Can Community-Owned Logging Concessions Work in Indonesia?

By Bernd Cordes

Preface

Indonesia’s economy crashed. It’s leader for thirty-two years was pressured to step down. A generally free and fair election was conducted. And a power struggle continues.

This has all been in the news. These are the big changes that everyone sees -- the "macro" economic and political shifts. But there are less obvious changes happening at the "micro" level, especially where access to and ownership and control of natural resources are concerned. It’s by no means a revolution, but slowly attitudes and assumptions are changing with regard to who owns what land, who has the legal license to mine what mountain, and who has the right to cut or conserve a forest.

As these assumptions and attitudes change, so do policies -- with, of course, some well-placed "influence" from international lending institutions. No matter what the motivation, however, policies, including forestry regulations, are changing, even if only at the margins. New laws are being drafted, others revised, some scrapped entirely. As different interests try to influence what these new policies will ultimately look like, conservation and development minded people and organizations continue to do their work.

One project the Biodiversity Conservation Network (BCN) has been supporting since 1995 fits well into this scheme of things. Four years ago, BCN provided funds to Harvard University’s Laboratory for Tropical Forest Ecology (LTFE) to try to establish a community-based, sustainable small-scale logging enterprise in the buffer-zone of Gunung Palung National Park (GPNP) in West Kalimantan. The basic idea was to identify what valuable timber was left in a 6,000 ha concession area that has already been high-graded and left idle, design an environmentally and financially sustainable rotational cutting cycle, and work with community members and local hand-loggers to transform the often illegal work they do into a well-managed and monitored local business. In short, if local people could be assisted to manage their own business, have legal access to the buffer-zone, monitor their own cutting, and add value locally to the unsawn timber (which usually just floats downstream to an externally owned sawmill), they might have an incentive to stop going into the National Park and illegally cutting.

Such an activity was unprecedented in Indonesia for a whole range of reasons -- forestry policies, tenurial rights, business practices, skill levels, etc. Nonetheless, LTFE, its local partners (i.e., Bina Swadaya) and the communities started down a path to try to make community-timber harvesting happen.

Four years later, not a tree has been cut or sold. This is, of course, disappointing. It took over two years simply to get a Memorandum of Understanding (between the Indonesian Government and Harvard University) for the project to be able to go to the field and fully explore the idea through forest inventories, discussing with community members the structure of a potential enterprise, training community members in biological monitoring, etc. The project suffered a series of setbacks too long to list here.

Nevertheless, it is a project that not only still has a life, but has, in several ways, set a precedent for establishing community-based timber operations in Indonesia and is very well-positioned to take full advantage of -- and even directly influence -- the changes in forestry policy happening right now in the country.

Much has been learned, and though no revenues have been generated, the project has had an impact on conservation in the area. That’s what this article is about. BCN asked LTFE’s staff, "If someone came to you today looking for advice on how to establish a community-based timber-cutting enterprise in Indonesia, what would you tell them?" After making it clear that "Don’t do it!" was not an acceptable answer (at least, not without further elaboration), they reflected on their experience and came up with the following lessons from the field.

The conversation took place in May 1999 with Edward Pollard (EP), Hikma Lisa (HL), Pahrian Ganawira (PG), and Marc Hiller (MH), all of whom were LTFE staff based in West Kalimantan. The Quotes used are not exact transliterations, but are based on extensive notes taken during the meeting and on subsequent edits made by the interview participants

 

BEFORE YOU DO ANYTHING IN THE FIELD, KNOW WHO YOU’RE WORKING WITH

BCN: Suppose someone approached you today and said he or she was interested in starting a community-based timber harvesting business in Indonesia, and they want to start tomorrow. Given all that you have learned and experienced over the past three years, what would you recommend to that person?

EP/HL/MH: First and foremost, we would say, "Know who you’re dealing with. Know who the stakeholders are." I think what we didn’t fully realize at the beginning was that we were working with communities that didn’t have traditional rules or reasons for conserving the forest. These aren’t really what you’d call "forest people"-- not historically or culturally. They see the forest as a resource; a mine. It’s not their forest either by traditional right or current legal standing. Some of them have a utilitarian stake in exploiting and managing the forests, but others don’t.

The communities with which the project is working most closely -- at villages like Semanjak, Muting, etc. -- are comprised of a mix of ethnic Melayu, Chinese, and Balinese groups who migrated to the area over the past sixty to seventy years. There is, therefore, little homogeneity ethnically or in terms of traditional patterns of resource utilization

So, you have to define the site in terms of who you need to work with. And who you can work with. With us, the project area is in Simpang Hilir District, but many of the current hand loggers [legal and illegal] are from Sukadana District, so how do you decide who you’re going to work with? It’s hard to do, but decisions have to be made. We certainly can’t include the total population of the 14 villages in the project area. That’s about ten thousand people. And at best the enterprise we are proposing can employ about 100 people -- at first, anyway. You have to define things clearly with and for everyone involved. What are the limits? Who do you include? Why are you working with these people but not these others? We didn’t do this well enough at the beginning of the project, and we didn’t do enough to prioritize and weigh the importance of working with various sub-groups and categories of people at the site.

About three years into the program, BCN staff realized that few of its project partners -- whether local communities or international NGOs -- could really define their project sites with any accuracy. If there was an existing tool to do that, none were using it. So, about three years into the program, BCN staff began to develop a "Site Definition Document" which was, in essence, an attempt to define project sites spatially (physical boundaries), socially (stakeholders), and temporally (project timeframe) with greater specificity than any of our partners had done in the past. In applying this "standard" across sites, the most consistently difficult element to pin down was, as experienced by the LTFE team, the stakeholder

 

DON’T THINK ABOUT TOP-DOWN OR BOTTOM-UP; IT’S TOO SIMPLISTIC

HL: Because we’re talking about CBFM [community-based forest management], it would be best if the planning process came "from below" and was initiated by the community. But this is too simplistic. Many people in the community will say they want a bottom-up approach. Some mean it, but others really want to be lead from above.

EP: It’s probably easier to try the bottom-up approach where there is a strong indigenous sense of community, maybe like a Dayak community. But with the Melayus and the villages where we are working, this is really difficult. Perhaps here there has to be some leadership from the outside or it won’t get done.

HL: But it’s always important to have a representative from the community at planning meetings. It’s important so that the community can have a true sense of ownership and belief in the project, rather than seeing all the work as coming from an outsider. That way, it’ll be enough for the outsider to just provide suggestions -- and not commands -- to the people below who are doing the work in the field.

The issue of whether or not "outsiders" are assisting or bulldozing is always a tricky one. One of the more frustrating and damaging elements of this project has been the way LTFE’s role has been perceived by the Indonesian and international conservation community. Most see this project as being a full product of Harvard University, with little or no input from the communities. In many ways, this is understandable. The initial project design, the cutting regime, most of the staff in the field, and the funding (through BCN) come from or through LTFE/Harvard. Also, except at the very local level, almost all of the interaction between this project and the Indonesian government has been managed by LTFE staff, and it’s true that most of the decision-making for the larger project issues has been made from Cambridge, Massachusetts rather than in the field But this isn’t the full picture. It leaves out the fact that LTFE was legally constrained from working more closely with the communities until an MOU was signed with the Indonesian government in 1997. It forgets that, throughout 1994-1997 and beyond, Hikma Lisa and other LTFE staff, by visiting and living in the communities, worked hard to manage expectations, keep open lines of communication, and maintain community support in the face of all the legal and bureaucratic obstacles. It also neglects the fact that LTFE’s original local partner organization had, for very legitimate reasons, to be dropped from the collaborative effort at the beginning of the project, and that by early 1997, LTFE had begun to work with another Indonesian NGO partner, Bina Swadaya (BCN provided a separate grant directly to Bina Swadaya for its work). Finally, it does not acknowledge that this project probably never would have happened without LTFE/Harvard’s name attached to it. For better or worse, no community timber harvesting enterprise has made any headway in Indonesia or with the Indonesian government unless a large, influential international organization was involved. The point? Any organization looking to replicate this sort of activity would do well to pay attention to the issues of "ownership" and perception, especially given the sometimes competitive and well-founded, skeptical nature of Indonesia’s conservation and development community.

BCN: In terms of community ownership, what else would you recommend?

HL: After working for almost four years on this project, I came to the conclusion that it is just plain hard to do any conservation project in a developing country like my own. Why? At this stage, I believe people are ready for development, not conservation -- that is, if they are implemented separately. By "people" I mean the community and other stakeholders in the local government. In the field, I find that people in the community can't really commit to conserving the national park when their stomachs are empty! By that I mean the community members are ready to develop their own skills and capacity to meet their own needs as well as conserve the national park.

EP: Exactly. The point is that development and conservation need to happen simultaneously. One needs to be the flipside of the other-- you can’t do one without the other. There shouldn’t necessarily be a distinction between the two. That’s what this project and BCN are about.

As part of their work, LTFE staff have spent nights with hand loggers in the forest. These hand loggers have plainly stated to project staff that, until an agreement is signed that allows a community-based timber harvesting enterprise to start operating, they will continue to cut trees in and around the national park-- because they need the money. They say that once the agreement is signed, they’ll support and work with the project on its sustainable management and conservation goals. But until then, no one should expect them to stop cutting in the name of conservation.

EP/HL/MH: But making sure people feel ownership can also raise expectations. Things would have been easier if we had done more socioeconomic baseline work at the beginning. People’s expectations two or three years ago were just way to high. To an extreme it would have been better, maybe, if we had come in and said to people that we were just Harvard researchers and not told them about this idea for a community-operated timber business, do the preliminary research and work out if it was possible. You don’t want to deceive people, but you also don’t want to raise expectations, and that’s really difficult when you start talking "project."

Sometimes it’s just more advantageous not to include the community -- and not only to keep expectations down. For example, we included community members in our inventory of the forested area. Later, because they knew what was in there and because so much of the other nearby forest was burned in 1993 and 1997, some of them went in illegally and started cutting! People can’t wait and won’t wait.

Even with the MOU, we aren’t allowed to cut. And before there was an MOU, we couldn’t really do anything. Lisa couldn’t even do the household surveys, really. Yet, we were asking the communities to be patient. This really made Lisa’s job tough.

Sometimes it’s more advantageous not to include the community [from the beginning]. You don’t want to deceive people, but you also don’t want to raise expectations

 

LOCATION IS (ALMOST) EVERYTHING

BCN: If you’re going to do a community-based timber business, does it matter where you work?

EP/MH: That the project area is next to a national park probably complicated things a bit, but it’s not necessarily a limiting factor. But it is true that now we spend less time with officials at the Forestry offices in Jakarta and a lot more with local park officials on policing issues, boundaries, surveys, and things like that. What it comes down to is, if you care about the park and conservation, and are interested in buffer zone management, do it there. If you only care about creating an example of community forestry, the enterprise and the bottom-line, pick a different place with fewer complications.

If you care about conservation and are interested in buffer-zone management, do it next to a park. If you only care about creating an example of community forestry, the enterprise and the bottom-line, pick a different place with fewer complications

BCN: At first, the project was intending to work at two sites along the park borders, but only one site went forward. Did this have any impact on the project?

EP/HL/MH: We limited ourselves to working with one group of people, one community, and one piece of forest. Hypothetically, it might have been easier to work at the other site, Kembera, because there most people are Dayak, with cultural links to the forest, more of a sense of community and stronger adat [traditional laws regulating resource use]. But, there would have been complications there, as well. In fact, they [Kembera] ultimately decided they didn’t want to be part of the project. If they don’t want to do it, you can’t force them. Kembera is already selling wood to local concessions, anyway.

When the project was first conceived, there were two project sites; one in the area near Semanjak, and the other in the area around Kembera, a village on the other side of the National Park. After the initial planning phase, Kembera opted out of the project. There are various reasons and stories behind this decision, including a falling out between Harvard/LTFE staff and the community, unreasonable demands of the project (e.g., the construction of a road) from community members, the community’s desire to pursue rubber plantation development, confusion with mapping exercises and with political and cultural agendas. Whatever the real reason -- always hard to decipher in these situations -- the end result was the project’s focus on a 6,000 hectare former concession area near Semanjak and an agreement that the project would no longer work in Kembera

Not working with Kembera is OK, except that it limits us to one project area, one forest. If you want to do this type of business, you have to make sure first that there is enough good quality forest, not minimal amounts of commercially valuable trees. When we first did our estimates of the area, our numbers were too optimistic. This is partly because we didn’t yet have the government’s permission to go in and do a thorough survey. We didn’t get that until later. So, our projections were off.

If you want to do this type of timber business, you have to make sure first that there is enough good quality forest, not minimal amounts of commercially valuable trees. When we first did our estimates of the area, our numbers were too optimistic

Of course, if the area did have a lot of commercially valuable timber left, they [the government and the company holding the concession title] never would have allowed the project to start in the first place. It’s a vicious circle. The area has already been picked over, so timber value is lower overall, which necessitates a larger forest area to reach economies of scale, which hurts the conservation goals of what you are trying to do. On the other hand, that’s where the greatest opportunity is for these types of community-based projects. Especially now in Indonesia. Go in and look at these former concession areas that are no longer being actively cut by large logging companies. Some think the only other option is conversion of these forests to plantations, such as oil palm. These areas, however, may still have enough wood to maintain a small-scale community enterprise. It then becomes a matter of getting for communities the legal access to use and manage resources.

With all of the changes going on in Indonesia, public auctions for former concessions (some of which have been taken away from companies deemed to be irresponsible cutters) have already started in Jakarta

 

FIGURE OUT WHO THE IMPORTANT "GATEKEEPERS" ARE

BCN: So, if I decided to look into taking over one of these former concession areas, who would I talk with? Who did you talk with?

EP/HL: Right now, because of SK677 [a newly developed community forestry initiative being worked on by the Indonesian government], you have to talk with government officials at the provincial level. But this was different before. It changes. In 1997, we needed a lot of face time with the Ministry of Forestry at the central [Jakarta] level. But now we’re having to make up for not investing enough time in our relationships with local government and military officials involved at the district level. It’s all so personality driven.

HL: It’s difficult to "socialize" the project at the provincial government level because it’s a new idea to them. In Jakarta, the ministry had a similar idea, so they were thinking along the same lines. But they didn’t have any policy to follow it through. That’s why we had to get an MOU [or some other exception to existing laws like it]. Now that the current forest minister, Pak Muslimin, has put out instructions for CBFM, it’s easier to socialize people.

An interesting aspect of this project is that the LTFE staff never really had to work or negotiate directly with the entity that actually holds title to the former concession area. Though representatives attended project presentations on occasion, 99% of the work was done with government officials. For example, the Memorandum of Understanding allowing the project to enter an exploratory phase makes no mention whatsoever of the parastatal, PT. Inhutani II, which currently holds title to the 6,000 hectare area designated as the proposed cutting site

EP/HL: There’s so much turnover, and now there’s this move toward decentralization in Indonesia. This is a real problem. With all the changes in the country, our government counterparts in the field are constantly changing, leaving, or being replaced. Every 4-6 months we meet someone new. This is a bit frustrating because we are always having to re-educate new people about the project -- starting from the very beginning of the project. You put all your eggs in one basket, then they remove the basket. And the government officials themselves never transfer information to their replacements. So, you need to pay constant attention to face time.

PG: Like Ronnie [Cherry -- former project leader in Pontianak until mid-1998] talked with people at the provincial and district levels all the time, trying to improve the relationship and understanding of the project between the different government offices themselves and between them and LTFE, but it didn’t always work very well.

BCN: So, what would you recommend to deal with the turnover problem?

EP/HL: Having permanent field staff is one very important way to deal with it. Not only so there’s some consistency with our relationship on the government side, but also with the community. Too much project field staff turnover has a definite negative influence on how things go in the field, especially with project management. Almost every time we have someone new come along, we have to start our own orientation process over again: language, introductions to governments officials. It just increases confusion.

Hikma Lisa is the only Pontianak-based staff member who has been with the project from its inception. In many ways, she is the project’s continuity in the field. Because LTFE has had a field research station in Gunung Palung National Park since the early 1980s, there have been many young, talented people assisting with this project, but usually for a short term and on a semi-voluntary basis. Over the past two years, however, more Indonesian and expatriate staff have come on with the understanding that the commitment is a bit more long-term

BCN: Who, other than government officials should you talk with?

EP/PG: You also need support from the local police, because they’re rumored to be involved in the illegal wood trade as well as in enforcing laws. They work both sides of the business. And help is needed from the stakeholders themselves in terms of socializing new government officials.

HL: In my opinion, conservation can only be achieved if the community has a sense of belonging to or ownership of the nature reserve. You have to talk with them always. So far people in the community only have a general sense of belonging where their forest gardens are concerned, because they own those gardens. That feeling doesn’t extend to the Park. Also, in the field, the project will always face the challenge of dealing with people who have similar, competing interests; that is, timber. Like the toke, timber bosses, or government people. People like this will always be influential in ways that can defeat the project. Aside from that, there are also challenges with hand-loggers from the communities themselves, where many individuals simply prefer to work independently from other people or companies, and to work on their own schedules.

There are challenges with the hand-loggers from the communities themselves, where many individuals simply prefer to work independently

A toke is, essentially, a middleman. He provides advance money to hand-loggers, who then take it, buy food and other necessities, then go into the forest to cut timber, both legally and illegally, for weeks at a time. This system of advance money, repayments, etc. often puts hand-loggers in a debtor’s position from which they have a difficult time escaping, especially since they add no value to the timber and, therefore, cannot capture a greater share of the earnings. They just provide the raw material to the toke and earn very little cash per unit. One goal of this project is, in fact, to provide hand-loggers with an alternative to this system. As a result, it is a direct threat to some tokes.

BCN: What legal issues should one be aware of?

EP/PG: You have to get support from officials at the kecamatan [district] level. By doing this, you can find out who exactly has jurisdiction over the area where you’re working. Then, you have to learn what the national and local laws are. What might end up happening, though, is that you have to try to find special arrangements to change a law or to get exceptions to it. Sometimes you can’t change a law because it doesn’t exist. So, you start to circumvent or create agreements, but you have to be careful not to undermine any existing laws. This sounds contradictory, but it’s because many of the forestry laws are themselves too contradictory to follow.

You [might] have to try to find local, special arrangements to change a law or to get exceptions to it. Sometimes you can’t change a law because it doesn’t exist

In addition to this project, there are at least two others in Indonesia that have tried to establish community rights to cut timber. In all three cases, different legal and extra-legal mechanisms were used. That is not to suggest that the work is illegal, it just means that special permits and exceptions were made with different government entities and communities to allow the projects to move forward

 

PAYING FOR IT

BCN: What would you recommend in the way of financing a community-based start-up?

EP/MH: Despite all the problems associated with it, grant funds are the easiest way to fund the project. But it depends on how financially sustainable you need the business to be, and how fast. It would be great if you could get up-front capital, but it’s tough if you expect no returns for at least three years, especially when you have all these other non-business, conservation-oriented agendas attached.

In other words, it might be good to get a mix, where research and development is funded by a donor, but other business-specific things are capitalized through loans or something. If the baseline [biological and socioeconomic] information is already there, you don’t need so much, especially, of course, if you’re less interested in long-term biological and social sustainability and are more focused on the bottom-line. But we have these conflicting goals of sustainability and financial returns. This makes it tough. There aren’t a lot of loans out there for a business with conflicting definitions of sustainability and viability.

However you do it, you have to guarantee there is enough money to keep the project running for at least a five-year period! So all the project and business activities can be run as planned. Short-term budgeting won’t accomplish your goals. If the project runs out of money, problems in the community -- such as a lack of trust in similar, future projects -- will eventually come up.

PG: One strength of this project is that we’ve done it relatively cheaply. But this hurts at the government level. You need a lot of money to get their attention. For better or worse, doing this type of work can be easier when it is government to government [a reference to another community forestry initiative in West Kalimantan] rather than NGO to government. Still, LTFE was given a government counterpart to make things happen because we had a name [Harvard] and enough funds to get things started.

We have these conflicting goals of sustainability and financial returns. This makes it tough. There aren’t a lot of loans out there for a business with conflicting definitions of sustainability and viability

 

GIVING SOMETHING BACK

BCN: What distinguishes your work from a regular timber concession is the attention to the community-based element of the timber business. What experiences have you had there that are important to share?

EP/HL: Most importantly, make no promises. Be very careful with what you say to the community, and use language people understand. You have to be very clear. With us, people still unfortunately think the project is LTFE’s, and that the work and the logging concession would be for LTFE, not them. We’re trying to change this, but they don’t understand. It’s hard to change perceptions once they start.

PG: This is especially true with cash benefits. Until benefits start to flow to the community, it’s hard for people to think that the resources and the project belong to them.

HL: They need to work in the field or get money to feel this sense of ownership and benefit. Without the MOU, we were restricted as to who and how many people we could employ. People weren’t happy about this. Of course, even if the MOU allowed us to start the business, it wouldn’t have mattered much since the timber business alone can’t possibly employ all of the hand loggers and other people from the villages.

EP/HL/MH/PG: Still, some people have become too dependent on the project because they always thought they would make quick money from it. And the regent from Ketapang [the capital of one of the two districts where the project works] hasn’t been very supportive of the project because, he said, the project wasn’t distributing enough benefits back to the community. But what is "enough?" Can’t cash benefits be replaced by other things, like public facilities, in the community?

We also learned that kids are starting to work and cut timber at age 12. If you can only employ 100 people, even if they’re foresters, you can expect that 12 year-olds will also be logging or want to be employed, not just the heads of households. It gets back to the idea of knowing who you are working with and understanding who’s cutting the timber.

 

MIXING STRATEGIES

BCN: So, if the timber business isn’t enough to create incentives for conservation, what else can be done?

EP/HL/MH: We probably would have been better off if we considered other strategies for buffer-zone management at the very beginning. If you want to do good community-based forest management, you need to combine cutting with other strategies. It’s not enough to do it alone.

If you want to do good community-based forest management, you need to combine cutting with other strategies

Actually, there already was community-based forestry and timber-harvesting at the site, even before we arrived. They were already logging. It just wasn’t sustainable. But why should people change their practices? What’s the incentive? The concept [community-based logging] isn’t new. It’s not necessarily a way of increasing revenue. It can, but not if the process of implementing it is too top down and you’re just telling people to change without giving them a tangible incentive. If we just wanted to set up an example of community-based forest management it would have been easier to with a community that was starting from scratch, that wasn’t already logging, but there was more to this project than that.

This is, of course, part of the point of the project and its design: to work with current hand-loggers to add value locally by introducing new skills and a community-owned and operated sawmill. The idea is that this might give a greater incentive -- along with greater access to and control over local timber resources -- to community members so that they will have a vested interest in more sustainable yields, based on a carefully devised rotational cutting regime

EP/HL/PG: In the past, the Indonesian government saw the forests and thought, "How can we make more money from this." A whole generation has to change ideology. Policies have, in the past, been made without consulting CBFM practitioners. Fortunately, that’s changing now, but the Indonesian bureaucracy is so big, there are so many people, it’s hard to change people’s views of national parks and buffer-zone management. But that’s what has to be done, that’s the answer. Foresters and bureaucrats have very conservative ideas about conservation. Our project is especially controversial because we’re saying that we want to cut trees to save forests. We still don’t know if it can be done in Indonesia.

So, given all of this, we return to the original question: "What does one need to know to start a community-based, sustainable timber cutting operation in Indonesia?" To sum up the observations and experiences of the LTFE staff, if it is going to work in Indonesia, one must:

1. Know the community;
2. Determine if the resource base is really enough and benefits won’t get spread too thinly;
3. Know all the stakeholders and try to keep them happy, but make no promises; and
4. Beware -- laws that exist in Jakarta may not exist in the field, and visa versa.

Finally, as the LTFE staff put it, "It’s hard work, don’t expect anything to happen overnight. But it’s definitely worth the effort." For conservation and for the communities.

WHY BIODIVERSITY   FIELD STORIES   PARTICIPATE   RESULTS   MARKETSPACE ABOUT THE NETWORK   WHAT'S NEW   LEARNING MATERIALS   SEARCH   LINKS   SITE MAP   HOME