irowlh of Indonesia's I imber Kionomv

Although Indonesia now ranks among thelargest pl,iuT«. in I hi* global timber irade, il didiml begin lo commen.iali/e its forests unlil Ihekill1 l^dl's, and Ihi1 pi v wood Jlld oilier process-ing industries developed onh during theI 'SiK. Mel ore lllf>7, lorost exploitation was con-fined almost lomplelelv lo Ihe extraction, pro-n'ssing, and Ir.idi- of leak from lavanese plan-tations, loresiry acth ities outside ol lava weresmall-stale, and nearly all wood was marketedlocally. HVpartamen Kehutanan. ll'Sh)

I In- commercialization of Onli-r Nlandlorols took pku'i1.1^. j 1'i'sull of niiijor polilii\ilcluingi-s in Indom^i.i. In IL>fif•>, thi< milil.irv lookpowi-r. I'st.ililisliino iht- " \L ' \V Ordi-r" ivgimi1

tli.it persists li>diU". I'lu- new ^owrnmi'iit in-hi-iiU-d .in .llmiwt kinkrupt n.ilion middledwith <i in.is- iv e dt-bl, Mviring inl'kition. d st.ign.int induslridl MVlor, ,ind higli uni-mpluv-nu'iil. In tlii-- ainti'Xl, furi-st ri'^oiirii'^ wi-rc OIK1

ol I ho most liquid .l^si-t^ .Uiiil.ibk1 tor anivfrl-ini; to (."iipil.il iind tori'ign ii\v.-hiinim

i dnd lor ini-pnning thi' b.ikiiui' oi p.iymi'iils. 15y tin- kill-I'-'WK, tlu- li-^iil iind iiislituliondl stiuiUnv forIhi- limlvr-a'iK'iN.sion sv^lum \vtis in pl.ia1,

i •

i . l l ong vvilh liiw^. liKilil . i l i i i i ; liiroi»;ii i u w s l n u ' i i t ,i and a limlvr boom L

()\i.'r I he period o\ I he HrM live Year IX--\ eli)pnu'iH I'ldii bejj,inniivj, in 14( 1, timberearnings IOM- 2.SD0 percent, coining mainlyfrom the province of |-a>l Kalimantan, wherenewly-gr.inted logging concessions coverednearly 11 million hectares. (Iir.D'C'.OI, 14S5)While only four million cubic meters of logswere cut from Indonesian forests in l%7—mostlv for domestic uses bv ll)77 the total

had risen to approximately 28 million cubicmeters, at lea^l 73 pen ont oi that lor export.iMarber l"->Sl)> Uross foreign-exchange earningsIrom the loresiry seilor rose from Sn million inI9(id to more than S^n4 million in h'74. Myll)71', Indonesia was ihe world's major tropicallog producer, with a 41-percent share of Iheglobal markel and 2.1 billion dollars worth oiexport value. Tin1 coimlrv exported a highervolume oi tropical hardwoods than all olAirica ^nd I atin America lombined. ((.illis.

\\rn amid Ihe limber boom. Indonesia'secononu- remained exlremi'ly dependent onsales ot oil and gas throughout the ll>7ik, andoil exports rose Irom ^7.4 billion in I'-'7S. 71^ tosi11 billion in NSI •S2. (WAI.III 'I.Ml I. 11M2) Bvlate IVS2, however, real oil prices (adjusted forrising imporl u>stsi began to plummet, lallingby more than ^0 percent by the end ot IV'S7. Atthe same time, prices for rubber, palm oil, tin,.•\\K\ several oi the cnuntrs 's other importantexports fell. (World Mank. IWiS)

To diversity iheeiononu in lhe wake of this ;

crash, logging quotas were increased, and amajor push to '\\dd value" by developing pro-cessing industries was launched. In WS2, thegovernment announced a phased ban on theexport of imworked logs, and by 1L'S^ the legalexport of logs h.ul come lo a halt. I his policypaved the way tor explosive growth in pro-cessing facilities after I1W : by late NSN, therewere IOd plywood mills in production with a !total installed capacity of more than d.7 million |i ubic melers per \ear, and .'W more mills were junder construction. CCOI/ TAO I WO, \ ol. Ill) j

meters annually. Foreign exchange earnings fromthe export of timber products and rattan totalled$4.2 billion in 1991, more than one fifth of all ex-ports apart from oil. (World Bank 1993) By the

end of the 1980s, Indonesia supplied half of theworld's plywood and accounted for more thanthree fourths of all U.S. imports of hardwood ply-wood. (Schwarz, 1992a)

42

Transitions in Indonesia's TimberEconomy

In the absence of an accurate forest inventory, orreliable information on actual harvest levels (WorldBank 1993), nobody can say with certainty that "In-donesia will be logged-out by year X." On the otherhand, by almost any reckoning the country'sforestry sector faces a great and rapid transition.

Some simple calculations show that currentdemand is likely to undermine the forests withina few decades—sooner in some areas. The usualrule of thumb for sustained yield in Indonesia isthat one cubic meter per hectare of commercialspecies can be removed from productive forestannually. (Sedjo, 1987) If this rule and good log-ging practices were utilized, then supply wouldbe roughly in balance with current demand levelsfrom industry, now and into the future. But, formany reasons, this scenario is unrealistic:

• Much "production forest" is in fact classi-fied as "Limited Production Forest" becauseof its steep slope, or inaccessibility or otherreasons. The level of sustained yield, evenunder ideal conditions, is thus much lowerthan 46 million hectares, as claimed after arecent survey. (RePPProt, 1990)

• Collateral damage to standing stock andwaste is very high in Indonesian logging op-erations. For every cubic meter cut, at leastan equal amount of usable wood is left be-hind. (GOI/FAO, 1990, V.2) In all, some 8million cubic meters are left rotting in theforest annually. (World Bank, 1993) In addi-tion, damage to surrounding trees averages50 percent, soil compaction impedes regen-eration of dipterocarps, and favored speciesare "creamed" from stands. (Potter, 1991;Brookfield et al, 1990)

• The building of logging roads—and theclearing of areas alongside roads—removesa large area of forest. The 500 km. of loggingroads in one large East Kalimantan conces-sion involved "daylighting" clearance ofsome 40,000 hectares. (Potter, 1991)

• The Indonesian logging system allows a sec-ond cut only after 35 years, but no conces-sions are this old yet, and it is unlikely thatthey will be able to produce at the levels ofthe first cut. In neighboring Malaysia, stud-ies theorize, a second cut is possible only ifresidual stand damage is 30 percent or less,which it isn't in Indonesia. (Thang, 1989)

• According to the Indonesian Forestry Ac-tion Programme (GOI, 1991), "a 35-yearcycle may be only about half the length oftime required to support a sustainable har-vest in the long term," though the Pro-gramme endorses "continuous monitoringand evaluation" rather than stricter cutting-cycle regulations.

• Few concession-holders properly follow theselective cutting system mandated by theirconcession agreements, and some observersbelieve that even a 100-year concessionwould not provide incentives for better man-agement since concessionaires are simplynot interested in a second, less profitable cutthat would require years of costly interimmanagement and protection. The possibilityof converting "degraded" concessions totimber plantations, with a generous govern-ment subsidy, further reduces incentives forlong-term natural forest management.

• Logging roads and operations open forestlands to migrant farmers, whose activitiesmake sustained yield—or even maintenanceof forest cover—in these areas all but impossi-ble. In 1990, nearly 3 million hectares of pro-duction forest and nearly 9 million hectares of"conversion" or unclassified forest wereunder some kind of agricultural occupation(GOI/FAO, 1990, Vol. 4), and the actual fig-ure may be higher than these estimates.

A 1993 review concluded that an estimated 22million cubic meters of wood per year could becut sustainably from Indonesia's tropical forest,but that harvests are currently running 50 percenthigher. (World Bank, 1993) In short, natural for-ests probably can't even slake current demands

43

from Indonesia's wood-processing industrieswithout increased deforestation, much less higherdemands over the medium term.

Unlike Thailand and the Philippines, whichhave exhausted their forests, and Malaysia,where timber extraction looks to be a "sunset in-dustry" under current policies (World Bank,1991a), Indonesia still has time to reset exploita-tion targets to reflect ecological carrying capacityand to take the operational realities of timber ex-traction into account. But a major transition,whether systematic or wrenching, is clearly instore. Recognizing the inevitability of this transi-tion, the government states in its Tropical For-estry Action Programme that "[d]ue to popula-tion and industrial growth, the projectionssuggest that the raw material situation in Indone-sia will become critical in about a decade if In-donesia continues to maintain its market domi-nance and industrial pace, and if forest resourcemanagement and utilization efficiency do not sig-nificantly improve." (GOI1991)

The Distribution of Costs and Benefits

Shifting to a sustainable forest economy willrequire adjusting the current flows of costs andbenefits in the forestry sector. As things nowstand, relatively few large firms reap the benefitswhile costs show up as losses of government rev-enue and losses of livelihood in the communitiesliving off of and near official forest lands.

In timber exploitation, most of the availableeconomic rent—the profits exceeding the mini-mum that an investor needs to earn to make agiven project worthwhile—flows to concession-holders. If calculated on the basis of $145/m3,which Malaysia realizes on the same or compara-ble species, available rent per cubic meter comesto approximately $99. The Indonesian govern-ment captured only 8 percent of this in 1989 infees and royalties, while a fee increase in 1990raised the percentage to 17 percent. In 1993, thegovernment increased royalties by 47 percent toan average of $22 per cubic meter. However, thisfigure is, according to the World Bank, "stillbelow the $30 level royalties would have reached

by now had they been adjusted from 1985 levelsby the wholesale price index for the forestry sec-tor and, hence, is well within the capacity of theindustry to pay, particularly considering the re-cent sharp increases in world log prices." (WorldBank 1993) (See Table 3.1.)

If the government could capture the 85 per-cent of rent that it obtains in the oil sector, onestudy estimates, logging would have contributednearly $2.5 billion to government revenues in1990, five times the $416 million actually col-lected, and more than half of Official Develop-ment Assistance received in that year. For per-spective, during 1984-1989, total fees and chargeslevied on forestry operations accounted for nomore than 0.2 percent of the government's totaldomestic revenue and no more than 0.1 percentof the annual government budget. (WALHI,1991)

Along with low levels of rent capture, artifi-cially low domestic log prices have resulted in"environmental degradation, inefficiency in bothlogging and wood-processing industries and alack of market diversification." (World Bank1993) In 1992, export taxes replaced the ban onlog exports, but the impacts on resource use havebeen negligible because the taxes are highenough to effectively constitute a ban. As a re-sult, while prices for Meranti logs exported fromSabah (Malaysia) have averaged around $160 percubic meter since 1986, with 1993 prices topping$300, equivalent logs in Indonesia averagedabout $90 per cubic meter in 1993—maybe less,since most plywood operations are affiliatedwith concessions, and thus obtain logs at cost.(World Bank 1993) Another recent study con-firmed this analysis:

Several industrialists practicing intra-firmpricing compose a quasi-cartel. Their deter-mination of log prices reflects neither thescarcity value of tropical logs nor the exter-nalities involved in their exploitation. Thisallows Indonesians to value at only $70-80per cubic meter the same Bornean specieswhich Malaysians value at $140-165 per m3.(WALHI/LBH, 1992)

44

Table 3.1. Calculation of Potential Rent in Timber Production (US $/cubic meter, highlyconservative estimate)

Average FOB Value of Indonesia's Loga

Logging Costb

Normal Return to Capital (30%)

Economic rent in stumpage value

Rent captured by governmentLicence Fee, Property Tax & RoyaltyReforestation Fee

Total Rent CapturedPercentage of Total Rent

Unrealized RentPercentage of Total Rent

a. The estimated figure is the value of weighted average

1988

145.0032.009.60

103.40

4.004.00

8.008%

95.4092%

af log price

1989

145.0035.2010.56

99.24

5.007.00

12.0012%

87.2488%

for logs for plywoodsawnwood in Sabah port using the log equivalent volume of Indonesia's plywood andwood exports as the weight:(LESPE*PLP) + (LESSE*PLS) = (0.56*133) + (0.44*160) =LESPE = log equivalent share of plywood exportLESSE = log equivalent share of sawnwood exportPLP = price of log for plywoodPLS = price of log for sawnwood

b. Assuming 10% cost inflation per year

Source: From WALHI, 1991.

= US $144.8!1

1990

145.0038.7211.62

94.66

6.0010.00

16.0017%

78.6683%

and forsawn-

Although most direct financial benefits haveflowed out of the forest areas and into the handsof private concession-holders, it is frequently as-serted that considerable indirect benefits accrueto local and provincial economies through directcharges on forestry production, through the "de-velopment of backward and remote regions," andthrough "trickle down" of employment and otherbenefits to local communities. (GOI/FAO, 1990;Vol. Ill) But a recent study (WALHI, 1992) on theregional and local economic impacts of the timberindustry in East Kalimantan suggests that suchbenefits are exaggerated. (See Box 3.2.)

This large province, which accounts for 10 per-cent of Indonesia's land area, contains 20 millionhectares of legally recognized forest lands. Ofthis, 12 million hectares is held under 108 timberconcessions. From 1980 through 1988,25 percentof all logs produced in Indonesia came from EastKalimantan, peaking at 30 percent in 1984. Sur-veying the results of this massive timber boom,the Indonesian Forum on the Environment(WALHI) concluded:

• At current high rates of exploitation andnegligible rates of reforestation, commercial

45

Box .1.2. Tin1 F.conomic Impact of Timber Exploitation on a Village in Kalimantan

Tin.1 village of Jelmu Sibak lies on the Liiw.iriver in Fast Kalimantan, within the legallydesignated territory of two logging conces-sions. Us 541 residents are mainly indigenousHenlian Dayak people, with a smattering of im-migrants from other areas. Most make a subsis-tence living growing dryland rice and otherannual crops, supplemented by fruit trees, rat-tan, and other forest products. Honey and Ca-hciru resin is collected, and pigs and deer arehim led. Some villagers keep water buffalo,pigs, and chickens as well. Rice is grown on arotational basis; particular fields are used forseveral seasons, then allowed to lie fallow foryears until covered with brush and young treesof about 1U-20 cm. diameter. Whether in fallowor not, these fields are owned and inherited byparticular families. Fach family cultivates anaverage of about 1.7 hectares of rice per year,with a total annual production of about 100tons, and some plots lie as far as 40 kilometersfrom the village proper.

After the government banned all traditionallogging activities in the early 1970s, and the mar-ket for rattan improved, rattan cultivation andcollection gradually became the primary sourceof cash income for the village. Rattan is culti-vated in conjunction with both active rice fieldsand current fallows, but is also sought from for-mer fields of past decades and generations, andfrom the forest, where animals disperse its seeds.

The village's economy is primarily subsis-tence, though some products ,ire traded foreither cash or goods. Transportation links withlarger towns are difficult, whether by river orby logging road.

In 1L>7I and 19KI, two timber concessionsthat completely encompass the traditional ter-ritory and settlement sites of Jelmu Sibak weregranted by the government. The local peoplehave continuously attempted to maintain theirtraditional ihhil rights to their land and

resources, but various forestry laws criminalizethe long-standing way of life of Jelmu Sibak.

Conflicts first arose in 1 82. when the con-struction of the logging basecamp on iniiitlands destroyed crops, honey trees, and rattanstands and ruined a local cemetery. With sup-port from village and sub-district officials, thelogging companies were induced to pay mini-mal damages—less than 10 cents per squaremeter for land, 50 cents for a mature fruit tree,and S175 for the ancestral graveyard—and toprovide the village with a color television, asatellite dish, and five miles of new road.

In 1989, the two logging companies postedsigns on all paths from the village at about 2.5miles out, prohibiting all farming under penal-ty of imprisonment and fines up to 56(1,00(1,effectively cutting off the villagers from theirtraditional livelihood and shunting them ontoareas too small to support adequate fallow peri-ods. Yields of rice are expected to drop in thenext few years.

Logging operations are also directly dimin-ishing the village's harvests of wild rattan,fruits, and other forest products. Meanwhile,the connector road built as the major recom-pense to the villagers is largely impassable, sothe costs of local trade are high.

The logging operalion> have not created jobsfor Jelmu Sibak either. As of January 1992, fewerthan ten villagers had even part-time employ-ment with the concessions, and six of those wereday laborers. Nor have purchases of village goodsby concession employees added up to much. Onbalance, through logging in Jelmu Sibak, access totin- forest's wealth has shifted from the villagersto the concession-holders, damaging the local eco-logical balance and economic system to the detri-ment of the local people.

Source: WAI.HI, 1992

46

exploitable timber in East Kalimantan willbe exhausted by 2003.

Continuing Dependencies on HeavyTimber Harvests

• From 1985 through 1990, logging enter-prises directly employed only about 2 per-cent of the population over 10 years of age,while forest industries employed another 4percent or so.

• Logging and forest industries in 1985 indi-rectly created an estimated 18 and 45 jobsrespectively, per 100 directly created jobs,but these gains are offset by the still-uncal-culated but most likely large loss of employ-ment and income from local forest-basedcottage industries (e.g., rattan collection)denied access to forest resources controlledby concession-holders.

• Investment in the province's forestry sectoris becoming increasingly capital intensive,as shown by the ratio of jobs created perunit of investment (100 million rupiah;$50,000 at 1991 rate) in both logging and for-est industries. In logging, per unit jobs de-clined from nine in the 1970s to six in thelate 1980s. In forest industries, per unit jobcreation declined from eleven to three dur-ing the same period.

• From 1975 through 1989, only 28 percent offorestry taxes and levies returned to theprovince, and only 9 percent of what wasreturned was used for forestry conservationand development.

• Census data for 1987 through 1990 showedthat consumer prices rose more rapidly thanthe income of the province's poor.

Clearly, appreciable direct and indirect bene-fits are not reaching either local communities orthe provincial government, who are neverthelesspaying the costs of the current forestry exploita-tion system. These costs include loss of all com-mercially productive forests by 2003, loss of ac-cess to non-timber forest products, diminution ofhydrological and other ecological functions, andincreased risk of forest fires.

Both forest policy-makers and timber firms cansee change in forestry policy and the timber in-dustry coming, and both are aware that Indonesiacould run short of raw material for its timber in-dustries in a matter of years. But a powerful in-dustry's dependence on continued heavy har-vests narrows the range of options for all.

The log-export ban of the early 1980s and theaccompanying requirement that concession-hold-ers develop sawmills and other processing facili-ties rapidly created a large industry dependenton a continuous supply of timber. Indonesia'splywood and sawn-timber mills need some 44million cubic meters a year to operate at 80 per-cent capacity—well above the government-mandated production ceiling of 31 million cubicmeters. (Schwarz, 1992c) Either the mills areoperating far below capacity, or, more likely,felling far exceeds officially reported levels.(Sedjo, 1987) While the extent of illegal timber re-movals is by definition elusive, Indonesia's Na-tional Police Chief estimates that millions of cubicmeters of timber are stolen each year in Southand East Kalimantan alone. (Jakarta Post, 1993)Even so, many plywood mills are finding it diffi-cult to obtain an adequate supply of logs, espe-cially those in Sumatra and Kalimantan, whereforest standing stocks have declined considerablyin recent years. Rather than plan for a decrease inthe size of the plywood industry to put it in linewith sustainable harvest levels, the government isinstead urging mills to relocate to Irian Jaya—where the same cycle of exceeding sustainableharvest limits followed by declines in standingstock is likely to be repeated. (Jakarta Post, 1993a)

The dilemma is clear: if the country's forestsare to be sustained, timber-harvest levels shouldbe promptly halved, and the industry shouldeliminate the high levels of waste in the plywoodproduction process, estimated to be at least 33percent (World Bank, 1993) and, in one govern-ment estimate, as high as fifty to seventy percent(Jakarta Post, 1993a). Yet, the Ministry of Forestrytold Parliament in July 1993 that cutting was not

47

keeping up with its annual target of 31.4 millioncubic meters and suggested that the industryshould raise production to 54.5 million cubic me-ters annually to feed its processing industries.(Suharyanto, 1993)

The government's strategy for meeting indus-try's heavy demands rests largely on the ambi-tious new Industrial Timber Plantation (HTI) pro-gram. The new policy framework calls for thedevelopment of three types of plantations—millwood, fuelwood, and pulp/paper/rayon fiber—totalling 6.2 million hectares, but pulp fiber plan-tations are favored. As of 1992, the Ministry ofForestry had already accepted 353 applicationsfor 12.5 million hectares of plantations (alreadytwice the target for the year 2000), 7 millionhectares of that devoted to pi'lp estates.(WALHI/LBH, 1992) This crash program willhelp the government make Indonesia into one ofthe "top ten" pulp and paper producers in theworld, but it will also exert new pressures onboth natural forests and the people who live inand around them, and it will not reduce woodproducers' dependency on natural forests.

What plantations will do is feed a wholly newindustry. Investors are likely to site plantations instanding natural forests, not on degraded landsas government would like. A proposal pending in1991 from the Kian Lestari conglomerate, for ex-ample, would involve clear-cutting about 200,000hectares of natural forests—some currently desig-nated as limited production and protectionforests—to make way for fast-growing pulp-stockmonocultures. (Dick, 1991)

For several reasons, corporations prefer to siteplantations in cleared natural forests. Truly de-graded lands, such as those covered with alang-alang (Imperata cylindrica) grass, are difficult todevelop into commercially sound plantations.Also, entrepreneurs have the right to clear-cutand sell all natural timber in areas designated forplantation development, and the diversion of theReforestation Fee—one of several royalties col-lected from logging concessions—into equity cap-ital and no-interest loans provides a further in-centive for plantation development.

What's more, many of the "degraded lands"slated for HTI plantations are useful and produc-tive from a local community's point of view. Sec-ondary forest and scrub areas may be fallows forswidden farming systems, areas for grazing live-stock, or sources of fuelwood and other dailysupplies. Having lost access to primary naturalforests to logging concessions, local communitiesthen find themselves deprived of access to whatremains. (See Box 3.3.)

The Economics of the PacificNorthwest Forestry Sector

For nearly 100 years, the Pacific Northwest'seconomy was dominated by the timber industry.The world's most imposing coniferous forestsseemed to promise a never-ending stream of jobs,profits, tax revenues, and building materials.Lumber production was the premier manufactur-ing industry in the Pacific Northwest between1880 and the 1970s. West of the Cascades, mostrural communities that weren't farming in theWillamette Valley or fishing in Puget Sound weretimber towns.

During this era, forests were overwhelminglyvalued for their timber. In 1952, the chief silvicul-turalist for the U.S. Forest Service in the PacificNorthwest called old-growth forests "biologicaldeserts," virtually devoid of life and productivity.(Caufield, 1990) Although prized for tremendousvolumes of high-quality timber, every acre of tim-ber slowly wasting away in old-growth forestswas also viewed as one less acre of vigorous,highly productive, and biologically healthy forest.

For decades, federal forest policies reflectedthe "progressive utilitarian" views of Gifford Pin-chot (founder of the U.S. Forest Service) and hispatron, Theodore Roosevelt.1 Convinced that theexcesses of the timber barons would soon create atimber famine, Pinchot believed forest policy hadto ensure a continuous (preferably growing) flowof timber from public and private lands. (Clary,1986) Conservation meant protecting forests fromwaste and destruction but not from logging aslong as it was conducted to ensure future

48

Box 'AM. Plantations and People: The ^truggle of Sugapa Village

While Indonesian government plans call for.1 vast expansion of indiistri.il limber estates intin1 lL|lM)s, particularly to produce pulp. IIK1 op-erations of the Inli lni.liir.ivon Llama (ML) cor-poration in North Sumatra pro\ ide one of theonl\ iip-and-running examplesoi theenviron-mental, economic, and MKJ.II impacts of limberestate development. As such, it is .1 cautionerstale.

ML began opi-r.ilions in ll'8l) in the regionaround I ..ike Total, the largest l.ikein South-east Asi.i and home to the Kitak people. 11L." isone oi thirty companies owned by the Kaja(uiruda Mas Ciroup conglomerate. III. regis-tered profits of S^.fi million in I W , and KajaMas plans to expand the Lake Total operationand to build new plants and plantations inother parts of Sumatra, liy the mid-IWOs, itwill thus become the country's number onepaper-and-pulp producer.

IIL gets its iaw materials from aging planta-tion stands of pine (/'/»»> nirrku^ii) dating fromthe Hutch colonial period, and from its ownHP.itOU-heclare logging concession, parts ofwhich it hasclearcut and replanted in liucalyp-tus without the appropriate permits. The firmis also cutting forests it owns in the area's cru-cial water-catchment areas, though these areformallv zoned as Protection I'orest. As IlL.'sraw material needs expand, it N seeking newarea- to either log or plant in liiKalyptus.

From the st.iri, IIL has locked horns withloial (.oninuinilies over a landslidelhal killed1 "i people and forced a whole village to relo-cate, and over extremely high levels of air andwater pollution caused bv its operations. In-deed, a massive spill from III ' s waste pondtriggered the first environmental lawsuit in In-donesian history—non-governmental groups,which eventually lost the case, charged thecompany w ith failure to comply with environ-mental impact regulations.

Conflicts have also arisen over IIL 's restric-tion of liKeil access to forest lands ,uul resources.VVoodcarvers on Lake loba's Samosir island,for example, are forbidden to collect wood intheir own community's forests, and villagers inone area strongly protested 111,'s planting ofTiicalyplus on their ancestral graveyard.

A particularly divisive conflict erupted inI1W7 in Sugapa village when ML' rented 52hectares ol village land for 31) years to plantr.ucalyptus. This land was the village com-mons—utilized for grazing, iuelwood, andgathering berries sold in the local market. Thevillagers did not recognize the land transfersince it violated the local customary tenuresystem. l:or the loss of this land - and thus oftheir ability to raise water butfalo—the villagewas paid only :?(•>.33 per hectare, less a S^1 harge every time a buffalo wandered backinto its pasture. liventually. the villagers wereforced to sell their herds- a great loss consid-ering that families kept five to ten buffaloes,selling one a year for S4l)i)-MH).

After the villagers protested to the com-pany, several village men were harassed andbeaten. In April IV.s1'. when two plantationworkers were accused of trying to rape a vil-lage girl, the villagers decided to act, rippingup ld,W)() l-ucalyptus seedlings the companyhad planted. Police arrived and alerted thecompany, but arrested only the ten women in-volved, not the workers accused o\ rape, ^ineelocal customary law places land ownership inthe hands of male heads oi households, Ihewomen could thus not be said to be delendingtheir property. Riding roughshod overmstom-ary law in acquiring the land, the companylater used it in support ol the criminal chargeslor property destruction brought against theten women, who were sentenced to six monthsin jail for destroying propertv and "obstructingnational development."

'1 Olliilllliii I ' H ilfX! 1'ihji'i

49

I'lii' women appealed, antl thi- appellateiilk-rcd to excuse llii'in from jiiil it they

would promise to commit no further "criminalacK" Maintaining Ihiil they had never commit-ted a crime, Llie women rejeiled thi1 court's de-iKion ,ind appealed In I he \ation.il SupremeCourt, whii h had not rendered a decision a*- ofniid-l1'1'."1'. Angered by thi'- result, several othervillagers brought a uvil suit against IIL and thelocal government lor abuse of customary tenur-idl riili-s ,niil procedures. IIL offered to settleI he case by paying rent lor the land, but themany villager-, whodn not want a plantationunder any conditions- are harassed continu-ously by local ottiual>. Vleanwhile. lheca.se hassplit the formerly harmonious village into threehostile f.utions—tho-e for. against, and unde-cided on the rental oiler.

In at least eight other villages. III.: has simi-larlv taken advantage of weak documentationof ancestral community land rights, and

government. III , and the courts have con-spired to intimidate and even prohibit localnon-governmental organizations (\CiOs) Iromhelping them. One loial \C!C) that had beenadvising the Sugapa villagers was *.hul diu\ nwithout expl.mation b\- the governmenl for si\months, and allowed lo reopen onlv on thelondilion lh.it it st^p dispensing legal aid.

Annual per capita income inIndonesia S4^5

Market I'rice of one 3-year oldbuffalo raised in ^ugapa ^ 0 0

III 's compensation for taking landtor 3D vears. per ha b(->

Charge each time one buffalo enterstormer pasture ST

Compensation villagers seek IromIIL S3D.IK10

I l l ' s annual profit s53,h()ll/i)0(i

undiminished harvests. Dissenters included suchwilderness advocates as John Muir and those inthe timber industry who categorically opposedany forest policy.

In recent decades, new knowledge and increas-ing scarcity have changed the values attached tonatural forest ecosystems, especially to old-growth forests. The consensus around Pinchot'svision of forest policy began to erode in the 1960s,as the public became more interested in the non-timber benefits of forests. Today, the biodiversity,hydrological, recreational, and climatic values offorests are more appreciated than ever before.

But while the "new values" are of growing im-portance to an increasingly (sub)urbanized coun-try, rural economies largely dependent on timbervalues persist, as do the relatively narrow eco-nomic interests of commodity-based corporationsthat control much of the access and rights to for-est resources. This concentrated dependence oncommodities has frustrated attempts throughout

the United States to make forest policy and man-agement better reflect the changing mix of valuesattached to forests by the general public. In thePacific Northwest, the struggle over the fate ofthe remaining old-growth forests outside of Na-tional Parks and legally protected wildernessareas has intensified during the past decade, be-coming perhaps the most visible manifestation ofthe clash over which forest uses and values toemphasize in public policy.

In other parts of the country, the transition toforest policies that sustain a wide array of forestvalues is no less difficult. But below-cost timbersales, marginal physical and economic forestryconditions, and clearly undervalued recreationand environmental assets all convincingly arguefor forest policy reform. (See Box 3.4.) Indeed,some sort of reform seems imminent. Shortlyafter taking office, the Clinton Administrationproposed eliminating below-cost timber sales aspart of its deficit-reduction plan. Although theadministration dropped the original proposal

50

Box 3.4. Below-Cost Timber Sales On Public Lands

In March 1493, the U.S. Forest Service re-leased its annual accounting oi' National For-est timber sales from the previous year. Al-though the agency concluded that 68 of 122national forests lost money, the timber saleprogram overall earned £25ti million in 1992.(L'SDA, 1493a) A couple of months later, theCascade I lolistic Fconomic Consultants(Cl I HO released its own analysis, indicatingthat the Forest Service timber program lostS453 million. (OToole, 1493) This was the lat-esl in a long scries of disagreements—by nowan annual spring ritual—between the ForestService and critics of its timber sales program.Below-cost timber sales (i.e., those in whichthe costs of producing timber and administer-ing sales exceed receipts) have become a focalpoint for advocates of U.S. Forest Service re-form.

Differences between Forest Service esti-mates of net timber sale revenues and those ofmany analysts (e.g., O'Toule, 1993; Repetlo,1988; Neuter, l4S=i; GAO, 1984; Wolf, J984;Sample. 1484) inside and outside of govern-ment generally come down to what costsshould be counted against timber receipts. TheForest Service counts two categories oi costs—timber sale expenses and timber program ex-penses—against annual timber revenues. Tim-ber sale expenses include administrative costs,such as conducting timber surveys in saleareas, advertising and conducting sales, moni-toring harvest operations, etc. The limber pro-gram costs include long term-capital ex-penses—those associated with road surfacing,culvert construction and maintenance, refor-estation and limber improvement, etc.—amor-tized overan extended period and chargedagainM timber sales during that period.

Forest Service accounting, however, de-parts from standard accounting practices incurious wavs. For example, past expenses(e.g., the amortized reforestation costs) are not

accumulated with interest while future bene-fits (e.g., future timber harvests in reforestedareas) are not discounted back to a commonbase year. (Repetto, 14SS) Moreover, theagency often amortizes reforestation costs overperiods much longer than a typical rotationand road construction costs are often amor-tized beyond their average life expectancy. Me-yond that, the agency charges only some road-construction costs (surfaces, bridges, andculverts) against the timber program, ignoringmost road construction costs (for the base layerof the road or the "prism") altogether.(O'Toole, 1491) The Forest Service justifies thisas a capitalized land improvement—not acost—even though the National Forests al-ready have a 370,1)00 mile road network andthe agency spent S90 million decommissioningroads in 1992. The benefits of new roads arequestionable given the well-documented costsexisting roads already impose on inireasinglyvaluable non-timber resources. Finally, as crit-ics point out, county payments from limbersales should be treated as costs (the Forest Ser-v ice likes to think of them as revenues) sincethey are payments in lieu of taxes that privateowners must pay.

Although various independent analyses(e.g., O'Toole. 1993: Repetto, 1988; Beuter,1985; Sample, 1984; CAO, 1984) define costssomewhat differently, their conclusions are re-markably consistent. First, timber sales on Na-tional Forests in the Rocky Mountain states, inAlaska, and in the Fast are chronically below-cost. Second, most U.S. Forest Service acreagemanaged for timber production produces tax-payers losses that exceed the profits made inthe Pacific Northwest and a handful of Na-tional Forests elsewhere in the country. Overthe past decade, these analyses show, overalllosses to the Treasury total between S200 andover $ W million annually, depending on tin-cost criteria used and the year.

51

Thi.1 Forest Service recognizes tli.il Ivlow-cosl sales do occur, but argues lli.il timbermanagement activities yield closely-linkedio>ts <ind benefits (ji)int benefits and cost--) tli.itproduce net social goods. Roads built tor log-ging trucks cin also be used by recreational ve-hicles, iind logging in creases lorage tor elk <mdother wildlife. Such benefits .ind owls, how-ever, ,iiv extremely dil'fii Lilt lo measure and al-locate. Meanwhile, mos-l evidence suggestslh.it the agency overestimates non-timber ben-efits from logging and underestimates thecosts. I'erhaps more important, tlie supposedbeneficiaries of Ihe joinl benefits, including

stale lish and (iame agencies, conservationgroups, and outdoor recreational users, Ire-quently oppose Forest Service logging plans.(RepeLto, NKK;

Below-cost limber s.iles have come underincreasing scrutiny in Washington in recentyears a policy-makers have become more con-cerned about Limber-related losses lo the Trea-sury and environmental damage in areas eco-nomically and physically unsuiled to timberprodiiclion.Th.it they haw survived testifiesto the dilficulK of reforming even the most ob-viously flawed loresl policies.

under political pressure,2 the Chief of the U.S.Forest Service announced in April 1993 that theagency plans to end logging in 62 NationalForests (none of them in the Pacific Northwest)plagued by below-cost sales. (Schneider, 1993)

In the Northwest, highly productive forestlands and high prices for valuable old-growthtimber have made heavy harvesting economicallyattractive to the timber industry, even withoutthe government subsidies so prevalent elsewhere.In addition to the misvaluation of forest re-sources, three major features of the Northwestforest economy contribute to policy-makers' re-luctance to embrace forest policy reforms. First,technological change, shifts in timber-industry in-vestment, and log exports all take a toll on thetimber-based economy by eliminating jobs andpotential revenues. Second, the principal eco-nomic benefits of heavy harvests go to a compar-atively small group while the costs are generallyspread around. Finally, past forest policies havecreated century-old economic dependencies onhigh timber-harvest levels and left communitieswith few economic alternatives.

The Changing Timber Economy

The domination of regional and local econ-omies by timber in the Northwest is coming to an

inevitable close. What was once a large foresteconomy fueled by a voracious appetite for old-growth timber is rapidly becoming a smaller for-est economy supported by less valuable second-growth timber. Along with the rapid liquidationof old-growth trees, the transition to a smallerforest economy in the Northwest is driven by im-provements in labor and technological productiv-ity and by relatively high production costs com-pared to other regions.3 (Sample and LeMaster,1992) At the same time, the regional economy hasdiversified dramatically as service and profes-sional industries have grown in urban areas, fur-ther shrinking the comparative role of the timberindustry.

Despite record cutting levels during most ofthe past decade, the timber industry lost at least10,000 jobs between 1980 and 1990. (Haynes,1992) All segments of the forest industry togethernow employ about 4 percent of the total workforce in Oregon and Washington, still higher thanthe national average, but much lower than levelsof ten and twenty years ago. Increasing automa-tion and other productivity improvements in theforest industry have reduced labor requirementsfrom an average of five workers per millionboard feet of processed lumber in 1980 to onlyfour workers in 19904 (Sample and LeMaster,1992), and the newest mills require only about

52

1.75 workers per million board feet. (Flora, 1990)This trend is predicted to continue during thenext decade (Sessions, et al., 1990),5 though thejob losses may be less rapid than during the 1980ssince most surviving mills will have already in-vested in labor-saving technologies.

Increases in log exports from private and statelands have also put a damper on processing ac-tivity and pushed employment downward in thePacific Northwest.6 Between 1963 and 1988, logexports from Oregon and Washington increasedby nearly 500 percent (Flora et al., 1991), averag-ing 3.1 billion board feet between 1984 and 1988.(Adams and Haynes, 1990) This volume is equiv-alent to over half of the total sawtimber harveston forest industry lands in western Oregon andWashington and over one quarter of all timberharvested in the region in the late 1980s. Assum-ing that four jobs are created for every millionboard feet milled into lumber, these exports po-tentially cost 12,000 timber industry jobs (and anadditional 15,000 to 27,000 indirect and inducedjobs) during the 1980s.

Of course, timber exports create jobs as well—asmany as 5,800 jobs in Oregon and Washington.(Flora 1990) If log exports were banned, only afraction of these export jobs would remain, (thoseserving the needs of offshore log buyers who de-cide to substitute finished lumber products for atleast some raw logs). Other buyers will no doubtshop for logs in other countries (e.g., Russia) in-stead. (Flora, 1990) Some experts argue that furtherexport restrictions would end the U.S. "monopoly"on supplying high-grade softwood logs,7 sacrific-ing lucrative markets and government tax rev-enues on log sales.8 (Sedjo et. al., 1992, Flora andMcGinnis, 1989) In any case, log exports hit do-mestic mills and their workers particularly hard—the same businesses and people who would bearmost of the brunt of forest policy reforms.

The past decade has also seen a dramatic shiftin forest industry capacity from the Pacific North-west to the southeastern United States. Duringthe 1960s, the Pacific Northwest had 37 percent ofall U.S. lumber and plywood capacity, comparedto 23 percent in the South. By the mid-1980s, 40

percent of lumber and plywood capacity was inthe South, and capacity in the Northwest had de-clined to 30 percent. (Adams, et al., 1987) Thisshift mainly reflects higher delivered log costs inthe Northwest, where harvesting is more expen-sive due to steeper terrain and the use of morecomplicated and capital-intensive logging sys-tems.9 Technological advances also allow the for-est industry to use the lower-quality southernpines in an ever wider variety of products. And,with rotation times for loblolly and other south-ern pines typically ranging between 25 and 35years, compared to 45 to 75 years for Douglas firin the Northwest, industry investment in theSouth is more profitable.

Protection of endangered species and policiesto lower timber harvest levels will visit additionalburdens on some timber-dependent communi-ties. Already victims of a large-scale transitionthey cannot control, forest industry workers, rep-resentatives of forest industries, and local com-munities fiercely oppose forest policy reforms.Trying to offset losses from the larger economictransition transforming the regional timber econ-omy, these interests seek to prolong logging inold-growth forests and other forest areas whereintensive timber management and the sustain-ability of non-timber benefits are increasinglyincompatible.

Concentrated Benefits and Diffuse Costs

The benefits of high timber harvest levels, ofcourse, have also come at considerable cost. Butthe nature of the costs is in many ways differentfrom the nature of the benefits. Few people canattribute lost jobs to the disappearance of an old-growth forest in the same way that a logger or amill worker might if the forest was protected.Many of these costs are hidden or at least difficultto measure, and logging is often but one of sev-eral factors degrading the forest and related re-sources.10 Although it seems safe to say that de-pleting mature timber stocks and liquidatingold-growth forests will generate severe long-termopportunity costs, the short-term costs—geo-graphically and economically diffuse—are moredifficult to enumerate than the benefits. Federal

53

and state policy-makers have thus been naturallyreluctant to embrace forest-policy reforms.

The principal beneficiaries of timber-drivenforest policies have been the forest products in-dustries, their employees, and the communitiesthat house them. Wages in the timber industry inWashington and Oregon contributed $2.5 billionto the economies of those two states in 1988. (U.S.Department of Commerce, 1992) In some coun-ties, especially west of the Cascades, timber in-dustry and related indirect and induced employ-ment provide more than 25 percent of all jobs.Many of these counties also benefited from over$500 million in local government tax revenues11

generated by timber-industry activities on privateand public forest lands in Oregon and Washing-ton. And, despite complaints about environmen-tal restrictions on logging, some segments of thetimber industry (especially large integrated firms)with extensive operations and landholdings inthe Northwest reported record or near-recordproduction levels and profits for lumber and ply-wood in 1992 in their annual reports.12

Nevertheless, recreation, biodiversity, conser-vation, fisheries, and other forest resources are in-creasingly competing with timber as valued forestuses in the Pacific Northwest. Tourism and recre-ation is a huge business in the region, contributingmore than $6 billion annually to the economies ofOregon and Washington in the mid-1980s. (Wild-erness Society, 1988) Wildlife-related recreation13

in Oregon and Washington alone totals at least $2billion annually. (USFWS, 1988) Nationwide, Na-tional Forests get over 280 million visitor days forrecreational use (USDA, 1992), more than tentimes the use in 1950. (Repetto, 1988) NationalForests in Oregon and Washington alone enjoyed44 million visitor days in 1991.u Conservativelyassuming that 25 percent of all wildlife-associatedrecreation reported by the U.S. Fish and WildlifeService took place in the National Forests, thevalue of expenditures related to hunting, fishing,birdwatching and other non-consumptive wildliferecreation in these forests may have totaled over$500 million in Washington and Oregon in 1985(USFWS, 1988), or about two-thirds the value ofNational Forest timber sales in 1988. Were they

marketed, O'Toole (1988) estimates, recreationaland other "amenity benefits" (such as fish andwildlife) in National Forests in the Northwestwould be worth approximately one third as muchas timber values.15 Currently, the U.S. Forest Ser-vice collects only about 2 percent of the estimatedvalue of recreation benefits. (O'Toole, 1988)

Salmon and other anadromous fisheries16 arealso a major economic activity often in conflictwith forest policies in the Northwest. In 1989,these fisheries were valued at approximately $150million in Washington and Oregon. (U.S. Depart-ment of Commerce, 1992) According to U.S. For-est Service estimates, the commercial value ofsalmon and steelhead produced in streams in theNational Forests of California, Oregon, and Wash-ington totals $120 million. (USDA, 1987) The fish-eries industry employed at least 13,000 in theNorthwest in the late 1980s. (U.S. Department ofCommerce, 1992)

Policies encouraging high timber-harvest lev-els have been undercutting the potential of bothfisheries and the tourism/recreation industries.In the Suislaw National Forest in Oregon's CoastRange, clearcuts and logging road constructionaccount for more than 75 percent of the landslidesthat have blocked streams or otherwise damagedhabitat and spawning grounds for coho and chi-nook salmon and sea-run cutthroat and steelheadtrout. (Anderson and Gehrke, 1988) Commercialand sport fisheries catches have remained rela-tively stable during the past decade (WashingtonState Office of Financial Management, 1992) onlybecause hatchery-planted fish are growing innumber. Throughout the region, natural fishstocks are in serious trouble: most remaining nat-ural runs of anadromous fish are considered to beat moderate to high risk of extinction during thenext century unless expansive and costly restora-tion efforts are undertaken. (Thomas et al., 1993)Although demand for roadless recreation in Ore-gon's and Washington's National Forests is pro-jected to increase dramatically in coming decades,plans for individual National Forests completedin the 1980s indicate that their capacity to meetthis demand would drop between 40 and 75 per-cent on some National Forests if roadless areas

54

were opened for logging as planned. (WildernessSociety, 1988)

The costs of losing recreational opportunitieswould hit far more people than the benefits ofheavy timber harvests, but the impacts would bediffuse. The outdoors-lovers who seek naturalforest environments come from a heterogenouspopulation throughout the region, the country,and the world. For the most part, the tourism/recreation industry also serves a large clientele in-terested in many attractions besides naturalforests. And the fisheries industry, relativelysmall compared to the forest-products industryanyway, has many employees who work outsidethe industry for much of the year.

The benefits of protecting watersheds and bio-diversity are also diffuse and difficult to quantify.Potential beneficiaries include such disparategroups as makers and users of the new anti-can-cer drug taxol,17 mushroom hunters and restau-rants, and landowners in flood plains. In theNorthwest, thousands of people are affected eachyear by flooding and landslides linked to or exac-erbated by extensive clearcuts in steep water-sheds above. While disaster victims may be hard-est hit, taxpayers end up paying more for roadand bridge repairs. In other cases, ecologicallyunsound logging practices contribute (along withheavy rainfall and snowmelt) to flooding, makingit difficult to apportion blame and costs.

A clean environment, recreational opportuni-ties, and other components of "quality of life"have been at least partially responsible for thegrowth of some of the region's most importanteconomic sectors. A high quality environment in-fluences investment decisions and job growth inhigh technology, professional services, and otherhigh-value economic sectors. But as Rivlin (1993)points out, the political decision process empha-sizes benefits that can be measured, appropriated,and valued in monetary terms—so many boardfeet of timber sold, for example. On the otherhand, the process tends to neglect diffused socialbenefits—clean air, wildlife habitat—that cannotbe easily measured despite their apparent valueto society.

Dependencies and Transition

A regional economic transition away from nat-ural resource-based sectors to a more diversifiedeconomy based on trade and services has alreadybeen taking place in Washington and Oregon. Dur-ing the 1980s alone, while jobs were lost in the for-est industry due to mechanization and the exportof more raw and fewer processed logs, trade added126,000 jobs to the economy and the service sectorgrew by 246,000. (Northwest Policy Center, 1992)

New forest policies that protect old-growthforests and give increased emphasis to non-tim-ber values will add momentum to the shift—atleast in the short-term. To ease this transition, theregion needs alternative employment, educationand training, investment capital, government rev-enues, and established markets for more sustain-ably produced timber and non-timber forestresources.

Occupational and Cultural Shifts in Logging Com-munities Jobs lost in logging and timber manufac-turing will have to be replaced by employmentin other occupations. In the Northwest, unem-ployed timber workers and job openings do notmake a perfect match. Most new employment isin urban areas in the professional, service, andtrade sectors while rural employment in manu-facturing is declining. In Oregon and Washing-ton, the fastest growing economic sectors includerestaurants, medical and health services, foodstores, business services, social services, and pro-fessional services. (Sommers, 1988) Employmentin heavy construction—where unemployed log-gers might be able to use acquired skills—isn'tgrowing. Without additional education or train-ing, most forestry-industry employees cannotenter professional jobs, and wages in basic ser-vice industries (restaurants, tourism) are usuallya fraction of those in the timber industry. AsWilliam Dietrich notes in The Final Forest: TheLast Great Trees of the Pacific Northwest, part of thetragedy of the economic demise of rural timbertowns in this region is that they represent theend of an era in which blue-collar America couldlive in beautiful affordable places with compara-tively high-paying jobs.

55

In any case, for many in the forest industry,adaptation to long-term social and economicchange is painful. Like family farming, loggingrepresents a way of life, not simply a way to earna living. Getting trees out of the woods is a stren-uous and dangerous occupation that most log-gers consider more rewarding and more valuablethan virtually anything else they could do. (Car-roll, 1989) But loggers may be clinging to culturaland social beliefs at odds with the technologicalrevolution of the past half century. According toCarroll (1989), "Strongly developed occupationalrole identities which motivated loggers to thedirty and dangerous work of their occupation ap-pear to be a hindrance to successful adaptation toa changing economy. If successful change is tooccur, the logger's social organization must adaptto economic changes exogenous to his immediateworld. The outcome is uncertain, and the stakes,from the logger's point of view, are very high."

Workers intent on staying in the forest industrywill be hard-pressed to find work outside the re-gion as well. Workforce reductions notwithstand-ing, the forest industry in Oregon and Washingtonremains an important regional employer relativeto its size in most areas in the United States. In1990, it18 employed 137,000 people in a regionalworkforce of nearly 3.25 million. (WashingtonState Employment Security, 1992b; Sessions et al.,1990) This accounted for almost 20 percent of allmanufacturing jobs.19 In contrast, the timber in-dustry at the national level employs only 4 percentof all U.S. workers in manufacturing. (U.S. Depart-ment of Commerce, 1991) (See Box 3.5.)

For some rural counties in the Pacific North-west, employment in the forest industry is muchmore pronounced and supports a high percent-age of jobs and income.20 In the twelve rural non-metropolitan Washington counties west of theCascades,21 on average 12.5 percent of all jobs(and over 60 percent of manufacturing jobs) arein the forest industry. These jobs generated over$636 million in monthly wages—nearly a fourthof all wages paid in the twelve counties. (See Table3.2.) In rural southwestern Oregon, between 20and 30 percent of all jobs are in the timber indus-try. (Sessions, et al., 1990)

The economic impact of the forest industrygoes beyond what these direct employment fig-ures suggest. Sample and LeMaster (1992) esti-mate that for each job in the forest industry, an-other job is indirectly supported or induced byservice demands from the industry and spendinggenerated by its workers. According to this ruleof thumb, in seven rural Washington countieswest of the Cascades, between 26 and 50 percentor more of all jobs come from the forest industrydirectly or indirectly.

At the same time, these counties have had un-employment levels substantially above the stateaverage in 1992. (Washington Employment Secu-rity, 1992b) When timber harvests on federallands were greatly reduced in 1991, followingcourt orders to protect the northern spotted owl'shabitat, unemployment levels in the countiesmost dependent on federal timber increased.22 InSkamania County, Washington, where 27 percentof all employment is in the forest industry andnearly 90 percent of the sawtimber volume is onForest Service lands, unemployment rose from15.5 percent in March 1990, before federal timbersales were judicially restricted in May 1991, to32.6 percent in January 1993. (Washington Em-ployment Security, 1993; 1992b) Already strug-gling with high unemployment rates and the tim-ber industry's reduction in force, communitieslike these will take any further loss of jobs in theforest industry as a bitter blow.

Government Revenues Government will play animportant role in the transition to more sustain-able forest economies. But to help those affectedby the transition, it must raise additional rev-enues to meet increased demand for the publicservices needed to buffer economic and socialchanges. They will also have to find a substitutefor declining federal timber receipts. For perspec-tive here, U.S. Forest Service timber sales in 1988totaled nearly $881 million in Washington andOregon (Ulrich, 1990)—25 percent of which wentdirectly to county governments.

Government financing is essential for fundingjob training and education programs and for pro-viding career counseling and social services in

56

15ox A.5. "local Communities" and lorest Management: Celling I'ast tin- Rhetoric

j Many of the tensions and conflicts thatsl\ niie forest policy changes in both Indonesiadnd the United States revolve around differing

j views about luiw much authority dnd controllocal communities should have over forest re-sources. In Ihisollen pitched battle, environ-

! menl.il advoiales .ire sometimes .ucu^ed (itiniun-isiciKN in their treatment ol Iouil com-munities dnd tlieir proper roles in lores! pol-icy-making dnd loresl management. Whengreater community control augurs well lor

i conservation, the argument goes, environmen-talists back it. Mul when a local community fa-vors lommercial exploitation ol forests dl theexpense ol some environmental value, then en-\ ironmentdlists advocate stronger go\ ernmen-tal controls in the interest.-, ol "broader societalinterests."

In all lases, strengthening local manage-ment is desirable, and giving communities in-cetilives lo manage natural asseLs sustainablyshould bed primary goal o! forest policy. Yet,environmentalisls and policy-makers must re-spect each community's unic|iie economic >MM.\social slructuie.. as well as its historical rela-tionship to forest lands and resources. Wisepolicy is flexible enough to take all such differ-ences into account and adjust accordingly.

1-ven communities found within a particularregion—be it Oregon or South Sumatra—are ofmany dificrenl kinds, and governments orenvironmentalists -have no right or way tocalegori/e communilies ds "good" or "bad"stewards and managers. Still, some \ariablestypically distinguish different kinds of com-munities and thus provide some basis for pre-dkling their potenlial for safeguarding theforests' prochutiv ily and diversity:

}iiul!i!,hrti-J.' (..'ommunities with diverse, mulLi-ple lies to the I'nrol are more likelv to valuethe long-term integrity of I lie whole ecosystem

than those whose relationship is restricted toone or two narrow objectives, such as timberextraction or mining.

In Indonesia's Irian Java province, lor exam-ple, forests provide wood, game, fruit andother foods, craft materials, and medicines formany communities. They regulate the watersupply and figure in the community's religiouslife. In some lommunilies in Sumatra's Kerinci\ alley region, on the other hand, the forest islargely viewed as a "resource" lo be i KM redand replaced with lucrative edsh-crop mono-(.•ulturo i>l'l"iKs/(/,-v.i-,i (cinnamon) trees. Com-munities in both areas have a long hisU>r\ onthe lands in question, and both have legitimateinterests in influencing decisions about howforesls in their areas an- used. Hut, it would benaive to think that "handing over" the forestslo the cinnamon farmers of Kerinci would leadlo anything (apart from high short-lerm profitsfor siime) other than rapid forest degradation,increased erosion, biodiversity kiss, and defor-estation in the region.

In the I. nited Stales, some lorest communi-ties in northern ("alilornia, Ihe Rocky Mountdinstates, and northern \ e w lingland among otherplaces are trading one monolithic relationshipwilh the surrounding forest (i.e., intensive log-ging) for another (i.e., recreational develop-ment and subdivisions). In either case, iorestfragmentation, biodiversity loss, and decliningwater quality are side effects. Hut in other com-munities around the country, diverse commu-nilv inlerests are now negotiating compromiseslo protect Ihesustainability of surrounding for-est resources. In \lendocino County, California,such discussions led lo.i paikageol measureslo slow forest fragmentation, eslablish systemsof long-term ownership management plan>. re-build forest >toik. .mil restrict acti\ ilies detri-mental to riparian, watershed, and wildlifehabitat quality.1 (Roinm, I1W3» In the Applegale

•ivnli'iiii'il i'ii nrxl fii-ft'1

57

Valley of southwestern Oregon, diverse stake-holders are cooperating to develop broad-based forest management plans and incentivesto sustain public and private forest resources.Such transformations occur only where accessto economic and policy decision-makingprocesses controlled principally by outsidegovernment and corporate interests is openedto the community at large. (Honadle, 1993;Rivlin, 1993; Romm, 1993)

2. Are the community's economic relationshipsto the forest direct or mediated by outside organiza-tions? In some communities, local individualsor institutions directly manage economic rela-tionships with the forest. Examples includesubsistence relationships, such as hunting forgame that is directly consumed, or small- tomedium-scale market activities, such as a localsawmill that draws logs from forests in the im-mediate area. In other cases, a community'seconomic relationship is not so much with theforest as it is with an intermediary organiza-tion from outside of the community, such as alarge commercial firm or development project.

Not every community with direct economicrelationships with the forest will manage itsustainably—witness the cinnamon farmersnoted above. But most such communities havethe capacity to change their management ap-proach if they choose or can be persuaded todo so. In contrast, a community workingthrough an intermediary—say an externally-based logging firm—can't easily change thefirm's relationship to the forest.

3. Do members of the community, or the com-munity as a whole, possess long-term tenurialrights over forests lands in their area? Where acommunity's members own local forest landsand resources, they tend to take care of themover time. Where they do not own land, butrather, have an interest in, say, the wages gen-erated by logging, their stake in the overalllong-term health of the forest won't be asgreat.

4. To what extent do community members sharea common history, culture, and local social organi-zation that could control forest access and othermanagement functions? Some communities havemore social cohesion and ability to controltheir members and outsiders than others, andsuch cohesion can grow or disintegrate.("Community" becomes a uselessly vague con-cept, for example, when applied equally to anewly established Indonesian logging campand a traditional clan of forest-dwellers.) Somecommunities in the U.S. Pacific Northwestbegan as helter skelter logging camps but haveevolved into effective functional communities.Where members of a settlement have not de-veloped—or have lost—the ability to reasontogether from a common cultural basis and totake effective collective action to direct andcontrol human activities, how can it be ex-pected to take on an active role in sustainableforest management?

The degree of community management andcontrol needed to support forests' sustainabil-ity into the next century will always lie be-tween the poles of giving communities com-plete control to do whatever they wish andallowing government agencies and large com-mercial firms to dictate forest uses strictly fortheir own purposes. Striking the right balancefor a particular forest area and its communitieswill depend in large part on whether policy-makers, environmentalists, and local commu-nities themselves, can get beyond rhetoric andbegin to ask questions such as those posedabove.

1. The negotiations were carried out by acommittee appointed by the county board ofsupervisors. Unfortunately, industrial forestrymembers of the committee withdrew their sup-port for the recommendations at the end of theprocess. Romm suggests this may have hap-pened because the county and state did not doenough to legitimize the trades made withinthe negotiating framework of the committee.(Romm, 1993)

58

Table 3.2. Washington Forest Industry Employment and Income Patterns in 1990.

Forest IndustryLocation

StatewideMetropolitanCounties

Rural CountiesW. Cascades

SkamaniaCowlitzGrays HarborMasonWahkiakumLewisClallamPacificSkagitJeffersonSan JuanIsland

Employment

60,007

31,130

20,570

5137,3544,0391,707

1002,9082,248

647866

905335

% ManufacturingEmployment

16.3

10.7

63.4

94.072.072.282.177.568.681.044.022.111.522.3

7.7

% TotalEmployment

2.8

1.9

12.5

27.621.618.017.515.513.813.011.42.81.81.40.0

Source: Washington State Employment Security (1993,1992a, 1992b).

% TotalWages

3.6

2.3

23.0

30.732.625.925.826.417.630.020.0

5.52.31.00.1

Jan.1993% Unemployment

9.1

7.4

13.6

32.612.519.011.816.014.612.315.714.510.910.87.2

timber towns. Government can also provide low-interest loans and other financial support (lowertax rates, tax credits, infrastructure development,purchases of goods and services, and short-termsubsidies) to encourage individuals to invest innew businesses and economic activities—whetherfurniture production from underutilized treespecies or tourism and recreation. Since privateinvestment capital for small enterprise is scarce inrural areas, government backing for private-sec-tor investments may be crucial to the survival ofmany timber-dependent communities, especiallythose that have relied on old-growth timber sup-plies from public lands.23

Unfortunately, the timing is bad. Both Wash-ington and Oregon have seen growing state gov-ernment budget deficits in recent years. In themost recent biennial budget period, Washingtonstate government deficits increased to nearly $1.2

billion, compared to a total budget of roughly $30billion. (Washington Office of Financial Man-agement, 1991) Oregon, with a $7.5 billion statebudget in 1992, had a deficit of nearly $500 mil-lion. If these deficits continue as expected, statelegislators will be under increasing pressure totrim spending.

County governments, especially those in tim-ber-producing areas, may face even greater finan-cial problems. Although county finances inWashington and Oregon have been generallysound, their financial health has benefited fromthe 25 percent of the gross receipts they receivefrom timber sales on National Forest lands in thecounty, and in 18 Oregon counties from the 50-percent share of gross timber sale revenues fromBureau of Land Management (BLM) lands. (Leeet al., 1991) In 1988, sales from the NationalForests brought in $220 million in revenues for 25

59

Oregon and 18 Washington county governments.In Oregon, ten counties depend on federal timberrevenues for between 25 and 66 percent of theirincome. (See Table 3.3.) In western Oregon, federaltimber receipts from both the National Forestsand BLM lands totaled $235 million in 1990 (Leeet al., 1991), or 22 percent of all county govern-ment expenditures.24 Local governments alsoenjoy revenue from taxes paid by timber indus-tries and from severance taxes paid by privatetimber owners. (Sessions, et al., 1990)

Lowering harvest levels could reduce countyrevenues substantially unless property taxes in-crease or other revenue sources are found. Ac-cording to Lee et al. (1991), implementing plansto protect the northern spotted owl could reducecounty revenues by an average of 23 percent intimber-producing counties west of the Cascades.If so, cut-backs in public health services, law en-forcement, and social services would come at thesame time local governments are grappling withunemployment and economic dislocation.

The federal government, itself deficit-ridden,may be reluctant to increase or alter discretionary

funding of any kind. Already, federal revenue-sharing programs that could compensate localgovernments for lost timber revenues have beendramatically cut during the past decade.

Timber Supply Although second-growth timberhas become increasingly important to the timberindustry, not all firms can use these slimmertrees. Many sawmills produce premium gradeproducts that can be manufactured only from thehuge logs found mainly on public lands. In 1987,some 22 percent of sawmill capacity in westernWashington and Oregon was totally dependenton old-growth and large sawtimber supplies.(Olson, 1988) An additional 45 percent of sawmillcapacity was partially dependent on old-growth.In the wake of the 1991 court injunction, that fig-ure is undoubtedly lower, but opponents of forestpolicy reform continue to make an issue of thisdependence.

Another way to gauge the dependence ofsawmills on public timber is to look at their landholdings. Firms without land depend on publictimber since private supplies are more expensivewhen they can be found at all.25 West of the

Table 3.3. County Government Dependency on Federal Forest Receipts, Western Oregon, 1990.

CurryDouglasJosephineKlamathJacksonLinnLaneCoosTillamookColumbia

TOTAL

Source: Adapted from Lee et al.

TotalExpenditures

$15,848,93578,258,93130,528,07638,263,66549,780,18936,278,086

141,716,01924,735,99213,785,2869,233,057

424,346,236

(1991)

Federal ForestReceipts

$10,432,50350,365,81316,757,41619,412,30623,716,08914,399,10451,366,3758,143,3223,604,9322,264,169

200,462,029

Federal ForestReceipts as % of

County Expenditures

66%64%55%51%48%40%36%33%26%25%

47%

60

Cascades, up to 35 percent of the sawmill capac-ity belongs to landless firms. (Olson, 1988) Thesemills will be hard hit by old-growth protectionand other reforms that reduce the public landharvest unless new policy breaks help them makethe switch to second-growth timber. Then too,many smaller companies lack the capital neededto invest in new efficient milling technologies thatwould enable them to process smaller logsprofitably.

Some Washington counties are particularly de-pendent on sawtimber from National Forest tim-

berlands. (See Table 3.4.) In several western coun-ties, at least 30 percent of the sawtimber volumecomes from National Forest lands, and the figureis generally higher in eastern counties. Similar pat-terns exist in Oregon. Considering that three quar-ters of forest-industry sawtimber is less than 50years old (Adams and Haynes, 1990)—too youngto harvest—actual dependency on federal timbermay be even more pronounced in some areas.

The current entrenched local political opposi-tion to forest policy reforms targeted at publiclands is only natural. Forest policy reform efforts

Table 3.4. Washington Sawtimber Volume by Timberland Ownership

Location TotalVolume

(million board feet)

Statewide

WestEast

Western Counties

239,989

168,66071,239

NationalForests

37.2

35.441.5

Percent Sawtimber VolumeOtherPublic

24.3

21.031.9

With highest volumes (57 percent of volume west of Cascades)

SkamaniaGrays HarborLewisSnohomishClallamSkagit

Eastern Counties

21,98718,60019,40913,70311,19311,129

86.712.746.346.736.941.3

7.219.112.820.431.427.4

With highest volumes (79 percent of volume east of Cascades)

OkanoganYakimaFerryStevensKittitasChelan

12,74211,0578,5428,2488,0147,840

Source: MacLean et al. (1992); Bassett and

41.537.133.618.552.377.0

45.756.552.832.5

9.04.3

Oswald (1983)

ForestIndustry

23.8

28.014.0

3.052.727.515.122.018.8

3.95.35.1

17.534.012.2

OtherPrivate

14.7

15.612.6

3.115.513.417.79.7

12.5

8.91.18.5

31.54.76.5

61

now focus on public forests, and nearly all re-forms would result in substantially lower har-vests. At present, timber industries and workersremain skeptical of the local economic benefits abroader, more sustainable forest economy wouldprovide.

Consumer Preferences Adopting more sustain-able forest-management policies and practiceswill probably raise consumer prices for woodproducts and perhaps for recreation and manyother non-timber forest resources as well. Con-sumers have enjoyed low prices for wood prod-ucts26 because harvests are heavy and prices donot reflect the costs that such harvest levels im-pose on other parts of the economy and on theenvironment. As a result, the consumption ofwood products from lumber to paper continuesat levels that are unsustainable: many resourcesfound in Northwest forests—from salmon andclean water to non-consumptive recreational pur-suits and biodiversity—simply can't last attoday's use rates. Market demand for sustainablyproduced wood products could become an im-portant incentive for reforming forest manage-ment in many parts of the world (Johnson andCabarle, 1993), including the Pacific Northwest.Although various programs to certify sustainablyproduced wood products are emerging in theUnited States, consumers currently have scantopportunity to "vote with their pocket books."Moreover, it is unclear whether the market forsuch products is large enough to influenceproducers.

Toward Sustainable andEquitable Forest Economies

Four key conclusions arise from this analysis ofthe forest economies of Indonesia and the UnitedStates. The first is that most of the profoundchanges that forest economies are experiencingare not affected one way or another by policy in-terventions intended to conserve forest resourcesand ecological services. In the U.S. Pacific North-west, overharvesting, technological changes, in-creasing production capacity in the southernUnited States, and large increases in log exports

account for the forest industry's declining impor-tance. In Indonesia, the transition is less far along,but just as inevitable: timber production from nat-ural forests is headed toward exhaustion if currentlogging rates and practices are maintained. Ab-sent policy changes, the likely fate of Indonesia'sforests and forestry sector can be seen in the mir-ror of neighboring Thailand, which has become atimber importer, the Philippines, which has dev-astated almost all of its forests, and of Sabah andSarawak (Malaysian Borneo), where commercialtimber will be exhausted in the coming decade orso at current cutting rates (World Bank 1991).

However inevitable these transitions, forestpolicy will influence the nature, speed, and costsof transition, as well as the distribution of thosecosts. If the growing consensus in favor of in-creased protection of "new" values in the forest—such as biodiversity, the rights of forest-dwellingcommunities, or the protection of hydrologicalfunctions—solidifies, transition costs will un-doubtedly increase, and the burden of these costsmay hit some actors or communities particularlyhard. Saving endangered species and threatenedecosystems requires immediate steps to protectforest systems, such as the old growth of the U.S.Northwest and the remaining lowland rainforestsof Sumatra and Kalimantan, but such action willcost some timber-dependent communities and in-dustries jobs and revenues. To ensure that thebenefits and burdens of an unstoppable transitionare equitably shared is the only recourse.

Second, economic policies past and presenthave made many towns and counties dependenton unsustainably heavy timber harvests. In Indo-nesia, a large forest-products industry created bypolicy interventions in the 1980s has come to de-pend on cheap timber supplies, in part to capital-ize timber firms' diversification into other sectors;and the sheer size, concentration, and profitabil-ity of this vertically-integrated industry has madeit a powerful political player in blocking policychange. In the United States, some rural areas,particularly in the Pacific Northwest, depend onlogging and the forest industry for over a third ofall employment and over half of all local govern-ment revenues. The economic survival of many

62

small landless firms depends on the availabilityof large sawlogs from public forests. Meanwhile,larger firms with their own timberlands exportedtheir own logs profitably and used the relativelycheaper public timber supplies to prolong theprofitable life of aging processing facilities thatare increasingly uncompetitive with forestry-in-vestment opportunities in the South. As a result,political pressures to maintain high harvest vol-umes and to resist forest-management reformsare intense.

Third, those who have reaped the economicbenefits of forest exploitation have not paid theattendant costs. In the United States, loggingpractices have been linked to significant losses infisheries production, water quality, and recre-ational opportunities—losses that virtually every-one absorbs. But a few Americans (salmon fisher-men, among them), pay dearly, and the timberindustry pays none of these costs. So far, biodi-versity losses due to forest mis-management inthe Pacific Northwest are probably low, but an in-creasing number of species will face extinction inthe coming decades as natural forest habitats dis-appear. Others will diminish in number. Logginghas contributed significantly to the decline ofsalmon, trout, sturgeon, and other fisheries, caus-ing millions of dollars in annual economic losses.It could also wipe out the Pacific Yew (the sourceof the life-saving drug Taxol) and other still-undiscovered pharmaceuticals.

Meanwhile in Indonesia, the uncounted costsof logging—such as erosion of the resource basefor millions of forest-dependent rural people, theloss of biodiversity, and the degradation of watersupplies and systems—have been visited oncommunities in or near production forests, onpublic agencies that must pay for erosion controland other losses of ecological function, and oncitizens at large, who are rapidly losing the eco-nomic benefits of the country's great biologicalwealth.

Finally, formal and de facto systems of collect-ing economic rent from logging and forest indus-tries are extremely inefficient, allowing the pri-vate sector to reap excessive profits at the

expense of the public treasury. In Indonesia, esti-mates of uncollected economic rent on forest ex-ploitation in the late 1980s range from 70 to 83percent, and only a small proportion of the rentcollected through government fees and royaltiesis reinvested in sustaining the natural forests.

In the United States, actual and potential rentsare more closely aligned, but timber extraction onfederal lands is highly subsidized in other ways.The costs of timber management and timber-salepreparation exceed sale revenues in six of eightNational Forest regions. Moreover, many of thesebelow-cost timber sales take place in environmen-tally sensitive areas where lasting environmentaldamage is the typical legacy. In the Northwest,timber sales generate large revenue surpluses forthe U.S. Forest Service, but the agency subsidizesprivate timber harvesting by paying for road con-struction and reforestation. As for other forest re-sources, such as recreation, the Forest Servicecaptures only a minute fraction of potential eco-nomic rents.

Unless these four structural issues are squarelyaddressed, neither the United States nor Indone-sia is likely to enter the coming century with ahealthy and productive forest estate that providesthe broad range of goods and services both soci-eties now require. Nor will the costs and benefitsof forest management and exploitation be equi-tably distributed. If either country is to make sus-tainable forestry a reality, significant policychanges will be necessary, beginning with the re-form of policy-making itself.

Notes

1. Roosevelt stated that the goal of forest policywas "not to preserve the forests because they arebeautiful, though that is good, nor because theyare refuges for the wild creatures of the wilder-ness, although that, too, is good in itself; but theprimary object of our forest policy.. .is the makingof prosperous homes... A forest which contributesnothing to the wealth, progress, or safety of thecountry is of no interest to the government andshould be of little interest to the forester."

63

Theodore Roosevelt address ("Forestry and For-esters") to the Society of American Foresters,March 26,1903, as quoted in Clary (1986).

2. A half dozen senators from western statesobjected that the proposal put an undue burdenon their states and threatened to withhold sup-port from the administration's economic plan.Clinton withdrew the proposal from the eco-nomic program and promised to pursue the endof below-cost sales separately (which environ-mentalists charged would never get past timberindustry lobbyists and western senators).

3. These lower-cost production areas are main-ly in the southern U.S. and Canada.

4. Olson (1988) cites a 13 percent decrease in di-rect timber industry employment in Oregon andWashington between 1980 and 1986 while outputclimbed to record levels, based on data from theU.S. Department of Commerce, Oregon State De-partment of Human Resources, and WashingtonState Department of Employment Security.

5. Compared to late 1980s timber industry em-ployment, Sessions et al. (1990) forecast a loss of6,200 timber industry jobs in Oregon by 1995even without increased environmental protection.Approximately 40 percent of the job loss is due totechnological change and 60 percent due to a re-turn to sustained-yield harvest levels (harvestsduring the late 1980s were above sustained-yieldlevels). However, an increase in finished woodproducts manufacturing (e.g., cabinet making,moulding and millwork, etc.) is forecast to in-crease by 2,000 jobs, resulting in a 4,200 net jobloss in the forestry sector by 1995.

6. Log exports from federal lands were prohib-ited in 1969, and log exports from Washingtonstate lands ended in 1992. A long-standing log ex-port embargo from Oregon state lands was re-newed in a voter referendum in 1989 by a 9:1margin. (Flora, 1990) All log exports from Oregonand Washington now come from private lands.

7. Most other countries that are exporters ofsoftwood, such as Canada, restrict log exports or

are small exporters in comparison to the UnitedStates.

8. The loss of federal tax revenue may not be agood argument for maintaining log exports, how-ever, since log exporters receive generous tax cred-its estimated at $100 million annually for exports toforeign subsidiaries according to several membersof Congress (including Representatives Kotpetskiand Wyden of Oregon, and Senator Baucus ofMontana) who introduced legislation in 1993 toeliminate the tax breaks or switch the tax breaks tosupport reforestation rather than log exports.

9. Although labor costs in the Northwest areabout 25 percent higher than in the South, higherproductivity levels in the Northwest mean thatlabor costs are competitive with those in the South.

10. For example, salmon runs have been ad-versely affected by the construction of roads,dams, irrigation canals, and urban developmentin addition to the impacts directly caused by log-ging operations.

11. Including real and personal property taxespaid by the timber industries, severance taxespaid by private timber owners, and revenueshares from timber harvested on U.S. Forest Ser-vice, BLM, state forest, and county forest lands.

12. These corporations included Weyerhauser,Georgia Pacific, Champion, Louisiana Pacific, andWillamette Industries.

13. Wildlife-related recreation includes hunt-ing, fishing, and non-consumptive activities suchas birdwatching and wildlife photography.

14. Of which approximately 20 percent was forhunting, fishing, hiking, and various forms ofnon-consumptive fish and wildlife viewing activ-ities. The other 80 percent included camping andpicnicking in developed sites, skiing, motorizedtravel sightseeing, and visits to resorts, cabins,and organized camps. Many of these visitors, ofcourse, also participated in recreational activitiesthat are closely associated with diverse naturalforest ecosystems.

64

15. In other parts of the country, recreation bene-fits exceed timber benefits, by nearly three to one insome Rocky Mountain areas, and they exceed tim-ber values when the aggregate values for nationalforest resources are compared. (O'Toole, 1988)

16. Fish, such as salmon and steelhead trout,that spawn in freshwater rivers and streams andmigrate to the ocean for the adult phase of theirlife cycle.

17. Taxol is a compound extracted from thebark of the Pacific yew, a small tree associatedwith late successional and old growth forests inthe Pacific Northwest. Taxol is proving effectiveagainst breast, ovarian, and possibly other cancers.Yet the Pacific Yew was for decades treated as a"weed tree" that was piled and burned followinglogging in late successional forests. Althoughchemical synthesis is likely within the next year ortwo (and cultivated Pacific Yew became availablein commercial quantities in mid-1993), those de-pending on taxol have thus far had to rely on sup-plies found in late successional forests.

18. Forest industry employment here refers tojobs in forestry, lumber and wood products man-ufacturing, and in pulp and paper manufacturing.

19. Based on Washington labor statistics,(Washington State Employment Security, 1992a),most forest industry jobs in the region are in lum-ber and wood products manufacturing (46 per-cent), and pulp and paper products manufactur-ing (30 percent). The remaining jobs are inlogging (16 percent), and nurseries, reforestation,and forest management (4 percent).

20. Even within some urban and suburbancounties, the timber industry is much more im-portant than it is on a regional basis. In ClarkCounty, Washington (Vancouver, WA), forest in-dustry employment accounts for 6.5 percent of alljobs, and 30 percent of manufacturing sector jobs.

21. These counties include: Clallam, Cowlitz,Grays Harbor, Island, Jefferson, Lewis, Mason, Pa-cific, San Juan, Skagit, Skamania, and Wahkiakum.

22. Sample and LeMaster (1992) have ana-lyzed several studies (Anderson and Olson, 1991;Gordon et al., 1991; USDA, 1991; Beuter, 1990)forecasting job losses due to old-growth forestconservation. The estimates in these studiesrange between 15,000 and over 100,000 jobs, mostof the difference being due to the use of differentmultiplier factors for indirect and inducedemployment that depends on direct timber in-dustry employment. After reconciling assump-tions underlying the estimates, they show thatthe four studies indicate a decline in timber-re-lated employment of between 19,000 and 34,000between 1990 and 2001. Harvest levels on federallands may fall by 30 to 40 percent during thatsame period due to restricted old-growthharvests.

23. Although there is considerable evidence tosuggest these functions are best left to the privatesector, or government-private sector partner-ships. See Chapter V for further discussion.

24. It should, however, be noted that countygovernment dependencies on federal timber rev-enues may not be as prominent as they appear.For example, average per capita county govern-ment expenditures in counties with large federaltimber revenues in some cases (e.g., Curry andDouglas counties) are double the U.S. average percapita county expenditures (U.S. Department ofCommerce, 1992). Moreover, as income from tim-ber declines, counties will receive federal pay-ments in lieu of taxes (PILT) determined by astandard formula if PILT payments are greaterthan timber receipts.

25. Mainly because owners of private timbercan sell their supplies on the lucrative interna-tional log market, which gives them higher re-turns than the domestic market where large sup-plies of public timber (that can't be exported)depress prices.

26. Seasonal prices do fluctuate dramatically,and there has been upward pressure on woodprices in 1993, which many analysts blame on thetimber stalemate in the Pacific Northwest.

65

IV. The Political Economy of Forest PolicyReform

Two questions must be answered to deter-mine what the underlying problems withforest policy-making are and how to fix

them. First, who benefits from which current for-est policies and how? Second, what structuraland functional aspects of forest policy-makinggive some stakeholders undue influence, perpet-uate unfounded assumptions underlying forestpolicies, and inhibit change?

Answers to these questions differ in Indonesiaand the United States, since the two cultures havedifferent forest policy-making processes that posedifferent obstacles to policy reform. But an over-riding parallel is striking: in both countries, theforest policy-making process itself stands in theway of reform.

Forest Policy-making in Indonesia

Like the rest of the government, Indonesia'sforestry agency is highly centralized, reflectingthe historical struggle of successive regimes tobuild and maintain a cohesive nation out of a far-flung archipelago with hundreds of distinct cul-tural groups and languages, as well as numerousreligious traditions. The Ministry of Forestry, itsregional offices, provincial forestry services, andthe four state-owned forestry corporationstogether employed about 47,000 people in 1989—3,700 in Ministry headquarters, 29,000 at the pro-vincial level, and 14,000 in the four state enter-prises (upwards of 12,000 just at the StateForestry Corporation that manages Java's

forests.) More than 200,000 people work in pri-vate forestry enterprises. (GOI/FAO, 1990 Vol.IV) Within the Forestry Ministry, the DirectorateGeneral for Forest Utilization is the most influen-tial office, with jurisdiction over logging conces-sions and forest industries activities and rev-enues. Numerous regional offices reportingdirectly to the Minister represent the Ministry inthe provinces, and the four parastatal corpora-tions are also basically under the Ministry's con-trol. (See Figure 4.1.)

Three elements influence how the forestry bu-reaucracy makes policy: the nature and functionsof law in Indonesia; conflicting bureaucratic man-agement styles; and the prevailing norms, as-sumptions, and priorities of the forestry profes-sionals who staff that bureaucracy.

The Indonesian Constitution grants control offorest lands and resources to the state, which thecurrent government interprets as exclusive au-thority over all aspects of human activity withinany territories classified as state forest lands."The Rule of Law," heralded by the governmentas the ultimate justification of its political author-ity, and as the governing principle of public life,means orderly obedience to the state, whosepower flows both from the Constitution and fromPancasila, Indonesia's official five-point state ide-ology. In theory, laws and regulations are certainin meaning and form part of a coherent wholethat orders the state apparatus itself, social orga-nization and action, and the relationship betweenstate and society. But Indonesian law also wears

67

Figure 4.1. Indonesian Ministry of Forestry

Ministry ofForestry

LInspectorate-General

Secretariat

Inspectorate of

Personnel Finance andInfrastructure

GeneralAffairs

Develop-ment

Directorate Generalof ForestUtilization

Secretariat

Directorate ofForest UtilizationPlanning

Directorate ofForest ProductsHarvesting

Directorate ofForest ProductsUtilization

Directorate ofForest ProductsDistribution

TechnicalImplementation

X

Directorate Generalof Reforestationand LandRehabilitation

Secretariat General

Ministry of Finance

(owns 100% of BUMNs)

State-owned Enterprises

(BUMNs)

Perum Perhutani

PT Inhutani I, II, HI*

Planning Personnel Finance

iBureau of

Laws andOrganization

PublicRelations

GeneralAffairs

Foreign Coopr.and Investment

1

Directorate Generalof Forest Protectionand NatureConservation

Directorate Generalof Forest Inventoryand LandusePlanning

Secretariat

Directorate ofIndustrial ForestPlantations

Directorate ofSoilConservation

Directorate ofReforestation &Re greening

Directorate ofExtension Services

TechnicalImplementationUnits

I

Secretariat

Directorate ofForestProtection

Directorate ofNatureConservation

Directorate ofNational Parks &Recreation Forests

Directorate ofExtensionServices

Secretariat

Directorate ofForestInventory

Directorate ofForestLanduse

Directorate ofForest Gazetting& Mapping

TechnicalImplementationUnits

Line co-ordination

TechnicalImplementationUnits

Agency forForestry Researchand Development

Secretariat

Forest Researchand Development

Forest ProductsResearch andDevelopmentCentre

27 RegionalForestry Offices(KanwilKehutanan)

TechnicalImplementationUnits(Research Institutes)

J

HCentre for Educationand Training ofGovt. ForestryPersonnel

Centre of ForestryEducation andTraining for thePrivate Sector

Ministry ofHome Affairs

Governor ofProvince

Provincial ForestryServices (DinasKehutanan in24 Provincesexcept inJawa.)

• Co-ordinating function

Source: GOI/Ministry of Forestry, 1991. Decree No. 116/Kpte-II/1989 Tgl. 27 February 1989 and Decree No.388/Kpte-II/90;Tgl. 26 July 1990

* The Government has plans to establish five new state-owned enterprises, Inhutani IV to VIII

68

another face—the empirical reality of law-as-rules, a complex, overlapping, and constantlychanging body of laws, decrees, and administra-tive regulations that are often applied erratically.Forests and forest policy are thus governed byboth an unassailable core of exclusive and com-prehensive authority held by the state, and a vastbody of indeterminate and often-contradictorylaws and regulations that delegate de facto author-ity over many aspects of forest policy and man-agement to the private sector, while effectivelyabdicating authority altogether in other respects.

At the same time, the Indonesian bureaucracyvacillates between following a rational bureau-cratic management ideal and operating throughpersonalized "patron-client" relationships. Underthe bureaucratic ideal, a formal hierarchy coordi-nates action for specific purposes, law is centralto the system, and experts make, interpret, andcarry out laws and regulations within a clearlydefined mandate. In practice, the bureaucracydoes not live up to this ideal, though it does pow-erfully influence assumptions and discourse re-lated to how forest policies are and should bemade.

The numerous forestry sector reviews and ac-tion plans produced in recent years (e.g., GOI,1991; GOI/FAO, 1990) describe the bureaucraticideal and merely hint at day-to-day realities andthe bureaucratic undertow of "patron-client" au-thority relationships,

.. .a system of relatively autonomous, highlypersonal groupings, bound together by adiffuse sense of personal reciprocity foundbetween patron and client. Each group orcircle is composed of a set of unequal butreciprocal obligations between leaders andfollowers... These diffuse, personal, face-to-face enduring noncontractual relationshipsare the primary social cement integratingIndonesian organizations to the limited de-gree that they are integrated at all. (Jackson,1978)

These relationships function within the vast andcomplex structure of forestry laws and regulations

and are shaped by it. The formal rules and regu-lations are by no means a facade, but on the otherhand, many important deals and decisions aremade in the back room. The ideal bureaucracy isthus constantly at odds with the patron-clientsystem, and each influences the other.

The third key element in forest policy-making,besides law and bureaucracy, is the "corporateculture" of Indonesian foresters and forestry in-stitutions, a culture characterized by:

• A highly centralized, pyramidal hierarchyand process for making decisions about pro-jects and expenditures;

• Strong reliance on traditionally trained pro-fessional foresters in top management posi-tions;

• A close relationship between the forestryservice and large-scale user industries;

• An urban and upper-middle class biasamong policy-level foresters;

• A strong colonial forestry tradition andbackground;

• Patterns of forestry sector development as-sistance that are technically based and exe-cuted in cooperation with the forestry bu-reaucracy and that tend to reinforce existingstructures and ways of doing things (Dou-glas, 1985); and

• The belief that good forest managementmeans creating legally-gazetted forest re-serves managed by a professional forestryservice comitted to multiple-use, sustained-yield practices that balance demands for in-dustrial timber production with the mainte-nance of basic environmental services.

• The concomitant belief that the land-usepractices of local people usually obstructthese objectives, forcing the forest serviceinto a territorial or custodial role in limitinglocal access and use. (Wiersum, 1987)

69

In the field, the formal vision and structures ofstate-led forest management run up against seri-ous limitations and contradictions. First, the legalmandate of the Ministry dwarfs its capacity tomanage, or even monitor, forestry. There is onlyone professional staff per 127,100 hectares of pro-duction and protection forest, for example, andone per 111,000 hectares of park and reserve for-est, in the forests, except on Java. In East Kali-mantan, the ratio of staff to hectares of produc-tion and protection forests is 1:314,000. (GOI/FAO, 1990, Vol. IV)

Second, the large body of forestry laws and reg-ulations are complex and, in some cases, self-con-tradictory, but there is no formal process for ap-pealing a bureaucratic decision and obtaining anauthoritative interpretation that is binding on thebureaucracy. Third, government policies assumethat public officials hold sway over forest manage-ment, but most officially-recognized personnel inthe forestry sector work for private firms, and themillions of local people who practice forest man-agement on a daily basis go unrecognized—or arecondemned as interlopers—in the official policyenvironment. Fourth, Forestry Ministry policy re-lies heavily on technical approaches to silvicultureand criminal-law approaches to enforcement, butthe conflicts between local people living in andaround forests and agents of government policiesare not easily amenable to either approach.

Resolving these contradictions will require sig-nificant policy changes accompanied by changesin the processes and institutions that set policypriorities and make decisions. In this respect, thechallenges therefore range beyond the forestrysector per se to cross-cutting issues of public par-ticipation, institutional accountability, and othergeneral issues of public administration.

Who are the Dominant Stakeholders?

The three major groups of stakeholders whobenefit most from Indonesia's current forest poli-cies are also the key players in forest policy-mak-ing. First, the commercial firms that dominatetimber production and processing have reapedimmense benefits from current policies. Second,

"bureaucratic capitalists" (Shin 1989) within gov-ernment form mutually beneficial business rela-tionships with private firms in the forestry sector.Third, members of the state forestry bureaucracyitself have authority over nearly three quarters ofthe nation's land area.

The benefits that a relatively limited number ofprivate enterprises receive from the forest policyas currently structured are enormous, as dis-cussed in Chapter III. Private profits are huge,and any incentives for efficient wood use under-mined. (World Bank, 1993) Lifting export restric-tions and increasing rent capture could, theWorld Bank estimates, generate up to $2 billion ayear in additional forestry fees. (Schwarz, 1992a)Ostensibly, something approximating that sum iscurrently accruing to private firms.

In Indonesia, close links between political andeconomic power have characterized economic de-velopment for 25 years. Forestry revenues havebeen both a major source of hard currency for thestate treasury from the late 1960s on, and majorsources of financing for political and militaryelites. Hundreds of concessions (HPHs) appearedin the late 1960s, many linked to various militaryorganizations, including three regional militarycommands in Kalimantan. (Shin, 1989) A 1971study (Manning, 1971) noted that over one mil-lion hectares of concession area had been given tofive paramilitary organizations, representing 10percent of the total forest area set aside for pro-duction and 20 percent of that in production atthe time. Numerous concession-holders also clus-tered around other centers of power in govern-ment. Unlike private businesses that simply havegood political connections, many of these compa-nies were bureaucratic capitalists, not serving theinterests of individual capitalists so much as"providing] collective benefits for the politicalfigure of the state institution with which it is as-sociated." (Shin, 1989)

After the logging and log-export boom endedin the early 1980s, the prevalence of bureaucraticcapitalist enterprises declined somewhat in theforestry sector, though the importance of politi-cal-economic relationships did not. Today, many

70

powerful civilian or military political figures, ortheir family members, are partners, silent or other-wise, in ventures with the country's large businessconglomerates. According to a 1990 survey on thetimber industry, about 25 "timber kings" in effectcontrolled the country's forestry sector. In 1988,aggregate sales by the ten largest of these con-glomerates exceeded $1.5 billion, mostly from tim-ber-related businesses. (Warta Ekonomi, 1990) Anumber of these same conglomerates are expectedto dominate the expanding pulp and paper indus-try soon too. (Friedland, 1991) (See Box 4.1.)

According to the Far Eastern Economic Review,Indonesia's most visible and outspoken "timberking" and chair of both the umbrella trade associ-ation of forestry producers and various chambersthat set policy for plywood companies, sawn-tim-ber mills, and producers of rattan and other forestproducts—"is unquestionably the strongestplayer in setting Indonesia's forest policies..."While forestry policy is nominally under the di-rection of the Ministry of Forestry, trade associa-tions such as Apkindo [the plywood groupheaded by this timber baron, Bob Hasan] and in-dividual businessmen have enormous influence.Apkindo, for example, tells mill-owners howmuch they will produce, where they will export,and at what price. (Schwarz, 1992b; 1992c)

Important stakeholders with a lower profilethan the timber conglomerates are the nearly50,000 members of the forestry bureaucracy itself.Their jobs and power both depend on the Fores-try Ministry retaining sole legal authority overmost of the nation's territory. In addition, it iswidely believed—though difficult to documentbeyond a few well-publicized cases—that someofficials collect various unofficial fees, kickbacks,and shares in businesses from concession-hold-ers, contractors, and others who require officialaction of some kind to pursue their businesses.(Clad, 1991; Shin, 1989)

While it might be expected that local communi-ties would support the forest policy status quo ifmany jobs are at stake, as they have in the UnitedStates, this is not the case in Indonesia, where con-tracted labor has been drawn from geographically

dispersed areas, timber-extraction activities havein many places restricted net income and employ-ment opportunities for local communities by cut-ting off access to a range of forest products, andindependent labor activity is generally discour-aged by the government. (Aznam, 1992) Ac-cordingly, timber industry spokespersons—notworkers—raise the issue of "jobs" in defense ofexisting policies, and the details of wages andworking conditions in logging and forest indus-tries are not part of the public policy debate.

Neither the businessmen nor the forestry offi-cials who benefit from current forest policy ar-rangements have much personal incentive toworry about who gets hurt by these policies andhow. Since both groups are urban, erosion, land-slides, decline in rural water supply and quality,or loss of direct access to forest products does notaffect them immediately. Some businessmen donot even worry much about exhausting Indo-nesia's timber since they are part of conglomer-ates diversified into many industries. And manyforestry officials aren't overly concerned eitherbecause Indonesia's plans to develop industrialtimber plantations and pulp-and-paper industriesin the next several decades include them.

That said, many in government and the privatesector are concerned about the declining state ofIndonesia's forests and the social inequities andconflicts that current policies are bringing about.With the blessing of international and nationalenvironmental groups and of internationaldonors facing their own environmental lobbies athome, the Ministry of State for Environment andthe National Development Planning Board con-sider current forestry policies environmentallyunsustainable and believe they will entrain direconsequences in the medium term if not revised.Economists in the Ministry of Finance—sup-ported by the World Bank—believe that currentpolicies allow the private sector to collect toomuch economic rent from the forests, at the ex-pense of the government—a belief some domesticenvironmental non-governmental groups share.(WALHI, 1991) Progressive private forestryfirms—some motivated by international pres-sures to halt rainforest destruction—have also

71

Box 4.1. I'rajogo I'angeslu, Indonesia's largest "I'imlvr Operator

I'rajogo Pangestu, presidenl of Indonesia'sKirito I'acilic (.!roup, reportedly control-, morenl I he world's tropical rainforests than anyother indh idual. Harito holds concession rightsover v:~ million hci tare1-across Indonesia andhas built the world's largest ph wood opera-lion. with export', ol !i2.^ billion between ll»S7and NlH. Reliable linancial inlorm.ition on theten companies that make up Barilo's wood em-pire is hard to obtain, but 77.v 1'iir I'.n-tiTii I i<'-ai'Hiii' Mi1.•/:•.•(' estimates the lol.il value ol thecom essions .ind .lssini.iteo! wooii-produclion

.it "TO billion to hih billion.

Horn the son ot .1 rubber farmer in K.ili-11u111l.n1, I'r.ijogo ro'.e quickly during the 'Yow-bov" d.i\s ol' Kiilini.inlcin'^ timber boom in the|47(K when he forged fin.inii.il ri'l.iLioiiship>wilh J.ip.ineM1 v.omp.inies lo create the Hjajanti(Iroup, then the country's l.irge^l limber com-pan\. In |47f>, he obtained a small concessionon his iiwn and parlayed his l.ipanese connec-tion^ inlo lapital and logging equipment.When the prospect of Indonesia's ]*->S( 1 loo

export ban sent raw wood price> into a tail-spin. I'rajogo bought more than 4l)0.(Whectare--of concession-, from tinancially dis-tressed lompanies. With the continuing helpolhis lap.inese partner-., I'rajogo built do/en.s ofplywood laclories, I'u.Mher expanded his con-cession holdings, and diversified inlo sugarand oil-palm planlalioiis, banking, real estate,and petrochemicals. Prajogo's plans for the|W(is include a s[.S-billion plant to manufai.-Inre oil-fins- (the precursor maleriaK for pl.islk)and a ^1.2-biIlion pulp-.md-paper f.uilily com-plele wilh a 300.01 )(t-heclare timber e.slate.

I'rajogo translated his vast holdings inloconsiderable clout in forest policy-making.While mosl oilier prominent Indonesian busi-nessmen have Used Iheir political connectionsto amass ueallh, I'rajogo "was a capitalist be-fore he was a crony," according to a lellowbusinessman. Apart from the contributions lluilI'rajogo makes to national development plansby virtue ot being one of the biggest employersin rural Indonesia he is aKo believed lo be

made a long-term commitment to maintainingthe country's natural production forests throughinnovative management.

Sustainable forestry also finds advocatesamong strategic thinkers in government and themilitary who worry about the potential for socialunrest as public distaste for the great concentra-tions of wealth held by the forestry conglomer-ates grows, along with conflict over the use offorest lands by expanding forest industries. Thisgroup also rightly fears ethnic tensions: eight ofthe ten largest forestry sector conglomerates areheaded by ethnic Chinese magnates—frequenttargets of popular resentment and occasional at-tacks throughout Indonesia.1

Although these four groups are growing andtheir agendas for forest policy reform are con-verging, a serious high-level debate on alternativevisions and models for the country's forests hasbarely begun. The two-year process leading to thepromulgation of the Indonesian Forestry ActionProgramme (IFAP) (GOI, 1991) was dominatedby debates over what forestry projects to proposeto international donors (and which parts of thebureaucracy would control them). Only minorand marginal changes in the existing system weredebated. At the February 1992 Roundtable meet-ing on the IFAP, one forestry official surprisedthe assembled donors, policy-makers, and NGOswith the comment that "this is not the place todiscuss forestry policy." (Barber, 1992)

oiH- of I wo businessmen who covered KinkDul.i's IH4H-4] los-oi M20 million in foreignexchange.

A M j n . l i S. [ W l m e m o obta ined by tin.1 l\ir

l.ii<!cni I'ii'iu'iiiic liiiirw p r o v i d e s a r a r e i n s i g h tinlo how those .it Llit' top of Indonesia's limberindustry influence policv divisions. The mi'mo,Irom Pr.ijogo lo PresidenL Suharto, asks lor as-

in gelling the Minister of I'oreslry loup paperwork and financing for the in-

limber estate thai will supply Ihe SI.2-billion pulp-and-paper mill mentioned above.On Ihe memo, the President wrote lo Ihe Minis-ter lh.it he should fulfill all ol Prajogo's re-quests and told Ihe .Minister lo contact iheTransmigration Minister lo recruit emigrantsfrom |,n\i for Ihe projeil. I5y May 11W], IVdjogoh.id reiei\ed a liiense for a .^iliU'lM'-litvUire tim-ber eslale in ti joint venture with .1 sl.iie-char-lered iorestrv I'omp.inv ••••iKVoming the luimlvrone lompanv in timbi-r plantations overnighland plans to obtain financing fur the mill unn-ple\ were proceeding smoolhly.

such high-level backing, IVajogo r.mMou\ of the Minislrv o\ l:ore-try in Inly 1VW],when the Minister lined H.irito Pacific over^^million for logging \ iolalioiis on a K.ilim.mlanconcession. H.irito relused to pav. howewr,din! Ihe Ministrv drupped the nialter.

In I W , IV.ijogo took Barito I'acilic Timberpublit on the laLirL.i Slock exchange, overnightbecoming ils single largest component ,il 12 per-cent ol Ihe 1-Nchange's index weighting. While acoalition ol Indonesian and overseas environ-mental groups began a campaign lo urge in-\estors not lo buy Ihecompanv's slock, the lureof Ihe earnings that the worlds largest inlegratedplywood company is able lo make in Indonesia'slimber eionomy was enough to ensure lh.it thestock issue was rapidly oversubscribed. In re-sponse to environmentalists' protests. IVajogotold luilonc-i.m Ru<inr<> WWklu lhal "Thev lalknonsense. Their actions are irresponsible."

Si'i/m1-..- Indoiii^i-.m /lif.-w'Schw.ii/and I'riedland,

IViV/Wi/

In this setting, innovation is difficult, and onlythose with specialized knowledge or political rela-tionships have any real power. Until the laws gov-erning forestry are simplified and rationalized, fullpublic participation becomes the norm, and mis-taken ideas about forest management are ferretedout of government—all through open public de-bate—it will be difficult to bring about the substan-tive policy reforms that could set Indonesian forestpolicy on a more sustainable footing. (See Box 4.2.)

Public Participation and Access toInformation

Apart from weaknesses in the legal and regu-latory system, the norms and mechanisms

governing public participation also hinderchange in Indonesia's forest policy-making sys-tem. Both the direct participation of local commu-nities in policy and project decisions that affecttheir vicinities and the participation of non-gov-ernmental organizations (NGOs) in policy dia-logues and decisions at the central and provinciallevels of government are inadequate.

In general, Jakarta policy-makers view ruralcommunities and societies as relatively backwardand ignorant—ripe for a state-led transformationinto more modern, technologically- and market-oriented patterns of agriculture, settlement, socialorganization, and industry. This developmentprogram reflects government's desire to increase

73

Box 4.2. Indonesia's Legal and Regulatory Process

The Constitution of 1945, Indonesia's su-preme source of law, can be implemented inthree ways: by Decree of the People's Consul-tative Assembly, by Statute, and by PresidentialDecision. Statutes, such as the Basic ForestryLaw of 1967, are implemented through govern-ment regulations signed by the President andpromulgated by the State Secretariat. Below thegovernment regulations are the ministerial de-cisions [Surat Keputusan Menteri-SK] imple-menting provisions for higher orders of lawand regulation. An article in a Statute or Gov-ernment Regulation may, for example, establisha general principle or policy, but delegate thepromulgation of implementing regulations to aMinister, whose Ministry then drafts a detailedSK. Ministers can also issue SKs on their own,by virtue of their responsibility for running theMinistry. In turn, a Ministerial SK may delegatespecific regulatory authority to the Minister'sDirector Generals, who then issue their ownSKs-—typically, detailed documents on the pro-cedures and internal administrative require-ments for carrying out one regulation oranother.

Within the Ministry, draft SKs are usuallyprepared by technical staff with help from therelevant Directorate General's Legal Staff or theDepartment's overall Law and OrganizationBureau within the Secretariat General. Thedraft SK is then sent up to the Director Generalor Minister, depending on who is issuing it.When the SK in question involves the interestsof more than one Directorate or DirectorateGeneral, an internal team is formed to providea vehicle for coordination. Where other govern-ment Departments or Agencies may be affectedor involved, an inter-departmental team is setup. In some cases, inter-departmental efforts re-sult in a Joint SK involving two or more Minis-ters. Usually, at official meetings of these coor-dination teams, agreements hammered outearlier in informal discussions are formalized.Some Provincial regulations also bear onforestry policy, but these are generally of a de-rivative and technical nature.

Coordination in rule-making is intermittentat best, and SKs, government regulations, andeven basic laws often overlap and contradict

political integration and control at the local level.The primary political thrust of New Order devel-opment policies in rural areas over the past 25years has thus been to depoliticize the villages inthe hope of making them more amenable to statepolitical control and to the delivery of such ser-vices as education and healthcare. (Barber, 1989)

At the same time, officials are well aware thatrural development activities typically fail if localpeople don't lend at least passive support, in ex-change for which they must receive some benefitsfrom development. Donor agencies have alsourged "increased community participation" onthe government in many contexts, both becausethey believe that community support is essential

to success and because it is in line with the West-ern political traditions that influence the officialsthemselves and the non-governmental groups intheir home countries that scrutinize their activi-ties abroad.

As a result of this uneasy balance in theforestry sector, many official policy documentsextol the virtues of "participation," even whileexisting laws and policies severely limit themeaning of the term as applied. The IndonesianForestry Action Programme, for example, arguesthat "there is a need for transforming the tradi-tional biological-cum-financial approach inforestry to a more broadly-based socio-economicapproach in order to support locally sustainable

74

i\kh oilier. Compilations ol" IntWrv regulationsare publislii'd sporadically ((iOI, ll»7li I W ) . Kitthere is no -\-^ti-ni.iliv. process for cataloguingregulations or determining to what extenta nowregulation voids .111 old one, and laws are nol in-dexed or cross-ivlerencod. As ,1 result, Indonesiahas amassed more than I .Sdl) pages of law .indregulation on forestry that is ullon dil'fii ult todraw authoritative meaning or guidance troni.

Ironicalh, significant gaps in forestry lawsand regulations still remain. I hi1 relationshipol cu-lomary .-.*./##/ law lo national forestryregulation, lor example, ha> III'MT been legisla-t ive^ 1 larilied, and so conllict in the field,uhere these laws ,ire applied, lontinues. In-doni'si.i ,ilso lacks an independent process forinterpreting \ague or debatable law or regula-tion authoritatively. !?y definition, the llucid.i-tions and explanatory memorandums tli.it al-ways accompany Hasic 1 aws cinJ go\ernmentregul.itions i.^n'1 resolve unforeseen situations.

The judiciar\ plays virtually no role in inter-preting laws and regulations. It can neither

offer authoritative interpretations- ol disputedprovisions nor strike dow n legislation or regu-lations ,is unconstiiuiional. 1 Vatakiotis, |4SlJ;I ev, 1477) In any c.ise, the judiciarv is part otthe executive branch, so it lacks Ihe indepen-dence to conduct rev iew ol legislation. Since noother institution posses^.-- this authority either,the bureaucrat v itself becomes the 1/11 W/i'"court of last resort." A> onv goxernment offi-cial who helps drall legislation notes, "peopledon't start with b.i^ic mncepts ot law the lawis only one form of political position-l.iking."iVatakiolis,

I his state of affair-- benefit'- two stakeholdersin forest policy-making, loreslrv otfiiiaU them-selves benefit, since the indeterminacy of lawand regulation—and the lack ol an external re-view nieihanism -mean that those who inter-pret and administer the rules have greaterpower. Second, those with access to and influ-ence on the apparatus benefit, primarilv largeprivate I inns.

economic development, with due considerationgiven to maximizing meaningful participation ofthe people." (GOI, 1991) On the other hand, notone Indonesian forest policy document addressesthe need to reform the many laws on land rights,forms of village organization, and forestry.

Non-governmental organizations (NGOs) havealso found their access to forest policy-makinglimited. Under pressure from some aid donors,NGO participation has increased in those policyforums where such donors hold sway (See Box4.3), but NGOs have no systematic way to provideinput to forest policy-making and to comment onpending decisions or regulations, and the Min-istry of Forestry is not required to respond pub-

licly to questions raised by NGOs, citizens, or any-one else outside the formal apparatus.

To increase their access and participation,NGOs have taken their case to the nationalmedia, the Parliament, and, working throughNorthern-based environmental NGOs, todonors and the international media. Successhas been limited, however. Although the na-tional media has grown bolder since the late1980s, traditionally sensitive issues, such asland rights in forest areas, economic concentra-tion in the forestry industry, and the like, arestill subject to de facto censorship. Occasionally,the parliament raises sticky issues, getting themmore media attention than NGOs could on

75

Box 4.3. Participation by Non-Governmental Organizations (NGOs) in TheProgram in Indonesia

ropical Forestry Action

The Tropical Forestry Action Program(TFAP) has failed to involve non-governmentalorganizations (NGOs) in many of the countrieswhere the plan has been carried out since themid-1980s. (Cort, 1991) The "top-down" natureof the international program itself is partly toblame (Colchester and Lohmann, 1990; Winter-bottom, 1990), but the weaknesses of national-level participatory norms and mechanisms arealso at fault. Indonesia is a case in point.

In 1988, the World Bank funded an "Indo-nesia Forestry Institutions and ConservationProject" managed by the Ministry of Forestrywith help from FAO consultants. As part of theproject, forty Forestry Studies were completedand, in late 1990, synthesized into four volumes(GOI/FAO, 1990) that provided the basic infor-mation, proposals, and documents needed to de-velop the national TFAP. Two national Round-tables were held in May 1990 and February 1992on successive versions of the national plan.

Whether NGOs would participate in the1990 Roundtable remained uncertain until sev-eral weeks before the meeting. Both the Min-istry of Forestry and FAO initially resisted theidea. The Secretariat of the Indonesian Forumon the Environment (WALHI)—an umbrellagroup for some 400 or more NGOs—receivedits invitation and accompanying documenta-tion only five days before the Roundtable, andthe Indonesian Forest Conservation Network(SKEI'Hl) was invited only 24 hours in ad-vance. The NGOs were given little time to pre-pare, each was allowed only ten minutes tospeak, and their written presentations were notincluded in the minutes of the meeting. Backed

by several donors, WAI III called for the estab-lishment of a broad-based working group to re-vise the draft document, but no MH h groupwas created. Concerns raised about equity,popular participation, land tenure and otherpolicy reforms, needs lor a more cross-sectoralorientation, and needs for more emphasis onbiodiversity conservation were nol lormallv re-sponded to at the Roundtable. or aflerwaids.

The forty Forestry Studies documents weredisplayed—wrapped in plastic bul were nolmade available, and though they were laterleaked, their distribution still remains re-stricted, as does that of the Synthesis Report;these documents produced in linglish only, fur-ther restricting access. Summary documentsproduced in English and Indonesian in late1990 (GOI, 1990) were so brief that the basis ofthe policy plans and the process by which theywere developed can't be analyzed critically.

The 1992 Roundtable held to discuss thefinal version of the Action Plan (GOI, 1991) wassomewhat more participatory: NGOs were in-vited to take part and received documentalionin advance, some of which thev translatedthemselves. Yet, the government did nol ad-dress the policy issues the NGOs raised- in-cluding the issues of tenure, the distribution nlthe costs and benefits of forest management,and public participation—and major donorswould discuss policy questions ,im.l projectfunding only with Ministry officials and onU inprivate. In short, though pub]it. p.irlit/ip.ilion inthe TFAP process has widened, most svriousdiscussion and policy-making still takes placebehind closed doors.

their own, but in Indonesia's strong Presiden-tial system, the Indonesian parliament has rela-tively little power. And while recruiting the as-sistance of Northern environmental NGOs to

lobby on specific projects has worked in somecases, bringing in outsiders can also promptgovernment officials to dig in their heels on anissue on grounds of patriotism. Indeed, provi-

76

sions of a 1992 Law on Immigration allow gov-ernment to prevent citizens who had criticizedthe government while overseas from returninghome and to revoke their citizenship. (Aznam,1992b)

Over-arching all NGO activities in Indonesia isthe 1985 Law on Societal Organizations, whichholds that NGO activity is legitimate only to theextent that it conforms to the official Pancasila ide-ology, and to the goals and programs of nationaldevelopment.2 In short, an NGO's existence andactivities depends on state approval, which isgranted only to non-political organizations thattake Pancasila as their sole principle and devotethemselves to national development as definedby the authorities.

However constrained, NGOs clearly have op-tions. In contrast, local communities influencepolicy mainly through what Scott called "theweapons of the weak"—everyday forms of peas-ant resistance, such as ignoring forest boundariesto farm or collect forest products, ripping out treeseedlings planted by state foresters, setting fires,and the like. (Peluso, 1988; Scott, 1985)

Neither of these strategies has had much im-pact on policy. The work of NGOs has raised theprofile of many problems in the current policyframework, but so far few policy-makers takethese new upstart organizations seriously, andtheir lack of access to information, their limitedcapacities and skills, and the restrictions imposedby laws on non-governmental social and politicalspeech and action all pose constraints. Peasant re-sistance, on the other hand, has been extremelyeffective in rendering many state forest policiesineffective, from reforestation schemes to protec-tion of nature reserves. But resistance, by its verynature, provides no coherent policy alternatives.

Restrictions on information within the forestrysector both attest to and reaffirm the exclusive na-ture of the policy process in Indonesia. Only theofficials of the Ministry of Forestry are allowed tosee documents related to pending projects or ac-tions, even those sponsored by outside donors.

For instance, World Bank documents, whichoften contain the most up-to-date and compre-hensive general data available on the forestry sec-tor, as well as key information on pending projectdecisions, are officially confidential. They are par-ticularly closely guarded when key decisions arebeing made—just when NGOs and the public atlarge most need the information.

Official forest policy-makers themselves oftenlack vital information. True to bureaucratic form,what is reported upward through the ranks oftendisguises problems in the field and generally ac-cords with what policy-makers want to hear.Since a dispute between a timber concession-holder and a local community, for example,might reflect poorly on a local official unable toresolve it swiftly, the official naturally downplaysthe problem. (Barber 1989) The net effect of thou-sands of such acts of bureaucratic "spin control"is to distort policy-makers' views of the specificimpacts of their policies.

Structural Ignorance

Reform of Indonesian forest policy-making isalso stymied by "structural ignorance"—definedby Dove (1988) as "the failure to perceive thatwhich is not in one's own best interests to per-ceive." Too often in policy-making, some playersperpetuate unfounded—or at least widely con-tested—assumptions and assertions that supportthe status quo. Although such myths are generallynot the actual cause of environment and develop-ment problems, they impede solutions becausethey blind decision-makers to empirical evi-dence—no matter how solid—that contradictsthem.

One unproven assumption enshrined in boththe Constitution and the Basic Forestry Law of1967 is that prevailing forest policies benefit "thenational interest." Accordingly, forestry officialsconsider rural communities or others who opposecurrent policies to be ignorant, misled, misin-formed, or, in some cases, politically motivatedand subversive. Conflicts over forest policy arethus framed as "conflicts between the welfare of

77

the country as a whole and the self-indulgence ofone particular group" and as "conflicts betweennational development and backwards peasantculture" (Dove, 1988: 32), even though peasant re-sistance to policies such as the timber concessionsystem is, in fact, "a simple matter of the peasantsdefending their personal interests against theequally personal interests of the policy-makers."(Dove, 1988: 31,32)

The way that the costs and benefits of particu-lar forestry sector policies and projects are evalu-ated in policy discourse also misrepresents real-ity. Nearly all Indonesian forestry policy-makersfail to perceive the true opportunity costs to ruralpeople of limiting their access to forest lands andresources and of taking their land out of produc-tion. Even when monetary compensation is paidby government agencies or timber concession-holders, it is usually a fraction of the actual valueof the resource—in effect, a token payment, as inthe case of Dusunpulau village in Sumatra'sBengkulu province. (See Box 4.4.)

At the same time, inflated views of the benefitsof forest development policies and projectsprompt forestry officials to dismiss or patronizepeasants who don't concur:

According to this view, peasant resistance todevelopment projects is due not to the pos-sibility that a project was planned withoutregard for the peasants' own interests, butrather to the fact that the project was simplynot completely understood by (or ade-quately explained to) them.. .[T]he possibil-ity of government error is thereby catego-rized out of existence: there are no badprojects and mistreated peasants, but only"misunderstood" projects and "misunder-standing" peasants. (Dove, 1988: 29)

Strengthening this view is the attitude of manyforest policy-makers that traditional societies inIndonesia cling to wasteful resource-managementpractices that will never deliver them frompoverty. Official policies that discourage tradi-tional swidden agriculture systems of the OuterIslands are indicative of this view.

Despite mounting scientific evidence that someforms of swidden are environmentally appropri-ate and sensible in many Indonesian settings(Weinstock 1990), if combined with well-man-aged agro-forestry and adequate access to land—and despite evidence that few alternative crop-ping systems are ecologically feasible for manymarginal lands (NRC 1993)—the Indonesian gov-ernment's line on these practices continues toecho colonial assessments: that swidden and itspractitioners are environmentally unsustainable,destructive, and wasteful. In the country's basicland and forest laws, this view is institutional-ized: all forms of land under swidden cultivationare considered "abandoned" and thus ineligiblefor ownership. (Zerner, 1990; Barber andChurchill, 1987)

This purblind view of swidden-based forestsocieties persists because the belief that the forestis an empty and dangerous territory, unproduc-tive in its natural state, runs deep in the cultureand history of the Javanese—Indonesia's demo-graphically, culturally, and politically dominantethnic group. A continuing concern of the earlyJavanese kingdoms was to open up forests fornew agricultural lands: "Just as cleared land be-came associated with the rise of the Javanesestates and their cultures, so too did the forestcome to be associated with uncivilized, uncon-trollable, and fearful forces." (Dove, 1985) But ifthe swidden cultivators of those times were notunder the control of the courts, and swidden cul-tivators on forest lands were poorly integratedinto the body politic and the economy during thecolonial period when swidden was characterizedas a "robber economy" (Colchester, 1990) the cur-rent blanket condemnation of swidden (GOI,1991) reflects mainly cultural myth—the Javanesepreference for the settled wet-rice cultivation sys-tems of Java. (Dove, 1985) This myth also justifiesthe transfer of rights in the forest from traditionalshifting cultivators to timber concession-holdersand others with vested interests in the govern-ment's model of forest development.

Swidden cultivation's bad reputation isn't de-served. Generally, this form of agriculture is onlyone part of a household livelihood strategy that

78

Box 4.4. TI111 I nanmtod C'o--ts oi l.oi^inu, in Du^unpul.iu \ ill.it;o, Sum.itr.i

l i m o m m o n l - iiiiii tinibor aimp<mios .ilikoimdoivslini.ilo Iho aw|«, ih,ii lo^qini; opor.ilioiis\ M t on m.iny forost-dopondent \ i1hii;o-. Thoo\porioiKo of niisimpiil .ui Vill.];.;o in Snin tilia~.nongkiilu I 'mvina 1 providos .1 st.irk bill typic.ilo\ .unplo. Wh.it is r.uv is lh.it Iho vill.i^orsbrought thoirwi-o Loamr t in Soplomlvr IW3,li.iimini; lo>so-. .imounliiij; lo somo S.'VS mil-lion, .mil doniiindiiit; amiponvi l io i i .

l o r . i l lo.isl lOOyo.irs. l)iiMinpul.iu'-. rosi-donls li.ivo Lippod d.un.ir troos iS/fi':-.1.; hir-.wic.nlo t;ol ro.idily-m.irkol.iblo rosin. Indi-i-d, thoirwrilU-n ii-.Lii I'ldims o\i>r ddniiir I ra ' s a roundIhoir si'llii'inonl ddU1 b .uk to ISS.'V I "or ^ I ' IHT. I -lions, ihi> in-i-v, h.ivi- pro\ idi-d UK-M.' vill.i^i-rswilh •.iippliMiii'iilciry aisli ina>nn\ "Sina-1 w.islillk-. I licivi'.ippri-u.iU'd l lu 'd. im.ir In-i's," s.iidD.ilil.in, >i lot.il I'drnu-r who o\\ lu-d 200 diim.irliw-. bi'loiv lln-y wi-ro ti l l d o w n bv I hi- lo^j;ini;ionip>in\'. "Shovil l ivs, tor I'XcimpU.', wen-n i 'wr ci probli'in lor m\ pdronls, ,i^ loni; ,1-. llicvau i ld Lip llii1 ivsin."

I hi- iiKoino Irom iLim.ir is indi-i-d sij;nili-t.Yinl. h \ i ' iy l l inv nionlhs, ,i m.ilinv d.im.ir l a vi.in vii-ld 1^ kiloj;r.ims of ivsin. whit h c.in K-i-.isilv sold for dll ivnls por kilo. O V I T .1 yi'.ir,oni' Miu'h Iri-i1 thus poU'ntuilly yield-- sonii1 l->.'5(i.I Xihlcin's .iiiiiii.il i.ish ini'onii1 Irom his ZOO trie'slluis mii;hl ri-.uh ^7,i)iii), mow Ih.in U-n limoslln- .n i-Miii1 piT i.ipit.i n.ilinn.il inionuv O n a -p.isi pr inu ' ,ii;i' lor n-sin l.ippins;. lln- h.ir\i'sU-dtimbiT .ilso tVUlu's .lboul S 7 T por iiibii ' mi-U'r.

In lli7-4,1 lie I'I M.iju |.i\,i K.i\\i l imbor a>m-p.in\' obl.iiiH-d a 20 \ i \ i r I MM I cona^-sion a> \ -iTin>; Minii- SO.01 ID hci-Lin1-. dia-f lh ' iiiljiia-nl lonus impuLui villa^i-. l o r si i iu1 w. i rs , t h i - ami -p j n y did nol inliTl'm1 with tlii- \ill.ii;i.'r-' a>n-linuod ri-sin Lipping in tlu-ir ,i,inl lorfsts,though Ihnsi' fon-sts lii> wilhin tin.1 ollin.il

of thi1 timbi-r loi i i i^^ion. In ivivnt

M T , tin1 a ' m p . i n y iiil d o w n llu1

a i m m u n i t v ' s J.im.ir t n v s -'. ' '^O by tin- i o m -muni ly ' s cuiinl .nul loiik llu1 l imlvr . iw.i \ ."Wi1 an i l dn ' i s lop llu-m," s.iid D.ihkm. "lx-I'.HISI1 Ilii-x won.1--upporU'd b\ llii-liovi-r

.ipp.ir.itus."

Tlu1 a>inniunily aimpl.i ini 'd In loi.ilmi'iil ollitiiils. iind thi1 /!/.',".•///' (Ki'^i-nl) .iski'dllu1 a impi iny lo si-tlk' ihi1 nnilliT. i A IU71 \ l i n -isk-ri.il IX-iivi1 hold> lh>il.(./.;.' rit'Jils to luirvi-stfoivsl product'— s ikh .isd.im.ir rosin—shouldbo n-spivlod. but in this Vlisi- ilu- tompi iny ' sfitZ.liL lo h.irvo-4 timbi-r lonl l i i l s diroit ly wilhIho I'omniunily's.j.yii/ ri;;ht to h. i r \ iM tho rosinIrom Ihi- \ o ry s.inio Iroos.) Tho timbor a m ip.my. l iowo\or . w.is onl\ willing lo pro\ idoi 1,000 in i,i-li .ind .lbout s i .7^0 to build .1 \ i l -l.ii;o mosi |uo. .in of for lh.il "h.is no lonnoi lionwith l l iodom.indx for i.ompon->.ilion." . i n o r d -ins; to tho \ ill.icors' .lllornoy.

Tho i omp.my ' s numd^onionl, ho\vo\ or, a m -sidors tlu1 \'ill.idols' iompon>.ition il.iim .isKisoloss, ond Iho l o m p . i m ' s .lttornov il.iimsth.it "Ihoro is no d.imar s;ro\vini; in tho i i m a vsion liro<i...onl\ untondoil troos" .mil ih.H "bo-foro tho OMioi'ssiuii w.is o-^Libli'-hod. lK.it .iro.iw.is thiik torosl th.il poop lo iou ld not [lossibkonlor." Not so, --.i\s /u lk i l l i , .molhor . l i^riovod\ill.ii;or: "'I'liis forosl is tho souivo ol our livi-li-hood, so ^oini; inlo tho loro.-l h.i> .llw.iy- boonour d.iik work. Indood. il i1- u n h lho-~o pooploin nivktios .nul i.irs lh.it .no un.iblo to onlor thotorost."

Whilo .iw.iitim; tho ou l iomo of l l i o a m r l o.isoi.which lould t.iko .i vo.ir or moro). Diisunpul.uivill.i^ors ,iro I'.irmini; •.ubsi-.loiia11 rops .IIOIVJ,Iho od>;os of llioir formor d.im.ir forost. w h i i hUKI loni;or o\ists.

>i'iii\i" Svukur. ll'lJ".

79

might also include gathering of forest products,wage employment, cultivation of long-rotationtree crops, such as damar (Shorea javanica), andsedentary farming. As traditionally practiced,such "diversified portfolio" systems—used by asmany as six million people, mainly in Kalimantanand Sumatra—have been "relatively stable andself-sustaining" in Indonesia. (FAO/GOI, 1990Vol. 4,24)

Officially, the government distinguishes tradi-tional swidden practitioners from "forest squat-ters"—typically, poor and landless people fromlowland rural or urban areas who follow loggingroads or other entry points into the forest insearch of a living. Most so-called squatters havelittle knowledge of the local forest environment,grow mainly such cash crops as pepper or cinna-mon, and use land continuously until its fertilityis exhausted, with no intention of returning to aparticular plot once it is used. Unfortunately, "itis not possible to distinguish the two groups in ameaningful way in the field" (FAO/GOI, 1990,Vol. 4,29), and the official solution has thereforebeen to convert all "shifting cultivators" to seden-tary farmers, either in situ, or after resettlement.

Government views are changing, however. Anoted Indonesian social scientist and senior offi-cial in the National Development PlanningAgency recently noted that traditional shiftingcultivation is an environmentally sound and pro-ductive land use that should be distinguishedfrom the activities of "forest scavengers." Tradi-tional systems, he noted, were under pressurefrom these scavengers and competition for landfrom commercial interests—pressures com-pounded by government attempts to control tra-ditional ways of life in inappropriate ways. Thesepolicies frustrate forest farmers, he concluded,and create the false impression that they are ene-mies of the forest. (Indonesian Observer, 1993)

Despite some changing attitudes, a range ofgovernment programs is aimed at dismantlingtraditional swidden-based societies. Indeed, in1993 the former Ministry of Transmigration wasrenamed the "Ministry of Transmigration and Re-settlement of Forest Squatters," which promptly

announced a plan to resettle 10,000 "forest squat-ter" families. (Jakarta Post, 1993b)

The experience of traditional villagers with theHPH Bina Desa program (hereafter Bina Desa) inthe Bukit Baka/Bukit Raya National Park area ofwest and central Kalimantan illustrates the day-to-day impacts of structural ignorance on forestcommunities. Promulgated by the Ministry ofForestry in 1991, Bina Desa requires concession-holders to undertake rural development activitiesto acquire and maintain their licenses. A main ob-jective of Bina Desa is to convince local communi-ties to abandon swidden in favor of sedentarywet-rice farming. The concession-holder suppliesseed, pesticide, and sporadic extension services,and Javanese transmigrants are brought in fromother areas to demonstrate "proper" agriculture.A recent field assessment in the area concludedthe following about the program:

Wet rice cultivation may indeed have the po-tential for economic and ecological sustain-ability in certain niches. However, farmersnow participating in [the program] are de-pendent on agricultural inputs supplied bythe concessionaire, and intensive fertilizeruse has led to a proliferation of weeds in thedryland rice fields. Pesticide use withoutproper instruction has adverse implicationsfor ecological and human health. The nega-tive psychological impact of concessionaire(and government) attempts to change tradi-tional practices is palpable in the projectarea. Farmers now refer to their own agricul-tural system as perladangan liar, a pejorativeterm meaning "wild cultivation." (Seymouret al, 1993)

Inevitably, traditional shifting cultivationpractices will change in coming decades as in-creasing demands for food production and de-creasing per capita land availability fuel thedrive to intensify food production. Moreover,traditional agriculture systems have never beenstatic—witness the relatively recent addition ofrubber to Indonesian swiddeners' crop port-folios. There is much to build on in the diversetraditional systems employed throughout

80

Indonesia. But until the blanket condemnation ofswidden as "backward and unproductive" is laidto rest, it will be very difficult to develop newhybrid systems that combine the best of tradi-tional and modern systems and allow increasedfood production in and on the fringes of fragilerainforest ecosystems.

A final set of myths also influences forest pol-icy. Too often, policy-makers equate natural, in-tact tropical rainforests with industrial timberplantations, even though these two ecosystemsdiffer radically in terms of biological diversity,goods, and services. While tree farms are neededto supply fiber for industry, they are not nearly asbiologically rich or as economically valuable tolocal communities as natural forests.

The distorted discourse on the costs and bene-fits of alternative forest-management policies andstrategies combines with a legal morass and alack of popular participation to insulate the forestpolicy-making process in Indonesia from criti-cism, narrow the range of alternatives that are se-riously discussed, and perpetuate existing poli-cies. Add the lobbying of the forest industry andthe Indonesian forestry bureaucracy's efforts tomaintain the existing system, and it is not surpris-ing that change is slow in coming.

Forest Policy-making in theUnited States

In the United States, the complex forest policy-making process reflects a century of legislative at-tempts to balance tensions between the exploita-tion of forest resources and their conservation.Compared to Indonesia, policy-making is rela-tively decentralized and broad-based. Legislationaffecting forests is considered by a variety of Con-gressional committees and by state legislatures,while policy and regulatory decisions are made bystate and federal agencies at various levels. Butthough forest planning processes and policychanges are often structured to allow public com-ment, and the United States has "checks and bal-ances" not found in Indonesia, forest policy-mak-ing has not yet struck a balance needed to sustain

the many valued assets and services provided bythe Pacific Northwest's forest ecosystems.

In the Northwest, the National Forests are themajor policy battleground. They contain most ofthe remaining natural forest ecosystems, providethe region with its most important wildlife habi-tats and reservoirs of biodiversity, protect vitalwatersheds that provide municipal and agricul-tural water, and permit public recreation and sci-entific research3—goods and services that inten-sively managed private timber lands can nolonger provide. At the same time, the public has afar greater say over what happens on publiclands than it does on private lands.4 Then too, thehistory of forestry innovation and reform in theUnited States suggests that the Forest Service in-troduces most major changes in forestry.

For the first four decades after their creation,the National Forests were managed as forest re-serves. The Organic Act of 1897 and the TransferAct of 1905 (which transferred federal forest re-serves from the Department of Interior to the De-partment of Agriculture) gave the U.S. Forest Ser-vice its principal and rather simple managementmission—to improve and protect the forests, tomanage the forests for water supplies, and to fur-nish a continuous supply of timber, in that order.The agency mainly protected the forests fromfires, pests, and timber poachers and carried outother custodial duties. Since most timber needscould be met on private lands, demand for timberfrom the National Forests was minimal. (Clary,1986) Most new federal laws affecting the U.S.Forest Service during the agency's first fewdecades simply expanded its geographic area ordirected it to increase forestry research and im-plement cooperative forest programs with stateand private landowners.

Government's custodial role ended as de-mands for wood products rose during the SecondWorld War and the ensuing post-war housingboom. As supplies of old-growth and mature tim-ber on private lands dwindled, production wasstepped up in the National Forests nationwide,from less than 1.5 billion boardfeet in 1941, tim-ber production grew to 12.8 billion boardfeet by

81

1968. (Sample and LeMaster, 1992; O'Toole, 1988)In the Northwest, annual harvest levels reached4.5 billion boardfeet in the National Forests by the1960s. Totals ranged from 3.1 (during the 1981-83recession) to 5.5 billion board feet (in the late1980s) annually for over 25 years before a 1991federal court injunction halted most federal tim-ber sales in the Northwest until the northernspotted owl habitat is adequately protected.

By the 1950s, however, it became clear that log-ging on National Forests could threaten otherpublic non-timber forest resources, such as water,fisheries, wildlife, soil, and recreation. (Lyden etal, 1990) In 1960, on the recommendation of theU.S. Forest Service, Congress passed the Multi-ple-Use Sustained-Yield Act, which expanded theagency's management mandate to include forestresources beyond water and timber. For the firsttime, the Forest Service was directed to managethe National Forest system for outdoor recreation,range, fish and wildlife, and wilderness, in addi-tion to watershed and timber uses. Moreover, theAct defined "sustained-yield" to cover not justtimber but other renewable forest resources aswell. (See Box 4.5.) Yet, though the Multiple-Use

Sustained-Yield Act (MUSY) was a major land-mark in forest legislation, its implementation wasleft largely to the discretion of the Forest Service.Indeed, in a 1979 ruling, the U.S. Ninth CircuitCourt of Appeals concluded that the Act"breathes discretion at every pore."5 Contro-versies over extensive clearcutting in Montana,West Virginia, and elsewhere during the early1970s convinced many conservationists that theMUSY alone could not protect non-timber re-sources. Congress eventually agreed, and firstpassed the Forest and Rangelands Resource Plan-ning Act in 1974 and then the National ForestManagement Act in 1976 to address MUSY'sweaknesses.

The Forest and Rangelands Resource PlanningAct (RPA) requires the Forest Service to developa long-range national strategic plan to assure thelong-term sustainable management of all renew-able forest resources in the National Forest sys-tem. This plan, updated every five years,6 re-quires the agency to set clear goals and objectivesfor a range of forest resources from timber towildlife, wilderness, and recreation, and to bud-get what's needed to implement them. For the

Box 4.;}. The Multiple I. si-Sustained Meld Ait of

I he mosl important parts of Ihe MultipleI.se-Suslained Yield Ait are its delinitions of"multiple use" and "sustained vield." Their in-terpretation fuels much of Ihe debate over I or-

. esL Service mandates and relorms. S/clion 1 ofIhe Act defines ihe terms ,is follows:

i.i» "Multiple use" means the management ofall the various renew able surface resources ofthe National I Wests so thai thev are utilized inIhe lombin.ilion that will best meet the needsol the Amerii.in people; m.iking the judicioususe (it land for some or all of these resources orrelated services over areas large enough to pro-vide suttii ient latitude tor periodii adjustmentsin use to conform to changing needs and condi-

tions: that some land will be used for less thanall of the resources: and harmonious and iooi-dinated management of the various resources,each with the other, without impairment ol theproductivity of the land, with considerationbeing given to Ihe relative values of the variousresources, and not neicssarily the combinationof iisi-, |hat will give the greatest dollar returnor the greatest unit output.

ib) "Sustained yield ot the>e\eral productsand siTviii-s" means the achievement and main-lenanie in perpetuity of a high-level annual orregular periodic output of the various renew-able resources of the National I oresls withoutimpairment of the productivity of the land.

82

basic assessment and each update, renewable re-sources on Forest Service lands are inventoried,then analyzed in terms of supply-and-demandfor the next 50 years. Finally, policies and regula-tions that might affect all forest land owners areproposed, enabling Congress to keep long-termgoals and the big picture in mind as it makesshorter-term policy and budget decisions.

The National Forest Management Act (NFMA)essentially amended the RPA, extending long-range planning to the local level.7 For each Na-tional Forest, the law requires a detailed, ten-yearland-and-resource-management plan. The Acttries to promote sustainable forest managementby restricting timber operations on lands physi-cally and economically unfit for such use.8 UnderNFMA-mandated planning, several managementalternatives are produced, typically ranging frompreserving non-timber forest services to the inten-sive production of timber or other commodities.The idea is to integrate "top-down" RPA plan-ning with "bottom-up" perspectives. Congress,hoping to avoid making controversial decisionsitself, built public participation into the legisla-tion in the belief that conflicts would be resolvedduring the planning process.

Despite the intent of the MUSY, RPA, andNFMA, the Forest Service and Congress contin-ued to emphasize logging at the expense of otherforest resources. In the Northwest, harvest levelswere raised to record volumes during the mid-1980s (Haynes, 1992) despite clear evidence (e.g.,Thomas et al., 1993; Gordon et al, 1991; Norse,1990; Anderson and Gerhke, 1988) that heavyharvests were already seriously damaging waterquality and fish and wildlife habitat and threaten-ing endangered species.

As the status of old-growth forest ecosystemsand the wildlife that inhabit them became betterunderstood during the 1980s, environmentalgroups charged that the U.S. Forest Service wasviolating NFMA, the National EnvironmentalPolicy Act (NEPA), and other environmentallaws. When the agency planned to continue har-vesting old-growth forests at annual rates ofnearly 25,000 hectares without an approved

protection plan for the northern spotted owl, asrequired by the NFMA, the conflict entered thecourts. (Bonnet and Zimmerman, 1991)

In a series of rulings, the federal courts havefound the U.S. Fish and Wildlife Service,9 the U.S.Forest Service,10 and the Bureau of Land Manage-ment11 in violation of various environmental lawsintended to protect endangered species and otherforest resources in the Pacific Northwest.12 OnMay 23,1991, U.S. Judge William Dwyer barredlogging in northern spotted owl habitat until thefederal government came up with a scientificallyand legally sound species-protection plan. (SeattleAudubon Society v. Evans) The judge's statementwas unusually blunt:

The records in this case.. .show a remark-able series of violations of the environmen-tal laws.. .More is involved here than a sim-ple failure of an agency to comply with itsgoverning statute. The most recent violationof the NFMA exemplified a deliberate andsystematic refusal by the Forest Service andthe FWS [U.S. Fish and Wildlife Service] tocomply with laws protecting wildlife.

When the Forest Service submitted a protectionplan in March 1992, the court rejected it because itfailed to consider new information on decliningowl populations and other species dependent onold-growth ecosystems. The permanent injunc-tion on logging remained in place.

Why did high timber harvest levels continuedespite growing public opposition, legal reforms,and scientific evidence that intensive logging isseriously damaging the Northwest's forestecosystems and their diverse resources? Twoother questions come first: who are the dominantbeneficiaries of current forest policies on the Na-tional Forests? And what aspects of policy-mak-ing work against forest policy reform?

Who Benefits from High Harvest Levels?

In the Northwest, three interest groups benefitmost from the heavy timber harvests thatthreaten National Forests' ability to sustain a

83

variety of forest resources. First, the forest indus-try enjoys subsidized access to public timber sup-plies—including the large sawlogs available onfew private lands. Second, timber-processing fa-cilities, employment, and local government rev-enues from the sale of federal timber benefit somelocal communities. Third, the Forest Service bene-fits from high harvest levels because budgets andperformance incentives are tied to timber sales.

Most forest industry firms, whether or not theyown land, benefit from heavy harvests on federallands. Although reduced timber supplies on fed-eral lands have increased the value of timber onprivate lands, there are several reasons why thetimber industry has been relatively unified in itsbid to keep public timber harvest levels high. Sub-sidized road construction is part of a winning bid-der's bounty. In 1991, the U.S. Forest Service spentnearly $190 million in road construction (OMB,1992), much of it in the Pacific Northwest. In 1987,100-percent reimbursable road credits totaled $21million dollars in just two Oregon NationalForests (Willamette and Umpqua). (Gorte, 1989)

In parts of the country where timber sale re-ceipts are less than road-construction and othertimber-sale costs, the road-construction subsidy ismore obvious than it is in the Northwest, wheretimber sales generally surpass timber sale admin-istration costs (including roads).13 Either way,road credits amount to short-term, interest-freeloans since they can be used instead of cash topay for the federal timber (OTA, 1992), and pur-chasers can transfer credits among timber sales inthe same National Forest (but not betweenForests or between purchasers), effectively ex-tending the loan's term.

Many firms have benefited from the availabil-ity of large supplies of public timber in otherways, too. Until the mid-1980s, a purchaser ofNational Forest timber had five years to harvestthe sale with no down payment. This allowedtimber companies to purchase large quantitieswhen prices were relatively low and to harvestwhen prices increased. Moreover, when timberprices plummeted during the recession of theearly 1980s, Senator Mark Hatfield of Oregon

pushed Congress to extend the performance ofthe contracts by two years to help companies thathad purchased large amounts of federal timber inthe late 1970s avoid bankruptcy. In contrast, onprivate lands, timber sale contracts usually callfor a substantial down-payment and give conces-sionaires only one year to harvest. In otherwords, federal timber supplies and sales proce-dures have allowed timber companies to specu-late on timber prices while taking virtually norisks. Although abuses of this system did sparksome reforms in the mid-1980s—now sold timbermust be harvested within three years and a 5 per-cent down payment is required—opportunitiesfor almost risk-free speculation remain.

Smaller firms—especially companies with noland of their own—benefit from federal timbertoo because they have little access to alternativesupplies. Because they lack the investment capitaland assets to finance the technological changesneeded to use second-growth trees efficiently,their profit margin often rises and falls with theiraccess to large sawtimber—most of which is onNational Forest lands. (Olson, 1988)

The longstanding ban on the export of federallogs benefits both large and small timber compa-nies. Since timber from the National Forests can-not be exported, a dual timber market has devel-oped in the Northwest—a domestic market and ahigher-priced export market. Flora and col-leagues (1989) estimate that export logs in 1988sold for between $25 and $400 more per thousandboardfeet (for second-growth small-diameterspruce and for high-grade old-growth, respec-tively) than logs sold on the domestic market.14

The partial export ban effectively enlarges the do-mestic timber supply (lowering prices) and servesas a form of international trade protection for in-efficient producers—many of them either smallerindependent companies or older mills owned bylarger companies. As federal timber supplieshave been reduced following the federal courtlogging injunctions, the inefficient producershave been affected most severely.

Because the ban does not apply to timber fromprivate lands,15 land-owning companies (and

smaller non-industrial owners) enjoy higher in-ternational market prices for the timber they dolegally export. Since the United States is the dom-inant supplier of softwood logs to the world mar-ket,16 private American log producers—most ofthem in the Pacific Northwest—almost control in-ternational softwood log prices (Sedjo et al.,1992), and in 1991, log exports from Washingtonstate alone were worth over $1.35 billion.17

(Washington Office of Financial Management,1991)

Despite federal laws designed to prevent directsubstitution by allowing log-exporting mills topurchase federal logs only from third parties, in-direct substitution is apparently common. With-out large supplies of public timber, forest indus-try representatives have claimed they would haveto close mills and lay off thousands of workers.(Rasmussen, et al., 1991; Beuter, 1990) Yet, duringthe 1980s and early 1990s, timber exports fromOregon and Washington exceeded 3 billionboardfeet,18 most of it from forest industry lands.(Adams and Haynes, 1990) This volume is equiv-alent to 50 percent of the total sawtimber harveston forest industry lands west of the Cascades andjust under the 1980-89 average harvest on the Na-tional Forests. To the extent that substitution oc-curs, these firms can sell their own supplies forhigher prices and then use lower-cost public tim-ber to feed regional processing operations. Andfederal tax credits give log exporters an estimated$100 million in annual tax breaks on top of therecord international prices they have enjoyed inrecent years. (Oregonian, 1993a)

Local governments also benefit enormouslyfrom high harvest levels on the National Forests.Since 1908, the Forest Service has shared revenuesfrom timber sales, recreation, minerals, and othersources with local governments (mainly counties),based on net receipts. In 1976, the same year inwhich NFMA passed, Congress approved a little-noticed amendment to the 1964 National ForestRoads and Trails Act that raised the revenue shar-ing with counties to 25 percent of gross receipts tocompensate for tax revenues that would be paid ifthe land were privately owned. But many coun-ties in western Oregon and Washington have

received far more from the Forest Service thanthey would have collected in taxes on the sameamount of land. (O'Toole, 1988)

Since over 80 percent of Forest Service rev-enues come from timber sales,19 many countieswant high harvest levels maintained. In 1988,counties in Washington and Oregon collectedover $220 million from National Forest timbersales. Afraid of losing these revenues just whenother federal assistance has waned, local govern-ments in the Northwest have opposed efforts toreduce harvest levels in the National Forests. In-deed, many have lobbied to maintain or increasefederal timber sales, even at the expense of otherresources and industries. (Sample, 1990)

And, not least, the Forest Service has benefitedfrom high timber-harvest levels on the forestlands it manages because budget levels are tied totimber production. Since Congress traditionallyallocates more than 80 percent of the Forest Ser-vice project budget to road construction, timbermanagement, and timber sale activities (OTA,1990), forest supervisors have an obvious incen-tive to orient planning toward timber produc-tion.20 Jobs also depend on the status quo. ByFebruary 1993, the agency was considering abol-ishing hundreds of timber-related jobs in theagency, citing the court-ordered injunctionagainst harvesting in spotted owl habitat. (Green-wire, 1993)

The Knutson-Vandenberg Act in 1930 gives theForest Service still another incentive to keep tim-ber harvest levels high. This act allows the agencyto retain some of the proceeds from timber sales(K-V Funds) to carry out reforestation and silvi-cultural management on the forest where the har-vest took place. In 1976, the NFMA amended theact to allow the use of K-V funds for wildlifemanagement, environmental education, andother chronically under-funded activities. Inother words, forest managers have to cut trees tosave wildlife habitat.

As O'Toole (1988) points out, "Forest Servicemanagers who wish to increase their budgets willdiscover that they can use their [Congressional]

85

appropriations to sell timber and collect moreK-V funds." OTA (1992) found no evidence thatthese permanent appropriations are efficient ornecessary for improving forest management, butdid conclude that they influence managers to in-crease timber harvests to increase budgets. More-over, Congress exercises virtually no oversight orcontrol of K-V funds and other permanent, dis-cretionary accounts. (OTA, 1992)

Finally, the relatively "profitable" and high-volume timber sales in U.S. Forest Service Region6 (Oregon and Washington) have also given theagency political benefits. Since timber sales inother regions of the country lose money for thefederal treasury (O'Toole, 1988; Repetto, 1988),the timber sold in Region 6 contributes the bulkof the approximately $400 million returned to theTreasury each year from National Forest rev-enues. If these sales were curtailed,21 the agencywould lose much more than the $300 to $400 mil-lion it has been losing annually on timber salesnationwide—perhaps another $250 million ormore. Political pressure to make the agency man-age its assets more productively is growing, andtimber sales in the Northwest make the bottomline look a little less dismal.

A Forest Policy Process Divided AgainstItself

Several features of the American politicalprocess have enabled the principal beneficiariesof high harvest levels to maintain or expand theirbenefits during the past decade. First, short-termpolicies that determine harvest levels are out ofsync with long-term policies intended to protectforest resources. Second, key aspects of forest pol-icy-making have been dominated by timber inter-ests despite the increasing influence of environ-mental groups. Third, the forest-planning processis so complex that public involvement is limited.Finally, as in Indonesia, the status quo is sup-ported by the embrace of unproven assumptionsand the selective use of facts in policy debatesand political discourse. All too often, the empha-sis is on how to protect forestry and forest indus-tries from change, not on how to sustain naturalforest ecosystems.

Federal forest policy is made in three ways.First, long-term management goals and planningprocesses are legislated in acts such as MUSY,NEPA, RPA, and NFMA. These laws are in-tended to provide an overall policy framework toensure the long-range sustainability of all renew-able resources in National Forests. Second, on anannual basis, short-term policies are establishedas the budget requests of the U.S. Forest Serviceand the administration are prepared, negotiated,and Congressionally approved. Third, the federalcourts make forest policy when laws are not car-ried out, or when Congress and the Executivehave not taken actions to resolve conflicts or am-biguities in the Federal laws that govern the useand management of National Forests.

In theory, the policies manifested in the annualbudget and appropriations are to reflect the sus-tainability issues identified and addressed in theRPA program and in the National Forest manage-ment plans mandated by NFMA. In practice, an-nual appropriations don't reflect long-term poli-cies to promote the sustainable management ofall forest resources. The Forest Service doesn'tprovide Congress with specific and credible in-formation on critical sustainability issues, or sug-gest budgetary priorities for addressing them.Congress isn't blameless either: it focuses nar-rowly in annual appropriations legislation ontimber sale targets and largely ignores many ofthe other programs in the budget that are crucialto meeting the requirements of NEPA, RPA, andthe NFMA. The U.S. Office of Technology Assess-ment (OTA) concludes that the RPA, the act mostdirectly concerned with the forests' use and fu-ture, has so far been a failure despite significantimprovements in some areas covered by the law.In its summary, OTA (1990) states:

RPA Assessments have suffered from poordata on resource conditions and the analy-ses of opportunities and threats have beenincomplete. RPA Programs have providedneither sufficient guidance for annual bud-gets nor clear direction for agency activities.Annual Reports have provided inadequatefeedback on implementation. And neitherthe administration nor Congress has

86

demonstrated sufficient commitment tomake the process work.

meet the environmental requirements of variouslaws.

The OTA report notes that while timber re-source assessments are relatively complete (withthe exception of those on old-growth forests),most RPA assessments of recreation, rangeland,water, wildlife, and wilderness resources are not.Most troubling is the lack of information on re-source quality and trends in the RPA inventories,since program analyses are based on this infor-mation. Also, Congress's review of Forest Servicemanagement and administrative programs is in-adequately linked to the resource assessments.Congress appropriates less than two thirds of theForest Service budget each year. The remainderof the Agency's budget comes from special trustfunds or permanent appropriations accounts cre-ated by Congress to allow the Forest Service touse some of its revenues from the sale of timberand other resources. Since nearly all of these per-manent appropriations are tied to the timber saleprogram (OTA, 1990), the other two thirds of theAgency's budget comes from funds that are com-peting with other federal programs. If Congresshas no budget priorities to follow and simplycuts annual Forest Service appropriations acrossthe board, the non-timber programs lose out be-cause they are not protected by trust funds andspecial accounts (financed by timber revenuesnot returned to the Federal treasury).

Although Congress passed laws such as theMUSY, RPA, and NFMA to protect non-timbervalues, it has also perpetuated intensive timberexploitation at the expense of other forest re-sources. There are two main explanations forthis seeming inconsistency. First, through theyearly budget appropriations process, Congresssets annual timber-harvest targets for the Na-tional Forests.22 Politically determined, theseharvest levels often exceed realistic expectationsbased on the available timber base, past harvestlevels, and environmental considerations man-dated by federal law. Second, by focussing theappropriations process and mandates for the useof National Forest revenues on the timber pro-gram, Congress has created stronger incentivesfor the Forest Service to "get the cut out" than to

Ideally, the budget proposals presented by theU.S. Forest Service and prepared under the guid-ance of the RPA and the NFMA would reflect a"balance" between commodity-management pro-grams and programs aimed at preserving water,fisheries, wildlife and recreation. Indeed, theNFMA requires the agency to design its resourcemanagement programs in an integrated fashion.(For example, timber sales must involve theanalysis of impacts on watersheds, wildlife, recre-ation, and other issues.) But several factors distortthe final result.

First, the proposed budget is passed on to theSecretary of Agriculture and to the Office of Man-agement and Budget, which alter it to reflect theadministration's political concerns. Throughoutthe 1980s and early 1990s, the administration'smain concern was commodity production. With amandate to review budgets for short-term eco-nomic impacts and for consistency with adminis-tration economic policies, OMB emphasized com-modity production in final administrationrequests.

Second, Congress requires the Forest Serviceto divide its budget into 50 to 60 line items,grouped into several program areas. Timbermanagement is thus addressed as one separateissue and wildlife or recreation as another. Natu-rally, budget negotiators lose sight of the interre-latedness of the many separate budget items.(Sample, 1992)

Finally, over the past decade, Congress has ig-nored the timber harvest levels proposed throughthe Forest Service planning process, instead fo-cussing narrowly on the volume of timber to beoffered for sale (timber sale targets) and on thefunding needed to facilitate the timber harvest(road construction, timber sale preparation, etc).(Sample, 1992) Non-commodity resources getshort shrift. In general, over the past decade tim-ber appropriations have often been higher thanthose requested, while non-timber programs haveusually been reduced.

87

Because Congress has strong constituencies ar-guing for heavy harvests on federal lands andstrong constituencies arguing against, its policiesoften send conflicting directives. As Gregg (1992)observes, ".. .even as the legislators were busy en-acting laws like the Wilderness Act, EndangeredSpecies Act, and National Forest Planning Act, intheir annual budget hearings they were forcinghigher allowable cuts than forest supervisorsknew were sustainable."

Influencing the Political Process

The contradictions in federal forest policy havebeen perpetuated by the powerful influence inCongress of the chief beneficiaries of those poli-cies and by the commodity orientation of the Rea-gan and Bush administrations. At the same time,significant forest policy reforms have lackedpowerful political sponsors in the Northwest andin the capital, at least until 1992 when conserva-tion-minded candidates were elected to office inthe White House and in the Northwest's congres-sional delegation.

Millions of dollars have been waged by timberindustry groups on a Congressional fight to deter-mine the fate of the Northwest's old-growthforests. Federal Election Commission (FEC) cam-paign contribution data for the period betweenJanuary 1,1985 and June 30,1992 indicate that for-est industry groups contributed nearly $5 millionto hundreds of Congressional candidates. (NLMP,1993) Although these political action committee(PAC) contributions represent a small fraction ofthe hundreds of millions spent on Congressionalcampaigns during this period, they were at leastthree times greater than environmental PAC con-tributions ($1.6 million) to all environmentalcauses combined, and most of the contributionswere for $1,000 or more.23 (NLMP, 1993)

Congressional candidates in Oregon andWashington gained handsomely from timber-in-dustry PAC contributions. While the delegationfrom the two states holds only 3 percent of theseats in Congress, candidates for those seats re-ceived nearly 15 percent of timber industry PACmoney between 1985 and 1992. (NLMP, 1993)

And the timber industry out-spent environmentalPACs by more than six to one on Congressionalraces in the two states. Timber industry politicalactivities at the state level have also been aimedat influencing federal policies. In 1992, a dozentimber companies bankrolled two unsuccessfulefforts to recall Oregon's Governor BarbaraRoberts because she refused to endorse the ex-emption of some timber sales from the 1991 fed-eral court injunction prohibiting logging in spot-ted owl habitat on public lands. (Walth, 1992)

For twelve years before the 1992 election, theWhite House and executive agencies had beencontrolled by administrations with little enthusi-asm for conservation. In 1981, the newly-electedPresident Reagan appointed John Crowell as as-sistant secretary of agriculture overseeing the U.S.Forest Service. When he was tapped, Crowell wasgeneral counsel for Louisiana Pacific—one of thelargest purchasers of Forest Service timber and acompany with a particularly poor environmentalreputation. Working outside the established RPAplanning process, Crowell pressured the ForestService to propose as one option, sales targets ofup to 16 billion boardfeet nationwide by 1990—45percent higher than 1985 levels. Crowell then di-rected the Chief of the U.S. Forest Service to pre-pare a program that would increase harvests to 20billion boardfeet by 2030—far higher than any ofthe alternatives prepared by the Forest Serviceduring the 1985 RPA process. (CHEC, 1985)Crowell's hope was to widen the range of timbertargets so that other options with high timber har-vest levels would appear moderate. Ultimately,Crowell went too far, alienating both the ForestService bureaucracy and Congress, and he re-signed in 1985.

Crowell's departure, however, did nothing todampen the Reagan and the Bush administra-tions' plans to keep timber harvest levels high.His successor vowed to continue policies Crowellset, and timber sales in the Northwest grew dur-ing the late 1980s. When the crisis over the north-ern spotted owl erupted during those years, theBush administration sought to amend the Endan-gered Species Act to minimize the impacts of owlconservation on the logging industry.

Members of Congress also leaned heavily onthe Bush administration and the Forest Service tokeep harvest levels high. In 1991, John Mumma,Regional Forester for the Northern Region (Idaho,Montana, and the Dakotas) was transferred to adesk job in Washington when several western Re-publican senators and congressmen complainedto the Bush Administration that timber targetswere not being met. (Washington Post, 1991) Ac-cording to Mumma, who retired rather than ac-cept reassignment, it was impossible to meet cut-ting quotas and still comply with NEPA, MUSY,NFMA, and other federal laws. But no law saysthat the timber target must be met, and environ-mentalists claim Mumma fell victim to politicalpressures on Secretary of Agriculture EdwardMadigan.

In 1993, shortly after taking office, the Clintonadministration moved to resolve the logjam overforest management in the Northwest. In April1993, President Clinton convened a "forest sum-mit" in Portland, Oregon to discuss forest man-agement-issues in the Pacific Northwest. Joinedby Vice President Gore and six cabinet members,the president listened as loggers, environmental-ists, and community leaders outlined their viewson resolving the deadlock over logging in the re-gion's dwindling old-growth forests. AlthoughClinton stated that the solution would have to ad-dress the needs of both endangered species andcommunities long dependent on logging, he indi-cated that changes in how forestry is practiced inthe region are inevitable. He promised to developa plan to address the "crisis" within 60 days, andwithin a week a federal task force was convenedin Portland to begin outlining the plan. In lateJuly, President Clinton submitted a plan to thefederal courts. (See Box 4.6.)

Despite the change in executive branch atti-tudes toward the use of federal lands, the policyprocess in Washington, ever vulnerable to the in-fluence of special interests, will continue to poseobstacles to forest policy reform. Shortly after theadministration proposed ending subsidized com-modity production on federal lands to help re-duce the deficit, several western senators withsubstantial mining, grazing, and logging interests

at home successfully pressured the administra-tion to drop the proposals from the economicpackage. While the administration has promisedto pursue these proposals separately, survivingpassage through committees dominated by thepolitical allies of logging interests or weatheringthe threat of filibusters in the Senate will be politi-cally difficult at best. As Rivlin (1993) points out,change in America is not easily embraced:

.. .the social and political system of NorthAmerica, like most others, is designed to re-sist change. Those who are hurt by changetend to get more attention than the benefi-ciaries. The political system is willing tosubsidize the status quo (to subsidize tim-ber-dependent communities, for example)because that is less painful than figuring outhow to manage change. The forces opposedto policy change tend to have the resourcesand organization to capture the politicalsystem, while the beneficiaries of change donot.

Public Participation

Public involvement in Forest Service policy-making takes place indirectly through the elec-toral process and more directly through theagency's planning process as mandated byNEPA, RPA, and the NFMA. In theory at least,the U.S. Forest Service's policy-making process isno doubt among the most democratic of any for-est agency in the world. But considerable evi-dence suggests that broad public participation isnot part of agency planning, partly because thecomplexity of the planning process works againstthoughtful public participation. Also, by skirtingsuch controversial issues as clearcutting, the plan-ning process does not provide a public forum fordeliberations on the key policy and planning is-sues facing the agency. (Shannon, 1990; Blahnaand Yonts-Shepard, 1989)

National Forest plans provide the most struc-tured opportunity for public participation. But, asO'Toole (1988) notes, "In practice, forest plans areso complex that real public participation is all butimpossible." A forest plan can run to a thousand

89

Bi)\ 4.(5. I he C linlon l-oiv-l .111

mi;; Liu- ll»i)2 I. .S. presidential campaign.

I hi- debate ov er hnw ID resolve the stalemate

over l o^ i i i i ; in old-^rowlh lore-Is bi-i.inie .1 re-

gional campaign issue and received extensive

national media coverage. While visiting; saw-

mills durini; several campaign swings lhrmu;li

Oregon and Washington. I'resMcienl Hush siii;-

j;esied lli.il limbiT industry workers were in

danger ol becoming an "endangered species"

in tin1 wake ut' the liid^e1 Hvver decision In b.ir

Iogi;in» mi most federal forest Kinds. I le im-

plied th.it (In1 \\ci\ to save thi1 ini.Jus[i\- w,is In

mnilily llii1 Indiin^iMX'd Spi-i ii> Ail, mil to

loin' llu1 li'doiMl ^nviTnim-nt Ininmpiv wilh

I'sistiiii; |,n\>. Hnrint; ii ••imilcir(.ijnipIiii;n trip.

I'liiuliilcitf liill (.'lintnn prnmisi'd In mmiMU1 d

"sLimmit" nt timl'i-r ivMikiTs, f in irniinii'iit.il-

i^ts, ,inj industry n.-piv?-i-nkilivvs tn .uidri"-.-. is-

b\ tlii' U'diT.il i imrl nrdi-rs.

Within w I'rks o\ his i-U-i linn, c Iinlnn's tr.in-

>itiiiii s[,iiY |\t;,in pl.innini; I In.- Inn-it siminiil

b\ innsuliin^ with huiiilri-ils-nl i;iMssrnnts i-n-

\ irnnnii'nl.ilists ,md limbi-r nr^nni/.itinns in tin-

riy,ion. .is \vi«ll tis ^ t ii-ntisK ivnnnmisl>, and

pnlitiii.ms. Tin- amk-n-niv1 w.is di'sij;ni\l tn

L;i\ i1 l.ibnr, limber, ,ind eiix'irnnmu'ntii! inlori'sts

.1 ihaiKi' In m.iki1 Iheir I.IM1 tn thi- I'li-siik'nt bi--

Inn- his .ldiiiinisiiYitinn dulteil d pl.in tn iid-

dti-ss ihi- I)\\yi-r I'nurl injuiii'tinn. A Tier liMiMi-

ini; tn ^1 panelists aniwy their hiipi>. ti-.irs,

.in11 nvommend.itiniis. the I'resklenl i losed the

innti-reiiie b\- .lnnnimriiii; his iidniinislr.ilinii

unuld develop .1 'kil.iiKi'd .niv.1 inmprehensi\e

lon^-lerni poliey" within Wld.iys.

the pl.in took lmii;er th.in e\-

peited. bill for the ne\t three ninnths, >i te.im

nt ne.irk 10lU'i.nl"i;ists-. I'm-esters. eionnnii-ls,

.uui soi.inln;',isls' worked trenetk.illy in ,i

renti-il ntliie in downtown I'ortl.ind to de\i-lop

options fnr ni.in.i^iiii; l\i i it i i - \nrthwesl forests

in .Hinrd.inii- with thebrn.id principles .irlicn-

l.iled b\- I'resjdenl Clinton .it tin- April 2 coii-

lerenie.' I he Forest l-VosWem M.iiKinemeiil

Assessment le.ini (\T.MAT) te.mi IMIIK- u]">

with ten options. (ITAIAT, ll>lHi Most u-,e vwi-

lerslii'ds ,is their piim.ir\ unit ol ,in,ilvsjs, .md

.ill i recite reser\ e dre.i.s lo provide li.ibil.it lor

spe« ii's js-,tH.i.itt-d w ith Kile sunessinn,)] <ind

old-growth forest i\ os\ sinus, enli.uiiv rip.ir-

i.m h.iliil.il prok\tion on leder.il Imvsl l.ind.s.

•mil speiil\ th.il limber s,ik-:, in the I ores-1 "m.i-

l r i \ " belwivn ri-ser\e .ire.is ret.iin .it le.ist some

unloved .in1.) .ind dispersed s-t.nulini; Irees.

L nder .ill Ihe su.-n.irio>. leiler.il timber h.ir\ests

.ire rediued -itinilic.mtl\ compared lo levels in

ths- recent p.ist ,mJ those pl.inned by the I'orest

Ser\ ice .uiii the HI \1 lieion- the injiinclions

were in pl.u e.'

Th.il s.iid, thi1 options differ s i ^ n i f i c i y

I lie most piiilecLi\e, C)ption 1, establishes- ,i

l.iiV,e svslem ""i..^ million heclaresl of essL-n-

li.ilh" inviol.ile reserves encompassing all late

sucies-,iniial and nld-i;rowlh fore>l, sharply

ri-s-trifts timber-man,lqement acti\ilies in

foresliil areas outside reserves, and vields

only Zl'i1 million boardfei-t oi annual timber

volume -a "-'O-percent rediklion Irom Ihe

record levels of the late ll|Slls. The le.i.sl pro-

ti-clis e optii>n K iplion 7i i.ill.s fnr a much

smaller reserve system ;2.~-l- million hectares),

allows [hinniiiL; and timber salvage" within

this area, and restruls timber-man.ii;emeiil

outside oi reserv es nuii h less slrin^eiilly.

L. nder this option, annual limber \olume

total more than 23 billion boardfeet.

On July 2, President Clinton announced that

the administration would ihoose neither ol

ihese sienarios bul wiuild instead i.;o with C>p-

tinn L'. li.isic.illv, Optinn L' iniludes a "^.'-mil-

lion hi'il,ire reserve svstem in which thinniiii;

and salvage are possible. In nnn-reserve Inr-

ests, limber operations must leave 1^ percent

live tree volume in harvest areas. Oplion l> also

calls for 10 "adaptive m.ina^i'menl /ones""

where lm.il lommunilies w ill have greater op-

portunities to influence management .nlivities

90

en federal loresl lands. In addition, the Presi-dent asked ( ongress [o approve .in economicassistance package of Si .2 billion lor job re-training, watershed restoration, and economicdevelopment in rural communities.

Ik-loivOption 4 becomes the managementstrategy lor federal forest Kinds in llie North-west, .in Fnvirnnmenlal Imp.icl "statement(HS) that conforms lo NHPA requirementsmust lx1 completed." I'luit process started inKite July when the .ldministr.ition released adrall I:nvironmental Impact Statement (L'SDA,|W5b) thai included all 10 of the options eval-uated by the I FMA I team for public com-ment.1 ' After rev iewing public comments, theadministration will select a final plan. It thelinal plan complies with NF.PA rec|uirementsand other conditicins ot Ihe injunction, tile lor-est Service w ill be allowed to resume loggingconsistent wilh the new plan.

Whether or not Option '•i (or some variant)becomes the new lramework lor federal lorestpolicies in the I'acilic \orlhwesl, the scope andseali1 of forest reforms in the region will, in .illlikelihood, remain unsettled. In his opening re-marks lo the Portland confereiKe. the Presi-dent predicted that the plan's "...ouUome * an-not possibh make everyone happv." 11 judgedb\ the volume of public' i omnient.- on the pro-posed actions to protect the northern spottedowl and other endangered speues! • andthreats of lawsuits from both timber induslrvand env ironmental interests <( V,-.SVK/:;»,l^ ' ib). the President's prediction mav havebeen understated. •' In lale October, the IVolot;-ical Society oi America and the American Insli-tule i)\ Biolo^kal Sueiues- "• released a joint re-port concluding that "...the choice of Option l)

i.inni>t be justified on scienlilii grounds."'Marks, el al., 1^3) AI .mv rate, the f l intonloresi plan mav crumple under future iourtchallenges unless it is modi lied to enhance Iheproleilion of endangered species or Congress

resolves the deadlock legislatively. Whateverthe fate of Ihe Clinton forest plan, il does fore-shadow major changes in l.'.S. forest policy- -perhaps the mosl significant sime the Pineholera l'O years ago.

1. The lorest "summit" was downgraded toa "confereiue." both to reduce expectationsover the outcome and lo avoid conlusion withPresident C. linton's summit with Russian Pres-ident >ellsin in Vancouver, B.C. the followingday.

2. According to St. Clair (I'W.i), this in-cluded 21 slots tor limber interests (divided be-tween labor and industry). nine environmen-talists, four salmon lishi'fies advocates, threelocal government representatives, two stategovernment ollicials, si\ M ientists. [wo econo-mists, two soi iologists, a v (national counselor,and the Archbishop of Seattle.

"V Ihe team—known as the lorest I'cosystemManagement Assessment 'learn (MAIAT) -washeaded bv lack Ward Thomas, a L'.S. I'oresi ser-vice wildlile biologist, and lerrv I'ranklin, a I. ni-versity ol Washington torest ecologisl. Untilmen ligured prominently in earlier scientific as-sessments (e.g.. Thomas el al., l l)l'3; (iordon elal., 1WI:: Thomas et al., I1WH) of old-growlhforests, endangered species, and tores! manage-ment in the Pacifk Northwest. Thomas wasnamed Chief of the loresl Service in I Vi ember

•1. In his closing remarks lo Ihe Portlandconterenie, President Clinton identified liveprinciples I lid I would guide Ihe developmentol his administration's loresl plan. First, theneeds of loggers and timber communities mustbe addressed. Second, the health o\ Ihe forestmust be protected. I hird. the plan must be sei-enlifically sound and legally responsible.Fourth. ,i sustainable and predii table level ot

' i i ' i i l i i i i u ' i l i ' u n r x l j \ i \ t ' i

91

fimlvr musl be provided. Fil'th, I hi1 federalgovernment must speak willi one voice.

5. \ o t counting timber volume from polen-lidl thinning and salvage operations in reservearea->. (hi.1 projected annual timber volumesunder the ITMAT options range Irom ll. I1) bil-lion board feel to 1.S4 billion board feet. TheNSO-|l>Nl> average limber harvest on USFS andlil.M lands w,b !i.S billion boardfeel while na-tional forest and IJI.M plans developed beforethe Dwver injunctions projected harvests aver-aging .".1 billion board feet during the l lWs.

d. Thinning operations are intended to allowmanagers to create uneven age stand struc-ture^ in reserve areas now characterized byeven age stands to augment existing old-grow th and late siuve.ssion.il habitats withinreserves. Salvage provisions would allow man-agers to harvest Irees heavih damaged bv\\ ind, lire, or disease, that might pose a Lhre.itto the old-growth and late successional standsin which Ihev are Waled. These provisionshave prompted considerable criticism frommany environmental groups. They believe theForest Service ha» a history of using "salvage"to justify logging in old-growth and roadlessareas.

7. This would include limber volumes har-vested in reserve areas due to thinning and sal-vage activities whkh would be allowed underall of llie options except Option I. Although noone knows how high limber volume levelstrom reserve- would be, some estimates havespeculated this could lolal as much as I billionboard feet per year.

S. These /ones lolal 0. million hectares.

*•'. Judge lawyer's May Wl>\ injunction sim-ply requires the L.S. loresl Service to preparean Fnvironmenlal Impact Statement (I IS) onits proposed actions to protect the northernspotted owl and other endangered species.Once an HS, prepared in accordant e with\ I P A requirements, is submitted to the Court,the injunction will be lifted.

111. The public comment period il'O days)ended October 2S, WV

11. In an October 21-) memorandum to lorestconservation activists, Jim Owens, l:\ecutiveDirector of Lhe Western Ancient I'oresl Cam-paign, wrote "Our understanding is that some-where between Si),(llH)-I(10,iK)0 comments werewritten on Option l'. The Forest Service... isscrambling lo develop processes and capacityfor wlial could be Ihe largest public responseloan HS comment period in history." The I-'or-esl Service asked I lie court to extend the periodfor review ing comments In C)0 days, whichmeans the final plan and a signed "Record ofDecision" will be finished by Ihe end of March

12. A July survey ol editorial reai lions to theClinton plan by (ireenwire (1W. ), indicatedthat many newspapers observed that no onewas happy with Ihe plan.

l.v The hcological Souely of America (l-i A)is a scientilic society oi 7.iHH) prolessional ecol-ogisls, i\n^] the American Institute o\ BiologicalSciences (AIMS) is a federation of ^0 scientificsocieties and sii.ililii members.

pages or more. Typically, the language is bureau-cratic, the pages of terms and definitions mind-boggling, and the scores of data tables in tinytype overwhelming. Public questions unan-swered by the draft plan and referred to theagency are usually answered with references to

the FORPLAN computer model, though a dozenother programs are also used. (O'Toole, 1988) Un-fortunately, FORPLAN computer runs are typi-cally two-to-three inch bundles of computerprintouts filled with cryptic codes and numberswith little explanation. Public requests for the

92

data that went into the model are often filled byproviding another printout consisting entirely ofnumbers that have no meaning to the lay person.According to O'Toole (1988), most FORPLAN ex-perts outside of the Forest Service work for thetimber industry and "The number of citizens'groups who have been able to penetrate FOR-PLAN's mysteries without the help of outsideconsultants can be counted on one hand." Withfull public participation limited to forest policyjunkies with formidable computer skills, interestgroups on both sides of the issue have confinedthemselves largely to seeing which group cangenerate the most form letters and postcards.24

Other barriers to full public participation arealso formidable. Blahna and Yonts-Shepard(1989) studied the development of thirteen Na-tional Forest plans and identified three barriersbesides the complex, technocratic nature of theagency's planning process. First, public participa-tion in the planning process is highly selective.Most National Forests took a passive approach tosoliciting public involvement in planning: in theearly stages of planning, public comments aver-aged fewer than 140 per forest and virtually allcame from commodity-oriented users of the for-est resources. (Blahna and Yonts-Shepard, 1989)After the release of the draft plan, forests aver-aged over 840 written public comments fromlocal, regional, and national interests, most ofwhich emphasized conservation and were highlycritical of the draft plan.

Second, as Blahna and Yonts-Shepard found,forest planners rarely interacted with the publicmid-course in planning, when key decisions aremade. After years of work and debate,25 manyforest staff members involved in planning weretoo attached to their own ideas to throw theplanning process wide open. Of the thirteen Na-tional Forests studied, only one (Green MountainNational Forest in Vermont) encouraged publicparticipation throughout the planning cycle andheld interactive meetings on high-conflict issuesduring this period. In the end, it was one of thefew National Forest plans that was not ap-pealed—and the only one amongst the thirteenstudied.

Third, most National Forest plans met theminimum legal requirements for public partici-pation by using the least confrontational meth-ods possible. Typically, written or one-way com-munication was encouraged instead of directinteraction.26 Acting in isolation, public interestgroups had to develop their own vision of whatthe plans should include, and some took ex-treme stands just to carve out unclaimed politi-cal territory. In other cases, contentious issuesidentified by the public early in the planningprocess had been sanitized or buried by agencydecision-makers in the draft plans finally re-leased, forcing the public to resolve their dis-putes in court. As Blahna and Yonts-Shepard(1989) conclude, controversies over forest plansstem mostly from the Forest Service's attemptsto avoid confrontation.

Structural Ignorance

As in Indonesia, the political discourse on for-est policies in the United States is riddled withunproven or even false assumptions that helppreserve the status quo. Those with huge stakes incurrent policies often believe these assumptions.In other cases, the assumptions are calculatedhalf-truths devised to convince enough votersand policy-makers that forest policy reformsthreaten their self-interest or that current forestpolicies and practices are adequate.

In the United States, one of the most question-able assumptions promoted by the timber indus-try and public land-management agencies is thatfederal timber is needed to meet an ever-growingdemand for wood fiber. Since the U.S. Forest Ser-vice was founded in 1905, it has consistently pre-dicted that demands for its timber would con-tinue to rise and that timber supplies would be inshort supply. (OTA, 1990) In the 1989 RPA as-sessment, the agency predicted that total de-mand for wood fiber will increase by 50 percentover the next five decades. (USDA, 1989) To meetthat demand, the agency assumes, harvest levelsin the National Forests will have to increase by20 percent, and even then prices in real termswill increase by as much as 12 percent eachdecade.

93

If history is any guide, these assumptions arelikely to prove incorrect. The agency's own statis-tics show that U.S. demand for timber has actu-ally declined by nearly 50 percent since the turnof the century, although it has increased by 0.3-0.4 percent annually in recent decades (Mac-Cleery, 1991)—considerably less than the 1 per-cent annual growth forecast by the 1989 RPA as-sessment. Meanwhile, the net volume of timberon private timberlands in the United States in-creased by over 40 percent between 1952 and1987. (Waddell et al, 1989) Even for softwoods(the major timber type harvested in NationalForests), private timberland stocks increased sig-nificantly—by 22 percent between 1952 and 1987.

Some proponents of continued harvests of Pa-cific Northwest old-growth argue in response tosuch evidence that this timber is needed for high-quality construction lumber and specialty prod-ucts, such as furniture and musical instruments.But this justification, especially for constructionlumber, is increasingly out of step with the times:technological advances have produced oriented-strand board, chipboard, finger-joint board, parti-cle board, and a host of other emerging compos-ite wood products that can be made from a widevariety of wood types that are abundant on pri-vate timberlands. And nothing close to one bil-lion boardfeet of old-growth timber is required tosatisfy the annual demand for fine furniture andmusical instruments (tens of millions of boardfeetare more likely).

Relying on such unproven assumptions con-tributes to poor forest management decisions thatcan have irreversible consequences. As O'Toole(1988) notes, excessive road-building is a case inpoint:

[Long-term economic forecasting] trendsoften lead planners to take irreversible ac-tions—such as proposing to build roads inroadless areas or to invade the habitat of en-dangered species—that would not have beenproposed if trends were not used.... The de-cision not to build roads is completely re-versible: The Forest Service can build roadsto harvest the timber at any time. If future

timber prices increase relative to road costsand recreation values, the roadless area maybe able to contribute to next year's timbersupply. In the meantime, there is no need tosecond-guess the future and foreclose op-tions by building roads today.

Another common assumption is that, even ifsubsidized public timber sales lose money, theycontribute to "community stability"—jobs, in-come, profits, and economic development. Al-though Chapter III showed how important tim-ber can be to some rural economies in the PacificNorthwest, timber dependency is not synony-mous with community stability. As noted, timberemployment declined even as harvests increasedto record levels during the 1980s due to automa-tion, log exports, and regional shifts in timber in-dustry investments. Although many smallsawmills survived (at least until 1991) thanks tothe availability of public old-growth timber,larger forces have doomed most of them whetherthe last old-growth forests are logged or not.

In any case, old-growth timber has already dis-appeared from many areas and would run outwithin the next two decades if harvests at 1980slevels continued. What will communities dependon for development then? The timber industrywill be gone, property values will be down, andthe recreational potential that could attract invest-ment and diversify the local economy will begreatly diminished. Knize (1991) suggests that themythical link between National Forest timbersales and community stability has created de-structive dependencies that have foreclosed fu-ture options:

The loggers and mill workers who dependon National Forest timber are, like theforests, victims of federal policy. Since theend of World War II, the Forest Service hasfostered in their communities an expecta-tion that federal timber would be availableindefinitely, and a way of life has evolvedaround that expectation. If the Forest Ser-vice and the loggers' elected representativeshad been honest with their constituentseven ten years ago, and warned them that

94

the supply of trees could not support theirindustry forever, mill owners and loggersmight not have invested further in lumberoperations that are doomed, National Foresttimber or no. These communities were mis-led, and they deserve aid in adjusting towhat is for them a catastrophe.

OTA (1992) further notes that payments to coun-ties based on federal timber receipts actuallydestabilizes communities since such paymentsswing widely from year to year due to economicand market fluctuations even if the harvest isn'trestricted. What's needed for stability, OTAstates, is "Fair and consistent compensation forthe tax exempt status of National Forest landsand activities [that] could stabilize county pay-ments, regardless of how the lands aremanaged."

Other questionable assumptions will emergeas economic, social, and political conditionschange. The overriding point here is that policy-making based on myths can't succeed except byaccident.

Toward Effective ForestPolicy-making

Recent attempts to deal with forest problems in-ternationally, through the Tropical Forestry ActionPlan and the International Tropical Timber Orga-nization in the 1980s and, more recently, throughattempts to negotiate an international forest con-vention prior to the Rio Summit, have founderedfor want of national-level commitment to policyreform. But before any such commitments can so-lidify, fundamental structural weaknesses and fail-ures in the policy-making process itself—whetherin wealthy industrialized countries such as theUnited States or in developing countries such asIndonesia—have to be addressed.

Four basic issues bedevil forest policy-makingin both the United States and Indonesia. First,planning, legislative, and regulatory mechanismsare overly complex, incoherent, and therefore donot function very well. Second, the aggregate

body of plans, laws, and regulations emergingfrom this system is so arcane and impenetrablethat only insiders and powerful interests withspecialized knowledge and contacts can manipu-late it. Third, mechanisms and opportunities forinformed and sustained participation in forestpolicy-making are inadequate. Many stakehold-ers, particularly those who are not wealthy or po-litically connected are simply frozen out of theprocess. A lack of public access to useful andtimely information upon which to base participa-tion exacerbates the problem. Fourth, forestrypolicy-making processes are characterized by ajurisdictional and intellectual "sectoralism"which frustrates development of policies basedon an integrated view of economic activity withinand outside forest areas, much less a view thattakes into full account the considerable social im-pacts of forest policies.

If national governments and their citizens—and the people of the planet as a whole—are toslow forest loss and put forest management on asustainable and equitable footing, these issuesmust be confronted with as complete and objec-tive a picture as possible of the problems to befaced, the costs and benefits of alternative re-sponses, and the distribution of those costs andbenefits. Fearless and informed dialogue is thusthe first step toward addressing the systemic po-litical weaknesses that have stymied forest policyreforms. Once these weaknesses are corrected,hard choices about how to break the economics ofinertia and the stranglehold of current forest-tenure regimes will remain, but so will hope thatwe can manage our forests sustainably and equi-tably into the next century and beyond.

Notes

1. In September 1992, for example, P.T. IndahKiat, the country's largest pulp and paper pro-ducer, was forced to apologize in parliament forhiring almost 700 workers from China. Whilethere is a large expatriate community working inIndonesia, "In fact the main cause of the problemis not the number of foreign workers itself, butmore their country of origin and the ethnic origin

95

[Chinese] of the project owners", said DefenseMinister Benny Murdani in his remarks to Parlia-ment on the matter. (Aznam, 1992a)

2. Law No. 8/1985 Concerning SocietalOrganizations.

3. As noted in a recent court decision (SeattleAudubon Society v. Moseley, 1992), the laws gov-erning the National Forests make them the onlyopportunity to manage for all forest values:"Management of the National Forests in compli-ance with the National Forest Management Actis vital because other measures are inadequatefor many species.... [For example] the efforts ofthe Fish and Wildlife Service fall short of sys-tematic management of a biological community.In this sense the National Forests offer a lastchance."

4. The public can indirectly influence forestpolicy and planning for private land throughstate forest practices legislation and such policymechanisms as state forestry commissions orboards (which, in general, are dominated by pri-vate forest land owners).

5. Perkins v. Bergland (1979), 608F. 2d 803, 806(U.S. Ninth Circuit Court of Appeals).

6. Actually, the RPA planning process startswith an analytical "assessment" of the currentforest situation. Inventories of forest data andtrends are carried out every ten years. The "pro-gram" to implement strategic responses to the as-sessment is updated every five years, as is the"statement of policy," which is supposed to pro-vide budget guidance and programmatic com-mitment to the strategic directions outlined in the"program." Finally, on an annual basis, the ForestService is to provide Congress with an annualbudget that reflects the priorities of the "pro-gram" and "policy statement" and an annual re-port on progress in implementing the "program."

7. The National Forest Management Act alsoforces the agency to satisfy other federal environ-mental laws, such as the National EnvironmentalProtection Act (NEPA), that require the federal

government to evaluate the environmental im-pact of its actions and to explicitly consider theimpact of management activities on endangeredspecies.

8. Provision 6 (k) of the National Forest Man-agement Act.

9. Northern Spotted Owl v. Hodel (1988); North-ern Spotted Owl v. Lujan (1991); Marbled Murrelet v.Lujan (1992).

10. Seattle Audubon Society v. Evans (1987); Seat-tle Audubon Society v. Evans (1991); SeattleAudubon Society v. Mosely (1992).

11. Lane County Audubon Society v. Jamison(1991); Portland Audubon Society v. Lujan (1992).

12. All appeals of these federal district courtrulings were rejected by the Ninth Circuit Courtof Appeals.

13. The Forest Service does not consider roadconstruction costs a subsidy since they claim theroads generate non-timber benefits as well. Forexample, logging roads are justified on the basisof providing better recreational access and firecontrol, and facilitating the agency's efforts tomanage a wide range of forest resources.(O'Toole, 1988) However, during planning, thepresumed beneficiaries of these roads, includingoutdoor recreational users, state Fish and Gameagencies, and others often vehemently opposeroad construction. (Repetto et al., 1992) Moreover,many logging roads are slated for removal afterloggers no longer need them.

14. Flora (1990) estimates that there is an aver-age $200 differential between upper-grade logssold domestically and those exported.

15. A 1990 federal law that phased out exportsof logs from state lands was overturned by the9th Federal Circuit Court of Appeals in May 1993.Several Washington state agencies had broughtthe lawsuit claiming that the state governmentwould lose nearly $500 million in timber salesthrough the 1990s and thus "cripple its ability to

96

adequately fund public education." (Wall StreetJournal, 1993)

16. Most other countries restrict or prohibitraw-log exports.

17. Exports can generate far more profits thandomestic processing since relatively few capital,labor, and other processing costs are involved.Exports are especially attractive because of theoverall declining international competitiveness offorest manufacturing in the Pacific Northwest.

18. Approximately 500 million boardfeet camefrom Washington State lands. (USFS/BLM, 1990)

19. In 1991, 84 percent of agency revenuescame from timber receipts, six percent from min-erals, six percent from recreation, one percentfrom grazing, and three percent from "other"sources. (OMB, 1992)

20. The project budget is for such on-the-groundactivities as timber sales, road construction, camp-ground maintenance, wildlife management, andother activities, and totals approximately 60 per-cent of the total Forest Service Budget. This ex-cludes the administration or overhead budget,which usually amounts to 40 percent of the totalcongressional appropriation.

21. This assumes that there were no efforts toeliminate below-cost timber sales or to raiserecreation and other user fees.

22. When Congress sets the annual timber-pro-duction targets, they reflect the end result of thecomplex planning process carried out by the For-est Service under RPA and NFMA, as well as ne-gotiations between Congress and the ExecutiveBranch.

23. The legal limit for PAC contributions to anindividual candidate is $5,000 per election.

24. According to O'Toole (1988), on manyplans, over 80 percent of the public comments aremade in form letters or form postcards.

25. National forest plans typically take from sixto eight years to develop.

26. According to Blahna and Yonts-Shepard(1989), the U.S. Forest Service spent 96 percent ofits public affairs budget on "one-way" informa-tion programs such as the Smokey the Bear,Woodsy Owl, news releases and speeches, andbrochures and audiovisual presentations. Only 4percent of the budget was spent on trying to de-termine public opinion on policy and planningissues, and most of this was merely to solicit andcode written comments from the public.

97

V. Conclusions and Recommendations

A nalysis of the root causes of the forestcrises in Indonesia and the United Statesindicates that effective policies to protect

forests' ecological integrity, make production ofdiverse forest products and services sustainableand equitable, allow for management at a sociallyworkable scale, and ensure broad participation inforest decision-making can be made only afterthese structural issues are addressed. Here weprovide some recommendations for action in In-donesia and the United States that directly ad-dress these issues.

Of course, generic policy recommendationsmust be put into perspective. As Raikes notes, it is

.. .difficult to say what are practical sugges-tions, when one's research tends to showthat what is politically feasible is usually toominor to make any difference, whilechanges significant enough to be worth-while are often unthinkable in practical po-litical terms. In any case, genuine practical-ity in making policy suggestions requiresdetailed knowledge of a particular countryor area; its history, culture, vegetation, exist-ing situation, and much more besides. Listsof general "policy conclusions" make it alltoo easy for the rigid-minded to apply themas general recipes, without thought, criti-cism, or adjustment for circumstances.(Raikes 1988)

Yet, much in the experiences of Indonesia andthe United States is relevant in other countries,

provided that adjustments for particular circum-stances are made thoughtfully and critically.

Reforming Forest Policy-making

Changes in the process by which forest policyissues are framed and discussed, and policy deci-sions are made, are a prerequisite for changinganything else.

In Indonesia, the following steps need to betaken to address structural deficiencies in forestpolicy-making:

• Give high-level political recognition to the legiti-macy of participation by all actors and interestsaffected by or involved in forest policy. In Indo-nesia, government at the presidential andministerial level must formally acknowl-edge, through word and deed, that the na-tional government is not and should not bethe only legitimate arbiter of forest policy;rather, local communities, non-governmen-tal organizations, and the private businesssector must be formally recognized as actorswho—like timber companies—are alreadykey players, or who —like NGOs and forestdwellers—have a legitimate right to be.Some encouraging developments are the1992 recognition by law of the territorialrights of indigenous forest communities (seeChapter II), the increasing receptivity ofmany government agencies to working withNGOs in exercises such as formulation of

99

the 1991 National Biodiversity Action Plan,and the increasingly public debate withingovernment on the extent and propriety oftimber companies' role in policy-making.

Increase public access to information relevant toforest policy decision-making. The policyprocess can never truly serve and benefitfrom the full range of affected interests andactors unless all parties receive relevant in-formation in a useful form and at the righttime. This is still an extremely grave prob-lem in Indonesia, where most information isheld closely by forestry officials, local com-munities are generally kept in the darkabout projects and policies that will drasti-cally affect their lives until it is too late forthem to influence the course of events, andNGOs must rely on leaks from sympatheticofficials to figure out what is going on. Onthe other hand, the national media is farmore diverse and outspoken than it waseven a few years ago, and many publica-tions now routinely report on environmen-tal issues. The proliferation of computersand fax machines allows even small NGOsand individuals to link into a global net-work of information sources. Recently initi-ated donor-aided forest and conservationprojects, such as the World Bank-assistedGlobal Environment Facility (GEF) projectin Sumatra have broken new ground: withgovernment's consent, NGOs and localcommunities will receive full documenta-tion on project preparation at the earlieststages. Needed now is a bold commitmentby the government to institutionalized,legally-guaranteed freedom of informationin all of its forestry activities and policyprocesses.

Initiate pilot efforts to manage forests region-ally, integrating different sectors. Experienceshows that most forests can be managedand conserved successfully in Indonesiaonly through a cross-sectoral, landscape-scale approach that integrates diverse forestuses and takes surrounding social and eco-nomic needs and realities into account. The

first step in what must be a long term-strat-egy is to initiate more strategic pilot efforts,like those supported by the Asian Develop-ment Bank, GEF, and other donors. Thegovernment, donors, and NGOs shouldcontinue to support and should also evalu-ate such pilot efforts, correcting mis-stepsas the initiatives mature. In the longer term,the government must draw on this experi-ence to come up with ways to institutional-ize the cross-sectoral, landscape-scale ap-proach to forest management within itsagencies.

• Remove obstacles to the empowerment and par-ticipation of weak and disenfranchised groupswith a stake in forest policy and build thesegroups' capacity to participate. Indonesia'sgovernment recognizes that its consider-able development successes over the pastseveral decades have left some groups andareas behind, and it has made the eradica-tion of poverty its highest priority in thecurrent Five-Year Development Plan.Moreover, many in government are begin-ning to realize that economic developmentmakes political development inevitable. Inforest policy, the government has repeat-edly noted the importance of "popular par-ticipation." But giving this phrase practicalmeaning will require loosening restrictionson the freedom of forest-dwellers, NGOs,and others to form organizations, to holdmeetings, to speak out in the media, and tocontact like-minded groups around thecountry and the world. Governmentshould also provide resources and politicalsupport to strengthen the capacity of localand national NGOs—indispensable inter-mediaries between policy-makers and localcommunities. Finally, if local communitiesare to become true partners in managingportions of the nation's forest estate, lawsmust change to allow community-basedforest-management groups to establish alegal corporate identity that allows thesegroups to make decisions democraticallyon their own and to possess and manageland and capital.

100

In the United States, overcoming structuralproblems in forest policy-making will require thefollowing steps:

• Develop a new alliance of all who stand to bene-fit from forest policy reform. The constituencypromoting forest policy reforms hasswelled during the past decade. Scientists,resource economists, natural resource man-agers (including foresters), and sometimeseven fiscal conservatives, have joined envi-ronmentalists in calling for reform. Still,most pro-reform coalitions represent but asmall segment of those who would benefitfrom change. The potential alliance shouldthus be expanded to include urban resi-dents who enjoy water and recreation bene-fits, commercial and recreational fishermenwho need aquatic habitat protected, smalltown and rural residents seeking stableeconomies and greater political and eco-nomic access, private land owners whocould profit as forest resource values rise,and forest industry innovators and entre-preneurs looking for business opportuni-ties. Proponents of change should start toexpand the active constituency for reformsby first analyzing who stands to gain fromreform and why. Through such techniquesas "participatory rural appraisal," forest-based communities should also be involvedin the analysis of forest resource problemsand opportunities. Although it cannot sub-stitute for analysis, dialogue is also criticalto expanding the alliance of interests sup-porting forest policy reform. While theClinton forest conference in April 1993 wasa symbolic step in that direction, reformersshould encourage a sustained dialogue onforest policy issues with all stakeholders,especially at local levels.

• Improve participation in forest planning and pol-icy development so the public gets more involvedin defining what Americans want from theirforests. Although sophisticated by the stan-dards of most countries, mechanisms forpublic participation in forest planning andpolicy-making do not encourage broad

involvement in determining "desired futureconditions" in public forests or in monitor-ing the Forest Service's performance. Tomake amends, the Forest Service should ac-tively solicit all stakeholders to help developNational Forest plans; involve the public inthe development of forest-management op-tions from beginning to end; keep the publicinformed of controversial forest-manage-ment issues; and compile and distribute pol-icy-relevant data to the public and theirelected representatives. Since a growingnumber of national and local NGOs are ana-lyzing critical forest-management issues, for-est-management agencies have an extra in-centive to involve the public more—avoiding costly and lengthy legal conflicts.

Give scientists and professional natural resourcemanagers more say in determining what re-source-use levels are sustainable. Despite theincreasing diversification of professionals(e.g., ecologists, sociologists, wildlife biolo-gists, hydrologists, etc.) in natural resourcemanagement agencies, science and profes-sional judgment are often subordinated topolitical considerations to maximize com-modity production. The annual timber tar-gets that Congress set, for instance, becomethe benchmarks for measuring agency per-formance, in turn creating pressures formanagers to sacrifice forest resourcesagainst the better judgment of agency scien-tists and resource professionals. Recent an-nouncements by the U.S. Forest Service andthe Bureau of Land Management that theyare adopting "ecosystem management"policies suggests that science will soon playa greater role in future management deci-sions. But advocates of forest policy reformshould step up the pace of change by work-ing with forest management agencies to de-fine "forest ecosystem management" poli-cies, setting benchmarks or standards formonitoring progress in ecosystem manage-ment, and developing legal and administra-tive measures that reward progress towardecosystem management goals. At the sametime, perverse incentives that currently

101

reward environmentally and economicallyunsustainable actions must be eliminated.

• Initiate pilot efforts to manage forests regionally,integrating the needs of different sectors andlandowners. Consistent with experiences inother countries, it is becoming increasinglyapparent that U.S. forests can be managedand conserved successfully only through across-sectoral, regional approach that inte-grates diverse forest uses and takes full ac-count of surrounding social and economicneeds and realities. A number of recent in-novative proposals reflect this approach, in-cluding efforts in the "Greater YellowstoneEcosystem" of Wyoming, Idaho, and Mon-tana and the forest lands of northern NewEngland. So far, the federal government—amajor landowner with the power to providetechnical assistance, tax incentives, data,and other critical resources—has shiedaway from a leadership role in these efforts.On the other hand, the new administrationappears willing to experiment with land-scape ecosystem approaches to the manage-ment of natural resources in other settings,in part to head off costly and divisive con-flicts over endangered species.

Toward Sustainable ForestEconomies

Forest economies in both Indonesia and theUnited States are driven by commodity-produc-tion policies that concentrate economic benefitswithin certain groups while shifting costs to thewider public. Policies that support a transition tomore sustainable forest economies will be crucialto the future of natural forests in both countries.

In Indonesia, the following steps will promotethe transition to sustainable forest economies:

• Conduct comprehensive forest inventories andutilize natural resources accounting methods todetermine the real status and trends of the re-source base and the full values of alternativeuses. Rational economic choices in the

forestry sector cannot be made without afull accounting of what the resource base isand what the real costs and benefits of alter-native uses are. Both private and govern-ment-sponsored inventory and mapping ef-forts are under way, promising a far betterpicture of the resource base by the mid-1990s. Necessary too, however, is a shift inthe ways that the costs and benefits of alter-native policies are accounted for. In particu-lar, economic-assessment methods shouldbe developed that account for the values ofnon-timber forest products, of local forestproducts and services that do not enter for-mal markets, and of such "ecosystem ser-vices" as the maintenance of hydrologicalfunctions and the prevention of erosion andlandslides. Some preliminary theoreticalwork has been done (Repetto, et. al, 1989),but government and the private sector haveyet to internalize the natural resources ac-counting approach systematically.

Account fully and publicly for the economic, eco-logical, and social costs and benefits of forest ex-ploitation. Just as important as detailing whatthe true costs and benefits of alternative pol-icy choices are is detailing exactly who gainsand who loses. While government agenciescan facilitate this kind of "distributionalanalysis" by freeing up access to relevant in-formation, much of this work is likely to bedone by researchers and NGOs and injectedinto public debate by the press. The growingcapacity and willingness of independent re-searchers to take on questions of equity inthe forestry sector is documented by themany studies cited in this report, and the in-creasing freedom of the press to report onsensitive forest controversies strengthensthis movement. To give it added momen-tum, aid donors should support the develop-ment of independent research capacity.

Eliminate policies that lead to resource waste orthat subsidize special interests at the expense ofthe public. While the government is begin-ning to reform timber-concessions, wastestill pervades the system. A significant

102

example is the way timber levies are calcu-lated for plywood: it is assumed that twocubic meters of logs are used to make one ofplywood, but nobody checks to see if thatmuch is actually used, so the incentive is notto use raw material efficiently. A number ofother perverse incentives bear scrutiny aswell, including the still-low level of govern-ment rent capture from logging operations,and the generous subsidies granted for es-tablishing industrial timber plantations.

• Promote sustainable forest uses and provide in-centives for forest conservation. While timberproduction will remain the cornerstone ofIndonesia's forestry sector, the sameamount of revenue could be realized from alower level of timber harvest if non-timberuses received greater emphasis. Naturetourism, the sustainable exploitation of non-timber forest products, and "biodiversityprospecting" for commercially valuable ge-netic resources all warrant proportionatelygreater attention.

In the United States, a transition to more sus-tainable forest economies will require the follow-ing steps:

• Use natural resource accounting methods to de-termine the true status of the resource base, thetrends affecting it, and the full values of alterna-tive uses. Even though the Forest Service andother land-management agencies have col-lected voluminous data on forest resources,serious gaps exist in the information theygather and monitor.

• Eliminate below-cost timber sales and other poli-cies that invite waste or subsidize special inter-ests at the expense of the public. Much U.S.Forest Service land is unsuitable for com-mercial timber production, especially in theIntermountain West, Alaska, and the East.Yet, timber targets set by Congress andpressure from local timber interests haveperpetuated timber operations in suchareas—despite National Forest ManagementAct directives to remove these areas from

the timber base. Although the subsidy im-plicit in below-cost timber sales varies withthe volume and price of timber sold, in re-cent years it has been estimated at up to$400 million annually. Such sales damageother resources (fisheries, recreation, waterquality, and wildlife habitat) worth more tothe public than timber in areas wherebelow-cost sales are prevalent. Requiringthe Forest Service to establish a minimumbid for all timber sales so as to recover thefull costs of growing and selling trees (andprotecting valuable non-timber assets)would do much to eliminate these subsidies.Although below-cost timber sales are un-common in the Pacific Northwest (espe-cially in National Forests west of the Cas-cades), other policies create subsidies inconflict with the public interest. Tax creditsfor the export of raw logs save Northwestlog producers nearly $100 million annually,according to the Congressional Joint Com-mittee on Taxation. At the same time, road-construction credits against timber pur-chases that amount to interest-free loans,form an indirect public subsidy to loggingin the Northwest that makes harvesting onpublic lands more attractive than purchas-ing private timber supplies.

Invest the savings from the elimination of publicsubsidies to private timber interests in therestoration of degraded forest lands and the eco-nomic diversification of communities that havegrown dependent on federal timber resources.Valuable forest assets—among them, fish-eries, habitat for wildlife and biodiversity,and forested watersheds—throughout theUnited States have been damaged by forestpractices, many of which were encouragedby federal subsidies. Investing the savingsgained by eliminating such subsidies wouldincrease the forest's future values and eco-nomic returns and give local forest econo-mies a new lease on life.

Replace federal programs for sharing revenuesfrom timber sales with fair and consistent com-pensation to counties that have tax-exempt

103

federal forest lands in their jurisdictions. Coun-ties with extensive federal forest lands havecome to depend on federal forest revenues(90 percent of them from timber) to fundschools, roads, and social services. Natu-rally, local government support for perpetu-ating timber sales is fierce even in the face ofgrowing damage to other important re-sources and industries. Yet, even continuedrevenues from sales would not mean stabil-ity for forest communities: timber revenueshares to counties can fluctuate by as muchas 50 percent or more from year to year.

Congress should require a study to deter-mine appropriate compensation methodsand levels and then replace the current sys-tem with stable tax-equivalency payments,regardless of how the lands are managed.Alternatively, federal payments could bebased on net rather than gross revenues,provided that the federal government cap-tures more revenue from valuable non-tim-ber resources, such as recreation, than it cur-rently does. Under this alternativeapproach, local governments would encour-age the efficient management of federallands for their most valued uses. But be-cause many important forest assets andfunctions (e.g., biodiversity, water quality)are unlikely to ever be adequately recog-nized in forest revenues and user fees, fixedcompensation rates per unit area are proba-bly preferable.

Encourage the development of markets for sus-tainably produced forest products, includingtimber, recreation, wildlife and fisheries, water-shed protection, and such other non-timber re-sources as biodiversity. Although some tim-ber-dominated local economies will moveheavily into service, professional, and tradeactivities, many communities in the North-west (and in other parts of the country) willalways be dependent on forest resources.Sustainable forest economies will thus de-pend on building markets for more sustain-ably produced forest products. Many suchproducts will be produced by small,

entrepreneurial businesses without muchinvestment capital or easy access to markets.The private sector, which must take thelead, can work with non-profit organiza-tions to help build such markets by educat-ing the public on the benefits and quality offorest products created without destroyingforest diversity and productivity and on theimpacts of buying products whose pricesdon't include the cost of externalities.

In partnership with Southshore Bank,(which pioneered community-based bank-ing to fund locally initiated urban redevel-opment in Chicago), a Portland-based non-governmental organization, Ecotrust, isexploring options to create community-based financing for small businesses that donot have negative environmental impacts inrural forest areas. (Ecotrust, 1992) To facili-tate such important private initiatives, gov-ernments should back private investors insustainable forest activities with loan guar-antees or revolving low-interest loans andtarget investment tax credits for more envi-ronmentally sustainable businesses.

• Establish incentives to encourage private invest-ment in sustainable timber management on com-mercial timber lands and small tracts of non-commercial lands. The Pacific Northwest willremain an important source of timber forthe rest of the country and internationally,even as public timber supplies contract andthe forest products industry's regional eco-nomic role shrinks compared to those of ser-vices. But on many privately owned forestlands, productivity is not as high as it couldbe and non-timber benefits are limited.

Where timberland values and timber pricesavailability are not high enough to encour-age more investment in currently unproduc-tive private forest lands, tax credits andother incentives to encourage the restorationof forest productivity should be considered.On all private forest lands, state and federalpolicies can encourage resource manage-ment that leads to a wider array of public

104

forest benefits by offering tax and other fis-cal incentives tied to enhanced water qual-ity, wildlife habitat, and other forest-relatedassets and functions for which land-ownersare not traditionally paid. Finally, tempo-rary targeted investment tax credits couldbe offered to smaller producers dependenton old-growth timber so they can retool tohandle second- and third-growth process-ing. Similar incentives could be offered toprocessors to invest in capital improve-ments to produce high-quality processedand finished wood products for the specifi-cations of the demanding international mar-ket. Meanwhile, the United States shouldnegotiate lower foreign trade barriers to fin-ished wood products and eliminate tax in-centives for the export of raw logs and mini-mally processed wood products.

Revamping Forest-TenureRegimes

Forest ecosystems will be managed sustainablyonly when it is in the best interest of forest usersand managers. In both Indonesia and the UnitedStates, rights to and responsibilities for using forestresources are often defined and distributed in waysthat do not encourage sustainable management.

In Indonesia, steps to correct deficiencies inforest tenure regimes to promote sustainable for-est management will include the following:

• Conduct a Ministerial-level legal and regulatoryreview of the status of customary adat lands inforest areas and produce a coherent and authorita-tive statement of law and policy based on therecognition that legitimate customary land rightsare valid under national law and asserting thattheir protection is in the national interest. Whilemany government- and NGO-sponsoredpilot projects are currently trying to get adatforest land rights recognized in the context ofsustainable and productive forest-manage-ment systems, they are likely to remain iso-lated demonstration projects unless govern-ment launches a "top-down" effort to clarify

the status of adat rights and makes sense ofthe confusing tangle of laws and regulationscurrently governing forest tenure.

• Determine, map, and accord recognized legalstatus to the ancestral territories of rural peoplesliving in or next to public forest lands. Once thegovernment recognizes adat rights, the hardwork of translating a commitment into prac-tice remains. Conflicts and differing inter-pretations are inevitable, and not every adatright will be compatible with new sustain-able forest-management strategies. But se-cure boundaries for both the nation's forestsand the communities that live in them or ontheir fringes are essential preconditions formaking new strategies work.

• Strictly enforce laws requiring recipients of log-ging-concession rights to care for the land, levy-ing heavy fines and revoking licenses as neces-sary. The government has already begun tocrack down on some concession-holders,but it does not have the information or theinspection capacity needed to do the jobright. Establishing an independent inspec-tion capacity and requiring a stiff "perfor-mance bond" from concession-holderswould go a long way toward bringing er-rant logging firms into compliance withtheir concession agreements.

• Review and eliminate overlaps between timberconcessions and protected areas. Given the na-tional and global significance of Indonesia'sbiodiversity, eliminating logging activitiesin protected areas and in areas immediatelyadjacent to them must be a high priority forgovernment if it is to make good on itsstrong commitment to conserving biodiver-sity. Given the timber industry's economicimportance and political strength, govern-ment will not be able to eliminate these con-cessions by fiat, any more than the U.S.Government has been able to halt logging inthe remaining old-growth forests in the Pa-cific Northwest. Needed is a negotiating ap-proach based on an understanding of thecosts that concession-holders will have to

105

bear and of the need to at least partly com-pensate them, perhaps with other conces-sion areas or preferential rights to developindustrial timber plantations. Internationaldonors should support such efforts, giventhe global interest in conserving Indonesia'sbiodiversity.

Establish a category of forest property right thatallows certain qualifying logged concessions tobecome "community concessions" restored andmanaged by local communities with help fromgovernment agencies and the private sector.Many logged-over forests in Indonesia couldbe restored if access could be controlled.Local communities are, in many cases, theparties best situated to control access, pro-vided they have an incentive to keep thearea forested. Pilot efforts of this sort alreadyunder way in Kalimantan should be encour-aged, improved, and expanded.

Strictly review and monitor those granted In-dustrial Timber Plantation Rights to ensure thatplantations are sited only on truly degradedlands and that establishing plantations does notdisplace the sources of livelihood (e.g. grazingland) for local people or, if it does, that these peo-ple are consulted well in advance of any land-usechange and receive just and adequate negotiatedcompensation. Timber plantations will playan important part in Indonesia's forestrysector in coming decades, but they need notbe allowed to destroy both natural forestsand local people's livelihoods. If commonsense prevailed, natural forest, even so-called "secondary" forests, would never becleared expressly to establish plantations;instead, the millions of hectares of alreadydegraded lands would be used. Equally im-portant, careful socio-economic surveysshould be made of all "degraded land"areas targeted for plantation development;some will certainly turn out to be important,if undocumented, resource bases for localcommunities, which should be party toplantation planning and siting and shouldhave a say about what species are to begrown.

In the United States, steps to improve the bal-ance between rights to use forest resources andresponsibilities to maintain them include:

• Strictly enforce existing responsibilities to main-tain forest resources on public and private lands.Timber companies are already required toprotect some forest resources, and recenttougher laws on state forest practices inWashington state are encouraging. But suchlaws have been enforced selectively or lack-adaisically on both public and private landsthroughout the Pacific Northwest. Tighten-ing enforcement will produce public bene-fits evident for years. It will save taxpayersthe expense of destroyed fisheries habitat,recovering endangered species, stabilizingerosion-prone slopes, and minimizing infra-structure and personal losses due to flood-ing exacerbated or caused by poor forestmanagement.

• Identify the forest areas most important for biodi-versity and other non-timber "forest values" andprotect the areas where logging and non-timbervalues are found to be incompatible. Given theirextremely limited extent, all remaining old-growth forests on public lands should beprotected from logging and other uses thatwould irreversibly reduce their biodiversity,and their use in scientific research, recreation,and other activities. Accordingly, efforts toexpand habitat areas critical to the survival ofthreatened and endangered species shouldreceive priority over commodity production.Habitat restoration should also take prece-dence over timber production in public forestareas where additional species are likely tofall into the Endangered Species Act listingprocess if remedial actions are not taken. Inother unprotected and publicly owned nat-ural forest areas not yet converted to mono-cultural forest stands, an ecological basis fornatural forest management should be firmlyestablished before any logging occurs. (Alter-natively, logging should be restricted to areasalready converted to highly modified ormonocultural stands.) The ecological goalsshould be:

106

° protecting natural regeneration of impor-tant successional and dominant treespecies by retaining biotic diversity,maintaining suitable microclimates forgeneration, and allowing fires and othernatural disturbances that are part of nat-ural successional processes;

0 preserving nutrient cycles by protectingmineral nutrients, organic soil materials,and soil microfauna and leaving woodydebris;

° protecting the forest from large-scale dis-turbances to which it is not adapted—inmost areas, this means extensive andcomplete removal of tree canopies sinceclearcutting may give tree species (suchas Douglas fir) an advantage while limit-ing the successional role of other treesand the tremendous biological resourcesassociated with naturally regeneratingforest ecosystems;

° and protecting contiguous natural forestareas from conversion and maintainingrelatively undisturbed habitat corridorsto the nearest large similar forest habitat.

Develop forest ecosystem management plansthat anticipate conflicts between commodity-ex-traction and the conservation of endangeredspecies and other non-commodity values. Long-range trends for a wide array of forest re-sources need to be established through new

monitoring programs so that forest man-agers, policy-makers, and the public can an-ticipate and deflect emerging problems andconflicts—whether they involve timber sup-ply, water quality, carbon storage, habitatarea, or recreational opportunities. Such in-formation should be collected from all forestareas to give public and private forest man-agers the widest view of possible problemsand potential solutions. Actions based onthis information should ideally be deter-mined at a scale in which forests, ecologicalprocesses, and economic activities arestrongly linked. The scale may be definedby some combination of watershed bound-aries, biogeographic classification, or eco-nomic markets, but preferably not by arbi-trary political boundaries.

Possible actions should be developed bytask forces composed of individuals repre-senting diverse interests with a stake in areaforests. This should include representativesof government agencies (local, state, andfederal), private landowners and businesseswith a stake in the area's forest resources aswell as representatives of local communi-ties, non-governmental organizations, andinterested members of the public. Such taskforces might call for voluntary actions byprivate and public interests, or for policychanges accomplished through tax and fis-cal incentives, reform of existing laws andinstitutions, or new regulations.

Charles V. Barber is a Senior Associate in the Biological Resources and Institutions Program at the WorldResources Institute, where he works on legal and institutional analysis of forestry and biodiversity con-servation issues. Prior to joining WRI, he worked in Indonesia as a consultant for the World Bank, theFord Foundation, and the U.N. Food and Agriculture Organization. Nels C. Johnson is an Associate inthe Biological Resources and Institutions Program at WRI, where he works on biodiversity conservationplanning and forest management policies. Previously, he worked for the International Institute for Envi-ronment and Development in Washington, the Center for International Development and Environmentat WRI, and Oregon State University's cooperative forest research program. Emmy Hafild has spent thelast ten years as an environmental researcher and activist in Indonesia. She is now a Fulbright Scholar atthe University of Wisconsin/Madison in the Institute of Environmental Studies. Emmy is an active mem-ber of the Indonesian Environmental Forum and is currently on leave from WALHI, an Indonesian coali-tion of environmental groups.

107

References

Abdoellah, et. al., Sustaining the Natural Resourcesof Kalimantan: An Interim Research Report(draft). Mimeo.

Abdurrahman, 1984. Hukum Adat Menurut Perun-dang Undangan Republik Indonesia. [CustomaryLaw According to the Legal System of theRepublic of Indonesia]. Jakarta: CendanaPress.

Adams, D.M., K.C. Jackson, and R.W. Haynes.1987. Production, Consumption, and Prices of Soft-wood Products in North America: Regional TimeSeries Data, 1950-85. U.S. Department of Agri-culture, Forest Service, Pacific Northwest For-est and Range Experiment Station. Portland,OR.

Adams, D.M., and R.W. Haynes. 1990. Publicpolicies, private resources, and the future ofthe Douglas-fir region forest economy. Westernjournal of Applied Forestry. 5: 64-69.

Agee, J.K. and M.H. Huff. 1987. Fuel successionin a western hemlock /Douglas fir forest. Cana-dian Journal of Forest Research. 17: 697-704.

Aji, B., Karsadi, A.K. and Wahyuni, S. 1993 "Ya,Ya, Ya, Yamdena." Tempo, 18 September,1993.

Anderson, H.M. and C. Gehrke. 1988. NationalForests: Policies for the Future. Volume 1: WaterQuality and Timber Management. The Wilder-ness Society, Washington, D.C.

Anderson, H.M. and J.T. Olson. 1991. Federal For-ests and the Economic Base of the Pacific North-west. The Wilderness Society, Washington,D.C.

Asian Development Bank (ADB), 1992. Appraisalof the Biodiversity Conservation Project in Floresand Siberut in the Republic of Indonesia (draft).Manila.

. 1992a. Indonesia: Private Sector Industrial TreePlantations Program—Report of a Technical Assis-tance Consulting Team. Manila.

Atkinson, W. 1990. Another view of New Fores-try. Forest Watch 11(2): 12-15.

Aznam, S. 1992. "The toll of low wages", Far East-ern Economic Review, 2 April, 1992; 50.

Aznam, S. 1992a. "Help not wanted", Far EasternEconomic Review, 1 October, 1992; 18.

Aznam, S. 1992b. "Passport control: New immi-gration law can render citizens stateless", FarEastern Economic Review, 26 March, 1992; 18.

Barber, C.V. 1992. Unpublished trip report onparticipation in the "Roundtable III" meetingon the Indonesian Forestry Action Programme,February 24-25,1992, Yogjakarta, Indonesia.

. 1990. The Legal and Regulatory Framework forForest Production in Indonesia. Included as Ap-pendix 1 in Zerner 1990.

109

. 1989. The State, The Environment, and Devel-opment: The Genesis and Transformation of SocialForestry Policy in New Order Indonesia. DoctoralDissertation, University of California,Berkeley.

Barber, C.V. and Churchill, G. 1987. Land Policy inIrian Jaya: Issues and Strategies. Jakarta; Govern-ment of Indonesia/United Nations Develop-ment Programme.

Bassett, P.M. and D.D. Oswald. 1983. Timber Re-source Statistics for Eastern Washington. Re-source Bulletin PNW-104. Pacific NorthwestResearch Station, Portland, OR.

Beuter, J.H. 1990. Social and Economic Impacts of theSpotted Owl Conservation Strategy. TechnicalBulletin 9003. American Forest Resources Al-liance, Washington, D.C.

Blahna, D.J. and S. Yonts-Shepard. 1989. Publicinvolvement in resource planning: Towardbridging the gap between policy and imple-mentation. Society and Natural Resources, 2:209-227.

Bonnett, M. and K. Zimmerman. 1991. Politicsand preservation: The Endangered Species Actand the northern spotted owl. Ecology LawQuarterly. 18: 105-171.

Booth, W. 1989. New thinking on old growth. Sci-ence, 244:141-143.

Boulter, D. 1988. Proposals for Medium and LongTerm Planning for Forestry and Forest Sector De-velopment in Indonesia (draft). Jakarta; Paperprepared for FAO/UNDP project on "Assis-tance to Forest Sector Development Planning".

Boyd, R.G., and W.F. Hyde. 1989. Forestry SectorIntervention: The Impacts of Public Regulation onSocial Welfare. Iowa State University Press,Ames, IA.

Bromley, D. 1989. Property relations and eco-nomic development: The other land reform. InWorld Development, Vol 17, No. 6, pp. 867-877.

Brookfield, H., et. al. 1990. Borneo and the MalayPeninsula, in B.L. Turner, et. al., eds., The Earthas Transformed by Human Action. CambridgeUniversity Press.

Brown, G. and C.C. Harris. 1992. The U.S. Forest Ser-vice: Toward a new resource management para-digm? Society and Natural Resources, 5:231-246.

Bruck, R.I. 1989. Forest decline syndromes in thesoutheastern United States. In: J.J. MacKenzieand M.T. El-Ashry, eds., Air Pollution's Toll onForests and Crops, Yale University Press, NewYork. pp. 113-190.

Bundestag. 1990. Protecting the Tropical Forests: AHigh Priority International Task. 2nd report ofthe Enquet-Commission "Preventive Measuresto Protect the Earth's Atmosphere." GermanBundestag, Bonn.

Callister, D.J., 1992. Illegal Tropical Timber Trade:Asia-Pacific. Cambridge: TRAFFIC International.

Carroll, M.S. 1989. Taming the timberjack revis-ited. Society and Natural Resources 2: 91-106.

Cascade Holistic Environmental Consultants(CHEC), 1985. The politics of planning. ForestPlanning, April 1985. CHEC, Eugene, OR.

Caufield, C. 1990. The ancient forest. The NewYorker, May 14,1990: 46-84.

Clad, J. 1991. Behind the Myth: Business, Money andPower in Southeast Asia. London, GraftonBooks.

Clary, D.A. 1986. Timber and the Forest Service.University Press of Kansas, Lawrence, KS.

Cleaver, K, M. Monasinghe, M. Dyson, N. Egli, A.Peuker, F. Wencelius. Conservation of West andCentral African Rainforests. The World Bank,Washington, D.C.

Cohn, R. and T. Williams. 1993. Interior views. In-terview with Interior Secretary Bruce Babbitt.Audubon 95(3): 78-84.

110

Colchester, M. 1990. Shifting Cultivation: RationalResource Use or Robber Economy? Paper preparedfor the Third World Network/APPEN Confer-ence on "The Destruction of Asian Agriculture,"Penang Malaysia, 10-13 January, 1990.

Colchester, M. and Lohmann, L. 1990. The TropicalForestry Action Plan: What Progress? Penang,Malaysia, World Rainforest Movement.

Cort, C. 1991. Voices From the Margin: Non-govern-mental Organization Participation in the TropicalForestry Action Plan. Washington, D.C., WorldResources Institute.

Cubbage, F.W. 1991. Public regulation of privateforestry. Journal of Forestry 89 (12): 31-35.

Cubbage, F.W., J. O'Laughlin, and C.S. BullockIII. 1993. Forest Resource Policy. John Wiley andSons, New York.

Cubbage, F.W. and W.C. Siegal. 1985. The lawregulating private forest practices. Journal ofForestry 83: 538-545.

de Beer, J. and McDermott, M. 1989. The EconomicValue of Non-timber Forest Products in SoutheastAsia. Amsterdam, Netherlands Committee forIUCN.

Departamen Kehutanan [Ministry of Forestry]1991. Social Forestry Development Project. Reportpresented at a Coordinating Meeting of theMinistry of Forestry, 16 December, 1991.Jakarta: Mimeo.

. 1986. Sejarah Kehutanan Indonesia [The His-tory of Forestry in Indonesia]. Jakarta.

Dick 1991. Forest Land Use, Forest Use Zonation,and Deforestation in Indonesia: A Summary andInterpretation of Existing Information. WALHI,Jakarta.

Djamaluddin, S. 1991. Pemanfaatan Hutan YangBerkelanjutan [Sustainable Forest Utilization].Paper presented at Seminar on SustainableForest Utilization, 11 June 1991, Jakarta.

Douglas, J. 1985. Organization for Production.Paper presented at the Ninth World ForestryCongress, Mexico City, July 1985.

Dove, M. 1988. Introduction: Traditional Cultureand Development in Contemporary Indonesia.In M. Dove, ed., The Real and Imagined Role ofCulture in Development: Case Studies from Indo-nesia. Honolulu: University of Hawaii Press;1-37.

. 1985. The agroecological mythology of theJavanese and the political economy of Indone-sia. Indonesia 39:1-36.

Dudley, N. 1992. Forests in Trouble: A Review of theStatus of Temperate Forests Worldwide. World-wide Fund for Nature, Gland, Switzerland.

Durning, A. 1992. Guardians of the Land: IndigenousPeoples and the Health of the Earth. Washington,D.C., Worldwatch Institute Paper 112.

Eagan, T. 1992. Space photos show forests in Paci-fic Northwest are in peril, scientists say. NewYork Times, June 11,1992.

Economic and Social Commission for Asia andthe Pacific (ESCAP), 1992. State of the Environ-ment in Asia and the Pacific 1990. Bangkok:United Nations Economic and Social Commis-sion for Asia and the Pacific, 15-16.

Ecotrust. 1992. Fiscal Year 1992 Annual Report.Ecotrust, Portland, Oregon.

Flora, D.F. 1990. Timber exports: Winners andlosers. Forest Watch 10(11): 9-25.

Flora, D.F., A.L. Anderson, and W.J. McGinnis.1991. Pacific Rim Log Trade: Determinants andTrends. Research Paper PNW-RP-432. PacificNorthwest Research Station, Portland, OR.

Flora, D.F., and W.J. McGinnis. 1989. Embargoeson and off: some effects of ending the exportban on federal logs and halting exports ofstate-owned logs. Western Journal of AppliedForestry 4(3): 77-79.

I l l

Food and Agriculture Organization of the UnitedNations (FAO), 1992. Forest Products AnnualYearbook 1990. FAO, Rome.

Forest Ecosystem Management Team (FEMAT),1993. Forest Ecosystem Management: An Eco-logical, Economic, and Social Assessment. Re-port of the Forest Ecosystem ManagementTeam. USD A, Washington, D.C.

Friedland, J. 1991. "Pulp and Paper: Aiming for aNew Market. Far Eastern Economic Review. 18April, 1991: 50.

Friends of the Earth. 1992. Deserts of Trees: The En-vironmental and Social Impacts of Large-ScaleTropical Reforestation in Response to Global Cli-mate Change. London, Friends of The Earth,Ltd.

Gedney, D.R., P.M. Bassett, and M.A. Mei. 1989.Timber Resource Statistics for All Forest Land, Ex-cept National Forests in Eastern Oregon. USFSResource Bulletin PNW-RB-164, Pacific North-west Research Station, Portland, OR.

. 1987. Timber Resource Statistics for Non-Fed-eral Forest Land in West-Central Oregon. USFSResource Bulletin PNW-RB-143, Pacific North-west Research Station, Portland, OR.

. 1986a. Timber Resource Statistics for Non-Fed-eral Forest Land in Northwest Oregon. USFS Re-source Bulletin PNW-RB-140, Pacific North-west Research Station, Portland, OR.

. 1986b. Timber Resource Statistics for Non-Fed-eral Forest Land in Southwest Oregon. USFS Re-source Bulletin PNW-RB-138, Pacific North-west Research Station, Portland, OR.

Gillis, M. 1988. Indonesia: Public Policies, Re-source Management, and the Tropical Forest.In R. Repetto and M. Gillis, eds., Public Policiesand the Misuse of Forest Resources. CambridgeUniversity Press.

GOI (Government of Indonesia) 1991. IndonesiaForestry Action Programme. Jakarta.

—. 1991a. Industrial Forestry Plantation and For-est Rehabilitation. Jakarta, Ministry of Forestry.

—. 1991b. Biodiversity Action Plan for Indonesia(final draft). Jakarta.

. 1990. Summary: Situation and Outlook of theForestry Sector in Indonesia. Seminar Techni-cal Report, Forestry Studies Project, 8 De-cember, 1990. Jakarta, Department of Fores-try. [Produced in both English and BahasaIndonesia.]

. 1974-1990. Himpunan Peraturan Perundangandi Bidang Kehutanan Indonesia, Jilid I-VIII [Com-pilation of Laws and Regulations in the Indo-nesian Forestry Sector, Vols. I-VIII]. Jakarta,Ministry of Forestry.

GOI/FAO [Government of Indonesia/UnitedNations Food and Agriculture Organization]1990. Situation and Outlook of the Forestry Sectorin Indonesia. Jakarta. [In four volumes.]

Gordon, J.C., J.F. Franklin, K.N. Johnson, and J.W.Thomas. 2992. Alternatives for the Managementof Late Successional Forests of the Pacific North-west: Report of the Scientific Panel on Late Suc-cessional Forest Ecosystems. U.S. House ofRepresentatives, Committee on Agriculture,Washington.

Gorte, R.W. 1989. National Forest Receipts: Sourcesand Dispositions. Report No. 89-284. U.S. Li-brary of Congress, Congressional ResearchService, Washington, D.C.

Gottlieb, A.M. 1989. The Wise Use Agenda: The Cit-izen's Policy Guide to Environmental Resource Is-sues. Merril Press, Bellevue, WA.

Gray, J.A. and S. Hadi. 1989. Forest Concessions inIndonesia: Institutional Aspects. Jakarta, Govern-ment of Indonesia /FAO.

Greene, S. 1988. Research Natural Areas and Pro-tecting Old-growth Forests on Public Lands inWestern Oregon and Washington. NaturalAreas Journal, 8: 25-30.

112

Gregg, N.T. 1991. Will "New Forestry" Save OldForests? American Forests, 97: 49-53.

Gunawan, G. 1991. Sistem Silvikultur Dalam Pen-gusahaan Hutan Alam Produksi Indonesia. [TheSilvicultural System in the Exploitation of Nat-ural Production Forests in Indonesia.] Jakarta,WALHI.

Guppy, N. 1984. Tropical deforestation: A globalview. Foreign Affairs 62: 928-965.

Haeruman, H. 1992. Masalah Sosial dalam Pem-bangunan Kehutanan [Social Problems inForestry Development]. Andal No. 12. Jakarta.

Hansen, A.J., T.A. Spies, F.J. Swanson, and J.L.Ohmann. 1991. Conserving biodiversity inmanaged forests. BioScience, 41: 382-392.

Hansen, G. and Mahoney, T. 1978. Rural Organi-zations and Development in Indonesia. In In-ayatullah, ed., Rural Organizations and RuralDevelopment. Kuala Lumpur; Asia and the Pa-cific Development Administration Center.

Haynes, R.W. 1992. Owls, jobs, and old growth.Forest Watch 12(10): 15-17.

. 1986. Inventory and Value of Old Growth in theDouglas Fir Region. Research Note PNW 437.Pacific Northwest Research Station, Portland,OR.

Honadle, G. 1993. Institutional constraints on sus-tainable resource use: Lessons from the tropicsshowing that resource over exploitation is notjust an attitude problem and conservation edu-cation is not enough. In: G.H. Aplet, N. John-son, J.T. Olson, and V.A. Sample, eds., DefiningSustainable Forestry. Island Press, Washington,D.C.

IIASA. 1990. The price of pollution. Options, Inter-national Institute for Applied Systems Analy-sis, Vienna, Austria.

IIED/GOI [International Institute for Environ-ment and Development/Government of

Indonesia] 1985. Forest Policies in Indonesia.Jakarta.

Indonesian Business Weekly. 1993. "A Public Con-cern." September 3,1993.

Indonesian Observer. 1993. "Real Nomadic FarmersDo Not Destroy Forests." 3 February, 1993.[Reporting on an address by Professor Mu-byarto of Gadjah Mada University at a govern-ment workshop on managing shifting cultiva-tion. Mubyarto is currently a senior official atBAPPENAS—the National Development Plan-ning Agency.]

Irwin, L.L., and T.B. Wigley. 1992. Conservationof Endangered Species. Journal of Forestry 90:27-30.

Jackson, K.D. 1978. The Political Implications ofStructure and Culture in Indonesia. In Jackson,K.D. and Pye, L., eds. Political Power and Com-munications in Indonesia. Berkeley, University ofCalifornia Press.

Jakarta Post. 1993. "Operations against illegal log-ging." April 5,1993.

-. 1993a. "Plywood firms complain of logshortages." September 3,1993.

—. 1993b. "10,000 forest squatter families to beresettled." 9 September, 1993.

. 1993c. "Logging activities in Yamdena torestart despite stay order." 18 January, 1993.

. 1993d. "Yamdena logging row to be settledsoon." 4 February, 1993.

. 1993e. "Government to allow resumption oflogging on Yamdena island." 11 September, 1993.

Johnson, A.H., and T.G. Siccama. 1989. Decline ofred spruce in the high elevation forests of thenortheastern United States. In: J.J. MacKenzieand M.T. El-Ashry, eds. Air Pollution's Toll onForests and Crops. Yale University Press, NewYork. pp. 191-234.

113

Johnson, N. and B. Cabarle. T993. Surviving theCut: Natural Forest Management in the HumidTropics. World Resources Institute, Washing-ton, D.C.

Kerr, A. 1990. New (age) perspectives: glossydogma to hide old habits. Forest Watch 11(4):22-26.

KLH [Indonesian Ministry of State for Populationand Environment] 1992. Indonesia CountryStudy on Biological Diversity. Jakarta.

Knize, P. 1991. The mismanagement of the Na-tional Forests. Atlantic 268: 21-29.

Lee, R.G., P Sommers, H. Birss, C. Nasser, and J.Zientek. 1991. Social Impacts of Alternative Tim-ber Harvest Reductions on Federal Lands in O andC Counties. Final Report for the Association ofOand C Counties. Northwest Policy Center, Uni-versity of Washington. Seattle, WA.

Levin, J. 1992. Russian forest laws—scant pro-tection during troubled times. Manuscriptsubmitted for publication in Ecology LawQuarterly.

Levy, D. 1977. Judicial Authority and Rechstaat inIndonesia. In R. Vuylsteke, ed. 1977. Law andSociety: Culture Learning Through Law. Hon-olulu; East-West Center.

Little, C.E. 1992. Report from Lucy's Woods.American Forests, 98(2): 25-27, 68-69.

Long, J. 1991. Cheating on sales of timber costingmillions every year. The Oregonian (Portland),November 17,1991.

Lyden, F.J., B.W. Twight, and E.T. Tuchmann.1990. Citizen participation in long-range plan-ning: The RPA experience. Natural ResourcesJournal. 30:123-138.

MacCleery, D.W. 1991. Condition and trends ofU.S. Forests: a brief overview. USDA ForestService, Timber Management Staff. Wash-ington, D.C.

MacKenzie, J.J., and M.T. El-Ashry. 1989. Treeand crop injury: A summary of the evidence.In: J.J. MacKenzie and M.T. El-Ashry, eds., AirPollution's Toll on Forests and Crops. Yale Uni-versity Press, New York, pp. 1-21.

MacLean, CD., P.M. Bassett, and G. Yeary. 1992.Timber Resource Statistics for Western Washing-ton. USFS Resource Bulletin PNW-RB-191. Pa-cific Northwest Research Station, Portland,OR.

Manning, C. 1971. The timber boom. In The Bul-letin of Indonesian Economic Studies, Vol. 7, No.3. (Cited in Robison 1978.)

Marks, P, J.D. Allan, C. Canham, K. Van Cleve, A.Covich, and F. James. 1993. Scientific Peer Re-view of the Ecological Aspects of Forest Eco-system Management: An Ecological, Economic,and Social Assessment. Report by an ad-hoccommittee of The Ecological Society of Amer-ica and The American Institute of BiologicalSciences. The Ecological Society of America,Washington, D.C.

Miller, P.R. 1989. Concept of forest decline in thewestern United States. In: J.J. MacKenzie andM.T. El-Ashry, eds., Air Pollution's Toll onForests and Crops. Yale University Press, NewYork, pp. 75-112.

Moniaga, S. 1991. Towards Community-BasedForestry and Recognition of Adat Property Rightsin the Outer Islands of Indonesia: A Legal and Pol-icy Analysis. Paper presented at the Workshopon Legal Issues in Social Forestry, Bali, 4-6 No-vember 1991.

Morrison, P.H. 1988. Old Growth in the PacificNorthwest: A Status Report. The Wilderness So-ciety, Washington, D.C.

Myers, N. 1989. Deforestation Rates in TropicalForests and Their Climatic Implications. London,Friends of the Earth.

Neraca, April 6,1993. [Jakarta newspaper]. Men-hut Menjamin Eksistensi Hak Adat di Hutan.

114

[Minister of Forestry Guarantees the Existenceof Customary Rights in the Forest.]

Newsletter of the New England EnvironmentalNetwork (NEEN), 1992. Eastern Old GrowthSurveyed. Environmental News: The Newsletterof the New England Environmental Network. Vol.9 (4). Tufts University, Medford, MA.

Ngo, M. 1991. Ambiguity in Property Rights:Lessons from the Kayan of Kalimantan. Paper pre-sented at the conference on "Interactions ofPeople and Forests in Kalimantan", New YorkBotanical Garden, 21-23 June, 1991.

NLMP. 1993. Contributions from environmentalgroups and the timber and paper industry toall congressional candidates: 1/1/85-6/30/92.Printouts from database maintained by Na-tional Library on Money and Politics, based onFederal Election Commission records. NationalLibrary on Money and Politics, Washington,D.C.

Norse, E.A. 1990. Ancient Forests of the PacificNorthwest. Island Press, Washington, D.C.

Norse, E.A., K.L. Rosenbaum, D.S. Wilcove, B.A.Wilcox, W.H. Romme, D. Johnston, and M.L.Stout. 1986. Conserving Biological Diversity inour National Forests. The Wilderness Society,Washington, D.C.

Northwest Policy Center. 1992. Responding to theNorthwest's workforce challenge. The Chang-ing Northwest, 4(3): 1-6. Newsletter of theNorthwest Policy Center, Seattle, WA.

NRC (National Research Council). 1993. Sustain-able Agriculture and the Environment in theHumid Tropics Washington, D.C, NationalAcademy Press.

Nugroho, T. 1991. Studi Sekunder Konsep dan Im-plementasi Pembangunan Hutan Tanaman Indus-tri di Indonesia [Desk Study on the Concept andImplementation of Industrial Timber Planta-tion Development in Indonesia]. Jakarta,WALHI.

ODA, 1992. Sustainable Forest Management inKPHPs. UK/Indonesia Tropical Forest Man-agement Project Discussion Paper. Jakarta.

Olson, J.T. 1988. National Forests: Policies for theFuture. Volume 4: Pacific Northwest Lumber andWood Products: An Industry in Transition. TheWilderness Society, Washington, D.C.

OMB. 1992. Budget of the United States Government,Fiscal Year 1993. Executive Office of the Presi-dent, Office of Management and Budget,Washington, D.C.

Oregon Department of Forestry. 1991. Forest Prac-tice Rules. Published October 29,1991. ForestPractices Section, Oregon Department ofForestry, Salem, OR.

Oregonian. 1993a. Log export tax breaks face ax.The Oregonian (Portland), May 6,1993.

-. 1993b. Forest plan faces another challenge.The Oregonian (Portland), October 27,1993.

Ostergaard, L., Traditional Swidden Cultivatorsand Forces of Deforestation in Sumatra: TheSignificance of Local Land Tenure Systems.Paper presented at the Second Asia-PacificConsultative Meeting on Biodiversity Conser-vation, 2-6 February, 1993, Bangkok, Thailand.

OTA. 1992. Forest Service Planning: AccommodatingUses, Producing Outputs, and Sustaining Ecosys-tems. Office of Technology Assessment, Wash-ington, D.C.

. 1990. Forest Service Planning: Setting StrategicDirection under RPA. Office of Technology As-sessment, Washington, D.C.

O'Toole, R. 1993. Recalculating the 1992 TSPIRS.Forest Watch, 14(6).

. 1988. Reforming the Forest Service. IslandPress, Washington, D.C.

Peluso, N. 1988. Rich Forests, Poor People, and De-velopment: Forest Access Control and Resistance in

115

Java. Doctoral dissertation. Ithaca, N.Y., Cor-nell University.

. 1986. Rattan Industries in East Kalimantan, In-donesia. Paper commissioned by United Na-tions Food and Agriculture Organization,Forestry Department. Rome.

Perry, D.A. 1988. Landscape pattern and forestpests. Northwest Environmental Journal, 4:213-228.

Perry, G., and A. Perry. 1983. Guide to NaturalAreas of Oregon and Washington. Sierra ClubBooks, San Francisco.

Poffenberger, Ed. 1990. Keepers of the Forest: LandManagement Alternatives in Southeast Asia. WestHartford, Kumarian Press.

Postel, S. and J. C. Ryan. 1991. Reforming forestry.In: L. Brown, ed., State of the World 1991. W. W.Norton and Company, New York. pp. 74-92.

Potter, L. 1991. Forest Degradation, Deforestationand Reforestation in Kalimantan: Towards aSustainable Land Use? Paper presented at theconference on "Interactions of People andForests in Kalimantan", New York BotanicalGarden, 21-23 June, 1991.

Pramono, A.H. 1991. A Brief Review on Forest LandUse and Deforestation in Indonesia. WALHI.Jakarta.

Raikes, P. 1988. Modernizing Hunger. London:Catholic Institute for International Relations, v.

Ramakrishna, K. and G.M. Woodwell. WorldForests for the Future: Their Use and Conservation.Yale University Press, New Haven, CT.

Rasmussen, M, D. Olson, and W. Maki. 1991. So-cial and economic impacts in Washington,Oregon, and California associated with imple-menting the proposed critical habitat designa-tion. In: Comments on the Designation of CriticalHabitat for the Northern Spotted Owl on NationalForests, American Forest Resource Council,Washington.

Reid, W.V. and Miller, K.R. 1989. Keeping OptionsAlive: The Scientific Basis for Conserving Bio-diversity. Washington, D.C., World ResourcesInstitute.

Repetto, R. 1988. Subsidized timber sales for na-tional forest lands in the United States. In: R.Repetto and M. Gillis, eds., Public Policies andthe Misuse of Forest Resources. Cambridge Uni-versity Press, New York. pp. 353-383.

Repetto, R., R.C. Dower, R. Jenkins and J. Geog-hehan. 1992. Green Fees: How a Tax Shift CanWork for the Environment and the Economy.World Resources Insitute, Washington, D.C.

Repetto, R. and M. Gillis. 1988. Public Policies andthe Misuse of Forest Resources. Cambridge Uni-versity Press, New York.

Repetto, R., W. Magrath, M. Wells, C. Beer, and F.Rossini. 1989. Wasting Assets: Natural Resourcesin the National Income Accounts. World Re-sources Institute, Washington, D.C.

RePPProT [Regional Physical Planning Program-me for Transmigration] 1990. The Land Resourcesof Indonesia: A National Overview. Overseas De-velopment Administration (UK) and Depart-ment of Transmigration (Indonesia), Jakarta.

Rice, R.E. 1989. National Forests—Policies for the Fu-ture: Volume 5: The Uncounted Costs of Logging.The Wilderness Society, Washington, D.C.

Rivlin, A.M. 1993. Values, institutions, and sus-tainable forestry. In: G.H. Aplet, N. Johnson, J.Olson, and V.A. Sample, eds., Defining Sustain-able Forestry. Island Press, Washington, D.C.

Roberts, E.F. 1974. A basic introduction to landuse control and doctrine. In: Proceedings of theConference on Rural Land-Use Policy in the North-east. Cornell University, Ithaca, NY.

Robertson, F.D. 1992. Ecosystem management ofthe national forests and grasslands. Memo toRegional Foresters and Station Directors, USDAForest Service, Washington, D.C: June 4,1992.

116

Romm, J. 1993. Sustainable forestry and sustain-able forests. In: G.H. Aplet, N. Johnson, J.Olson, and V.A. Sample, eds., Defining Sustain-able Forestry. Island Press, Washington, D.C.

Salazar, D.J. and F.W. Cubbage. 1990. Regulatingforestry in the West and South. Journal ofForestry 88:14-19.

Sample, A. 1984. Below-Cost Timber Sales on theNational Forests. The Wilderness Society, Wash-ington, D.C.

Sample, A.V. 1992. Resource planning and bud-geting for National Forest management. PublicAdministration Review. 52: 339-346.

. 1990. The Impact of the Federal Budget Processon National Forest Planning. Greenwood Press,New York.

. 1989. What's really driving National Forestmanagement? American Forests, 95(1): 58-69.

Sample, A.V. and D. LeMaster. 1992. Assessing theEmployment Impacts of the Proposed Measures toProtect the Spotted Owl. American Forestry As-sociation, Washington, D.C.

Schneider, K. 1993. U.S. would end cutting oftrees in many forests. New York Times, April 30,1993.

Schwarz, A. 1992a. "Timber is the Test: ForestryControls Dampen Export Earnings". Far East-ern Economic Review, 23 July, 1992: 36.

Schwarz, A. and J. Friedland 1992b. "Green Fin-gers: Indonesia's Prajogo proves that moneygrows on trees." Far Eastern Economic Review,12 March, 1992: 42.

Schwarz, A. 1992c. "Trade for Trees: Tariff reformwill help save the forests". Far Eastern EconomicReview. 4 June, 1992: 60.

Scott, J. 1985. Weapons of the Weak: Everyday Formsof Peasant Resistance. New Haven, Conn., YaleUniversity Press.

Sedjo, R. 1988. Native Forests, Secondary Species,Plantation Forests and the Sustainability of In-donesia's Forest Industry. Jakarta; Paper pre-pared for FAO/UNDP project on "Assistanceto Forest Sector Development Planning."

. 1987. Incentives and Distortions in IndonesianForest Policy. Unpublished report prepared forWorld Bank. Jakarta.

Sedjo, R.A., A.C. Wiseman, and K.S. Lyon. 1992.Exploiting National Returns to Log Exports.fournal of Forestry 90: 35-39.

Sessions, J., K.N. Johnson, J. Beuter, Brian Greber,and G. Lettmann. 1990. Timber for Oregon's To-morrow. The 1989 Update. Oregon State Univer-sity, Corvallis, OR.

Seymour, F. and Rutherford, D. 1990. Contrac-tual Agreements in Asian Social Forestry Pro-grams. Paper prepared for the First AnnualMeeting of the International Association forthe Study of Common Property, 27-30 Sep-tember, 1990, Duke University, Durham,North Carolina.

Seymour, F., et. al. 1993. Summary of Findings andRecommendations of the Environmental Assess-ment of the Indonesia Natural Resources Manage-ment Project (Final Draft). Washington, D.C:Biodiversity Support Program.

Shannon, M.A. 1990. Public Participation in theRPA Process. OTA background paper. Officeof Technology Assessment, Washington,D.C.

Sharma, N.P. 1992. Managing the World's Forests.Dubuque, Iowa: Kendall/Hunt, 1.

Shin, Y.H. 1989. Demystifying the Capitalist State:Political Patronage, Bureaucratic Interests, andCapitalists-in-Formation in Soeharto's Indonesia.Doctoral Dissertation, Yale University.

Showalter, T.D. and J.E. Means. Pest response tosimplification of forest landscapes. NorthwestEnvironmental Journal 4: 342-343.

117

Soeharto, 1993. Speech by the President of the Re-public of Indonesia His Excellency Soeharto atthe Opening of the Global Forest Conference,Jakarta, 17 February, 1993.

Sommers, P. 1988. State of the Northwest. In: P.Sommers, W.E. Whitelaw, E. Niemi, and D.S.Harrison, eds., The Once and Future Northwest.Northwest Policy Center, Seattle, WA.

Sonner, S. 1993. Federal report sees costly timbertheft, fraud. The Oregonian (Portland), May 4,1993.

St. Clair, J. Cutting it down the middle: Clintonopts for experimental strategy in Northwestforests. Forest Watch, 14 (1): 4-12.

Sudiyat, I., 1981. Hukum Adat. [Customary Law].Yogyakarta: Liberty.

Suharyanto, H. 1993. "Foresters Fall Short of Tar-gets." Indonesian Business Weekly, July 16,1993.

Syukur, H. 1993. "Dari Hutan ke Pengadilan"[From the Forest to Court], Tempo, 18 Septem-ber, 1993: 82.

Thang, H. 1989. Forest Conservation and Manage-ment Practices in Malaysia. Paper presented atworkshop on "Realistic Strategies for TropicalForests", IUCN General Assembly, Perth, Aus-tralia, 28 November-5 December 1990. (Citedin Potter 1991.)

Thomas, J.W., M.G. Raphael, R.G. Anthony,E.D. Forsman, A.G. Gunderson, R.S.Holthausen, B.G. Marcot, G.H. Reeves, J.R.Sedell, D.M. Solis. 1993. Viability Assessmentsand Management Considerations for Species As-sociated with Late-Successional and Old-GrowthForest of the Pacific Northwest. Report of USDAForest Service Scientific Analysis Team toU.S. District Court Judge William L. Dwyer.USDA Forest Service Research, Washington,D.C.

Thomas, J.W., E.D. Forsman, J.B. Lint, E.C. Mes-low, B.R. Noon, and J. Verner. 1990. A Conser-

vation Strategy for the Northern Spotted Owl: Re-port of the Interagency Scientific Committee to Ad-dress the Conservation of the Northern SpottedOwl. USDA Forest Service, Portland, Oregon.

Tjitradjaja, I., 1991. Differential Access to Resourcesand Conflict Resolution in a Forest Concession inIrian faya. Paper presented at the workshop on"Legal Issues in Social Forestry," Bali, Indone-sia, November 4-6,1991.

Ulrich, A.H. 1990. U.S. Timber Production, Trade,Consumption and Price Statistics 1960-1988. Mis-cellaneous Publication No. 1486, USDA, Wash-ington, D.C.

UN-ECE/FAO. 1992. The Forest Resources of theTemperate Zones: Main Findings of the UN-ECE/FAO 1990 Forest Resource Assessment.United Nations, New York.

United States Department of Agriculture (USDA),1993a. 1992 Annual Report: Timber Sale Pro-gram Information Reporting System, Washing-ton, D.C.

. 1993b. Draft Supplemental EnvironmentalImpact Statement on Management of Habitatfor Late Successional and Old-Growth RelatedSpecies within the Range of the Northern Spot-ted Owl. USDA Forest Service, Washington,DC.

. 1992. Report of the Forest Service: Fiscal Year1991. USDA Forest Service, Washington, D.C.

. 1989. RPA Assessment of the Forest and Range-land Situation in the United States, 1989. ForestService Report No. 26. USDA Forest Service,Washington, D.C.

. 1987. Rise to the Future: The Fisheries Programof the USDA Forest Service. U.S. Forest Service,Washington, D.C.

U.S. Department of Commerce. 1992. StatisticalAbstract of the United States 1992. U.S. Depart-ment of Commerce Bureau of the Census,Washington, D.C.

118

. 1991. Statistical Abstract of the United States1991. U.S. Department of Commerce Bureau ofthe Census, Washington, D.C.

U.S. Department of Interior Fish and Wildlife Ser-vice (USFWS), 1992. Critical Habitat for the North-ern Spotted Owl. U.S. Department of InteriorFish and Wildlife Service, Washington, D.C.

-. 1990. Status Review for the Northern SpottedOwl. U.S. Department of Interior Fish andWildlife Service, Washington, D.C.

. 1988.1985 Survey of Fishing, Hunting, andWildlife Associated Recreation. U.S. Departmentof Interior Fish and Wildlife Service, Washing-ton, D.C.

Vatakiotis, M. 1989. "Order in Court", Far EasternEconomic Review, 15 June 1989: 28.

Waddell, K.L., D.D. Oswald, and D.S. Powell.1989. Forest Statistics of the United States. Re-source Bulletin PNW-RB-168. Pacific North-west Research Station, Portland, OR.

WALHI, (Indonesian Forum for the Environ-ment) 1993. Victims of Development, Environesia,Vol. 7, No. 1 (1993).

-. 1993a. Violated Trust: Disregard for the Forestsand Forest Laws of Indonesia. Jakarta.

. 1992. Peran HPH dalam PembangunanEkonomi Regional Kalimantan Timur [The Role ofTimber Concessions in the Regional EconomicDevelopment of East Kalimantan]. Jakarta.

. 1991. Sustainability and Economic Rent in theIndonesia Forestry Sector. Jakarta.

WALHI/LBH (Indonesian Forum for the Envi-ronment/Indonesian Legal Aid Institute) 1992.Mistaking Plantations for the Forest: Indonesia'sPulp and Paper Industry, Communities, and Envi-ronment. Jakarta.

Walth, B. 1992. Timber industry bankrolled recallbid. Eugene Register-Guard (OR),October 6,1992.

Warta Ekonomi [Economic News] 1990. Hutan,Pengusaha, dan Nasibnya [Forests, Businessmen,and their Fate], No. 24, 23 April, 1990.

Washington State Employment Security. 1993.Washington Labor Market Highlights, 17(2): 13.

—. 1992a. Employment and Payrolls in Washing-ton State by County and Industry: 1990 AnnualAverages. Washington State Employment Secu-rity Office, Olympia, WA.

. 1992b. Washington Labor Market Highlights16:1-16.

Washington State Office of Financial Manage-ment. 1992. Washington State 1991 Data Book.Washington Office of Financial Management,Olympia, WA.

Weinstock, J. 1989. Study on Shifting Cultivation inIndonesia (draft). Jakarta, Ministry of Forestry.

Wells, D.R. 1971. Survival of the Malaysian BirdFauna. In Malayan Nature Journal, Vol. 24, 248-256. (Cited in Whitmore 1984.)

Weyerhauser. Weyerhauser 1992 Annual Report.Weyerhauser Company, Seattle, WA.

Wiersum, K.F. 1987. International Experience in So-cial Forestry and Implications for Research Support.Paper presented at the Conference on Planningand Implementation of Social Forestry Pro-grams in Indonesia", Gadjah Mada University,Yogyakarta, 1-3 December, 1987.

Wilcove, D. 1988. National Forests: Policies for theFuture. Volume 2: Protecting Biological Diversity.The Wilderness Society, Washington, D.C.

Wilderness Society. 1988. End of the AncientForests: Special Report on National Forest Plans inthe Pacific Northwest. The Wilderness Society,Washington, D.C.

Winterbottom, R. 1990. Taking Stock: The TropicalForestry Action Plan After Five Years. Washing-ton, D.C, World Resources Institute.

119

World Bank 1993. Indonesia: Sustaining Develop-ment. Washington, D.C.

. 1991. Malaysia Forestry Subsector Study(draft). Washington, D.C.

—. 1991a. Indonesia: Developing Private Enter-prise. Washington, D.C.

—. 1991b. The Forest Sector—A World Bank Pol-icy Paper. Washington, D.C.

—. 1990. Indonesia Poverty Assessment and Strat-egy Report. Washington, D.C.

. 1989. Indonesia—Forest Land and Water: Is-sues in Sustainable Development. Washington,D.C.

. 1988. Indonesia: Adjustment, Growth and Sus-tainable Development. Washington, D.C.

World Resources Institute (WRI), 1992. World Re-

sources 1992-93: A Guide to the Global Environ-ment. Oxford University Press, New York.

Wyant, W.K. 1982. Westward in Eden. The PublicLands and The Conservation Movement. Univer-sity of California Press, Berkeley, CA.

YLBHI [Indonesian Legal Aid Foundation], TheTorching of the People's Homes and the Destruc-tion of Their Fields in Subdistrict Pulau Panggung,Lampung Selatan, Sumatra, Indonesia. Jakarta:Mimeo.

Yoho, J.G. 1985. Continuing Investments inForestry: Private Investment Strategies. In: In-vestments in Forestry: Resources, Land Use, andPublic Policy. R.A. Sedjo, ed. Westview Press,Boulder, CO. pp. 151-166.

Zerner, C. 1990. Legal Options for the IndonesianForestry Sector. Goverment of Indonesia/United Nations Food and Agriculture Organi-zation. Jakarta.

120

World Resources Institute

1709 New York Avenue, N.W.Washington, D.C. 20006, U.S.A.

WRI's Board of Directors:Matthew NimetzChairmanRoger W. SantVice ChairmanJohn H. AdamsKazuo AichiRobert O. AndersonManuel ArangoRobert O. BlakeDerek BokJohn E. BrysonJohn E. CantlonPamela G. CarltonWard B. ChamberlinEdwin C. CohenLouisa C. DuemlingSylvia A. EarleAlice F. EmersonJohn FirorShinji FukukawaCynthia R. HelmsMartin HoldgateMaria Tereza Jorge PaduaCalestous JumaJonathan LashJeffrey T. LeedsThomas E. LovejoyJane LubchencoC. Payne LucasAlan R. McFarland, Jr.Robert S. McNamaraScott McVayPaulo Nogueira-NetoRonald L. OlsonRuth PatrickAlfred M. Rankin, Jr.Stephan SchmidheinyBruce SmartJames Gustave SpethMaurice StrongM.S. SwaminathanMostafa K. TolbaAlvaro UmanaVictor L. UrquidiGeorge M. Woodwell

Jonathan LashPresidentJ. Alan BrewsterSenior Vice PresidentWalter V.ReidVice President for ProgramDonna W. WiseVice President for Policy AffairsRobert RepettoVice President and Senior EconomistMarjorie BeaneSecretary-Treasurer

The World Resources Institute (WRI) is a policy research centercreated in late 1982 to help governments, internationalorganizations, and private business address a fundamentalquestion: How can societies meet basic human needs and nurtureeconomic growth without undermining the natural resources andenvironmental integrity on which life, economic vitality, andinternational security depend?

Two dominant concerns influence WRI's choice of projects andother activities:

The destructive effects of poor resource management oneconomic development and the alleviation of poverty indeveloping countries; and

The new generation of globally important environmental andresource problems that threaten the economic andenvironmental interests of the United States and other industrialcountries and that have not been addressed with authority intheir laws.

The Institute's current areas of policy research include tropicalforests, biological diversity, sustainable agriculture, energy, climatechange, atmospheric pollution, economic incentives for sustainabledevelopment, and resource and environmental information.

WRI's research is aimed at providing accurate information aboutglobal resources and population, identifying emerging issues, anddeveloping politically and economically workable proposals.

In developing countries, WRI provides field services andtechnical program support for governments and non-governmentalorganizations trying to manage natural resources sustainably.

WRI's work is carried out by an interdisciplinary staff ofscientists and experts augmented by a network of formal advisors,collaborators, and cooperating institutions in 50 countries.

WRI is funded by private foundations, United Nations andgovernmental agencies, corporations, and concerned individuals.