Krystof Obidzinski

Environmental and social impacts of oil palm plantations and their implications for biofuel production in Indonesia.

This paper reviews the development of oil palm with linkages to biofuel in Indonesia and analyzes the associated environmental and socioeconomic impacts. We selected three plantation study sites in West Papua (Manokwari), West Kalimantan (Kubu Raya), and Papua (Boven Digoel) to assess the impacts. Research findings indicate that the development of oil palm in all three sites has caused deforestation, resulting in significant secondary external impacts such as water pollution, soil erosion, and air pollution. In terms of social impacts, many stakeholder groups, i.e., employees, out-growers, and investing households, report significant gains. However, we found these benefits were not evenly distributed. Other stakeholders, particularly traditional landowners, experienced restrictions on traditional land use rights and land losses. We observed increasing land scarcity, rising land prices, and conflicts over land in all sites. Three major trade-offs are associated with the development of oil palm plantations, including those related to biofuels: unevenly distributed economic benefits are generated at the cost of significant environmental losses; there are some winners but also many losers; and economic gains accrue at the expense of weak rule of law. To reduce the negative impacts and trade-offs of oil palm plantations and maximize their economic potential, government decision makers need to restrict the use of forested land for plantation development, enforce existing regulations on concession allocation and environmental management, improve monitoring of labor practices, recognize traditional land use rights, and make land transfer agreements involving customary land more transparent and legally binding.

Illegal logging, collusive corruption and fragmented governments in Kalimantan, Indonesia

SUMMARY The paper distinguishes between collusive and non-collusive corruption in the forestry sector and analyses their interaction with the political/institutional environment. While non-collusive corruption increases costs for the private sector, collusive corruption reduces costs for the bribee, therefore it is more persistent. Data from confidential interviews in Indonesia show that illegal logging, supported by collusive corruption, became widespread after the fall of President Suharto. While economic liberalisation and competition among government officials may lower non-collusive corruption, they exacerbate collusive corruption. During political transitions, countries are particularly vulnerable to collusive corruption because governments are often weak and fragmented, with underdeveloped institutions. Sustained wider reform and institutional strengthening to speed up the transition to a true democracy is needed to fight collusive corruption. For Indonesia greater accountability of government, legal and judicial reform and encouragement of public oversight could be useful corner stones for combating illegal logging and corruption.

Transition to Timber Plantation Based Forestry in Indonesia: Towards a Feasible New Policy

ABSTRACT: Indonesias forestry sector is in a dilemma due to the long-standing disparity between high processing capacity of forest industries and the limited supply of timber. The supply crunch has led to over-harvesting in order to meet demand and resulted in a decline of natural forests. The Indonesian government seeks to revive the forestry sector and secure its long term survival through a massive timber plantation effort: 9 million hectares of new plantations by 2016. This paper shows that while timber plantations are vital for the future of Indonesias woodworking sector, the expansion plan relies on overly optimistic assumptions about the current state of Indonesias timber plantations, their future performance, and associated benefits. In order to ensure effective implementation of the new plantation policy, this paper analyzes its key underlying principles and identifies information gaps that need to be filled.

Formalizing the Logging Sector in Indonesia: Historical Dynamics and Lessons for Current Policy Initiatives

This article reviews the Indonesian central governments efforts to regulate logging activities in historical perspective to draw lessons for the new timber legality verification system called SVLK. It shows that throughout history, illegal logging networks have been a fixture in Indonesias forestry sector and that the involvement of local and national power holders has given logging activities a formal backing. The SVLK is expected to help improve forest governance, but since it is primarily an administrative tool there is a risk that preexisting trends and practices will continue. This underlines the need for anticorruption measures and independent monitoring to make the legality adherence system more robust and reliable.

Oil palm plantation investments in Indonesia’s forest frontiers: limited economic multipliers and uncertain benefits for local communities

This paper examines the implications of oil palm estate development in Indonesia’s frontier province of Papua. Government planners believe that oil palm investment will develop the local economy, create jobs and reduce poverty. Using the input–output approach, we find that, in aggregate terms, oil palm investments boost the economic output in the province, generate jobs and increase worker salaries. However, the oil palm subsector operates in isolation and has limited economic multipliers. The number of jobs is potentially large, but those best positioned to benefit from them are mostly skilled migrants, not local poor. The government should reduce the size of plantation investments and plan their implementation as part of a broader development package to allow greater economic integration and skill acquisition by local communities. The priority areas for plantation development should be degraded, non-forest land.

Can 'legalization' of illegal forest activities reduce illegal logging?: lessons from East Kalimantan

Abstract Illegal activities are one of the most pressing problems facing the Indonesian forest sector today. The debate on illegal forest activities has focused primarily on legal and governance issues. Economic forces, however, are increasingly recognized as fundamental drivers of illegal forest activities. We ask the question whether the legalization of small logging concessions and their development can teach us anything about how to address the illegal logging problem. We find that legalization alone-when a legal timber concession is granted to a previously illegal operator-does not necessarily result in a significant reduction in illegal activities. When illegal activities are profitable, they can be expected to continue. Changing the regulatory framework to increase monitoring and enforcement can affect the profitability of these illegal activities. By changing the underlying economic incentives for logging, such interventions hold greater promise of success. In the medium to long term, however, legalization may help reduce illegal logging when it entrusts local people with ownership and control of forest resources and maintains a monitoring role for government agencies.

Pulp industry and environment in Indonesia: is there sustainable future?

The global demand for wood is set to increase significantly over the next two decades. The growth is to be particularly pronounced in the Asia Pacific, and timber plantations are expected to be a major source of wood fiber. Indonesia is taking steps to meet the global demand for wood by expanding its pulp production and timber plantations. However, there are concerns about the environmental trade-offs of this expansion. The pulp sector continues to rely on natural forests for timber. The size and productivity of timber plantations are uncertain because of unreliable data. The employment and poverty alleviation potential of the pulp sector are overstated. The pulp sector continues to attract large-scale foreign capital due to high returns on undervalued timber from natural forest. However, environmentally and socially, it is a high-risk investment. The pulp sector in Indonesia can be environmentally sustainable and economically profitable, but the conversion of natural forest must be stopped; the use of non-forest land for plantations must be maximized; and smallholder tree-growing schemes must be made simpler and more attractive. Careful revision of the pulp growth targets and greater investor due diligence are needed to ensure a more sustainable future.