IMPORTING DESTRUCTION - Salva le Foreste

How U.S. imports of Indonesia’s tropical

hardwoods are devastating indigenous

communities and ancient forests

IMPORTING DESTRUCTION

© Copyright 2003

All rights reserved

Rainforest Action Network

221 Pine Street, Suite 500

San Francisco CA 94104

Tel. (415) 398-4404

Fax. (415) 398-2732

www.ran.org

Written by Jessica Lawrence,Noriko Toyoda and Helvi Lystiani

Edited by Curtis Runyan

Acknowledgements: Sincerest thanks go to our hard working colleagues Agi Cakradirana, Mumpuni Ardiyani, Yuli Wulandari, Yuni

Istiningisih, Longgena Ginting, Abdon Nababan, Martua Sirait, Togu Manurung, Albertus Mulyono, Christian Purba, Hapsoro, Nabiha Muhamad,

Bambang Setiono, Patrick Anderson, Kim Loraas, Serge Marti, Eva Castaner, Chris Barr, David Brown, Tim Brown, Liz Chidley, Carolyn Marr, Dave

Currey, and Julian Newman. In Kalimantan, special thanks go to Rudy Ranaq, Niel Makinuddin, Ade Cahyat, Sugeng Raharjo, Godwin Limberg, Iman

S o e romangala, Y. Lukas, Lirin D., D. Mamun, Nawa Irianto, Graham Tyrie, Satria Pribadi, and many communities and individuals who remain nameless for

their safety. Thanks also go to the staff of Rainforest Action Network, especially Mike Brune, Jennifer Krill, Sara Brown Riggs, Brant Olson, and Adam Chew.

Acronyms and Abbreviations:

AMAN (Aliansi Masyarakat Adat Nusantara) Indigenous Peoples Alliance of the Archipelago

CGI Consultative Group on Indonesia

IBRA Indonesian Bank Restructuring Agency

HPH (Hak Pengusahaan Hutan) a timber concession in “production” forests granted at the national level

HTI (Hutan Tanaman Industri) a large-scale plantation

IPK (Izin Pemanfaatan Kayu) a timber utilization permit for “conversion” forests granted by the national Ministry of Forestry

IPPK (Izin Pemungutan dan Pemanfaatan Kayu) a timber extraction and utilization permit, which allows timber harvesting associated with forest

conversion in areas designated as Social Forest or Privately Owned Forest. Granted by district-level governments since 1998.

WALHI (Wahana Alam Lingkungan Hidup Indonesia) Indonesian Forum for the Environment

Executive Summary ................................................................................1

Recommendations for Wood Buyers...................................................3

Recommendations for the Government of Indonesia........................3

Introduction .............................................................................................5

Indonesia’s Forests Under Siege ............................................................6

Deforestation .........................................................................................7

Biodiversity Threats ..............................................................................8

Rainforest Fires......................................................................................9

Corruption and Conflict: Logging’s Social Impacts ........................11

Illegal Logging and Trade....................................................................12

Violating Indigenous Rights...............................................................13

Making the Plywood Connection .......................................................16

Mills Drive Demand for Illegal and Destructive Logging...............18

Military Profits from Plywood Trade................................................19

International Demand for Endangered Wood..................................21

Beyond Rhetoric: A Call for a Logging Moratorium ....................22

A True Logging Moratorium..............................................................22

Recommendations for Action.............................................................24

Case Studies ...........................................................................................26

Intracawood..........................................................................................26

Sumalindo ............................................................................................28

Barito Pacific........................................................................................30

Appendices ..............................................................................................31

Figure 1: Indonesian Forest Overview..............................................31

Table 1: Practices of Selected Indonesian Logging Companies.......32

Sources .....................................................................................................33

CONTENTS

The rainforests of Indonesia make up one of the oldest and

most biologically diverse ecosystems on earth. However, these

forests are also among the most threatened. More than 64 mil-

lion hectares of forest cover have been lost—more than a third

of the country’s original 162 million hectares of forest have

been cleared since 1950. Indonesia’s rainforests are being felled

at what may be an unprecedented rate, in large part to produce

cheap plywood for export.

This destruction is taking place with the collusion of several

“environmentally and socially committed” U.S. businesses,

despite agreements to stop purchasing wood from “endan-

gered forests.” Demand for cheap Indonesian plywood from a

number of U.S. home-improvement retailers, wood distribu-

tors, and home builders is helping to fuel the rapid destruction

of the country’s ancient rainforests and the indigenous cultures

they support.

This report examines the forces that are driving forest destruc-

tion in Indonesia, and outlines some of the connections of U.S.

companies to the international market for Indonesian ply-

wood. The report concludes that ensuring the continued exis-

tence of the country’s endangered forests—and the rare species

and threatened cultures they support—will require interna-

tional businesses to stop supporting the illegal and unsustain-

able timber trade from Indonesia’s rainforests.

Indonesia’s Forests Under Siege

With only 1.3 percent of the earth’s land cover, Indonesia sup-

ports a large share of the world’s known species. However,

this biodiverse region also has the longest list of endangered

species in the world.

Indonesia’s rainforests have been shrinking rapidly for the past

30 years. The lowland rainforests of Java, Bali, and Sulawesi

no longer exist. The forests have been cleared, in large part, to

supply the world’s timber traders with cheap products. Today,

98 million hectares of forest cover remains, less than half of

the country’s original forests. Untold numbers of species—

thousands of endemic plants, animals, and insects—are nearing

extinction as habitats are destroyed. Massive fires, many delib-

erately set, sweep through logged-over

areas during each El Niño drought cycle,

destroying the capacity of forests and

wildlife to regenerate.

Fragile coral reefs that surround the hun-

dreds of once-forested islands are now

caught in the shadow of death, as soil from

the land slides into the streams, the rivers

and out to sea. Forest fires add a significant

amount of carbon to our atmosphere and as

the forests disappear, less carbon is taken

out of our atmosphere, adding to the global

warming that is throwing off the world’s

weather patterns and leading us into the

new era of severe climate volatility.

EXECUTIVE SUMMARY

More than a third of the country’s original 162 million hectares of forest have been cleared since 1950. This

destruction is taking place with the collusion of several "environmentally and socially committed" U.S. businesses,

despite agreements to stop purchasing wood from "endangered forests." Photo by Jessica Lawrence

1 THE PLYWOOD CONNECTION

THE PLYWOOD CONNECTION 2

Corruption and Conflict: Logging’sSocial Impacts

Logging not only destroys primary forest habitat for millions

of species, it opens the forest to fire, illegal logging, agricultur-

al expansion, and poaching. As traditional communities lose

land and the resources for their livelihood, they struggle with

worsening poverty, malnutrition, disease, and displacement.

For thousands of years, the rainforests have supported the

indigenous peoples of Indonesia. Remaining forests are home

to an estimated 50 million indigenous peoples who have no

legal rights to protect the forests they depend upon for subsis-

tence and cultural survival. Traditional communities that hope

to protect ancestral forests from destruction from logging,

mining and commercial plantations are powerless to do so

without resorting to threats and violence. Local people are not

adequately consulted or compensated for use of their tradi-

tional lands. Those who protest are jailed or intimidated, with

no recourse for justice. Nearly all logging operations are rife

with social conflicts due to unresolved disputes over land

tenure, resource control, and environmental degradation.

Low commodity prices means mill and factory workers, the

majority of whom are young women, toil at dangerous jobs

for an average of 5 cents per hour without safety equipment,

insurance, or child care. In several plywood mills of East

Kalimantan, for example, workers went unpaid for over four

months in early 2002. Many are striking to raise wages to 7

cents an hour, the equivalent of US$1 for each 14 hour shift.

Illegal logging in Indonesia has significantly intensified in the

past five years. A former forestry official estimates that about

10 million hectares of Indonesia’s forests have now been

destroyed by illegal logging. Global Forest Watch estimates in

its 2002 report, The State of the Forest: Indonesia, that illegal

logging “appeared to be the source of 50 – 70 percent of the

country’s wood supply.”

Making the Plywood Connection

The capacity of plymills to process wood significantly out-

weighs the amount of legal wood supplies available to them.

Wood mills in Indonesia have the capacity to process 30.9 mil-

lion cubic meters of roundwood beyond what their own con-

cession holdings can supply (Brown, 1999). In theory, mills

should purchase logs from other legal concessions to meet

demand. In practice, they are turning to illegal supplies,

whether by over-harvesting in their concessions, logging out-

side their concessions, or buying illegal timber from other

sources, to fill this demand.

The largest trees of Indonesia’s rainforests are being turned

into the world’s cheapest tropical hardwood plywood, furni-

ture, tool handles and construction materials. Due to competi-

tion with illegal loggers, writes forestry expert Chris Barr of

the Center for International Forestry Research, “there is little

incentive for large-scale concessionaires to follow sustainable

cutting cycles.” Some concession managers have admitted that

they abandon the selective cutting guidelines rather than leave

commercially valuable timber to be taken by other parties.

Indonesia’s wood industries demand the largest rainforest logs

so that they can maximize profits in production.

Environmentally concerned buyers are thwarted by the lack of

trustworthy “chain of custody” monitoring, and unwittingly

buying wood from illegal loggers, military operations, and the

convicted criminals of the Suharto regime such as Mohammad

“Bob” Hasan, who continues to profit personally from every

shipment of Indonesian plywood despite his jail sentence. The

planet’s natural heritage is destroyed to finance Indonesia’s

military, police, political parties, corrupt officials, illegal timber

barons and a handful of timber traders around the world.

The volume of hardwood-based plywood imported into the

United States is significant, with Indonesian plywood supply-

ing the majority of the market. U.S. imports remain a critical

source of income for many Indonesian plywood companies,

especially with volatile Asian economies.

Beyond Rhetoric: A Call for aLogging Moratorium

The past 10 years of certification initiatives in Indonesia have

p roven counterproductive to solving the country ’s forest crisis.

In April 2001, 144 Indonesian environmental advocates and local

p e o p l e ’s organizations called for the halt of fore s t ry cert i f i c a t i o n

evaluations and partial chain of custody monitoring until the cer-

tification systems are overhauled to address major short c o m i n g s .

Under current legal systems, it is structurally impossible for

any logging operation in Indonesia to comply with the inter-

nationally recognized standards of the Forest Stewardship

Council (FSC). In direct conflict with FSC standards, the gov-

ernment, which owns and controls all of Indonesia’s forests,

has systematically prevented adequate protection of high con-

servation value forests. In addition, the legal system eliminates

customary use or land ownership rights for forest dependent

communities, resulting in social conflicts and impoverishment

for tens of millions of people. In sharp contrast to FSC dic-

tates, there is little respect for indigenous peoples’ rights to

land, livelihood, and free and informed consent for any “devel-

opment” taking place on customary lands.

T h e re are plenty of alternatives to wood from the last re m a i n-

ing rainforests of Indonesia. Lauan (meranti) plywood can be

replaced with eucalyptus, poplar or ru b b e rwood; ramin tool

handles and paintbrush handles can be replaced with poplar;

merbau, balau and bangkirai flooring and furn i t u re can be

replaced with bamboo, coconut wood, ru b b e rwood, and rattan.

Recommendations for TimberTraders

In such a context of environmental and social chaos,

Rainforest Action Network urges all international wood

traders to get out of the trade in Indonesian rainforest prod-

ucts entirely, and insist that supplying middlemen do the same.

Lauan/meranti, keruing, merbau, balau, bangkirai and nyatoh

products are in clear violation of any credible corporate envi-

ronmental or social policy as well as Indonesian law and inter-

national standards of ethical business practices. In order to

prevent this irreversible tragedy, all companies trading in wood

products sourced from Indonesia’s rainforests must:

• Replace wood products from Indonesia’s rainforests with

environmentally and socially preferable alternatives.

Rainforest hardwood plywood can easily be replaced with

eucalyptus, rubberwood, or birch plywood, for example.

Garden furniture can be made of rattan rather than nyatoh

or bangkirai, while rubberwood and bamboo can replace

merbau in flooring.

• Notify Indonesian suppliers of the criteria for eventual reen-

gagement, urging them to support the following five steps

for forest protection:

Recommendations for theGovernment of Indonesia

Before trade or investment in Indonesian wood products could

ethically resume, the Government of Indonesia should, at

national, provincial and regional levels:

• Protect the critically endangered rainforests of Indonesia by

empowering the people who actually want to and can effec-

tively protect them. In Indonesia’s case, this means empow-

ering many of the traditional (adat) communities whose

livelihoods are dependent on healthy forests, diverse ecosys-

tems, and undamaged watersheds and coastlines. This

requires legal recognition of the indigenous rights of 50 mil-

lion forest-dependent people, including their right to veto

extractive industries on traditional lands. Sustainable, equi-

table forest management must become a valid option for tra-

ditional communities before timber certification can eventu-

ally be possible in accordance with the standards of the

Forest Stewardship Council (FSC).

• Cancel industrial logging and conversion plans for endan-

gered forests, including primary lowland forests, such as the

areas mapped as “potentially low access forests” in the 2002

report of Forest Watch Indonesia (Barber, 2002). A 2002

report of the World Wildlife Fund marks all lowland and

montane rainforests of Indonesia as critically urgent ecore-

gions for forest protection, imperiled primarily by logging

concessions, not by local population growth

(Wikramanayake, 2002).



• Downsize Indonesia’s wood manufacturing capacity, which

is driving illegal logging with demands for raw materials at

ten times sustainable estimates. The recommended first step

to downsize the industry is to permanently shut down

indebted primary manufacturing and logging companies con-

trolled by Indonesia’s Bank Restructuring Agency, IBRA.

Closure of these 96 companies (69 mills, 24 HPHs, and 3

HTIs) would succeed in eliminating demand for 37 million

cubic meters of roundwood per year. Closure of additional

mills using illegal timber would further reduce demand – and

thus illegal logging and deforestation.

• Implement the Presidential call for a national logging mora-

torium in all natural forests, not just “degraded” forests, in

order to effectively crack down on illegal logging and laun-

dering of wood into the “legal” trade. This would help slow

the loss of both “protected” and “production” forests.

• Tr a n s i t i o n f rom an economy dependent on timber, oil and

mining in primary forests to one based on healthy enviro n-

ments for subsistence livelihoods (traditional, organic and

diverse rotational agro f o re s t ry, non-timber forest pro d u c t s ,

riverine, mangrove and coastal fisheries) as well as tourism,

re s e a rch, and other non-extractive industries. Transition and

retrain displaced workers of the logging

and wood manufacturing industries. In

o rder to pay for this, the Indonesian gov-

e rnment should use powers granted to it

under national law (PP 17, 2001) to seize

the billions of dollars that large Indonesian

f o rest debtors now have hidden in overseas

bank accounts and holding companies.

Map of Indonesia

The rainforests of Indonesia make up one of the oldest and

most biologically diverse ecosystems on earth. However, these

forests are also among the most threatened. More than 40 per-

cent of Indonesia’s 162 million hectares of rainforest have been

cleared since 1950. Only 98 million hectares remain today.

And that number is declining quickly. Forest loss has increased

from about 1 million hectare per year in the 1980s to about 2

million hectares a year since 1996. At this rate, about 10 acres

of forest are cut down every minute. Indonesia’s ancient

forests are now being cleared at what may be an unprecedent-

ed rate, in large part to produce cheap plywood for export

(Barber, 2002).

Since 1999, many of the world’s largest wood retailers have

agreed to stop buying and selling wood originating in “endan-

gered forests.” Despite these commitments, Rainforest Action

Network and other environmental organizations have discov-

ered that many retailers continue to purchase wood and sell

products made from Indonesia’s rainforests. Demand for

cheap Indonesian plywood from a number of U.S. home-

improvement retailers, wood distributors, and home builders

is helping to fuel the rapid destruction of the country’s ancient

rainforests and the indigenous cultures they support. Lowland

hardwoods like lauan (also know as meranti) and keruing are

being sold around the world for plywood, molding, and doors.

Rare and threatened trees like nyatoh, ramin, balau, bangkirai,

and merbau are being cut and sold for furniture, dowels, and

flooring. Brisk trade in these hardwoods is rapidly destroying

Indonesia’s last remaining lowland tropical rainforests.

This report examines the forces that are driving forest destruc-

tion in Indonesia, and outlines some of the connections of U.S.

companies to the international market for Indonesian ply-

wood. Several case studies provide information about typical

logging operations that supply U.S. retailers with timber prod-

ucts. Specific attention is paid to meranti plywood, which

makes up the bulk of Indonesian timber imports to “environ-

mentally committed” US retailers.

This re p o rt is based on extensive re s e a rc h

conducted from 2000 to 2002, including sur-

veys of retail stores across the United States

and Canada, study of recent publications

about and media coverage of Indonesia’s

f o rests, reviews of the PIERS Database, and

i n t e rviews with affected communities,

Indonesian forest activists, fore s t ry expert s ,

c e rtifiers, consultants, policy-makers, gov-

e rnment officials, biologists, journalists, log-

ging company staff members, log bro k e r s ,

mill workers, and truck drivers.

INTRODUCTION

Along with its extensive biodiversity, Indonesia has the world's longest list of species threatened with extinction.

Some of the better-known threatened species include the Sumatran tiger, the Asian elephant,the rhino, the

leopard,the sun bear, and the orangutan. Orangutan photo by John Werner.



Indonesia's 98 million hectares of forests represent 10 percent

of the world's remaining tropical forest cover. Indonesia’s

tropical forests are the third most extensive in the world,

behind the Amazon and the Congo Basin.

In many of the country’s forests, particularly the lowland rain-

forests, logging begins a chain of events that erode ecological

stability. Timber harvesting initiates forest and species decline

by thinning the towering “cathedral” canopies of the rainfor-

est, allowing the remaining forest lands to dry out and become

more susceptible to fire. Logging also curbs the number of

fruits and flowers in the forests, forcing animals to seek out

the ever-smaller forest fragments for refuge. The remaining

forest patches are increasingly unable to regenerate. Many

dipterocarps, for instance, are less able to re-seed forests, given

their declining numbers and the increased ratio of animals con-

suming their fruit and seeds.

While the most commercially valued trees are being logged to

extinction, understory plants are killed by heavy machines,

erosion, and sudden change in microclimate. Logging opera-

tions usually leave huge amounts of slash and damaged trees in

their wake, building up fuel loads that are highly susceptible to

fires. Hastily crafted logging roads, often built without cul-

verts and other drainage aids, erode rapidly and often cause

mudslides that block streams and rivers. Logging roads also

open inaccessible forests to small-scale farmers and industrial

plantation businesses. With improved access to remote areas,

farmers and plantation operators often develop logged-over

areas, ensuring that natural forests do not regrow (Heaton,

2000). Logged hillsides, absent the stabilizing tree roots, often

suffer massive slides or serious erosion when annual monsoon

rains fall. Huge amounts of soil from logged-over areas erode

into streams and rivers, causing fish and aquatic plant popula-

tions to crash. The heavy silt loads that are washed out to sea

cloud and degrade coral reefs, which play a crucial role in sus-

taining ocean fisheries.

Poor concession management and illegal logging have serious-

ly degraded the region’s habitats. Today roads criss-cross

much of Borneo's remote interior. Commercial logging con-

cessions cover more than 55 percent of East Kalimantan like a

patch-work quilt. Since the fall of Suharto in 1998, illegal log-

ging has significantly intensified. A former forestry official

estimates that about 10 million hectares of Indonesia’s forests

have now been destroyed by illegal logging (Barber, 2002).

Timber companies log illegally when they harvest more tre e s

than they are allotted, cut trees on river banks and steep slopes

(which are protected), underre p o rt their harvests to avoid taxes,

or harvest beyond the boundaries of their concessions. Ti m b e r

plantations also act illegally when they clear-cut undamaged

natural forests (those with standing stocks of large commerc i a l-

ly valuable trees of more than 10 cubic meters per hectare) and

do not replant the area, or when they replant trees at a low

density or with low-quality species. “Wild” logging operations

fell trees illegally and sell them to large companies.

Companies have logged protected parklands illegally as well.

The boundaries of the Kutai National Park in East Kalimantan

have been reduced several times, with the final result of an area

less than 65 percent of its original coverage. It appears that all

lowland rainforest protected areas of Sumatra and Kalimantan

are being ravaged for the timber trade.Indonesia's tropical

forests are the most biologically diverse in Southeast Asia, and

their destruction threatens many species. Logging is a leading

cause of forest loss and species decline. As commercially valu-

able trees are logged out entirely, their associated food webs

disappear along with them. Although the archipelago of

Indonesia occupies only 1.3 percent of the earth's land surface,

it’s forests support 10 percent of the world's plants, 12 percent

of mammals, 16 percent of reptiles and amphibians, and 17

percent of birds.

Along with its extensive biodiversity, Indonesia has the

world's longest list of species threatened with extinction. Some

of the better-known threatened species include the Sumatran

tiger, the Asian elephant, the rhino, the leopard, the sun bear,

and the orangutan. Habitat loss poses the greatest threat to

most of the country’s threatened species. For example, around

80 percent of the orangutan's forest habitat has been destroyed

in the last two decades. In the last decade alone, orangutan

INDONESIA’S RAINFORESTS UNDER SIEGE

numbers have fallen by 50 per cent. Only 15,000 to 25,000 of

the animals survive today.

Deforestation

A 2002 study by Forest Watch Indonesia and the Wo r l d

R e s o u rces Institute concludes that “environmental org a n i z a t i o n s

a re sometimes accused of hyperbole in their claims of imminent

d e s t ruction. In the case of Indonesia, predictions of catastro p h i c

habitat loss and species decline are not exaggerated.”

The lowland dipterocarp rainforests of Java, Bali, and Sulawesi

have been completely cleared. And at current rates of logging

the lowland forests of Sumatra will disappear by 2005, and

those of Kalimantan will be gone by 2010 (Holmes, 2000).

Scientists acknowledge the lowland rainforests of Sumatra and

Borneo (Sundaland) as being among the most threatened in

Asia due to intensive exploitation. According to WWF,

“Forests in the Intensive Exploitation stage are subjected to

high extraction pressures from export-oriented timber-pro-

cessing industries….These forests are simultaneously subjected

to conversion pressures from large-scale agricultural planta-

tions” (Wikramanayake, 2002).

Today, more than 70 percent of Indonesia's original “frontier”

forests (undisturbed stands that display their original ecologi-

cal features) have been roaded, cut, burned, thinned, or

cleared. More than 2 million hectares are now being cleared

annually. The deforestation rate has quadrupled since 1970 due

unsustainable “legal” logging, illegal logging, land conversion

for agriculture as well as industrial plantations, fires and min-

ing (Barber et. al., 2002).

As mature timber has started to become depleted in the “selec-

tive logging and planting” concessions granted to logging com-

panies by the government, Indonesia’s wood-manufacturing

sector is coming to depend increasingly upon forest “conver-

sion” operations. These conversion schemes allow companies

to completely clearcut the forest to use the land for other pur-

poses, often to convert into palm oil plantations. Many of the

fires that burned more than 5 million hectares of forest in 1997

and 1998 were illegally set by companies to convert thinned

and logged-over timber concessions into plantation lands. In

2001, an estimated 40 percent of Indonesia’s legal timber sup-

ply came from the “conversion” of natural forests (Barr, 2001).

In the late 1990's the Indonesian Ministry of Fore s t ry made

several changes in order to increase the output of logs to meet

demand. These include: designating large areas as conversion

f o rests, opening them up to logging companies for clear- c u t t i n g ;

allowing private timber operators to extract logs from are a s

d i rectly managed by government fore s t ry agencies (Inhutani);

and weakening the selective cutting guidelines that re q u i re com-

panies to leave smaller trees uncut and to replant trees after they

have logged (Barr, 2001). Although the Ministry has indicated in

various ways that it re g rets most of these changes and has taken

faltering steps to reverse them, most continue unabated.


As we moved slowly up-river, these forests were like a dream

come true, a dream of abundance, of beauty and peace, but

also of mystery alive behind this wall. All abstract words for

concrete objects–yet the power of forest forces is so great we

cannot be impartial to it. Man cannot fail to be dominated by

the forests. So dominant is the forest, it is said to be possible for

an orangutan to travel from the south to the north of Borneo

without descending from the tree-tops.

Cambridge University botanist Patrick Synge

Borneo, circa 1940

Sumatra’s Lowland Rainforests

“This large lowland moist forest ecoregion in Sumatra… harbors

several large vertebrates of conservation significance, including

the tiger, Asian elephant, Sumatran rhinoceros, orangutan, sun

bear, clouded leopard and an incredible assemblage of ten

hornbill species. The ecoregion also boasts two plants that prod-

uct the largest flowers in the world: the better-known Rafflesia

arnoldi and the less known giant aroid lily Amorphophallus

titanum.”

(Whitten and Whitten, 1992)


D e f o restation has accelerated, especially since the recent eco-

nomic crisis and the decentralization of administrative authority

to the regional districts. Several studies estimate the rate of rain-

f o rest destruction has reached 2 million hectares per year, up

f rom 1 million hectares per year in the 1980s. Further loss of

natural habitat is expected to occur as the local govern m e n t s

now rely on natural re s o u rce exploitation to finance themselves.

Biodiversity Threats

The concentration of biological diversity in Indonesia’s rain-

forests is among the highest of any major ecosystem in the

world. In one 2-acre plot in Kalimantan (Indonesian Borneo)

researchers counted 240 different species of trees—not includ-

ing palms, vines, herbs, ferns, and mosses. The entire Southeast

Asian archipelago, including Malaysia, Indonesia, the

Philippines and New Guinea, is intensely species rich.

The archipelago is home to at least 25,000 different species of

flowering plants. In comparison, the British Isles are home to

fewer than 1,500 types of flowering plants. More than 633 bird

species breed in this bioregion. That’s about the same number

as in all of North America, which is several times the land

mass of the archipelago. More than 4,000 species of moths

have been recorded in Borneo alone.

In the remaining lowland and montane forests of Sumatra and

Kalimantan, large-scale commercial logging is the greatest

threat to terrestrial biodiversity. According to the World

Wildlife Fund, threats to biodiversity from logging conces-

sions “will be most serious in areas with large forest blocks,

where large-scale operations and habitat conversion would be

economically viable and attractive,” (Wikramanayake, 2002).

The loss of habitat through deforestation is the most signifi-

cant pressure threatening many species in Indonesia. Forest

destruction has been so intense that the country now has the

world's longest list of species threatened with extinction. The

list includes:

• The Sumatran tiger. Only an estimated 400-500 remain

throughout the country. The tigers recently went extinct on

the islands of Bali and Java.

• The Asian elephant. Populations have plummeted, leaving

this species highly endangered in Indonesia.

• The Sumatran and Javan rhinoceros. Only an estimated 400

remain. The population declined 50 percent in the last 10

years.

• The clouded leopard. This rare species is now extremely

endangered.

• The sunbear. Facing rapid loss of habitat, the sunbear is

highly endangered.

• The orangutan. Indonesia is home to 90 percent of the

world’s orangutans. They are now seriously threatened due

to the destruction of their habitat, the lowland dipterocarp

forests. More than 80 percent the lowland forest have been

cleared in the last 20 years. The orangutan population has

declined more than 50 percent in the last 10 years. Only an

estimated 15,000 animals remain in the wild.

As commercially valuable trees are logged out, their associated

food webs disappear along with them. The fragmentation and

degradation of some of the most biologically diverse habitats

in Asia threatens the future of many species. In Indonesia, log-

ging is the leading cause of species decline. Fragile coral reefs

that surround the hundreds of once-forested islands are now

caught in the shadow of death, as soil from the land slides into

the streams, the rivers and out to sea. As the forests disappear,

less carbon is taken out of our atmosphere, adding to the glob-

al warming that is throwing off the world’s weather patterns

and leading us into the new era of severe climate volatility.

Borneo’s Lowland Rainforests

“This vast ecoregion supports globally outstanding levels of

species richness. Some of the mammals of conservation signifi-

cance include the charismatic orangutan as well as two species

of gibbon, four species of leaf monkeys, clouded leopard, hairy-

nosed otter, and several tree shrews, all species that need intact

habitat to survive. Similarly, of the almost 400 bird species in

the ecoregion, the seven hornbills and a number of pheasants

also need undisturbed habitats. At present, almost half of the

natural forests in this ecoregion are still intact, but only about 3

percent of the ecoregion receives formal protection; thus, threats

from proposed logging concessions place it in the critical list.”

(Wikramanayake, 2002)

Rainforest Fires

In the past 30 years more than 10 million hectares of

Indonesia’s rainforests have been burned by fires. Prior to

these recent conflagrations, fires played only a minimal role in

the ecology of the region’s forests. In Kalimantan, records of

fires associated with El Niño drought cycles in Kalimantan

date back to 1914, but these fires were on a very small scale.

Undisturbed rainforest is normally highly resistant to fire

because of low loads of available fuel, low fuel-energy content,

and high humidity levels—even during the dry season and

droughts.

Logging is a significant cause of the severe, re c u rring fires that

now threaten the survival of Indonesia’s rainforests. Ti m b e r

operations open up the canopy of tropical rainforests and frag-

ment contiguous stands, which allows forests to dry out. Open

f o rest canopy in logged forests increases light penetration

resulting in increased flammability. In addition, logging waste

and the dense underg rowth of fast-growing pioneer species pro-

vide huge fuel loads (Hoffman et al., 1999; Siegert et al., 2001).

When logging and road-building disrupt hydro l o g y, peat fore s t s

– which cover vast areas of Kalimantan and Sumatra– become

d ry and pose major fire risks (Jakarta Post 3/20/03).

An extreme El Niño drought in 1982-83 helped spark the

largest fire disaster ever observed to date. The fire consumed

3.2 million hectares of Indonesia’s forests, largely in

Kalimantan and Sumatra. Another extreme El Niño drought in

1997-98 helped dry out many forests that had already been

made susceptible to drought by extensive logging. This time

the affected area increased by 40 percent to roughly 5.2 million

hectares—the largest fire event in history.

“Selective logging directly contributed to the unprecedented

extent of the 1998 fires,” concludes a report published in 2001

in the journal Nature. “Many areas burned in 1982-1983 fires

suffered from recurrent fires in the 1990s and did not recover

into fire-resistant tropical rainforest. Similarly, for forest areas

burned in 1998 the fire hazard has greatly increased, especially

where fires left behind an opened-up forest or large volumes

of unburned biomass as in peat swamp forests” (Siegert et al.,

2001). In 1998, lowland dipterocarp, secondary forests, and

peat swamp forests were hardest hit.

Satellite analysis by the Indonesian govern-

ment found that most of the fires had been

set in timber or plantation areas. Timber

concessions logged over decades by Georgia

Pacific, the Indonesian army and police, and

Suharto-crony Bob Hasan experienced

some of the most extensive and severe fires.

The companies use fire as a low-cost way to

clear lands during droughts, or as a way to

clear recently logged production forests in

hopes of having the land reclassified as open

for a pulp or palm oil plantation.

In a letter to the journal Nature last year,

scientists reported that rainforest fires in

1997 accounted for 13-40% of global car-

bon emission for that year, contributing to


Massive fires,many deliberately set by forestry companies,sweep through logged-over areas and into intact forests

during each El Niño drought cycle,destroying the capacity of forests and wildlife to regenerate. Photo of Kutai

National Park in East Kalimantan provided by Anja Hoffman, Integrated Forest Fire Management Project.


the accumulation of atmospheric greenhouse gases responsible

for global warming (Page et al., 2002). Many of these fires

were started by logging companies and oil palm plantations

that then went out of control.

Logging not only greatly increases the risk of fires in rain-

forests, it significantly increases the damage that a fire inflicts.

In the 1998 fires, the bulk of the fires occurred in timber con-

cessions, plantations, agriculture, plantations, shifting cultiva-

tion, or fallow lands. Less susceptible to drought, primary

forests suffered significantly less damage. Only 5.7 percent of

the undisturbed forests in East Kalimantan were affected by

fire, whereas 59 percent of logged forests were damaged. Of

the 9.7 million hectares covered by forest concessions in the

province, 24 percent burned. And half of that burned-over for-

est was severely damaged. The most severe damage occurred in

pulpwood plantations. Two-thirds of the plantations were

destroyed by fire (Siegert et al., 2001).

Intensive salvage logging of merchantable dead trees was

allowed following the fires of 1998. However, at every logging

operation, companies were found to be illegally logging the few

remaining live trees, further increasing the fire risk and re d u c-

ing the ability of the forest to become fire resistant in the future

with a closed canopy. With the next El Niño, scientists warn

the burned areas, and the primary forests logged since 1998,

will be increasingly susceptible to another major fire disaster.

“Unless land use policies are changed to control logging…

recurrent fires will lead to a complete loss of Borneo’s lowland

rainforests.”

(Siegert et al., 2001)

Indonesia’s forests were state controlled both before and after

the country broke away from Dutch colonial control in 1945.

Large-scale logging, however, has only taken off since the

1970s, when then-President Suharto allocated hundreds of log-

ging concessions to himself, his family, and a select group of

his business and military cronies.

Since Suharto’s fall in 1998, economic and political upheavals

have brought additional threats to the forests. Efforts to

decentralize the forest ministry bureaucracy and its system of

patronage have led to an explosion of illegal logging, local-

level corruption, and resource “vacuuming” by business inter-

ests—both large and small.

Indeed, by mid-2000, so much timber was flowing out of inte-

rior Kalimantan, that a Mahakam-area observer claimed that

“she had not seen so much timber pass through the region

since the 1970s” (Casson, 2002).

F o rest peoples have demanded the right to control what happens

on their traditional lands, but with the continuation of military

rule and a corrupt judicial system, their situation remains dire .

In 2000, regional autonomy laws put into place contradictory

sets of logging rules. Today logging can be authorized at any

level of government—national, regional, or local—for a “fee”

or political favors. In addition, provincial and district officials

are challenging the central government’s authority by giving

out hundreds of small–scale clearcutting permits (both for tim-

ber concessions and for creating plantations) in areas overlap-

ping with existing concessions and in protected forests. Thus

illegal logging at one level of government is legal according to

another level, and vice versa.

Although these locally granted concessions are relatively small

c o m p a red to commercial timber concessions (only 100 to 10,000

h e c t a res, rather than hundreds of thousands of hectares), they

tend to be even more destructive than larger concessions. Unlike

l a rge-scale concessions that are re q u i red to follow various crite-

ria to log selectively and replant, there are no such stipulations

for permit holders (Barr et al., 2001). The

p e rmits expire within 3 months to one year

of issuance, but there is no limit on how

often they can be renewed. This results in

rapid clear-felling of forests, followed by

reapplication of permit to clear whatever

stands remain. Thus the destructive cycle

c o n t i n u e s .

The district forestry chief of Kutai Barat,

East Kalimantan said in an interview that

his staff is so overwhelmed by the

onslaught of applications for timber conces-

sions that there is no capacity to monitor

them once they are issued (Casson, 2002).

The district is geared toward generating

revenue, rather than in ensuring that log-

CORRUPTION AND CONFLICT: LOGGING’S SOCIAL IMPACTS

A former forestry official estimates that about 10 million hectares of Indonesia’s forests have now been destroyed

by ill egal loggi n g . Fo rest Wa tch Indonesia esti m a tes in its 2002 repo rt , The St a te of the Fo rest: In d o n e s i a ,that ill ega l

logging “appeared to be the source of 50 – 70 percent of the country’s wood supply.” Photo by Jessica Lawrence



ging activities stay within the 100 hectare boundaries assigned.

In Kapuas Hulu, West Kalimantan, the district government has

been aggressively lobbying the national government to permit

logging in extensive areas of protected and national park lands

(Jakarta Post, 9/4/2001).

Local communities often receive more direct benefits—jobs

and profits—from this type of logging than from large-scale

concessions. However, since small-scale, local contractors usu-

ally do not have much capital or equipment, “the bulk of the

profits go to the organizers, financiers and protectors of the

illegal activity, while ordinary people generally earn little and

are left to cope with the social and environmental conse-

quences” (International Crisis Group, 2001).

Low commodity prices means mill and factory workers, the

majority of whom are young women, toil at dangerous jobs

for an average of US$0.05 per hour without safety equipment,

insurance, or child care. In several plywood mills of East

Kalimantan, for example, workers went unpaid for over four

months in early 2002. Many are striking to raise wages to

US$0.07 cents an hour, the equivalent of US$1 for each 14

hour shift.

Illegal Logging and Trade

Illegal logging in Indonesia has significantly intensified in the

past five years. A former forestry official estimates that about

10 million hectares of Indonesia’s forests have now been

destroyed by illegal logging. Forest Watch Indonesia estimates

in its 2002 report, The State of the Forest: Indonesia, that ille-

gal logging “appeared to be the source of 50 – 70 percent of

the country’s wood supply” (Barber, 2002).

Timber companies log illegally when they harvest more trees

than they are allotted, cut trees on river banks and steep slopes

(which are theoretically protected), under-report their harvests

to avoid taxes, or harvest beyond the boundaries of their con-

cessions. Timber plantations also act illegally when they clear-

cut natural forests and do not replant the area, or when they

replant trees at a low density or with low-quality species.

Methods of illegal logging include:

• Logging outside of concession boundaries and in protected

areas. For instance, the boundaries of the Kutai National

Park in East Kalimantan have been reduced several times,

with the final result of an area less than 65 percent of its

original coverage.

While some illegal logs come from “mechani-

cal smuggling” operations, where no legal

documents or papers accompany them, most

are made to look legal through “administrative

smuggling.” The legality of any log or ship-

ment is virtually impossible to determine or ver-

ify, as falsification of documents is rampant.

Illegal permits are often issued on official

papers with official stamps from forestry offi-

cials (Lawrence, 2002; Brown 2002b).

After logs are cut and loaded for transporta-

tion, they receive certificates that specify their

quantity, type, size, and the destination of the

shipment. The certificates determine the fees

the concessionaires owe to the Fore s t ry

Ministry for reforestation and other charges,

and they specify the time it should take for the

shipment to reach the sawmill from the base

camp, so that the volume of timber does not

increase during the transport.

Companies may record lower timber quantities

on shipments than the actual volume to reduce

taxes and fees. In addition, some companies

may pick up additional logs—usually illegally

harvested—during transport and then falsify

transport times on the forms or pay bribes to

officials. Logging outfits illegally harvesting

beyond their concession boundaries or cutting

LAUNDERING ILLEGAL LOGSON THE WAY TO THE MILL

greater volumes than allowed avoid punishment

by paying forestry inspectors bribes (Jakarta

Post, 5/23/2000).

Given the amount of collusion at all levels, it is

extremely difficult to check legality of logs once

they leave the forest. In fact, in the waters around

Kalimantan, ships carrying a cargo of illegal tim-

ber can be escorted by the navy for a fee of Rp.

500 to 700 million (Kompas, 8/5/2001).

Depending on the loading capacity of the ship,

this can be considerably cheaper than paying

the associated formal fees.

• Logging without authorization and obtaining concessions by

corrupt and illegal means (bribery and coercion).

• Over-cutting and removing under or over-sized trees.

• High-grading (targeting more logs than authorized from the

most commercially attractive species).

• Re-harvesting before end of rotation cycle.

• Reporting lower than actual timber harvest numbers to avoid

paying taxes.

• Under-grading, under-measuring, under-valuing, and mis-

classifying logs.

• Buying or selling timber at prices far above or below the

market price to disguise the transfer of profits off-shore,

thereby avoiding taxes in the country of operation (this is

known as “transfer pricing”). According to one corporation,

19 out of 20 timber companies in southern Sumatra manipu-

late their export documents to evade taxes (International

Crisis Group, 2001).

The failure of law enforcement and legal systems is exacerbating

the proliferation of illegal logging. Officials at all levels, includ-

ing police, military, fore s t ry officials, rangers, and customs are

involved in the collusion for significant “informal” income.

Many raids on illegal sawmills are preceded by tip-offs, or

equipment/logs are confiscated but re t u rned without furt h e r

action. In some cases, confiscated logs have also “disappeare d ”

or “sunk in the water” before they could be auctioned off .

In 2000, a three week sweep of Tanjung Puting National Park

netted 16,864 cubic meters of illegally harvested ramin logs.

More than 100 people were caught and arrested, but only 11

were officially prosecuted. The Forestry Department then auc-

tioned the contraband logs off to be processed by legal manu-

facturers at prices far below market rates: less than Rp. 137,000

(US $13.70) per cubic meter. In the United States ramin wood,

which is used to make tool handles, furniture, wooden blinds,

picture frames, costs around US $1,000 per cubic meter. This

extremely low auction price indicates more collusion at work,

even when there is an attempt at law enforcement

(Environmental Investigation Agency 2001).

In recent years, the Department of Forestry has taken meas-

ures to revoke (or not extend) many concessions, and has

divided Indonesian concessions into two categories: those still

running, and those declared withdrawn. Officially, there are

311 operational concessions, and 344 that have been with-

drawn. The withdrawn designation, however, does not neces-

sarily signify that they have actually been shut down and are

now inactive. The most recent data indicate that 116 “with-

drawn” concessions are still being logged (Brown, 1999).

New non-concession concessions continue to spring up. For

example, in West Kalimantan many companies with expired

concessions continue to exploit timber. They work with local

businessmen and pay for all costs of permits and operation,

including building access roads and sawmills, and acquiring

equipment, such as chainsaws and trucks. Of 49 concessions in

the province, 14 were found to be “non-existent,” six were in

protected areas, and the rest belonged to business people con-

nected to Suharto (Jakarta Post, 9/4/2001).

Violating Indigenous Rights

Indonesia is home to more than 210 million people. It is also

home to a vast diversity of cultures. With 60 percent of the

population and the majority of the military and political

power, Java dominates the rest of the country. More than 300

different ethnic groups live in Indonesia, most of them in the

“outer islands”, where an estimated 50 million people depend

on natural forests for their livelihoods.

The traditional customary laws, or adat laws, of Indonesia’s for-

est-dependent people, are not recognized under Indonesian law,

and forest-dwellers are at a particular disadvantage. Communities


Action from the law enforcement teams only comes after publici-

ty in the mass media. Even that’s only for show. Tens of thou-

sands of cubic meters are deliberately “sacrificed” to prove the

seriousness of law enforcement apparatus. On the other hand,

hundreds of thousands of cubic meters of logs are allowed to

slip through.

Forestry Department Dean, Tanjungpura University, Pontianak, West

Kalimantan (Kompas, 8/5/2001)


that have been dependent upon the forests for subsistence, health,

and security for generations are being displaced by the clearing of

their lands and re s o u rces (Down to Earth, 2000).

Although recent international standards, including the princi-

ples of the Forest Stewardship Council and the International

Labor Organization’s Convention 169, now call for indige-

nous participation of in the decision-making processes that

affect them, Indonesia’s forest-dependent communities contin-

ue to be excluded and marginalized in the name of “national

interest” (FERN, 2001).

For decades Indonesia has subordinated the traditional land

tenure of indigenous people to the country’s drive for eco-

nomic development. For example, the government drafted a

forest-planning map in the early 1980s that zoned more than

70 percent of the country’s forests for logging, while setting

aside the remaining 30 percent as conservation areas. The dis-

tinction between production and protected forests was based

largely on soil and topographic considerations (Peluso, 1995;

Eghenter, 2000). This map, which is entirely devoid of com-

munity-land boundaries, became the basis for providing the

concessions that were given out by the central government—

often to Suharto’s family, business cronies, and the army and

police. Concession holders were almost exclusively based in

Java. By 1990, 57.9 million hectares of concessions had been

awarded, though only 43.3 million hectares of forests had

actually been classified as production forests (Peluso, 1995).

Many communities found out that their ancestral lands had

been awarded to a timber company as a concession only when

the loggers arrived on site. Timber companies

responded to conflicts with local communities by

hiring paramilitary thugs, military units, or police

troops to crack down on dissenters.

Local resentment ran particularly high during the

Suharto years. Concessions were mainly operated

with laborers imported from other islands. Many

concessionaires relied on army and police coercion

or the use of hired thugs to keep logging opera-

tions active. Others used more subtle tactics to

silence community opposition, such as bribing

influential local leaders or tricking village chiefs or

customary leaders into signing away their commu-

nity’s lands. Some communities were offered sub-

sidies for fertilizers or tractors in exchange for log-

ging rights for a year.

Little Local Benefit

“Typically, local communities benefit little from the timber wealth,

with governments often superimposing large-scale concessions in

areas where local communities had traditional rights to forests

resources. Because of the valuable timber in these forests, the

forestry sector… is particularly prone to corruption, illegal log-

ging, and frenzied struggles between different stakeholders to

capture the remaining forest wealth. Governments… have kept a

lid on these struggles through punitive measures and police or

military action, but the struggles tend to erupt when controls are

relaxed, as is currently occurring in Indonesia.”

(Wikramanayake, 2002)

Many communities found out that their ancestral lands had been awarded to a timber company as a concession

only when the loggers arrived on site.Timber companies responded to conflicts with local communities by hiring

paramilitary thugs,military units,or police troops to crack down on dissenters. Photo by Jessica Lawrence

After the collapse of the Suharto government in 1998, indige-

nous peoples in Indonesia began to agitate for change. In

March 1999, the inaugural Congress of the Indigenous Peoples

of the Archipelago (AMAN) demanded recognition of adat

rights under Indonesian law, stating: “The political rights of

indigenous peoples to control our own economies, societies,

laws and culture must be restored, including our rights over

land, natural resources and other sources of livelihood.”

(Down to Earth, August 2000).

Some local governments have recently passed regional autono-

my measures to provide partial compensation to indigenous

communities for past damages. The provincial government of

East Kalimantan, for example, has enacted a measure to allow

communities to retroactively claim compensation from conces-

sions that extracted timber from their land. The levels of com-

pensation, however, have been relatively small. Communities

receive Rp. 3,000 (US $0.30) per cubic meter of meranti wood.

The international market price for meranti is more than US

$100 per cubic meter (Barr et al., 2001). And many communi-

ties lack titles and deeds, making it unlikely that local commu-

nities will be able to legally prove that compensation for past

damages is due to them.

With their resources degraded and few job opportunities avail-

able, the future of many communities is uncertain. Timber

industry operations have provided few opportunities.

Provinces with extensive logging in Sumatra, Kalimantan, and

West Papua (Irian Jaya) remain some of the poorest in the

archipelago, while their forests have contributed enormous

profits to concessionaires’ pockets and state coffers. These

provinces are plagued by sub-standard infrastructure. For

example, poorly constructed public roads make for difficult

access, especially during the rainy season when roads turn into

mud. Small-scale farmers are often left with rotting products

en route to market, while the price of basic goods soars.

Indonesia’s laws deny the collective rights of indigenous peo-

ples to protest the issuance of logging permits (Basic Forestry

Law No. 5, 1960). National law gives “national economic

development” precedence over local survival and sustainability.

Article 2 of Basic Forestry Law No. 5 (1967) prevents indige-

nous people from gaining customary rights without certificates

of private land titles. The law declares that all forest lands—

except for privately owned areas—belong to the state. Many

indigenous communities recognize adat law, an unwritten cus-

tomary law that regulates land ownership within the commu-

nity, both individual and communal. However, land titles cer-

tifying land ownership can only be issued by the National

Land Administration after the area has been surveyed and

mapped. This is a lengthy, expensive process that most tradi-

tional communities cannot afford, as political influence often

depends on ability to pay. Legal recognition of customary land

rights becomes a near impossibility.

Granting security of land tenure to indigenous people could

foster better management of forest lands. Communities that

are invested in their land are less likely to choose short-term

gains from practices like illegal logging. Much of the current

illegal logging at the community level has been a reaction to

the weakening of government powers that had excluded

indigenous peoples from participation for decades.

Through a series of legal amendments in 1999 the existence of

adat rights are beginning to be recognized. However, imple-

mentation of legal changes has been almost nonexistent, a fact

that is frustrating to forest dependent communities. It remains

to be seen how—or if—official changes will manifest in imple-

mentation on the ground.


Increasing Conflict

P redicting a rise in conflicts, Director General of Pro d u c t i o n

F o re s t ry Management Soegeng Widodo admitted to the com-

plicity of government and companies through “mistakes made

by the old government in granting concessions,” and compa-

nies “contributing to the conflict by ignoring the needs of

local communities or using locals' farmland without off e r i n g

fair compensation.”

(Jakarta Post, 3/18/2000)


“Lauan” is the North American commercial name for a variety

of timber types obtained from trees that belong to the diptero-

carp family (including Shorea species). Dipterocarps are so

diverse they comprise nearly 10 percent of the world’s tree

species. Dipterocarps also make up roughly 80 percent of the

remaining commercially valuable trees within most of Sumatra

and Kalimantan’s lowland rainforests. These trees are in high

demand, largely due to the plywood export industry. If cur-

rent rates of timber harvesting continue, these forests are

expected to be logged out in a decade.

Trees from the dipterocarp family make up more than 70 per-

cent of the tropical timber market because the wood, which is

pale, soft, and low in density, makes excellent veneer and ply-

wood. Lauan is lightweight, flexible, rigid, flat, and it has an

attractive smooth surface that won't warp. It is most frequent-

ly used for light construction, interior joinery, paneling,

veneer, cabinets, furniture, and boat building (Heaton, 2000).

Dipterocarps are “late-successional” trees, meaning that they

thrive only in forests with closed canopies. Plantations are not

a significant source of these trees, nor are they likely to be in

the next few decades. The World Conservation Monitoring

Center’s report, Conservation Status of Tropical Timbers in

Trade, concludes that natural forests in Southeast Asia are not

being successfully managed for the long-term production of

timber. The report classifies the dipterocarp species that grow

in Indonesia and Malaysia as either extinct, endangered, or rare

(Heaton, 2000).

With the primary forests in the Philippines and Malaysia now

virtually commercially logged out, the Indonesian forests of

Sumatra and Kalimantan have become the major source of the

huge logs used in ply and veneer production. Demand for

these logs threatens the continued existence of the lowland

MAKING THE PLYWOOD CONNECTION

“Lauan” and “Meranti”

Internationally, Asian and European traders call the commercial

dipterocarps “meranti,” while it is marketed as “lauan” in North

America. The name lauan was first used to market Philippine

“mahogany,” which is also a dipterocarp. Somewhat confusing-

ly, some South American hardwoods with construction qualities

similar to Indonesian lauan/meranti are now also being market-

ed as “lauan,” but most of the international trade is from the

endangered rainforests of Southeast Asia.

Through the 1970’s and 1980s, most of what we cut was mer-

anti. The trees were enormous and we could pick which ones we

wanted. Generally, we chose those 60 cm and up. Now, the big

meranti is much more scarce and hard to get. At least half of

what we harvest is other species.

Bob Hasan, former head of Apkindo, Indonesia’s plywood cartel, May 1999

dipterocarp forests. Quick and dirty logging operations often

severely damage residual trees. And loggers often return to

logged-over areas to harvest residual trees before they can re-

seed the forest. And with little government oversight in con-

cessions, sufficiently high numbers of trees for seed produc-

tion are now rarely left behind (Heaton, 2000).

Due to competition with illegal loggers, writes forestry expert

Chris Barr of the Center for International Forestry Research,

“there is little incentive for large-scale concessionaires to fol-

low sustainable cutting cycles.” Barr finds that “some conces-

sion managers have complained that they are being ‘forced to

abandon the selective cutting guidelines’ rather than to ‘simply

leave commercially valuable timber to be taken by other par-

ties’” (Barr, 2001).

Many dipterocarps use a “saturation” technique to re - s e e d

f o rests, producing seeds in unison every few years to ensure

that predators cannot consume all of their seeds. But with

fewer trees left to satiate predators, dipterocarps are incre a s-

ingly unable to regenerate, according to Professor Lisa

C u rran, an expert on Indonesia’s dipterocarp forests at Ya l e

School of Fore s t ry and Environmental Studies. “New

re s e a rch is showing that the state of these forests is more

grim than we imagined,” Dr. Curran stated in an interview in

F e b ru a ry, 2003.

Logging also poses real obstacles to seedling survival. Young

plants must not only contend with the trampling, skidding and

disruption caused by logging but also compete with faster

growing pioneer species that can outgrown them to reach light

breaking through the canopy (Appenah, 1995).

Despite high demand, lauan now accounts for considerably

less than 70 percent of the timber currently being harvested in

many timber concessions, reports Chris Barr in his 2001

report, Banking on Sustainability. According to the report,

multiple industry sources indicated that there has been a sig-

nificant drop in the number of high-value, large-diameter

lauan logs being harvested in the past 10 to 15 years. Timber

companies are now cutting smaller-diameter trees and a broad-

er range of species than in the past. The report finds that the

decline in high-value lauan logs “has been obscured by the fact

that, since the early 1990s, the Indonesian Timber Society

(Masyarakat Perhutanan Indonesia) has encouraged its mem-

bers to market a variety of species with properties similar to

Shorea as ‘meranti group’” (Barr, 2001).


I worked in a Samarinda, East Kalimantan

plymill in the late 1990s monitoring meranti

log procurement. The system was full of fraud

then, and even more so now. During the

Suharto era until 1998, plymills were required

to buy a certain percentage of their wood from

timber concessions [HPH], so the mills had to

report, even if falsely, where they were buying

logs from. After 1998, that requirement was

d ropped and most mills stopped keeping

records. The old records were tainted with fal-

sification, but at least the mills had to be

accountable to the government. But now every

mill can buy simply from log brokers, so the

amount of illegal wood has of course

increased. This isn’t just because illegal is more

economical, but it is certainly the only way to

ensure the necessary volume of logs to keep

the mills running. Of the meranti logs being

floated from Kalimantan’s interior down the

Mahakam river to Samarinda, 20 percent are

of insufficient quality to enter the mills. The

other 80 percent enter mills, whereupon 20

percent go into sawn wood products and 80

percent are processed into plywood. Plywood

conversion rates are typically 40 perc e n t ,

though the industry exaggerates this to a false

50-60 percent recovery rate. Legal conces-

sions send 30 to 60 percent of their logs direct-

ly into processing, while 40 to 70 percent are

sold to brokers. Logs would come from HPH

(legally) or from brokers (both legally and ille-

INTERVIEW OF FORMER PLYWOOD MILL STAFF WITHRAINFOREST ACTION NETWORK, FEBRUARY 2002

(Anonymity respected)

gally. With illegal logs, the brokers work in coor-

dination with illegal loggers. Brokers profit by Rp

50,000 (US $5) per cubic meter after paying for

the labor of the illegal loggers, transport, police

bribes, forestry department bribes, false docu-

mentation costs, and false markings for the logs.

The brokers sell illegal logs to the mill at the same

price as legal, so the mills profit less from illegal

logging than the brokers. Of course, since the

mills require far more volume than concessions

legally supply, mills depend on the brokers laun-

dering the logs for them. When a crack down

happens, the mills simply point to the brokers

and wash their hands of their guilt.

Mills Drive Demand for Illegal andDestructive Logging

The capacity of plymills greatly outweighs the amount of legal

wood available to them. In 1999, wood mills in Indonesia had

the capacity to process 30.9 million cubic meters of ro u n d w o o d

beyond what their own concession holdings can supply (Bro w n ,

1999). By 2003, the legally permitted volume of selectively felled

timber was only 6.4 million cubic meters (Jakarta Post 1/28/03)

Meanwhile,demand from the mills remained about the same,

roughly 20 million cubic meters for plywood, 40 million for

sawnwood, and 15million for pulp (Brown, 2002a).

This vast discrepancy between supply and demand does not

begin to consider the demands of plywood mills in Malaysia,

Singapore, China and the Philippines, which also rely on logs

smuggled out of Indonesian rainforests for supply. Indonesian

law explicitly prohibits the export of logs.

In theory, Indonesian mills should purchase logs from other

legal concessions to meet demand. In practice, they are turning

to illegal supplies, whether by over-harvesting in their conces-

sions, logging outside their concessions, or buying illegal tim-

ber from other sources, to fill this demand.

The table below demonstrates the dependence of major

Indonesian timber organizations on illegal wood to supply

their mills. The companies simply do not harvest enough logs

from their timber concessions (HPHs) to keep their mills

operating. The shortfall column indicates the total volume of

wood that did not come from legal concessions, but instead

came from illegal sources.

Alternatives to Lauan Plywood

There are a number of plywood options that do not contribute to

the destruction of endangered lowland dipterocarp rainforests of

Indonesia, including:

• North American Birch plywood

• Birch veneer & white fir plywood

• White fir with hem-fir plywood

• Yellow poplar plywood

• Cottonwood plywood

• Roseberg Superply

• Eucalyptus plywood

• Italian Poplar plywood

• Rubberwood plywood

• Albizia plywood

(Heaton, 2000)

Company Timber Concessions (HPHs) Compared to Their Mill Capacity, 1997/1998

Group name

Barito Pacific

Djajanti

Kayu Lapis Indonesia

Alas Kusuma

Bob Hasan Group

Armed Forces/Army

Sumalindo

Tanjung Raya

Benua Indah

Area of HPHs (hectares)

5,043,067

3,365,357

2,806,600

2,661,376

2,131,360

1,819,600

1,057,678

630,481

596,100

Annual Shortfalls in roundwood capacityof HPHs to supply company mills (m3)

-2,882,707

-1,380,463

-2,862,298

-1,482,212

-545,970

-692,332

-140,278

-874,479

-216,103

The shortfall column shows the net raw material deficit of each timber group, assuming that concessions are logging according to legal requirements, and that sawmills and

plymills were running at their full licensed capacity.(Adapted from Brown, 1999).


Given the inability of the Indonesian government to regulate

logging practices, it is simply uneconomical for plymills to

secure their raw materials legally. Getting a legal supply of

meranti logs to port in Jakarta could cost Rp. 570,000 cubic

meters after paying the various fees, while the logs would only

fetch a market price of Rp. 550,000 (Kompas, 8/5/2001).

In the wood trade it is standard practice for log brokers to

purchase fraudulent “legalizing” documents from corrupt

company and government personnel before selling illegal logs

to mills. East Kalimantan plywood mill managers openly

admitted in 2002 interviews with Rainforest Action Network

researchers that they buy logs from brokers without knowing

the wood’s source, as the preferred large logs become more

scarce from legal concessions.

The plywood industry has relied on timber from natural

forests, rather than on the timber plantations that were to be

established to replace natural forests as suppliers of raw mate-

rial. Even though the Indonesian timber industry has been in

operation since the 1970s, industrial timber plantations have

failed to provide significant amounts of logs, let alone become

the sole and sustainable source of raw materials. Due to mis-

management of the country’s Reforestation Fund, industrial

timber plantations have not begun to yield significant supply

of raw roundwood and natural forests are becoming more and

more depleted. Currently, only 1.8 million hectares (25 percent

of the target area) of industrial tree plantations (HTI) have

been planted, and many of these were destroyed in the 1997-

1998 fires (Sinar Harapan, 11/14/2001).

Plantations in Indonesia have so far proven capable only of

accommodating fast growing exotic species suitable only for

pulp mills, and not the slower-growing dipterocarp species on

which plywood mills rely.

High demand is not the only factor driving the rapid and often

illegal clearing of forests, Indonesian mills are highly ineff i c i e n t .

The average mill has a conversion rate of at best 50 perc e n t —

requiring 2 cubic meters of raw logs to make just 1 cubic meter

of plywood. Mill in most other countries use less than 1.6 cubic

meters of logs to make 1 cubic meter of plywood, a conversion

rate of more than 62.5% (Asia Times, 11/20/01).

Military Profits from PlywoodTrade

The Indonesian military has significant investments in the ply-

wood industry. It is the sixth largest concession holder in the

country (Brown, 1999). Between 1999 and 2002, the number

of known Army concessions fell from seven to five, while the

number of known mills rose from seven to twelve, suggesting

that it has an increasing dependence on illegal or untraceable

sources. The rent earnings of the Army’s large mills exceeded

US$67 in 2001 (Brown, D. 2003. pers. comm.). Military forces

consistently use intimidation or force to ensure that their prof-

it-making operations run smoothly, often at the cost of com-

munities that inhabit the area.

Several sources estimate that 75 percent of the military’s

expenditures are financed by the numerous business ventures

undertaken by its various branches and its affiliated founda-

tions (ICG, 2000; Aditjondro, 2000). The military has exten-

sive holdings in logging and sawmill companies, including:

• PT Yamaker. Owned by the armed forces through Yayasan

Maju Kerta, this logging concession borders West

Kalimantan and Malaysian Sarawak as well as East

Kalimantan and Sabah. Satellite images have revealed a net-

work of illegally constructed roads crossing the

Indonesian/Malaysian border to facilitate log smuggling. The

Ministry of Forestry revoked the concession in 1998 after

finding the company was smuggling logs across the border.

Since then there has been an explosion of illegal logging in

the former concession by “communities that are unleashing

their vengeance against all the injustice that they experi-

enced” during the quasi-military control (Kompas,

8/5/2001).

• PT Sumber Mas. The Armed Forces owns minority or

majority shares in virtually all of Sumber Mas’s concessions

and mills, meaning the group effectively belongs to the

Armed Forces (Brown, 1999).

• PT ITCI. Weyerhaeuser Co. established ITCI in partnership

with Bob Hasan and the Indonesian Army. By 1999, the

forests on ITCI's concession had nearly disappeared due to

rampant industrial logging and the resulting forest fires. The



ITCI timber concession is 35 percent held by the Bimantara

conglomerate, 15% held by Nusamba, and 51% held by the

Army’s Tri Usaha Bhakti foundation (Brown, 1999).

• Hasko Jaya Abadi group. Although nominally owned by

Chinese businessman Hasan Winarko, the informal (though

undocumented) owner of this group is reportedly the

Indonesian Army. The Hasko group owns three large ply-

wood mills, one in Sumatra (Putra Sumber Utama) and two

in South Kalimantan (Basirih and Wijaya Tri Utama). Until

the 2002 acquisition of Sumalindo concessions in late 2002,

Hasko group did not own any timber concessions, which

means it used a variety of sources, often irregular, to main-

tain its output of plywood (Brown, personal correspon-

dence). Now the Hasko Group, and its Sumalindo conces-

sions, are poised to destroy the some of the last remaining

ancient forests in Kalimantan. Local people’s resistance to

the destruction of their ancestral lands is increasing.

Plywood mills operated by the Indonesian Army in 2003 include

ITCI, Kayan River Indah, Meranti Sakti, Panca Usaha Palopa,

Sumber Mas Indah, Sumber Mas Ti m b e r, Hasil Delibert y,

Mohammad “Bob” Hasan was a close busi-

ness partner of Suharto’s for 40 years. After

establishing his career with partnerships with

G e o rgia Pacific, We y e rh a e u s e r, the

Indonesian military and the Suharto family,

Hasan came to control dozens of multinational

companies with interests in logging, plywood,

pulp and paper, mining, shipping, and insur-

ance (Wakker, 2000). Hasan also profited

from years of trade with the military dictator-

ship of Burma (SLORC) (Aditjondro, 1997).

As chairman of Apkindo, Indonesia’s plywood

c a rtel, Hasan came to dominate the intern a t i o n-

al plywood industry for 15 years, squeezing

h u n d reds of millions of dollars from plywood

m a n u f a c t u rers and traders. The Far Eastern

Economic Review called him “unquestionably

the strongest player in setting Indonesia’s fore s t

policies” which in turn “led to the liquidation of

its forest re s o u rce base, sparked major contro-

versy with indigenous peoples and…set the

stage for the 1997 fires” (Weiss, 1997).

Hasan controlled exports to the world’s larg e s t

markets for tropical plywood, including

Singapore (Fendi Wood ), Hong Kong

(Celandine Co. Ltd.), South Korea (Indo Kor

Panels Co. Ltd.) and Japan (Nippindo) the Middle

East (PT Fendi Indah in Jakarta), Europe (Kiani

UK) and the U.S. (Chesapeake Hardwoods in

Vi rginia and Plywood Tropics in Oregon). Hasan

used organizations to pay Apkindo members low

prices for their plywood, sell the exports at a sig-

nificant mark-up, and pocket the diff e rence him-

self (Brown, 1999). Hasan controlled the market-

ing of roughly 57 percent of world tropical ply-

wood exports (Barr, 98).

In 1992 Suharto directed that US $100 million

from the state Reforestation Fund be given to

Hasan for investment in his US $1.1 billion

pulp and paper plant in East Kalimantan, PT

Kiani Kertas. This was almost half of the

Reforestation Fund (Down to Earth, 1997). The

Kiani Kertas plant was also given a 10 year

tax holiday (Brown, 1999).

Since the fall of Suharto, 15 of Hasan’s compa-

nies have declared bankruptcy with accumulat-

ed debts of over US$600 million (DTE 49,

5/01). Nevertheless, these companies continue

to operate. His PT Kiani Kertas group alone

owed US$670 million in off s h o re debt and a

f u rther US$440 million to IBRA (Barr, 2000).

In 2001, Hasan was convicted of a litany of

f o re s t ry crimes and imprisoned. According to

some accounts, he has illegally siphoned over

US $5 billion from the Indonesian govern m e n t .

He continues to own and profit from dozens of

companies connected to the international tro p i-

BOB HASAN: KING OF PLYWOODCONTINUES REIGN FROM PRISON

cal hardwood trade. Despite conviction and

imprisonment in 2001, Hasan’s wealth continues

to accumulate in over 40 “charitable foundations”

upon which Hasan serves as a chair or board

m e m b e r. His plywood insurance industries contin-

ue to bring him profits, while the logging and

manufacturing companies he established contin-

ue to raze Indonesia’s forests. One HPH, PT

Timber Dana in East Kalimantan, established by

Hasan and Georgia Pacific in 1982, seized and

d e s t royed over 160,000 hectares of indigenous

Bentian Dayak forests. With loss of livelihood and

continued re p ression at the hands of company

and military police, local communities are in

despair about how to salvage their lives and their

lands. In 2002, three locals were jailed for weeks

after participating in a negotiation with the com-

pany re g a rding its illegal logging and road con-

s t ruction in sacred primary forest beyond conces-

sion boundaries.

Plywood Tropics, a major US importer of

Indonesian plywood, was established and owned

by Bob Hasan and Richard Newman, form e r

D i rector of International Fore s t ry at Georg i a

Pacific. Plywood Tropics was a major US branch

of Hasan-plywood cartel APKINDO until 1998.

Trade experts believe Hasan continues to pro f i t

f rom Plywood Tropics despite his imprisonment

for massive fraud (Brown, D, 2003. pers. comm.).

Basirih (Hasko Group), Wijaya Tri Utama (Hasko Gro u p ) ,

Putra Sumber Utama (Hasko Group), Hendratna Plywood, and

Inka Raya Plywood (D. Brown, 2003, pers. comm.).

International Demand forEndangered Wood

Asian countries make up 60 percent of Indonesia’s export mar-

ket for plywood, with 32 percent going to Japan, 16 percent to

China, 8 percent to Taiwan, and 4 percent to South Korea.

North America, Europe, and the Middle East each comprise

about 13 percent of Indonesia’s export market for plywood.

(Jaako Poyry 2000).

The volume of hardwood-based plywoods imported into the

United States is significant, with Indonesian plywood supply-

ing the majority of the market. U.S. imports remain a critical

s o u rce of income for many Indonesian plywood companies,

especially with volatile Asian economies. There are plenty of

a l t e rnatives to wood from the last remaining rainforests of

Indonesia and Malaysia. Lauan (meranti) plywood can be

replaced with eucalyptus, poplar or ru b b e rwood; ramin tool

handles and paintbrush handles can be replaced with poplar;

merbau, balau and bangkirai flooring and furn i t u re can be

replaced with bamboo, coconut wood, ru b b e rwood, and rattan.

Home builders in the United States that rely on endangered

lauan products include KB Homes, Ryland Homes,

and US Homes. In 2002, Centex Homes announced

they would fully phase out of trade in lauan prod-

ucts by the end of the year.

The top five U.S. importers of Indonesian plywood

between May 2001 and April 2002 were Georgia

Pacific, Taraca Pacific, North Pacific Lumber, Far

East American, and IHLO Sales & Imports, each

importing over 40 million pounds of plywood.

In 2001, over 760 million pounds of Indonesian ply-

wood entered the US, valued over $283 million.

Imports of doors and jambs valued over $13 million,

with Interpacific Sales, Canusa, John Plummer,

Lowe’s Global Sourcing, and Molding Associates as

the top five importers.

Top 5 US Importers of Plywoodfrom Endangered Indonesian Wood

Georgia Pacific

Taraca Pacific

North Pacific Lumber

Far East American

IHLO Sales & Imports

Each imported over 40 million pounds of Indonesian plywood between

May 2001 and April 2002.

The largest US importers and distributors of lauan products include:

Georgia Pacific

Jeld-Wen

Columbia Forest Products

Plywood Tropics

Masonite

Logs,many from illegal and unknown sources,are floated down the Mahakam River of East

Kalimantan before being processed in Sumalindo's plywood mill. Photo by Jessica Lawrence



The past 10 years of certification initiatives in Indonesia have

proven ineffective in addressing the root causes of the coun-

try’s forest crisis. In April 2001, 144 Indonesian environmental

advocates and local people’s organizations called for the halt of

forestry certification evaluations and partial chain of custody

monitoring until the certification systems are overhauled to

address major shortcomings (WALHI, 2001).

Under current legal systems, it is structurally impossible for

any logging operation in Indonesia to comply with the inter-

nationally recognized standards of the Forest Stewardship

Council (FSC). In direct conflict with FSC standards, the gov-

ernment, which owns and controls all of Indonesia’s forests,

has systematically prevented adequate protection of high con-

servation value forests. In addition, the legal system eliminates

customary use rights for forest dependent communities, result-

ing in social conflicts and impoverishment for tens of millions

of people. In sharp contrast to FSC dictates, there is little

respect for indigenous peoples’ rights to land, livelihood, and

free and informed consent for any “development” taking place

on customary lands (Loraas, 2002).

Efforts to reform the country’s corrupt timber certification

system cannot succeed at reducing illegal logging and halting

unsustainable practices while demand for wood from plywood

mills remains high. Until Indonesia’s manufacturing capacities

are downsized to regionally sustainable levels that would reign

in illegal logging, certification endorsements for a handful of

concessions will continue to undermine the government’s will

to enact urgently needed structural changes to save remaining

forests and protect the rights of indigenous communities

(WALHI, 2001).

Some international observers, government officials, and envi-

ronmental advocates have called for reforms that would pro-

mote a “sustainable logging” agenda in Indonesia’s beleaguered

forests. But forestry experts remain skeptical of such an

approach to reforming the country’s logging practices. To

quote Chris Barr (2001) of the Center for International

Forestry Research, The sustainable logging reform agenda

“fails to address key factors that are encouraging unsustainable

rates of log removals—most notably, effective demand for tim-

ber on the part of the nation’s wood processing industries and

new technologies that have made previously marginal areas

and species commercially viable.”

Barr also questions whether timber operators would have the

will and ability to employ environmentally sustainable logging

practices, even if required to do so, due to the lack of prof-

itability of fully legal operations in a market awash with ille-

gal—and thus cheaper– wood. Advocates of reforming the

current system through sustainable logging also “overestimate

the Indonesian government’s political will to impose a sub-

stantial reduction in the nation’s timber supply, as well as its

institutional capacity to carry out such a policy.”

Barr appropriately concludes that “the pervasiveness of illegal

logging and the Indonesian government’s relatively weak

capacity to enforce its own forest boundaries suggests that any

efforts to control timber supply without reducing effective

demand on the part of the nation’s wood-based industries is

likely to be futile” (Barr, 2001).

A True Logging Moratorium

In 2000, the Indonesian government committed to a 12 step

action plan to reform the forestry sector at the urging of the

Consultative Group on Indonesia (CGI). The CGI is a group

of multilateral and bilateral creditors led by the World Bank,

which includes the International Monetary Fund, Asian

Development Bank, European Commission, USA, Britain,

Japan and UN agencies. Indonesia agreed to:

1. A moratorium of new approvals for primary forest

conversion;

2. Closing down heavily indebted industry;

3. Putting an end to illegal logging;

4. Restructuring the wood processing industry;

5. Revaluation of forest resources;

6. Making the reforestation program in line with industrial

capacity;

7. Decentralization in forestry sector;

BEYOND RHETORIC: A CALL FOR A LOGGING MORATORIUM

8. Development of a national forestry program.

9. Forest fire prevention;

10. Re-arrangement of tenure rights;

11. Inventory of forest resources; and

12. Improvement of forest management systems.

Three years have elapsed without progress on any of these

commitments. For this reason, Indonesia’s largest environmen-

tal organization, WALHI, has called for a two to three year

moratorium on logging in the country’s natural forests.

It must also be noted that log export bans improve Indonesian

mill supply, but such bans do nothing to protect forests.

A moratorium would create the necessary context for the gov-

ernment to implement its twelve commitments to the

Consultative Group on Indonesia in 2000. A moratorium

would halt the cycle of illegal logging and corruption that

stands as an obstacle to reform. With the smokescreen of legal-

ity removed, law enforcement officers have fewer options to

collect bribes, sell false permits, or allow illegal logging and

trade to go officially “unnoticed.”

A logging moratorium would also substantially reduce conflict

between forest tenure stakeholders, including local communi-

ties, industries, and various government agencies. Between

1990 and 1996, there were 8,741 documented cases of conflicts

between logging concessions and communities (LATIN, 1999).

In the short term, forest industries would have to turn to

Indonesian or imported plantation wood, or simply close their

operations. According to WALHI, if a logging moratorium is

not implemented:

• Monitoring of illegal logging will continue to be nearly

impossible.

• Market distortions will not be corrected and the industry

will continue wasting timber.

• There will be little incentive for industry to improve efficien-

cy in raw material supply.

• Manufacturers will continue postponing the establishment of

timber plantations and will rely, as now, on the destruction

of natural forests to meet their needs.

• The government will continue to suffer a US$2.5 billion per

year deficit from the forestry sector based on lost revenue

from illegal logging.

• Indonesia will lose an industry that could contribute sub-

stantial revenue (potentially up to US$7 billion per year)

when the forests of Sumatra, Kalimantan and West Papua are

degraded (WALHI, 2000).

In May 2002, the President of Indonesia, Megawati Sukarn o p u t r i ,

d e c l a red her support for what she called a “logging moratorium.”

While environmental advocates welcomed the call, it has pro v e d

to be largely rhetoric: the president has since failed to specify

what a successful moratorium would entail.

In response to President Megawati’s statement in support of a

undefined “moratorium,” Indonesia’s Director General of

Production Forestry Management has interpreted “logging

moratorium” to mean “continuation of logging of trees over

50 cm in diameter in forests with timber harvest potential of

75 cubic meters per hectare for all species.” This effectively

leaves primary forests open for logging, while severely degrad-

ed forests are now theoretically “off limits” to further logging

(Bisnis Indonesia, 4/10/2002).

The Ministry of Fore s t ry announced that legal logging will be

reduced to a total of 6.4 million cubic meters in 2003, and has

disingenuously claimed that the intended reduction is a “mora-

torium.” While the govern m e n t ’s proposed reduction sounds

like a positive move, it can only have a beneficial effect if the

mills that rely on illegal logging are effectively closed. A nation-

al harvest of only 6.4 million cubic meters would provide just 10

p e rcent of the volume needed to keep current mills operating.

Without closing mills, illegal loggers will certainly step up to

supply the remaining 90 percent of Indonesia’s mill capacity. A

true moratorium, one that includes downsizing the industry to

reduce illegal logging and promoting effective law enforce-

ment, must be instigated to save what is left of Indonesia’s

threatened forests.



Recommendations for TimberTraders

In such a context of environmental and social chaos,

Rainforest Action Network urges all international wood

traders to get out of the trade in Indonesian rainforest prod-

ucts entirely, and insist that supplying vendors do the same.

Lauan/meranti, keruing, merbau, balau, bangkirai and nyatoh

products are in clear violation of any credible corporate envi-

ronmental or social policy as well as Indonesian law and inter-

national standards of ethical business practices. In order to

prevent this irreversible tragedy, all companies trading in wood

products sourced from Indonesia’s rainforests must:

• Replace wood products from Indonesia’s rainforests with

environmentally and socially preferable alternatives.

Rainforest hardwood plywood can easily be replaced with

eucalyptus, rubberwood, or birch plywood, for example.

Garden furniture can be made of rattan rather than nyatoh

or bangkirai, while rubberwood and bamboo can replace

merbau in flooring.

• Notify Indonesian suppliers of the criteria for eventual reen-

gagement, urging them to support the following five steps

for forest protection:

Recommendations for theGovernment of Indonesia

Before trade or investment in Indonesian wood products could

ethically resume, the Government of Indonesia should, at

national, provincial and regional levels:

• Protect the critically endangered rainforests of Indonesia by

empowering the people who actually want to and can effec-

tively protect them. In Indonesia’s case, this means empow-

ering the traditional (adat) communities whose livelihoods

are dependent on biologically diverse forests, healthy ecosys-

tems, and undamaged watersheds and coastlines. This

requires legal recognition and definition of the indigenous

rights of 50 million forest-dependent people, including their

right to collectively control—and veto – extractive industries

on traditional lands through their own institutions.

Permanent tenure rights must become an accessible option

for traditional communities before sustainable forest man-

agement (and thus timber certification) could eventually be

possible in accordance with regional standards of the Forest

Stewardship Council (FSC).

• Cancel industrial logging and conversion zoning for endan-

gered forests, including primary lowland forests,

such as the areas mapped as “potentially low

access forests” (Barber, 2002). (The 2002 report of

the World Wildlife Fund marks all lowland and

montane rainforests of Indonesia as critically

urgent ecoregions for forest protection, imperiled

primarily by logging concessions, not by local

population growth (Wikramanayake, 2002.)

• Downsize Indonesia’s wood manufacturing

capacity, which is driving illegal logging with

demands for raw materials at ten times sustain-

able estimates. The recommended first step to

downsize the industry is to permanently shut

down indebted primary manufacturing and log-

ging companies controlled by Indonesia’s Bank

Restructuring agency, IBRA. Closure of these 96

companies would succeed in eliminating demand

for 37 million cubic meters of roundwood per

year. Closure of additional mills using illegal

In such a context of environmental and social chaos,Rainforest Action Network urges all international wood

traders to get out of the trade in Indonesian rainforest products entirely, and insist that supplying vendors do

the same. Photo by Jessica Lawrence


• timber would further reduce demand – and thus illegal log-

ging and deforestation.

• Implement the Presidential call for a national logging mora-

torium in all natural forests, not just degraded forests, in

order to effectively crack down on illegal logging and laun-

dering of wood into the “legal” trade. This would help slow

the loss of both “protected” and unprotected forests.

• Transition from a state economy dependent on timber, oil

and mining in primary forests to one based on a guaranteed

healthy environments for subsistence livelihoods (traditional,

organic and diverse rotational agroforestry, non-timber for-

est products, riverine, mangrove and coastal fisheries) as well

as tourism, research, and other non-extractive industries.

Transition and retrain displaced workers of the logging and

wood manufacturing industries. In order to pay for this, the

Indonesian government should use powers granted to it

under national law (PP 17, 2001) to seize the billions of dol-

lars that large Indonesian forest debtors now have hidden in

overseas bank accounts and holding companies.

The 2002 field survey found that Intraca’s claims to be moving toward sustainable forest management are not

legitimate. The company is engaged in a number of practices that violate human rights and ecological integrity—

and cl e a rly vi ol a te certi f i c a tion re q u i rem ents as well as Home Depot’s pu rchasing pol i ci e s .Ph oto by Jessica Lawren ce


PT Intracawood Manufacturing (Intraca) is one of the primary

suppliers of lauan (meranti) plywood to The Home Depot, the

world’s largest home improvement retailer. In 1999, Home

Depot committed to phasing out purchases of lauan and other

endangered forest products. At meetings with Rainforest

Action Network in 2001 and 2002, Home Depot representa-

tives said they had decided not to fulfill their commitment to

stop selling lauan. Instead, the company was planning to

“remain at the table” with Intraca and other concessionaires,

because the logging companies are reportedly working toward

receiving certification for sustainable forestry practices with

the Forest Stewardship Council (FSC).

In order to verify Home Depot’s assertions that Intraca was

deserving of FSC certification and continued Home Depot

patronage, Rainforest Action Network investigators visited the

company’s 250,000-hectare logging concession in East

Kalimantan, Indonesia. In February 2002 investigators visited

areas being logged by Intraca, areas the company had logged

in the past, and nearby primary forest. They interviewed local

people in several neighboring communities, as well as Intraca

managers, staff, local government officials, police, researchers

and journalists.

The 2002 field survey found that Intraca’s claims to be moving

t o w a rd sustainable forest management are not legitimate. The

company is engaged in a number of practices that violate human

rights and ecological integrity—and clearly violate cert i f i c a t i o n

re q u i rements as well as Home Depot’s purchasing policies.

Heavy logging and extensive road building in fragile areas have

led to degradation and destruction of vast high conserv a t i o n

value forests within the concession area. Each year, new ro a d s

open up primary forests never before accessible to industrial

extraction. Logging roads have blocked many streams, causing

swamp formation and lowering of river water levels. Logging

and road building on steep slopes causes tremendous amounts of

soil to wash into streams, muddying waters, devastating fish

populations, and eliminating local people’s source of clean water.

Many logged-over areas have been cut so severely that they

have little to no remaining closed forest canopy. Damaged

residual trees, vines and pioneer tree species now dominate

many logging sites.

Sixty percent of Intraca’s wood purchases are sourced from ille-

gal clearcut logging of primary rainforest. Over a third of

I n t r a c a ’s concession is overlapped by these clearcutting opera-

tions, some of which are clandestinely operated by Intraca,

despite having been officially revoked at the end of 2001.

Intraca has re p o rted to the Indonesian government that in 2000

and 2001, 60% of the volume of logs received at the Ta r a k a n

mill were sourced from small clearcutting operations inside and

a round Intraca’s “sustainable” concession area (HPH).

In 2001, only 26% of Intraca’s mill volume was sourced from its

own concession. Other suppliers included PT ICTI, a military

logging operation linked to severe forest fires, social conflicts,

human rights abuses, illegal deforestation, and the fraudulent

business practices of Bob Hasan. Wood was also sourced fro m

central Sulawesi, where lowland forests have almost completely

d i s a p p e a red. Intraca’s mill could not stay open if it was expected

to source only from legal, selective logging concessions.

The human rights of indigenous communities, including sever-

al Dayak and semi-nomadic Punan, are severely violated.

Intraca began logging their concession without consultation

with or compensation to the dozens of indigenous communi-

ties in the area. In 2002, RAN interviews revealed that com-

munities still had no idea where Intraca would be logging next

inside their vast concession. What they did know was that

compensation to communities had begun since 1991, sporadi-

cally and unevenly. Resentments, confusion, and unmet

demands were high. Hundreds of locals protested at govern-

ment offices, but requests for local government control over

Intraca’s unfair practices went unheeded. By July 2001, com-

munities were calling for Intraca to stop all logging and leave

the area. By 2002, frustrations boiled over and protesters

destroyed a company base camp. Intraca called in the military

CASE STUDY 1: INTRACAWOOD


to interrogate and threaten the villagers. No journalists were

allowed to enter the area.

Intraca steadfastly denies that indigenous Dayak and Punan

peoples have the right to control– and prevent destruction of–

their ancestral forests. Intraca managers insist that dissenting

locals are simply “drunken provocateurs” who are unable to

understand that Intraca’s logging is actually “liberation thin-

ning”. Locals disagreed, and pointed to lowered stream levels

and muddy water, loss of wildlife, rattans, fuelwood and

medicinal plants, wild honey, fruits, birds’ nests, damar,

gaharu, and trees used in house and canoe construction—all

resources they depend upon for survival and health.

Punan communities complain that Intraca has bulldozed

ancestral gravesites. Rivers have been polluted with waste oil

from Intraca’s machinery. Intraca workers have used poison to

fish in the rivers, depleting a critical local food source. In the

logged areas, Dayak villagers note that forest pigs, hunted as a

main food source, are scarce and thin now that the large mer-

anti trees are gone and no longer produce vast amounts of

seeds—a main food source for pigs. With compensation taking

place in some Punan communities in the form of housing, vil-

lagers noted with dismay that the cost of a house was equal to

the value of one year’s wild honey yield. Housing for semi-

nomadic people, they claimed, does not replace the value of all

the damaged forest resources and the loss of their freedom to

choose their own way of life.

Intraca’s plantation unit clearcut 20,000 hectares just outside

the boundary of their concession. Replanting had barely

occurred. In February 2002, locals claimed the area was now

uninhabitable—and unfarmable– without adequate shade. In

December, 2002, Indonesia’s Forest Minister revoked the

license of PT Intraca Hutani Lestari for being both financially

and technically inappropriate.

On September 16, 2002, Intraca instigated the jailing of Bro .

Opu, a trade union official of PT Intracawood Mfg. Ta r a k a n .

Opu was sentenced to six months imprisonment after leading a

peaceful–and legal–strike in support of minimum wage. Dozens

of international organizations are petitioning the President of

Indonesia to protest this case (IFBWW news, 2002).

Intraca is owned by Mr. Widyawimarta Murdaya (called

“Poo”), a renowned Suharto crony, who maintains business

partnerships with Bob Hasan and Tommy Suharto, both con-

victed for corruption. Murdaya’s Berca/CCM Group controls

30 companies and 25,000 workers.

Murdaya and his wife, Siti Hartati Tjakra, own at least three

Nike Shoe factories in Indonesia, exporting to 82 countries.

Working conditions at these factories have caused international

scandal as women workers are extremely poorly paid

(Ballinger, 1998). Only after 10,000 workers staged a strike in

1997 did the company agree to pay the government-regulated

minimum monthly wage of US$8.60.

Murdaya has been implicated in financing Suharto’s dictator-

ship, as well as current military and paramilitary operations to

repress pro-democracy activism in Indonesia (Aditjondro,

2000). Murdaya has maintained power since the fall of

Suharto, winning lucrative contracts for his companies such as

Asea Brown Boveri, the main contractor for the devastating

Bakun Dam in Sarawak, Malaysia.Though construction was

eventually suspended before dam completion, the Bakun proj-

ect forcibly displaced 10,000 indigenous Kenyah and Kayan

people from their ancestral forests into the brutal poverty of

resettlement camps (The Borneo Project, 2001,Aditjondro,

2000, 1998a and 1998b).

In February, 2003, research by WALHI, AMAN and the

Rainforest Foundation regarding Indonesian forestry and

indigenous people determined that local people claimed to

own all of Intraca’s exploited area. However, there were no

indications that Intraca would respect local peoples’ rights to

manage the forests. This has resulted in prolonged disputes.

“Intracawood allegedly pressed local community leaders to

drop their claim over the land”, the study said. Researchers

warned against continued use of military and violence by con-

cessionaires, instead recommending that government recognize

indigenous rights and exclude such lands from concessions

(Jakarta Post, 2/3/03).


PT Sumalindo Lestari Jaya (Sumalindo) is a controversial log-

ging company with more than 1 million hectares of logging

concessions on Sumatra, West Papua, and Kalimantan. The

company was, until late 2002, a subsidiary of the Astra Group,

owned by Suharto crony and convicted criminal Bob Hasan

(Down To Earth 1998, No. 37.) Sumalindo operates two ply-

wood mills and two MDF plants, with an output of 225,000m3

per year (APKINDO, 1996).

Sumalindo has four subsidiaries, namely PT Surya Hutani Raya

(SRH) and PT Sumalindo Hutani Jaya (SHJ) which own and

operate industrial timber plantations; PT Batu Penggal Chemical

I n d u s t ry (BPCI) that produces glues and other chemical sub-

stances; and PT Nitiyasa Prima (NP) that holds a license of pulp

i n d u s t ry and is not yet operational (Astra Group News 2002).

In 1996, Surya Hutani Jaya bulldozed community forests and

gardens in Sabintulung village near Kutai National Park, East

Kalimantan. On August 28, 1999, the community filed a claim

to SHJ, demanding a mere Rp. 16 million (US $2000) as com-

pensation for the taking of their lands and for the destruction

of forests, waterways, and crops. In November 1999, the com-

munity carried out a road block on the company’s access road.

This act of civil disobedience led to a community meeting with

company management but Sumalindo officials refused to

accept the community’s request for compensation of Rp. 5

million per hectare. The company requested some time to

bring the matter to their head office and promised a response

by December 16, 2002. Days after the deadline passed with no

word from the company, about 15 community members car-

ried out another protest action by blocking a log transport

road by laying logs across it (Komite HAM, 2000).

Prior to the act, the community notified the local police about

the planned roadblock. They sent a letter outlining their frus-

trations with Sumalindo:

• 5 years had past since community’s lands and crops were

bulldozed by the company, and no compensation had been

provided.

• The Kutai District Government had completed

its inventory of losses caused by Sumalindo, and

still there had been no action.

• Negotiations following the inventory have been

carried out many times, yet always resulted in

pressure against the communities to drop their

demands.

• Sumalindo had refused to accept the communi-

ty’s price for compensation of Rp. 5 million per

hectare.

• The community/claimants refused to wait any

longer for a response from the company, and

they believed that if they did not carry out an

act of protest, the company would continue to

ignore their claims.

CASE STUDY 2: SUMALINDO LESTARI JAYA

“The company burned the land and accused us, but it was not us who caused the land to be barren. They took

away the trees and planted nothing. We can not afford to buy the food and medicines that used to come from our

forests.All we got was their dust.” –A villager who had been jailed for protesting Sumalindo’s activities.

Photo by Jessica Lawrence


The road was blocked for 19 days without the company

responding to any of the issues. Instead, the police were called

in. Two villagers were jailed and interrogated for five days,

though they were never charged with a crime. The following is

excerpted from a 2002 interview by Rainforest Action

Network with a villager who had been jailed for protesting

Sumalindo’s activities:

“We’ve lost so much—all our livelihood! All 36 kilometers of

riverbanks that were once lined rattans, medicinal plants,

honey and fruit gardens and crops have been destroyed. The

river was sealed off for the company roads, so we have no

navigable waterways.

“The company burned the land and accused us, but it was

not us who caused the land to be barren. They took away the

trees and planted nothing. We can not afford to buy the food

and medicines that used to come from our forests. All we got

was their dust.

“If Sumalindo continues with its current practices, we surely

object to international companies supporting them. We shall

fight for our rights and our land. Sumalindo’s new promises

sound good, but we haven’t seen any results. If this is the

way they do things, it will kill us slowly but surely.”

Another Sumalindo conflict took place in Teratak village along

the Mahakam river, approximately 90 kilometers from Samarinda,

East Kalimantan. According to East Kalimantan Commission on

Human Rights, there was a conflict between 50 families whose

lands have been taken over by PT Surya Hutani Jaya.

In 1999, five Teratak community leaders met with officials

from SHJ to discuss the claims for compensation over commu-

nity’s lands and crops and for the return of community’s lands.

At the end of the meeting, the company stated that they

refused to pay compensation for lands since they claimed that

the lands were owned by the state. SHJ agreed to return 40

hectares in 2008, after one plantation rotation, but refused to

pay Rp 6 million to the communities for their losses.

In 1997 and 1998, 95.7% of Surya Hutani Jaya’s area was

burned in the infamous forest fires. Sumalindo’s other planta-

tion area was 95.8% burned (Hoffman et. al, 1999).

In an interview with Rainforest Action Network, Sumalindo

plymill officials claimed that the mill workers, mostly women,

had “voluntarily” gone unpaid for several months in 2002.

By July 2001, Surya Hutani Jaya(SHJ)/Sumalindo owed the

Indonesian Bank Restructuring Agency (IBRA) over

US$4million (IBRA, 2002). On October 20, 2002, Indonesia’s

Forest Minister revoked the license of SHJ for being neither

financially nor technically appropriate (Antara, 2002). In late

2002, Astra was planning to sell three quarters control of

Sumalindo and its subsidiaries to the reputed Indonesian

Army front company Hasko Jaya. The sale price was to be one

US dollar. The terms of the deal were for the Army to inherit a

debt free company, with Indonesian state banks writing off

(forgiving) Sumalindo's debts at the moment control was

transferred to the Army.

In 2002, Dayak communities at a Sumalindo concession in the

remote interior of East Kalimantan had been demanding

Sumalindo to leave their area. As a result of blockades that had

shut down logging operations for four months, Sumalindo was

beginning to explore possibilities of granting community for-

est permits to communities, as well as contributing to village

development via monetary contributions to local cooperatives.

Sumalindo was active in bringing in facilitators from provincial

non-governmental organizations to mitigate conflicts. Though

observers expressed hope that these early negotiation may be a

model for how companies can work more equitably with local

communities, they noted that indigenous people have not yet

been granted any clear legal rights to control industrial extrac-

tion on their lands.

Sumalindo’s plywood mill along the Mahakam river continues

to source meranti logs from unknown—most likely illegal–

sources. RAN inspections of company logyards and river rafts

in 2002 noted many unmarked logs, an indicator of illegality.

Barito Pacific conglomerate is Indonesia’s largest holder of

natural forest timber concessions, as well as the nations largest

plywood exporter. It owns 52 logging concessions and 31

mills, consuming over 4.3 million cubic meters of timber per

year (Brown, 2002). In 2003, assuming these mills are running

at full capacity, this would represent 67% of the nations legal

log supply. It also holds minority shares in dozens of other

Indonesian logging and wood manufacturing companies,

including Bob Hasan’s Astra group (of which Sumalindo was a

subsidiary), and major pulp, paper, oil palm and petrochemical

industries. Barito also operates forestry companies in Malaysia,

Papua New Guinea and China.

Despite appropriating US$87 million per year from plywood

exports alone, the Barito conglomerate is one of Indonesia’s

largest debtors, owing US$800 million to the Indonesian Bank

Restructuring Agency by 1999 (Brown, forthcoming). By

2002, nine Barito forestry companies owed IBRA over

US$140million (IBRA, 2002).

Barito is owned by Suharto crony Prayogo Pangestu, who is

accused of misusing US$34million from reforestation funds

(Down to Earth, 2001). In a more recent scandal, Barito

Pacific borrowed US$1.1 billion from the Indonesian govern-

ment to build the Chandra Asri petrochemical plant, but after

a serious of suspect dealings has been “forgiven” for all but

US$100million (Brown 2002).

Barito was a major financial backer of Suharto’s dictatorship,

and in more recent years has been implicated as one of the

principle financiers of military and paramilitary operations to

repress pro-democracy activism in Indonesia and East Timor.

Pangestu personally funded the salaries of 3,000 clandestine

Kopassus members – unofficial high-level military forces

trained as snipers and pilots (Aditjondro 1997 and 2000).

Barito’s mills are reliant upon illegal logging. By 2002, media

accounts had identified eight Barito concessions engaged in

illegal or grossly unsustainable logging. A 1999 study indicated

that two-thirds of Barito’s wood supply comes from illegal or

unsustainable sources, and the situation is likely to have wors-

ened. In 2001, the logpond of Barito’s IFA concession was

reportedly mixing illegal and legal logs. (Brown 2002).

Barito has been repeatedly implicated in illegal use of fires to

clear logged areas, rather than reforest them. In one case, a fire

set by Barito concession Limbang Praja caused the death of a

woman, one week after the village head had written a letter

requesting that Barito be more careful with its use of fire. In

the summer of 2001, NOAA satellites noted fires on four

Barito concessions. In 2000, fires also burned hundreds of

hectares of forest on Barito concessions Rimba Equator

Permai (West Kalimantan) and Meranti Sembada (Central

Kalimantan) (Brown 2002).

Barito’s conflicts with local communities are a litany. In Riau,

indigenous Suku Rimba and Talang Mamak peoples, whose

lives and cultures depend on mature forests, are being driven

out of their ancestral territory by Barito logging concession

IFA, among others. Logging of their customary forest in and

around highly endangered Bukit Tigapuluh National Park, is

providing wood for 31 mills in the area (Jakarta Post,

3/11/2003). IFA has also been in a major land conflict with the

villagers of Pemayungan since 1996. At a Barito’s Musi Hutan

Persada plantation in South Kalimantan, 31 villages had land

claims pending against the company in 2002. Barito’s Tunggal

Agathis plywood mill on Halmahera Island was closed for a

number of years due to the ongoing effects of, as Barito

described it, “social riot” but has since reopened.

At Barito’s Hasil Bumi logging concession, the Department of

F o re s t ry announced it would revoke the license due to bad log-

ging practices. When the withdrawal was postponed, the pro v i n-

cial governor requested that it proceed “because of the negative

impact on the people, such as the floods that have now visited

Southeast Sulawesi”. In 2001, locals protested Kampari Plywood’s

dumping of chemical waste into the Siak River. And at Dexter

Kencana and Rokinan Timber HPH, locals and students pro t e s t-

ed fore s t ry practices and land appropriation. On a daily basis at

the Barito pulp mill of PT Tanjung Enim Lestari (TEL), guard s

h i red from the armed forces perf o rm intimidating military exer-

cises on lands claimed by local people. (Brown 2002).

CASE STUDY 3: BARITO PACIFIC TIMBER


APPENDICES

Figure 1: Indonesian Forest Overview*Reprinted from Down to Earth Special Report June 2002: Forests, People and Rights

* All figures (unless otherwise indicated) from Gautam M et al, January 2000, The Challenges of World Bank Involvement in Forests, OED Report World Bank.

i. All official figures vary considerably depending on the source.

ii. FWI/GFW (draft), 2002, p.10. This includes degraded and fragmented forest.

iii. D. Holmes in his Deforestation in Indonesia report to the World Bank (2000) gave a deforestation rate of at least 1.7 million ha/year for the decade to 1997.

According to Forest Watch Indonesia, the rate may now be as high as 3.6 million ha/year: New Scientist 2/Mar/02.

iv. 7.8 million ha had been allocated to HTI concessions by 2000, but only 23.5% of this had been planted FWI/GFW, 2002.

v. Indonesian forestry academic Hariadi Kartodihardjo estimated that nearly 7 million ha of forest had approval in principle for conversion - mainly to oil palm.

Cited in FWI/GFW, 2002.

vi. Critical land in forest areas covers 35.9 million ha according to Kartodihardjo, Tempo 5/Mar/01.

vii. World Bank, 1999, cited in Trial by Fire, 2000, Barber CV & Schweithelm J, WRI p17.

viii, ix, x. Scotland, N, Fraser A and Jewel N, 1999, Roundwood Supply and Demand in the Forest Sector in Indonesia, DFID/Indonesia-UK Tropical Forest Management

Programme, Report No. PFM/EC/99/08.

Note: estimates of 'sustainable' yield ignore the impact of extraction on local peoples' livelihoods.

Total land area of Indonesia

'Forest lands' (official - 1998)

Area administered as forest lands

Total forest cover

Forest as proportion of total land area

Annual deforestation rate

Protection Forest (1997)

Conservation Forest (1997)

Production Forest (1997)

Conversion Forest (1997)

Area allocated to logging - HPH (1998)

Established timber plantations - HTI (1997)

Area allocated to timber plantations (1998)

Area allocated to other plantations (1998)

Forest degradation due to logging operations (1998)

Total area affected by 1997/1998 forest fires

- of which forests

Land affected by forest fires - Kalimantan

Contribution of 1997/8 fires to global CO2

Estimated sustainable timber supply from forests

Total industry capacity to process timber

Deficit between recorded supply and estimated use

189 million ha

147 million hai (78% total land)

112 million ha

93 million haii

48%

over 2 million haiii

35 million ha

19 million ha

59 million ha

8 million ha

69.4 million ha

2.4 million ha

4.7 million haiv

3.8 million hav

16.57 million havi

possibly 10 million ha

at least 5 million ha

5 million ha

Up to 30%vii

20 million cubic m/yearviii

117 million cubic m/yearix

41 million cubic metresx


Table 1: Practices of Selected Indonesian Logging Companies (X = Yes; - = No or Unknown)


Company

Intracawood

Sumalindo Lestari Jaya

Timber Dana

Alas Helau

Austral Bina

Barito Pacific

ITCI

Yamaker

Logging in PrimaryTropical Rainforest

X

X

X

X

X

X

X

X

Logging in OrangutanHabitat

-

X

-

X

-

X

-

X

Conflicts withI n d i g e n o u s

Communities re p o rt e d

X

X

X

X

X

X

X

X

Illegal loggingreported

X

X

X

X

X

X

X

X

Officially “Bankrupt”but still logging?

(Indebted to IBRA)

-

X

X

-

-

X

-

-


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support the rights of their inhabitants through education, grassroots

organizing, and nonviolent direct action.

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