English (1.6 MB) - Forest Peoples Programme

1ExecutiveSummary withConclusions andRecommendations

Executive Summary with Conclusionsand RecommendationsEthical consumers want to be assured, when they buyforest products, that they are not buying timber stolen from the lands and territories of local communitiesand indigenous peoples. The Forest StewardshipCouncil’s (FSC) Principles 2 & 3 seek to provide that assurance.Anyone managing forests, who seeks to have the foreststhey manage ‘certified’ by independent certifiers accordingto FSC standards, must be able to demonstrate compliancewith these (and all the other) FSC ‘Principles andCriteria’.FSC PRINCIPLES AND CRITERIA 2&3PRINCIPLE #2: TENURE AND USE RIGHTS ANDRESPONSIBILITIESLong-term tenure and use rights to the land and forestresources shall be clearly defined, documented andlegally established.2.1 Clear evidence of long-term forest use rights tothe land (e.g. land title, customary rights, or leaseagreements) shall be demonstrated.2.2 Local communities with legal or customary tenureor use rights shall maintain control, to the extentnecessary to protect their rights or resources, overforest operations unless they delegate control withfree and informed consent to other agencies.2.3 Appropriate mechanisms shall be employed toresolve disputes over tenure claims and use rights. Thecircumstances and status of any outstanding disputeswill be explicitly considered in the certificationevaluation. Disputes of substantial magnitudeinvolving a significant number of interests will normallydisqualify an operation from being certified.2

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesPRINCIPLE #3: INDIGENOUS PEOPLES’ RIGHTSThe legal and customary rights of indigenous peoples toown, use and manage their lands, territories, andresources shall be recognized and respected.3.1 Indigenous peoples shall control forestmanagement on their lands and territories unless theydelegate control with free and informed consent toother agencies.3.2 Forest management shall not threaten ordiminish, either directly or indirectly, the resources ortenure rights of indigenous peoples.3.3 Sites of special cultural, ecological, economic orreligious significance to indigenous peoples shall beclearly identified in cooperation with such peoples,and recognized and protected by forest managers.3.4 Indigenous peoples shall be compensated for theapplication of their traditional knowledge regardingthe use of forest species or management systems inforest operations. This compensation shall be formallyagreed upon with their free and informed consentbefore forest operations commence.This study examines the obstacles and challenges tothe application of these Principles and Criteria in Indonesia.A first part reviews the international experience with theapplication of these Principles and Criteria, while the mainpart of the report then examines the Indonesian situation.International ExperiencesThe study details how indigenous peoples’ rights to theirlands and territories and to free and informed consent arewell established in existing and emerging norms of interna-3

Executive Summary with Conclusionsand Recommendationstional law. There has been considerable discussion abouthow these rights are applied in practice. Procedures for givingconsent are greatly strengthened if land and resourcerights are legally secure.The study also reviews how Principles 2 & 3 have beenapplied in a number of other countries, which have beenthrough lengthy participatory processes to agree how the FSCPrinciples and Criteria should be applied nationally and/orregionally. After reviewing the way Principles 2 & 3 havebeen adapted in Bolivia, Sweden, Canada’s Maritimes andBritish Columbia, and Brazil, the study notes that:• The agreement of national standards is a complicated processthat requires detailed discussions with many localinterest groups. Achieving consensus among these interestgroups often takes many years.• Criteria should be adopted which help clarify what constitute‘Major Failures’ of compliance with each Principle.• These national standard-setting exercises have given riseto the following interpretations of Principle 2 and its associatedcriteria.• The aim of the principle is to ensure that there are noconflicting rights over the forest which is being assessed.It thus seeks to ensure that the rights of both the forestmanager and local communities’ are clearly establishedand that acceptable mechanisms are in place to resolveany conflicts in an agreed way.• It applies to both indigenous peoples and other local communitiesand seeks to ensure that local communities’ rightsare legally secure and that the forest managers, if theyare not the local communities, are not in conflict withthese communities.• Two interpretations of Principle 2 are possible. A ‘strong’or ‘legalistic’ interpretation is that local communitiescustomary rights must be legally established. A ‘weak’4

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesor ‘pragmatic’ interpretation is that only the forestmanager’s tenure that needs to be legally established.Where this is not the local community, then local communities’customary rights may be secured by othermeans.• These rights should thus be secured through legal titlesor else recognised in written agreements which are partof the management plan.• The management plans likewise should incorporate agreedmechanisms for the resolution of conflicts.• Conflict resolution mechanisms and negotiation processesshould be participatory, transparent and, according to somenational standards, should involve other civil societygroups, such as NGOs and Trades Unions, to help ensurefair play.With respect to Principle 3, the following guidance alsoemerges from these national experiences:• The concept of ‘indigenous peoples’ needs to be appliedin an inclusive way to embrace all socially marginalizedgroups with distinctive cultural identities and customarysystems of forest management and use.• Indigenous rights to land and resources should be legallyrecognized in a manner acceptable to the indigenouspeoples. Without this clarity, conflicts or disputes arelikely to arise.• However, where legal recognition has not been achieved,national standard-setting bodies may accept other meansfor the recognition and respect of indigenous rights in orderto allow certification to proceed, subject to indigenousconsent and clearly agreed procedures.• Where mutually accepted legal recognition of rights isnot achieved, the extent of indigenous rights areas shouldbe self-defined by the indigenous peoples concerned. Theyare not required to prove their rights over these areas in5

Executive Summary with Conclusionsand Recommendationscourt.• Where indigenous peoples are not the forest managers,the extent of these rights should be formally recognizedin written joint contracts (‘agreements’/‘protocols’)agreed between the forest managers and the indigenouspeoples. These areas should be mapped and the agreementsdocumented and incorporated into managementplans.• One alternative is then to excise all these claimed areasfrom the forest management units.• Alternatively, forest managers should then negotiateagreements with the indigenous peoples concerned, forthe use of these areas.• These agreements should also be included in the managementplans.• Mechanisms for negotiating these joint agreements shouldthemselves explicitly recognize and respect indigenousrights and define clearly the roles of the various partiesin future decision-making.• These mutually agreed processes of achieving consentshould be incorporated in the management plans.• Likewise, management plans should also incorporatemutually agreed conflict resolution mechanisms, proceduresfor the documentation of sites of special value andmechanisms for agreeing and paying compensation for –loss or damage to livelihoods or natural resources or theuse of indigenous knowledge.• All such agreements should be without prejudice to anysubsequent land claims negotiations with the governmentand should not imply any recognition by the indigenouspeoples concerned of State ownership or rights to land orforests or imply the extinction of any indigenous rights.6

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesIndigenous Peoples in an Indonesian ContextWho are ‘indigenous peoples’ in Indonesia? Internationallaw, and notably the International Labour Organisation’sConvention No. 169, which has been endorsed by FSC, acceptsthe principle of self-identification as a fundamentalcriterion. In the past, the Indonesian government has rejectedthe term ‘indigenous peoples’ as applying in Indonesia. Duringthe ‘New Order’, the government’s policy towards thoseit officially designated as suku suku terasing (isolated andalien tribes) sought their rapid assimilation into nationalmainstream society through forced resettlement and imposedeconomic and cultural change, while denying these peoples’rights to lands and forests. An objective of the policy was tofree up land and forests for logging and ‘national development’.The current policy towards masyarakat terpencil (remotecommunities) promotes their integration with less emphasison forced change and more opportunities for participationbut still does not address land and resource rights.Recent years have seen the emergence of a nationalmovement of self-identified masyarakat adat (peoples governedby custom), who are demanding recognition of theirright to self-government, the exercise of their customary lawsand the legitimacy of their customary institutions and rightsto their lands and forests. The Indonesian government nowaccepts that these masyarakat adat are those referred to as‘indigenous peoples’ in international discourse. Estimatesof the numbers of these peoples in Indonesia’s forests areimprecise: it seems likely that between 30 and 65 millionmasyarakat adat have customary rights in Indonesia’s forestzone. The study concludes that it is these peoples whoserights are meant to be protected under Principle 3.7

Executive Summary with Conclusionsand RecommendationsLand Tenure and Resource Rights in Indonesia lawIndonesia has long given prominence to adat (custom) inthe Constitution and other laws. Many peoples in Indonesiahave customary systems of recognising collective rights inland, concepts which are commonly referred to as hak ulayat.The study examines in detail the extent to which these rightsare recognised in national land and forestry laws. It seeks toanswer the question, can indigenous peoples and local communities‘legally establish’ long term tenure and use rightsin forests (Principle 2) and have their rights ‘to own, useand manage their lands, territories and resources’ ‘recognizedand respected’ (Principle 3). Even a short answer mustbe given in two parts depending on whether such security isbeing sought within or outside areas considered by the Ministryof Forestry to be ‘State forest lands’, even though theBasic Agrarian Law may apply in forests contrary to administrativetradition.• Outside of State forests, the conclusion is that while theconcept of collective land rights (hak ulayat) is recognizedin Indonesian law, no effective procedures exist tosecure these rights. Secure titles are only offered to individualsand even then the administrative procedures forsecuring land are deficient. All tenures in Indonesia aresubordinate to State interests to a degree that far exceedsprevalent concepts of ‘eminent domain’.• An unclear right of possession (hak kempunyaan) is recognizedas applying to customary land but may not beregistered in areas overlapping existing rights and concessions.The right has never been applied however.• Inside ‘State forest lands’, legal recognition of proprietaryrights is, by definition, impossible and customary rightsare treated as weak forms of usufruct, which are subordinateto the interests of concessionaires. Legal recognitionof communities’ land rights within forestry concessions8

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesis not possible under current law.• There are, however, a number of community forestry optionswhich, while not recognizing the customary rightsto ‘own’ lands, do offer a measure of management authorityto communities. Although there are doubts whetherthese options are long-term enough to comply with Principle2, some of these options may constitute a basis forthe certification of community forestry.• A more startling and unexpected conclusion has alsoemerged from this study. Perhaps the majority of forestconcessions, including community forestry options, issuedin Indonesia are of questionable legality owing to majordeficiencies in the process of gazettement of forest lands.As a result of these procedural failures as much as 90%of ‘forest lands’ have never actually been properly transferredto the jurisdiction of the Department of Forestry.This implies that the great majority of State forests (andthe concessions within them) are ‘illegal’ and thereforeinvalid in terms of Principle 2 and Criterion 2.1.Customary Institutions and the Principle of ConsentFree and informed consent is a central principle for FSC.Effective exercise of this right is a key safeguard that communitiesand indigenous peoples need to ensure that certifiedlogging and plantation schemes do not violate theirrights. Moreover, since in Indonesia legislative protectionsof land rights and customary rights are weak, absent or insufficientlyenforced, then free and informed consent becomesthe central safeguard for these communities. Can Indonesiancommunities exercise this right to protect their interestswhen dealing with forest industries seeking certification?9

Executive Summary with Conclusionsand RecommendationsThe following conclusions emerge from this section ofthe study:• The extent to which local communities and indigenouspeoples can exercise their rights to free and informed consentand to control forest management is limited in Indonesia,owing to both a legacy of repression and remaininginstitutional and legal obstacles.• A uniform system of village administration was imposedin 1979, which disempowered customary institutions anddisenfranchised community members. Although the Actwas revoked in 1999, the majority of rural villages in Indonesiacontinue to be administered through the desa system.• Under the desa system, communities are deprived of representativeinstitutions with legal personality, which cansign contracts with forest management companies or pursueactions in the courts on behalf of community members.• Concessionaires commonly retain, and pay for interventionsby, elements of the State security services to resolvedisputes and enforce their management regimes. A legacyof fear and distrust remains which discourages communitiesfrom exercising their right to free and informed consent.• Recourse to the law is a difficult option for communitiesin Indonesia. Successive evaluations by international bodiesconcur that the courts system in Indonesia is in seriousneed of reform if the rule of law is to prevail.• On the other hand, legislative and administrative reformsare underway to reform the system of village administration.Where these reforms have been carried through andthe authority of customary institutions restored to thesatisfaction of communities, then the basis for moreequitable negotiations between communities and privatesector companies may now exist.10

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilities• Participatory mapping by communities has proven to be apowerful tool that can provide the basis for negotiationsbetween communities and government or private sectoragencies over issues of land rights, resource access andboundary definition.The Indonesian Experience with FSC CertificationBased on detailed community-level workshops and a reviewof the publicly available literature, the study then looks at anumber of case studies to get a clearer idea of the practicalchallenges for the application of Principles 2 & 3. It examinesexamples of local land claims and negotiation processesin KPH (Forestry Concessions in Java), HPH (Loggingconcessions on the Outer Islands) and HTI (IndustrialTimber Plantations). The examples looked at include: PerumPerhutani in Java; PT Diamond Raya in Riau; PTIntracawood Manufacturing in East Kalimantan; and PTFinantara Intiga in West Kalimantan.Six forest districts administered by Perum Perhutanifor a time enjoyed FSC certification, issued by RainforestAlliance Smartwood, though five of these districts have sincelost their certification. Among the points for discussion,which emerge from this case, are the following (the relevantFSC Principles and Criteria are noted in brackets):• Perum Perhutani has acquired long term use rights whichhave been clearly documented and legally established,however, no equivalent security is provided to the communitieswithin these forests. (Principle 2)• There is clear evidence that Perum Perhutani is authorizedby government decree to hold long-term forest userights thus apparently providing the company with legallysecure tenure of their lands. However, this tenure is dis-11

Executive Summary with Conclusionsand Recommendationsputed by affected villages on three grounds: that someState forests have annexed village lands; that customaryuse rights are not adequately recognized in other Stateforests; and PP is not sharing the benefits of these publicforests with the people in line with the requirements ofthe Constitution. (P&C 2.1)• The communities claim that some forests should be recognizedas village lands and that they have ‘customaryrights’ in other forests, but they are not being given theopportunity to ‘maintain control’ of these forests to theextent that they think is necessary nor have they delegatedcontrol to Perum Perhutani with their ‘free and informedconsent’. (P&C 2.2)• Major unresolved conflicts over tenure and use rights existand no appropriate mechanisms are in place to resolvethese disputes. (P&C 2.3). The fact that these disputesare of a very ‘substantial magnitude’ should by itself precludecertification under 2.3.• Some of the communities in the area do claim to bemasyarakat adat, suggesting that Principle 3 should applyin at least some community areas within the PerumPerhutani concession area. However, their rights to own,use and manage their lands, territories and resources areneither recognized nor respected by national or local lawsnor by the company. (Principle 3)• These communities are not being given the opportunityto ‘maintain control’ of the forests in which they claimrights nor have they delegated control to Perum Perhutaniwith their ‘free and informed consent’. (P&C 3.1)• The communities do feel threatened and feel the operationshave curtailed both their rights and their access toresources. (P&C 3.2)• Routine recourse to the security services to resolve disputeshas resulted in serious human rights violations includingextrajudicial killings. This is inimical to ‘free and12

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesinformed consent’ and cannot be considered part of an‘appropriate conflict resolution mechanism’. (P&C 2.2,2.3, 3.1).• Management plans have not clearly identified ‘sites ofspecial cultural or religious significance’ in cooperationwith the communities, nor are these area recognized orprotected by PP staff responsible for forest management.(P&C 3.3)• The communities point to the local regulation inWonosobo (Perda Kabupaten Wonosobo 22/2001) as anexample of a reformed legal and management regime compatiblewith their rights and aspirations.PT Diamond Raya (PTDR) is the first HPH concessionin natural forests to be FSC certified in Indonesia, inthis case by SGS Qualifor. Six main issues for discussionemerge from the examination of this case:• SGS Qualifor’s generic standards, notably the indicators,seem to be either ambiguous or weaker than the FSC Principlesand Criteria 2 & 3.• Given that PTDR’s concession is operating on a 35 yearlogging cycle, while the company concession only extendsfor 20 years, clarification is needed about what constitutes‘long-term forest use rights’. (P&C 2.1)• In the absence of secure and agreed legal rights to land,clear participatory mapping exercises are needed to helpresolve land disputes to the satisfaction of allparties.(P&C 2.1, 2.2, 2.3)• Clarification is needed about whether customary usesshould be distinguished from customary use rights.(P&C2.2)• Prior agreement is needed through community fora toascertain appropriate mechanisms for negotiation and thegiving of consent. Agreements signed by camat (subdistrictadministrators), in the name of the community, can13

Executive Summary with Conclusionsand Recommendationsnot be construed as consent. (P&C 2.2)• Given the legacy of army violence and intimidation, disputeresolution mechanisms need to be very transparentand participatory. Long term capacity building of affectedcommunities may be required to restore equitable relationsbetween communities and forest managers. (P&C2.3)PT Intracawood Manufacturing (PTIM) has subcontractedpart of a large concession from the para-statal companyPT Inhutani I in East Kalimantan. The area so securedby PTIM entirely overlaps Dayak lands. PTIM has soughtcertification from two FSC accredited certifiers, SGSQualifor and Rainforest Alliance Smartwood, but has notbeen successful. The case brings out the following issuesfor discussion:• The absence of any legal process giving land security toindigenous peoples has contributed to serious confusionsand disputes about tenure and access to forestresources.(Principle 2 and 3)• Incomplete forest gazettement processes mean that concessionrights are insecure and of uncertain duration. Inthis case, neither PT Inhutani I nor PTIM have fulfilledtheir obligations to delineate the boundaries of theconcession.(P&C 2.1)• There is a lack of clear evidence that the forest manager,PTIM, has long-term forest use rights to the land, owingto the fact that PTIM acquired rights from PT Inhutani Ibut, in the opinion of the regional forestry offices, PTInhutani I’s rights to the PTIM area have lapsed.(P&C2.1)• The conflicts of interest between the national, provincialand district forest offices further undermine the forestmanager’s security of tenure.(P&C 2.1)• The entire concession area is claimed by indigenous14

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiespeoples but there is no evidence that PTIM’s managementplan ‘recognizes and respects’ these peoples’ rightsto ‘own, use and manage’ these areas.(P&C 3, 3.1)• PTIM are alleged to have pressurized community leadersto repudiate their land claims. (P&C 3, 3.1)• No agreements have been negotiated with the communitiesallowing PTIM to log the communities’ areas withtheir ‘free and informed consent’ (P&C 2.2, 3.1)• Appropriate mechanisms have not been established eitherto resolve disputes between PTIM and the communitiesor with the small-scale concessionaires.(P&C 2.3).PT Finantara Intiga is a mainly foreign-owned plantationcompany seeking to develop softwood plantations onDayak lands. The case illustrates many of the difficultiesand contradictions in achieving a mutually acceptable applicationof the principles of respect for customary rightsand free and informed consent in Indonesia.• On the face of it, the land acquisition processes carriedout for the PTFI development seems to have been respectfuland consensual. Signed agreements were entered into,with benefits for both parties, and communities even celebratedcustomary land transfer ceremonies as a result.It is easy to imagine that a certification body shown thisdocumentation and informed of the salient events couldconclude that forest management is being carried out inaccordance with the principles of recognition and respectfor customary rights and free and informed consent. It isonly when we look beneath the surface that it becomesplain that things are not so simple.• The case shows how, even where a land acquisition processis undertaken with the aim of ensuring communityparticipation, the lack of clearly defined land rights andthe existence of imposed forest zoning processes substantiallydisadvantages communities in their dealings with15

Executive Summary with Conclusionsand Recommendationsdevelopers. Lacking strong and clearly recognized rightsthey accede to imposed plans against their inclinations.• Cooptation of village leaders, through the imposed structuresof the 1979 Land Administration Act and by payingprominent village members to negotiate on behalf of thecompany, means that decisions are taken and imposedwithout the possibility of consensus-building within thecommunity first.• Negotiations are made further one-sided by the fact thatpolice and military personnel directly participate in landacquisition teams. Individuals rejecting land acquisitionhave suffered intimidation and discrimination. Communityleaders feel isolated in such negotiations.FSC Certification Procedures in IndonesiaA major difficulty for FSC-accredited certification bodiesoperating in Indonesia is that there has not been, to date,any national standard-setting process nor has a national FSCinitiative to develop such standards yet been set up. Indeedthere are only 4 FSC members in Indonesia.In the absence of national standard-setting processes,FSC requires certifiers to adjust their ‘generic standards’ tothe country through a participatory discussion and due publicationof the standards used. However, FSC accreditedcertifiers operating in Indonesia have not developed ‘locallyadapted generic standards’ in accordance with FSC proceduresand instead leave it to field assessors to use their ownjudgment to adjust the standards to the local situation in thefield. Interviews with a number of these assessors revealthat they have diverse views of how specific criteria shouldbe applied and they admit there are real difficulties applyingFSC Principles and Criteria.16

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesThese findings pose a basic question for this study:where in the FSC system should these issues be resolved?Currently, they are being resolved in the field, during theactual implementation of certification by inspectors, andsubsequent decision-making. This is the wrong place to solvesuch fundamental issues. The right place is to bring thesediscussions into the open, and to discuss them in the contextof national standards development, not case by case in thecontext of the issue of individual certificates.Prospects for ReformThe study also examines current initiatives to reform thenational legal and administrative framework regarding forestsand forest based communities. The National Assemblyhas passed a decree (TAP MPR IX/2001) requiring a majorchange in natural resource management laws which wouldrecognise customary rights in forests and to land in general.These reforms are now being resisted by the Ministry ofForests. New Autonomy Laws are now also changing theextent to which central or district level administrations willmanage forests. Legal confusion currently prevails. Movesare being made to allow the registration of hak ulayat butthe rights conferred by this recognition remain very weakand will not be strengthened unless the Basic Agrarian Lawis changed. Forestry laws are also being reformed as a resultof which more aperture now exists for a recognition ofcommunities’ rights in the spatial planning process, but thestrength of these rights remains unclear. Meantime, as a resultof decentralization, district legislatures are beginningto recognize the rights of local communities to land, to ameasure of autonomy and to community forestry by passinglocal decrees. These may offer some security for communitiesduring this period of political and legal uncertainty.17

Executive Summary with Conclusionsand RecommendationsConclusionsFSC Principles 2&3 provide important provisions aimed atassuring the buyers of FSC certified forest products that theyare produced in socially acceptable ways. The Principlesprovide four tiers of protection designed to ensure that theneeds and rights of local communities and indigenous peoplesare accommodated by forest management. The spirit of P2&3is: first, to establish that customary rights of local communitiesand indigenous peoples are secure, preferably throughformal, legal means; secondly, that there be locally acceptablemechanisms to ensure community control of forest managementwhich may only be delegated through the principleof free and informed consent; thirdly, that acceptable disputemechanisms are in place; and, fourthly, that the existenceof serious unresolved disputes should ‘normally’ begrounds for refusing certification.FSC national standards have been approved even incountries where the legal recognition of customary rights isunclear or uncertain. In these circumstances, the importanceof the second line of protection, through exercise of the rightto free and informed consent, becomes doubly important.The general finding of this study is that the IndonesianState lacks effective measures for securing customary rightsto land and forests. Moreover, it also lacks legal provisionsthat facilitate exercise of the right of free and informed consent.On the contrary, the prevalent development model, administrativesystem and legal framework deny customaryrights, dis-empower customary institutions, and encouragetop-down forestry, all in violation of internationally recognizednorms. The current Indonesian forest policy environmentis difficult for, even hostile to, certification to FSC standards.However, the situation is not entirely bleak. Widereachingreforms are underway. Constitutional revisions and18

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesNational Assembly decisions are opening the way for a recognitionof customary rights. Decentralization laws nowprovide for the possibility of a measure of self-governanceby customary institutions. Local governments are beginningto pass local laws which recognize customary rights andpromote community forestry options. Certification is increasinglyfavoured by the national government as a way for reformingforestry practice.This final section first summarises the findings of thisstudy with respect to the obstacles to the application of FSCPrinciples 2&3, reviews the reform options that may facilitatecertification, and then makes recommendations aboutwhat should be done in the circumstances.Current obstacles in law and practiceThis review has found a series of major obstacles to the applicationof FSC Principles and Criteria 2&3 in Indonesia.The most salient include the following:• Current national land laws do not ‘clearly define, documentand legally establish’ ‘long term tenure and userights of local communities’.• Nor do they provide the basis for such communities to‘control to the extent necessary their rights and resources’.• Customary (hak ulayat) rights are subordinated to Statedecisions and interests and do not confer the right of ‘freeand informed consent’ on local communities. Communitiesare not entitled to reject the imposition of logging orother forms of state-sanctioned land use on their lands.• The prevalent model of administration at the local level(the desa system) does not provide an appropriate mechanismsfor the resolution of disputes. Coercive decisionmakingand intimidation by local administrators and securitypersonnel is common. Legal processes are widelyrecognised as deficient and even unjust.19

Executive Summary with Conclusionsand Recommendations• Although the ‘customary rights’ of indigenous peoples totheir lands and resources are nominally recognized in therevised Constitution, under the Basic Agrarian Law theseare interpreted as weak rights of usufruct subordinate toState interests. Regulations for the definition of these areasare lacking.• In State forest lands, under the Basic Forestry Law (No41/1999), the customary rights of indigenous peoples andother local communities are further weakened.• Proprietary rights in state forest lands are by definitionexcluded, meaning that long term tenure for local communitiescannot be legally established, nor can the rightsof indigenous peoples to own, manage and control theirlands be legally asserted. Communities’ use rights aresubordinated to logging.• Likewise, under the Basic Forestry Law, the weak rightsof usufruct of local communities do not secure their rightto free and informed consent regarding logging or plantationoperations on customary rights areas.• Short-term community forestry concessions (HPHKM)can be leased on forest lands, but subject to strict governmentoversight and intervention.• Logging and plantation concessions are routinely grantedwithout consultation with local communities and indigenouspeoples, much less their ‘free and informed consent’.• On the other hand, application of the laws governing thezoning, delineation and gazettement of forest lands andforest concessions have often been incompletely adheredto. As a result as much as 90% of forest lands thought tobe under the jurisdiction of the Forest Department are notlegally so.• Disputes between the central and local government administrationover the legal status of forest lands and concessionsis thus widespread.20

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesProspects for legal and institutional reformIn recent years, there have been moves to reform laws andpolicies related to forestry and community rights. These reformsinclude the following:• Constitutional provisions now endorse the internationalhuman rights regime and explicitly recognize the rightsof indigenous peoples (masyarakat adat).• The National Assembly has ordered the DPR and Executiveto carry out far-reaching reforms of land tenure andnatural resource management law to establish more equitableaccess to land and to recognize customary rights.The reform process has however been held up.• The Regional Autonomy Act now paves the way for reformsof the local administration, which may allow therecognition of customary institutions. Where these reformshave been pushed through to the satisfaction of local communities,a more secure basis for the exercise of the rightof free and informed consent may now exist.• Participatory mapping techniques have proved their worthas effective mechanisms for documenting and recognizingthe extent of customary rights areas.• The decentralization laws may also give local governmentthe authority to legislate on forest lands. Using this powersome district level legislatures have begun to confer rightsto community forestry (Wonosobo) or customary rights(Lebak) through local legislative acts (Perda).• The reform process remains uncertain and a number oflocal government decisions regarding forests and rightsin forests are now being contested by central governmentMinistries.• The reform process, while encouraging, is not yet far advancedenough to provide a secure basis for certificationexcept in some specific locales.21

Executive Summary with Conclusionsand RecommendationsRecommendationsFSC certification in IndonesiaThe social acceptability of FSC certification processes dependson the quality of the participation that leads to decisions.Where participation is weak or absent, national standardsetting, forest management and certification assessmentsare all likely to fail to meet FSC’s high standards.The prevalent national policy and legal framework providesa very difficult context in which to carry out certificationto FSC standards in Indonesia, especially with referenceto FSC Principles 2 and 3. With a few local and disputedexceptions, current Indonesian laws do not providethe security that local communities need to establish clearrights to their lands and resources, to ensure that indigenouspeoples’ rights to own, use and manage their lands arerecognised and respected, to exercise their right to free andinformed consent and to control forest operations on theirlands insofar as they affect their rights.Reforms that are required include the following (thecorresponding FSC P&C are indicated in brackets):• Ambiguity about the boundaries of forest lands and concessionsmust be resolved through revised participatoryland use planning, mapping, demarcation and gazettementprocesses (2.1).• Enabling laws and corresponding regulations must bepassed to allow the customary use rights of local communitiesto be defined, documented and legally establishedso that they can maintain control to the extent necessaryto protect their rights in forests (2, 2.2, 3.1).• Laws must be amended so that customary rights holderscan represent themselves through their own representativeinstitutions and so that these are assured legal personalityand can thus enter into negotiated agreements withforest managers where they choose to delegate control22

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitieswith free and informed consent (2.2, 3.1).• Forest and land tenure laws are amended to provide effectivemechanisms for the recognition and respect of therights of masyarakat adat to own, use and manage theirlands, territories and resources in forests (3).• Current concessions established on indigenous peoples’and local communities’ customary lands and rights areas,without their free and informed consent, should be revoked(2.2, 3.1).The investigation is therefore driven to conclude that,according to a strong reading of FSC Principles 2 & 3 and aliteral application of these Principles, certification to FSCstandards in Indonesia is currently not possible. It will notbecome possible until substantial national and local legal,institutional and policy reforms take place, such as thoseoutlined above.This conclusion may seem harsh, litigious, unhelpfulor unrealistic.Indeed, it is not clear to the authors that a legalisticand inflexible application of the FSC Principles to the Indonesiancase is the best way forwards. Many of the problemsin forests in Indonesia, indeed, derive from a top-down, prescriptiveapplication of laws and standards, which do notgive scope for local solutions. Indonesian civil society groupsthemselves stress the importance of a flexible recognition ofcustomary law. Strict and legalistic requirements of documentaryproof of tenure can be a problem for local communitiesseeking secure access to forests based on customarylaw and oral culture.A more flexible and locally-adapted interpretation ofFSC Principles 2 & 3, it can be argued, should allow FSCcertification, even in the absence of unambiguous, legallydefined rights, if forest managers, certification bodies, in-23

Executive Summary with Conclusionsand Recommendationsdigenous peoples and local communities agree on how tointerpret the P&C to suit local realities and if clear measuresare taken to go beyond what the law currently allowsor requires.The question then arises: who should make these judgmentsand how?The current situation is that there has been no nationalFSC initiative in Indonesia to develop national standards.There are only four FSC members in the entire country.Moreover, the certification bodies have not themselvesadopted ‘locally adapted generic standards’ in accordancewith FSC processes. Currently, judgments about how FSCP&C should be interpreted in Indonesia are being made bycertification teams in the field. This is leading to certificationdecisions being contested by local communities andNGOs, a situation that is neither useful for forest managers,certification bodies nor the FSC and which risks discreditingthe whole process of certification.This situation is not satisfactory and is contrary to establishedFSC procedures. Local interpretation, of how FSCPrinciples 2 and 3 should be applied, require detailed localdiscussions, with the full and informed participation of affectedcommunities and indigenous peoples.A major conclusion of this investigation is thereforethat an urgent and required next step must be to embark on anational dialogue to decide how and whether to promotevoluntary certification in Indonesia using international standardssuch as those of the FSC. Until such a national dialoguehas been held and a national consensus achieved onthe way forward, FSC certification processes in Indonesiashould be suspended.At the multistakeholder dialogue held in Jakarta inJanuary 2003 to discuss the first draft of this study, this recommendationwas fully endorsed by the local community,indigenous peoples’ and NGO representatives present. How-24

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesever, a number of spokespersons for certification bodies andthe FSC spoke out against this recommendation, claimingthat without certification Indonesia’s forests would betrashed as there would be no incentive for improvement offorest management. This is to misunderstand the recommendation,which is that there be a pause in the certificationprocess while the uncertainties about how to go ahead withcertification, which this study has identified and which arecausing such contention, are resolved.It is our view that a temporary suspension would focusthe minds of those committed to improvements in forest managementin Indonesia to find solutions to the problems thathave been identified. A pause would thus hasten not delaydevelopment of good guidance and a reformed certificationprocess. Agreements must be found about how to:• legally establish secure tenure for concessionaires;• establish mechanisms for ensuring that local communitieswith customary rights control forest operations thataffect their rights;• ensure recognition and respect the rights of indigenouspeoples to own, use, control and manage their lands, territoriesand resources• and establish verifiable and meaningful procedures forensuring free and informed consent of forestry operationson local communities and indigenous peoples’ lands.Until there is agreement about how these principlesand criteria should be complied with in the Indonesian context,we consider that it is irresponsible to recommend thatFSC certification should continue. A national dialogue is, inour view, absolutely necessary to address these issues, forto press ahead without this is to risk further problems withthe interpretation of P 2&3 in Indonesia, provoke more conflictin concession areas, bring further discredit to certificationamong consumers, and generate growing doubts about25

Executive Summary with Conclusionsand RecommendationsFSC’s ability to respect the views of indigenous peoples,who are the primary rightsholders in forests. These are seriousissues which cannot be brushed aside and must be agreedthrough a national dialogue.We do not seek to pre-judge the outcome of such a nationalprocess. The following recommendations are thus offeredas proposals for discussion by the national dialogue.• An inclusive national level dialogue should be carriedout to establish whether there is wide enough support forestablishing a national FSC initiative. A successful dialoguewill depend on indigenous peoples’ and local communities’organizations, and other civil society groupshaving the time, capacity and resources to engage in it.• If a national FSC initiative is decided on, a reasonablenumber of national organizations would need to becomemembers of FSC for it to be credible.• Consideration should then be given to the chamber structureof such a process. Should the process have the standardthree chamber process (economic, social and environmentalchambers) or (as in Canada) include a fourthchamber for ‘indigenous peoples’?• The term ‘indigenous peoples’ used in FSC Principle 3should be understood as referring to masyarakat adat inIndonesia. Self-identification should be a fundamentalcriterion for establishing which groups are referred to assuch.• ‘Customary rights’ areas should be established throughcommunity-based mapping exercises.• In the absence of effective national legal reforms that recognizethe rights of local communities and indigenouspeoples to their lands, recognition should be soughtthrough the following steps:• Recognition of rights through a local decree (perda)and/or through the determination of the boundaries ofrights areas through participatory mapping.26

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilities• Community rights areas should either be managedby the local communities themselves or excised from theconcessions of other operators or else managed by theseother operators according to agreements negotiated withthe rights holders.• Where community rights areas are to be managedby other operators, the full extent of community rightsareas should be formally recognized in negotiated agreementsagreed between the forest managers and local communitiesand/or indigenous peoples. These areas andagreements should be incorporated into managementplans.• Serious thought needs to be given to how such negotiatedagreements can be made binding in the Indonesian context.Signed agreements registered by a local notary havebeen suggested as one option in community consultations.Additional measures will be required to give the representativeinstitutions of the local communities and/or indigenouspeoples legal personality.• ‘Appropriate’ dispute resolution mechanisms may includethe submission of disputes to the adjudication of adatcouncils and customary decision-making fora. Agreementabout such mechanisms must be part of negotiated agreementsand made explicit in the management plans.• All such agreements should be without prejudice to anysubsequent land claims negotiations between the communitiesand government.• Transparent mechanisms should be developed at the forestmanagement level to ensure that civil society institutionsare able to monitor certification processes and forestmanagement agreements. 1• The experience of the Indonesian Ecolabelling Institutewith standards development and with regional consultativefor a should be taken into account.• Appropriate national standards should be considered for27

Executive Summary with Conclusionsand Recommendationspromoting the certification of community-based forestmanagement.Recommendations for the GovernmentThis investigation has concluded that internationally crediblecertification is unlikely to become widely establishedin Indonesia without substantial reforms to recognise andrespect the customary rights of local communities and indigenouspeoples (masyarakat adat) to their lands and forestsand to give them legal standing so they can negotiateagreements with forest managers.In line with the Constitutional commitment to recognizingthe rights of indigenous peoples, the governmentshould:• Ratify ILO Convention 169/1989 on Indigenous andTribal Peoples in Independent Countries.• Ratify the International Covenants on Civil and PoliticalRights and Economic, Social and Cultural Rights.• Through a participatory process of legal reform, promulgatenational laws in accordance with these internationallaws and constitutional provisions to:• Recognize the rights of local communities and indigenouspeoples to own, manage and control their landsand forests• Recognize their rights to self-governance• Revoke current laws and executive decisions whichviolate these rights• Implement Agrarian and Natural Resource ManagementReforms in line with TAP MPR IX/2001, includinga revision of the Forestry law which currently classifiesadat land as State forest lands.• Ensure the legal delineation and gazettement of Stateforest land in agreement with neighbouring communities28

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesaccording to the correct procedures before handing outconcessions to these areas.• Conflict resolution and negotiation mechanisms should beadopted, which do not rely on security forces and/or violentactions.• Human rights violations associated with land and naturalresource conflicts should be addressed as a matter of priority.• Procedures to excise customary rights areas from concessionworking areas should be implemented.• In future, concessions should not be handed out withoutthe free and informed consent of affected local communitiesand indigenous peoples.• Programmes to develop national mandatory certificationshould take into account the conclusions and recommendationsof this investigation and ensure that standards includerespect and recognition of the rights of indigenouspeoples and local communities, in particular their rightsto their lands and to free and informed consent.Recommendations for FSCSpecific recommendations related to Indonesia• If the national dialogue decides to promote a national FSCprocess, then FSC should openly support and encouragethe setting up of a national FSC initiative in Indonesia. Itshould ensure that this national initiative is developedstrictly in accordance with FSC guidelines. 2• In the meantime, it should immediately call on accreditedcertification bodies to suspend certification in Indonesiauntil the national initiative reaches a consensus on theway forward.29

Executive Summary with Conclusionsand RecommendationsGeneral recommendations• The FSC should amend the definition of ‘indigenouspeoples given in the glossary of its Principles and Criteriato reflect the advances in thinking made at the UNWorking Group on Indigenous Populations and, in linewith the FSC Board’s decision to operate in conformitywith the ILO Conventions, should give due recognitionof the right to self-identification.• The FSC Board and Assembly should give careful considerationto the way it promotes certification processesin countries without existing national standards, especiallyin developing countries.• Given the difficulties which this study has highlighted inapplying international standards to local realities, the FSCBoard should consider halting certification in developingcountries in the absence FSC-approved national standardsagreed through national FSC initiatives.• Alternatively or in addition, the FSC should take strongsteps to prohibit accredited certification bodies from carryingout certification in such countries relying on theirgeneric standards.• If (which we do not recommend), the FSC decides to continueto allow certification in the absence of national standards,strict mechanisms must be applied to ensure thatcertification bodies develop ‘locally adapted generic standards’as required.• FSC Guidelines for the development and disseminationof such draft ‘locally adapted generic standards’ shouldbe strengthened to ensure that there is genuine local consensusamong key interested parties for the application ofthese standards. Strong local objections to the proceduresor standards being used should normally be grounds forthe suspension of certification processes.• FSC Guidelines should make stronger requirements of30

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesnational working groups and certification bodies that theircertification standards and procedures clarify what constitute‘major failures’ in compliance, especially withrespect to Principles 2&3.• Through participatory dialogue among FSC members,make clear whether Principle 2 requires that the customaryrights of local communities need be ‘legally established’or this provision only applies to forest managers. 3• Complaints procedures should be made more accessibleand agile, so local communities and indigenous peoplescan raise concerns about certification decisions directlywith the FSC.Recommendations for Certifiers• Accredited certification bodies should suspend certificationactivities in Indonesia, pending a decision from anational FSC initiative on the appropriate way forward.• No certifications should be made in developing countrieswithout strict adherence to FSC requirements regardingthe development of ‘locally adapted generic standards’.• Generic standards should be revised to make clear whatconstitute ‘major failures’ in terms of compliance withPrinciples and Criteria 2 and 3.31

Photo: Sawit Watch Doc.

2Introduction

IntroductionWhy this study?When the Forest Stewardship Council (FSC) was firstfounded in 1993 at an international meeting held in Toronto,a number of non-governmental organisations (NGOs) andIndigenous Peoples Organisations (IPOs) from South EastAsia expressed the view that certification could not be aneffective tool for forestry reform in their countries. In theirview, the lack of political space in national ‘democratic’ processes,the endemic corruption in the timber industry, theinstitutionalised denial of indigenous peoples’ rights and theprevalence of patrimonial political systems would undermineany efforts to apply internationally agreed standards effectively.4 Some of these NGOs retain this view today.Others, however, have been persuaded that independentthird-party certification can, potentially, provide a usefulmeans of improving forestry standards, even in the contextof South East Asia. So long as there is vigilant adherenceto FSC’s principles, criteria and procedures, they believe,the pressure from vested interests to distort certificationprocesses can be held in check. Certification, as proposedby FSC, involves the genuine involvement of three‘chambers’ of ‘stakeholder’ groups, representing ‘economic’,‘social’ and ‘environmental’ interests and the ideal of FSCis that through dialogue these groups should find commonground on national certification standards which accommodatethe interests of all parties. There is an expectation, therefore,that certification according to FSC standards can empowerhitherto marginalized groups, offering them new politicalspace to push for a recognition of their rights and concernsin both specific forestry operations and in national lawsand administrative systems.During the mid-1990s, in both Indonesia and Malaysia,national processes got underway to develop certificationstandards, initially independently of the FSC process. The34

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesFSC secretariat has made a strong effort to marry these nationalprocesses with those of FSC. Progress has been unevenbut, at least initially, indigenous peoples were involvedin these national dialogues. 5 At the same time, there havebeen complaints about the certification of a number of forestryoperations in Indonesia, some of which have been withdrawnas a result. 6In Indonesia, annual rates of deforestation have exceededa million hectares a year for over a decade and arenow believed to be well over 2 million hectares per year. 7Forestry malpractice has made a major contribution to thisloss both due to wasteful and destructive logging and laxcompliance with the regulations on forest conversion. 8 It isnow recognised that the almost annual fires, which destroyhuge swathes of forests, are largely caused by poor forestryand corrupt plantation companies. 9 There have been persistentcomplaints that the rights of indigenous peoples are systematicallydenied and conflicts between forestry operationsand local communities are reported from all over the archipelago.Those with expectations that the ‘reformist’ administrationsof President Habibie (1999-2000), President Wahid(2000-2001) and President Megawati (2001- present) wouldaddress head-on the crisis confronting Indonesia’s forestshave however been disappointed. Indeed, the economic crisis,coupled with precipitate moves to grant district levelautonomy and decentralize the administration of forestryoperations, has caused a startling increase in rates of forestloss and uncontrolled logging. It is now estimated that over60% of timber extraction in Indonesia is ‘illegal’. 10 On theother hand, the emergence of a new vigorous movement ofindigenous peoples demanding effective recognition of theircustomary rights has not yet led to real change on the ground.Faced with this worsening situation, in March 2001,Indonesian environmental and human rights organisations,35

Introductionbacked by international NGOs, called for a moratorium onlogging in Indonesia, to give time for a proper reform of forestrypolicies in the country and for the elaboration of newlaws and more effective administrative processes to applythem. 11 On 21 st April 2001, many of the same NGOs, alsocalled on FSC to suspend the processes leading to certificationof industrial logging operations in Indonesia, until sucha time as certifications could be carried out reliably. In discussionswith the secretariat and board of FSC, the NGOsasked that an independent study be carried out of the obstaclesand challenges to the application in Indonesia of FSCPrinciples 2 & 3, which relate to indigenous peoples andother local communities, the legal establishment of theircustomary rights to their lands and resources, and whichassert the principle that logging should only go ahead ontheir lands subject to their free and informed consent. Thisstudy has been commissioned and carried out as a directconsequence.In response to these demands and other appeals, FSChas called on its certifiers not to certify new logging operationsin Indonesia, until this study is completed. 12 As wellas recognising the importance of this study being independentof those with financial interests in certification, FSChas also lent its support to this study by: making recommendationsfor the terms of reference; helping raise funds forthe research; advising on suitable consultants for the research.The study has been jointly sponsored by WALHI, theIndonesian Environmental Forum, and AMAN, the Allianceof the Indigenous Peoples of Indonesia. It has been commissionedby WALHI and AMAN and carried out under a jointWALHI/ Rainforest Foundation project titled ‘Analysis ofFSC Principles 2 and 3 Relative to Indonesian Laws andReform Processes’. The study has been funded by the UKDepartment for International Development (DfID) and the36

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesFord Foundation. Additional support for the study was facilitatedby FSC and came from the German Gesellschaftfur Technische Zusammenarbeit (GTZ) GmbH. Workshopsassociated with the study have been supported by DfID, FordFoundation, GTZ and NORAD.The research team comprises the following individuals:• Marcus Colchester, Team Leader (Director, Forest PeoplesProgramme, UK)• Martua Sirait, Researcher (Land Tenure Programme, InternationalCentre for Research in Agroforestry, Bogor)• Boedhi Wijardjo, Researcher (Executive Director, RACA,Jakarta)Between January and November 2002, the team alsoincluded the certification consultant, Matthew Wenban-Smith, specifically to provide guidance on the application ofcertification procedures. Matthew later took up a positionas Head of Policy & Standards Unit at FSC. In November2002, he chose to withdraw from the project in recognitionof a potential conflict of interest. His valuable influence andinsights have nonetheless been critical to this study and thediscerning reader may yet detect his contributions.The research has comprised:• a broad-ranging literature and legal review;• carrying out interviews with a wide range of stakeholders,including government officials, forest managers andconcessionaires, assessors and inspectors working forcertification bodies, NGOs and community members;• community workshops in four very different areas:• with the communities bordering the certified concessionof PT Diamond Raya in Riau Province;• the communities in Blora district, Cepu KPH, wherethe forests are managed by Perum Perhutani;• communities in Sanggau in West Kalimantan, whose37

Introductionlands have been incorporated into a plantation scheme byPT Finantara Intiga;• communities whose customary lands overlap the thePT Intracawood concession in East Kalimantan.• original research was also carried out of the forest classificationand gazettement system and of Forestry Departmentregulations concerning the obligations of concessionholdersThe report has been designed as a tool to inform allthose actively involved in certification processes about theobstacles and challenges to the application of FSC Principles2 & 3 in Indonesia: it is targeted, equally, at Governmentofficials and policy-makers, accreditation bodies, certifiers,concessionaires, NGOs and indigenous peoples. It is alsohoped that the report will provide useful background for thosewho deal with timber certification processes in other partsof the world where indigenous peoples’ and local communities’rights are imperfectly secured.Ever since its inception, many FSC members had hopedthat certification process would promote a greater respectfor the rights and interests of people who make their livelihoodsfrom forests. Many had also hoped that certificationwould stimulate community-based forest management. In theevent, the FSC has had difficulty ensuring that social issuesget full prominence. The social chamber of the FSC has relativelyfew members, especially from the South. The highcosts of developing certifiable forest management plans, andof certification itself, have favoured large-scale operations.In addition the main demand for certified timbers is in Northernmarkets. As a result 86% of certified areas are locatedin developed countries and over 90% are managed by corporations.13 The Board of the FSC has been making effortsto redress these imbalances. The FSC’s support for this study38

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiescan be seen as part of this effort to give greater prominenceto social issues in certification.WHAT IS THE FOREST STEWARDSHIP COUNCIL? 14The Forest Stewardship Council is an international nonprofitorganisation founded in 1993 to promoteenvironmentally appropriate, socially beneficial, andeconomically viable management of the world’sforests.It is an association of Members consisting of a diversegroup of representatives from environmental and socialgroups, the timber trade and the forestry profession,indigenous peoples’ organisations, community forestrygroups and forest product certification organisationsfrom around the world. Membership is open to all whoare involved in forestry or forest products and share itsaims and objectives.Members are the organizations highest authority andexercise their authority at 3-yearly General Assemblieswhere decisions are made by vote. Members arecategorised into three Chambers made up memberswith social, environmental and economic interests.Each chamber has an equal proportion of the vote andvotes are also shared equally between North andSouth.The FSC membership elects 9 members to formits Board of Directors, who are responsible forapproving all FSC national or regional standards,approving all FSC certification bodies, and recognisingany national FSC initiatives.The Board of Directors appoints an Executive Director,who runs the day to day business of FSC together with apermanent staff of about 20 people. The permanentstaff are currently based in Oaxaca, Mexico and Bonn,Germany.39

IntroductionFSC aims to provide a truly independent, internationaland credible labelling scheme on timber and timberproducts and provide the consumer with a guaranteethat forest products bearing the FSC label have comefrom a forest which has been evaluated and certifiedas being managed according to agreed social, economicand environmental standards.FSC has developed procedures and standards toevaluate whether organisations (certification bodies)can provide an independent and competent forestevaluation (certification) service. This process is knownas ‘accreditation’. FSC accredited certification bodiesare required to evaluate all forests aiming forcertification according to the FSC Principles andCriteria for Forest Stewardship. Accreditedcertification bodies may operate internationally andmay carry out evaluations in any forest type. Certifiedforests are visited on a regular basis, to ensure theycontinue to comply with the Principles and Criteria.The performance of the certification bodies ismonitored by FSC through periodic reviews. Productsoriginating from forests certified by FSC-accreditedcertification bodies are eligible to carry the FSC-logo,if the chain-of-custody (tracking of the timber from theforest to the shop) has also been certified by anaccredited certifier.THE CERTIFICATION PROCESSFSC does not evaluate forest management or issueforest management certificates directly. This work iscarried out by FSC approved (‘FSC-accredited’)certification bodies. The detailed procedures for eachcertification body are different. However, all FSC–accredited certification bodies have to comply with therequirements of the ‘FSC Accreditation Manual’, the40

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiescertifier’s guidelines and the certifier’s contract. The‘Accreditation Manual’ is designed to incorporate therequirements of the international standardsorganisation, ISO, as well as the policies of FSC. Onlythe main features are described here.Firstly, the certification body has to check whetherthere is already an approved FSC standard, or anapproved ‘FSC national initiative’, in the country inwhich it is going to work. If there is, then thecertification body works with the approved standard,and/or consults with the national initiative. InIndonesia there is currently no FSC national initiativeor national standard. However, FSC has agreed to workclosely with Lembaga Ekolabel Indonesia (LEI). All FSCaccreditedcertification bodies operating in Indonesiahave agreed to carry out their evaluations togetherwith a team of nationals approved by LEI and using theLEI forest management standards (see below forfurther details).Before carrying out a full evaluation, the certificationbody usually carries out a ‘pre-evaluation’ or ‘scoping’visit to the forest – to interview the forest managers,identify the main issues related to implementation ofthe FSC Principles and Criteria, identify potentialstakeholders, and to consider logistics for a fullevaluation. In the absence of an FSC approved nationalstandard the certification body has to seek commentsfrom national stakeholders on its own ‘generic’standard, and has to demonstrate that it hasconsidered these comments in order to develop a‘locally adapted’ generic standard.The certification body then puts together a team ofprofessionals with expertise in forest auditing,environmental issues, social issues and traditionalforest management requirements such as silvicultureor harvesting. The size of the team depends on the sizeand complexity of the forest operation beingevaluated, but the team must always include peoplewith previous experience in the country, knowledge ofthe language of the country, the forest management41

Introductionsystem being implemented, and the local forestrycontext.The inspection team makes the arrangements for theinspection, including consultation with foreststakeholders. This might include interviews bytelephone or in person, public meetings, informal adhoc meetings during the evaluation, and commentsbeing received by post or e-mail. The team may splitup in order to carry out the evaluation itself, withdifferent team members looking at different aspects ofmanagement. The team’s objective is to determinewhether the forest management complies with the‘locally adapted generic standard’ – which itself isdesigned to ensure compliance with the FSC Principlesand Criteria for Forest Stewardship.After the evaluation the certification body prepares adetailed report for the forest manager, which presentsits findings. The objective of the report is todemonstrate how the forest management complieswith, or fails to comply with, the standard used for theevaluation. Different FSC-accredited certificationbodies have developed different methodologies forcoming to a final certification decision. Somecertification bodies score the forest management unit’sperformance on each criterion, and then combine thescores to come to a final decision (e.g. SmartWood);others require substantial compliance on everycriterion (e.g. SGS-Qualifor).It should be noted that FSC does not require perfectcompliance with FSC Principles and Criteria. While‘Major Failures’ of compliance disqualify forestryoperations from being certified, the FSC systempermits ‘minor failures’. The exact definition of aminor failure varies between certification bodies. Theobjective is that if a forest management unit complieswith the standard in spirit and practice, despiteoccasional lapses or mistakes, or some areas in whichimprovements are agreed in advance, then acertificate can still be issued. In this case thecertificate may be issued on the basis of agreed42

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesconditions for improvement. The forest managers arecontractually obliged to meet such conditions within aspecified time frame. If the improvements are notimplemented then the certificate should be suspendedand subsequently withdrawn.If a certificate is issued, then the certification bodymust make a public summary of the certificationevaluation report, and the final version of the ‘locallyadapted generic standard’ on which the certificate wasbased publicly available.The public summary must show, at least, the basis forthe certification decision in terms of each of the FSCPrinciples. It must also include any conditions on whichcertification was based. The public summary has to beupdated annually to show how the forest managementunit is progressing to comply with any conditions thatwere issued. The public summary must be madeavailable in the national language of the country inwhich the certificate was issued. Procedures exist forany member of the public to raise concerns about theissue of the certificate, with the forest manager, thecertification body, or, ultimately, with FSC itself.Terms of Reference for the StudyThe specific terms of reference for this study was to undertakean analysis of FSC’s Principle 2 and 3 relative to relevantIndonesian laws and relevant ongoing reform processes- in order to determine under what circumstances these principlescould be implemented in Indonesia. The study was toexamine in particular the Forestry Act, the Basic AgrarianLaw and the Local Administration Act as well as relevantongoing reform processes such as processes for the recognitionof Customary Forests (Hutan Adat) and the enactmentof a new more encompassing “Natural Resources Act”. Additionalobjectives set out in the Terms of Reference included:43

Introduction• Inform the FSC and LEI of debates around the issues coveredin FSC Principle 2 and 3 internationally, with referencealso to relevant conventions such as ILO 169, andother international legal provisions.• Provide insights into concepts such as “free and informedconsent” (P 2.2 and P 3.1.) and how this concept relatesto Indigenous Rights and implementation of the Principle2 and 3 of the FSC… Provide guidance and identify themechanisms by which free and informed consent and representativenessmay be evaluated by certification bodiesin relationship to the implementation of Principles 2and 3.• Inform the FSC of the status of land and resource rightsunder current legislation in Indonesia, by referring to theBasic Agrarian Law/Forestry Act and other relevant laws– and their application. The study should aim to explainrelevant concepts such as “State land”, “Private Land”and “Tanah/Hutan Ulayat”, as well ongoing reform processesrelated to land tenure, and outline this relative toIndigenous Rights and the Indonesian Constitution.• Discuss the relevance of the regional autonomy processin Indonesia, and what problems and possibilities thisraises for certification efforts.• Determine what requirements would be necessary to makeit possible for logging concessions in Indonesia to complywith Principles 2 and 3, including possible legal andpolitical reforms, and describe the status and relevanceof relevant ongoing political and legal reform processesin Indonesia.The study should provide specific recommendationsconcerning:• Under what possible circumstances Principles 2 and 3 canbe implemented in the current legal and political situa-44

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiestion, and in what kind of operations that could be possible.• What requirements would be needed in order to implementFSC Principles 2 and 3 in community forestry o-perations, as well as in concessions (KPH, HPH, HTI etc)in Indonesia (to be listed).• At what level of decision-making these different requirementsmust be agreed and implemented, and what the currentstatus is. Indicate which organisations or bodieswould have responsibility for addressing these requirements,indicate what the current status of these is, andmake recommendations for how they may be advanced.FSC PRINCIPLES AND CRITERIA 2&3PRINCIPLE #2: TENURE AND USE RIGHTS ANDRESPONSIBILITIESLong-term tenure and use rights to the land and forestresources shall be clearly defined, documented andlegally established.2.1 Clear evidence of long-term forest use rights tothe land (e.g. land title, customary rights, or leaseagreements) shall be demonstrated.2.2 Local communities with legal or customary tenureor use rights shall maintain control, to the extentnecessary to protect their rights or resources, overforest operations unless they delegate control withfree and informed consent to other agencies.2.3 Appropriate mechanisms shall be employed toresolve disputes over tenure claims and use rights. Thecircumstances and status of any outstanding disputeswill be explicitly considered in the certificationevaluation. Disputes of substantial magnitude45

Introductioninvolving a significant number of interests will normallydisqualify an operation from being certified.PRINCIPLE #3: INDIGENOUS PEOPLES’ RIGHTSThe legal and customary rights of indigenous peoples toown, use and manage their lands, territories, andresources shall be recognized and respected.3.1 Indigenous peoples shall control forestmanagement on their lands and territories unless theydelegate control with free and informed consent toother agencies.3.2 Forest management shall not threaten or diminish,either directly or indirectly, the resources or tenurerights of indigenous peoples.3.3 Sites of special cultural, ecological, economic orreligious significance to indigenous peoples shall beclearly identified in cooperation with such peoples, andrecognized and protected by forest managers.3.4 Indigenous peoples shall be compensated for theapplication of their traditional knowledge regarding theuse of forest species or management systems in forestoperations. This compensation shall be formally agreedupon with their free and informed consent beforeforest operations commence.FSC and the Lembaga Ekolabel IndonesiaAn analysis of FSC-based forest certification in Indonesiawould be incomplete without consideration of FSC’s relationshipwith Lembaga Ekolabel Indonesia (LEI) a non-governmentalorganisation set up in 1996, as an Indonesian responseto growing international demand for certified timberfrom Indonesia. The relationship between FSC and LEI isrelevant because the two systems aim to achieve similar ob-46

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesjectives, and make use of similar standards. Furthermore thetwo systems are formally linked through the ‘Joint CertificationProtocol’ signed by LEI and FSC in 2000, and subsequentlyupdated in October 2001.Like FSC, LEI has developed standards for the evaluationof forest management (see 2.3.1 below). LEI also approvesinspection bodies to carry out forest evaluation, andin doing so acts like an accreditation body. Certification inspectionsand initial decisions are carried out by the LEIapprovedinspection bodies (referred to by LEI as ‘certificationinstitutions’).LEI decisions are made in a two-stage process. Thedecision is initially made by an ‘Expert Panel’ made up ofindividuals appointed by the inspection body. The ExpertPanel follows guidance provided in LEI’s ‘Intensity Scale’which distinguishes between ‘excellent’, ‘good’, ‘fair’,‘poor’ and ‘bad’ performance by the forest management unitcompared with each LEI Indicator. By combining performanceon all criteria, a decision is made resulting in theaward of ‘gold’, ‘silver’, ‘bronze’, ‘copper’, or ‘zinc’ certifications.A certificate is only awarded to companies thatachieve the bronze level or higher. 15 Certificates may beawarded to operations failing to comply with some criteriaso long as the overall score is considered adequate.LEI differs from FSC in reserving to itself direct involvementin certification decision making through its ‘CertificationAdvisory Board’. This Board takes on the role of‘confirming’ the certification decision and acting as an ‘appeals’mechanism for certification decisions. If the LEI CertificationAdvisory Board concludes that the Expert Panel’sdecision was incorrect, the Board has the power to revokethe certificate. 16 LEI developed its standards between 1996and 2001. Standards were developed in consultation with,and subsequently approved by, a broad range of forest stakeholders.47

IntroductionLEI standards are similar to FSC’s in that both covereconomic and social, as well as environmental considerations.The LEI standards were developed with input fromIndonesian forest stakeholders and provide a greater levelof ‘Indonesia-specific’ detail than the FSC Principles andCriteria. The FSC Principles and Criteria and LEI Criteria,Indicators and Verifiers are quite similar with regard to content.However, both standards include a number of wordswhich require close consideration to understand how theyshould be implemented in practice. For example, both standardsrefer to ‘control’ by local ‘communities’.The FSC Principles and Criteria refers to ‘free and informedconsent’, whereas the LEI Criteria, Indicators andVerifiers refer to boundaries being ‘approved by’ interestedparties. FSC refers to ‘appropriate mechanisms’ to resolvedisputes, and LEI refers to ‘appropriate solution procedures’.THE JOINT CERTIFICATION PROTOCOL (JCP)FSC and LEI have maintained close contact during thedevelopment of their respective systems. In 2000 thiscooperation was formalised by the signing of a ‘JointCertification Protocol’ (JCP), subsequently updated inOctober 2001. Under the Joint Certification Protocol,LEI-inspection institutions and FSC-accreditedcertification bodies agreed that they would not issuecertificates in Indonesia unless the requirements ofboth schemes are met.As the name indicates certifications are carried outjointly under the JCP. Applicants for certification areassessed by two teams of inspectors, separatelyrepresenting an FSC-accredited certification body, anda LEI approved certification institution. During theassessment both teams collaborate closely and48

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesexchange information. This joint assessment isintended to facilitate the understanding of each otherssystems. Certification decisions are under theindependent authority and responsibility of therespective certification body participating in the jointassessment. Each certification body has to ensurecompliance with the requirements of its ownaccredited system.By this mechanism all natural forest management unitswhich receive an FSC-endorsed certificate should also(separately) meet LEI requirements. Conversely, anynatural forest management unit which receives an LEIcertificate, should also (separately) meet FSCrequirements.Allthough forest management operations may receivecertificates under both schemes (LEI and FSC), FSCnotes that this does not imply substantial equivalenceof the LEI and FSC systems nor ‘Mutual Recognition’between the systems. Indeed, the JCP is specificallynecessary only in the absence of Mutual Recognition.LEI StandardsLEI forest management standards are based on a hierarchicalevaluation of three principle ‘functions’ of forests: ecological,social and production functions. Within each functioncriteria and indicators are specified. Criteria are in theform of general areas for evaluation – for example SocialCriterion 1 (S.1) is “Secured Community-based Forest TenureSystem”. Each criterion is then sub-divided into indicatorsfor evaluation. These are generally statements thatcould in principle be verified by inspection (e.g. S1.1, below),though occasionally are in the form of issues to evaluated(e.g. S1.4, below).For example, under Criterion S.1 there are four indicators:49

IntroductionSocial Indicator S1.1Boundaries between forest concession areas and localcommunity areas are clearly delineated and approved byinterested parties.Social Indicator S1.2Communities’ inter-generational full access and controltowards traditional forest areas is guaranteed.Social Indicator S1.3Communities’ inter-generational full access on the forestproduct utilization in concession areas is guaranteed.Social Indicator S1.4:The use of appropriate solution procedures for every claimover the same forest area.The full list of LEI criteria and indicators is availableon the LEI website at: www.lei.or.id.The LEI system does not stop at the level of indicators.LEI has also developed detailed guidance for assessors.This guidance provides a ‘definition’ of each indicator,and associated ‘verifiers’. For each verifier the guidancespecifies ‘verification/sampling methods’, and both‘primary’ and ‘secondary’ sources of data and information.Thus, for example, for the evaluation of Social Sustainabilityindicator S1.1 the following guidance is provided:DefinitionIn this context, delineation is not only a technical matterof ‘drawing a line’ between one concession area and another.In situations where a concession area is side-bysidewith an area belonging to the traditional community,delineation can also come to signify ‘drawing the line’between areas that abide by the rules of the law, and those50

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesthat abide by the rules of the local traditional community.The absence of delineation process, or delineation doneonly by one party without consultation with the local community,can lead to future claim/ disputes on the samearea between the management unit and the local community.Reversely, a collaborative delineation process onequal terms, will ensure tenurial security from both sides.VerifiersS1.1.1Boundary delineation process is collaboratively conductedby the relevant partiesS1.1.2Informed concern principle of the existence of the managementunitS1.1.3Certainty of the boundaries of the concession area.With respect to Verifier S1.1.1 the following sourcesof data and information are specified:PrimaryFacts from the field on: Tenurial disputesSecondaryDocuments/Reports on: Tenurial disputesFinally, LEI also provides an ‘intensity scale’ designedto allow the LEI Expert Panels to come to a decision as towhether or not a forest management unit complies with theLEI standard. For example, with respect to compliance withindicator S1.1 the following guidance is provided:51

IntroductionExcellentThe management unit provides the facilities to produce amap of traditional communities done in collaboration withthe local communities, specially along the areas that sharea common border with a concession area.GoodCollaborative process on equal terms in determining andensuring security of the boundary lines between the managementunit and the local community area.FairThe delineation process is done by oneparty withoutclaims from the local community for the concession area.The process started from disagreements concerning thesetting of boundaries between the concession area and thelocal community area.PoorThe delineation process is done by the management unit,which resulted in the inclusion of the local communityarea within the concession area, which in turn resulted inarea disputes/claims on parts of the concession area.BadThe delineation process is done by the management unitin collaboration with repressive administrators that resultedin the inclusion of the local community area withinthe concession area, which in turn led to a breadown offurther discussions with the local community regarding areview of the concession area.This intensity scale is broadly equivalent to the ‘scoring’or ‘decision support’ systems implemented by someFSC-accredited certification bodies.52

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesThe degree of difference between the LEI and FSC systemsshould however not be underestimated. A notable illustrationof this difference concerns the PT IntracawoodManufacturing’s concession in East Kalimantan (see section6.2), which has been passed by a LEI assessment buthas twice failed to receive a certificate under FSC standards,substantially because of problems related to Principles 2 &3. The inference that may be drawn from this case is thatLEI’s system appears to offer less protection of local communitiesand indigenous peoples’ rights than FSC. Becauseof these differences between the LEI and FSC systems, thisinvestigation did not look more exhaustively into the LEIcertification process as this fell outside the Terms of Referenceof the Study.FSC Principles and Criteria 2&3from An International Legal PerspectiveFSC Principles and Criteria have been developed taking intoaccount existing and emerging standards of international law.FSC also requires that certification accommodates the standardsof the International Labour Organisation. Specifically,according to an FSC Board Decision made in March 2002,the Board accepted an interpretation that ‘FSC Principles 2& 3 require that the legal and customary rights of indigenouspeoples be legally established and respected’ andendorsed a new Indicator regarding compliance with Criterion2.1: ‘2.1.1 Communities have clear, credible and officiallyrecognised evidence, endorsed by the communitiesthemselves, of collective ownership and control of the landsthey customarily own or otherwise occupy or use.’ 17 Thissection summarises relevant international law and jurisprudencerelating to key elements of FSC Principles 2&3, withrespect to ‘indigenous peoples’, ‘lands and territories’ and‘free and informed consent’. Many of these elements of in-53

Introductionternational law have become so commonly referred to thatthey are sometimes considered to have become ‘internationalcustomary law’. 18Land and Territorial RightsInternational law recognises that indigenous peoples enjoyinherent rights because of their distinctive identities and theirconnections to their ancestral lands, based on customary law,which precede the creation of nation states or the extensionof effective government administration over their areas.Among the most important for the purpose of this study isthe recognition of the rights of indigenous peoples to theownership, control and management of their traditional territories,lands and resources.These rights were first set out in the InternationalLabour Organisation’s Convention No. 107 on ‘Indigenousand Tribal Populations’, of 1957, and were later expandedon, in 1989, in a revised Convention No.169 on ‘Indigenousand Tribal Peoples’. 19 Articles 14 and 15(1) of ConventionNo. 169 state:Article 14(1)The rights of ownership and possession of the peoples concernedover the lands which they traditionally occupy shallbe recognised. In addition, measures shall be taken in appropriatecases to safeguard the right of the peoples concernedto use lands not exclusively occupied by them, butto which they have traditionally had access for their subsistenceand traditional activities. Particular attention shall bepaid to the situation of nomadic peoples and shifting cultivatorsin this respect.(2)Governments shall take steps as necessary to identify thelands, which the peoples concerned traditionally occupy, andto guarantee effective protection of their rights of ownershipand possession.54

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilities(3)Adequate procedures shall be established within the nationallegal system to resolve land claims by the peoples concerned.Article 151. The rights of the peoples concerned to the natural resourcespertaining to their lands shall be specially safeguarded.These rights include the right of these peoples to participatein the use, management and conservation of these resources.The ILO’s Conventions broke new ground in internationallaw in that they confirmed the principle that ‘aboriginaltitle’ derives from immemorial possession and does notdepend on any act of the State. The term ‘land’ is genericand includes the woods and waters upon it. 20The International Covenant on Civil and PoliticalRights (ICCPR) is one of the central human rights instrumentsof the United Nations. 21 It was adopted in 1966. TheCovenant does not make specific reference to indigenouspeoples but it applies equally to them as to other human beings.Articles 1 and 27 of the Covenant are of particularimportance to indigenous peoples. They note:Article 1(1)All peoples have the right to self-determination, by virtueof that right they freely determine their political status andfreely pursue the economic, social and cultural development.(2)All peoples may, for their own ends, freely dispose of theirnatural wealth and resources… In no case may a people bedeprived of its own means of subsistence.Article 27In those States in which ethnic, religious or linguistic minoritiesexist, persons belonging to such minorities shallnot be denied the right, in community with the other mem-55

Introductionbers of their group to enjoy their own culture, to professand practise their own religion, or to use their own language.Concerns about the treatment of indigenous peopleshave been frequently brought to the attention of the UNHuman Rights Committee, which monitors compliance withthe Covenant by States which are party to the Covenant’sOptional Protocol, designed to encourage its application. In1994, the Human Rights Committee issued a note clarifyingthe obligations of State parties under Article 27 of theICCPR:With regard to the exercise of the cultural rights protectedunder article 27, the Committee observes that culture manifestsitself in many forms, including a particular way of lifeassociated with the use of land resources, especially in thecase of indigenous peoples. That right may include suchtraditional activities as fishing or hunting and the right tolive in reserves protected by law. The enjoyment of thoserights may require positive legal measures of protection andmeasures to ensure the effective participation of membersof minority communities in decisions which affect them. 22In 2000, the UN Human Rights Committee offered additionalguidance about State party obligations under theCovenant:…in many areas native title rights and interests remain unresolved[and] in order to secure the rights of its indigenouspopulation under article 27… the necessary steps should betaken to restore and protect the titles and interests of indigenouspersons in their native lands… securing continuationand sustainability of traditional forms of economy of indigenousminorities (hunting, fishing and gathering), and pro-56

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiestection of sites of religious or cultural significance for suchminorities, [are rights] that must be protected under article27… 23The Convention on the Elimination of Racial Discriminationforms another key international human rights instrumentwith importance for Indigenous Peoples. In interpretingthe application of the Convention to indigenous peoplesthe United Nations Committee on the Elimination of RacialDiscrimination, at its 1235 th meeting on 18 August 1997,noted:The Committee especially calls upon States parties torecognise and protect the rights of indigenous peoples toown, develop, control and use their communal lands, territoriesand resources and, where they have been deprived oftheir lands and territories traditionally owned and otherwiseinhabited or used without their free and informed consent,to take steps to return these lands and territories… 24These rights of indigenous peoples, already implicit inexisting human rights instruments and whose interpretationhas been clarified in international jurisprudence, have beenconsolidated in the UN’s Draft Declaration on the Rights ofIndigenous Peoples, which provides a clear statement of indigenouspeoples’ territorial rights. Article 26 states:Indigenous Peoples have the right to own, develop, controland use the lands and territories, including the total environmentof their land, air, waters, coastal seas, sea-ice, floraand fauna and other resources which they have traditionallyowned or otherwise occupied or used. This includesthe right to the full recognition of the laws, traditions andcustoms, land tenure systems and institutions for the devel-57

Introductionopment and management of resources, and the right to effectivemeasures by States to prevent any interference with,alienation or encroachment on these rights.Free and Informed ConsentArticle 7(1) of ILO Convention 169 provides that:The people concerned shall have the right to decide theirown priorities for the process of development as it affectstheir lives, beliefs, institutions and spiritual well-being andthe lands they occupy or otherwise use, and to exercise control,to the extent possible, over their own economic, socialand cultural development.This article is one of the general principles of the Conventionand provides a framework within which other articlescan be interpreted. Although qualified and weakenedby the phrase, “to the extent possible,” it recognizes thatindigenous peoples have the right to some measure of selfgovernmentwith regard to their social and political institutionsand in determining the direction and nature of theireconomic, social and cultural development. Other generalprinciples of the Convention require participation, consultationand good faith negotiation. 25In its 1997 General Recommendation, the Committeeon the Elimination of Racial Discrimination elaborated onstate obligations and indigenous rights under the Convention.The Committee called upon states-parties to:… ensure that members of indigenous peoples have equalrights in respect of effective participation in public life, andthat no decisions directly relating to their rights and interestsare taken without their informed consent. 2658

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesIn its Concluding Observations on Australia’s report,the Committee reiterated in 2000:its recommendation that the State party ensure effectiveparticipation by indigenous communities in decisions affectingtheir land rights, as required under article 5(c) ofthe Convention and General Recommendation XXIII of theCommittee, which stresses the importance of ensuring the“informed consent” of indigenous peoples. 27Building upon these principles, Article 30 of the UN’sDraft Declaration on the Rights of Indigenous Peoples acknowledgesthat:Indigenous Peoples have the right to determine and developpriorities and strategies for the development or use of theirlands, territories and other resources, including the right torequire the State to obtain their free and informed consentprior to the approval of any project affecting their lands,territories and other resources particularly in connection withthe development, utilization or exploitation of mineral, wateror other resources….International agencies working in specific sectors suchas hydropower, forestry and conservation have also begunto recognise indigenous peoples’ rights to free and informedconsent and to the use, ownership and control of their landsand territories. The International Tropical TimberOrganisation’s Guidelines for Natural Forest Managementaccept ILO and World Bank standards towards IndigenousPeoples. The World Conservation Union’s (IUCN) new protectedarea categories accept Indigenous Peoples as ownersand managers of Protected Areas. New IUCN and WWFpolicies endorse the UN Draft Declaration on the Rights of59

IntroductionIndigenous Peoples, recognise their rights to own, controland manage their territories, and accept the principle thatconservation initiatives should only go ahead in indigenousareas with the free and informed consent of the traditionalowners. The World Commission on Protected Areas has alsoadopted guidelines for implementing these principles. Sincethe 1992 United Nations Conference on Environment andDevelopment (UNCED), there has been an intergovernmentalconsensus that Indigenous Peoples should be involved inpolicy making and they have been accepted as a ‘MajorGroup’ that should be involved in implementation of Agenda21. The European Community has adopted a Resolution onIndigenous Peoples and Development which endorses theprinciple that initiatives on their lands should be subject totheir agreement and Guidelines for the implementation ofthis resolution likewise require the recognition of indigenousrights to land. The Inter-American Development Bank acceptsthat indigenous peoples should not be forcibly relocatedwithout their consent and the same principle was recentlyadopted by the World Commission on Dams. 28Mechanisms for Consultationand Engagement in Decision-makingInternational law regarding indigenous people is unique in anumber of respects, perhaps the most important being that itrecognises collective rights. It thus asserts the authority ofthe indigenous group to own land and other resources, enterinto negotiations and regulate the affairs of its membersin line with customary laws which may be quite different tonational laws. External agencies should thus accept not onlythat indigenous peoples rightfully have a say in their ownfutures but that they should be permitted and encouraged toexpress their views and make their decisions according to60

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiestheir own processes and through their own institutions.These issues have been further clarified in ILO ConventionNo. 169, which recognises the right of indigenouspeoples to exercise their customary law. This right is morefully affirmed in the UN’s Draft Declaration.ILO Convention No. 169 also makes clear how statesand other institutions should interact with IndigenousPeoples. Article 6 (1) of the Convention notes:In applying the provisions of this Convention, governmentsshall:(a)consult the peoples concerned, through appropriate proceduresand in particular through their representative institutions,whenever consideration is being given to legislativeor administrative measures which may affect them directly;(b)establish means by which these peoples can freely participate,to at least the same extent as other sectors of the population,at all levels of decision-making in elective institutionsand administrative and other bodies responsible forpolicies and programmes which concern them;(c)establish means for the full development of these peoples’own institutions and initiatives, and in appropriate casesprovide the resources necessary for this purpose.These principles have been elaborated on in the UnitedNations Draft Declaration on the Rights of IndigenousPeoples. Article 19 of the Declaration notes:Indigenous peoples have the right to participate fully, if theyso choose, at all levels of decision-making in matters whichmay affect their rights, lives and destinies through representativeschosen by themselves in accordance with theirown procedures, as well as maintain and develop their ownindigenous decision-making institutions.61

IntroductionArticle 32 also affirms:Indigenous peoples have the right to determine the structuresand to select the membership of their institutions inaccordance with their own procedures.In December 2001, the UN Office of the High Commissionerfor Human Rights, in collaboration withUNCTAD, ILO and WTO, hosted a workshop on ‘Indigenouspeoples, private sector natural resource, energy andmining companies and human rights’, which included a discussionof forest industries. The workshop, which was attendedby the High Commissioner, representatives of theextractive industries, NGOs, Indigenous Peoples’organisations, governments and the international agenciesincluding the World Bank, recognised that:the issue of extractive resource development and humanrights involves a (tripartite) relationship between indigenouspeoples, governments and the private sector. The Workshopalso acknowledged that a precondition for the constructionof equitable relationship between indigenous peoples, Statesand the private sector is the full recognition of indigenouspeoples’ rights to their lands, territories and natural resources.The workshop also recognised:the link between indigenous peoples’ exercise of their rightto self-determination and rights over their lands and resourcesand their capacity to enter into equitable relationshipswith the private sector. It was noted that indigenouspeoples with recognised land and resource rights andpeoples with treaties, agreements or other constructive ar-62

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesrangements, were better able to enter into fruitful relationswith private sector natural resource companies on the basisof free, prior and informed consent than peoples withoutsuch recognised rights. The Workshop recalled the ViennaDeclaration and Programme of Action (paragraph 20 of theDeclaration and paragraph 30 of the Programme) in whichStates recognise the importance of the free and informedparticipation of indigenous peoples in matters affecting themas a means of contributing to their rights and well-being.The Workshop affirmed the importance of economic andsustainable development for the survival and future of IndigenousPeoples. It also considered, in particular, that theright to development means that Indigenous Peoples havethe right to determine their own pace of change, consistentwith their own vision of development, and that this rightshould be respected, including the right to say “No”.This conclusion is important for this study. Effectiveexercise of the right to free, prior and informed consent requiresalso the effective recognition of indigenous peoples’land and resource rights. The two are interrelated and flowfrom the right of peoples to self-determination.Experiences with Principles 2 & 3in Other CountriesThere is much confusion over the practice of certification atthe national level. Certification requires an adequate policycontext and certain incentives to be in place for it to beeffective.(Upton and Bass 1995 29 )The FSC is conceived as an international scheme with standardsthat are compatible throughout the world. Accord-63

Introductioningly, all FSC standards, anywhere in the world, must complywith the ‘FSC Principles and Criteria for Forest Stewardship’.These Principles and Criteria are designed to providethe framework for all other FSC forestry standards andthey incorporate social as well as other requirements, includingenvironmental ones. They are designed to ensurethat the needs of local people are addressed, as well as protectionfor the environment.However, the Principles and Criteria are not designedto be used directly, in the forest. Because social and otherconditions are different in every country, the FSC expectsforest stakeholders at the national or regional level to interpretjust how the generic FSC Principles and Criteria are tobe applied in these national or regional circumstances. It istherefore FSC’s objective that the Principles and Criteria bediscussed and debated in every country in which they are tobe used, with the aim of agreeing national or regional standardsto be applied in that country or region. Once thesestandards have been agreed by a nationally accepted processsthey are sent to the international Board of the FSC for approval.Once approved by the FSC Board, these standardsthen become the standards that must be applied by all forestmanagers seeking FSC certification and all certification bodiesare then required to assess forest management usingthese national standards.None of this has yet happened in Indonesia, but FSC’sexpectation is that Indonesian stakeholders including environmentaland social NGOs, representatives of indigenouspeoples’ organisations and also forest managers, techniciansand forest product traders should form a national workinggroup for them to participate in on an equitable basis to discussthe best way to interpret and implement the FSC Principlesand Criteria in the diverse conditions that are presentin Indonesia. If agreement was achieved, the result would64

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesbe ‘National FSC standard for Indonesia’. This would thenbe used as a minimum requirement for all FSC-approvedevaluations in the country. This kind of process has now takenplace in many countries around the world, including Bolivia,Sweden, parts of Canada and Brazil, as well as several regionsof the USA. Processes are also ongoing in a number ofother countries. The sections which follow summarize howsome of these other countries and regions have interpretedPrinciples 2 & 3 in accordance with local circumstances andseek to draw out certain lessons relevant to the Indonesiancase.BoliviaBolivia was the first developing country to develop nationalcertification standards for the FSC. The initiative was takenby the government in October 1994 and led to a nationalOrganising Committee being established which in turn appointeda Standards Committee. In 1996, these Committeeswere brought under the auspices of a specially created BolivianCouncil for Voluntary Forest Certification. After a longprocess of drafting and redrafting, a set of standards, developedby the Standards Committee and accepted by the threechamberCouncil, was passed to the FSC international Boardfor approval. Final approval for the standards was given in1998. Although no indigenous peoples organizations wererepresented in the Social Chamber of the Council, local communityconcerns were represented by two NGOs and a community-basedorganization representing peasant groups(APCOB), which has had a long history of working in solidaritywith indigenous groups.As required, the Bolivian standards adopt withoutmodification the Principles and Criteria 2&3 of the FSC.Additional Indicators are included to guide compliance. ForPrinciple 2 these include:65

Introduction2.2.1 There exists agreement in the community for long-termforest management and the latter controls the processes relatedto such management.2.2.2 In case the utilisation were to be delegated to third parties,there are clear agreements or contracts in which localand community standards for the control of forest activitiesare respected.2.2.3 The plans for forest management are agreed upon in common,and are based on practices of participative planning,execution and local control.2.3.1 There are no serious conflicts regarding land tenure and/ or possession which may put forest operations at a risk.2.3.2 If a potential for conflicts exists, there are written mechanismsto prevent them. If conflicts arise, there are writtenmechanisms and actions for their resolution, wherein thestrategies for negotiation of the local population arerecognised, and the participation of a mediator accepted bymutual agreement within the legal framework in force. Suchmechanisms are included in the Management Plan.2.3.3 There exists a policy of public relations between the personresponsible for management and the neighbouring communitiesor those affected by the aforesaid management.For Principle 3, the additional indicators adopted are:3.1.1 There exists agreement among the indigenous communityto carry out long-term forest management, and it hascontrol over the procedures related to such management.3.1.2 In case utilisation were to be delegated to third parties,there are clear agreements or contracts in which local andcommunity standards are respected with regard to the controlof forest activities.3.1.3 The plans for forest management are agreed upon incommon, and are based on practices of participative planning,execution and local control.66

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilities3.2.1 Legal or traditional rights or customs of indigenouspeoples, the management or use of their forest resources(timber-yielding and non-timber), have been formallyrecognised and documented in written agreements and, werethis necessary, will be reflected in maps showing the areasconcerned.3.2.2 Indigenous lands have been excluded from the forest concessionor property, with well defined limits, or writtenagreements.3.2.3 If potential conflicts exist, there are written mechanismsto prevent them. If conflicts arise, there are written mechanismsand actions for the resolution of same, in which thestrategies for negotiation of the indigenous population arerecognised as well as the participation of a mediator acceptedby mutual agreement within the legal framework inforce. Such mechanisms are included in the ManagementPlan.3.3.1 The management plan identifies places of special cultural,ecological, economic or religious significance for theindigenous peoples and proposes actions for their protection,with the existence of a written agreement among theparties.3.4.1 If the persons responsible for forest management useknowledge privative of the indigenous peoples, they (theindigenous peoples) are recompensed and acknowledged.3.4.2 If the indigenous peoples participate in different phasesof the management plan, they are adequately recompensed.Such compensation is agreed upon with the consent of theaforesaid peoples. 30SwedenNational standards for the application of FSC Principles andCriteria in Sweden were negotiated between 1994 and 199867

Introductionwithin a standard three-chamber national working group,which included workers’ organisations and institutions representingthe Sami reindeer herders in the social chamber,conservation NGOs in the environment chamber and privatesector companies in the economic chamber. A full consensuson the standards was not achieved owing to strong oppositionto some of the social and environmental safeguardsby institutions representing small forest owners. In the event,the small forest owners agreed to withdraw from the negotiationsrather than veto the process and they allowed anagreement to be achieved among the other players interestedin promoting FSC certifications.The final standards agreed by the large forest ownersand social and environmental chambers include special provisionsfor the maintenance of the rights and activities ofSami reindeer herders - indigenous transhumant pastoralists- even though these rights had never been adequatelyrecognised in Swedish law. Most of the Sami, who continueto graze reindeer, graze their herds during the summermonths in upland areas that are classified as public lands.Logging is not permitted in these areas but Sami reindeerherding, fishing and hunting is permitted subject to a complexset of rules. The Swedish FSC-agreed standards do notrelate to these uplands although a dispute exists aboutwhether the Sami’s land rights are adequately recognizedby the Swedish State in these areas.The reindeer (Rangifer tarandus) is native to the borealforests of Eurasia. In its undomesticated condition itnaturally migrates between summer and winter areas, movingNorth and up into the mountains during the summer andSouth and down into the lowlands in winter. In summer andautumn its diet consists of grass, leaf browse, wild fruitsand especially lichen. In winter, lichen forms an even greaterproportion of its diet.68

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesAbout five centuries ago the Sami in Sweden began todomesticate their reindeer herds, 31 and, following the naturalpattern, they became accustomed to bringing their herdsdown into the lowland forests for the winter months. TheSami do not claim full ownership rights to these lowlandareas but, in accordance with Article 14 and 15 of ILO Convention169, do claim rights to winter-grazing in lowlandforests and on certain intermediate pastures that they havebeen accustomed to use both for grazing and calving whilemoving between their upland and lowland pastures. Broadlyspeaking, government legislation recognizes the Sami’s customaryrights to winter-grazing in lowland forests on Stateland. However, these legal provisions do not extend clearlyto privately owned forests, which comprise the majority ofSweden’s lowland forests.The Swedish FSC working group agreed an interpretationof FSC Principles 3 and 4, which allows for wintergrazingby reindeer herds both in State forests and in privatelyowned forests. The standards also accommodate thefact that in harsh winters, when the deer cannot break throughthick snow crusts, the reindeer require access to old growthforests with pendent lichens in order to survive. The industrial-scalelogging companies and the government have thusagreed to allow Sami access to forests in winter and to setaside 10% of forest concession areas for old-growth to provideareas for reindeer survival in harsh winters. 32The FSC process in Sweden has not been an unblemishedsuccess story. Small-scale private land-owners, whoown up to 50% of Sweden’s forests and up to 75% of Samiwinter-grazing areas, do not accept these standards and haveadopted an aggressive approach to the Sami, suing them inthe courts for continuing their ‘illegal’ access to forests. Samicommunities, unable to provide the documentary evidenceof their customary practices that the courts demand, nowface bankruptcy as punitive court costs are exhausting their69

Introductionfinancial resources.Other Sami are also in dispute with FSC-certified companiesabout the exact interpretation of the new standards. 33Part of the problem seems to result from the lack of proceduralclarity about how the newly agreed principles shouldbe applied. As one of the certifiers, SGS, notes:Social aspects of forest management are not well defined inthe procedures. However, in general these are considered tobe of low importance in Sweden [because the legal frameworkis assumed to be comprehensive]… Accordingly, socialappraisal is not a top priority for forest companies. 34The problem for the Sami is that their rights have notbeen legally secured.The Swedish experience with certification is generallyconsidered to be a positive one. Certainly Sami spokespersonshave made clear that the process of developing nationalstandards did provide them with useful political space toclarify their relations with the timber industry. However, itis also clear that there is considerable room for improvementof their situation, including:• legal recognition of Sami land and grazing rights, especiallyon lands privately owned by third parties• open and participatory negotiation between the governmentand Sami to determine where they enjoy these rights• clear delimitation of these areas• strengthened criteria for community consultations in FSCprocedures.CanadaA Canadian national FSC working group was established in1996 but relatively quickly resolved to develop regional stan-70

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesdards because of the diversity of forest types across the country.35 Given the unresolved nature of indigenous peoples’ landclaims in Canada and the importance of finding a solution, itwas agreed to include a fourth chamber in the process fornegotiating standards, such that an indigenous peoples’chamber would be added to the social, environmental andeconomic chambers. One standard-setting process was completedin 2000 for the eastern maritime provinces of NewBrunswick, Prince Edward Island and Nova Scotia, whilethree further processes, for the Ontario, Boreal Forests andfor British Columbia, are still underway. Standards for theGreat Lakes region developed before the FSC Working Groupgot underway have also been developed but were agreedwithout the participation of indigenous peoples.MaritimesAdopted in 2000, the Maritime standards, as required, includeP&C 2 and 3 unchanged from the originals. They aresupplemented by sub-Criteria and Indicators, which provideforest managers with guidance on how the Principles andCriteria should be adapted to the context in the Maritimes.Notable Indicators for Principles 2 include:• ‘There is documentation showing the legal status of allland and forest that demonstrates legal, long-term (or renewable)rights to manage the land and/or utilize forestresources. The extent of any First Nations’ claims or otherclaims to forest lands (mining, trapline, water permits,easements etc.) are documented. There is evidence of duediligence in establishing clear title.(2.1)• ‘First Nations (see Principle 3), local communities, orother stakeholders, who have recognized legal or customarytenure, or traditional use rights, have been identified(e.g treaty lands, municipal boundaries, water licences,and permits, community watersheds, traplines, traditional71

Introductionhunting or gathering etc.)….. There is evidence that freeand informed consent to forest management activities affectinglegal, customary or traditional use rights has beengiven by affected groups and individuals and their interestshave been accommodated.’(2.2)• ‘There are records of all previous and on-going disputesover aboriginal title (see Principle 3), land use, or tenureand use rights. There is documented evidence of commitmentto resolution of on-going disputes.’ (2.3)Principle 3 is given more detailed treatment. Criterion3.1 restates the need for indigenous peoples to control forestmanagement on their lands and territories unless they delegatecontrol with free and informed consent. Sub-Criterion3.1.1 then notes the special relationship that First Nationshave with Canada and requires that the ‘Rights of FirstNations shall be formally recognized and given fair accommodation.’Indicators related to this Criterion include:• ‘There is documented evidence that efforts have been madeto get First Nations participation in forest managementdecision-making process. The owner/manager has a program/procedurefor consulting with local First Nations.Decision-making incorporates and respects the traditionalknowledge of First Nations. Local First Nations have notchallenged the management plan in court.’(3.1)With respect to Criterion 3.3, an additional sub-Criterion3.3.1 requires that ‘Areas of cultural sensitivity mustbe identified and incorporated in forest management/operationalplans.’ An Indicator associated with this Criterionrequires:• ‘Local First Nations have participated in the identificationof Native values and in the production of native backgroundinformation reports.’(3.3)72

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesTo date, there has been only one FSC certification of atimber operation in the Canadian Maritimes that has affectedindigenous peoples. The Pictou Landing First Nation in NovaScotia has had its community-run forestry operation certifiedand the certifier did not question the government’s‘grant’ of ‘tribal land’ as a basis for tenurial security underPrinciples 2 & 3. 36 An independent assessment of this operationcarried out for the Taiga Rescue Network has concludedthat the operation seems likely to provide real benefitto the community due to its having a clear land title andtenure agreement, and to developmental support provided bythe First Nations Forestry Association, a professional associationof foresters who support First Nations’ rights. 37British ColumbiaUnlike much of the rest of Canada, and with the exceptionof those in the North-East of the Province, 38 the indigenouspeoples of British Columbia have never signed treaties withthe colonial powers or with Canada. Nor have land settlementsbeen negotiated or imposed by other means. 39 Theextent of indigenous peoples’ lands and territories in theProvince is thus legally disputed. Under the Canadian Constitution,a province may not legislate in relation to ‘Indians’or ‘Indian lands’ as these are matters for the Federalgovernment. However, the numerous indigenous peoples ofBritish Columbia have unsettled land claims, which extendover a very large but undefined part of the province. Althougha Federally administered Comprehensive LandClaims Settlement procedure exists, the process is extremelytardy and costly. It is generally thought that it may take yearsor even decades before all outstanding claims are settled inthe Province. The logical corollary is that, in the meantime,the Provincial Government of British Columbia cannot legislateon matters relating directly to the lands and forests73

Introductioncovering the majority of the Province. The Provincial Governmentdisputes this interpretation and takes the positionthat ‘no Aboriginal interests will be acknowledged untilproven except where a treaty is signed.’ 40 This disagreementposes a fundamental challenge to forest industries seekingFSC certification in the Province in terms of compliance withPrinciples 2 & 3.A provincial working group with the task of developingmutually acceptable FSC standards for British Columbiawas established in 1996. 41 Early in the proceedings ofthis working group, indigenous representatives made clearthat they understand the terms of Principle 3 (recognition ofthe legal and customary rights of indigenous peoples to own,use and manage their lands and territories and resources) tomean legal recognition of their right of ‘Aboriginal title’.This is a principle that the government of British Columbiahas been reluctant to accept. The controversy about the interpretationof Principle 3 has contributed to delays in thedevelopment of FSC standards in the Province. 42Aboriginal title is a legal doctrine dating back, at least,to the 15 th and 16 th centuries, which recognizes the rights ofindigenous peoples as owners of their lands. These rightsare conceived as deriving from traditional occupation anduse, and the management of the lands according to custom,prior to the acquisition of sovereignty by a colonial power.The doctrine accepts that the consent of the peoples’ concernedis required before colonists can obtain lands fromthem. In North America, the doctrine was upheld by theRoyal Proclamation of 1763, which reserved all lands westof the Allegheny Mountains for the use of Indian nations.The convention in Canada is that Aboriginal title must besurrendered to the Crown before indigenous lands can beacquired by third parties. 43 The ostensible purpose of thisarrangement has been to provide additional protection againstthe alienation of indigenous land.74

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesAboriginal title implies a proprietary right in the landand the resources pertaining to it, but the exact extent andnature of these rights is determined by the practices, customsand laws of the indigenous people that maintains itsconnection with the land. According to the Canadian SupremeCourt, aboriginal title confers more than a right toengage in site-specific activities, but a right to the land itself,including the right to exclusive use and occupation, andthe right to exclude others from the land. In US and Canadiancourts aboriginal title has been upheld as includingmineral rights, rights to commercially exploit timber, fish,game and water rights. Extinguishment of Aboriginal titlehas been interpreted by the Privy Council as providing abasis for compensation equivalent to the deprivation of ‘fullownership’. 44A legal review carried out for the British Columbiaworking group on the interpretation and application of Principle3 included the following conclusions and recommendations:• Use of an inclusive definition of ‘lands and territories’that conforms to the definitions in ILO Convention 169and the UN Draft Declaration on the Rights of IndigenousPeoples• The existence of a treaty process and set of consultationguidelines is not an acceptable substitute for settlementof land claims• Require that indigenous control of their lands and territoriesbe through formal co-management agreements thatare not merely elaborate consultation guidelines• Vigilance to ensure adherence to ‘informed consent’. 45Regional Standards for British Columbia were agreedin early 2002 and endorsed by FSC Canada in June 2002.They were then sent to the FSC for the consideration andadoption by the FSC’s international Board. They have since75

Introductionbeen critically commented on by FSC Secretariat and sentback to FSC Canada for review. Final approval is still pending.These revised standards have been designed to allowcertification ‘independent of any evolution or changes in caselaw, legislation, or policy,’ with respect to aboriginal rightsand title. 46 They thus allow certification in advance of, andindependently of, any legal resolution of claims made by indigenouspeoples to their lands and resources.The British Columbia standards, which use the term‘First Nations’ to refer to the indigenous peoples referred toin FSC Principles and Crietria, interpret the term ‘legal andcustomary rights’ in Principle 3 to mean:Aboriginal Rights and Title, which are largely self-definedby non-treaty First Nations, or Treaty Rights, which aremutually defined by First Nation and Federal Governmentat the time the treaty is settled. Principle 3 and its four Criteriaidentify rights which specifically relate to FSC certificationand which are protected at the Principle and Criterionlevels. These rights, which may be modified by existingor future treaties, are:• the right to “own, use and manage their lands, territoriesand resources”;• the right to “control forest management on their lands andterritories”;• the right to identify their own “lands, territories and resources”;• the right to freely and knowledgeably grant, withhold orwithdraw consent for forest management within theirlands and territories;• the right to delegate control for forest management andrevoke that delegation; and• the right to protection or accommodation of resource andtenure rights, sites of special significance, and use of intellectualproperty. 4776

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesThe standards also note that there is no requirementthat First Nations must prove their rights or title in courtbefore they need to be consulted by forest managers. 48 Thestandards also provide a number of ‘Indicators’ that need tobe satisfied to assure compliance with Principle 3 and associatedCriteria. These are given as follows:3.1.1 The manager recognizes and respects the legal and customaryrights of the First Nation(s) over their lands, territoriesand resources.3.1.1(i) First Nation(s) formally indicate, clearly, unambiguouslyand normally in writing, that their legal and customaryrights over their lands, territories and resources havebeen recognized and respected.3.1.1(ii) First Nation(s) interests or concerns are clearly incorporatedin the management plan.3.1.2 At the request of the affected First Nation(s), the agreementsoutlined in 3.1.3 and 3.1.5 below are written so they:a) are without prejudice to treaty, land claims settlements,or agreements the First Nation(s) may reach withgovernment;b) cannot be construed that the First Nation(s)accept Provincial Crown title or extinguish their own Aboriginaltitle, and, c) do not derogate from their Aboriginalrights.3.1.3 The Manager has negotiated a protocol agreement(s) withrelevant First Nation(s) that provides for the nature of therelationship between the parties, including: a) how the partieswill establish and conduct their relationship; b) the rolesand responsibilities of the parties; c) the interests of theparties;d) a description of appropriate decision-making authoritiesfor all parties; and, e) provides the framework forsubsequent agreements necessary to give effect to the protocol.3.1.5 The manager has obtained free and informed consent,normally in writing, for the management plan from the ap-77

Introductionpropriate First Nation(s) by either: a) jointly developing theplan according to the process set out in a joint managementagreement, or, b) consulting with the First Nation(s) on theplan.3.1.5(i) The First Nation has the financial, technical and logisticalcapacity to enable them to participate on an informedbasis in planning and decision-making.3.1.6 Conditions under which consent has been given and underwhich it might be withdrawn, if any, are recorded in themanagement plan.3.1.7 Where more than one First Nation is affected by the areabeing proposed for forestry activities, consent from each isordinarily required.3.2.1 Forest management activities within the management unitare planned and implemented in such a way as to maintainthe resources and tenure rights of the First Nation(s), exceptin the following circumstances: a) the First Nation(s)are satisfied with measures to offset the loss or diminishment(e.g., restoration, replacement, monetary compensation,or other consideration); or, b) the First Nation(s) agreeto accept the loss or diminishment.3.3.1 Forest management activities within the management unitare planned and implemented in such a way as to protectsites of special cultural, ecological, economic, or religioussignificance to the First Nation(s) except in the followingcircumstances: a) the First Nation(s) are satisfied with measuresto offset the loss or diminishment (e.g., restoration,replacement, monetary compensation, or other consideration);or, b) the First Nation(s) agree to accept the loss ordiminishment.3.4.1 Where mutually agreed, the manager incorporates FirstNation(s) traditional knowledge into the management planand supporting operational plans and practices.3.4.2 The First Nation(s) maintain control of their traditional78

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesknowledge, and are satisfied that the manager provided faircompensation for any traditional knowledge used. 49The standards also set out clearly what is consideredto be an acceptable form of consultation for the purposes ofsecuring free and informed consent for forestry operationscarried out by third parties on lands claimed by First Nations.The consultation process is designed with First Nations’and is agreed to by both forest manager and First Nation.• The management plan is developed with the FirstNation(s) communities.• The First Nation(s) are satisfied the schedule of consultationis sufficient to provide them with effective involvementin the development and monitoring of the plan.• The First Nation(s) are satisfied their concerns have beenappropriately recorded (e.g., in writing, maps, videos) andhave been incorporated in the management plan as required.• First Nation(s) identify the resources and tenure rightsand the sites of special cultural, ecological, economic, orreligious significance they require to be protected andindicate their locations on maps where appropriate.• The extent to which proposed management activities maythreaten or diminish the resources and tenure rights, orimpact sites of special significance of the First Nation(s)is assessed to the satisfaction of the First Nation(s).• Strategies are developed and implemented to maintain theresources and tenure rights and to protect sites of specialsignificance of the First Nation(s).• The First Nation(s) are satisfied the strategies are sufficientto avoid threatening or diminishing their resourcesand tenure rights and to protect their sites of special significance.79

Introduction• In the case of an unanticipated threat or diminishment toresources or tenure rights or sites of special significancedue to management activities, the First Nation(s) are satisfiedappropriate measures are taken to maintain thoseresources or tenure rights (e.g., stop work, notification,assessment, mapping).• Financial, technical or logistical capacity-building support,in proportion to the scale and intensity of operations,is available to the First Nation(s) where required to assistwith consultation. 50According to these standards, failure either to recognizeand respect the rights of First Nations or to negotiate aprotocol agreement with the First Nations constitute ‘MajorFailures’ that prohibits the awarding of a certificate to theforest management operation. 51BrazilBrazilian civil society engagement with the FSC began withthe founding conference in 1993 but an FSC-approved threechamber national working group only began concerted effortsto develop national standards in 1997. Three series ofconsultations and workshops were then undertaken to developnational standards. These drafts were subsequentlysubjected to field trials and debated in open public consultations.Revised nationally approved standards for certifyingplantations were sent to the FSC for approval in 2001 andfor natural forests in 2002. The natural forest standards arenot yet approved by FSC. The plantation standards constitutethe first FSC-approved certification standards for plantationsadopted by a developing country. In the meantime,FSC accredited certifiers have already certified 15 operationsin Brazil, 10 of which are for plantations. 5280

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesAs Rezende de Azevedo notes ‘by and large, forestoperations in Brazil are the object of conflicts between enterprisesand local communities’. 53 This is because ‘manyforest operations cause adverse effects on the subsistence oflocal communities’. 54 FSC Principles and Criteria 2, 3 and 4thus, potentially, provide important tools to address theseconflicts and resolve them in favour of impoverished andmarginalized groups, in those operations prepared to subjectthemselves to certification.The Brazilian national standards have opted for an inclusiveapproach to the term ‘indigenous peoples’, recognizedunder Principle 3, to include not only Brazilian ‘Indians’but also rural communities engaged in extractivist enterprisessuch as rubber tapping and Brazil nut collectingand quilombos, Afro-Americans who fled slavery to recreateforest-based societies in the Brazilian interior. 55Principle 3 is thus adopted verbatim in the Brazilianstandards except that the term ‘indigenous peoples’ has beensubstituted with the phrase ‘indigenous and traditional communities’.56 The criteria have not only been adjusted to suitthe national context but different forms of the criteria havebeen developed for plantations and natural forests. Thesedifferences are shown in the following table. 57The Brazilian standards also include a series of Indicators,which certifiers will look out for in evaluating compliancewith the principles and criteria. These include suchmeasures as: 59• ‘Negotiations related to forest management with indigenousor traditional communities will be done throughtheir representatives, preferably, assisted by governmentaland non-governmental agencies, that defend the rightsof indigenous or traditional communities, that they appoint.’(natural forests 3.2.1 and plantations 3.2.2)• ‘Negotiations related to management activities shall be81

IntroductionTABLE 1: COMPARING FSC CRITERIA 3 58FSC International Brazilian Plantations Brazilian Natural Forests3.1 Indigenous peoples shallcontrol forest management ontheir lands and territories unlessthey delegate control with freeand informed consent to otheragencies.3.1 Indigenous and / or traditionalcommunities must control forestmanagement activities in theirterritories and lands, unless theydelegate this control to third parties ina free and aware manner.3.1 Indigenous and traditionalcommunities must directly controlthe use of their goods and naturalresources in their territories, butmay establish contracts or the liketo develop and implementmanagement plans.3.2 Forest management shallnot threaten or diminish, eitherdirectly or indirectly, theresources or tenure rights ofindigenous peoples.3.2 Forest management activities shallnot threaten or diminish, directly orindirectly, the resources or rights ofpossession of the indigenous andtraditional communities.3.2 Forest management activitiesshall not threaten or diminish,directly or indirectly, the resourcesor rights of possession of theindigenous and traditionalcommunities.3.3 Sites of special cultural,ecological, economic or religioussignificance to indigenous peoplesshall be clearly identified incooperation with such peoples,and recognized and protected byforest managers.3.3 Sites of special cultural, economic,religious, historical or archaeologicalsignificance to the indigenous andtraditional communities must beidentified clearly (in cooperation withthese communities), recognised andprotected by those responsible for theforest management unit.3.3 Sites of special cultural,economic, religious, historical orarchaeological significance to theindigenous and traditionalcommunities must be identifiedclearly (in cooperation with thesecommunities), recognised andprotected by those responsible forthe forest management unit.3.4 Indigenous peoples shall becompensated for the applicationof their traditional knowledgeregarding the use of forestspecies or management systemsin forest operations. Thiscompensation shall be formallyagreed upon with their free andinformed consent before forestoperations commence.3.4 The indigenous and/or traditionalcommunities must be justlycompensated for the use of thetraditional knowledge regarding theuse of forest species or managementsystems in forest operations. Thiscompensation must be formally andfreely accepted or used subject to theunderstanding and agreement of thesecommunities before the initiation ofcommercial use of this knowledge.3.4 The indigenous and traditionalcommunities must be compensatedfor the use of the traditionalknowledge regarding the use offorest species or managementsystems in forest operations. Thiscompensation must be formally andfreely accepted or used subject tothe understanding and agreement ofthese communities before theinitiation of commercial use of thisknowledge.3.5 Measures must be taken asnecessary to avoid [any] negativesocial impacts from forestmanagement and to promote the valueof the cultural diversity of theindigenous and traditionalcommunities.3.6 Those responsible for the forestmanagement unit must provideinformation about the identity, localeand population of all those indigenousand/or traditional communities wholive in the forest management unit orneighbouring areas, and/or arereclaiming customary rights in thearea that is the object of certification.3.7 The indigenous and/or traditionalcommunities who live in the forestmanagement unit or neighbouringareas, must directly control the use oftheir own natural resources but mayestablish contracts or the like todevelop and implement managementplans in their territories.3.5 Measures must be taken asnecessary to avoid [any] negativesocial impacts from forestmanagement and to promote thevalue of the cultural diversity of theindigenous and traditionalcommunities.82

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesdocumented in writing and / or audiovisual form’. (naturalforests 3.2.3 and plantations 3.2.4)• ‘The communities will be called to discuss the social andenvironmental impacts of the forest management. In whichcase, the one responsible for the forest management unittakes necessary measures to minimize the negative socialand environmental impacts.’ (natural forests 3.2.5similar to plantations 3.3.5)• ‘Workers involved in the forest management should havecertificates of good health and up to date immunization.’(natural forests 3.5.1) ‘….Those workers who are carriersof infectious or contagious diseases will not establishcontact with these communities.’ (plantations 3.5.1)• ‘Evidence if mitigatory measures to address negative impactsfrom the residence or comportment of personnel…’(natural forests 3.5.2 cf. plantations 3.5.2)• ‘The engagement of members of the community in managementactivities will not cause negative impacts on thesocial organization and institutions of the community.’(natural forests 3.5.3, plantations 3.5.3)• ‘Existence of documentary proof of the delegation of controlof forestry activities’ (plantations 3.1.1)• ‘Existence of a map or sketch map, or written documentthat identifies the areas possessed and/or areas customarilyused and such neighbouring areas’ (plantations 3.1.2)• ‘Agreements and negotiations will consider the economicand social sustainability of the indigenous and/or traditionalcommunities with the participation of their representatives.’(plantations 3.2.1)• ‘Forest management contracts involving the lands of indigenousor traditional communities will take account ofthe long term activities, in conformity with the durationof the management plan.’ (plantations 3.2.3)• ‘Forest management activities preferably of native speciesuse indigenous knowledge’ (plantations 3.7.2)83

IntroductionThe Brazilian Constitution and laws notionally providestrong protections of indigenous rights. The law doeshowever maintain State ownership of indigenous territories,granting the indigenous inhabitants rights of possession tothese areas. These rights are ‘permanent’ (subject to Congressionaldecisions to the contrary). Current Brazilian lawdoes not permit logging by outside operators on indigenouslands but does permit plantations in non-forested areas. Theselegal realities explain the main discrepancies between theFSC International P&C and the Brazilian standards and explainthe main differences between the Brazilian standardsfor plantations and natural forests. Natural forest operationsin Brazil have been required to excise indigenous areas fromtheir properties in order to qualify for FSC certifications andunresolved disputes have led to major operations such asAracruz Florestal being refused certificates. 60Brazil has a long and tragic history of unresolved landdisputes and these issues pose a great challenge to the applicationof FSC Principle 2 in the country. Rezende deAzevedo notes one case where the logging company MilMadeira that was seeking FSC certification and in order toaccommodate resident local communities, which did not recognizethe company’s title, first carried out a survey of allcommunities and settlements within the company property,suspended all logging in cutting lots adjacent to the communitiesand then worked with the local government and thecommunities to survey and title their lands and have themexcised from company property. 61As well as adopting a number of additional indicatorsrelated to Criteria 2.1, 2.2. and 2.3, designed to ensure clarificationof forest tenure and community land rights and toguarantee their right of free and informed consent to operationson their lands, an additional Criteria has been addedwhich states:84

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesThe land tenure situation of local communities with directcustomary rights of possession or use of the land must beregularized through documented agreements which securetheir presence in harmony with the forest management activities,or that promote their planned and participatory resettlement,or that provide them with justcompensation.(natural forests 2.4, plantations 2.4)Additional Indicators related to this criterion or alsorequire:• ‘Conflicts, when they exist, shall be resolved justly, andthe agreements shall be satisfactory to both parties’ (naturalforests 2.4.3, plantations 2.4.2)• ‘In the case of conflicts involving local communities, theirresolution shall include the participation of representativesocial organizations (NGO, Trades Union and others)’(natural forests 2.4.4, plantations 2.4.3)It should be noted that a number of problems have beenidentified with the application of these standards in forestscertified to FSC approved standards suggesting that the safeguardsand procedures in Brazil require refinement if theyare to be effective. 62ConclusionsThese precedents provide a number of lessons and suggestionsfor those now seeking to apply FSC standards to theIndonesian situation. These include the following:• The agreement of national standards is a complicated processthat requires detailed discussions with many localinterest groups. Achieving consensus among these interestgroups often takes many years.• Criteria should be adopted which help clarify what con-85

Introductionstitute ‘Major Failures’ of compliance with each Principle.These national standard-setting exercises have givenrise to the following interpretations of Principle 2 and itsassociated criteria.• The aim of the principle is to ensure that there are noconflicting rights over the forest which is being assessed.It thus seeks to ensure that the rights of both the forestmanager and local communities’ are clearly establishedand that acceptable mechanisms are in place to resolveany conflicts in an agreed way.• It applies to both indigenous peoples and other local communitiesand seeks to ensure that local communities’ rightsare legally secure and that the forest managers, if theyare not the local communities, are not in conflict withthese communities.• Two interpretations of Principle 2 are possible. A ‘strong’or ‘legalistic’ interpretation is that local communitiescustomary rights must be legally established. A ‘weak’or ‘pragmatic’ interpretation is that only the forestmanager’s tenure that needs to be legally established.Where this is not the local community, then local communities’customary rights may be secured by othermeans.• These rights should thus be secured through legal titlesor else recognised in written agreements which are partof the management plan.• The management plans likewise should incorporate agreedmechanisms for the resolution of conflicts.• Conflict resolution mechanisms and negotiation processesshould be participatory, transparent and, according to somenational standards, should involve other civil societygroups, such as NGOs and Trades Unions, to help ensurefair play.86

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesWith respect to Principle 3, the following guidance alsoemerges from these national experiences:• The concept of ‘indigenous peoples’ needs to be appliedin an inclusive way to embrace all socially marginalizedgroups with distinctive cultural identities and customarysystems of forest management and use.• Indigenous rights to land and resources should be legallyrecognized in a manner acceptable to the indigenouspeoples. Without this clarity, conflicts or disputes arelikely to arise.• However, where legal recognition has not been achieved,national standard-setting bodies may accept other meansfor the recognition and respect of indigenous rights in orderto allow certification to proceed, subject to indigenousconsent and clearly agreed procedures.• Where mutually accepted legal recognition of rights isnot achieved, the extent of indigenous rights areas shouldbe self-defined by the indigenous peoples concerned. Theyare not required to prove their rights over these areas incourt.• Where indigenous peoples are not the forest managers,the extent of these rights should be formally recognizedin written joint contracts (‘agreements’/‘protocols’)agreed between the forest managers and the indigenouspeoples. These areas should be mapped and the agreementsdocumented and incorporated into managementplans.• One alternative is then to excise all these claimed areasfrom the forest management units.• Alternatively, forest managers should then negotiateagreements with the indigenous people(s) concerned, forthe use of these areas.• These agreements should also be included in the managementplans.• Mechanisms for negotiating these joint agreements should87

Introductionthemselves explicitly recognize and respect indigenousrights and define clearly the roles of the various partiesin future decision-making.• These mutually agreed processes of achieving consentshould be incorporated in the management plans.• Likewise, management plans should also incorporatemutually agreed conflict resolution mechanisms, proceduresfor the documentation of sites of special value andmechanisms for agreeing - and paying compensation for– loss or damage to livelihoods or natural resources orthe use of indigenous knowledge.• All such agreements should be without prejudice to anysubsequent land claims negotiations with the governmentand should not imply any recognition by the indigenouspeoples concerned of State ownership or rights to land orforests or imply the extinction of any indigenous rights.Key Issues for Applicationof Principles and Criteria 2&3 in IndonesiaTo date, there has been no comparable FSC-endorsed nationalor regional standard-setting process in Indonesia toagree how FSC Principles should be applied in Indonesia.Moreover, the Indonesian Government has ratified relativelyfew pieces of international law relevant to indigenouspeoples’ rights. It has not ratified ILO Convention 169 norhas it ratified either the UN Covenant on Civil and PoliticalRights or UN Covenant on Economic, Social and CulturalRights. 63 It has however endorsed the UN Declaration ofHuman Rights, which can be interpreted as placing an obligationon the Government to recognize indigenous peoples’property rights. Indonesia has also ratified the Conventionon the Elimination of Racial Discrimination, thereby accept-88

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesing the principle of prior and informed consent for indigenouspeoples and recognizing their rights to the ownership,control, use and management of their communal lands, territoriesand resources (vide supra). 64 In 1999, the DPRpassed the Human Rights Act which, inter alia, providesfor the protection and recognition of customary (adat) communitiesincluding collectively owned (ulayat) land. 65 (Theconcept of ulayat land is explored below and section 4.3examines the current obstacles to giving practical effect tothis decision.)However, as explained above, the FSC Principles themselvesimply the need for FSC certifications to adhere to internationallyagreed standards, such as those summarized insection 2.4 (above), which may be above those required bynational law. Specifically, the FSC has already agreed thatcertified forest management units should operate in conformitywith the standards set out in the relevant ILO Conventionsregarding the rights and welfare of workers and indigenouspeoples regardless of whether the State has ratifiedthese conventions or not. 66The following sections of this report thus attempt tounpick the key concepts and principles implied by Principlesand Criteria 2&3 in further detail in the Indonesian context.Section 3 seeks to clarify who ‘indigenous peoples’ are inIndonesia and summarises how government agencies havedealt with them. Section 4 summarises what is meant by‘customary rights’ in Indonesia and explains in detail howindigenous peoples’ and other forest-dwelling communities’land and resource rights are dealt with under existing lawsand regulations. Section 5 explores the existing proceduresby which local communities are able to express their viewsand concerns and assesses them against the FSC Principleof ‘free and informed consent’. Section 6 reviews the experienceto date in Indonesia with certifications and explores89

Introductionthe procedures that certifiers have adopted in assessingwhether Principles 2 & 3 have been applied. Given the difficultiesindigenous peoples and other local communitiescurrently experience in Indonesia in securing their rights andexpressing the will, Section 7 then explores current proposalsfor legal and institutional reform, which may fundamentallyreshape the relationship between the IndonesianState and indigenous peoples and local communities. Finally,Section 8 concludes the study with a review of the obstaclesand challenges in the way of proper application of Principles2 & 3 and makes targeted recommendations about how theymay be applied in future.90

3Indigenous Peoplesin IndonesianContext

Indigenous Peoples in Indonesian ContextFSC Principle 3 refers to ‘indigenous peoples’, a termthat has achieved widespread currency in internationaldiscourse. But to whom does this term refer in the Indonesiancontext? This section of the report thus attempts toclarify – as far as the data allow:• who are indigenous peoples in an Indonesian context?• how many are they?• how has the Indonesian government dealt with thesepeoples?• What implications does this have for the ability of thesepeoples to articulate ‘free and informed consent’?Definitions and Numbers: Problems of Lack of DataIn 1986, the United Nations’ Working Group on IndigenousPopulations adopted the following working definition toguide its work:Indigenous communities, peoples and nations are thosewhich, having a historical continuity with pre-invasion andpre-colonial societies that developed on their territories,consider themselves distinct from other sectors of the societiesnow prevailing in those territories, or parts of them.They form at present non-dominant sectors of society andare determined to preserve, develop and transmit to futuregenerations their ancestral territories, and their ethnic identity;as the basis of their continued existence as peoples, inaccordance with their own cultural patterns, social institutionsand legal systems. 67Since 1983 the Working Group, which has met annually,has heard presentations from thousands of indigenousspokespersons from all over the world. Many of these spokes-92

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiespersons are from countries in Asia and Africa that were eithernever colonised by European powers (such as China,Thailand and Japan) or from which colonial settlers mainlywithdrew following decolonisation (such as India and Malaysia).Nevertheless the ‘aboriginal’ or ‘tribal’ peoples inthese countries, whose territories have been administrativelyannexed by emerging independent nation states, experiencediscrimination and a denial of their rights. They thus equatetheir situation with that of other Indigenous Peoples in settlerstates and demand the same rights and consideration. 68Summing up the deliberations of years of work, theChairperson of the UN’s Working Group has concluded:In summary, the factors which modern internationalorganisations and legal experts (including indigenous legalexperts and members of the academic family) have consideredrelevant to understanding the concept of “indigenous”include:a) priority in time with respect the occupation and use of aspecific territory;b) the voluntary perpetuation of cultural distinctiveness, whichmay include aspects of language, social organisation, religionand spiritual values, modes of production, laws andinstitutions;c) self-identification, as well as recognition by other groups,or by State authorities, as a distinct collectivity;d) and an experience of subjugation, exclusion or discrimination,whether or not these conditions persist. 69The International Labour Organization’s ConventionNo.169 applies to both Indigenous and Tribal Peoples andthus includes many such peoples from Asia and Africa. Itascribes both the same rights without discrimination. Article1(2) of ILO Convention No. 169 notes:93

Indigenous Peoples in Indonesian ContextSelf-identification as indigenous or tribal shall be regardedas a fundamental criterion for determining the groups towhich the provisions of this Convention apply.The principle of self-identification has been stronglyendorsed by Indigenous Peoples themselves and has beenadopted in Article 8 of the United Nation’s Draft Declarationon the Rights of Indigenous Peoples. The Draft Declarationis now being reviewed by another special workinggroup of the UN’s Human Rights Commission, with the objectiveof it being adopted during this current ‘InternationalDecade of Indigenous People’. Although disputes betweengovernments about definitions have absorbed a disproportionateamount of time at this Working Group, many internationallawyers agree with Indigenous Peoples that thereis no need for an external definition of the term ‘IndigenousPeoples’. Indeed they note that this is hardly possible as thecomponent term ‘peoples’, which is fundamental to the constitutionof the United Nations, is itself undefined. 70Meanwhile there has been growing acceptance that theterm ‘indigenous peoples’ applies in Asia and Africa. Thenewly established United Nations Permanent Forum on IndigenousIssues, for example, includes representatives ofindigenous peoples from Africa and Asia on its panel. Likewise,the African Commisssion on Human Rights has establisheda working group on indigenous peoples. A number ofAsian governments, such as the Philippines, Nepal and Cambodiahave accepted that the term ‘indigenous peoples’ appliesto marginalized ethnic groups in their countries.Indonesian Government PolicyTowards ‘Indigenous Peoples’: the Suharto yearsIndonesia is a country of some 215 million people belonging94

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesto perhaps 500 ethnic groups speaking as many as 600 differentlanguages. 71 Ever since the 1928 Youth Congress,when the demand for national independence was first clearlyarticulated, the project of nation building has aimed at unitingthese diverse peoples into a single cultural identity. Althougha national policy of cultural tolerance was explicitin the national slogan ‘Unity in Diversity’, during the era of‘Guided Democracy’ (1956-1965) and especially during the‘New Order’ era (1966-1999), a centralized programme ofcultural assimilation got underway.National policies promoted the gradual developmentof rural communities through three stages of social evolutionfrom ‘traditional’ (swadaya) communities, through asecond phase of ‘transitional’ (swakarya) communities, withthe goal of creating ‘developed’ (swasembada) villages ofthe third category. Membership of a mainstream monotheistreligion was a requirement of citizenship and conformity tothe doctrines of pancasila (the five principles) obligatory. 72The diverse customary communities of the ‘tribal’peoples of the archipelago were perceived as posing a seriouschallenge to this programme of national integration. Livingas they did as ‘tribes’ (suku suku) outside the purviewof the administration, they were conceived as dwelling in‘pre-villages’ outside the official classification of villagetypes. Accordingly, under Basic Stipulation on Social Welfare(No. 6/1974), the State expressed an obligation to handlethe ‘national problem’ of these ‘isolated and alien peoples’(masyarakat terasing) and under Presidential Decree No.45 of 1974, this task was entrusted to the Department ofSocial Affairs (DEPSOS). 73 DEPSOS officially describedthese communities as being comprised of ‘people who areisolated and have a limited capacity to communicate withother more advanced groups, resulting in their having backwardattitudes...’ 74 DEPSOS set out its integrationist95

Indigenous Peoples in Indonesian Contextprogramme in startlingly ethnocentric terms:The Indonesian Government has been and is of the resolveto transform the societal status of said isolated communities,so that these communities will become normal communities,as well developed as, and on a par with, the restof Indonesian society. 75To this end DEPSOS implanted community developmentprogrammes aimed at: promoting monotheistic religions;building ‘awareness and understanding of the Stateand Government’; ensuring participation in national development,‘raising their capacity for rational thinking’; increasingeconomic productivity; ‘developing and nurturing theiraesthetic concepts and values… in tune with the values ofIndonesian society’; ‘guiding and inducing [them]… to settlein an area with government administration’. 76 In line withthis programme of social engineering, traditional religionswere proscribed, customary religious paraphernalia burned,traditions of tattooing and ritual practices prohibited,longhouses torched, and shifting cultivation banned.A central plank of the national programme of culturalintegration was the obligatory resettlement of dispersed andisolated communities into large centralised villages underclose government supervision. Some of these villages wereresettled and then targeted for development by DEPSOS itself,while others were inserted into larger settlements madeup of landless settlers resettled from Java and Madura ontothe customary lands of the peoples of the ‘Outer Islands’ inthe government’s Transmigration programme. Still otherswere incorporated as members of the labour force of palmoil and rubber plantations established in ‘conversion forests’.77 Furthermore, because DEPSOS had only a limitedcapacity to reach all these communities, the Ministry of Fo-96

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesrestry 78 itself carried out an extensive programme of resettlementof forest dwellers, targeting the 6 million people it estimatedwere engaged in shifting cultivation, in order to giveunimpeded access to forests to large-scale logging operations.The explicit aim of this programme was to preventshifting cultivation, prevent the loss of valuable timberthrough non-commercial logging and provide unskilledlabour to the logging industry. 79Minister of Home Affairs Regulation 11/1984 and Instruction17/1989 concerning Development and Assistanceto Customary Law Communities in the Regions (PembinaanMasyarakat Hukum Adat di Daerah), instructed Provincialgovernors and district heads (bupati) to make inventories ofthe customary institutions in need of restructuring and toprovide the resources to so change them. Field studies byIndonesian scholars show that the consequences of theseinterventions were to undermine the authority of traditionalleaders and ‘emasculate’ customary institutions. 80Despite criticism of the programme both inside andoutside Indonesia, these policies continued to be applied rightthrough 1980s and 1990s. The policy of DEPSOS was restatedin little changed terms in the Minister of Social Affair’sDecree No 5/1994 at which time the government was estimatingthat 1.5 million, or 300,000 households, fell into itscategory of ‘masyarakat terasing’ 81 Of these, some 160,000had already been resettled by DEPSOS, while a further 1million were still thought to require the agency’s attention. 82Likewise the policy of the Ministry of Forestry and Plantationsto resettle forest dwelling peoples, who were officiallyrenamed masyarakat adat in 1993, 83 also continued.During the latter years of the Suharto era, DEPSOS’programme changed somewhat. 84 In its ideal application,which was rarely realised due to budgetary and personnellimitations, the communities were to be studied for 2 years,97

Indigenous Peoples in Indonesian Contextwhile an inventory of persons and resources, ethnographicinformation and livelihood data were collected. The idea wasto ascertain basic social conditions, needs, potentials, theenvironmental situation and the presence and capacity ofsupportive institutions. Communities would then be classifiedas either very backward or more advanced. In the lattercase the communities were not resettled and instead a ‘stimulusmodel’ of community development was imposed aimedat accelerated social change over a couple of years. The ‘verybackward’ groups, on the other hand, would usually be resettledand then subjected to a gradual process of integrationinto the national society over a period of five years,which aimed at providing them with social services and basicinfrastructure such as roads, housing and electricity.The current administration today admits that the oldapproach was unduly uniform, with the same methods beingapplied to communities from West Sumatra to West Papua.The highly centralised budget and lack of scope for participatorymethods meant that the role of local government inthis programme was restricted to implementation, which wasin reality severely limited. The ‘site manager’, ‘socialworker’ and ‘community representative’ who were assignedto each resettlement community had no control of budgetsand were only given their own houses and a single motorcycleas means towards implementing their assistanceprogrammes.In his last term, President Suharto also established aDepartment of Transmigration and Resettlement of ForestEncroachers, which aimed to speed up the removal of forestdwellers and others residents from forest areas and resettlethem in Transmigration villages. We have not been able toidentify a study of the impacts of this scheme.98

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesA New Policy for Dealing with ‘Indigenous Peoples’In the revised Constitution of 1999, in Article 18 b(2), theState ‘recognizes and respects the unities of adat law communitiesand their traditional rights’. However, in Article28.1 (3), the Constitution stipulates that the ‘cultural identityand rights of traditional communities are to be respected,in line with their evolution in time and civilization’, a phrasethat has been interpreted as still having an assimilationist orintegrationist intent.A careful reading of article 18 of the 1945 constitutionrefutes the argument that the rights of indigenous peoples(masyarakat adat) over their lands and resources werethereby extinguished and became state ‘property’ as a consequence.In the first place, the state never claimed to ‘own’the land and resources, but only to administer them. 85 Secondly,the Zelfbesturende Landchappen, the Kingdoms thatrecognized Dutch sovereignty (recognized in the constitutionalexplanation of article 18 wherein around 250 units ofself-rule were identified [Swapraja]) are different from the‘Volksgemeenschappen’ (recognized as Desa, Marga,Nagari etc identified as masyarakat adat). Thus whereasthe self-governing Swapraja were merged into the governmentadministrative system through the Laws No. 18 & 19/1965, the status of the masyrakat adat lands were not affected.86Nevertheless, during the era of reformasi, a gradualrethink of national policy towards indigenous peoples hasbecome apparent, although the process has been severelydisrupted both by political decentralization and by institutionalreshuffling in the capital. In 1999, DEPSOS was dissolvedand most of the staff retrenched.Just prior to the dissolution of DEPSOS, a new PresidentialDecree was passed on Establishing the Social Welfareof Remote Communities governed by Custom99

Indigenous Peoples in Indonesian Context(Keputusan Menteri Sosial 97/HUK/1999) which articulateda revised policy towards, and a new name for, the target group(Komunitas Adat Terpencil). 87 The government estimatestheir numbers at some 1.3 million, in total, of whom about80% live in State forests. 88According to the Decree, these ‘remote’ communitiesare those with ‘a local and dispersed character that have notbeen involved in social, economic or political networks orservices’. They live in small, homogenous secluded communities,have kinship based social rules, are geographicallyisolated and hard to reach, generally have a subsistenceeconomy, a simple technology, with a high dependence onthe environment and natural resources (Article 1). The mainaim of the policy is to ‘empower the remote communitiesgoverned by custom in all aspects of life and living so thatthey can live normally – physically, mentally and socially –and so that they can play an active role in development, inwhich activities are carried out with very deep concern forlocal traditions’ (Article 2).However, the subsequent dissolution of DEPSOS severelylimited the government’s capacity to implement thenew policy. Retrenched staff sought employment in othergovernment departments or in the newly established provincialand district administrations. Equipment, offices and localfunds were likewise appropriated by these decentralizedagencies, which however, in most cases have not re-establishedany local bureaux charged with indigenous affairs.Social programmes have often got low priority in the newlyestablished regional administrations, which are preoccupiedwith revenue generation and economic development.DEPSOS was restored in 2001 and a renamed ‘Directoratefor the Empowerment of Remote Communities Governedby Custom’ (DPKAT) was re-established within it. Aflurry of new publications and handbooks set out the new100

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesvision of the Directorate. 89 In early 2002, a new MinisterialDecree was passed setting out Operational Guidelines forthe Empowerment of Remote Communities governed byCustom. The guidelines note the importance of respectinghuman rights and responsibilities in line with the five principlesof the nation (pancasila). Empowerment is interpretedas ‘meaning giving a mandate and trust to the local communityto determine its own destiny and select the form of developmentaccording to its own needs, and through the provisionof sanctuary, capacity-building, advancement, consultationand advocacy’. In DEPSOS’ view, however, ‘thelow quality of religious life and understanding, and theirorientation towards the past, traditions, customs and systemsof belief can be an obstacle to the process of change inremote communities governed by custom’. A further obstacleis that sometimes ‘the social-cultural values of the communitiescontradict those of society in general and the developmentprocess itself’. 90Neither the decrees nor the accompanying handbooksmake any mention of land rights but a draft set of TechnicalGuidelines for Efforts to Protect Remote Communities Governedby Custom does note the importance of respecting thesepeoples’ rights to security meaning that ‘in their dwellings,nobody can be disturbed by anyone trespassing on their inhabitedplace or home without the consent of the inhabitant’.The Technical Guidelines also highlight as problemsthe takeover of customary lands as protection forest, nationalparks, conservation areas and logging concessions and thefact that collective land rights (hak ulayat – see section 4.1.1)have not been regularized. 91The Directorate finds its human resources severelydepleted by the institutional changes, despite ongoing supportfor its infrastructural development programme throughan OECF project funded by ‘soft’ loans. Many experienced101

Indigenous Peoples in Indonesian Contextstaff secured other jobs during the period when DEPSOSwas dissolved and a mechanism for effective implementationhas yet to be established, given that, according to Article10 and 11 of the Ministerial Decree, implementation isto be realized by the provincial and district administrations.Personnel note that the new orientation of the Directorateis to enhance self-reliance, with local programmesbeing determined through participatory rural appraisal techniques.Officials admit, however, that although the implementationis now meant to be guided by participatory methodsand devolved to local government initiative, the budgetis still very centralized.Resettlement is still contemplated as part of theprogramme but only where this is required by local circumstances– such as those living in ‘vulnerable zones, protectionforest and border areas’. The Directorate claims that itis tailoring its new programme as far as possible to the requirementsof ILO Convention 169 (although the lack of attentionto land rights leads one to question this) but notesthat ratification of the Convention is unlikely in the shortterm as it is the Ministry of Labour which deals with theILO. Directorate officials complain that, although the newdecrees are designed to be as progressive as possible, localgovernment officials have not been retrained to accept thesenew ideas. PRA methods, it is hoped, will not only help ensurethat assistance programme are locally adapted but willalso help re-orientate local officials.Questioned during this investigation, the Directorateagrees that new mechanisms are needed to secure communities’land rights. Noting that it is impossible to secure communities’lands so long as they remain within State forests,the Directorate states that it is necessary to excise communitylands from the Forest Estate before tenure can be regularizedbecause, notwithstanding the new Constitution re-102

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesspecting indigenous rights, land tenure laws have yet to bechanged. ‘They need to change the [land tenure and forestry]policy and the law if they are to recognize the rights of communitiesin the forests’ notes the head of the Directorate. 92Section 4 of this report details the reasons behind such views.Self-definition of Indonesian ‘Indigenous Peoples’As noted above, Indonesian government policy as developedin the late 1970s and 1980s had already recognized aclass of peoples, officially referred to as ‘suku suku terasing’or ‘masyarakat terasing’ (‘isolated and alien tribes/peoples’), who required special attention in development (seesection 3.2). 93 By the 1990s, this policy was modified andaddressed to ‘remote communities governed by custom’ (seesection 3.3). However both the policy and terminology ofthe government was repudiated by these peoples themselves.The policies had been developed without taking into accountthe aspirations of the communities and the communities wereclassified using imposed and pejorative terms. The opportunityfor self-identification, that is an accepted principle ofinternational human rights law (section 3.1), was not part ofthis ‘top-down’ process.A process of self-definition of Indonesian ‘indigenouspeoples’ began in the 1980s, when representatives of discriminatedcommunities within Indonesia, claiming to be ‘indigenouspeoples’, began to bring their concerns to the attentionof international organizations such as the UnitedNations and began demanding recognition of their rights. Inresponse to these claims, the Indonesian government delegationat the UN made a number of interventions at theUN Working Group on Indigenous Populations denying thatthe concept of ‘indigenous peoples’ applied to Indonesia.103

Indigenous Peoples in Indonesian ContextHowever during the 1990s, through dialogue with theWorld Bank, the Government began to accept that the conceptdid apply to some of the more remote and marginalizedgroups on the ‘Outer Islands’. A working group was established,jointly with World Bank regional staff in Jakarta, todevelop a methodology for the identification of those groupsto which the World Bank’s policy on ‘Indigenous Peoples’should apply. 94 Although a methodology was never agreedon (and the draft definition was contrary to the principle ofself-identification accepted in international law and theWorld Bank’s own policy), the process did encourage theIndonesian authorities to accept that Indonesia does have itsown ‘Indigenous Peoples’ as understood internationally.With the gradual restoration of democracy in the late1990s, a strong and much broader social movement of selfidentified‘Indigenous Peoples’ has emerged questioningprevious government policy and calling for respect for theirrights. These peoples, who refer to themselves collectivelyin Bahasa Indonesia as ‘masyarakat adat’ (a term that canbe glossed as ‘peoples governed by custom’), are far morenumerous and widespread than the set of peoples who hadbeen pejoratively referred to by the government as ‘isolatedand alien tribes’. 95 Activists in the movement ‘guesstimate’that as many 60 or even 120 million Indonesians class themselvesas ‘masyarakat adat’. The authors consider this figurerather high. However, no official or methodical NGOeffort has been made to substantiate these figures.Nor are there any sound statistics regarding the numbersof forest residents in Indonesia. Using projections basedon isolated studies of populations in specific areas and theextent of Indonesia’s forests, rough estimates have been madeof the numbers of long-term forest residents that range between30 and 95 millions. 96 Of these, it has been suggested,as many as ‘40 – 65 millions are indigenous peoples living104

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitieson land classified as public forest and managing their resourcesthrough customary law.’ 97 The absence of reliablecensus data about who lives in Indonesia’s forests is a strongindicator of their political marginalization. Forest peoplesare, literally, off the map.In its contribution to the World Summit on SustainableDevelopment, the Indonesian Minister for the Environmentsubmitted a progress report explicitly setting out the measuresboth the government and civil society organizationshave undertaken in conformity with agreements made at theEarh Summit in 1992 to recognize and strengthen the role ofindigenous peoples. This document refers to adat communitiesas co-terminous with indigenous peoples and may beinterpreted as an official recognition that the term ‘indigenouspeoples’ does indeed apply to Indonesia’s ‘customarycommunities’. 98In sum, the reform era government apparently acceptsthat there are ‘indigenous peoples’ in Indonesia. Thesepeoples are becoming well-organised as a self-defined socialmovement and refer to themselves as ‘indigenouspeoples’ in international discourse and as ‘masyarakat adat’in Bahasa Indonesia.ConclusionsFSC has endorsed the ILO Conventions and accepts the principlethat self-identification should be a fundamental criterionfor defining ‘indigenous peoples’. 99 In Indonesia thisterm is increasingly used by a self-defined social movementof masyarakat adat – communities governed by custom –that includes a very wide number of peoples in Indonesia.These peoples have increasingly begun to refer to themselvesas ‘indigenous peoples’ in international discourse and elementsin the reform era government now seem to accept that105

Indigenous Peoples in Indonesian Contextmasyarakat adat and indigenous peoples are co-terminous.It seems fair to conclude therefore that, in the absence of anational FSC consensus-building process, FSC Principle 3should be interpreted as applying to masyarakat adat. Thisconclusion also takes into account the lesson from the reviewof other national FSC standards (section 2), whichshowed that in other countries, FSC national initiatives havechosen to apply the term ‘indigenous peoples’ in an inclusiveway.106

4Land Tenure andResource Rights:the Law and ItsApplication

Land Tenure and Resource Rights: the Law and Its ApplicationFSC Principle 2 requires that long-term tenure and userights be clearly defined, documented and legally established. As the associated Criteria make clear, clearevidence of these rights is required (2.1) not only to ensurethat a forest manager has legal security to manage forestsfor the long term but also to ensure there are no unresolvedconflicts between resident communities, other forest usersand concessionaires (2.3). Criterion 2.2 further requires thatlocal communities with such rights should maintain controlof their lands “to the extent necessary to protect their rightsor resources”. Adherence to Principle 2 thus requires notonly clarification of the rights of the forest manager but alsothose of any other resident communities or users. Specificallywith respect to indigenous peoples, Principle 3 in additionrequires the recognition and respect for the legal andcustomary rights of indigenous peoples to own, use and managetheir lands, territories and resources.This section of the report thus attempts to answer thefollowing questions:• What does the term ‘customary rights’ mean in the Indonesiancontext?• How can local communities define, document and legallyestablish long-term tenure and use rights in Indonesia?• How can indigenous peoples in Indonesia gain recognitionof, and respect for, their legal and customary rightsto own, use and manage their lands, territories and resources?• Do these tenures provide them with control of their lands?Adat and Land:Basic concepts and administrative interpretationCustom: a traditional or widely accepted way of behav-108

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesing or doing something that is specific to a particular, society,place or time.Customary law: law established or based on customrather than common law or statute. (New Oxford Dictionaryof English).Adat… can mean any of the following: law, rule, precept,morality, usage, custom, agreements, conventions, principles,the act of conforming to the usages of society, decentbehaviour, ceremonial, the practice of magic, sorcery,ritual. The precise meaning of the term depends upon context,but an important underlying sense seems to be the ideaof proper behaviour in one’s relations both with other peopleand with natural phenomena. (Hooker 1978:50)A cornerstone concept in Indonesian law, identity andculture is adat, a word that can be glossed as ‘custom’ butwhich embraces far more than the English term usuallydoes. 100 In Indonesia, the term adat has come to convey muchthat is ‘essential’ to the Indonesian identity, the cultural inheritancethat Indonesians have from their pre-colonial past.A community that observes adat is, moreover, not just onethat observes traditional ways of behaving, but one that isgoverned by customary law, according to customary institutions,and which allocates rights, responsibilities and resourcesand orders relations in line with customary valuesand beliefs. For customary communities, masyarakat adat,custom implies a way of life.The Dutch realized the importance of adat to thepeoples of the Indonesian archipelago early in their imposedrule and, in common with many colonial regimes since theRomans, accepted adat as a more acceptable and practicalway of ordering the lives of their subjects than imposing109

Land Tenure and Resource Rights: the Law and Its Applicationtheir own laws and beliefs. They thus adopted a dualisticlegal system, with one law for Europeans and another basedon adat for their subject peoples. Yet as the colonial embracetightened and administrative interventions intensified,the Dutch also sought to formalize the relations betweenthese two legal regimes. 101Attempts by Dutch legal scholars to document, formalizeand then codify adat, led them to realize the huge varietyof social systems that they were dealing with and yetdiscern what they felt were underlying commonalities ofusage and belief. By the 1930s, they had identified 19 adatareas which, in particular, they distinguished according toperceived commonalities and differences in customary lawsrelating to marriage and the allocation of land and naturalresources. 102 The colonially perceived boundaries betweencustomary rights regions substantially determined the administrativeboundaries of the Netherlands East Indies andthus the provincial boundaries of modern Indonesia. 103The Dutch also formalized customary law in codes,and instituted courts and appellate courts to administer adatand adjudicate disputes. Indirect rule through adat continuedduring the short period of Japanese rule, although intheory a unified judiciary was introduced. 104 With the rise ofan independence movement, beginning in the 1920s, a debatebegan on the extent to which adat should be retainedonce Indonesia was free. Modernists saw adat as a symbolof their backward past in which the Dutch had tried to trapthem, but the majority view which prevailed was that adatrepresented the authentic spirit of free Indonesia (and anywayunderpinned the status of many of the Indonesian eliteat the forefront of the Independence movement). The majorityof Indonesian lawyers also strongly favoured the maintenanceof the adat legal framework established by the Dutch.Moreover, those nationalists advocating a unified modern110

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesstate of Indonesia feared that any abolition of adat mightprovoke religious rivalry and conflict between religious andsecular authorities. 105Adat was thus formally recognized in the Indonesiaconstitution of 1945 and the old legal forms of the Dutchwere substantially retained. The plural legal system continuedto function for a further 15 years, but the governmentgradually dismantled native courts, in North Sumatra in1946, South Sumatra in the 1960s and Kalimantan, Sulawesiand Nusatenggara in the 1970s. 106 Likewise, the authorityof the remaining sultanates, recognized by the Dutch throughthe policy of indirect rule, was abolished in 1965 -Yogyajakarta being the single exception. Legal theory aboutadat did not change drastically upon the establishment ofindependent Indonesia. 107 The basic principle that was retainedwas that adat should be maintained where it doesnot conflict with state law and policy. However, as WorldBank/UNDP lawyers Barber and Churchill point out, ‘thevastly increased capacity of the government to penetrate andorder village life, has meant that the role of adat has shrunkaccordingly’. 108Since independence there has been much scholarlyanalysis and debate about the real intent and impact of Dutchrecognition of adat. 109 An important point which emergesfrom this polemic is that ‘the external, scholarly analysis ofadat upon which much national policy towards adat is baseddoes not in many cases reflect an accurate picture of adat asit functions in the life of the rural communities’. 110 Thereified adat of government and the law, is not the adat of thepeople. 111Forms of Customary TenureA key concept in the legal discussion of Indonesian tenure isthe adat concept of hak ulayat. 112 The term was translated111

Land Tenure and Resource Rights: the Law and Its Applicationby the Dutch legal scholars Van Vollenhoven as meaningthe ‘right of disposal’ 113 and Ter Haar as ‘sovereignty’ 114 . Ithas also been translated as meaning the ‘right of avail’ 115 ,while Burns has translated it as meaning the ‘right of allocation’.116 The truth is that adat regimes generically knownas hak ulayat probably imply all these things in differentcontexts and the difficulties in translation of the term reflectthe difference there is between indigenous customary lawconcepts and western law. Like ‘Aboriginal Title’, hak ulayatderives from custom and precedes any act of the State. 117Under very many of the customary regimes prevalentthroughout the Indonesian archipelago, land is consideredto ‘belong’ to the community as a collective, though it maynot be ‘owned’ by it in accordance with western ideas ofland as an alienable, private property. The community enjoysthe right, subject to its customary rules, commonly referredto as hak ulayat, to ‘allocate’ land within the collectiveterritory to members of the group for their long-termstewardship, or to outsiders for their temporary use. Landsallocated to community members are, in many societies, heritableand even alienable within the group but may not bealienated to outsiders. 118 When such lands are abandoned,remain unclaimed, or have no heirs, they revert to the collective.Hak ulayat can also be seen as a bundle of rightsand, besides implying rights of access to and to use naturalresources, also confers rights to regulate land for use andconservation, supervise the relationships between personsand the land, regulate transfers and the inheritance of landand other resources, as well as the right of representation ofthe community in relations with outsiders. 119 Hak ulayat thusimplies a much greater proprietary relationship with theland than the western concept of ‘ownership’, but in moderninternational law usage corresponds to a substantial degreewith such concepts as ‘Aboriginal title’, or an inalienable,112

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesfreehold, collective right to territory. 120 As Wright notes:‘Hak ulayat is the historical and philosophical cradle of adatland rights…’ 121Summarising existing knowledge of adat rights, Barber,Johnson and Hafild have noted:Under adat:• Land has socio-religious significance, and it is closely connectedto the identity of the group. Matters concerning landcannot easily be separated from matters of kinship, authorityand leadership, modes of subsistence, ritual, and thesupernatural.• In many areas, land and its resources support a broad arrayof seasonally staggered activities. Rotational and shiftingcultivation (swidden), hunting, fishing, and the collectionof forest products generally predominate over sedentary,intensive agriculture or the intensive exploitation of a fewspecies for the market.• Individual, heritable rights in land exist, but most individual‘rights in land’ are either rights of use subsidiary to a superiorgroup right, or rights to particular resources, such asrubber or other trees, or to harvest a particular cultivatedplot. Thus land tenure and resource tenure aren’t necessarilythe same thing, and one parcel of land is often encumberedwith a variety of rights held by different persons andgroups.• Unworked lands are, for the most part, as encumbered byrights as individual garden plots. Land is rarely considered‘empty’.• Rights in land and its resources are rarely recorded in mapsor written records, with the exception of ownership marksplaced on trees and other discrete, individually owned resources.Borders are determined on the basis of natural features,such as rivers, and by mutual understanding. 122113

Land Tenure and Resource Rights: the Law and Its ApplicationThe following sections explore the extent to whichthese customary law concepts of land and territorial rightsare accommodated by current Indonesian Agrarian and ForestryLaws.CUSTOMARY RIGHTS OF HUNTERS AND GATHERERS 123Like other Dayak peoples (see box on Kantu’ below),the Punan groups of Borneo may not have a concept ofterritorial ‘ownership’, in the western sense ofproprietary rights to buy and sell land, but theynevertheless have a clear sense of identifying with aparticular landscape, in which they have prior rights,which they will defend against intruders. Unlike thefarming peoples of Borneo, who tend to conceiveterritories as extending from the river towards thewatersheds, many Punan conceive their territory as amountain massif bounded by the main rivers into whichthe waters drain, the downriver limits of suchterritories being marked by river mouths. In the past,these territories were also extended by conquest.Within the ethnic territory, bands are also associatedwith particular areas to which they have rights basedon their prior occupation of the area. Historically,these territories were not only defended against othermobile groups but also against encroachment byfarmers.WHO ‘OWNS’ THE FOREST? KANTU’ CONCEPTS OF LANDRIGHTS 124The Kantu’ are a ‘Dayak’ people of West Kalimantanwho live along the banks of the northern affluents of114

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesthe Kapuas River bordering Sarawak. They live inlonghouses which are comprised of a row ofindependent household units, referred to as ‘rooms’ or‘doors’ and which nonetheless share a roof and acommon verandah, with shared steps from the raisedfloor leading down to the ground. Although eachindividual household is substantially independent onefrom the other in terms of daily chores, commerce andsubsistence, the longhouse itself is a corporate body –‘a unit of appropriation’ - in which substantial rightsare vested. The longhouse thus has clear rights over acommunal territory, with usually well defined andwidely known boundaries. Within this territory, thelonghouse likewise shares all the footpaths and most ofthe primary forest within the territory. Farmlands andsecondary forest, which are unencumbered withhousehold claims, revert to the longhouse.Based on this territorial right, the longhouse willprohibit anyone from outside the community clearingland within this territory and may also expel anymembers of the longhouse who broach adat rules ofsharing in the labour of opening new farms, ritualproscriptions, who do not participate in long-housemoots and who do not join with others in clearinglonghouse trails. Householders’ shared rights in thecollective territory thus come with sharedresponsibilities.Exclusive household rights in forest land areestablished by the clearance of primary forest. Theserights in land are retained by the household for as longas the area can be distinguished from primary forest.The result is that the shared longhouse territory isoverlaid by a chequerboard of farms and secondaryforests belonging to households. These rights in landare heritable and shared by household membersequally between men and women. Such householdlands may be lent, permanently exchanged, rented outor sold to other households in the longhouse (and also,though rarely, alienated to households of otherlonghouses where there are relatives).115

Land Tenure and Resource Rights: the Law and Its ApplicationClearance of primary forest is also subject to wellknown rules. In the first place, primary forest may notbe cleared in the territory of a neighbouring longhouse.In addition, primary forest of the dimensions of anormal swidden abutting secondary forest and farms isconsidered to belong to those who hold rights to thosesecondary forests and farms. These ‘rights ofadjacency’ do not pass to those renting or borrowinganother’s land. Where two households claim ‘rights ofadjacency’ to the same piece of primary forest, thehousehold which owns a swidden nearest to ordownslope of the disputed area has the superior claim.If two households have swiddens downslope, the rightsof adjacency are deemed to be held by the householdwhich first cleared a swidden downslope. Householdsmay agree not to exercise their rights to adjacentprimary forest and thus permit others to clear the areainstead. In such cases priority is given to those whoseswiddens are nearest. Rights of adjacency then pass tothat household. The logic of this system is that itencourages the sharing of the most fertile riverbanklands among the households, because a household’srights extend by further clearance upslope from thefirst swidden rather than along the riverbank.Because rights to already cleared lands are stronger,such plots may be sold as well as rented, or lent.However, ‘rights of adjacency’ in uncleared primaryforest can only be passed to others and not sold, lentor rented. Disputes over rights to old swiddens areresolved by adjudication of the longhouse headman orother person of rank. Disputed lands may not becleared until the dispute is resolved. Disputes betweenlonghouses over forest lands are adjudicated by supralonghouseauthorities.116

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesCONFLICT OVER LAND TENURE AND OTHER NATURALRESOURCES IN THE MANAGEMENT OF REPONG DAMAR, INKRUI LAMPUNGIntroductionThe systems of land tenure and other natural resourcescontrol practised by coastal indigenous peoplesgrouped in 16 marga (traditional territories) in theDistrict of West Lampung, the Province of Lampung arebroadly similar. These systems are underpinned by aconcept of adat territory and by the managementsystem known as repong damar, a system of landcultivation that started with dry land agriculture, wasthen followed by planting pepper, coffee, fruit trees,and petai as well as other timbers, and whicheventually evolved into an agroforestry systemdominated by damar (Shorea javanica). Damarcultivation has gradually developed since 150 years agowhen there was lack of resin from natural damar trees.Alongside their system of repong damar, as a method ofdamar cultivation, the coastal indigenous peoples alsocultivate rice paddies (sawah), have small gardens, andalso manage river and marine resources. Some ofpolicies of Ministry of Forestry in 1980s and in 1990swere developed with so little understanding andknowledge, and even with a deliberate denial, of thesepeoples’ (indigenous and other local people’s) systemsof land tenure and natural resources management thatthese policies have endangered the sustainability ofrepong damar.The Land Tenure SystemThere are various stories about the origins of thecoastal indigenous peoples in West Lampung, but it isgenerally agreed that they were there long before theDutch came to Indonesia. Indigenous peoples in thisarea speak a language that is different from that117

Land Tenure and Resource Rights: the Law and Its Applicationspoken by indigenous peoples living inland but similarto that of indigenous peoples in Bengkulu and thecoastal indigenous peoples in the eastern coastal areaof Lampung. Kinship among marga members is notbased on lineages but comes through belonging to theterritorial units known as marga. Each marga has itsown chief who is responsible for the various villageswithin the marga. In turn each village has a kepalaadat (head of adat).Each marga has clear boundaries with neighbouringmarga and these territorial units were recognised incolonial documents from the British and Dutch colonialperiods. 125 The marga are also acknowledged by otherneighbouring peoples in the area. Participatorymapping carried out in 1994 in Kampung Malaya(northern coastal area) and later with NGO & LocalGovernment assistance among the others of the 16marga further south has helped make this system ofland management more intelligible to outsiders. 126Although the repong damar, is a relatively new system,it is underpinned by a system of land tenure that hasfunctioned since time immemorial. Within each margarights of ownership are acquired in four ways:• By opening land for cultivation, a job that is donecollectively, after getting the permission from thechief of marga. A person must be a member of one ofthe sixteen marga to acquire land rights in this way.• By inheritance, in which case land is passed to theeldest son or, if there is no son, the eldest daughter.Sale of such land is not allowed and the one whoinherits is expected to look after his extended family.• Younger sons and daughters may also inheritsmaller repong damar. Sale of such land is likewiseprohibited.• Rarely, land rights acquired through clearance(not through inheritance) may also be sold, with landbeing valued according to its productivity in damar. 127118

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesBenefit SharingCustomary rules also set out how the benefits fromrepong damar must be shared out among members ofthe extended family, between the sexes and with nonfamilymembers. Generally, the resin which drips tothe ground is for the children, the resin from the firstthree notches near the ground is for the women, whilethe resin from the upper notches is for the owner. Thedamar is also shared between the owner and workersaccording to agreed ratios varying from 5:5 to 6:4.There is also a rule, known as a pawning system,according to which, when the owner of a repong damarcannot repay his debts, the resin has to be paid to thelender.Conflict resolution within the communityWithin the community, the most common conflictsrelate to inheritance, the cultivation of plants withinrepong damar, theft and control over marga lands.Most of these conflicts are settled without the need forgovernment intervention by bringing the conflict to thehead of adat and then to the chief of the marga. Incase of conflict between marga, the conflict will bebrought to the meeting of the chiefs with the presenceof neighbouring marga leaders. Another kind of conflictis related to the clearance of forest water reservoirs(tanah ralangan) without the permission of the chief ofthe marga for establishing repong damar. Suchconflicts are usually brought directly to the chief to besettled.Division of Labor in the Economy of Repong DamarIn addition to sawah (wet rice paddy), repong damar isvery important in the economies of the indigenouspeoples in the western coastal area of West Lampung.The agroforests not only yield damar resin but alsoother products such as dukuh, petai, coffee, anddurian, etc. The resin is important as it provides a119

Land Tenure and Resource Rights: the Law and Its Applicationsteady cash income. The cash income is also sharedout, according to customary rules, for the variousdifferent tasks involved :• Pengunduh: harvesting resin from the notches byclimbing and putting it into a basket. Yields can reach40 kgs a day.• Mepat: the work of making notches in the trunk ofyoung-age damar (20 –25 years). This must be donecarefully to avoid making too deep a notch which canendanger the tree. In a day a worker can make up to250 notches.• Ngambica: carriers who bring the resin from thegarden to the village. This work is done by both menand women, once they have finished their householdwork, and besides bringing in the resin they also collectfirewood. Every man or woman can bring 15 – 45 kgs ofresin per day.• Penghadang: the collector waits on the boundarybetween the gardens and the village to collect theresin brought in by carriers. There are more than onein each village and their house is also used as thestorehouse for the damar resin.• Pemilah Damar: sorting the resin, usually done inthe village or in the warehouse. This is done by siftingthe resin and separating it out piece by piece based onits quality. The women usually carry out this work andeach of them can sort up to 100 kgs per day.• Cecingkau: is the person who buys the resin andother products from villages. Generally cecingkau is atrader who sells the everyday goods needed by thevillagers. Thus resin and other products can be directlyexchanged for soap, sugar, pails, etc.• Operator Chainshaw or chainshawman is theperson who cuts down the unproductive damar trees tomake into planks or beams and to provide light and120

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesspace in order to enhance the growth, and thus yield,of productive trees.Conflict over control of land between communitiesand Ministry of ForestryA part of adat territory of the 16 marga has beenconsolidated as a Conservation Area (now Bukit BarisanSelatan National Park) following long negotiationsbetween Department of Forestry of Dutch ColonialGovernment and the indigenous peoples. In 1939, thearea was consolidated by official forest designation,forest delineation and official forest decision. Theindigenous peoples still respect the result of thatnegotiation, accepting that part of their customaryland was given to be a State forest area. Theboundaries of the delineated area are likewiserespected. 128In 1984, Department of Forestry of the Republic ofIndonesia reclassified 29,000 ha. of customary land asa State Forest. However, the local communitiesstrongly protested against this designation, when thedelineation process was being carried out in 1988.Consequently, as for many forest areas in Indonesia(see section 4.6) the legal status of the area was neverconsolidated. Notwithstanding, in 1987, the Ministry ofForestry issued a Ministerial Decree granting a loggingconcession over the area to the parastatal company PTInhutani V. The company however has accepted thatalmost the entire area of the concession is cultivatedas repong damar agroforest and has declined to log thearea. 129Many NGOs, local government officials, universityresearchers and research institutions have studied theKrui system and recommended that the governmentrecognize the west coast indigenous peoplesagroforestry system and provide them the security theyseek to maintain their the land as repong damaragroforest. They note that the agroforestry system iseconomically, socially and environmentally viable.121

Land Tenure and Resource Rights: the Law and Its ApplicationIn 1998, the Ministry of Forestry issued SK No. 47/1998denoting 29,000 ha. of Krui as an Area with SpecialPurposes (KDTI). The policy gives an opportunity forthe indigenous peoples to continue cultivating repongdamar in the area for an unlimited time as long as theycan demonstrate that they are indigenous people andmanage the area sustainably. The decision also annulsthe logging concession granted to PT Inhutani V. 130However, it does not provide them the long-term landsecurity that they seek, nor offer a guarantee that noother concessions will be granted in the area. Thereare other problems too resulting from the lack of localcontrol of land, such as illegal logging, and the threatthat the KDTI permit might be annulled by the MoF.The villagers are also concerned that there is nowherefor them to expand the repong damar. In 2001 afurther 600 ha. of forest land was reclassified andbecame the object for the communities to own asprivate lands. This process is still being adjudicated bythe district land office in West Lampung.The Future of Repong DamarThe current repong damar system does provide ameasure of economic security to the Pesisircommunities of West Lampung. It sustains a vigorousbusiness community and enjoys fairly stable prices andgood relations between traders and farmers. The adatland tenure system is still used and respected by thelocal people, who thereby maintain control over theirlands and other natural resources, including throughinheritance and customary conflict resolutionmechanisms. There is, however, outmigration from thearea for those deprived of inheritance or who lack theskills for managing repong damar. The main threatfacing the repong damar cultivation system is theuncertainty resulting from its status as State forest,which means that the Department of Forestry can stillallocate the area to a third party whenever it wants. 131122

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesThe Basic Agrarian Law[T]he general conclusion is that, from a legal perspective,[Indonesian] tenures are complex, use-related and are notat all secure. This is so because they remain continuallyliable to forfeiture to the State, usually without justcompensation…The result is that rather than there being adeveloped system of private land law, there is constant interventionin and control of land tenures by the State. Furthermore,this insecurity is compounded by an astonishingdegree of uncertainty in the Indonesian land law, which isgenerated by the basic provisions of the Basic Agrarian Lawand maintained by successive governments since the lawwas enacted... there is little or no protection of the rights ofindigenous peoples. (World Bank 1999 132 )In 1960, the Indonesian Government enacted Undang-Undang Pokok Agraria No. 5/1960, commonly referred toin English as the Basic Agrarian Law or simply BAL. Thiswas the first national law enacted after independence in1945. 133 The law sought to overturn the legal dualism whichhad been applied by the Dutch, whereby Indonesians andother ‘orientals’ were governed by customary law, whilewesterners and commercial transactions were governed by‘positive’ laws, based on Roman-Dutch legal precedents. Inplace of this dualism, which was seen as paternalistic andcolonial, the BAL attempted to affirm a single system of lawbased on adat. 134 The law thus annulled some of the previousland laws inherited from the Dutch, including the 1870Agrarian Act, the regulations establishing State land rights(domeinverklaring), the agrarian property rights containedin the Royal Decree of 1872 and Book II of the Civil Code.The law also implicitly revoked the colonial proscription onthe alienation of adat lands. 136123

Land Tenure and Resource Rights: the Law and Its ApplicationForms of Tenure Rights implications Main beneficiaries LimitationsHak milikTransferable, right ofownership, may be used ascollateral for loansIndividuals – not available tocorporations or collectivesLand reverts to State ifabandoned or is used‘not in accordance’ withBALHak guna usahaHak guna bangunanTemporary (up to 35 years)transferable, right ofexploitation/ cultivationTemporary right to use (andconstruct) buildingsCompanies Only for areas over 5hectares. Can only beextended for a maximumof a further 25 yearsIndividuals and IndonesiancorporationsThe extent to which the BAL recognizes customarytenures is extremely ambiguous. Article 5 of BAL specificallystates that:Adat law applies to the earth/land, water and the air as longas it does not contradict national and State interests, basedon national unity and Indonesian socialism, and also theother related regulations within this Law and others, all inrespect to the religious laws. 137Land tenure specialist Roger Plant summarizes theMaximum term 50 years.Subject to regulationswhich do not exist.Hak pakai Right of use Individuals on State lands Granted for a definitetermHak sewa Right of lease Individuals Only available forstructures, not availableon State landsHak membuka tanah Right to clear land Individuals Subject to regulationswhich do not existHak memungut-hasilhutanRight to collect forestproduceGranted to individuals byGovt. ‘based on adat’.Subject to regulationswhich do not existHak guna-air Right to use water Granted to individuals byGovt. ‘based on adat’.Subject to regulationswhich do not existHak pemeliharaan danpenangkapan ikanRight to raise and catch fish Not clear Subject to regulationswhich do not existHak guna-ruang-angkasa Right to use airspace Energy companies Subject to regulationswhich do not existHak ulayat Right of usufruct Adat communities on StatelandHak kepunyaanTABLE 2: INDONESIAN LEGAL TENURES MADE SIMPLE 135Right of ‘possession’ (legalmeaning is unclear)Adat communities onunencumbered landCannot be recognized onlands overlappingconcessions. Unclearprocedures exist forrecognition. Subject toregulations which do notexist. No compensationpayable when landexpropriated in nationalinterest.Subject to regulationswhich do not exist. Notimplemented.124

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesBAL thus:The fundamental principles of the BAL can be summarizedas follows. Agrarian law is to be based on adat, but only tothe extent that adat laws and procedures do not conflict withthe national interest. All land rights have to have a socialfunction, with legal relationships over land and resourcesregulated for the maximum prosperity of the people. 138The intent of the BAL was thus to subordinate adat tothe national interest and the State. 139Tenures recognized under the BAL differ substantiallyfrom western concepts of private property but also departnoticeably from adat concepts in that they emphasise individualrights and provide the basis for alienable, individuallyowned land. A series of rights were also invented topromote the interests of private companies. As Indonesianlegal authority Gautama notes, the BAL thus ‘creates itsown hybrid system which is perhaps as different from traditionaladat law as it is from Western law’. 140 Table 1 (previouspage) summarises Indonesian tenures provided underthe BAL and subsequent laws.Article 5 of the BAL also makes clear that ‘other legislation’may override adat law. Notably, GovernmentRegulation No 24 of 1997 sets out rules, which are contraryto adat, on how lands should be certified and registered.This regulation can be interpreted as having frozen the allocationof adat rights ever since the enactment of the BAL on24 September 1960. 141 The BAL in effect, while professingto uphold customary law (hukum adat) in defiance of coloniallegal impositions, in fact entrenched the authority of anew body of imposed laws, known in Indonesia as ‘positivelaw’ (hukum positif). 142The weakness of customary land rights under the BALhas been exposed by the very severe problems faced by In-125

Land Tenure and Resource Rights: the Law and Its Applicationdonesian villagers forcibly resettled by national developmentprojects. For example, the tens of thousands of Javanese villagersforced off their lands by the World Bank-fundedKedung Ombo dam in the late 1980s, received nugatory compensation.Many were intimidated into participating in theTransmigration programme. After national and internationalprotests, development agency investigations into the legalityof this process of dispossession revealed that the governmentfelt entitled to extinguish customary land rights wheneverit wanted to. Whereas, in most countries, the State’spower of ‘eminent domain’ (the right to expropriate privateproperty in the national interest), is heavily conditioned byprotections of the rights of property holders to fair compensation,in Indonesia the mere fact that a developmentprogramme is mentioned in a government ‘five year plan’(pelita) is interpreted by government functionaries as sufficientevidence of the ‘national interest’. 143 Indigenous communitiesstanding in the way of government-sponsored Transmigrationprogrammes have lost heavily as a result. 144As World Bank consultant Warren Wright observes:The subjection of adat land law to the national interest basedon the unity of the nation meant that adat authority mustcrumble whenever it came into conflict with the exercise ofauthority by the central State because the State cannot tolerateany other source of authority other than its own. 145Even greater obstacles confront those seeking land securityunder other forms of tenures aside from hak milik.Many of these tenures, are meant to be applied by regulationssetting out how they should be applied and registered.As Wright again notes:40 years after the enactment of the Basic Agrarian Law, these126

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiescritically important implementing regulations still do notexist. The continuing failure to enact implementing regulationsmandated by the BAL concerning the creation andtransfer of adat land means that a second major source oflegal uncertainty prevails. How and, indeed, whether newrights on land can come into existence in accordance withadat law and, if they can come into existence according tolocal adat, how they may be transferred remain unclear questions.146Hak UlayatThe main form of tenure found among forest-dwelling indigenouspeoples in Indonesia is that referred to by the catchallterm hak ulayat (see 4.1.1 above). Contrary to indigenousviews, this right has been interpreted as a right pertainingto State lands an interpretation reaffirmed in GovernmentRegulation No 24 of 1997 Re. Land Registration.This is based on a highly restrictive understanding of Article33 (3) of the Constitution which gives the State theright to control natural resources. As Asian DevelopmentBank consultants Safitri and Bosko note this has been:Interpreted and implemented as to enable the state (the government),for the purpose of national development, to grantrights over uncultivated adat/ulayat land or forest withoutthe need of obtaining consent of the relevant adat communityand without triggering the legal obligation to pay ‘adequate’compensation to the adat community which holdsthe ulayat right over that land and forest. This policy hasbeen applied most notably in relation to the granting of timberconcessions to the logging companies, granting of miningconcessions to mining companies, the declaration anddemarcation of protected forests, and the allocation of landfor transmigration projects. This resulted in the processes127

Land Tenure and Resource Rights: the Law and Its Applicationof displacement, dispossession and marginalization of indigenouspeoples, together with the loss of their culturalintegrity. 147Article 3 of the BAL states:In view of the provisions contained in paragraphs (1) and(2) of Article 2, the implementation of ulayat rights andother similar rights of adat-law communities – as long assuch communities in reality exist – shall be such that it isconsistent with the nation’s interests and the interests ofthe State based on national unity and shall not contradictthe laws and regulation of higher levels.The General Elucidation of the BAL further notes:It would not be justifiable for an adat community… to rejecta plan of large-scale clearing of forests on an on-goingbasis, which is required for the implementation of projectsfor food production or relocation of people. Experienceshows that regional development is impeded by problemsrelated to hak ulayat. The interests of the adat communityshould be subordinated to the broader interests of the nationand of the State and the implementation of hak ulayatshould also be consistent with the broader interests. 148The Indonesian Government has thus been extremelyreluctant to tolerate, let alone effectively ‘recognize and respect’hak ulayat. Instead, the emphasis of the BAL is onthe provision of individual ownership and recognition ofcollective rights is ‘tokenistic and superficial’. Hak ulayatis not recognized in juridical terms. 149An additional problem for those who hold land underadat, is that the collective lands may be gradually broken128

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesup as individuals acquire private land ownership rights (hakmilik) within customary lands. Contrary to adat traditions,under the BAL, such lands do not revert to the collectivewhen abandoned but instead revert to the State. Moreover,the determination of abandonment or misuse of land may bemade by a simple decision of the executive. As Wright explains‘through such processes, the original territory of theadat community will be diminished until eventually it disappears’.150 Barber and Churchill observe, moreover, thatsuch a procedure is rarely invoked by the adat holder ofland of his own initiative, but only when another party wantsto acquire adat land. Land titling is thus really a procedurefor the transfer rather than for the recognition of landrights. 151The process is positively endorsed by Article 4 of theRegulation of the Minister for Agrarian Affairs No 5 of1999. 152 Indeed Budi Harsono, an acknowledged expert onthe BAL, argues that the BAL is instrumental in restructuringadat communities, obliging them to abandon collectiveland use patterns and adopt individualized land entitlements.153The same Regulation, titled Concerning Guidelines forthe Settlement of Hak Ulayat Issues of the Adat Community,does however recommend a mechanism for the registrationof hak ulayat. Article 5(1) provides for the RegionalGovernment to investigate and determine whether ulayatexists with the participation of adat law experts, the adatlaw community, NGOs and other institutions involved in themanagement of natural resources. Under Article 2(1) theGuidelines recommend that such lands shall be drawn cartographicallyon the land registration base map ‘if possibleby drawing the boundaries and recording them in the landregister.’ Implementation of these Guidelines apparently nowrequire the enactment of Regional Government regulations129

Land Tenure and Resource Rights: the Law and Its Applicationbefore they can be applied in practice, however the Regulationdoes not provide legal security of any rights. Wrightnotes ‘the regulation is neither adequate in itself to deal withthe problems of hak ulayat nor does it apply to forest areaswhich are outside the jurisdiction of the National LandAgency…’ 154 (and see section 4.3).A further critical problem relates to the lack of legalpersonality of customary law communities. Under existinglaws, no corporate entities or collectives may own land rightssave for those specifically designated by Government RegulationNo 38 of 1963. ‘An adat community enjoys no legalstatus under existing law let alone being recognized as acorporate entity capable of owning land rights’. 155Following the AMAN Congress of March 1999, atwhich the Minister for Agrarian Affairs, Hasan Basri Durin,promised to issue a policy to recognize adat land rights,Ministerial Regulation No 5/1999 was passed. The regulationcreates a new category of land rights – hak kepunyaan– which has been translated as meaning a ‘right of possession’.Under the regulation, an adat community may be recognizedby the local legislature at the kabupaten level andgiven a register number and recorded in the land book of theBPN (see section 7.5 for examples).Land tenure scholars now dispute the legal implicationsof this regulation and the meaning of the term – hakkepunyaan – as this is not found elsewhere in the law. Theactual rights conferred by the law are therefore unclear.According to Maria Ruwiastuti, these rights may only beregistered for areas which do not overlap existing rights andconcessions. 156 The ADB defines it merely as ‘a right to reapthe benefits of the natural resources, including land, in thesaid area for survival and livelihood’ – in other words a weakright of usufruct. 157World Bank land tenure expert Warren Wright concludes:130

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesWhat is required is an Act of the Indonesian Parliament todeal comprehensively with hak ulayat. Until that occurs,the difficult issues associated with hak ulayat will continue.158Maria Sumardjono, Professor of Law at Gajah MadahUniversity and Vice Director of the National Land AdministrationAgency (BPN), likewise asserts:Some explicit clarification is…required about what is meantby recognition of ulayat rights and such clarification needsto be stated in a piece of legislation that can serve as a fairbasis for settling the existing cases of ulayat land and formanaging ulayat rights. If neglected, the ulayat rights issuewill be a time bomb that is ready to explode anytime. 159Land AgencyArticle 19 of the BAL says that land registration is to becarried out throughout the whole of Indonesia to providelegal certainty. This process is to be implemented accordingto the provisions of Government Regulation No 10 of 1961Concerning Land Registration. Land registration is to proceedin two main steps, first, the surveying and registrationof the land itself in the land registry and, second, the registrationof rights to land in the form of titles. The emphasis ofthe latter stage is on the provision a titles (sertifikat) to thoseclaiming hak milik. The BAL and the Regulation passed theresponsibility for administering this process to the BPN(Badan Pertanahan Nasional) and its subsidiary bodies,with the overall policy being the preserve of the nationalplanning agency BAPPENAS. However, the capacity of theseagencies to actually implement the law has been deficient. 160131

Land Tenure and Resource Rights: the Law and Its ApplicationAccording to the World Bank, which is just embarkingon a second long-term project to strengthen the capacity ofthe land administration in Indonesia:Only about 14 million of the nation’s estimated 70 millionland parcels (20 percent) have been registered in the 40 yearssince land registration began. If the current pace of registrationcontinues, land registration would never catch upwith the total number of parcels, since this total is estimatedto be growing by more than 1 million parcels per year. Themain reasons for such a low coverage are the weak institutionalcapacity of the [District Land Offices], complex andoverlapping patterns of land tenure, absence of documentation,long-term disputes and unclear procedures for adjudication,large number of parcels, and rapid increase in thenumber of parcels. Even where titling has been substantiallycompleted, the number of registrations of transactionssubsequent to the titling are low and threaten the integrityof the land records as does poor records management. 161Further:…the land administration institutions are, generally, poorlyfocused and commonly resented. Until 1999, non-forest landmatters were administered by the National Land AdministrationAgency (BPN), a central agency reporting directlyto the President and controlling a network of some 300 DistrictLand Offices. BPN has been characterized as over-centralized,unresponsive to landholders, secretive, and usedin ways incompatible with good governance. Overall landpolicy was the responsibility of BAPPENAS whose role wasmarginal at best because of the weak policy position…. 162Registration and certification of collective rights hasbeen even more deficient. Again according to the World132

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesBank:While the [BAL] established that Indonesian land law wouldbe based on highly diverse adat laws, most of the implementinglaws, decrees, and regulations needed to clearlydefine the land rights specified in the [BAL] have not beenenacted, at least partly, because there is no clear policy forthe legal framework to support. This gives administrators awide amount of discretion in interpreting the law and inallocation of land rights with little basis for fair resolutionof tenure disputes… communal rights of traditional societies(hak ulayat) were ignored by formal policy. Contrary tothe requirement of Law No. 20 of 1961 on Revocation ofRights on Land, formal land expropriation procedures arenot used and unfair bargaining mechanisms are used to forceout landholders. Appeals to the courts are rarely successfuland confidence in the court’s impartiality in enforcing thelaws and their intent has been eroded. Legal and regulatoryreform is needed but must be preceded by an inclusive consensuson the policies and objectives that they will support.163In 1999, as part of a country-wide process of decentralization,far greater powers for the allocation of landrights, land registration, and dispute resolution were conferredon the 268 District (kabupaten) governments, eachof which has it own legislature, district head (bupati) andexecutive. 164 The process of land titling is thus in a phase oftransition (see also section 7.3).The Forestry ActOne of the most difficult issues for consensus is the policyfor land under control of the Ministry of Forestry. This land133

Land Tenure and Resource Rights: the Law and Its Applicationamounts to about 70% of the total land in Indonesia. Muchof this land is not forested, and the Ministry effectivelymaintains a parallel land administration system for urbanand farm land within the forest boundary that is even lesstransparent than that of BPN. The boundary itself is unclearand registration of private land rights in these areas isdifficult. Even more difficult, is establishing customary landrights within the forest estate. Probably most forest landhas been used by ethnic communities for many generationsand the land rights are recognized within and amongcommunities.(World Bank 2000 165 )In 1967, the Indonesian Government promulgated ActNo 5, Undang-Undang Pokok tentang Kehutanan, whichis referred to in English as the Basic Forestry Law (BFL).The BFL radically redefined the property rights of the tensof millions of Indonesians living in areas that were to beclassified as ‘State Forest’. BFL had the aim of promoting arapid process of national development based on the exploitationof natural resources by facilitating the access of largecompanies to forests. 166During the 1970s, an administrative convention developedby which all lands classified as forests would be administeredby the Ministry of Forestry according to the BFL,while all other lands would be subject to the BAL to beadministered by BPN. The Ministry of Forestry thus assumesthat the BAL does not apply in forests, an interpretation thatappears to have no legal basis. 167Under BFL forests are divided into two categories:‘proprietary forests’ (hutan milik), being those areas of forestswhere land titles have already been secured, and ‘Stateforest’(hutan negara), where property rights are notrecognised. Forest dwellers claiming adat rights, such ashak ulayat, find their lands subsumed into the latter areas.The degree to which adat communities may continue to ex-134

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesercise their rights varies with the classification of the forest.Rights in ‘Conversion Forests’ are effectively extinguishedthrough the clearance of natural forests in the nationalinterest and the land is are transferred to the jurisdictionof BPN under the BAL. In ‘Production Forests’ traditionalrights to hunt and gather may be exercised relativelyfreely, but only the minor and incidental usages are permittedin ‘Protection Forests’. 168However, while recognising the existence of adatrights, following the interpretation in the BAL, the BFL treatsthese as weak rights of usufruct, and explicitly subordinatesthem to the national interest: logging. Article 7 of the BFLthus notes: ‘Implementation of ulayat rights should not hinderthe fulfilment of the aims of this Act’, a point reiterated inArticle 17. This charge is further clarified in ImplementingRegulation No 21 of 1971, Concerning the Right of ForestExploitation and the Right to Harvest Forest Products whichstipulates in Article 6(1): ‘the rights of adat law communitiesand their members to extract forest products… shall bearranged in a proper manner so as not to interfere with theimplementation of forest utilization’. 169Under the BFL, forests, that is both State and proprietaryforests, which have not yet been defined and whichtogether are claimed to include 70% of the national territory(but see sections 4.5 and 4.6), come under the direct jurisdictionof the Forestry Department and are considered, byadministrative convention but not by law, to be excludedfrom the jurisdiction of the BPN and the Department of Agriculture.170 De facto, the Forest Department acts as if it werethe owner of forests. 171Both the BFL itself and the way it has been interpretedhave been roundly condemned by legal analysts. FAO ForestryLaw Consultant Charles Zerner has characterised theclassification of State forests as lands unencumbered by propertyrights as:135

Land Tenure and Resource Rights: the Law and Its Applicationa potent legal fiction that is factually inaccurate and sociallyproblematic. The vast expanses of Indonesia’s designatedstate forest lands are in fact inhabited or directly usedby approximately 30 million people. 172Under Government Regulation No 28 of 1985 on ForestProtection further restrictions on the exercise of customaryrights were subsequently applied. Shifting cultivation,cutting, harvesting, unauthorized occupation or workingof forests were all criminalized and the forest police weregive authority to investigate violations and prepare casesagainst offenders. 173The BFL laid the basis for the intensive exploitationof Indonesia’s forests, which were first zoned as protection,production or conversion forests and then handed out to loggingcompanies and land developers. Production forests wereopened up to concessionaires as KPH (KersatuanPemangkuan Hutan) on Java and as HPH (HakPengusahaan Hutan) on the Outer Islands. Production forestscould also be developed as tree plantations under PIR(Nucleus Estates) schemes, mainly oil palm plantations,which were often supplied with labour through the TransmigrationProgramme, whereby the ‘surplus people’, mainlyfrom Java and Madura, were transported and resettled inoutlying provinces. 174 In 1990, the Forestry Department alsoinitiated a fourth form of concession, HTI (Hutan TanamuanIndustri), under which concessionaires could clearfell degradednatural forests and replant with fast-growing softwoodssuitable for use in the pulp and paper industry. 175Currently there are 57 KPH concessions, 420 HPH concessionsand 183 HTI concessions in Indonesia.The problem remained, however, that the simple assertionby the state of control of natural resources and thesubordination of adat to state decisions and interests, didnot cause adat rights-holders to vanish. The 30 years of in-136

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiestensive forest exploitation that followed the promulgation ofthe BFL have thus been characterised by continuous landdisputes and local resistance. An attempt to resolve theseconflicts was made by the Government in 1976 through PresidentialInstruction No 1 Concerning the Synchronisation ofImplementation of Agrarian Affairs with the Forestry, Mining,Transmigration and Public Works Sectors. With respectto adat the instruction notes:Where a piece of land (intended as part of a HPH) is controlledby the local adat community under a valid right (hakyang sah), that land must be cleared (of those rights) at theoutset with the payment of compensation…Where the holderof a HPH needs to close off an area with the result that thelocal community cannot enjoy adat rights, the HPH holdermust give compensation to the community.As Barber and Churchill point out, the trouble is thatit remains unclear what a ‘valid right’ is. 176In 1999, after intense advocacy by civil society groupsdemanding a more just process of allocating rights in forests,the 1967 BFL was revoked and replaced by a new BasicForestry Act No 41. However, the new law retains thesame provisions as the 1967 BFL regarding the recognitionof hak ulayat. Article 1(4) of the 1999 BFL notes that ‘Stateforest is forest situated on a piece of land not covered by anyproprietary rights’. The same is reiterated in the ExplanatoryMemorandum accompanying the new law, which notesthat ‘included in this category (State forest) are forests formerlycontrolled by adat communities known as ulayat forest,marga forest, or another name…. Adat forest is stateforests in the territory of an adat community.’ 177 The resultis that although adat forests are a new category of forest,this is still within the State Forest Zone and no clear rightsare conferred on adat communities. 178 At the same time, ar-137

Land Tenure and Resource Rights: the Law and Its Applicationticle 1(4) of the new Basic Forestry Act rejects the conceptof adat rights as some kind of ownership right regulated inthe BAL, PP 24/1997 re Land Registration and Permen 5/1999.The Ministry of Forestry also imposes the use of thenew Forestry Act No 41/1999 on the whole area that hasbeen designated as State Forest Land, currently 120 millionhectares of the land base of Indonesia, in place of the BasicAgrarian Law that allows, albeit weak, recognition of therights of masyarakat adat to their lands. The administrativeagreement between the Ministry of Forestry and the NationalLand Bureau to segregate the areas under their jurisdictions,applying the BAL in one and the BFL in the other, seriouslydisadvantages those communities whose lands fall insideareas designated as State forest lands. According to administrativeconvention, in these areas, the communities cannotown their land but can only get management rights to it,through long procedures which are not yet regulated norclarified through implementation guidelines. 179 (see section4.9 for further details).The Forest Gazettement ProcessIn what could be considered one of the largest land grabs inhistory, the government implemented a forest zonation systemthat classified most of the Outer Islands as forestlands.Seventy-eight percent of Indonesia, or more than 140 millionhectares were placed under the responsibility of theDepartment of Forestry and Estate Crops. This included over90% of the outer islands. Estimates place as many as 65million people living within these areas. According to theDepartment of Forestry, the creation of the State forest zoneauthomatically nullified local adat rights, making thousands138

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesof communities invisible to the forest management planningprocess and squatters on their ancestral lands. As aresult, logging concessions, timber plantations, protectedareas, and government-sponsored migration schemes havebeen directly overlaid on millions of hectares of communitylands, causing widespread conflict. Yet, in fact for manylocal people, traditional law, or hukum adat, still governsnatural resource management practices.( International Centrefor Research in Agroforestry 180 )Under Article 1(4) of the 1967 BFL ‘the determinationof forestlands is to be controlled and defended by theMinistry of Forestry’. 181 Government Regulation No. 33/1970 on Forest Planning required the Ministry to reserveland as forest areas. Official Decision 85/1974 then set outthe general procedures for forest gazettement. 182 Basically,these pieces of legislation reaffirmed the procedures laiddown by the Ministry of Forestry in Dutch colonial era,whereby the State determines the State’s forest area througha three stage process of designating an area according toits land use function, delineating the boundaries and thenfinally gazetting this area as ‘forest’ with a certain classifieduse through an official decision. The policy also setout procedures to determine whether an area is public landor not. (See table 3).TABLE 3: INDONESIAN FOREST GAZETTEMENT MADE SIMPLEEra Designation Boundary definition Official decisionColonial era Ministry of Forestry Local forestry team and Provincial Residentadat communityNew Order era(1970s and1980s)New Order era(1990s)Ministry of Forestry Bip. Hut. Ministry ofAgricultureMinistry of Forestry PTB headed by bupati BATB and KHTCurrent eraMinistry of Forestry byconsidering ProvinceSpatial PlanDistrict government withPTB and adat communityBATB and Ministry ofForestry139

Land Tenure and Resource Rights: the Law and Its ApplicationThe main difference between the various procedureslies in the location of the authority to carry out the varioussteps of forest gazettement. In the Dutch colonial era, theMinistry of Forestry (Bosswessen) only designated forestsand arranged forest boundaries technically, while final officialdecisions lay with the provincial colonial government.In the New Order era, the Ministry of Forestry had responsibilityfor both the designation and border arrangement,while the Ministry of Agriculture made the final decisions.Since decentralization, the designation of forests is carriedout by the Ministry of Forestry, taking into account provincialspatial planning, the boundaries are defined by localgovernment (kabupaten/City government), with the aim ofensuring that communities can participate in boundary definitionarrangement. The final decision is then made by theMinistry of Forestry. 183The Implementationof State’s Forest Gazettement PolicyNot only has the forest gazettement policy changed severaltimes, the implementation of these procedures has been verydeficient. The administrative process is long and complicatedand much of the work of implementation is leased to otherparties, with the result that many of the legally required proceduresare often omitted. When in 1978 the task for decidingforest boundaries was passed from the Provincial ForestryOffice (Bip. Hut.) to a boundary definition committee(Panitia Tata Batas (PTB)), which was headed by the bupatifrom 1990 onwards, further misunderstandings arose. 184Studies carried out for this review show that thehectarage of State forest land increased progressively until1984 (see figure 1). At that time the Ministry of Forestrydesignated 143 million hectares of land as ‘forests’. How-140

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesever, between 1999 and 2001, Provincial Spatial Planningexercises were carried out to determine more precisely theboundaries of these forest zones. This resulted in some 20million hectares being re-classified as outside official ‘forests’.The current total of ‘State forest land’ is estimated tobe some 120 million hectares. 185But beside this, there have also been serious deficienciesin the process of boundary definition. Because of widespreadresistance by local communities to the designation oftheir lands as State forest land, the legal document of forestdelineation (Berita Acara Tata Batas/BATB) cannot befinalised (and see section 7.4). Additional complications arisefrom the fact when concessions are handed out, concessionairesare contractually obligated to delineate their own concessionboundaries (see also section 4.8). Where these concessionboundaries follow the boundary of State forest lands,the concessionaires are expected to pay for and carry outjoint delineation along with personnel from the Ministry ofForestry. These processes are very often delayed or incompletelycarried out. The result is that no legally binding decisionon these areas has ever been made officially. In fact,our research shows that only 10% (12 million hectares) ofthe approximately 120 million hectares designated as Stateforest land has yet been officially delineated and decided. 186Therefore, 90% of all State forest lands have uncertainlegality and the status of the 10%, on which final decisionshave been made, is still disputed by many communities.Since the promotion of decentralization in 1999, bupatihave become increasingly critical of the forest gazettementprocess. There are loud calls for a rigorous review of thestatus of State forest lands, while at the same time manylong submerged conflicts have surfaced as local communitiesseek to reclaim rights to their lands, which they feelwere unjustly classified as state forest land. 187 A study con-141

Land Tenure and Resource Rights: the Law and Its Applicationducted by the International Center for Research inAgroforestry in 2000 showed that about half of all StateForests, that is half of the total 143 million hectares thenclassified as ‘forest’ by the Ministry of Forestry, are actuallydominated by agro-forests, agricultural lands and settlements.ICRAF has recommended that these areas be excisedfrom the State’s forest area in order to dampen land conflictsin the forest area, while priority then be given to decidingwhich of the remaining areas should be maintainedas forests. 188 Likewise a World Bank study of 2002, basedon the latest data from landsat satellites, has recommendedthat 30 million hectares out of the current 120 hectares ofState forest land, which are not categorized as protected forest,should be excised from the State’s forest lands. 189The KPH, HPH and HTI systemThis report examines in turn the three main types of forestryconcessions in Indonesia being forest concessions on Java(KPH), forest concessions on the Outer Islands (HPH) andtimber plantation concessions on the Outer Islands (HTI).Forest Concession on Java(KPH)Whereas most forest lands on the outer islands were arrogatedto the State and then allocated to forest concessionairesfollowing independence, on Java this system of assertingcentralised control over forests was instigated by theDutch colonial State at the beginning of the 19 th century.Forest lands were arrogated to the colonial State, assignedto the jurisdiction of an emergent forestry department, whilethe rights of local communities were overridden or limitedto small areas of permanent cultivation. Disputes were defused,in part, by introducing the taungya system, pioneeredby the British in Burma, under which local villagers were142

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiespermitted to cultivate crops between rows of teak saplingsfor a few years. In Java this system is now known as tumpangsari. However disputes between the local communities andforesters - over land rights, access and use rights, employmentconditions and the system of penalties – have been verywidespread and long-standing. 190In 1972, control over 1.8 million hectares of productionforest and protected forest on Java was given to aparastatal timber company, Perum Perhutani, for an unlimitedperiod. The area was later extended expanded in 1978(GR 2/1978) to include forest lands in West Java and BantenProvince. The company now has control over more than 2.5million hectares of land, 23% of the land base in Java. 191These concessions have given Perum Perhutani a virtualmonopoly of control over Java’s forests, with the exceptionof conservation forests, and the forests within the Jakartaregion and the Sultanate of Yogyakarta.In recent years, land conflicts, between villagers andPerum Perhutani (PP) have steadily worsened, although largeparts of the areas administered by PP are in fact no longerforested but are now irrigated fields, village settlements andareas of dry-land farming, and include some of the poorestvillages of Java.The reasons for these disputes have been summarizedby Perum Perhutani as follows:• Villagers have occupied forest lands without State authorizationbecause of their need for land.• Forest gazettement is disputed, in part because thegazettement procedures were not complied with properly.• Development projects have been given the go ahead evenin areas where unresolved land disputes exist.• Villagers facing relocation have refused to move.• Disputes arise from overlapping land rights or claims –land ownership, concession areas, use rights, and customaryor adat rights in the forest area. 192143

Land Tenure and Resource Rights: the Law and Its ApplicationAlthough a number of regulations have been passedsince 1951 to try to ease these problems, they persist. 193 Inthe 1980s, Perum Perhutani began experimenting with socialforestry and later developed a pilot ‘Cooperatives ForestManagement’ system (PHBM) to try to accommodatethe demands and needs of local communities. The systemincluded a profit sharing arrangement by which communitiesreceived 20% of the profits from timber sales, while PPretained the other 80%. The profit sharing has, however,been considered unjust by both local communities and somelocal governments. In one district, Wonosobo, a district regulationhas been passed, No. 22/2001 on Community-basedForest Management, which gives the community the opportunityto manage forest without any intervention by PerumPerhutani. The regulation can be seen as a response to arising tide of complaints from local communities about theway Perum Perhutani relates to them.Forest Concession on the Outer Islands (HPH)Shortly after the 1967 BFL was passed, Act No. 1/1967 onForeign Capital Investment was also passed in order to facilitateforeign investment in logging in Indonesia. Act No.6/1968 on Domestic Capital Investment opened the way fornational investment in logging the following year. GovernmentRegulation No. 21/1970 on Forest Concession Rights(HPH - Hak Pengusahaan Hutan), then set out the mechanismfor actually handing out these concessions. 194The process of handing out concessions thus wentahead of the processes for designating forest zones, delineatingboundaries and their official gazettement. Indeedsome 600 concessions had already been allocated by 1968,a number that has actually decreased, although many haveincreased in size, since. Forest zoning outside Java was notseriously implemented until 1984, when a national144

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesprogramme of forest designation was carried out accordingto a Consensus Forest Land-use Plan (Tata Guna HutanKesepakatan (TGHK)). Many of the conflicts between communitiesand concessionaires result from this back-to-frontprocess, whereby concessions were handed out long beforeareas were designated as State forest lands, boundaries wereproperly delineated or official gazettement had taken place.The later concentration of forest concessions in the hands ofa relatively small number of timber industrialists has exacerbatedthese difficulties, pitting local communities againstpolitically protected tycoons with massive resources andpower. 195Industrial Planted Forest (HTI)When HTI was initiated in 1984, the programme was conceivedas a way of promoting the rejuvenation and rehabilitationof unproductive production forest, as stated clearly inthe Forestry Ministerial Decree No.20/Kpts-II/1983: “Thedevelopment of HTI is an activity to rejuvenate and revitalizein order to increase the potential of production forest toguarantee the availability of industrial material and is aneffort to rehabilitate unproductive production forest.” Accordingly,funds were taken from Reforestation Fund and theForest Rehabilitation Fund to this end. In 1986, based onthe Forestry Ministerial Decree No. 320/Kpts-II/1986, thegovernment deemed HTI to be a National Programme, aimedat increasing the productivity of unproductive productionforest, whether inside or outside HPH. HTI development wasprioritized on “vacant lands, pastures, bushes and other unproductiveforests”. As the ministerial decree makes clearthere was prioritization in which lands should be used forthe development of HTI. This condition was maintained until1989, such as in the Forestry Ministerial Decree No. 471/Kpts-II/1989, where the prioritization of land for HTI de-145

Land Tenure and Resource Rights: the Law and Its Applicationvelopment is apparent.Ironically, in the Government Regulation No.7/1990on HPHTI (Right to Utilize Forest for Industrial Plantation)this prioritization was not stated explicitly. It merelystipulated that HTI should be sited in “regular productionforest area that is unproductive.” The lack of reference toland prioritization poses a significant set back to this policy,as an effort to keep the natural forest from being destroyedby HTI development. It propelled the implementation of HTIinto timber rich natural forests.HTI development is closely related to the effort of theforestry department to supply demand for wood from a decreasingnatural forest base, while at the same time maintainingits jurisdiction over forest lands. However, societyas a whole has had to pay the cost in terms of lost access tonatural forests and degraded areas, and severe disruption oftheir social, economic, legal and environmental conditions.The common pattern of HTI management goes throughseveral stages:• Residual timber is first harvested under a Logging ConcessionPermit• The residual forest is then cleared usually by slash andburn.• Skidders or tractors then clear out the remnants of theburning• In the early rainy season fast-growing, light-tolerant treespecies are planted such as Acacia, Gmelina, Leda, etc.)In practice rates of regrowth have often been disappointingmeaning a net loss of biomass of around 70%.To overcome the shortage of labour in HTI areas, manyHTI have been supplied with migrant workers under theTransmigration programme. These ‘HTI-Trans’ projectshave been negotiated through Inter-Regional Work Agreements(AKAD) and have resulted in a large influx of urban-146

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesized workers into the forest area with no guarantee of theland titles which are meant to be issued to migrants underthe standard Transmigration project. Under HTI-Trans,which is a national programme that HTI companies areobliged to join, the company is responsible for preparingfacilities for the workforce while the government suppliesthe manpower through Transmigration. Currently there are67 concessions under the ‘HTI Trans’ programme, coveringan area of 985,430 hectares of forest land.PT Finantara Intiga (see Section 6.3) and some otheroutgrower schemes companies are among the few HTI pulpcompanies that are still expanding their plantations followingthe economic crisis and the reform era.The majority of HTI schemes have slowed down, partlyfor financial reasons - the subsidy from the ReforestationFund has been stopped – and partly owing to pervasive landconflicts with local communities who in fact occupy muchof the land. Other HTI companies are currently either maintainingtheir current planting levels or are not continuingactivities, another common reason for a slow expansion ofHTI development is because local people occupy much ofthe land. 196 In October 2002, the Ministry of Forestry revokeddozens of HTI concessions due to their financial andtechnical problems but in November 2002, several HTI concessionholders brought their cases to court. It seems likelythat final decisions on whether these concessions can continueto operate will then be made by the MoF followingmandatory certification. 197The Obligations of Concession HoldersAs part of this study, original research was carried out inorder to gain a comprehensive understanding of the legalobligations of concessionaires towards local communities and147

Land Tenure and Resource Rights: the Law and Its ApplicationTABLE 4: THE OBLIGATIONS OF CONCESSION HOLDERSForest Management inJava: KPHAim of thecompanyPeriodGR No. 15/ 1972 GR No. 36/ 1986 GR No. 14/2002Economic Profit, MaintainSustainable Forest Productand its social functionEconomic profit byproviding forestsproduct andservices, andsupport to thegovernmentdevelopmentprogramNo time limitEconomicProfit byprovideforestproduct andservicesSupreme CourtDecision No.07.P/HUM/2002 & GR53/1999Economic profit byproviding forestsproduct and services,and manage the forestecosystemparticipative for thebenefit of the companyand the communityForest Land AreaExempted AreaWorking AreaDelineationThe alteration ofKPH areaProcedure to getthe concessionPermit HolderCommunityDevelopmentHuman ResourcesIndigenousCommunity RightsForest Class andHarvestingTechniquesCulturalConservationControl of theCompany1,874 million hectares, 2,567 million hectare, Central Java, East Java and West JavaCentral Java and East javaState ForestNature Reserve (CA) & National Parks (TN), Jakarta City forest land and Jogyakarta forest landUnfinished process left overby the Dutch, should bedone by the concessionholderUnfinished, should be done by the concession holder accordingto its own regulation (Perhutani Director Decree no17/1987)By the MoF through state forest land declasification and by the Director of Perhutani for otherpurpose such as public road, grave yard etc through Land for special purpose (LDTI)classificationPerhutani as a StateOwned Company (BUMN-State Enterprise)Taungnya system(Tumpang sari)Appointed by the Government through Government RegulationPerhutani as aState OwnedCompany (BUMN-State EnterpriseCommunityDevelopment bythe ConcessionHolder (PMDH)CharityPerhutani asPrivate CompanyCommunityDevelopment bythe ConcessionHolder (PMDH)CharityPerhutani as a StateOwned Company(BUMN-StateEnterprise)CommunityDevelopment by theConcession Holder(PMDH) Charity &Sharing Benefit(PHBM)Migrant contract workers (Pesanggem) & local communities from the nearby villages.Tumpang sari and/orTumpang sari (temporary farming between seedlings)benefit- sharingPlanted Forest (Jati Class, Sengon Class, Pinus Class) with clear cutting harvesting techniquesControlled by Ministry ofForestry, but CompanyRegulation issued by theDirector of PerhutaniLDTI for graveyard and other sacred placesControlled byMinistry of Forestryand Ministry ofFinance butCompany Regulationissued by theDirector ofPerhutaniControlled by Ministry of Forestry,Ministry of Finance & Ministry of StateOwned Company but CompanyRegulation issued by the Director ofPerhutani148

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesNatural ForestManagement (HPH)Enactment of ForestryBasic Forestry Act 5/1967& GR 21/1974Enactment ofBasic Forestry ActUUPK 5/1967 & GR6/1999Enactment of Forestry Act41/1999 & GR 34/2002Period 20 year right 75 year right 55 year permitSize No limit Max 100.000hectares in eachprovince (Papua200.000 hectares)Max 400.000 hanationally.Exempted AreaDelineation of theWork AreaThe revision of theWork AreaProcedure to getthe concessionProtected Forest (HL),Nature Reserve (CA), landowned by other party &land with other rightattached to it includes landsconverted into farming etc.Should be completed within3 years after the permit isissued, and the concessionwill take the risk for anyeffect of HPH activitiesbecause boundaries are notyet set.The right of the Ministry ofForestryApplicationProtected Forest(HL)Delineation shouldtake place in 3years after thepermit is issued, andis accountable forany impacts of HPHactivities becauseboundaries not yetsetAlteration of HPHarea as the result ofthe limitation ofHPH holders withinone company group(HPH restructuring)Auction &ApplicationNot yet regulatedLogging can only be done in productionforest with certain cubic meterpotentials and limited by set criteriaDelineation should take place within 3months after the permit is issuedRemoval of 20% of the working area asadministrative sanctionAuction, Application & MandatorycertificationPermit HolderCommunityDevelopmentHuman ResourcesIndigenousCommunity RightsForestConservationState Owned Company(BUMN) & Private Company(BUMS)HPH Assisting LocalGovernment in CDNot involved in theG30S/PKI(alleged communistsympathisers)Not limited by ForestAgreement (FA), thecompany shouldacknowledge and with thegovernment try to identifysuitable solutionsNo poaching protectedspecies, no using poison orexplosivesBUMN, BUMS, VillageOwned Company(BUMD),Cooperative.HPH supervising thecommunity andCooperative.Working opportunityfor the localcommunityHPH should allowthe indigenouscommunity tocollect non-timberforest resourcesNo poachingprotected andunprotected species,& preventing illegalpoachingPrevention of landclearance.Individuals, BUMN, BUMD, BUMS,Cooperative.HPH is obligated to supervise thecommunity and local CooperativeWorking opportunity for the localcommunity through contracts with thecompany’s on certain aspect of HPHoperation.The HPH will help ensure that the Adatcommunity secures their Right toCollect Forest Products legally throughan annual permit from MoF.Idem.No mining149

Land Tenure and Resource Rights: the Law and Its ApplicationCulturalConservationSteps to protect objectswith historical andscientific value fromdamage. Any cultural orhistorical site should bereported to thegovernment. The companyis accountable to thegovernment for any of itsemployees’ or its visitors’actions or neglect in theworking area.Accountable for &reporting historicalsites and creatingbuffer zones aroundthem.Idem.SanctionsOthersReprimand up to revocationof permitAuthorised to use ForceMajeur for regulating riots,blockades, natural disastersReprimand up torevocation of permitIncreasing the valueof the forest byplanting trees incritical areasbordering with theland of thecommunityReprimand up to revocation of permit,especially in cases of illegal loggingThe implementation of the preconditionof the mandatory certification ofSustainable Forest Management(Forestry Ministerial Decree No.4795/2002)Timber PlantationManagement: HTIBased on Forest Management Act No. 5/1967 & GR7/1990Based on Basic Forest Law No.41/1999 & GR 34/2002Period Right for 35 years + 1x cycle(42 years) Max. permit 100 yearsSizeMax 100.000 hectares in each province (Papua Not yet regulated200.000 ha)Max 400.000 ha. NationallyExempted Area Private Property, village, farming and land alreadymanaged by a 3 rd partyOnly vacant land, bush land and prairiesDelineation ofWork AreaBoundariesThe alteration ofHTI areaImplemented two years after the HTI Decree isissuedPossible, accordingly to the prevailing law andregulationAt least 3 months after the permit isissued.20% of the working area may bereduced as administrative sanctionProcedure Application Auction & ApplicationPermit Holder State owned company (BUMN) & Private company(BUMS)Individual, BUMN, BUMD, BUMS,CooperativeCommunitySupervisionHTI supervises the community and & koperasi andlets the community use the health facility of theHTI is obligated to supervise thecommunity and & CooperativeHTIHuman Resources Working opportunity for the local community Provide employment opportunities forthe local community through contractsfor aspects of the company’s operation.IndigenousHTI should allow the indigenous community to Allocation of rights to collect NTFP.Community Rights collect non-timber forest resourcesForestConservationNo poaching protected and unprotected species, &preventing illegal poaching, Preventing landclearance, No using fire in land clearing, Preventingnomadic farming, Erecting signs.Idem.No miningShould have finished planting 50% of thearea within 5 years after the permit.CulturalAccountable for & reporting historical sites and Idem.Conservation creating buffer zones around them.Sanctions Reprimand up to revocation of permit Reprimand up to revocation of permit,especially in cases of illegal loggingOthers Government would assess once every 5 years The implementation of the preconditionof the mandatory certification ofSustainable Forest Management(Forestry Ministerial Decree no4795/2002)150

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesthe forests they depend on. This research suggests that theseobligations have gradually diminished over time, through aseries of legislative reforms which have been based on the(false) assumption that the official programmes of ForestDesignation, Delineation and Gazettement, Spatial Planning,Transmigration and Resettlement have resolved landrights and resource access problems and secured communitydevelopment.Obligations of KPH HoldersAll KPH in Java are held as a monopoly of the state forestmanagement company Perum Perhutani. As a KPH holder,Perum Perhutani accepts two major obligations with respectto local communities. The first is to clarify concession boundariesthrough delineation exercises, with the aim of ensuringthat there are no misunderstandings between local communitiesand the company about the boundaries betweenvillage lands and concession boundaries. However, even by2002, the forest delineation commenced by the Dutch forestadministration is still uncompleted in three units ofPerhutanis (Unit I, II & III). 198 The rights of local communitieshave only been recognized as Land for Special Purpose(LDTI) to secure their sacred graveyards. In addition,the company provides opportunities for tumpang sari (interplantingof food crops between seedlings, in young plantations.Recent regulations require KPH holders to promotebenefit-sharing with the communities.Obligations of HPH HoldersThe HPH system of rights and responsibilities has variedover time. Three periods can be discerned: a first period between1968-1997; a second between 1999- 2001: and a thirdwhich commenced in 2002. The obligations of current HPHholders are determined by the date when the HPH was lastissued or renewed.151

Land Tenure and Resource Rights: the Law and Its ApplicationDuring the first period, Forest Delineation was supposedto be completed within three years of a concessionbeing granted. However, in the second period, this importantrequirement for sustainable forest management wasweakened by saying that forest delineation should be undertakenwithin 3 years, while the risk of not having the forestdelineation completed is the company’s. During the thirdperiod, forest delineation was to be undertaken within 3months of a concession being granted. In practice, the term‘undertaken’ has been interpreted as meaning that delineationshould have started and not been completed by the stipulateddate.The three periods of regulation also evince differentnotions of how communities should be dealt with. In the firstperiod, a patronising approach was adopted whereby the stateand the concessionaire were to identify the best solution forthe indigenous communities. In the second period, the Ministryof Forestry required the concessionaire to provide accessto local communities for the collection of non-timberforest products, while the concessionaire was also to encouragecommunity development as a charitable exercise. In thethird period, access to forest resources by the indigenouscommunity is no longer limited to non-timber forest products,but the communities are required to formalise theiraccess by securing permits from the Ministry of Forestry, anapproach which has not yet been implemented in practice.The details of these obligations are summarised in Table 4and elaborated in Annex 1.Obligations of HTI HoldersResponding to the increasing damage upon the forest as wellas the demand for timber, in 1990 GR No.7 on IndustrialTimber Plantation Utilization Rights (HPHTI) was enactedand implemented almost simultaneously in all production152

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesforest in Indonesia, supported by the Reforestation Fund inthe form of low-interest loans and was conducted by theholders of HPH in form of BUMS, BUMN or Joint Venture.The right and obligations of HTI companies relating to communityrights and land security are set out in this regulationand shown in Table 4 and in more detail in Annex 2. However,with the enactment of GR No. 34/2002 which replacedthe term, HTI with Natural Forest Utilization Venture, therehave been some additions and reduction of rights and obligations.These modifications are also shown in Table 4 andAnnex 2. 199Compliance with ObligationsAs noted in Section 4.6, there has been a massive failure bycompanies to delineate their concession boundaries in accordancewith these obligations. The result is that most concessionshave resident communities within their concessionareas but they have failed to identify the boundaries of thecommunities lands. This has created the basis for conflictsbetween concessionaires and communities and has becomea nationwide problem.There was not time during this investigation to assessthe extent to which companies actually comply with theirother obligations, although community complaints aboutcompanies’ failures to deal fairly with the communities wererecorded in all four areas studied (see section 6). A studycarried out by P3PK of Gadjah Mada University found that69% of villagers living within a heavily logged area in EastKalimantan suffered malnutrition as a result of reduced orlost access to forest products. Starvation owing to loss oflivelihoods has also been reported from other communitiesforced off their lands by concessionaires in Kalimantan. 200Recognising the failure of the Ministry of Forestry’sresettlement programme, whereby forest villages were re-153

Land Tenure and Resource Rights: the Law and Its Applicationmoved from concessions and encouraged to abandon shiftingcultivation, and taking account of the growing evidencethat logging was having a severe impact on local livelihoods,Ministerial Decree No. 691/Kpts-II/1991 was passed whichplaced obligations on concession holders to implement developmentprogrammes in the communities within or immediatelybordering their concessions. The developmentprogrammes were supposed to improve the community’swelfare and assure them some access to forest resources.Under the Decree, each concession holder was obliged toconduct a diagnostic survey of the villages in and aroundthe concession in preparation for the implementation of theHPH Bina Desa programme. One case study carried out forthe Ministry in 1996 revealed that these Bina Desaprogrammes were unpopular and were imposed in a top-downmanner. Assessments carried out for DfID, USAID and GTZconcur with these findings. The studies found:• Endemic prejudice against traditional agricultural practicesamong project staff• Poorly trained project staff• Lack of evaluation of alternative development strategiesbased on traditional systems• No collaboration between concessionaires and local administration• Inadequate or absent participation• Imposed patron-client relations with villagers• Forced pace of implementation due to direct linkage with5 year harvesting plans. 201In 1995, in accordance with Ministerial Decree No.69/ Kpts-II/1995, the HPH Bina Desa programme was replacedby an alternative programme for the ‘CommunityDevelopment of Forest Villages’ (PMDH). 202154

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesCommunity Forestry OptionsAlongside its national programme for promoting the developmentof the economy of the Indonesian people in all areasof life, the ‘reform era’ government has adopted a policy offorest development with the aim of securing community welfare.203 In line with TAP MPR Decree No. IX/2002, reformmindedpolicy advocates argue that this now requires a revisionof the current forest development paradigm away from‘state forest management’ towards ‘community based forestmanagement’, so that communities within and neighbouringforests become the main actors in managing forests. Thissection briefly summarises the options currently availableto promote increasing community involvement in forestryranging from benefit-sharing options to the direct managementand control of forests by communities.Charity, Fees and Benefit SharingThe most conventional option for involving communities inforest management systems is one exercised in many HPH,by which members of local communities are employed byforest managers to carry out tasks such as timber cruising,planting, and de-barking as paid workers. In addition manycompanies assist forest villages by providing infrastructuralimprovements such as roads, water supplies, bridges, schoolsand places of worship, as required of each company in orderget approval of its Annual Work Plan (RKT), which includesapproval of the Annual Allowable Cut.Under PP6/1999, communities may also take a moredirect role in forest management by incorporating as Cooperativesand acquiring a 10% share in the concession holdingcompany. However, in practice the scheme has brought uncertainbenefits to local communities as the cooperativesformed to acquire these concessions often have no connectionwith local communities more often being incorporated155

Land Tenure and Resource Rights: the Law and Its Applicationby other groups, such as forest company employees, membersof distant communities and religious institutions.Another type of participation was initiated by APHI(Asosiasi Pengusaha Hutan Indonesia - the concession holders’association) and the regional governments of EastKalimantan and Papua in year 2000. Under this policy, HPHconcessionaires were required to pay a royalty or fee to localcommunities for every cubic meter of timber extractedfrom community lands. The Governors’ Decrees in these twoprovinces set a fee of Rp. 2500/m 3 for timber that had alreadybeen logged and Rp. 3500/m 3 for wood yet to be loggedfrom the village area, which was to be paid to the villagecommunity. The policy, which acknowledges the people’sownership of the timber, has begun to be implemented slowlyowing to lack of clarity about how the funds should be paidto the community and who should then manage them.In Java, Perum Perhutani has also been under pressureto develop a profit sharing system similar to Joint ForestManagement in India. A trial scheme regulated by a Decreeof Perhutani’s Board of Directors has been initiated but notall villages have accepted the system, which would allocate20% of profts to communities and 80% to the corporation.Several villages in Kuningan District (in West Java) havebeen willing to give the system a try but the community ofSumedang District has rejected it, proposing instead a threewayprofit sharing system between the Province, a DistrictOwned Corporation and a Village Owned Corporation(33:33:33). The majority of inhabitants in the WonosoboDistrict (East Java) have rejected such ideas entirely optinginstead for community-based forest management (see section7.5).Small ConcessionsGovernment Regulation No.6/1999 gives the head of a dis-156

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiestrict the authority to issue an annual permit for logging covering100 ha.. The cost of each permit is approximatelyRp. 3 million. While the regulation does not provide a soundbasis for sustainable forest management, since it does notelaborate any management requirements and is very shortterm, it has proved popular as a means of rewarding communitiesand people with connections to local government.These IPHH/IPPK are very similar to the IPK (clear-cuttingpermit) which existed previously, the authority to issuewhich used to be held by the parastatal timber company PTInhutani.Almost all IPHH/IPPK have nominally been given outto village Cooperatives, incorporated using copies of the IDcards of one or several members of a community. However,the fact is that felling involves the use of heavy machineryand is carried out by contractor companies. Through thisprocess, contractor companies have been able to secure accessto thousands of hectares of forest lands. As commonlyapplied, profits are shared between the contractor and thevillage Cooperative, typically by payment of a fee of Rp.25,000/m3 to the village in whose name the permit has beenissued. Lack of transparency in these deals is one of theirmain problems (add see section 6.2.2.4).In March 2002, Government Regulation No. 34/2002was issued, which replaces Government Regulation No. 6/1999 and shifts the authority to issue IPHH/IPPK from thedistrict level to the national (ministerial) level. The futureof the IPHH/IPPK system is thus in doubt.Community Forests (Hutan Kemasyarakatan)In 1995, the Ministry of Forestry formed its own Directorateof Community Forestry (DPHKM), located within theDirectorate General of Land Rehabilitation and Social Forestryand began to offer communities permits for the extrac-157

Land Tenure and Resource Rights: the Law and Its Applicationtion of non-timber forest products. The DPHKM remains,however, a relatively small bureau with little power or influencecompared to the offices that promote and regulatelarge-scale commercial logging. The DPHKM currentlyemploys some 50 staff out of total of some 3000 in the Ministry.According to DPHK statistics, some 92,351 hectaresof the various kinds of community forestry permits had beengranted by 1999, of which well over 80% by area were inthe heavily degraded dry forest zones of Nusatenggara andWest Timor. 204The legal provisions developed to promote this communityforestry programme, (Ministerial Decree 677/Kpts-11/1998, Ministerial Decree 865/Kpts-11/1999) wererecognised as incompatible with the new Basic Forestry LawNo 41/1999 and efforts were simulatenously made to extendthe scope of the programme to include timber harvesting bycommunities. Accordingly, Ministerial Decree No 31/Kpts-11/2001 On Administration of Community Forestry waspassed to bring community forestry into line with the revisedBFL. Under the Decree, a Community Forestry permit(HPHKM – Hutan Kemasyarakatan) is a strictly limitedusufruct lease of 25 years, which entrusts forests to a localcommunity for it to be managed, according to its own internalregulations, in close coordination with the Ministry whichmaintains control of the area. The decree is explicit that aHPHKM does not confer an ‘ownership right on the workingarea and cannot be mortgaged nor transferred’ (Article18.2). Permit holders gain a provisional licence after developinga draft management plan for the area, ‘facilitated bythe District/Municipal Government’ (Article 29), and whichhas to be approved by the regional administration. The managementplan must include ‘internal regulations’ which makeprovisions for: managing the area; decision-making; conflictresolution; forest land use planning; preparation of a managementplan; forest utilization; forest rehabilitation; forest158

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesprotection; as well as set out community members’ rightsand obligations. Explicit provisions are included in the decreerequiring the zoning of the area into protection and cultivationblocks, with progressively stronger restrictions beingplaced on cutting within 50-500 metres of small streams,the coast, springs and rivers, lakes and dams. No cutting oftrees leading to exposure of the forest canopy is allowed inthe protection blocks. These ‘internal’ regulations are to bedeveloped in a ‘participatory manner by the District/MunicipalGovernment with the local community’ (Article 12.3).A signed agreement between the local government andthe community represented by the village head (kepala desa)endorses the regulations. Regular reporting to the governmentis required and the management is re-evaluated everyfive years. To gain a definitive licence the village has toincorporate as a cooperative. In the case of non-compliance,licence owners are first given a warning to take correctiveaction. If disagreements cannot be resolved through dialogue,a permit can be annulled ‘at any time’ at the discretion ofthe District Head/Mayor, whose decision is ‘final and bindingon all parties’ (Article 57.2(c)). Traded forest productsare subject to the same taxes and royalties as apply to otherforestry operators. 205HPHKM can only be given on State Forest Lands(hutan negara), by definition areas unencumbered by proprietaryrights. The law does not clarify whether such utilizationrights can be issued in areas subject to adat claimssuch as hak ulayat. Moreover it is not clear to the authorsthat the limited use rights, subject to State control, conferredby the Decree provide enough land security and local controlfor the certification of community forestry in line withFSC Principle 2.Since the Ministerial Decree was passed, a further 25HPHKM have been handed out by local government andreported to the Ministry, with a total area of 66,214 hect-159

Land Tenure and Resource Rights: the Law and Its Applicationares, the majority in the western parts of the archipelago. 206It is likely that other areas have been handed out which haveyet to be recorded in central government statistics.However in June this year the whole community forestrysystem was again placed in doubt subsequent to thepassing of GR 34/2002, which revokes the authority of districtlevel administrators, district heads (bupati) and provincialgovernors to allocate timber cutting rights. A revisedMinisterial Decree is now required to provide a system forthe allocation of community forestry permits.The DPHKM admits that the HPHKM system is onlya first step towards the devolution of forest management tothe community level but argues it is a process that requiressupport. In general, the DPHKM notes, the Ministry of Forestryis doubtful of even the existence of masyarakat adatand unsure whether adat systems of forest management arestrong or rigorous enough to the deal with the current pressureson forests from the market and competing interests. Itnotes that the Ministry of Forestry currently does not have asystem for recognizing adat rights, nor has it passed anyregulations to make this possible. The subject is still underdiscussion within the Ministry. 207 Temporary permits that lastfor 5 years have also been given out by the district head tomany groups, under Bupati decrees.The main limitations on the HPHKM programme resultfrom the fact that there is only a limited amount of landthat is not already under HPH and HTI and because of theserious difficulties that exists in locating areas that have beenlegally defined as ‘forest’ (see sections 4.5 and 4.6).Village Forests‘Village Forests’ are provided for both under Act No.22/1999 on Regional Government and Forestry Act No.41/1999but the concept remains unexpressed in the lesser laws, cre-160

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesating confusion among the various parties who are supposedto implement it. The law stipulates that a local communitywhose lands overlap State forest land may have them classifiedas ‘Village Forest’, over which they have managementrights. Such land will continue to be classed as State forestland (ie land in which there is no proprietary rights). Todate this option has not been applied in practice due to thelack of implementation regulations. The option may howeverbe suitable for those villages bordering State forest landsthat seek to regain responsibility for managing natural resources,whether for crops, natural forest or other types ofresources, while not seeking a proprietary interest in land.Customary ForestsAs noted, the revised BFL (No. 41/1999) on Forestry statesthat the management of state’s forest lying within the jurisdictionof customary law communities Masyarakat AdatTerritory (wilayah adat) may be classified as Hutan Adat(Article 1.5). Hutan Adat is still considered as State forestland (Formal Explanation of Law 41/1999, at line 10). Acommunity with a Hutan Adat may be issued a Hutan AdatManagement Right, only after it has been officiallyrecognised by the local legislature (Article 65). Under Articles8 and 34 of the revised BFL, State forest land may beclassified as an Area with Special Purpose (KawasanDengan Tujuan Khusus-KDTK) and entrusted to a customarylaw community, a religious group or a research institutionfor cultural and research purpose. However, no regulationshave yet been passed to implement these provisions.Apart from the lack of implementing regulations, thereare a number of procedural obstacles in the way of bequeathingauthority to manage a forest to an indigenous people accordingto this procedure. First, as noted, the procedures mustbe preceded by the recognition of the community’s exist-161

Land Tenure and Resource Rights: the Law and Its Applicationence through a decree of the district legislature (Perda),which is a very long process. Secondly, the legal process ofdeciding that the area is indeed legally State forest landwould have to have been complied with (something true foronly 10% of State forests – see sections 4.5 and 4.6). This isitself unlikely as local communities do not want their landsclassified as State forest lands as this denies their rights inland (see section 4.4).Further legal ambiguity surrounding the notion ofHutan Adat derives from the argument that the revised BFLitself is in contradiction with the way the BAL has beeninterpreted. For example, GR 24/1997 provides for the recognitionas individual title (hak milik) of ‘old rights’ in land,including lands originally held as customary land (tanahadat) that have since been allotted to individuals by villageheads. 208 Likewise the revised BFL also contradicts PermenBPN 5/1999, which provides for the recognition of the ‘possessory’rights of communities (see section 4.2.1). Insofaras these pieces of law recognise that customary land rightsconfer proprietary rights in land, such areas should morelogically be classed as ‘Private Forests’ (Hutan Milik) underthe BFL and not State forests (Hutan Negara), which iswhere Hutan Adat may be recognised.People’s Forest (Hutan Rakyat)The concept of ‘People’s Forests’ has been implemented forquite a long time in Java where market conditions favourthe local production and consumption of timber by individualfarmers. In ‘People’s Forest’, management rights to forestmay be issues as individualised rights to forest by the ForestryDepartment through the Directorate of People’s Forestry,itself under the Director General of Social Land andForestry Rehabilitation (RLPS). RLPS offers credits for‘People’s Forests’ to be used to restore and rehabilitate for-162

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesest on individually claimed lands. ‘People’s Forests’ can onlybe developed on lands where farmers have already acquiredeither an SKT (a letter recognising individual land ownershiprights issued by the village head - kepala desa) or asertifikat issued by the BPN (land title). Potentially, the conceptof People’s Forest may also be applied to indigenouspeople’s lands under the Decree No5/1999 of the AgriculturalMinister, on the indigenous peoples’ territory (tanahulayat). However, as for ‘Village Forest’, the legal categoryremains unimplemented in indigenous areas and cannot bereadily applied unless the indigenous community first gainsrecognition by the district legislature and is registered inthe land book by the BPN. The ministerial decree is consideredto be imperfect because the process is long and doesnot adequately acknowledge indigenous peoples’ proprietaryrights in land.ConclusionsThis long chapter has attempted to answer the question, canindigenous peoples and local communities ‘legally establish’long term tenure and use rights in forests (Principle 2) andhave their rights ‘to own, use and manage their lands, territoriesand resources’ ‘recognized and respected’ (Principle3). Even a short answer must be given in two parts dependingon whether such security is being sought within or outsideareas considered by the Department of Forestry to be‘State forest lands’, even though the BAL may apply in forestscontrary to administrative tradition.• Outside of state forests, the conclusion is that while theconcept of collective land rights (hak ulayat) is recognisedin Indonesian law, no effective procedures exist to securethese rights. Secure titles are only offered to individualsand even then the administrative procedures for securingland are deficient. All tenures in Indonesia are subordi-163

Land Tenure and Resource Rights: the Law and Its Applicationnate to State interests.• An unclear right of possession (hak kempunyaan) isrecognised as applying to customary land but may not beregistered in areas overlapping existing rights and concessions.• Inside ‘State forests lands’, proprietary rights are by definitionimpossible and customary rights are treated as weakforms of usufruct, which are subordinate to the interestsof concessionaires. Legal recognition of communities’land rights within forestry concessions is not possibleunder current law.• There are, however, a number of community forestry optionswhich, while not recognising the customary rightsto ‘own’ lands, do offer a measure of management authorityto communities. Although there are doubts whetherthese options are long-term enough to comply with Principle2, some of these options may constitute a basis forthe certification of community forestry.• A more startling and unexpected conclusion has alsoemerged from this study. Perhaps the majority of forestconcessions, including community forestry options, issuedin Indonesia are of questionable legality owing to majordeficiencies in the process of gazettement of forest lands.As a result of these procedural failures as much as 90%of ‘forest lands’ have never actually been properly transferredto the jurisdiction of the Department of Forestry.This implies that the great majority of State forests (andthe concessions within them) are ‘illegal’ and thereforeinvalid in terms of Principle 2 and Criterion 2.1. 209164

5CustomaryInstitutions andthe Principle ofConsent

Customary Institutions and the Principle of ConsentIn line with international standards (see section 2.4.2 and2.4.3) the effective expression of the right to free and informed consent, a key element of FSC Principles 2&3,requires that communities are able to confer amongst themselves,negotiate with other parties, and express their views,according to their customary systems of decision-making andthrough their own representative institutions.Free and informed consent requires in addition:• Adequate time to make decisions according customaryprocedures• A full and open provision of information in forms and languagessuitable to make them readily comprehensible tolocal parties• The absence of duress, intimidation, threat or negativeincentives.Experience in other countries also teaches us that inorder for the principle of free and informed consent to haveany binding power and thus provide the basis for genuineand equitable decision-making, communities must have clearlegal personality. In the absence of formal clarity about whomay legitimately speak on behalf of a community, disputesproliferate, causing divisions in communities, frustration onthe part of forestry operators and confusion among certifiers.This section of the report thus reviews the extent towhich forest-dwelling communities and indigenous peoplesin Indonesia are currently in a position to exercise this righteffectively.Adat Institutions duringthe Period of Guided DemocracyArticle 18 of the 1945 Constitution specifically recognized166

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesthe presence and status of local institutions within the newlyindependent Republic of Indonesia. The official explanationof this article notes:[T]here are roughly 250 types of self-governing villages(Zelfbesturende landschappen) and native communities(volksgemeenschappen)210 such as desa on Java and Bali,negeri in Minangkabau and dusun and marga in Palembang.These areas have their own indigenous organizational structures(susunan asli) and because of them can be construedas areas with special attributes (daerah yang bersifatistimewa). The State of the Republic of Indonesia respectsthe status of these special areas and all state regulationsconcerning them shall heed the original hereditary rights(hak-hak asal-usul) of these areas. 211These provisions were in line with the prevailing sentimentsof the time, during which the founders of the nationfavoured an open and decentralized Indonesian polity, whichwould respect custom and cultural diversity and providescope for local and regional autonomy. However, followingunsuccessful attempts by the US Government in the 1950sto dismember the Republic by fomenting regional rebellions,212 President Sukarno felt obliged to centralize the administrationand limit the scope for regional autonomy.Democratic freedoms were also limited and Indonesia enteredthe period known as ‘Guided Democracy’. 213Accordingly, in 1965, the Law on Village Governanceand Jurisdiction (UU 19/1965) was passed, which overrodeboth the constitution and the colonial laws that had acknowledgedthe plurality and relative autonomy of indigenous institutions.According to the law, a uniform administrativeregime was to be imposed throughout Indonesia, with thevillage becoming an administrative body of central govern-167

Customary Institutions and the Principle of Consentment. 214 The Dutch policy of indirect rule and legal pluralismwas replaced by a new policy of direct rule from thecentre.Suharto’s ‘New Order’and the Local Administration LawUndang-Undang 19/1965 was clearly unconstitutional andwas declared so by President Suharto soon after he tookpower. 215 However, ten years later, he imposed his ownequally unconstitutional Local Administration Law (Act No.5/1979), which put in place a uniform system of village administrationthroughout Indonesia, based on the Javanesemodel of rural organization. Accordingly, villages were regroupedand centralized, and referred to by the Javanese termdesa. 216 The desa became the lowest unit of the administration,sometimes referred to as the ‘administrative village’,and the head of the village (kepala desa) became the directagent of the administration, usually a government appointee.The imposition of this uniform administrative regimehas had profound and lasting effects on community lifethroughout the archipelago.Reviews of the application of these laws by Indonesianscholars have shown that the underlying motivation ofthese administrative reforms was to further a centrally directedmodel of national development which brooked no opposition.The reforms were charactarised by:• A lack of confidence in customary institutions• Belief that customary systems of law and decision-makingwere obstacles to development• Conviction that political control of villages was neededto promote national security and national development. 217Problems that resulted from this imposed reform includedthe following:168

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilities• Some traditional villages were too small to fit the systemand had to be regrouped• Resettlement resulted (much of this promoted under thepolicy towards isolated peoples – see section 3.2)• Customary systems for electing or choosing leaders wereoccluded• Alternatively, customary leaders were incorporated intothe village administration, but no longer spoke for thecommunity• Tribal chiefs even got ‘Letters of Promotion’ issued bydistrict heads.The result was that it was difficult for local villageleaders to effectively represent the will of their communities.218 According to Roedy, village autonomy was thus weakenedin a number of crucial respects:• Although villages were allowed to enact their own regulations,these were only given legal force after being ratifiedby the local administration.• Land and resources were not under the control of the community• Village revenues, which were customarily shared amongcommunity members, were no longer distributed accordingto custom.The enduring consequence is that, in many places, communitymembers now consider that the village administrationbelongs to the government and not to the community. 219As the Asian Development Bank has noted, the LocalAdministration Law ‘led to the weakening and disappearanceof adat institutions, together with its adat values andleadership…, the disappearance of potential, spirit of participationand creativity of the community, and caused dependenceof those communities on the government’. 220169

Customary Institutions and the Principle of ConsentRecent field research carried out as part of a nationalstudy coordinated by the NGO ELSAM (Lembaga Studi danAdvokasi Masyarakat), has corroborated these findings.The 1979 law on village administration ignored existingcommunity-based forms and processes of village decisionmaking,many of which provided for open debate and participation...It created an official legislative body (LembagaMusyrawah Desa), 221 and provided that decisions by theLMD were subject to approval by the Bupati [districthead]… The pseudo-democratic nature of the institution wasfurther corrupted by the requirement that all village officersand members of the LMD be members of the ruling party,GOLKAR. 222The occlusion of traditional village level decision-makingmechanisms was reinforced by the military’s policy of‘territorial management’ which was part of a nation-widepolicy of ‘sishankamrata’ (Sistem Pertahanan danKeamanan Rakyat Semesta – System for the Defence andSecurity of the Entire People). In accordance with themilitary’s policy of ‘dual function’ (dwi fungsi), which impliedequal vigilance against internal as well as externalthreats to the regime, the armed forces acted as an army ofoccupation throughout the archipelago, with military garrisonsstationed in each district (kodim), sub-district (koramil)and in each village (babinsa). 223 The combination of themilitary and civilian administrations meant that local communitiesrarely dared speak out against oppression and injustice.The CIEL study further notes:Traditional community-based village institutions were furtherundermined and even criminalized under the Ministry170

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesof the Interior Regulation on Villages No. 4/1981. It proscribedthe inclusion of any desa within a state forest areaor hak guna usaha (which means a concession). Traditionalcommunities located inside “state-owned” forest areas werelegally banned, and many residents were involuntarily relocated…224Although the Local Administration Law was repealedin 1999, the legacy of ‘New Order’ impositions on forestdwellers is still felt today. After twenty years of highly centralized,state-directed, repressive interventions in their lives,the institutions of local communities and indigenous peopleshave been severely affected. Customary forms of decisionmakinghave been weakened and communities internally dividedbetween those who continue to respect adat processesand those who rely on the imposed desa system. In thesecircumstances, securing ‘prior and informed consent’ fromcommunities becomes highly problematic.Changes in Village AdministrationStipulation No X/MPR/1998 of the People’s ConsultativeAssembly concerning Development Reforms for the Protectionand Stabilization of the National Condition recognizedthat the centralization of power under the New Order regimehad not accommodated local realities, had hinderedjustice and freedoms, encouraged the transfer of wealth tothe centre, and thus limited regional development. The Stipulationpaved the way for the passing of the Regional AutonomyAct No. 22 of 1999 which recognizes that the promotionof regional autonomy is in conformity with the 1945Constitution and is necessary for democracy, to provide aneffective role to the community, justice and in order to respectregional diversity and potential.171

Customary Institutions and the Principle of ConsentThe Regional Autonomy Act No. 22 of 1999, also repealedthe 1979 Local Administration Law and has provokedmajor changes in Indonesia. The Act recognizes villages of‘origin’ 225 and grants them authority to regulate and managecommunity interests in accordance with custom. Villages thatmay be so recognised must be natural resource- or agriculture-basedand enjoy government services. The Act specificallymentions a number of regional terms for such customarysocio-political units, such as nagari, kampung, huta boriand marga. However, authority to recognizes such villagesis given to the district government and this discretionarypower has been objected to by some lawyers, who fear itmay pave the way for a repeat of the abuses perpetrated under`the 1979 Local Administration Act.Indeed, Regulation No. 64/1999 of the Ministry ofHome Affairs states in Article 3 that villages which cannotmeet the criteria for recognition should be ‘eradicated andintegrated’. According to this regulation, to qualify for recognitiona village must have: a total population of at least1,500 people; a defined area; socio-culture; village capacity;government facilities and infrastructure. The integrationistintent behind these provisions is self-evident.Major ambiguities also remain about the way Act 22should be interpreted with regard to the recognition of villageinstitutions although the act does recognize the role ofcustomary village institutions to settle disputes within thevillage.Notwithstanding its deficiencies and ambiguities, theAct represents an advance for customary communities. Thespirit, if not the letter, of the law may provide the basis for arestoration of the authority of customary institutions and, ifbacked by appropriate regulations, could provide these institutions’with legal personality, thus providing a basis fornegotiated and legally enforceable contracts with private172

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiessector institutions such as logging and plantation companies.Indeed in some districts, the Act has already been interpretedto allow for the recognition of occluded customary institutions.In Toraja, where custom remains vigorous, the imposeddesa system has already been dismantled and replacedthrough the restoration of the customary institution of thelembang.The Act responds to widespread demands from bothcivil society and the regional administration for the decentralizationof State authority. The devolution of a measureof authority over forests and land to the kabupaten level,may also potentially facilitate the engagement of local communitiesin decision-making. This process is more likely tofavour customary forest dwellers and indigenous peoples inareas where they still form the majority and may thus morereadily influence the policies and decisions of locally electedpoliticians and regents (bupati). On the other hand, the reformshave also stimulated the creation of a new politicalclass of local politicians and administrators who have theirown interests and priorities. Without adequate mechanismsfor the genuine engagement of rural communities, the interestsof this class may come to predominate. 226 Whether forthis reason or because of a general failure of governmentregulatory power, there is already clear evidence that pressureon natural resources has increased greatly during thereform era. 227Dispute Resolution MechanismsOne of the few national discussions about the principle offree and informed consent in Indonesia took place in theWorkshop on Indigenous Peoples and Poverty Eradicationheld by the Asian Development Bank in cooperation withthe Department of Justice and Human Rights in 2001. The173

Customary Institutions and the Principle of Consentmeeting noted that exercise of the right to ‘Free, Prior andInformed Consent’ requires:• Absence of coercion• Full provision of information• Participation by other civil society organizations to ensuretransparencyGovernment agencies attending this meeting expresseda commitment to put this right into effect, including in a proposedguiding Protocol on Gender to be issued by the Departmentof Women’s Empowerment.One of the most promising tools for conflict resolutionthat has gained increasing popularity in Indonesia is communitymapping, which has proven to be a very useful insettling land-and-natural-resources-related disputes.The value of this technique has also led to it beingadopted by collaborative projects being carried out by theIndonesian government and foreign development and conservationagencies. For example, WWF projects to promotecommunity empowerment within Conservation Areas in Indonesiahave used community mapping exercises as a basisfor determining the boundaries of protected areas and communitylands. 228In the same way, the GTZ-SFDP project in Sanggau,West Kalimantan, introduced Community-Based ForestManagement (PHOM) by transferring the management ofAlas Ketue HPH area which covers 104,000 hectares to thecommunity. The main tool used in the planning of the projectwas ‘Village Agreement on Land Management’, which is inessence a local scale form of the Agreement of Forest Management(TGHK) process, which has been used to zone forestlands. The process went through continuous evolution tothe point where it was adopted as an umbrella policy by thegovernment to be applied in each village to prepare its com-174

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesmunity map to be used in village planning (Domestic AffairMinisterial Decree no 46/1994 on village management pattern)as a bottom-up input into provincial Spatial Planning. 229Of course, the other mechanism technically availablefor the resolution of conflicts in Indonesia, as elsewhere, isappeal through the courts. Assuming that legally bindingagreements can be negotiated between private companies andlocal communities or indigenous peoples with legal personality,enforcement could theoretically then be ensured throughrecourse to the law.Legally enforceable contracts are, however, of littlepurpose if legal processes do not function well. Indeed, thelack of effective rule of law in Indonesia poses a major challengeto the reform of the forest sector, as the very smallnumber of prosecutions of forestry businesses violating forestryregulations testifies. 230 The long years of dictatorshipand one party rule have left a serious problem. By the end ofthe Suharto period, as political analyst Kevin O’Rourkenotes:Indonesia was governed by what legal experts termed‘Ruler’s Law’, as opposed to rule-of-law. Over four decadesof authoritarian rule, every component of the legal systemhad been crafted to defend the supremacy of the ruler, ratherthan the supremacy of the law…. By necessity, Indonesia’slegal system was rife with corruption. Legal system actors– such as judges, prosecutors, police and lawyers – werenot motivated by professionalism, principles or ideals ofpublic service, as the system placed little value on thesequalities. Instead, the regime recruited and promoted legalsystem actors on the basis of their loyalty – loyalty that wasinduced by financial incentives. Over time, the practice ofrewarding loyalty with money conditioned legal system actors,who became highly susceptible to bribery while con-175

Customary Institutions and the Principle of Consentducting routine tasks. Thus, with the exception of decisionsthat directly affected the regime, the legal system actorsroutinely sold their service to the highest bidders. Eventually,the legal system became a mechanism through whichthe wealthy and powerful were able to consistently exploitthe poor and weak. The implications of Ruler’s Law wereprofound: the government continued not to be unaccountableto the people and ordinary Indonesians faced considerabledifficulty in their daily lives. 231Similar conclusions have been reached by many otheranalysts. For example, an exhaustive review carried out forthe World Bank during the closing months of the Suhartoera, revealed the very serious problems besetting the wholelegal system, a legacy of patrimonial politics and the absenceof democracy and civil and political rights and freedoms.Among the problems noted in the five volume reportwere: a lack of competence in the legal profession; low professionalstandards and ethics; lack of disciplining professionalsfor misconduct by their legal associations; and a conspicuousabsence of good conduct by senior members of theprofessional legal associations. Moreover, ‘court management…is inefficient and lacks transparency’, leading to abacklog of cases and long court delays. ‘At the present time,the business community and the public are very disappointedwith court services’, the report concluded after detailed surveys.The judiciary was likewise found to lack capacity andindependence. A serious lack of a separation of powers hasled to judges being chosen by the Ministry of Justice. ‘Thedominant role of the executive branch enables an unhealthyrestraining influence over the judiciary’, the report notes. 232Things do not seem to have improved much since theWorld Bank study. A United Nations mission to gauge thecountry’s judiciary in 2002 has again found pervasive cor-176

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesruption in the courts. 233 The situation, says Prof. Dr. MochtarKusumaatmadja, ‘is desperate but not hopeless’. 234SECURITY ISSUES 235A curious feature of security arrangements in Indonesiais that the budgets of the police and military are notfully funded by the government. Instead, ever sinceindependence, the security services have beenencouraged to supplement their incomes throughbusiness ventures. During the early years of the loggingboom senior military figures were commonly rewardedwith logging concessions. Security services also set upFoundations (Yayasan) to run businesses and generaterevenue. Some of these military foundations and seniorofficers remain substantial shareholders in forestryindustries, some of which have been implicated inillegal logging activities.Another way that the security services generaterevenue is through being contracted by largecompanies to police their concessions and industrialsites. Additional payments may also be made tomobilize security units to intervene in disputes. Themilitary’s Mobile Brigades (BriMob) are among the unitsmost commonly contracted by plantation and loggingcompanies to deal with the security issues. In someareas of Indonesia, very serious human rights violationsby security units have been alleged and in some casesthese have been substantiated in the courts.Exercise of the right to free, prior and informedconsent by local communities in their dealings withforestry industries is clearly compromised so long asmilitary or police units are involved in negotiations orare retained by the companies to deal with disputes.177

Customary Institutions and the Principle of ConsentConclusionsFree and informed consent is a central principle for FSC.Effective exercise of this right is a key safeguard that communitiesand indigenous peoples have to ensure that certifiedlogging and plantation schemes do not violate theirrights. Moreover, where - as in Indonesia (see section 4) -legislative protections of land rights and customary rightsare weak, absent or insufficiently enforced, then free andinformed consent becomes the central safeguard for thesecommunities. Can Indonesian communities exercise this rightto protect their interests when dealing with forest industriesseeking certification?The following conclusions emerge from this section ofthis study:• The extent to which local communities and indigenouspeoples can exercise their rights to free and informed consentand to control forest management is limited in Indonesia,owing to both a legacy of repression and remaininginstitutional and legal obstacles.• A uniform system of village administration was imposedsince the late 1970s, which disempowered customary institutionsand disenfranchised community members. Althoughthe Act was revoked in 1999, the majority of ruralvillages in Indonesia continue to be administeredthrough the desa system.• Under the desa system communities are deprived of representativeinstitutions with legal personality, which cansign contracts with forest management companies or pursueactions in the courts on behalf of community members.• Concessionaires commonly retain, and pay for interventionsby, elements of the State security services to resolvedisputes and enforce their management regimes. A legacyof fear and distrust remains which discourages communi-178

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesties from exercising their right to free and informed consent.• Recourse to the law is a difficult option for communitiesin Indonesia. Although field studies were not carried outto explore this issue in detail for this study, successiveevaluations by international bodies concur that the courtssystem in Indonesia is in serious need of reform if therule of law is to prevail.• On the other hand, legislative and administrative reformsare underway to reform the system of village administration.Where these reforms have been carried through andthe authority of customary institutions restored to the satisfactionof communities, then the basis for more equitablenegotiations between communities and private sectorcompanies may now exist.• Participatory mapping by communities has proven to be apowerful tool that can provide the basis for negotiationsbetween communities and government or private sectoragencies over issues of land rights, resource access andboundary definition179

Photo: Sawit Watch Doc.

6The IndonesianExperience withFSC Certification

The Indonesian Experience with FSC CertificationKPHAs noted in Section 4.8, on Java Forest Concessions are referredto as KPH and are all managed by the State-ownedcompany Perum Perhutani (PP), which controls over 2 millionhectares of land on Java as a result. Perum Perhutanihas experienced major reorganisation in recent years.Through Government Regulation No. 14/2001, the status ofPerhutani was changed from being a para-statal company(Perusahaan Negara Umum/Perum), ostensibly managed inthe public interest, to a private company owned by shareholders.236 Perum Perhutani was thus stripped of its socialfunction and turned into a proft-making enterprise. However,on 7 March 2002, following a judicial review, through itsDecision No. 07.P/HUM/2002, the Supreme Court abrogatedRegulation No. 14/2001, as contrary to the ForestryAct No. 41. Perhutani, thus, got back its dual social andprofit making function, in line with GR 53/1999, and becameagain Perum Perhutani instead of being PT Perhutani(Persero).CertificationPerum Perhutani was first certified by the RainforestAlliance’s SmartWood programme in November 1990, threeyears before the FSC was founded. The certificate coveredall PP managed land in Java. In 1995, when the FSC evaluatedthe Rainforest Alliance for accreditation, FSC had notfinalized its plantation standards and all plantation certificateswere thus excluded from the scope of accreditation.In 1996, the FSC approved its certification principleon plantations (FSC Principle 10) and FSC then evaluatedSmartWood’s plantation programme. FSC at that time wasnot satisfied that SmartWood’s evaluation of PP met FSCrequirements and FSC issued a number of ‘pre-conditions’for the extension of its accreditation to cover plantations.182

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesAs a result, in 1997, SmartWood suspended its certificate ofPP and decided to evaluate each KPH separately with theaim of ascertaining that the FSC Principles and Criteria werebeing complied with adequately in each. Three KPH receivedSmartWood certification on this basis in 1998, supposedlyin compliance with FSC procedures. A further three KPHwere certified in 2000.Concerns were raised about the situation in these KPH,especially with regard to the response of the company togrowing civil unrest characterized by illegal cutting of timber,civil protests and hostage taking. A number of deaths atthe hands of security forces were reported. Timber theft wasreported to exceed 100% of the annual allowable cut. In1999, SmartWood identified a number of problems with compliance,in particular, the worsening relations between PPand local communities. These had not been addressed sufficientlyat the time of monitoring in 2000. Subsequently, afteranother monitoring visit in 2001 showed continuing compliancefailures, certificates were suspended on three districtsincluding the Cepu KPH in Blora District, which wasrevisited as part of this investigation. Among the main compliancefailures noted by the investigation, the continuingproblems of civil unrest, serious security issues, illegal loggingand PP’s ‘lack of serious commitment to communityinvolvement in forest management’ were cited as reasonsfor suspension. 237 Smartwood emphasises that all PP certificateshave now been suspended.The PP management plan for the Cepu KPH, for example,includes details about the basis for land ownershipwithin each subdistrict and refers to the colonial system bywhich private lands, village lands and state forests were registered,a process which commenced in 1917 and which wasapplied to the Cepu area in 1924 and then amended in 1925,1934 and 1935. Under this system each village gained its183

The Indonesian Experience with FSC Certificationown ‘Letter C’, copies of which are meant to be depositedin the National Agrarian Agency. Some villages still havecopies of corresponding maps made during the colonial period,which show the village areas and surrounding forestsand the boundaries between the two. In some villages theseboundaries were later marked by cement boundary markersor fenced off. Village administrative boundaries, which arenot co-terminous with the boundaries on village lands or stateforest lands, also exist.This investigation notes that SmartWood’s interpretationof Criterion 2.2 given in its generic standard and beingused to evaluate compliance seems either to be ambiguousor to be weaker than FSC Criterion 2.2. Whereas FSC 2.2expects local communities to ‘maintain control’ over forestoperations ‘to the extent necessary to protect their rights orresources’, unless they choose to delegate this through ‘freeand informed consent’, SmartWood instead checks to ensurethat:• Local communities’ legal or customary/traditional rightsto own, manage or use forest resources (timber and nontimber)have been formally recognised, documented inwritten agreements if necessary, and honored.• Controlled access is given or offered to local communitiesfor timber and non-timber forest products based oneither legal agreements or longstanding local arrangements(emphasis added). 238This gives rise to two ambiguities: first it requires certifiersto decide for themselves if they think recognition ofcustomary rights is ‘necessary’; secondly the language seemsto suggest that forest managers should control customaryusers’ access to forests, rather than customary users havinga measure of control of forest management. As noted below,it is exactly because the ‘longstanding local arrange-184

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesments’ do not provide communities with the control and accessthat they now demand, that disputes have arisen betweenPerum Perhutani and the local villagers.Community PerspectivesAs part of this investigation, a series of community workshopswere undertaken in Cabak, Nglebur, Janjang andBleboh villages – all of which fall in the Cepu KPH, in Jikensubdistrict - to better understand the communities’ perspectivesabout Perum Perhutani and its forest management, withthe aim of shedding light on the way Principles 2& 3 shouldbe applied in the Indonesian context.In all the villages visited, community members relatedstories which recount how their ancestors came to occupythese areas long before the Dutch colonial period, beforewhich time, they claim, their access to forests was not controlled.In one village, the people noted they have a separateethnic identity from other Javanese of the area, beingknown as Kalang, a group of woodworkers and carpenterswith a long association with forests that is also mentionedin Dutch sources. In this sense the people do consider themselvesto be ‘masyarakat adat’.The community members note that many villages dohave sites of special cultural or social significance, some ofwhich are still revered through customary rites. These sitesinclude ancestral graves of the original founders of their villages,old graveyards, with associated sacred springs andvery old trees. These areas are not all accommodated in PP’smanagement plans and in the case of the village of Janjang,ancient trees associated with one such site have even beencut and harvested by PP.In line with the Dutch colonial land registers, the villagersnote two main kinds of land in their area – villagelands which they claim belong to them and state forest lands185

The Indonesian Experience with FSC Certificationwhich they accept now belong to the State but in which theystill claim customary use rights. Some of the villages disputethe boundaries between these two kinds of lands notingthat areas that they consider to have been village lands weretaken over by the Dutch without their consent and reclassifiedas state forests. They point to old village sites and oldgraveyards within these state forests as evidence that villagelands have been expropriated. According to the villagersinterviewed, PP’s management plans do not recognizethe villagers’ rights in these areas nor do any oral or writtenagreements exist transferring these rights to PP. 239In those forests lands, which the villagers agree nowbelong to the state, the villagers now claim use rights andthey also note that in line with the Constitution these Stateforests are meant to be administered for the benefit of thepeople. 240 They note however that these areas were allocatedto PP without their consent and they now dispute PP’s rightsin the area. They recognize that they did not feel able tocontest these rights during the Dutch colonial era or underthe dictatorship, but they now feel able to demand restitutionof their rights in this era of reform.The communities note that they do not have control ofeither the village lands, which have been annexed into stateforests, nor of these customary use areas in State forests. Inneither case have joint agreements been entered into aboutthese areas. Indeed they note that PP has very little connectionwith the district authorities at all, as it feels authorizedto regulate affairs in these public forests without referenceto the local administration.The communities do note that in the last three years,PP has talked about implementing the Cooperative ForestManagement (PHBM) pilot project in their villages but thisbenefit-sharing programme is neither yet in operation in thesevillages nor has it been negotiated with the village authori-186

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesties. Indeed the villagers noted that they have very negativerelations with PP and with the security services that PP relieson to punish those who offend its regulations. They feelthey are still treated as robbers and forest destroyers. Theyadmit, though, that timber theft is commonplace and thatthis behaviour has gotten out of control, being grounded inpervasive poverty, hostile relations with PP and resentmentat the fines and punishments meted out by the security services.According to testimony collected in one village, thelooting of the forests by the communities is their response tothe denial of their rights.The villagers recounted a number of incidents of theshooting of villagers for alleged timber poaching, resultingin injuries and some deaths. Resentment against one suchkilling in August 2001, led to the PP regional office beingburned to the ground by angry villagers. A further incidentoccurred in early October 2002, when a 40 year old villager,Wiji, from the Jepon subdistrict, Blora district wascaught by a PP official, allegedly in possession of illegallyfelled timber. Reportedly, Wiji was then arrested and torturedby PP officials for three hours. He suffered a numberof injuries to his head and body, as a result of which he fellinto a coma. Covered in blood, he was taken to hospital wherehe died, apparently from brain contusions suffered whilebeing beaten up. Although villagers have loudly protestedabout this action and vehemently assert that he was wronglyarrested, no investigation appears to have followed, nor hasthere been any legal action regarding the case. One of thevillagers said, “I am surprised that the case has never beenbrought to court. Instead the officials involved have beenmoved to another area. Killing people seems to be nothingserious. The perpetrators should have been brought to court.”As such cases illustrate, it is clear that no adequatedispute resolution mechanisms exist to deal with these kinds187

The Indonesian Experience with FSC Certificationof conflicts between the company and villagers, much lessto resolve the underlying land, access, use rights and benefitsharing problems. Indeed the lack of a dispute resolutionmechanism is itself noted to be part of the problem. The villagesnote that fines and punishments seem to be imposedby PP in an arbitrary manner, without coordination with districtauthorities and without clear reference to an agreed legalframework. Resentment – some villagers spoke of ‘hatred’- of PP officials is widespread.Villagers note that PP personnel and other local officialsroutinely carry weapons when they visit communities.‘Why do they always have guns and hold weapons then theytalk with us?’ asks one community member. ‘It is intimidating.They don’t respect us… They feel they are kings’.The villagers also note that a number of factors havecontributed to the breakdown in relations and good forestmanagement. These allegations include: arrogant and arbitrarybehaviour by PP officials; unjust and brutal activitiesof the security personnel; lack of benefit sharing from thesale of timbers; no, or inadequate, provision of timber tovillagers for house construction; general political instabilityduring the reform era.The villagers also recommend ways of overcomingthese problems and re-establishing working relations withPP. Proposed measures include the following:• Definition by the district authorities of the extent of villageautonomy• Restitution of village lands on the basis of agreed maps• Community forest management of customary rights areasin State forests• Greater benefit sharing• Tumpang sari modified to increase the space for subsistencecrops.188

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesThe villages have set up a village Forest Area CommunitySolidarity Forum (FSMKH) to provide the basis fornegotiated agreements between the villages and PP. We foundthat the villagers’ knowledge of the standards, proceduresand purposes of forest certification to be very limited. Weaddress this problem in the final section of the report.Implications for the Application of Principles 2 and 3This case study has many implications for the way Principles2 & 3 of the FSC should be applied in Java. Among theemerging points for discussion are the following:• Perum Perhutani has acquired long term use rights whichhave been clearly documented and legally established,however, no equivalent security is provided to the communitieswithin these forests. (Principle 2)• There is clear evidence that Perum Perhutani is authorizedby government decree to hold long-term forest userights thus apparently providing the company with legallysecure tenure of their lands. However, this tenure isdisputed by affected villages on three grounds: that someState forests have annexed village lands; that customaryuse rights are not adequately recognized in other Stateforests; and PP is not sharing the benefits of these publicforests with the people in line with the requirements ofthe Constitution. (P&C 2.1)• The communities claim that some forests should be recognizedas village lands and that they have ‘customaryrights’ in other forests, but they are not being given theopportunity to ‘maintain control’ of these forests to theextent that they think is necessary nor have they delegatedcontrol to Perum Perhutani with their ‘free and informedconsent’. (P&C 2.2)• Major unresolved conflicts over tenure and use rights existand no appropriate mechanisms are in place to resolve189

The Indonesian Experience with FSC Certificationthese disputes. (P&C 2.3). The fact that these disputesare of a very ‘substantial magnitude’ should by itself precludecertification under 2.3.• Some of the communities in the area do claim to bemasyrakat adat, suggesting that Principle 3 should applyin at least some community areas within the PerumPerhutani concession area. However, their rights to own,use and manage their lands, territories and resources areneither recognized nor respected by national or local lawsnor by the company. (Principle 3)• These communities are not being given the opportunityto ‘maintain control’ of the forests in which they claimrights nor have they delegated control to Perum Perhutaniwith their ‘free and informed consent’. (P&C 3.1)• The communities do feel threatened and feel the operationshave curtailed both their rights and their access toresources. (P&C 3.2)• Management plans have not clearly identify ‘sites of specialcultural or religious significance’ in cooperation withthe communities, nor are these area recognized or protectedby PP staff responsible for forest management.(P&C 3.3)The communities point to the local regulation inWonosobo (Perda Kabupaten Wonosobo 22/2001) as anexample of a reformed legal and management regime compatiblewith their rights and aspirations.HPHPT Diamond RayaPT Diamond Raya Timber (DRT) is a company belonging tothe UNISERAYA group, based in Pekan Baru-Riau, whichowns concessions covering 870,000 ha. of forests on the is-190

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesland of Sumatra (see Table 5). DRT was registered as a company(PT) in Jakarta in 1978 and was awarded a concessionon 27 June the following year, through Ministerial DecreeSK 403/Kpts/UM/6/1979. Logging operations commencedthat year. The contract was extended on 8 May 1998 underSK 443/Kpts-II/1998 giving DRT a concession of 90,956hectares. The renewed licence included significant changesto the concession boundaries, with some 35,000 ha. of degradedforest being excised of which 25,000 ha. were allocatedto local communities and the local government, while10,000 ha. were re-allocated to an oil palm plantation companyPT Sindora Seraya, which is also a member of theUniseraya Group. The current licence to DRT, which is dueto expire in 2019, covers 90,000 ha. of peat swamp forest,most of which is no more than a few metres above sea levelat any point and which merges into mangrove forest in thenorth east. The forest is known as the habitat of rare species,including the threatened Sumatran tiger. 241TABLE 5: UNISERAYA GROUP 242No Company (ha)1 Diamond Raya Timber Co. 115.0002 Uniseraya Co. 112.3003 Essa Indah Timber Co. 100.0004 Perkasa Baru Co. 106.2505 Rimba Mutiara Permai Co. 107.8006 Peranap Timber Co. 77.5007 Rokan Permai Timber Co. 153.8008 Triomas PDI Co. 97.500Total 870.150191

The Indonesian Experience with FSC CertificationDisputes with Local CommunitiesDisputes over the boundaries of the concession and the waythe company was dealing with the local communities surfacedin the 1990s. Salient incidents in this history of disputesare summarised in the following paragraphs. In the1990s, the DRT logging operation was one of several involvedin a project funded by the ODA243 to develop improvedforest management (KPHP and see section 7.4). Afirst effort to settle contested boundaries was made througha spatial planning exercise, which resulted in a zoning mapon 6 December 1994 (552.11/Bappeda/3759). This zoningwas however later contested by the local communities. In1996, as part of the KPHP project, an agreement was negotiatedbetween the local sub-districts administrators, forestrydepartment officials and the company, with the presence ofODA staff. At the time, ODA staff explicitly noted that thiswas meant to be a first step in making an agreement aboutthe boundary between village lands and the concession. Villageleaders today also repudiate this agreement arguing thatit was negotiated over their heads and was not even signedby them but by the sub-district camat (senior governmentadministrative official for the sub-district, kecamatan). Theagreement contributed to the redrawing of the DRT concessionboundaries in 1998, with the excision of degraded forest.However, the local communities interviewed in this studysay that they still claim lands in both the DRT area and thearea allocated to PT Sindora Seraya (the sister company witha HTI concession).In 1999, the village leader of Lenggadai Hulu villageraised a number of concerns about DRT operations and heclaims that he recommended to LEI and SGS that certificationbe refused to the company. At the same time, accordingto representatives of community of Sungai Sialang, they alsonoted that:192

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilities• The boundary ‘agreed’ in 1996 was not realistic and thevillage lands were not adequate to meet the villagers’needs• Even so logging was being carried out on agreed villagelands• There was no participation in planning• No information was shared with the community aboutoperations• Promised payments of compensation were not paid• No compensation had been paid for expropriatedchainsaws.At about the same date, the village of Bantaian alsoclaimed that the boundaries of the concession had beenagreed by officials without the participation of villagers.In a further effort to resolve this dispute on 22 May2001, a negotiation took place between DRT and communityleaders, with the mediation of government officials fromthe bupati’s office. The agreement noted inter alia:• The company would implement its community developmentplan (PMDH) before logging in the communities’areas.• Social services would be provided• Information would be provided about the percentage ofprofits that would be furnished to the communities• There was a need for a participatory discussion about theboumdary• Reports on these discussions should be provided to thelocal government, village teams and village heads• Local people would be involved in drawing up the annualcutting plan• Meetings would take place through a forum agreed to bythe community.193

The Indonesian Experience with FSC CertificationAt that time the community of Labuhan Tangga Kecilclaimed that 5 km 2 of their lands had been logged by thecompany without their consent. According to the villagers,it was understood on 22 May 2001 that the agreed actionsshould be undertaken by the end of that year. However, theynote, none of these issues had in fact been addressed by thetime of the community workshop arranged as part of thisstudy in August 2002.CertificationSGS Qualifor undertook pre-assessment visits to DRT inNovember 1998 and June 1999. The main assessment thentook place in December 1999. This was the first evaluationin Indonesia to take place in cooperation with LEI. The SGSteam of four inspectors was accompanied throughout theevaluation by an LEI team of five, and the teams completedtheir evaluations against both SGS standards and LEI standardsin parallel. The SGS evaluation resulted in the issueof a number of ‘major Correct Action Requests’, none ofwhich related to FSC Principles 2&3. In the SGS systemsuch major CARs must be ‘closed out’, i.e. corrected, priorto the issue of a certificate. SGS re-visited the concession inAugust 2000, and as a result of that visit the major CARswere all ‘closed out’. A certificate was subsequently issuedon the 27 th March 2001. 244With respect to the observation of FSC Principles 2&3,the SGS Qualifor assessment, published in 2000, notes interalia that apart from NTFP collection the communities‘have not traditionally been very dependent on the swampforest’. Although the assessment team heard claims relatingto community rights within the concession, these were foundto be outside the revised concession boundaries. The assessmentsnotes that ‘Since the December (1999) visit the (DRT)management has been proactive in contacting local commu-194

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesnities and ensuring there is an agreed Memorandum of Understandingbetween each community and the company’. 245Judging by the public assessment report, no considerationwas explicitly given to Criterion 2.3 to assess whether an‘appropriate’ dispute resolution mechanism was in place.This is itself contentious given that FSC rules that ‘disputesof substantial magnitude involving a significant number ofinterests will normally disqualify an operation from beingcertified.’ The assessment did however demand a ‘minor correctiveaction’ of DRT with respect to FSC Criterion 4.5,noting that ‘There are no appropriate mechanisms for resolvinggrievances in cases affecting legal and customaryrights’ and ‘DRT makes no specific reference to hutanadat’. 246 The absence of a mechanism for ensuring compliancewith Criterion 4.5 suggests there was also an absencefor ensuring compliance with Criterion 2.3.The assessment also took into account Principle 3.However the team concluded that:• There was no hutan adat (customary forest areas) in theconcession, while the people enjoyed free access to gatherNTFP.• ‘In 1996 DRT negotiated the concession boundaries inconsultation with the neighbouring communities and thelocal government’. Consequently the concession area‘does not have future claims on it’. 247In 2001, a complaint about the SGS Qualifor/LEI certificationof DRT was filed by a consortium of Indonesianand European NGOs with SGS and FSC. This complaintdeals with a large number of FSC Principles and, with respectto Principles 2 and 4, it highlighted the existence ofdisputes between DRT and the local communities about benefitsharing, access to forest resources and community boundaries.248195

The Indonesian Experience with FSC CertificationSome of these concerns were investigated by SGSQualifor when it carried out a routine surveillance missionin November 2001. A visit was made to one of the communitiesin dispute with DRT about the boundaries but ‘foundno clear evidence of a disputed boundary with PT DiamondRaya. However, boundary disputes with the oil palm plantationof PT Sindora Seraya are possible.’ 249As noted below (section 6.5.1), SGS Qualifor does nothave a locally adapted generic standard for Indonesia. Guidancefor the application of Principles 2 & 3 are given in certainindicators in the SGS generic standard. With respect toCriterion 2.2, the current generic standard notes:2.2.1 access to local communities or other stakeholders, whohave recognised legal or customary tenure or use rights isgranted where it does not threaten the integrity of theresource or management objectivesGuidance: Where legal or customary tenure or use rightsthreaten the integrity of the resource or management objectives,criterion 2.3 must be invoked2.2.2 there is evidence that free and informed consent tocurrent and proposed management activities affecting userights has been given by affected partiesThe exact meaning of these indicators is ambiguousbut seem to imply that customary rights and usages shouldbe subordinated to management objectives, subject to freeand informed consent. If this is the case then this is seriouslyweaker than the FSC criterion. The indicators wouldgive the primary right to maintaining the ‘integrity of theresource or management objectives’. This is the exact oppositeof the FSC criterion which gives the primary right to196

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitieslocal communities with legal or customary rights.With respect to Criterion 2.3, the current SGS genericstandard provides the following indicators:2.3.1 all interested parties have access to relevant informationand have the opportunity to influence decision making.2.3.2 every reasonable effort is made to resolve disputesthrough fair consultation aimed at achieving agreement andconsent2.3.3 large scale operations begin only once conflicts havebeen resolved or every reasonable effort has been made toresolved them2.3.4 dispute resolution mechanisms (including legal requirementsand internal procedures) are documented (guidance:applies to organisations with over 5000 ha only).2.3.5 records of previous and on-going disputes over tenureand use rights are maintainedThe public summary of the assessment report does notprovide an explicit assessment of how the criterion and associatedindicators have been complied with, although it doesnote that ‘it was felt that the management could put in placea more transparent system for dealing with claims and disputes.’250Community PerspectivesAs part of this investigation, interviews and a communityworkshop were carried out in four villages in Rokan HilirDistrict – Bantaian, Sungai Sialang, Labuhan Tangga Besarand Labuhan Tangga Kecil in August 2002. These discus-197

The Indonesian Experience with FSC Certificationsions made clear that the local communities still insist thatthe DRT concession does overlap forests that have long beenused by these villages. Indeed, they claim that their landsextend right across the concession to Bukit Kapur sub-district.They also note that the official village (desa) boundariesreach far inside the concession. The villagers identifythemselves as Malay belonging to various regional groupsreferred to as Melayu Riau, Melayu Kuala Rokan, MelayuRokan Hilir etc. The communities recognize that as a resultof the process of modernization and the imposition of newadministrative systems, they no longer govern themselvesfully according to custom, they are unsure of whether theyshould be classified as masyarakat adat and their customarysystem of land occupation is attenuated. On the otherhand, only a small proportion of their lands are formally recognizedin law and most lands are still allocated and usedaccording to custom. Forests are used quite extensively aspart of their livelihoods, particularly for non-timber forestproducts, notably rattan, but also though bark collection andtimber sales.As noted, DRT and SGS Qualifor hold that there areno customary forests within the DRT concession althoughthey do agree that customary use is made of the forests byneighbouring communities to access rattan and other nontimberforest products. However, community members disputethis claiming that the concession does overlap theircustomary lands (and see map).They also claim that they:• Have participated in only a limited way in decision-makingabout concession management• Gain very little benefit from DRT’s operations• Feel intimidated in meetings as the company relies on themilitary’s mobile brigades (BriMob) to ensure security• Are unsure what procedures there are to secure their rights• Are unclear how their customary rights system is relevant198

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesto the evolution of a concession management plan• Do not really understand in any detail the certificationprocess nor the Principles and Criteria that are meant tobe applied.The sense of grievance among the community memberswas very obvious, with some workshop participantstalking about DRT as an ‘enemy’ that has ‘looted’ their lands.Conflicts between the community and DRT also stemfrom the fact that many of the community members carryout small-scale timber cutting, today using chainsaws.Interviewees note that this trade, notably of the species milas,a small tree favoured by coastal communities, not only providesa vital source of cash income but has been carried outon a moderate scale for generations. 251 The milas wood resistssea water rot and is used by the coastal communities inBagan Siapi-api as part of their fishing gear and is indeedvital to the customary use of one of Indonesia’s major fisheries.Another interviewee did also note that the scale ofcutting was stepped up by the communities to get ‘revenge’on DRT for what they felt was the unfair exploitation oftheir resources. One village leader noted that he feels disappointedat the accusation that his people steal timber. ‘Thetruth is DRT Co. has seized the people’s land.’In 1998, the company cracked down on this ‘illegallogging’ and hired Brimob (military Mobile Brigade and seebox ‘Security Issues’ in section 5.4) to stop it. Brimob tookaway the people’s chainsaws and prohibited them from fellingmore timber, even in their own areas. Testimony to thiseffect was collected in Labuhan Tangga Kecil and also inSungai Sialang village.Noted the village leader from one community: 252I would tell you the truth – how they (DRT Co.) treated us.People here are about to be made destitute and they would199

The Indonesian Experience with FSC Certificationdo anything to save their life.A villager from another community explained:Honestly, I don’t want to share any information of what hashappened relating to DRT Company anymore because therewas not any follow-up. Many people from outside come andask for information but then they go to the company. Whatis their purpose in then going to the company ? Do they sellthe information and get money? … 253 Here, in Sialang, 60%of the community work in timber. We have done so for generations.We did it traditionally and later we took the wastetimber (kayu buangan) from DRT Co. The government saysthis is illegal and that we damage the forest. But we arevery sure that DRT Co. is responsible for the damage to theenvironment and forest degradation that has been happeningfor years. They never re-planted the land.Another village head agrees:I know that DRT Co. never plant ramin log in line with thereforestation requirement. I can prove and be the witness ofit. They just took the seed of ramin, then they put in thepoly bag but the ramin seeds are never planted. It is just aformality to show to the team from forestry department.On 24-25 August 2002, a community meeting was heldto consider progress in dealing with DRT, in particular thecompany’s failure to meet its obligations under its PMDHprogramme. The minuted meeting, which included representativesfrom 7 villages and 32 other village members, concludedthat:• DRT HPH should be revoked• LEI should revoke its certificate of DRT• DRT should discharge its outstanding obligations and200

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesagreements with the communities• The Ministries of Forests and Agriculture shouldrecognise the region of the DRT concession as the customarycollective lands of seven Malay villages and returnit to them.Implications for the Applicationof FSC Principles 2&3 in IndonesiaSix main issues for discussion emerge from this case study.• SGS Qualifor’s generic standards, notably the indicators,seem to be either ambiguous or weaker than the FSC Principlesand Criteria 2 & 3.• Given that DRT concession is operating on a 35 year loggingcycle, while the company concession only extendsfor 20 years, clarification is needed about what constitutes‘long-term forest use rights’. (P&C 2.1)• In the absence of secure and agreed legal rights to land,clear participatory mapping exercises are needed to helpresolve land disputes to the satisfaction of all parties.(P&C2.1, 2.2, 2.3)• Clarification is needed about whether customary usesshould be distinguished from customary use rights.(P&C2.2)• Prior agreement is needed through community fora to ascertainappropriate mechanisms for negotiation and thegiving of consent. Agreements signed by camat, in thename of the community, cannot be construed as consent.(P&C 2.2)• The deployment of company-hired military forces cannotbe considered any part of an ‘appropriate dispute resolutionmechanism’.• Given the legacy of army violence and intimidation, disputeresolution mechanisms need to be very transparentand participatory. Long term capacity building of affectedcommunities may be required to restore equitable rela-201

The Indonesian Experience with FSC Certificationtions between communities and forest managers. (P&C2.3)PT Intracawood ManufacturingAnother company that has been seeking certification underthe FSC process is PT Intracawood Manufacturing (PTIM),which is a joint venture of PT Inhutani I (30%), PT Altrack(35%) and PT Berca Indonesia (35%). PT Altrack and PTBerca Indonesia are companies owned by the Central CiptaMurdaya Group. PTIM commenced timber harvesting in EastKalimantan in Malinau and Bulungan districts in 1990. Inaccordance with a joint agreement signed with PT InhutaniI, PTIM also established a large wood processing plant inTarakan Island, just off the coast, from which it developeda lucrative trade with the US ‘Do-It-Yourself’ retailer, HomeDepot. In 2000, Home Depot announced that, as from 2003,it would only retail FSC-certified timbers, 254 so in 2000PTIM approached FSC-accredited certifying bodies SGSQualifor and then SmartWood for certification. Smartwoodcarried out an assessment of the operation but declined tocertify the operation pending the resolution of a number ofmajor difficulties.This study has included a detailed but not exhaustiveinvestigation into this concession area, with the aim of elucidatingthe practical difficulties with application of Principles2 & 3 in Indonesia. The study reveals that major disputesexist about: the legal status of the area; the status ofthe rights of the indigenous peoples who claim rights overthe whole concession area; and the legality or not of smallscalelogging licences which have been handed out in thesame area by local government.The following sections of the report set out these issuesin some detail. However, given the enormous complex-202

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesity of the issues uncovered, it is not claimed that these findingsare either definitive or constitute a comprehensive evaluationof the concession or its legal status. The case studydoes however provide some clear insights into the challengesin the way of an unambiguous application of FSC Principles2&3 in Indonesia.Legal status of the ConcessionIn 1988 PTIM was established as a joint venture companythrough three Notary Acts, which included agreements aboutwho should manage the timber concession, who should runseveral management activities and have access to the timber,and a joint agreement (Perjanjian Kerjasama) with PTInhutani I to promote industrial processing. 255 Key elementsof the agreement are:• Inhutani I subcontracted 250.000 hectares of its timberconcessions in East Kalimantan, over 75 years, to PTIntraca Manufacturing, based on the assumption that thegovernment would extend PT Inhutani I’s own underlyingHPH.• Exclude the timber plantation concession area (HTI, PTIntraca Hutani Lestari) over 42, 050 hectares which liewithin the PTIM concession area. However the logs fromthe land clearance of the HTI would be utilised by PTIM(See the Map # 3). 256• PT Inhutani I devolved the concession management activitiesinclude planning (areal concession deliniation,remote sensing uasing areal photo, mapping, etc.) harvesting, timber transporting, etc. to PTIM.• PTIM would sell the logs to PT Inhutani I at the rate of5000 m 3 per year, while a further 5000 m 3 /year would besupplied to the PTIM processing plant. If the factory hadnot been set in operation yet, then PT Inhutani I wouldpurchase all the logs from PTIM. If production from the203

The Indonesian Experience with FSC Certificationarea was insufficient, PT Inhutani I would have to sellPTIM logs from its other logging concessions which coveredsome 2.2 million hectares of East Kalimantan.The concession area transferred to PTIM by PTInhutani I lies on the boundary between Malinau andBulungan districts and covers 226,326 hectares of NaturalForest and Rehabilitated Forest. A further 42,050 hectaresare classified as HTI (industrial timber concession) (see map3) but this area was not considered for certification bySmartwood. Before its transfer to PTIM, the area had beenlogged for 15 years by PT Inhutani I under a MinisterialDecree of the Agriculture Ministry, SK #352/1976. This20-year concession made retroactive to start in 1973, gavePT Inhutani I rights over a total 2,465,000 ha. until 1993. 257By means of a letter from the Director of PT InhutaniI, reference number #1694/IC/10/Inh/89 dated 30 November1989, PT Inhutani I transferred the rights and responsibilitiesfor managing this concession to PTIM. This gavePTIM responsibility for all forest management operationsincluding forest concession planning, concession area delineation,mapping, remote sensing using areal photo surveys,forest inventory, forest rehabilitation, and training for sustainableforest management. This also included transfer ofthe right to all published documents and permit arrangementsrelated to the concession. 258However, on 4 th July 1992, the Director of PT InhutaniI through a further letter, reference number #949/IVC/10/Inh/92, issued new stipulations about the Concession ManagementPlan (Rencana Karya). According to this letter,owing to the continuing absence of forest and concessionborder delineation, any process of annual Proposed ManagementPlan (Usulan Rencana Karya Tahunan /URKT)submitted by PTIM should be subject to the approval of PTInhutani I.204

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesTABLE 6: THE ARRANGEMENT OF PTIM CONCESSION AREAForest Function(Hectares)Production Forest 146,386Limited Production Forest 66,972Excluded from the concession area:1) Conservation Area2) Community Lands30,31013,853Remaining Concession Area 169,195The Forestry Department claims all these areas as Stateforest land, which consist of production forest, limited productionforest, and which include all the forests on the crestsof Bengalun and Sondong mountains. However, these claimsby the Forestry Department were not followed up by forestdelineation either by the Department of Forestry or by theconcessionaires. In fact, to date, only the southern part ofthe concession has yet been delineated (around Bengalunand Sondong mountains) along the boundary of the protectedforest (hutan lindung). The northern part of PTIM wasdelinaated by PT Inhutani 1 in 1998 but overlapped withalmost all the villages of Mangkuasar, Sesua, Sempayang,Batu Lindung, Seputuk, Rian, Sendulum, Tidung Pala andTembalu along the Sesayap River and was rejected by thelocal government of Sesayap Sub-District, Bulungan Districtdue to lack of data on the village territory. 259Further investigation, shows that the status of the PTIMconcession is even more confused. On February 1988, theDirector of PT Inhutani I sent a letter, reference number 362/IVC/10/1988, enquiring about the forest gazettement forPTIM in the concession area (HPH) of Inhutani I. On 11 thMarch 1998, the Ministry of Forestry issued a letter, referencenumber 219/Menhut-IV/1988, announcing that such205

The Indonesian Experience with FSC Certificationareas were to be the long term stock supply for the jointconcession of PTIM with an area of 250.000 hectares (althoughin fact they only claim 226.045 hectares, which, oncethe HTI area is excluded, is really less than 180.000 hectares.)On October 1991, the general director of the forestconcessions in the Department of Forestry issued a letter, #2355/IV/BPHH/1991 dated on 9 October 1991, approvingPT Inhutani I’s authorization of PTIM as concessionaire.This was restated in a letter of the Department of Forestry, #2931/IV-RPS/1991 dated on 20 November 1991, concerningPTIM’s status, authorizing PTIM to propose the AnnualPlanning Program (RKT).Since the PTIM area falls inside the HPH of PTInhutani I , it is the terms of the PT Inhutani I’s concessionwhich apply to PTIM as a sub-contractee. PT Inhutani I’s,2.2 million hectare concession expired in 1993. In 1995, theevaluation report on PT Inhutani I (#656/Menhut-IV/1995)by the Department of Forestry noted that:1. After 20 years of forest exploitation – only 24.5% of theoriginal forest remained unlogged, while there should havebeen 42.9%, given that the operation was being cut on a35 year rotation. The implication is that PT Inhutani Iand any subcontractees had been mismanaging the concession.2602. Migrants and people from local communities were occupyingthe forest area, opening it up and cultivating it,which implies that Inhutani I was unable to secure theareas.Notwithstanding, PT Inhutani I did secure a temporaryextension of its contract – commencing on 8 th December1993 and lasting until 7 December 2013. The concessionarea was however reduced by 257.300 hectares (from206

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesthe requested area for 2.207.700 hectares) to allow for theestablishment of conservation areas and for other purposes.PT Inhutani I’s extension was made conditional on the followingrequirements:1. The areas have to be delineated and officially designatedfollowing the forest gazettement procedure and rearrangedas forest blocks. Without any of this tenure security therewould not be any sustainable production and there wouldbe a repeat of the the bad experience of forest managementof the past 20 years.2. The remaining old growth forest within the logged-overareas would have to be rehabilitated to maintain the secondcycle of rotation.3. Areas which had already occupied by the migrant neededto be sorted out:• Those areas on the boundaries of the concessions shouldbe excised from State forest lands in the delineation process• Those areas occupied by migrants within the concessionarea were to be ‘enclaved’ with permanent boundariesestablished, and subject to government approval.4. On the second round of rotation (2008), further loggingof standing stock would be prohibited unless there wasdata on forest increment.5. Fulfill the HTI and other obligations as required in law& regulation.Contradictorily, PT Inhutani I is one of the 116 companieslisted by the Department of Forestry as those whichdid not get their contracts extended. Many of these companiesare still waiting for the result of performance asessmentsdone by Forestry Departement of their sustainable managementof production forest (Pengelolaan Hutan AlamProduksi lestari) in accordance with Ministerial Decree207

The Indonesian Experience with FSC Certification#4796/Kpts-II/2002 on the performance appraisal ofsustainanble production forest management (Tata CaraPenilaian Kinerja Pengelolaan Hutan Alam ProduksiLestari- (PHAPL). The validity of PTIM’s concession is thusin doubt.Customary rights claimsWe want community title to the ownership of our villageterritory, but this land is not for sale: that would be likeselling ourselves. The land should not even be given out asa loan. It belongs to future generations. If we sell the land,we are selling our future generations. 261The area now covered by the PTIM concession includesa large portion of the ancestral lands of the Lun Dayeuh,Tidung and Berusu peoples, which they shared for manyyears, possibly centuries, with the hunting and gatheringPunan Bulungan. Historically the Punan and many of theother Dayaks inhabited the headwaters of the Sesayup,Bengalun and Sekatak rivers that drain the area, scatteredin small settlements and longhouses through the forests. 262Customary rights zones were, and still are, allocatedto longhouses in a manner broadly similar to that summarizedfor the Punan and Kantu’ in section 4.1. However, inthe first half of the last century, during the Dutch colonialperiod, communities were encouraged to congregate at themouths of some of the upriver tributaries in larger settlements,so that the Dutch administration could reach the villages.This process intensified sharply in the late 1960s and1970s as the New Order government began to apply itsprogramme of obliging shifting cultivators and nomads, ‘isolatedand alien tribes’ (suku suku terasing – see section 3.2),to move out of the forests and settle down as permanent farmerson the forest margins, thereby, in theory, freeing up forestsfor the exclusive use of the timber industries. The re-208

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiessult was that, by the mid 1970s, the majority of the Dayaksin the PTIM concession area had been removed from theirforest settlements and longhouses and settled along the majorrivers. In the 1980s, the government progressively imposedthe uniform desa administrative regime on the settlements,subjecting the communities to even more direct rulefrom Jakarta. Map 4 illustrates this process of resettlementschematically. 263Today the Dayaks interviewed have very mixed viewsabout the resettlement. On the one hand, they note, they havenot in fact fully abandoned the upriver areas. A small numberof upriver settlements remain, while many communitymembers from the downstream resettlements still maintainfields in the upriver areas, although not being resident nearbythey find the crops ravaged by pests more than in the past.At the same time, adat continues to govern a great part ofvillage affairs, is applied to visitors to the communities, andalso governs the allocation of hunting rights in the headwaters:community members are still expected to limit theirhunting activities to the forest zones where their ancestrallonghouses were located prior to the resettlement and canexpect to be penalized according to custom when they violatethese norms. The advantages of resettlement are thatthey now live in larger villages and enjoy more friendshipsand improved access to health, education and transport. Onthe other hand, they now have to buy many of their subsistencerequirements – fish, meat and sometimes even vegetables– ‘we need cash for everything’. Drinking alcoholhas become a social problem, they note.In the past, the Berusu relied on village wise men,orang tua adat, to apply adat and adjudicate disputes. Duringthe Dutch colonial period they adopted the institutionsof kepala adat (customary chief) and kepala adat besar (customarybig chief), to provide longhouse leadership and help209

The Indonesian Experience with FSC Certificationadjudicate disputes between settlements. These institutionsretain their vigour and now function alongside the administrativeregime imposed through the desa system. Both theBerusu and the Punan have now set up their own organizationsto deal with outsiders and press for a recognition oftheir rights. The Berusu organization, established in 1993,is called the Customary Consultative Body of the Berusu(Badan Musyawarah Adat Berusu) and is overseen by thesenior customary leader for the area (kepala adat besar),who lives in Sesua, and the customary leaders of the sevenvillages of the surrounding area – Sesua, Batu Lindung,Seputuk, Rian, Sedukun, Sebidai, Sebawang. For their partthe Punan have established a regional organization unitingall the Punan of East Kalimantan, the Customary PunanAssociation (Lembaga Adat Punan). The Punan characterizethemselves as people who live close to nature. The relationbetween Punan, their lands and forests they describe asbeing like ‘forest milk’ (telang otah urun lunang). 264Interviews carried out during this study reveal that atleast eight customary rights areas overlap the PTIM concessionand the associated HTI area (see table 7). 265 Theextent of these areas are shown on Map 4. Map 6 showshow these areas overlap the PTIM logging concession. Noneof these customary areas have been legally secured. 266TABLE 7 : CUSTOMARY RIGHTS AREAS OVERLAPPING THE PTIMCONCESSION AREACustomary rights Ethnic groups Map # (and colour)areaGong Solok Kenyah 1 (Light brown)Sesua and Punan Berusu and 2 (Light Blue)MangkuasarPunanSeputuk Berusu 4 (Dark Blue)Rian Berusu 5 (Red)Sendulum Berusu 6 (Green)Sesayat Tidung 7 (Grey)SekatakTidung, Berusu 8 (Dark Brown)and PunanPungit and Bengara Berusu 9 (Blue)210

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesDisputes with the companyWhen PT Intracawood first came here, we were not braveenough to say anything, because it was during the New Orderregime. Since reformasi we have spoken out. 267Disputes between the PTIM and the local Dayak communitieshave a long history. In the community workshopheld as part of this investigation, village members noted thefollowing issues which they have brought up with the companyand the local government.• Logging has soiled drinking and bathing waters, renderingit undrinkable• Fish stocks in turbid rivers have declined• Hunting has been disrupted• Machinery has destroyed forests• Burial grounds have been destroyed• Land rights have been denied• Access to forests for shifting cultivation and hunting hasbeen denied• Forests were cleared for HTI, exacerbating local flooding• Trees have been felled along river banks• Few employment opportunities have been offered to localpeople• Outside workers have molested local women. 268• Sacred trees have been felled• Agreed compensation has not been paid.• Adequate information has not been provided and dialogueshave not been sustained.Some of these complaints have been dealt with by thecompany. For example, compensation payments have beenpaid in some cases. A piped-water system was installed inone village, although it was not completed. The companyhas implemented a PMDH programme, although not in a veryparticipatory manner. When Dayak women complained about211

The Indonesian Experience with FSC Certificationa brothel which had been established on community landjust north of Sesua, local officials had it closed.In Sekatak, on the eastern side of the concession, disputesbetween the company and villagers have become morebitter. In early 2002, after a long history of disputes aboutcompensation payments, the community decided collectivelyto take matters into their own hands and impounded companymachinery while destroying buildings in the loggingcamp. The company responded by calling in the police, whichresulted in arrests and, after lengthy court hearings, threemonth imprisonment for those found guilty. Community membersevidently still feel angry with PTIM over this incident.‘If PTI carries on using the New Order rules, we will react.’This conflict was identified as a problem during thecertification assessment and Smartwood and DfID promoteda workshop in Tarakan between some of the Sekatak villageleaders and PTIM to try to resolve the dispute.The community of Rian has also been involved in aserious dispute with the company. According to the testimonyof villager members, during the July and September2002, members of the community sought to open discussionswith the company to settle their differences. On 10 October2002, members of the community filed a complaint aboutPTIM’s operations and asked local officials to check whetherthe company was operating correctly. When they got no responseto these efforts either, on 21 October 2002 the communitydecided to set up a blockade on the road through thevillage in order to freeze PTIM’s timber harvesting operations.The response was immediate. A large force of Brimobaccompanied by 20 members of another (unidentified) militaryunit came fully armed to the village and demanded thatthe blockade be lifted. Three members of the community werearrested. Summons were served on these three on 21 Novemberto appear at the Tanjung Selor police station where212

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesthey were charged and jailed. Bail was set at Rp. 3 millioneach (US$ 350) a sum too high for the three to pay. 269 Whilein jail the community leaders were approached by companypersonnel and persuaded that if they wanted the charges tobe dropped they should first sign letters withdrawing theircomplaints against the company. Under duress they signedbut the charges were not dropped. ‘I feel very frustrated’noted one community member ‘I am a notable figure in mycommunity and for me this is harassment’. 270The community workshop also discussed what wouldconstitute acceptable alternative negotiation mechanisms toestablish agreements with companies. The following suggestionswere made:1. Regularise community land claims through good maps.2. Provide clear information about the company’s intentionsto the community.3. Hold community discussions to decide on an appropriateresponse4. Delegate the kepala desa and kepala adat to jointly negotiatewith the company5. Hold further community discussions to assess the draftagreement6. Sign the agreement between the company and the kepaladesa and kepala adat.7. Register the agreement with a notary .One community member stressed the bilateral natureof such negotiations:We don’t need the government to mediate our business. Wecan settle our disputes without the government. We havethe right to determine our own fate. If outsiders come inthey need to respect our law.213

The Indonesian Experience with FSC CertificationAnother emphasized:The kepala adat cannot speak for the community withoutinvolving us all first.As for the content of such negotiations and agreements,the following elements were suggested:• Fees payable for each cubic meter of timber extracted• Community development programmes• Agreement to negotiate each annual cutting plan• Community monitoring of operations• Agreement to resolve all disputes through adat.Local Government claims and rights allocationsBefore the implementation of the 1999 Regional AutonomyAct, the Department of Forestry’s regional offices (kantorwilayah) and BipHut 271 had considerable authority over concessionareas, and over the delineation of concession boundariesand the boundaries of state forests. Decisions weremade from the top-down, without much authority being conferredon regional forestry offices (Dinas Kehutanan) or theregional forestry branch offices (Cabang Dinas Kehutanan).However, with the implementation of the RegionalAutonomy Act, many changes were made to the institutionalframework of government. The regional forestry officesgained more independence and began to operate under thecontrol of Provincial Governors and District regents (bupati).In Bulungan and Malinau, a new kabupaten carved outof Bulungan in 2000, the regional forestry bureaux did notrecognize the extension of the contract of PT Inhutani I bythe Ministry of Forestry #656/1995. Under the EastKalimantan Spatial Plan, 272 carried out in 2000, PT InhutaniI’s concession area was near halved to cover an area of214

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilities1.137.388 hectares, about 1.070.312 hectares smaller thanthe 1973 concession. A result of this is that local forestrybureaux officials do not recognise PTIM’s concession rights.Based on the Government Regulation # 6/1999 on theUtilisation of Production Forest, the local governments ofBulungan, Malinau and other districts (generally inKalimantan) have passed District Government Regulations(PerDa) on ‘Timber Harvesting from Private Forest, CommunityForest and Adat Forest’. 273 These regulations allowsthe bupati to give out 100 hectare annual timber harvestingpermits to private land owners, communities and customaryforest owners. This has opened the way for outside investorsto fund small-scale concession activities, in the name ofthe community, in areas claimed by local communities. 274To gain these concessions and before approaching thebupati in the name of the communities, outside investors havefirst sought local consent by signing deals with village headmen(kepala desa), and other prominent community members,and by offering to pay compensation to the communitiesaround Rp. 20.000 (US$2) per m 3 for all timber extracted.Considerable controversy within the communities and betweendifferent villages has been generated by these deals,due to lack of transparency in the negotiations, disagreementsabout who has authority under customary law to allocaterights in these areas, and lack of clarity about to whomthe money should be paid. Nevertheless, despite these problemsand even though the payments seem very small comparedto the value of the timbers on the international market,these deals are seen as highly advantageous by manycommunity members, used as they are to seeing timber extractedfrom their lands without receiving anything in return.Within the PTIM area there are at least 12 differentsets of such permits given out by the local governments.215

The Indonesian Experience with FSC CertificationThe result is that the PTIM concession area is now partiallycovered with a chequerboard of dozens of small-cutting licences(see Map 5). 275 PTIM has made strong efforts to havethese small permits cancelled, although this has exacerbatedrelations with some of those community members currentlygaining financially from these short term arrangements.The status of all these small concessions is now indoubt, however. In March 2002, Government Regulation(PP) # 34/2002 was passed, replacing the previous regulation(PP 6/1999), thereby restoring the authority of the ForestryMinister to issue new forestry concessions and denyingthis right to local government.Ongoing conflicts between provincial forest departmentand the district forestry offices over who has authority overforest delineation processes further complicates the picture.This confusion and competition between the forestry bureauxis one of the major constraints impeding forest delineationand concession delineation.Experience with certificationPT Intracawood has interacted with three FSC accreditedcertification bodies. It first contacted SGS Qualifor, but afterfield visits, the certification company indicated that itfelt conditions were not far enough advanced to merit a fullassessment. PTIM then brought in Smartwood, which carriedout a number of scoping visits and then a full assessmentof the concession in March 2000, which establishedthat a number of problems needed to be dealt with before acertificate could be issued. Smartwood has also carried outa number of subsequent audits in the concession.After carrying out its assessment of the Intracawoodconcession in 2001, Smartwood made three key Preconditionswhich relate to Principles 2 and 3:216

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesPrecondition 1Prior to certification, Intraca shall reach an agreement withthe district governments of Bulungan and Malinau Districtsthat will result in:1) Respect for the concession’s nationally recognizedboundary; and2) Stop the issuance of IPPK licenses, or extensions ofcurrent IPPK licenses, within concession.Precondition 3Prior to certification, Intraca shall conduct a community surveyto document and map community land claims, resourcesuse and sites of special community interest within concession,including existing and potential areas of conflict. Thecommunity survey will :1) establish social baseline data;2) assess social impacts from Intraca logging operations;3) make recommendations about actions to be taken tocompensate for and/or mitigate impacts;4) make recommendations for social impact monitoringprocedures; and5) recommend ground rules for community relations, includingthe steps required to establish the community forumdescribed in Pre-Condition 4.Precondition 4Prior to certification, Intraca shall establish a consultativecommunity forum composed of legitimate representativesof communities whose lands are fully or partially withinthe concession and including representatives from companymanagement and local government. Community membersof the forum should be transparently selected by community.The purpose of the forum is to set guidelines and policyrelations between Intraca and villages, to resolve specific217

The Indonesian Experience with FSC Certificationland and resources-related disputes, and to help the companyselect the villages to be assisted under the PMDH program.Intraca will support the forum financially and administratively.276Since these findings, PTIM has also being in contactwith a third certification body, SCS from which it secured aChain of Custody certificate. The certificate will permitPTIM to label as ‘FSC certified’ plywood it is manufacturingin its plant in Tarakan. PTIM is importing pine fromFletcher-Chalenge FSC-certified plantations in New Zealandand processing this into plywood with meranti veneersourced from the disputed concession. In this way, PTIM isable to supply the North American market with FSC certifiedplywood even though its own concession in not certified.Implications forthe implementation of Principles 2 & 3 in IndonesiaThe following issues for discussion are brought out by thiscase study:• The absence of any legal process giving land security toindigenous peoples has contributed to serous confusionsand disputes about tenure and access to forestresources.(Principle 2 and 3)• Incomplete forest gazettement processes mean that concessionrights are insecure and of uncertain duration. Inthis case, neither PT Inhutani I nor PTIM have fulfilledtheir obligations to delineate the boundaries of theconcession.(Principle 2.1)• There is a lack of clear evidence that the forest manager,PTIM, has long-term forest use rights to the land, owingto the fact that PTIM acquired rights from PT Inhutani Ibut, in the opinion of the regional forestry offices, PT218

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesInhutani I’s rights to the PTIM area have lapsed.(Principle2.1)• The conflicts of interest between the national, provincialand district forest offices further undermine the forestmanager’s security of tenure.(Principle 2.1)• The entire concession area is claimed by indigenouspeoples but there is no evidence that PTIM’s managementplan ‘recognizes and respects’ these peoples’ rightsto ‘own, use and manage’ these areas.(Principle 3, 3.1)• No agreements have been negotiated with the communitiesallowing PTIM to log the communities’ areas withtheir prior and informed consent.(Principle 2.2, 3.1)• Appropriate mechanisms have not been established eitherto resolve disputes between PTIM and the communitiesor with the small-scale concessionaires.(Principle 2.3).The certification body has obviously identified thatthere are serious problems for PTIM meeting Criteria 2.1,2.2, 2.3, 3.1, and 3.3. The question is, though, has it madeclear that compliance with Principles 2 and 3 should requirethe concessionaire to ‘recognize and respect’ the customaryrights of the indigenous peoples to own and control theirlands. As the owners of the area, it can be argued that thecommunities’ long-term tenure and use rights should alsobe ‘clearly defined, documented and legally established’ inaccordance with Principle 2. The problem arises when theCriteria and Indicators are attended to, one by one, withoutbeing framed by the overall intent of thePrinciples.(Principles 2&3)HTITo date there has not been an FSC certification of a timberplantation in Indonesia. The final case study carried out for219

The Indonesian Experience with FSC Certificationthis investigation instead examines a new HTI operationbeing developed in West Kalimantan. The concession wasselected as a case study because land acquisition processeswere more developed in this area than in most HTI operations.PT Finantara IntigaIt is really upsetting to see our own lands fragmented foroil palm plantations & HTI without having any chance tounderstand more about its consequences. It should have beenus that decided the future of our adat land and villages.(Tumenggung Udjon)PT Finantara Intiga (PTFI) received an Industrial TimberPlantation permit (HTI) through Ministerial Decree in 1996.The joint venture company secured a total concession areaof 299,700 hectares, located in Sanggau and Sintang districtsof West Kalimantan Province. The HTI is divided intofive management units, three in Sanggau and two in Sintang.PTFI aims to produce pulpwood from plantations on theseunits in order to supply a pulp and paper factory with a capacityof 500,000 metric tons per year. (Exactly when andwhere the projected factory is to be installed in WestKalimantan is not yet clear). To supply the factory, the HTIis expected to produce pulpwood at a rate of 1,000,000 cubicmeters per year from plantations of Acacia mangium,Acacia crassicarpa and Eucalyptus spp.Since its establishment in 1996, the management of thecompany has undergone three changes in the shareholding.Initially the proportions were 40% for PT Inhutani III, 30%for Gudang Garam (a private cigarette company) and 30%for Nordic Forest Development Holding Pty Limited. Thelatest position for the shareholdings of PTFI is PT Inhutani220

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesIII 20% and Nordic 80%. PT Inhutani III has had to graduallyreduce its shares in the company due to its own financialproblems, resulting from it losing an allocation from theReforestation Fund.Of the total concession area of 299,700 hectares, about80,056 hectares cannot be utilized because they overlap areasused for oil palm plantations, densely-populated residentialareas and primary forests. Apart from demonstrationplots, Acacia plantations are to be developed in partnershipwith local communities. Community members are expectedto collaborate with the plantation scheme in exchange foropportunities of paid employment and compensation paymentsfor lands used for plantations. The villages also benefitfrom the provision of various services.By 2000, the Acacia plantations covered 20,000 hectares.As a result of the lengthy processes of land acquisition,the company had had to lower its target for plantationestablishment for 2003, from 100,000 hectares to 50,000hectares. The company hopes to return the unusable areasof its concession to the Ministry of Forestry in exchange foran additional 104,958 hectares as a substitute. 277 However,much of this replacement land being sought by PTFI actuallyfalls outside State forests and include Dayak lands inareas classified as agricultural land. The company, however,expects to be able to appropriate this land as if it were inState forests. Although the company expected approval ofthis request in 2001, no information on the additional permithas been made public. Nor are data available on the statusof the boundary delineation of the HTI area.Land Acquisition Criteria for PT FI PlantationsTo establish its plantations, PT FI needs compact blocks ofland preferably of a minimum 100 hectares each. It seeksareas that are not fragmented, contain no enclaves of other221

The Indonesian Experience with FSC Certificationlands such as farms, rubber plantations or customaryagroforestry plots. According to the company’s guidebook,the kinds of land considered suitable for the development ofthe HTI are:1. Imperata grassland2. Scrubland3. Mixed Imperata grass land and scrub4. Rawang forests (low volume secondary forests).The company explicitly excludes from conversion thefollowing land types:1. Primary Forests2. Secondary Forests3. River banks4. Community Conservation Areas (forest preserves)5. Agroforests (mixed timber and fruit trees) (tembawang)6. Rubber Plantations7. Steep land, swamps and tidal forestsLands included in the plantations are to be leased tothe company by the community, implying recognition of thefact that the lands are owned and under the possession ofthe community and not actually controlled by the State. However,there is concern that using these criteria, the companymay consider converting a number of village lands to plantations,such as swiddens, fallow lands, old and new rubberplantations (where rubber trees do not grow as monocultures),fruit gardens, young tembawang, rice paddies, uplands(commonly without big trees) and sacred lands, basedon the fact that the Department of Forestry claims controlover these areas. 278 Whereas communities practise multipleuse forestry and rotational farming, the company’s criteriaand government officials see mixed species agroforests andfallow lands as unused areas suitable for conversion. Dis-222

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesagreements about where plantations are best established havearisen as a result (See Maps 7,8,9).Land AcquisitionTo take over land for its plantations, the company formed adistrict-level task force (Tim Pelaksanaan Satuan TugasKecamatan [TP3K]), consisting of TRIPIKA (three SubdistrictHeads), including the camat (Sub-district AdministrativeHead), the Sector Police Chief and the Koramil. 279The villagers note that since the Village Heads (Lurah/Kepala Desa) are direct subordinates of the camat in theadministrative hierarchy, they were obliged to accede to thistake-over programme, having lost their authority to managetheir own village lands, with the enactment of Law No. 5/1979 on Local Administration, which was followed by aVillage Regrouping Programme. 280 Since customary land wasnot recognized as such through legal documentation (ownershipcertificates), there were few obstacles to its acquisition.The take-over teams, along with community figuresstressed the advantages of the HTI scheme in providing jobopportunities, economic benefits, species enrichment to rivercatchment ecosystems, cooperative groups (Bina Desa),training opportunities, agroforestry, and agricultural intensificationon areas surrounding the HTI.Villagers allege that any individual or household opposedto the program was intimidated, stigmatized as antidevelopment,socially excluded and encountered subsequentdifficulties dealing with the administration. To try to ensurethe smooth take-over of land and prevent possible conflicts,the company appointed a prominent figure in each village tobe the head of an Executing Task Force. This village memberreceived payment of Rp. 24,000 per month as an incentive,with additional lumpsum payments being given for eachvillage meeting that they help convene.223

The Indonesian Experience with FSC CertificationThe land accquisition process was carried out eitherhousehold by household, or in relation to groups of households.Alternatively blocks of land of up to 100 hectares couldbe handed over by a village or by clusters of villages. Allthat was needed to ensure the hand-over was the submissionof ‘a statement of hand-over’ signed by the company andhousehold heads, village administrators, village heads, andprominent figures. In some cases land acquisition agreementswere signed by household heads, in other cases just by thevillage administrators.Villagers complain that the land acquisition processhas also been accelerated by the manipulative application ofcustomary law procedures relating to land transfers. Undera custom called bera, where a community member has notused an area for some years, villager elders may reallocatesuch land to another villager following community discussion.Villagers allege that in their dealings with PTFI, thebera procedure is being invoked by village leaders to alienatelands to the company against the will of the villagersinvolved.Under the agreements the company leased the landsfor a period of forty-five years, in accordance with GovernmentRegulation No. 7/1990 on the HTI-Pulp managementperiod, which grants concessions for 35 years with an extensionof ± 8 years for the planting rotation. According tothe villagers, mechanisms for transparent control and re-negotiationwere not part of the company’s formal procedures.However, some informal re-negotiations were carried out ona case-by-case basis in response to specific demands by theparticipating villagers.Customary rights claimsKampung Upe, Kolompu, Lanong, Entiop, Engkayu, andKotup are Mayao Dayak villages, in the sub-district of Bonti,224

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesSanggau District. The villages are all affliated to the MayaoIndigenous Peoples Council (Lembaga KetemenggunganBenua Mayao - LKBM) (See Map 7).The Bidoih Mayao Dayak trace their origins back toSungkung, in Sambas District, but they have been inhabitingthe Sanggau area since the 19 th century. At first, theycalled their village ‘Mayou’ but then they separated intoseveral groups: one led by Macan Balok moved and his descendantsinhabited Kampung Entiop and Engkayu; anotherled by Macan Batu formed Kampung Kelompu, Lanong andUpe; and the others led by Macan Labokng and Macan Trusiformed Kampung Sedua and Kotup (the latter, the last newsettlement, was formed around 1940). The Mayou Kotupcommunity lives across the Sekayam River and is usuallyreferred to as “the outcast Mayao”. 281 The 1997 census estimatedthe number of Bidoih Mayou at 422 households, comprising1,939 people.Communities in Sanggau still practise swidden agriculturequite extensively, although some people have adoptedmore intensive land-use systems also. Despite their involvementin the HTI Pulp development and some oil palm plantationssurrounding their villages, the community still dependson rice cultivation in their swiddens, complementedby rubber tapping and fishing. The average household incomeper month is estimated at Rp. 477,894 (US$52). Thecommunity has had some bad experiences with a reforestationproject coordinated by PT Inhutani III and funded bythe Asian Development Bank, and from an oil palm plantationscheme. 282CompensationBecause the lands acquired by the company were on customaryland, the signing of the hand-over agreements weremarked by a customary ceremony ‘Ngudas’. PT FI paid com-225

The Indonesian Experience with FSC Certificationpensation ranging from Rp. 10,000 to Rp. 30,000 per hectare,according to the following details: Rp. 20,000 for therubber and the fruit plantations, but only Rp. 10,000 for scruband coarse grass land. An additional Rp. 10,000 per hectarewas payable as a fee for the ceremony.. 283The company also provided ‘infrastructure compensation’to the village for the use of the land:a. 0.5 hectares of the HTI-Pulp plantation was given for each10-hectare handed-over land to the land givers under asoft credit scheme.b. 0.5 hectares of non-timber plantation was also given foreach 10-hectare handed-over land to the land givers. Thesenon-timber areas were established outside the HTI area,as part of the Village Development Program (ProgramBina Desa).c. Rp 10,000,- per hectare of the net size of landclearingwas given for building a social facility as part of the VillageDevelopment Program (Program Bina Desa)Forest Department ClaimsThe Department of Forestry asserts its jurisdiction over theareas based on the 1984 Forest Land Use Consensus(TGHK). In 2001 a re-designation of forest and coastal areaswas made, resulting in significant changes in the size ofareas. The new forest zoning is rather like the ProvincialSpatial Plan (RTRWP) carried out in 1997, but it excludessome areas and includes others as forest land. (See Map 8).Whereas, these zoning processes should be transparent andparticipatory so the public can input their opinions on howlands and forests should be classified and the extent of theirrights, such data have not been provided to the communities.The same should now apply to the additional area nowbeing sought by the company (and see section 5.4). Map 9226

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesshows how the additional area does exclude some of the villagesthat have rejected the HTI scheme, but also includessome areas which are not State forest lands.The Provincial Spatial Plan (RTRWP) and the DistrictSpatial Plan (RTRWK) need to be carefully scrutinized, becausein the past these zoning processes were often manipulatedto fulfill investors’ wishes. The monitoring is importantbecause the Plan is used as the base for the revision ofForest Designation, according to the Decree of the Ministerof Forestry No. 31/2001 and the Decree of the Minister ofForestry No. 70/2001, and it has already been used for thenew designation of state forest land of West Kalimantan Province(2001).Research findingsLBBT, the Dayak-run legal assistance NGO which carriedout the field study, drew the following conclusions from theirinvestigation and the community workshop that was part ofit.• The principle of prior and informed consent was not appliedin the land acquisition process.• Inadequate information is being given to the villagersabout company plans and processes of land acquisitionmeaning that consent, where given, is often not ‘informed’.• The legality of the land transfer process is in doubt as thecompany’s process of leasing land from the communitieswhile in line with the local administration’s view that theland is privately owned land conflicts with the view ofMoF, which considers the land to be State forest land.• The livelihoods of community members have been negativelyaffected.• The process of negotiating land deals with individualhouseholds has had the effect of transforming the landownership system from a customary notion of collective227

The Indonesian Experience with FSC Certificationtenure to one of individualized land entitlements.• Given the history of government interventions in villageadministration, communities need far more informationand capacity building to be able to exercise their right tofree and informed consent.• Coopting prominent villagers into each Executing TaskForce created village divisions and was contrary to customarynorms of decision-making, which would not allowvillage representatives to receive and incentives fromoutside companies.Implications for the application of Principles 2 and 3This case illustrates many of the difficulties and contradictionsin achieving a mutually acceptable application of theprinciples of respect for customary rights and free and informedconsent in Indonesia.On the face of it, the land acquisition processes carriedout for the PTFI development seems to have been respectfuland consensual. Signed agreements were enteredinto, with benefits for both parties, and communities evencelebrated customary land transfer ceremonies as a result. Itis easy to imagine that a certification body shown this documentationand informed of the salient events could concludethat forest management is being carried out in accordancewith the principles of recognition and respect for customaryrights and free and informed consent. It is only when welook beneath the surface that it becomes plain that thingsare not so simple.The case shows how, even where a land acquisitionprocess is undertaken with the aim of ensuring communityparticipation, the lack of clearly defined land rights and theexistence of imposed forest zoning processes substantiallydisadvantages communities in their dealings with develop-228

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesers. Rights of free and informed consent are overridden fromthe beginning because the company is granted a HTI concessionbefore any consultation takes place. Lacking strongand clearly recognized rights they accede to imposed plansagainst their inclinations.Cooptation of village leaders, through the imposedstructures of the 1979 Land Administration Act and by payingprominent village members to negotiate on behalf of thecompany, means that decisions are taken and imposed withoutthe possibility of consensus-building within the communityfirst.Negotiations are made further one-sided by the fact thatpolice and military personnel directly participate in landacquisition teams. Individuals rejecting land acquisition havesuffered intimidation and discrimination. Community leadersfeel isolated in such negotiations.As one workshop participant remarked:It is true there were written agreements but the companyalways makes excuses to avoid detailed discussion.. Whatwe need is to change the system of land acquisition whichcurrently involves the camat, police and military. This isnot prior and informed consent. We need to have our ownnegotiator, who will be accountable to us with a clear mandateand schedule. Negotiations should be carried out inthe village with the participation of as many people as possible.Just like we do in making decisions through our adatsystem. This is what we mean by prior and informed consent,without the presence of the police and military. Negotiationshould just be between the community and the stakeholderswho need our natural resources, witnessed by localgovernment. Once again, what we want is for the land acquisitiontask force and the task force of the oil palm plantationto be dismissed.229

The Indonesian Experience with FSC CertificationCommunity ForestryCertification of Community-Based Forest Management(CCBFM) has been promoted in Indonesia as an effective,economically viable, environmentally sustainable, sociallyjust and resilient forestry alternative. 284 However, theseclaims are yet to be tested, as CCBFM is still in its earliestphases of development in Indonesia. There are a number ofchallenges facing CCBFM which are noted by its proponents.These include:• CCBFM products have to compete in the open marketplacewith products from industrial-scale companies.• Connections between small-scale producers and consumersinterested in certified forest products are hard to maintainfor obvious logistical, cultural, linguistic and financialreasons.• The costs of certification itself are proportionately higherfor small-scale producers. (Experiments with group certificationhave yet to be attempted). 285To date there have not been any certifications of CBFMin Indonesia by FSC-accredited certification bodies. A partialexception is the group certification given to small-scaleproducers supplying PT Xylo Indah Pratama a company producingpencil slats made from a fast-growing hardwood –pulai (Alstonia scholaris). Most of these plantations arecultivated by transmigrants and long-term resident smallholderson non-forest lands in South Sumatra. The operationsreceived FSC certification from Rainforest AllianceSmartWood in 2000. 286 Regrettably, owing to time and budgetarylimitations, a field visit to these settlements and theirwoodlots was not carried out as part of this study. Accordingto the Public Summary Report, the company accepts theparticipant small-holders as ‘land-owners’. According to thereport, these transmigrants enjoy ‘village land entitlements’230

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesand ‘the land tenure is clear and legally secure’. Specifically,although the land-owners lack land title (sertifikat),in order to participate in the scheme they are obliged to showthat they have a ‘village land letter’, surat tanah desa, signedby village heads (kepala desa). 287 In addition, signed agreementsbetween the company and the 1,500 land-owners whoare part of the scheme, secure the flow of wood products tothe company. These agreements establish the mutual obligationsof the company and the landowners on diverse issuessuch as environmental protection, forest management,harvesting, wood supply, planting, personnel relations andbenefit sharing. Prima facie, the case suggests itself as amodel for other situations whereby private companies canexplicitly accept local people as rightful land-owners, evenin the absence of legal title, and sign binding agreementswith such land-owners in order to meet FSC Principles. Thecase merits further study.A pilot CCBFM project is currently being tested in threelocations in Indonesia under a collaborative engagementfunded by GTZ in Gunung Kidul (Yogyakarta), Wonosobo(East Java) and Sanggau (West Kalimantan). Tests certificationsare presently using modified LEI Criteria and Indicatorsand are apparently not being done under the Joint CertificationProtocol, as this only applies to HPH. 288 A furtherpilot scheme is now being planned jointly by a consortiumof 6 NGOs, comprising WWF-Indonesia, KpSHK, SHK Kal-Tim, AruPA, AMAN, and PERSEPSI, in collaboration withLEI.Certification ProceduresAdapting the International Standards to IndonesianRealitiesIn such circumstances, FSC has a clear position set out in231

The Indonesian Experience with FSC Certificationthe FSC Accreditation Manual Part 3.2, Section 2. As summarizedin ‘FSC Guidelines of Certification Bodies’Until a regional Forest Stewardship Standard has beenformally endorsed by the FSC Board, certification bodiesare required by the FSC to carry out certification accordingto their own ‘generic’ standard, which has been evaluatedand approved by the FSC Board…. Certification bodies arerequired to encourage local input to and comment on their‘generic’ standard and to take into account any inputs ontheir generic standard. Identified stakeholders must be informedat least one month prior to the main assessment evaluationtaking place of procedures for developing the ‘locallyadapted generic standard’. This ‘locally adapted generic standard’must be finalized through meaningful accommodationof stakeholder concerns prior to certification assessment auditcommencing in High Conservation Value Forests. For allother forest certifications, the ‘locally adapted generic standard’must be finalized and circulated at least one monthprior to the certification decision. 289According to the ‘FSC Accreditation Manual’290 allapproved certification bodies must have:• a ‘generic’ standard which specifies appropriate indicatorsand verification techniques, to serve as the basis forevaluating compliance with the FSC Principles and Criteriafor Forest Stewardship at the forest management unitlevel;• a document which provides explicit cross references betweensuch a ‘generic’ standard and the FSC Principlesand Criteria for Forest Stewardship;• procedures for ensuring that the locally adapted genericstandard conforms with relevant national and local lawsand administrative requirements;• procedures for encouraging effective local input to andcomment on the ‘generic’ standard, before the evaluationtakes place;232

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesIn addition, FSC approved certification bodies mustensure that the locally adapted standard developed as a resultof these procedures is publicly available.Interviews carried out for this investigation reveal that,in fact, in none of the cases studied did development of a‘locally adapted generic standard’ take place. RainforestAlliance has explained that they were careful to indicate thatthey were using their international generic standard andexplicitly did not attempt to develop a local standard as theyperceived this to be the role of LEI. In the case of subsequentevaluations, Rainforest Alliance has stated that it consideredthe Memorandum of Understanding between LEI andFSC as providing the equivalent of a national consultationon the standards used in Indonesia. Similarly, an SGS inspectorsuggested that parallel work to develop a local versionof an FSC standard would have been “counterproductiveto relations with LEI”. SGS inspectors have workedclosely with LEI inspectors, and have compared checklists,but have never developed a specific local adaptation of theirgeneric standard for use in Indonesia.In the context of the Joint Certification Protocol (seesection 2.3), Smartwood did, however, make efforts to reconcileits generic standards with the Criteria and Indicatorsof the LEI system.Smartwood notes that ‘we were sensitive not to affrontthe importance of the LEI C&I by seeming to be overlyaggressive in coming forth with an adapted standard thateither by perception or design would come across as somethingdiverging, rather than collaborating with LEI’Smartwood thus noted in its assessment report of PTIM:The Intraca assessment was conducted using the ForestStewardship Council-approved SmartWood Guidelines forAssessing Forest Management, March 2000 as related tothe LEI Criteria and Indicators. At present there are no en-233

The Indonesian Experience with FSC Certificationdorsed FSC regional guidelines for Indonesia. Within thecontext of the joint certification protocol, the LEI standardwas incorporated within the field guidelines used by assessors.As per SmartWood’s FSC accredited certification system,the findings, scores, preconditions, conditions, and recommendationsare presented according to the FSC P&C.FSC accredited certification bodies appear to have concludedthat the existence of the LEI process and implementationof the ‘Joint Certification Protocol’ meant that it wasunnecessary to carry out additional consultations on the adaptationof their generic standards, although, in the case ofSmartwood, their experience in Indonesia has neverthelessled to refinements of their generic standards which have beenissued in Bahasa Indonesia.The great amount of work done by Indonesian inspectorsand NGOs associated with the LEI process has thusresulted in less, not more, discussion of the implementationFSC Principles and Criteria in Indonesia with Indonesianstakeholders. The result is that although two different certificationbodies have implemented the FSC Principles andCriteria in Indonesia, there has been little public debate specificallyabout the standards to be used.Interpretation of FSC Standards by Certification BodiesIn the absence of either national standard-setting processesor due procedures for adapting certifiers’ generic standardsto local circumstances, certification bodies have developedtheir own means of adapting the standards during certification.Inevitably, the result is that different certification bodieshave ended up making different interpretations of the standards.For example, with respect to FSC Criterion 3.2 SGSQualifor evaluated implementation of the Criterion with twoindicators:234

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilities3.2.1 “adverse impacts of forest management on indigenouscommunities’ resources or tenure rights are identified”, and3.2.2 “documented actions are taken to address adverse impacts”.291Rainforest Alliance Smartwood evaluated the sameCriterion with the following two indicators:3.2.1 “Indigenous groups do not perceive Forest ManagementOperation operations as a major threat to their resourcesor tenure”3.2.2 “The Forest Management Operation takes explicit actionsto ameliorate threats or diminishments to indigenousresources or tenure”. 292These kinds of differences between different FSC-accreditedcertification bodies operating in the same countryare inevitable in the absence of a national standard-settingprocess.Another generic finding of the study is that some ofthe phrases that are difficult to interpret within the FSC Criteriaare used verbatim within the certification bodies’ owngeneric indicators.Thus FSC Criterion 3.1 requires that “Indigenouspeoples shall control forest management on their lands andterritories unless they delegate control with free and informedconsent to other agencies”. The expression ‘free and informedconsent’ was identified in this study as being difficult to interpret.But the SGS standard used for evaluation of thiscriterion requires its inspectors (amongst other requirements)to evaluate whether “there is evidence that free and informedconsent to management activities affecting use rights has been235

The Indonesian Experience with FSC Certificationgiven by affected peoples”. In the absence of a national FSCprocess, or comment on the generic standard, the difficultquestion of interpretation is passed directly on to the inspectorin the field.This can be viewed either a necessary area of flexibilityin the standard in which the auditor’s professional skillis to interpret the standard in the field. Or it can be viewedas putting the auditor in the uncomfortable position of havingto interpret the standard, rather than simply implementit. This study found signs that some auditors would welcomeadditional guidance. One inspector said “What I wouldlike for this process… [is] more clarity on how the Principlesand Criteria should be applied”. A local manager ofa certification body commented that “Certification in Indonesiahas suffered from a lack of guidance from the FSCSecretariat”. However another certification body manageremphasised the role of the auditors interpreting the standardsto suit the local context.As part of this study interviews were carried out withconsultants and inspectors used by certification bodies toascertain in more detail how they currently interpret andapply FSC Principles and Criteria 2&3. Many of those interviewedwere refreshingly candid and open about the difficultiesthey face adapting these P&C to the local situation.The relatively small number of certifications that have beengranted in Indonesia may reflect the certification bodies’caution. However, the interviews also revealed that there isconsiderable confusion and an apparent lack of proceduralrigour in the way standards are interpreted in current certifications.The following key issues emerged from the interviews:1) Definition of Indigenous Peoples and local communities(2., 3.) : Partly because the LEI process does not seek toidentify ‘indigenous peoples’, no locally adapted defini-236

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiestion of indigenous peoples applicable to the Indonesiancontext has been agreed by any of the certification bodiesoperating in Indonesia beyond the general definition givenby FSC generic standards. One inspector suggested thatan assumption should be made that all communities beconsidered indigenous unless proved otherwise but inpractice, in the Perum Perhutani certification, assessorsassumed that the communities were not ‘indigenouspeoples’ and so Principle 3 was apparently not applied.Our own community workshops, however, showed thatat least one of these communities does self-identify asmasyarakat adat.More consensus emerged among assessors on thedefinition of ‘local communities’ as including all thoseliving within and in areas neighbouring concessions, althoughno formal definitions have been adopted. One inspectornoted in this context: ‘There is not time during anassessment to visit all the villages in a concession, letalone all those outside, so we have to consult a sample.’2) The Extent of Customary Rights (2., 2.1., 2.2., 3., 3.2.):Assessors interviewed did not have clear expectations ofwhat forest managers are expected to have done to establishthe extent of customary rights areas within their concessions.One noted that ‘this is a very foggy area’. Anotherexplained that ideally there should be participatorymapping carried out jointly by the communities and thecompany but that in practice this is not done. However,as noted above, Smartwood has required such a mappingfor the PTIM concession in East Kalimantan.3) Local Community Control (2.2): Criterion 2.2 requiresthat local communities retain control ‘to the extent necessary’to protect their rights and resources, unless theydelegate this authority with their consent. Assessors wereasked what kinds of rights triggered the need to apply237

The Indonesian Experience with FSC Certificationthis principle. There was no clarity in the responses. Inthe Perum Perhutani case, the assessors had decided notto apply Criterion 2.2 but only Criterion 2.3. In the DiamondRaya case the assessors had not looked for evidenceof local control of , or consent to, the logging operations.4) Rights legally established or recognised and respected(2, 2.1, 3, 3.1) : Assessors agreed that the current legalframework in Indonesia makes it very hard to legally establishor provide clear evidence of long-term use rightsto land, with the possible exception of perda (see above).In general, the best that can be achieved is to have indigenousor customary rights areas noted in spatial planningmaps. Most certifiers did not make clear what kind ofdocumentation of these rights they require to satisfy themthat compliance with these criteria has been achieved. Theoptimum arrangement that could be expected in the currentlegal situation would be to have a tripartite agreementbetween Local Government, the concessionaire andthe local communities, which sets out the extent of communityrights areas. However, such agreements have notbeen drawn up for the areas so far certified. On the otherhand, most certifiers assume that holding a HPH/KPH isadequate proof of the legal establishment of aconcessionaire’s long-term use rights. Our own studiesshow that most concessions are issued on shakey legalgrounds.5) Not diminishing the resources or tenure rights (3.2): Criterion3.2 requires that forest management shall notthreaten or diminish the resources or tenure rights of indigenouspeoples. As noted, however, the very extensionof State forest lands and concessions over customary rightsareas has the legal effect of denying proprietary rightsand limiting recognition of customary rights to very weakforms of usufruct that must give way to concessionaires’238

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesrights. Doubts were expressed by assessors about whethera strict application of Criterion 3.2 is ever possible. Oneassessor noted: ‘I agree that if this is taken literally it isimpossible to log.’ Likewise another noted: ‘There is noway you can have a HPH without disputes. It is impossiblethat a HPH operates without doing damage so thesolution is to pay compensation.’ In general it seems thatcertifiers are interpreting 3.2 to mean that measures mustbe taken to ensure that people can go on with their lives –farming, hunting and gathering etc. – while any accidentaldamage to their properties and crops is paid for. Oneassessor noted that national standards are needed to giveguidance on this issue. Another noted that guidance wasalso needed as there is a potential conflict between theneed to protect hunting rights in accordance with Principles2&3 but to limit such activities to ensure compliancewith Principle 6.6) Procedures to establish free and informed consent (2.2.,3.1, 3.4.): Given the centrality of the principal of consentfor Principles 2&3, the degree of uncertainty we foundamong assessors about what they should look for to ascertainwhether or not local communities or indigenouspeoples had consented to logging operations in their customaryrights areas is surprising. Interviewees repeatedlyused phrases like this is a ‘grey area’, this is ‘not rocketscience’, ‘this is a very foggy area’, ‘our verification isweak on that to be perfectly honest’, when explaining theirassessment procedures.On the other hand, candid statements were madeabout the lack of consultation and consent in the way concessionshave been handed out historically in Indonesiaand the implications this has for certification. Noted oneassessor: ‘Formally none of the HPH are valid: none ofthem were granted with consent’. Another assessor vol-239

The Indonesian Experience with FSC Certificationunteered the opinion that: ‘It is true that the concessionswere all established without consent and (communities’)ownership rights were abrogated. It is true that the rightsshould go back to the people and, given what happened,certification should not happen.’ But at the same time mostassessors believed such a literal interpretation of the consentprinciple was not desirable. Explained one: ‘Ourbasic agenda is to go as far as possible in the currentframework.’Assessors did note that they could not rely on signeddocuments alone as evidence of agreements as such documentsare too easily falsified. As for the question of whoshould give consent, one assessor again noted: ‘Franklyspeaking no one has a valid solution to that’. Many assessorsaccept that there are doubts about therepresentativity of village leaders. Some held the viewthat ‘the way to apply P2&3 properly would be to establisha local forum to act as cross-checker and arbitrationbody’, although it was noted that this is not happening inany of the HPH even though such a ‘forum konsultasidaerah’ is required by the LEI standards.7) Appropriate dispute resolution mechanisms (2.3.): Askedabout the mechanisms in place to resolve disputes, wenoted a considerable confusion of roles, whereby certifiersexplained how they resolved disputes rather than howthe forest managers resolved disputes with the localcommunities (and see section 6.5.4 below). As far as wecould determine both the Diamond Raya and PerumPerhutani concessions were certified in the absence of anyagreed mechanisms for dispute resolution being in place.In general, certifiers accepted concessionaires’ evidencethat they had a mechanism for granting compensation asan ‘appropriate’ dispute resolution mechanism. As thecase studies above amply demonstrate, the affected com-240

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesmunities clearly do not feel that effective dispute resolutionis taking place.8) Identifying sites of special significance (3.3): Requiredmechanisms for mapping significant sites are also notclearly defined by certifiers. Most do not require participatorymapping of such sites and in general such sites arenot mapped by the companies. Assessors agreed that sitesshould be identified in management plans and that if communitiesdid really exercise the control required under2.2, the currently one-sided nature of management planningwould not present such an obstacle.9) Compensation and consent for the use of traditional knowledge(3.4): The interpretation of this requirement is likewiseunclear to many assessors and no formal verificationis carried out to ensure that such compensation ispaid ‘before forest operations commence’. However, theonly evident use of such knowledge occurs when tree spotters(‘timber cruisers’) use their local knowledge to identifyextractable timbers. They are then paid wages for theirwork accordingly. No allegations came to light of thisprinciple being violated by concessionaires.Implementation of Standards by Certification BodiesThere are also differences in the way the certification bodies’own standards are implemented. Both SGS Qualifor andRainforest Alliance Smartwood now structure their standardsin accordance with the FSC Principles and Criteria. However,they operate different systems for determining whethertheir standards have been complied with by forest managers.SGS Qualifor checks whether each of its indicators iscomplied with – non-compliance with an indicator results ina ‘minor’ corrective action. A decision is then made as towhether the FSC criterion is complied with, and non-com-241

The Indonesian Experience with FSC Certificationpliance would result in a ‘major’ corrective action, whichwould preclude certification.Rainforest Alliance Smartwood operates a differentsystem, in which the operation’s performance on each FSCcriterion is given a score on a scale of 1 to 5. A score of 1 isdefined as “Extremely weak performance; stronglyunfavourable or data lacking”. A score of 2 is defined as“Weak performance improvement is still needed”. A scoreof 3 is defined as “Satisfactory performance”. Performanceon each indicator informs this judgement, but is not explicitlyscored.In both systems there is considerable room for flexibilityin terms of the inspectors’ judgement as to the extentto which an FSC criterion is complied with. However, thisis made much more risky when the standard itself requiresconsiderable local interpretation, and yet a judgement is requiredas to whether the compliance is good or bad.This is a major problem. As noted above, several timesinspectors and certification bodies’ representatives interviewedin this study admitted that if applied ‘literally’, thenspecific aspects of specific FSC criteria were not being appliedby the forest managers. Some noted that indeed ‘strict’compliance would be impossible given the current legal andinstitutional framework. The representatives expressed theneed to be ‘realistic’, or to find a way through these problems.Such comments related particularly to issues such asestablishment of legal tenure and the provision of local consentfor logging operations.These findings pose a basic question for this study:where in the FSC system should these issues be resolved?Currently, they are being resolved in the field, during theactual implementation of certification by inspectors, andsubsequent decision-making. This is the wrong place to solvesuch fundamental issues. The right place is to bring these242

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesdiscussions into the open, and to discuss them in the contextof national standards development, not case by case in thecontext of the issue of individual certificates.Relations betweenCertification Bodies and Forest ManagersUnder current FSC procedures, FSC accredited certificationbodies are independently contracted by forestry operators toscope (pre-assess) and then assess their forest managementsystems with the aim of ascertaining whether or not a specificforest management unit complies with FSC standards.Scopings (pre-assessments) are currently not subject to theFSC’s Guidelines for Certification Bodies and are used byforest managers as an opportunity for them to get familiarwith the FSC’s requirements and take advice from the certificationbodies on what steps they should take to modify theirmanagement procedures and plans to bring them into compliancewith the FSC’s Principles and Criteria. Clearly it isdesirable that forest managers can get this kind of managementadvice, but the fact that they tend to get this advicefrom the certification bodies themselves leads to a blurringof the role of the certification bodies as impartial evaluatorsand their role as forest management consultants for the samecompanies.A detailed examination of this issue is beyond the scopeof this study but it seems important to flag up that there is areal risk that this confusion between the certification bodies’two roles can lead to a conflict of interests which couldpotentially undermine the certification process.243

Photo: Sawit Watch Doc.

7Prospects forReform

Prospects for ReformFollowing the change in Government in 1999, there has beena recognition that a fundamental overhaul of land policy,regulation, and institutions - both for land within and outsidethe gazetted forest - is needed and for the first timeGOI has indicated that it is ready to consider the adequacyof the [BAL] and to recognize and address the more difficultadat law issues, particularly those concerning communitytenure. (World Bank 293 )The previous sections of this report have sought to elucidate the obstacles in the way of a wide applicationof FSC Principles 2&3 in Indonesia. Current institutions,policies and laws related to land tenure, customaryrights and forestry do not provide an easy enabling frameworkfor the recognition of local communities’ rights to own,control and manage the natural resources that they customarilydepend on and use. What, then, are the prospects forreform ? This section attempts to summarise current reformsthat are underway in natural resource management laws, autonomy,land tenure and forestry, with the aim of ascertainingthe prospects for certification in the future.New NRM Law and Legislative Act #9 of 2001Pressure for a reform of the whole legal framework relatingto land and resource extraction has been building up in Indonesiafor years. An escalation of land conflicts, public indignationabout land expropriations and widespread demandsfor the restoration of communities’ rights to land and forests,have obliged a rethink of land tenure and natural resourcemanagement laws. 294 With the advent of the period ofreformasi, and the establishment of genuinely elected legislatures,this pressure became patently effective in the formof new laws. One of the most significant of these is the so-246

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiescalled TAP MPR IX/2001 concerning Agrarian Reform andNatural Resource Management, a decree passed by the IndonesianNational Assembly, Indonesia’s highest constitutionalbody, in September 2001.The decree is one of the first pieces of law which acknowledgesthat agrarian and natural resources in Indonesiaare being used unsustainably, that existing laws on landand natural resources overlap and contradict each other, thatthe agrarian regime is characterised by assymetrical notionsof proprietorship (ie domination of access to land by the Stateand the private sector) and that all this has led to serioussocial conflicts over natural resources.The decree invokes as its underlying principles the needfor: respect for human rights; the recognition of the rights ofcustomary law communities (masyarakat hukum adat); andsustainability. The decree likewise stipulates the needs torespect national unity, while encouraging legal pluralism,the rule of law, social justice, democracy, gender equality,inter-sectoral linkages and coordination, balance betweenrights and responsibilities and decentralization. The aim ofthe law is to provide a legal basis for fundamental land andnatural resource reform aimed at resolving land and naturalresource conflicts with the full engagement of the communities.Accordingly, the decree mandates the Executive andthe Parliament (DPR) to restructure tenurial rights and rightsof use and access to natural resources and to reform the legal,regulatory and institutional frameworks governing agrarianand natural resource relations. It calls for an integrationof agrarian reform and natural resource management objectives.It also instructs the Executive to carry out a legal analysisof the current laws, develop implementation strategiesfor reform and lay the ground for effective application ofthese reforms through the empowerment of implementing247

Prospects for Reforminstitutions and the provision of adequate funds. 295 Notwithstandingits coherence and wide scope, considerable legaland institutional ambiguity remains about just how theseambitious reform goals should be realized in practice.Since the law was passed, a concerted NGO coalitionhas emerged to support both the application of the decreeand those members of the legislature that protagonised thelaw. The hoped for outcome is a national framework law onNatural Resource Management, which would ensure coherencebetween sectoral laws and policies and would providea basis for the resolution of land and natural resource conflicts.Progress has been slow, however, partly because thedecree does not mandate any particular government agencyto carry the work forward. A cost of the decree’s intersectoralintent is that no one ministry or agency feels obligedto follow through on the proposed reforms. Observers note,in particular, a marked lack of enthusiasm for developingnew laws and regulations in line with the decree in the Ministryof Forestry, which appears to be dismissive of the decreeand passively resisting proposed reforms that threatenits control. There are concerns that the proliferation ofsectoral committees to consider the implications of the decreeis really a delaying tactic being deployed by those whowould see this provision overturned.The reforms are also being sidelined by other concerns.The more recent, TAP MPR II/2002 concerning Policy Recommendationto Accelerate National Economic Recovery,for example, to some extent competes with the natural resourcesreform agenda and indicates where the government’spriorities lie. TAP MPR II/2002 gives emphasis to the conventionaldevelopment model and calls for increased productionthrough forestry, plantations, fishing, mines, manufacturingand tourism. Production is given priority over management.Influential agencies like the World Bank have ex-248

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiespressed concern about radical reforms in natural resourcemanagement, noting that even under the existing system theinstitutions charged with environment, forestry and land titlingare struggling to cope. Radical legal reforms, they argue,are likely to precipitate chaos not an improvement innatural resource management given the weakness of regulatorycapacity, which has been aggravated by decentralization.Administration and AutonomyWhereas moves to overhaul radically the current systems ofownerhip and management of natural resources have beenstymied by competing political priorities and interests, theparallel process for government decentralization has gatheredpace. The basic framework for this process of decentralizationwas given in TAP MPR XV/1998 concerning theImplementation of Regional Autonomy, which noted that pastfailures to share revenues and control of resources with theregions had been inimical to justice and equity.The decision reaffirmed the unity of the nation whilecalling for national development through regional autonomyand a just sharing of revenues. This provided the basis forthe Law 22/1999, generally referred to as the Regional AutonomyAct, which, while retaining the authority of the centreto issue framework legislation, devolved much administrativeand managerial authority to districts and townships,including over key issues such as land, forestry, plantations,and environment. (Conservation was retained as a centralgovernment function). The Act also stressed the importanceof democratic principles, public participation, justice andequity. Further guidance was then given by the NationalAssembly through TAP MPR IV/2000. A large number ofother pieces of legislation then followed to give effect to these249

Prospects for ReformTap MPR No.XV/MPR/1998 concerning Regional GovernmentLaw no 22 of 1999concerning RegionalAutonomy.Tap MPR No.IV/MPR/2000 PolicyRecommendation on ImplementingRegional AutonomyPP No. 25 of 2000 concerningGovernment authority and Provincialauthority.Law no 25 of 1999 concerningFinance Balance between Centraland Regional governmentPresidential Decree No 49 of2000 concerning Council ofAutonomy Consideration.Presidential Decree no 151concerning the amendmentof Presidential Decree no 49 of2000.PP no 84 of 2000 concerningOrganizational Guideline on RegionalSystem.Presidential Decree no 52 of 2000concerning Coordination Team ofImplementation Follow-Up of Law no 22of 1999 and Law no 25 of 1999.Ministerial Decree no 48 of 1999concerning the Preparation andImplementation of Law no 22 of 1999 andLaw no 25 of 1999.Ministerial Decree no 49 of 1999concerning the Establishment of Team forPreparation and Implementation Law no22 0f 1999 and Law no 25 of 1999.PresidentialDecree No84/2000amendingPresidentialDecree No 49/2000.Presidential Decree No16 of 2000 concerningDistribution of PBBRevenue.PP no 59 of 2000 ofFinancial Right of Headof Region.PP no 104 of 2000 of Balance Fund.PP no 105 of 2000 concerning theManagement and Responsibility ofRegional financePP No 106 of 2000 concerning theManagement and Responsibility offinance and implementation andde-concentration and appointmentof support.PP No 17 of 2000 concerningRegional Loan.250

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesvarious pieces of law but a number of them, notably PP 25/2000, appear to have restored the authority of central governmentover many of these sectors. The relations betweenall these pieces of law are shown schematically above.A detailed consideration of these laws is beyond thescope of this study, but, as the right-hand column of the diagramsuggests, a focus of controversy has been over exactlyhow revenues should be shared between the centre and theregions. As far as natural resource management and authorityover land and forests is concerned, it is fair to sum up bysaying that decentralization has generated more confusionthan clarity and has resulted in a ‘tug-of-war’ between centraland district level authorities.TenureUnder the Regional Autonomy Act (Law No.22/1999), primaryresponsibility for routine land administration has nowbeen given to the District Administration (kabupatens), whilethe role of the national land agency (BPN) has been reducedto that of monitoring, training, and provision of some services.In practice, lack of capacity in the districts to takeover land administration means that in the interim the previoussystem is still operating. Meanwhile, it seems thatBappenas has lost its responsibility for land policy, whichhas been transferred to the Ministry of Home Affairs/BPN.Considerable confusion about land matters has thus resulted.296In line with the the Amendments to the Constitutionwhich recognises the existence of customary communities(see section 3.3 above) and which recognises both individualand collective human rights, including rights to property,cultural identity and the ‘rights of customary communities’,Law No. 25/2000 regarding the 2000-2004 development251

Prospects for Reformprogramme stresses the need for popular participation indecision-making, including by NGOs, gives priority to localcommunities’ rights and the rights of masyarakat adat andthe need to strengthen their institutions. Specifically withrespect to natural resource management, the law also establishesthe need to give local communities control of naturalresources and environmental management and acknowledgesthe rights of indigenous and local institutions to own andmanage natural resources. It remains unclear just how effectis to be given to these provisions.If the reform era governments do plan to recognise thecollective rights of customary law communities, they facethe challenge of finding a legal formulation that is at thesame time national in its encompass and yet does not try toimpose a single form of tenure on the great diversity of localsituations. It is perhaps wise to recall that eighty years ago,after exhaustive reviews, the Dutch concluded that a uniformdetailed land law for the recognition of adat would notbe desirable because of the very wide variety of customaryregimes in the archipelago. 297ForestryWhereas BFL (41/1999) has advocated a Forest EcosystemBased Management approach to reform of the forestry sector,GR 34/2002 one of the implementation guidelines sofar issued on this law seeks to return forestry to the old paradigm.PP34/2002 seeks to restore the authority for handingout HPH and HTI concessions to the Ministry of Forestry,while granting provincial governments the authority to handout forest concessions for environmental services and nontimberforest products. The move has been strongly objectedto by both the Regional Government Association (APKASI),and the Community Forestry Network (FKKM).252

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesREFORMING THE HPH SYSTEM 298Between 1991 and 1999, Britain’s Department forInternational Development provided long-term supportto Indonesia’s forestry sector in the form of the socalledKPHP project. 299 The project was designed todevelop through field experiments a rationalised modelof timber harvesting using improved silvicultural andfelling systems, enlarging the size and duration offorest concessions and training government forestrystaff in improved forest management techniques.Social components were built into the project as itmoved into the experimental phase in the field butwere not central to the project’s original conception.The KPHP project suffered the major detraction that itdid not seek to address directly the power imbalancesin forests. The project was ‘adapted to the systems,government apparatus and political culture’ prevalentin Indonesia and the Ministry of Forestry andPlantations (II:266). As such the project implicitlyendorsed and even entrenched a basically povertycreatingmodel of forest development in which 10companies controlled 43% of Indonesia’s forests andwhere industrial capacity is about 3 times officialestimates of sustained yield of timber of the forests.Illegal timber extraction, estimated at 30 m m3/year,exceeds legal extraction rates (I:6-7).As the concluding reports written by DfID and theForestry Department note, under Indonesian law, forestdwellers are effectively disenfranchised (II:216). Localrights and aspirations are overridden by centralgovernment and current laws (II:217). Consequently,local communities have insufficient land for theirsubsistence and development needs (II:253). In theensuing conflicts of interest between forest-dwellersand the government/industry nexus ‘business interestsare always dominant’ (II:253). Belatedly, in 1995, theproject officially recognised forest dwellers as ‘majorstakeholders’. To reduce conflicts and meet the needs253

Prospects for Reformof the poor, the KPHP project attempted to introduceprocesses for zoning customary land in forestryconcessions and provide mechanisms for benefitsharing.However, these attempts to resolve land useconflicts failed because they relied on existing powerstructures and institutions without genuineengagement of the primary ‘stakeholders’ (I:14). Afinding of the KPHP project was that, because thepresent mechanisms of decision-making about forestsfavour business interests at the expense of forestdwellers,experiments in benefit sharing wereineffective because they were not accompanied bytenure reforms or changes in power-sharing. Surveysshowed that communities targetted for benefit-sharingby the project were no better off than those not sotargetted. Most benefits were siphoned off by morepowerful players (II:254). Participation processesintroduced into the project were not effective,although well received at the level of rhetoric.Implementation was still top-down: ‘...variousdevelopment projects have been undertaken by thegovernment but in a top-down fashion so that [they]have not been effective or have failed due to lack ofsupport from the community. The participation of thecommunity did not occur’ (II:265). Owing tocommunities having no rights and thus a ‘very weakbargaining position’ (II:266), participation was weakand current models of decision-making by officialfunctionaries predominated. ‘Communityrepresentation on the project promoted functionalteam has been very limited or non-existent’ (II:267).The KPHP project report concludes that major reformsin the ‘rights of access’ of forest-dwellers are requiredif forest development in Indonesia is to becomesustainable and equitable(I:32). ‘Further regulation isrequired to ensure the recognition of customary rightsto forests, the development of forest communities, andthe support of local systems of forest management andconservation, which preceded the current laws anddate back to the original habitation of the forest areas’(II:258). ‘Without such reforms no progress can be254

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesmade in forest sector development’ (I:32). The projectconcluded that procedures for zoning the lands andforests used by forest resident communities should be‘legally formalised’ and new procedures introduced toformalise participation (I:40-1).Judged in terms of DFID’s renewed commitment to a‘rights-based approach’ to poverty-alleviation, theKPHP project was essentially a failure. It neithersecured rights nor alleviated poverty. It failed becauseit worked through existing (corrupt) power structuresand did not promote tenure reforms. The failure does,however, teach important lessons for future forestryprogrammes in Indonesia.In 1999, the Ministry of Forestry initiated a new processof negotiation in all the provinces to revise the designationof State forest lands (TGHK) by synchronising thesenegotiations with the Provincial Spatial Planning processes(RTRWP). This process of reedesigntaing forests has notyet been complted in some provinces like North Sumatera,Riau and Central Kalimantan. As noted in section 4.6, as aresult the State forest lands have been reduced to around120 million hectares only 12 million hectares of which haveactually been delineated and gazetted, meaning that mostforest areas are not yet officially State forest lands.The process of spatial planning, which forms the basisfor the designation of areas as forests does not adequatelyinvolve communities in the way prescribed in GR 69/1996on Implementation of Rights and Duties and on the form andcustom of people’s participation in spatial management, planning,and exploitation which states:Participation comes in several forms such as acts of suggestion,consideration, opinion, response, objection or in-255

Prospects for Reformput, as well as accountable input of data or information.The provincial government has a duty to follow up with concreteactions, by implementing a large meeting or forumdiscussion, involving several experts and public figuresalong with the provincial government. The authorized institutionwill then follow up and complete the ProvincialRTRW Program by paying serious attention to the suggestions,considerations, opinions, responses, objections orinputs from the people as well as those that result from theforum meeting. 300The quality of the revised Regional and ProvincialRTRW is gradually improving, especially where participatorymapping of community areas is included in the planningand also as people’s awareness increases of the overwhelmingimportance of spatial planning for the accommodationof their livelihoods. Spatial planning exercises arelikely to continue for the next 5-10 years and their successwill depend to a large extent on whether or not the Ministryof Forestry conducts intensive discussions in the districtsand assigns authority for designation and gazettement to thelower levels of the administration. Lands thus excised frompreviously designated State forest lands must either be reclassifiedas agricultural areas or accommodated in a revisedforest act.In November 2001, a Multi-Stakeholder WorkingGroup for Dispute Settlement of Lands in Forest Areas (WG-Tenure) was set up, facilitated by the Ministry of Forestry(Directorate General of Planology), with representatives ofthe private sector, NGOs, indigenous peoples, farmers’unions, DPR, local government, BPN and Ministry of HomeAffairs. WG-Tenure has sought to identify the pattern ofconflict in the forest areas and novel mechanisms of conflictresolution. It also makes recommendations for reforms of256

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiespolicy, law and administration.Over the past few years, policies towards land andforests have diversified in the different parts of Indonesiaunder pressure from local communities and the policies ofregional autonomy. One clear example is regulation UU No.21/2001 on Special Autonomy for the Papua Province, whichresults from a recognition by the Ministry of Forestry andsectoral departments that they cannot easily apply a uniformapproach to every region, especially with respect to indigenouspeoples’ land rights. Similar problems are likely toarise if the government seeks to apply in an uniform mannerthe criteria for recognising indigenous communities and customaryforests according to the revised BFL (No. 41/1999).Indeed, the very act of classifying community lands as customaryforests (hutan adat), which by definition are in Stateforest land where proprietary rights are denied, could beconstrued as a violation of human rights under the near simultaneousHuman Rights Act (UU no 39/1999), which waspassed only a few weeks earlier.Another example relates to the Special Autonomy Lawfor Papua Province (UU no 21/2001), Chapter XI of whichrefers to the Protection of Indigenous Peoples’ Rights. Article43 states:1) The provincial government of Papua is obliged to recognise,respect, protect, empower, and develop the rights of the indigenouspeople taking into account the provisions of existinglaws.2) The rights of the indigenous community stated in paragraph1) include both the collective rights (hay ulayat) and individualrights of the indigenous people.3) Implementation of ulayat rights, insofar as they still exist,shall be conducted by the leader of the indigenous peopleconcerned, in accordancw with the provisions of customary257

Prospects for Reformlaw, while respecting the rights of others over ulayat lands,which were legally obtained by other parties based upondue procedures and regulations4) Ulayat land and private land of the indigenous communitywill be made available for any need based on deliberationwith the indigenous people and concerned community toreach an agreement on the land transfer land and the compensationpayable.5) The provincial government provides an active mediationwith the intention to resolve any dispute between the ulayatland holders and former private owners in a fair and wisemanner to reach an agreementthat favours all parties.These special rights have also been adopted for theindigenous peoples in Aceh Darusallam, through the issuanceof the Special Autonomy Act for that province. Similarprovisions with respect to indigenous peoples would alsoseem to be required for the other provinces.The judicial system in Indonesia is being reformed veryslowly due to resistance from many parties, and the consequentlack of access to justice remains a serious problem(and see section 5.4). A special judiciary system for dealingwith land and natural resource conflicts has been proposedfor provinces where these conflicts are common, an issuecurrently under intensive discussion in the Supreme Court.In Papua, Aceh and other provinces, customary law systemsare now being revitalized creating a pressing need for legalmechanisms to allow these plural legal systems to functionin an agreed framework.At the national level, a proposal to establish a NationalCommission for Conflict Settlement and Natural ResourceManagement is being discussed by the 2 nd Committee of theNational Parliament (DPR) together with BPN. It is plannedthat this commission will be comprised of commissioners of258

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitieshigh integrity and will operate openly like the Commissionin Human Rights (KOMNAS HAM). NGOs have proposedestablishing a preparatory commission to raise awarenessabout the role of the Commission to ensure, when it is finallyapproved, that it functions effectively and credibly.Court verdicts have meantime introduced the conceptsof restitution and recovery, as mere financial compensationhas left compensated victims with a sense of not having receivedjustice or had their reputations restored. GovernmentRegulation 31/2002 regarding Restitution, Compensation andRehabilitation for Victims of Human Rights Violations allowsfor such remedies in the case of severe human rightsviolations. This raises the possibility that dispossessed communitiescould secure the restitution of their lands, for examplelands lost in the designation of their customary landsas State forest lands, although there are risks that the processof land restitution could provoke further land conflicts.One of the most significant changes in forest policyover the past year was signalled by the announcement bythe Forestry Ministry that in future all concessions will beprogressively subjected to mandatory certification. Full detailsabout the standards and procedures to be used for thesemandatory certifications is not yet available but preliminaryannouncements suggest that they will incorporate social, environmentaland economic considerations.Local AlternativesThe lack of a national process for recognizing and protectingcustomary rights to land has led to a number of localgovernment initiatives to resolve land claims and promotecommunity control of forests. These include efforts such asthe zoning of indigenous peoples’ lands under the SpatialPlanning process, as in West Kalimantan; the allocation of259

Prospects for Reformusufructory and management rights for harvesting non-timberforest products, as in Krui in West Lampung; and thepassing of ‘local regulations’ (perda) by district legislatures,as in Lebak in Java. Although to date only one ‘local regulation’(Peraturan Daerah – perda) has been issued relatingto the land rights of Masyarakat Adat, many NGOs andindigenous peoples’ organizations see this as the most practicablemethod for regularising indigenous land rights in Indonesiaat this time.The precedent has been established by the district legislaturein Lebak Kabupaten in Java, which passed a perdain June 2001 recognising the collective rights of two subgroupsof the Baduy people, resident in 52 villages in WestJava. The perda recognises the Baduy as Masyrakat Adaton the basis of the differences between their culture and customsand those of the mainstream population, and defineshak ulayat as the authority, in accordance with adat law,that a community governed by custom has over a definedterritory, which is the living habitat where it uses the naturalresources for survival and the maintenance of life, andwhich derives from the physical and spiritual relation overgenerations, which continuously exists between the customarycommunity and its territory. 301The perda excludes village lands which have alreadybeen surveyed and registered (Article 2) and those fieldsalready subject to individual land ownership, or areas whichhave otherwise been bought or obtained by other interests(Article 5), but recognizes as the Baduy’s collective territoryall the land in a broadly defined area and entrusts it totheir own management (Article 4 and explanatory note 2). 302The perda is not without its deficiencies, however.ž It gives authority for the demarcation and definition ofthe area’s boundaries to the district resident (bupati), insteadof requiring a participatory process involving the260

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesBaduy themselves.ž Likewise the regulation fails to identify which Baduy institutionswill manage the area or deal with outsiders.ž It fails to make clear what the relationship now is betweenthe customary community, now recognized as havingauthority over its territory, and the various protectedareas, protection forests, production forests and timberconcessions which have been entrusted to various stateagencies and parastatals.ž It empowers government officials to punish outsiders whoviolate these customary rights rather than conferring thesepowers on the adat authorities.Another problem is that the new perda invokes ratherthan revokes a previous perda agreed during the heyday ofthe Suharto dictatorship. The 1990 perda, couched in languagetypical of the New Order regime, aims to ‘Guide andDevelop the Customary Institutions of the Baduy People’.While recognizing the pre-existing institutions of the Baduy(Article 1 e.), the perda only protects those aspects of Baduyculture and custom that ‘enhance national stability in ideological,political, economic, social, cultural, religious andsecurity terms, in order to smooth the way for governmentdevelopment activities in the community’ and in order to ‘furthernational cultural development’ (Articles 2 – 4(1)). Thebupati is given the discretion to decide which institutionsneed to be ‘guided and developed’ (Article 4(2)). 303 Arguably,the 1990 perda is now unconstitutional.Several other districts have passed Perda acknowledgingCustomary Forests, such as those in Kerinci District andBunga Tebo District, which cover hundreds of hectares ofland mainly located outside forest areas. In addition RegionalRegulation No. 9/2000 on Nagari Government of WestSumatra Province, although it does not recognise customary261

Prospects for Reformforest management rights, does recognise the legitimacy ofindigenous institutions to govern the area under their jurisdiction.Perda are also being prepared in other districts suchas Landak, West Kutai, Malinau, Donggala, Jayapura, withthe aim of giving legal recognition of indigenous peoples’rights to manage their own resources, including forest resources.262

8Conclusions andRecommendations

Conclusions and RecommendationsIndonesia’s current forest-tenure system is working againstthe health of the nation’s forests and against the prospectsfor their sustainable management. By overriding traditionalrights, the relatively new system of nationally sanctionedrights and access rules has eroded local communities’ incentivesto manage forest for the long term and engenderedsocial conflict in many areas. (World Resources Institute1994 304 )FSC Principles 2&3 provide important provisions aimedat assuring the buyers of FSC certified forest productsthat they are produced in socially acceptable ways. ThePrinciples provide four tiers of protection designed to ensurethat the needs and rights of local communities and indigenouspeoples are accommodated by forest management.The spirit of P2&3 is: first, to establish that customary rightsof local communities and indigenous peoples are secure, preferablythrough formal, legal means; secondly, that there belocally acceptable mechanisms to ensure community controlof forest management which may only be delegated throughthe principle of free and informed consent; thirdly, that acceptabledispute mechanisms are in place; and, fourthly, thatthe existence of serious unresolved disputes should ‘normally’be grounds for refusing certification.FSC national standards have been approved even incountries where the legal recognition of customary rights isunclear or uncertain. In these circumstances, the importanceof the second line of protection, through exercise of the rightto free and informed consent, becomes doubly important.The general finding of this study is that the IndonesianState lacks measures for securing customary rights to landand forests. Moreover, it also lacks legal provisions that facilitateexercise of the right of free and informed consent.On the contrary, the prevalent development model, adminis-264

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiestrative system and legal framework deny customary rights,disempower customary institutions, and encourage top-downforestry, all in violation of internationally recognized norms.The current Indonesian forest policy environment is difficultfor, even hostile to, certification to FSC standards.However, the situation is not entirely bleak. Widereachingreforms are underway. Constitutional revisions andNational Assembly decisions are opening the way for a recognitionof customary rights. Decentralization laws nowprovide for the possibility of a measure of self-governanceby customary institutions. Local governments are beginningto pass local laws which recognize customary rights andpromote community forestry options. Certification is increasinglyfavoured by the national government as a way for reformingforestry practice.This final section first sumarises the findings of thisstudy with respect to the obstacles to the application of FSCPrinciples 2&3, reviews the reform options that may facilitatecertification, and then makes recommendations aboutwhat should be done in the circumstances.Current Obstacles in Law and PracticeThis review has found a series of major obstacles to the applicationof FSC Principles and Criteria 2&3 in Indonesia.The most salient include the following:ž Current national land laws do not ‘clearly define, documentand legally establish’ ‘long term tenure and userights of local communities’.ž Nor do they provide the basis for such communities to‘control to the extent necessary their rights and resources’.ž Customary (hak ulayat) rights are subordinated to Statedecisions and interests and do not confer the right of ‘freeand informed consent’ on local communities. Communi-265

Conclusions and Recommendationsties are not entitled to reject the imposition of logging orother forms of state-sanctioned land use on their lands.ž The prevalent model of administration at the local level(the desa system) does not provide an appropriate mechanismsfor the resolution of disputes. Coercive decisionmakingand intimidation by local administrators and securitypersonnel is common. Legal processes are widelyrecognised as deficient and even unjust.ž Although the ‘customary rights’ of indigenous peoples totheir lands and resources are nominally recognized in therevised Constitution, under the Basic Agrarian Law theseare interpreted as weak rights of usufruct subordinate toState interests. Regulations for the definition of these areasare lacking.ž In State forest lands, under the Basic Forestry Law (No41/1999), the customary rights of indigenous peoples andother local communities are further weakened.ž Propietary rights in state forest lands are by definitionexcluded, meaning that long term tenure for local communitiescannot be legally established, nor can the rightsof indigenous peoples to own, manage and control theirlands be legally asserted. Communities’ use rights are subordinatedto logging. 305ž Likewise, under the Basic Forestry Law, the weak rightsof usufruct of local communities do not secure their rightto free and informed consent regading logging or plantationoperations on customary rights areas.ž Short-term community forestry concessions (HPHKM)can be leased on forest lands, but subject to strict governmentoversight and intervention.ž Logging and plantation concession are routinely grantedwithout consultation with local communities and indigenouspeoples, much less their ‘free and informedconent’.266

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesž On the other hand, application of the laws governing thezoning, delineation and gazettement of forest lands andforest concessions have often been incompletely adheredto. As a result as much as 90% of forest lands thought tobe under the jurisdiction of the Forest Department are notlegally so.ž Disputes between the central and local government administrationover the legal status of forest lands and concessionsis thus widespread.Prospects for Legal and Institutional ReformIn recent years, there have been moves to reform laws andpolicies related to forestry and community rights. These reformsinclude the following:ž Constitutional provisions now endorse the internationalhuman rights regime and explicitly recognize the rightsof indigenous peoples (masyarakat adat).ž The National Assembly has ordered the DPR and Executiveto carry out far-reaching reforms of land tenure andnatural resource management law to establish more equitableaccess to land and to recognize customary rights.The reform process has however been held up.ž The Regional Autonomy Act now paves the way for reformsof the local administration, which may allow therecognition of customary institutions. Where these reformshave been pushed through to the satisfaction of local communitiesa more secure basis for the exercise of the rightof free and informed consent may now exist.ž Participatory mapping techniques have proved their worthas effective mechanisms for documenting and recognizingthe extent of customary rights areas.ž The decentralization laws may also give local government267

Conclusions and Recommendationsthe authority to legislate on forest lands. Using this powersome district level legislatures have begun to confer rightsto community forestry (Wonosobo) or customary rights(Lebak) through local legislative acts (Perda).ž The reform process remains uncertain and a number oflocal government decisions regarding forests and rightsin forests are now being contested by central governmentMinistries.ž The reform process, while encouraging, is not yet far advancedenough to provide a secure basis for certificationexcept in some specific locales.Implications for FSC Certification in IndonesiaThe social acceptability of FSC certification depends on thequality of the participation that leads to decisions. Whereparticipation is weak or absent, national standard setting,forest management and certification assessments are all likelyto failt to meet FSC’s high standards.The prevalent national policy and legal framework providesa very difficult context in which to carry out certificationto FSC standards in Indonesia, especially with referenceto FSC Principles 2 and 3. With a few local and disputedexceptions, current Indonesian laws do not providethe security that local communities need to establish clearrights to their lands and resources, to ensure that indigenouspeoples’ rights to own, use and manage their lands are recognizedand respected, to exercise their right to free and informedconsent and to control forest operations on their landsinsofar as they affect their rights.As noted, the FSC Board has stated that ‘FSC Principles2 & 3 require that the legal and customary rights of268

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesindigenous peoples be legally established and respected’and has endorsed a new indicator regarding compliance withCriterion 2.1: ‘2.1.1 Communities have clear, credible andofficially recognised evidence, endorsed by the communitiesthemselves, of collective ownership and control of thelands they customarily own or otherwise occupy or use’ (seesection 2.4: emphasis added). Minimum reforms that are requiredto meet these requirements include the following (thecorresponding FSC P&C are indicated in brackets):ž Ambiguity about the boundaries of forest lands and concessionsmust be resolved through revised participatoryland use planning, mapping, demarcation and gazettementprocesses (2.1).ž Enabling laws and corresponding regulations must bepassed to allow the customary use rights of local communitiesto be defined, documented and legally establishedso that they can maintain control to the extent necessaryto protect their rights in forests (2, 2.2, 3.1).ž Laws must be amended so that customary rights holderscan represent themselves through their own representativeinstitutions and so that these are assured legal personalityand can thus enter into negotiated agreements withforest managers to whom they choose to delegate controlwith free and informed consent (2.2, 3.1).ž Forest and land tenure laws are amended to provide effectivemechanisms for the recognition and respect of therights of masyarakat adat to own, use and manage theirlands, territories and resources in forests (3).ž Current concessions established on indigenous peoples’and local communities’ customary lands and rights areas,without their free and informed consent, should be revoked(2.2, 3.1).269

Conclusions and RecommendationsThe investigation is therefore driven to conclude that,according to a strong reading of FSC Principles 2 & 3 and aliteral application of these Principles as interpreted by theFSC Board, certification to FSC standards in Indonesia iscurrently not possible. It will not become possible until substantialnational and local legal, institutional and policy reformstake place.This conclusion may seem harsh, litigious, unhelpfulor unrealistic.Indeed, it is not clear to the authors that a legalisticand inflexible application of the FSC Principles to the Indonesiancase is the best way forwards. Many of the problemsin forests in Indonesia, indeed, derive from a top-down, prescriptiveapplication of laws and standards which do not givescope for local solutions. Indonesian civil society groupsthemselves stress the importance of a flexible recognition ofcustomary law. Strict and legalistic requirements of documentaryproof of tenure can be a problem for local communitiesseeking secure access to forests based on customarylaw and oral culture.A more flexible and locally-adapted interpretation ofFSC Principles 2 & 3, it can be argued, should allow FSCcertification, even in the absence of unambiguously legallydefined rights, if forest managers, certification bodies, indigenouspeoples and local communities agree on how tointerpret the P&C to suit local realities and if clear measuresare taken to go beyond what the law currently allowsor requires.The question then arises: who should make thesejudgments and how?The current situation is that there has been no nationalFSC initiative in Indonesia to develop national standards.There are only four FSC members in the entire country.Moreover, the certfication bodies have not themselves270

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesadopted ‘locally adapted generic standards’ in accordancewith FSC processes. Currently, judgments about how FSCP&C should be interpreted in Indonesia are being made bycertification teams in the field. This is leading to certificationdecisions being contested by local communities andNGOs, a situation that is neither useful for forest managers,certification bodies nor the FSC and which risks discreditingthe whole process of certification.This situation is not satisfactory and is contrary to establishedFSC procedures. Local interpretation of how FSCPrinciples 2 and 3 should be applied require detailed localdiscussions, with the full and informed participation of affectedcommunities and indigenous peoples.A major conclusion of this investigation is thereforethat an urgent and required next step must be to embark on anational dialogue to decide how and whether to promotevoluntary certification in Indonesia using international standardssuch as those of the FSC. Until such a national dialoguehas been held and a national consensus achieved onthe way forward, FSC certification processes in Indonesiashould be suspended.At the multistakeholder dialogue held in Jakarta inJanuary 2003 to discuss the first draft of this study, this recommendationwas fully endorsed by the local community,indigenous peoples’ and NGO representatives present. However,a number of spokespersons for certification bodies andthe FSC spoke out against this recommendation, claimingthat without certification Indonesia’s forests would betrashed as there would be no incentive for improvement offorest management. This is to misunderstand the recommendation,which is that there be a pause in the certificationprocess while the uncertainties about how to go head withcertification, which this study has identified and which arecausing such contention, are resolved.271

Conclusions and RecommendationsIt is our view that a temporary suspension would focusthe minds of those committed to improvements in forest managementin Indonesia to find solutions to the problems thathave been identified. A pause would thus hasten not delaydevelopment of good guidance and a reformed certificationprocess. Agreements must be found about how to:ž legally establish secure tenure for concessionaires;ž establish mechanisms for ensuring that local communitieswith customary rights control forest operations thataffect their rights;ž ensure recognition and respect the rights of indigenouspeoples to own, use, control and manage their lands, territoriesand resourcesž and establish verifiable and meaningful procedures forensuring free and informed consent of forestry operationson local communities and indigenous peoples’ lands.Until there is agreement about how these principlesand criteria should be complied with in the Indonesian context,we consider that it is irresponsible to recommend thatFSC certification should continue. A national dialogue is, inour view, absolutely necessary to address these issues, forto press ahead without this is to risk further problems withthe interpretation of P 2&3 in Indonesia, provoke more conflictin concession areas, bring further discredit to certificationamong consumers, and generate growing doubts aboutFSC’s ability to respect the views of indigenous peoples,who are the primary rightsholders in forests. 306 These areserious issues which cannot be brushed aside and must beagreed through a national dialogue.We do not seek to pre-judge the outcome of such a nationalprocess. The following recommendations are thus offeredas proposals for discussion by the national dialogue.ž An inclusive national level dialogue should be carried out272

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesto establish whether there is wide enough support for establishinga national FSC initiative. A successful dialoguewill depend on indigenous peoples’ and local communites’organizations, other civil society groups having the time,capacity and resources to engage in itž If a national initiative is decided on, a reasonable numberof national organizations would need to become membersof the FSC for it to be credible.ž Consideration should then be given to the chamber structureof such a process. Should the process have the standardthree chamber process (economic, social and environmentalchambers) or (as in Canada) include a fourthchamber for ‘indigenous peoples’?ž The term ‘indigenous peoples’ used in FSC Principle 3should be understood as referring to masyarakat adat inIndonesia. Self-identification should be a fundamentalcriterion for establishing which groups are referred to assuch. ‘Customary rights’ areas should be establishedthrough community-based mapping exercises.ž In the absence of effective national legal reforms that recognizethe rights of local communities and indigenouspeoples to their lands, recognition should be soughtthrough the following steps:• Recognition of rights through a local decree (perda)and/or through the determination of the boundaries ofrights areas through participatory mapping.• Community rights areas should either be managedby the local communities themselves or excised from theconcessions of other operators or else managed by theseother operators according to agreements negotiated withthe rights holders.• Where community rights areas are to be managedby other operators, the full extent of community rightsareas should be formally recognized in negotiated agree-273

Conclusions and Recommendationsments agreed between the forest managers and local communitiesand/or indigenous peoples. These areas andagreements should be incorporated into managementplans.ž Serious thought needs to be given to how such negotiatedagreements can be made binding in the Indonesiancontext. Signed agreements registered by a local notaryhave been suggested as one option in community consultations.Additional measures will be required to give therepresentative institutions of the local communities and/or indigenous peoples legal personality.ž ‘Appropriate’ dispute resolution mechanism may includethe submission of disputes to the adjudication of adatcouncils and customary decision-making fora. Agreementabout such mechanisms must be part of negotiated agreementsand made explicit in the management plans.ž All such agreements should be without prejudice to theany subsequent land claims negotiations between the communitiesand government.ž Transparent mechanisms should be developed at the forestmanagement level to ensure that civil societyinstitiutions are able to monitor certification processesand forest management agreements. 307ž The experience of the Indonesian Ecolabelling Institutewith standards development and with regional consultativefor a should be taken into account.ž Appropriate national standards should be considered forpromoting the certification of community-based forestmanagement.Recommendations for the GovernmentThis investigation has concluded that internationally cre-274

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesdible certification is unlikely to become widely establishedin Indonesia without substantial reforms to recognise andrespect the customary rights of local communities and indigenouspeoples (masyarakat adat) to their lands and forestsand to give them legal standing so they can negotiateagreements with forest managers.In line with the Constitutional commitment to recognizingthe rights of indigenous peoples, the governmentshould:ž Ratify ILO Convention 169/ 1989 on Indigenous andTribal Peoples in Independent Countries.ž Ratify the International Covenants on Civil and PoliticalRights and Economic, Social and Cultural Rights.ž Through a participatory process of legal reform, promulgatenational laws in accordance with these internationallaws and constitutional provisions to:• Recognize the rights of local communities and indigenouspeoples to own, manage and control their landsand forests• Recognize their rights to self-governance• Revoke current laws and executive decisions whichviolate these rights• Implement Agrarian and Natural Resource ManagementReforms in line with TAP MPR IX/2001, includinga revision of the Forestry law which currently classifiesadat land as State forest lands.• Ensure the legal delineation and gazettement of Stateforest land in agreement with neighbouring communitiesaccording to the correct procedures before handing outconcessions to these areas.ž Conflict resolution and negotiation mechanisms should beadopted which do not rely on security forces and / orviolent actions.ž Human rights violations associated with land and natural275

Conclusions and Recommendationsresource conflicts should be addressed as a matter of priority.ž Procedures to excise customary rights areas from concessionworking areas should be implemented.ž In future concessions should not be handed out withoutthe free and informed consent of affected local communitiesand indigenous peoples.ž Programmes to develop national mandatory certificationshould take into account the conclusions and recommendationsof this investigation and ensure that standards includerespect and recognition of the rights of indigenouspeoples and local communities, in particular their rightsto their lands and to free and informed consent.Recommendations for FSCSpecific recommendations related to Indonesiaž If the national dialogue decides to promote a national FSCprocess, then FSC should openly support and encouragethe setting up of a national FSC initiative in Indonesia. Itshould ensure that this national initiative is developedstrictly in accordance with FSC guidelines. 308ž In the meantime, it should immediately call on accreditedcertification bodies to suspend certification in Indonesiauntil the national initiative reaches a consensus on theway forward.General Recommendationsž The FSC should amend the definition of ‘indigenouspeoples given in the glossary of its Principles and Criteriato reflect the advances in thinking made at the UNWorking Group on Indigenous Populations and, in linewith the FSC Board’s decision to operate in conformity276

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitieswith the ILO Conventions, should give due recognitionof the right to self-identification.ž The FSC Council and Assembly should give careful considerationto the way it promotes certification processesin countries without existing national standards, especiallyin developing countries.ž Given the difficulties which this study has highlighted inapplying international standards to local realities, the FSCshould consider halting certification in developing countriesin the absence FSC-approved national standardsagreed through national FSC initiatives.ž Alternatively or in addition, the FSC should take strongsteps to prohibit accredited certification bodies from carryingout certification in such countries relying on theirgeneric standards.ž If (which we do not recommend), the FSC decides to continueto allow certification in the absence of national standards,strict mechanisms must be applied to ensure thatcertification bodies develop ‘locally adapted generic standards’as required.ž FSC Guidelines for the development and disseminationof such draft ‘locally adapted generic standards’ shouldbe strengthened to ensure that there is genuine local consensusamong key interested parties for the application ofthese standards. Strong local objections to the proceduresor standards being used should normally be grounds forthe suspension of certification processes.ž FSC Guidelines should make stronger requirements ofnational working groups and certification bodies that theircertification standards and procedures clarify what constitute‘major failures’ in compliance, especially with respectto Principles 2&3.ž Through participatory dialogue among FSC members,make clear whether Principle 2 requires that the custom-277

Conclusions and Recommendationsary rights of local communities need be ‘legally established’or this provision only applies to forest managers. 309ž Complaints procedures should be made more accessibleand agile, so local communities and indigenous peoplescan raise concerns about certification decisions directlywith the FSC.Recommendations for Certifiersž Accredited certification bodies should suspend certificationactivities in Indonesia, pending a decision from anational FSC initiative on the appropriate way forward.ž No certifications should be made in developing countrieswithout strict adherence to FSC requirements regardingthe development of ‘locally adapted generic standards’.ž Generic standards should be revised to make clear whatconstitute ‘major failures’ in terms of compliance withPrinciples and Criteria 2 and 3.Annex 1: The Obligations of HPH HoldersPeriod 1: 1968-1997According to Forest Agreement (FA) which implementationhad been initiated in 1968 and was extended by the HPHdecree under the PK Act No. 5/1967 and Government RegulationNo.21/1970 on Forest Management, the rights andresponsibilities are as follows:1. The duration of concession is 20 years with the possibilityof extension for companies that exercise their givenresponsibilities2. Only allowed to exploit commercial types of wood and278

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesnot including non-timber forest resources, minerals, fossilfuel, natural gas, chemicals, precious and semi-preciousstones, agriculture, agricultural products and othernatural resources.3. The working area of the concession excludes areas determinedas protected forest, nature reserve, tourism forestand other types of land ownership or reservation for otherspecific purposes. MoF may determine specific areas asmore productive if converted to agricultural function inorder to serve other purposes.4. The working area only includes the area of ProductionForest determined by the MoF. Delineation must be completedwithin three years after the permit is issued. Theimplementation can be done by MoF at the expense of thecompany. Individual property or land burdened with otherownership right may not be included in the working area.The company is accountable for all effects of the operationon individual property or land burdened with otherownership rights before the delineation is concluded.5. Rights may not be transferred without the MoF’s permission.6. Do not employ directly or indirectly human resources relatedto the Communist Party and/or its 1965 attemptedcoup (G30S/PKI)7. Rights and privileges of indigenous people accordinglyto the law would not be limited or influenced by this agreement(FA). The company has to acknowledge the rightand privileges of indigenous people to, among other, enterthe working area, collect certain types of plant to fulfilldaily needs and to collect subsidiary forest resourcesas regulated by the Regional Forestry Office and by referringto GR No.21/1970. The government along withthe company together would try to find the best solutionfor the indigenous people. The solutions should aim to279

Conclusions and Recommendationsestablish permanent (non-nomadic) farming communities.The company should try its best to promote and trainmembers of indigenous community within its workingarea.8. The company is obliged to aid the regional government inthe development of the community within and around itsworking area such as by building religious facilities, communicationfacilities for the regional government, electricityfor the people.9. Protected species and those on the brink of extinctionshould not be hunted, there should be no fishing exceptwith MoF’s permission, the use of explosives and poisonare banned without MoF permits.10.The company should protect objects with historical andscientific value from damage and should report any suchdamage to MoF. The company is accountable to the governmentfor any of its employees’ or its visitors’ actionsor neglect in the working area.11.MoF has the right to lessen the size of the working areaaccordingly to Article 15 of GR No.21/1970. MoF alsohas the right to reduce the size of the working area ongrounds of public welfare. This also applies to the amalgamationor exchange of working areas. Exchange or reducingthe size of the working area would be conductedby MoF at the expense of the company.12.When the company fails to fulfill its obligations basedon the FA and SKHPH, MoF should issue a written reprimand,and if after 60 days the company has not mendedits ways or offered an explanation, the FA agreement maybe annulled. Should the agreement be terminated becauseof violation, then the obligation stated in article 13 paragraph2 and article 16 of GR No. 21/1970 should be exercised,along with other regulations and the determinationof performance bond amounting to US$12,515.00280

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilities(regulated in the calculation of the quality and quantityof the working area).13.Report should be kept and maintained in the central officeof the company for auditing for at least 10 years afterthe operation has been concluded.14.The monitoring of the company is the obligation of MoF.15.FA Addendum may be conducted if viewed as necessaryby the department or both parties accordingly to a specialprocedure.Period 2: 1998-2001By the enactment of Forestry Act no 5/1967 and the replacementof GR No. 21/1970 with GR No. 6/1999 on Utilizationof Production Forest, the rights and obligations of HPHwere altered as follows:1. The concession lasts for 75 years (20+ cycles)2. The utilization should only cover commercial timber typesand does not include non-timber resources, minerals, fossilfuel, natural gas, precious and semi-precious gemstone,farming, agricultural products and other natural resources.3. The company is forbidden to fell trees in protected areas,including those with certain aesthetic and or scientificvalue, where supporting trails should be established accordinglyto the prevailing provisions.4. Forest inventory should be the obligation of the companyto avail accurate, credible and most recent data; physicaland socio-cultural data and should be included in the RKT,RKL and RKPH of the company, accordingly to the prevailingprovisions on forest inventory.5. The company should carry out parameter management andthe mapping of the whole working area within 3 yearsafter the SKPH is issued. The company should be accountablefor any effect that may arise as the result of its op-281

Conclusions and Recommendationseration on individual properties or owned lands.6. The company is obliged to allow members of customarylaw communities to collect non-timber forest resourcesaccordingly to the community or the indigenous people’sright.7. The company is forbidden from hunting wild animals, bethey protected or non-protected species and should preventillegal poaching in its working area.8. The company should provide and distribute/sale RKT timberfor the regional development/ domestic needs accordingto the prevailing provision.9. The company should increase the value of the forest byplanting on productive land or vacant lands, prioritizingcritical areas and the areas bordering communities’ lands.10.Elimination of forest should be prevented and overcome,such as by preventing shifting cultivation and illegal logging.11.Protection of objects with cultural, scientific or religiousvalues is the obligation of the company, including by reportingthe discovery of such sites and creating supportingtrails around them.12.The development of communities living around the forestis the responsibility of the company, including the provisionof religious, education, health, and sports facilitiesalong with training for employees. Development mustbe carried out in 1 village at the minimum. Supervisionis obligated to be exercised in 1 village including the promotionof an employees cooperative 310 and a village cooperative.Opprtunities must be provided for the publicto purchase shares in these cooperatives.13.Partnerships should be entered into the community cooperativesin order to involve them in the company’s operations(planting, cruising, logging, paring, etc.)14.Providing access for the collection of non-timber forest282

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesproducts to the people around the forest individually orthrough cooperatives.15.Allocating 20% of the shares for the local communitycooperative, 10% immediately after the venture is establishedand the rest within 5 years afterwards, and alsoallocating another 20% of shares to a foundation/cooperativechosen by MoF.16.The company must respect the rights of indigenous communitiesto enter the working area to collect, retrieve,gather and take non-timber forest products such as rattan,honey, sago, extract of fruits, grass, bamboo, barkand others to fulfill their daily needs.17.Supervision is the duty of the government which includesphysical observation, administration and company management.18.Should the SKHPH be revoked, the company must upholdits obligation as stipulated in the GR No.6/1999Article 21 Paragraph 2.19.If the Working Area is returned to the Department, thecompany should already complete and fulfill its technicaland financial obligations as stated in the SKHPH.Period 3: 2001- PresentBy the implementation of revised Forestry Act No.41/1999and GR No.34/2001, there were further alterations regardingthe rights and obligations of HPH concession holders.3111. The concession would last for 55 years at the most andcan be renewed if the auditor views the working performancewell. The renewal of permit would also depend onthe company having secured a certificate of sustainablemanagement of natural forest from MoF.2. The size of area is the same with the articles of GR No.6/1999 and GR No. 34/2002, namely 100.000 hectares283

Conclusions and Recommendationsper province (except Papua, where the limit is 200,000hectares) and the maximum of national level is 400,000hectares per year.3. Forest Utilization should fulfill the criteria and indicatorsof sustainable forest management, which covers theaspects of economy, social, and ecology. However, thereis also pre-condition criteria, one of the indicators beingthe definite sustainable natural productive forest managementunit area, whereas for the social aspect, the criteriainclude (Forestry Ministerial Decree 4795/2002:ž Define the size of, and boundaries between, the unit andthe territory of local indigenous community with the consentof related parties.ž Agreements involving the customary lw or local communitywith equal share of management responsibilities.ž Availability of mechanism and implementation of effectiveincentive distribution, and equal share of cost andbenefit between parties.ž Planning and implementation of forest management shouldconsider the rights of the customary law and local communities.ž Increase of role of the customary law and local communitywhose economic activity is forest-based.4. The Timber Exploitation of Natural Forest can only beconducted in production forests which still have the potentialto be exploited subject to set criteria.5. The permit for an area cannot be transferred6. Permit of Venture is given to individuals, Cooperatives,BUMN (State Business Enterprise), BUMD (VillageBusiness Enterprise), BUMS (Social Business Enterprise)through auctions and offers made by the Ministry of Forestry.7. The delineation of the working area’s boundaries shouldbe carried out at most within 3 months after the permit is284

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitiesissued.8. Exercising forest protection and pay the determined fees.9. Preparing annual, 5 yearly and 55 yearly work plan.10.Cooperating with the local Cooperatives at the longestwithin 1 year after the permit is issued; such as sharingthe shares and cooperation in aspects of operation (planting,logging, etc.)11.The permit may be revoked as administrative sanction bythe government. The holder of permit should still exerciseits financial obligations and adhere to all the regulations,since the government has no accountability overthe obligations of the permit holder to third parties.12.Administrative sanctions may be in form of temporarysuspension of administrative services, a one-year suspensionof field activities or revocation of the permit entirelyafter 3 warnings each given with the space of 30 days.13.Reduction of working area up to 20% may be done if thepermit holder leases its operation to other party, has notre-planted according to the work plan or not exercisedcredible financial management.14.Revocation of permit is an administrative sanction for:not delineating the boundaries of the working area; if thereis no material operation within 180 days of thepermitbeing issued; not involving community cooperatives;not paying the determined fees; or collecting forestresources not included in the permit. If the violations relateto illegal logging and mining within the working areaand transferring the permit of exploitation to other party,the permit may be revoked without prior warning.15.For companies that have obtained their HPH through theprevious procedures, the obligation and rights are not altereduntil the old permit has expired.285

Conclusions and RecommendationsAnnex 2: The Obligations of HTI holdersThe obligations of HTI holders between 1990 and 2002 includethe following:The Aspect of HPHTI Working Areaa. A certain size set out on a map 1:40,000 scale map. Thesize is not yet defined as it depends on ground surveyingand boundary delineation.b. The concession would last for 42 years, meaning 35 yearsplus one cycle (7 years), which should not be transferredin any form without the consent of the ministryc. The implementation of working area delineation shouldbe concluded within two years after the HPHTI permit isissued.d. Any individual property, village, paddy field or residentialarea, or areas managed bu the third party, should beexcised from the working area.e. Should the concessionaire desire to include any such area,settlement should be conducted by the HTI company withthe party according to prevailing legal provisions.f. The alteration of the working area’s size is possible andthe implementation should be in accordance to the prevailinglegal provisions.g. The company has no right over other natural resourcessuch as non-timber forest resources, mineral, natural gas,precious gems and so forth aside from timber.In the Planning Aspect, the Company Should Providea. Aerial photo at a scale of 1:20,000, or a Citra LandsatTM Band 542 image at a scale of 1:50,000, covering thewhole working area must be provided with a legend explainingthe set out of the plantation and other land.b. Forest inventory including the environmental parameters286

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilitieswithin and around the HPHTI including information suchas: condition of soil, animals, plantation, community’ssocio-culture.In the Aspect of Land Preparationa. The company is forbidden from using fireb. At the latest, 5 years after the HPHTI is issued, 1/10 th ofthe working area should already be planted.c. At the latest, 25 years after the HPHTI is issued, all ofthe working area should already be planted.d. Substitution Plantation (tumpang sari) practices shouldbe exercised in line with the development of primary industrialforest plantation as stated in the RKHT4. In the aspect of Natural Sustainabilitya. The community is obliged to prevent or avoid violationconducted by its employees or other parties that causesthe damage to forest within the working area, such as byshifting cultivation, forest clearance and erosion prevention.b. The company is obliged to prevent the poaching of wildanimals, whether protected or not, within the area, exceptby permission.c. The company has to prevent any damage being done toobjects with scientific and/or cultural value within itswork aread. The company should report to the appropriate state agencyshould it encounter objects with scientific and/or culturalvalue within its work areae. In order to secure protected areas, natural conservationareas and natural reserves, the company is obliged to establisha buffer zone at least 500 meters wide along theboundaries of the working area.f. A processing facility may be constructed within the areaonly if there is a road for transport. This should be only287

Conclusions and Recommendationsdone after securing permission from the ministry.In the Aspect of Community Developmenta. Obliged to permit the customary law community and itsmembers access to the working area to collect, take, gatherand carry away non-timber forest products to fulfill orsupport their daily needsb. Assist the improvement of the community’s welfare withinand around the working area.c. Support the area’s development, regional development andthe development of the welfare and economy of customarylaw communities living around the working area.d. Allocating 20% of the shares for the local communitycooperative as a form of community compensation. Theimplementation shall be conducted in stages. The first 10%once the cooperative is established and the other 10% ininstallments over the next five years.e. Assisting the government in community development, suchas constructing religious, education and health facilitiesf. Work opportunity and trainingg. The opportunity for the local community, though not thecompany’s employees, to use the health facilities withminimum cost.h. The company is obliged to set aside at the most 20% ofits profit for the supervision and development of VillageUnit Cooperative (KUD), primary cooperative and thosewho are economically deprived.Monitoringa. Every 5 years the Government would assess the managementof HPHTIb. The holder of HPHTI would be sanctioned if violatingthe prevailing regulations.288

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and PossibilitiesRevocation of HPHTIa. Should exercise all the provisions set by the ministry accordinglyto Article 21 of the GR No.6/1999.b. Should the HPHTI expire or be revoked, the plantationsbecome the property of the state, while mobile assets belongto the company.c. If the company return the right of utilization to the government,it should complete and fulfill all its technicaland financial obligations.After 2002 with the enactment of GR No. 34/2002 HTIholder obligations were modified as follows:1. The concession at most can last for 100 years and can berenewed if the auditor views the working performancewell. The renewal of permit should also be subject to certificationfor sustainable management to be conducted bythe ministry.2. The size of area is the same as was stipulated in GR No.6/1999, namely 100.000 hectares per province (exceptPapua, where the limit is 200,000 hectares), with a maximumof 400,000 hectares per year nationally.3. Forest Utilization should fulfill the criteria and indicatorsof sustainable forest management, which covers theaspects of economy, social, and ecology. However, thereis also pre-condition criteria, one of the indicators beingthe definite sustainable natural productive forest managementunit area, whereas for the social aspect, the criteriainclude (Forestry Ministerial Decree 4795/2002:a. Defined size and clear boundaries between the unit andthe territory of local customary law community and withthe consent of related partiesb. Types and amount of agreements involving the customarylaw community or local community with equal share ofmanagement responsibilities289

Conclusions and Recommendationsc. Availability of mechanisms to implement equitable benefitsharing among all parties.d. Planning and implementation of forest management thathas considered the rights of customary law communitiesand local communities.e. Increase the role of customary law communities and localcommunities, whose economic activity is forest-based.4. Plantations may only be established on vacant land, pasturesor bush.5. The concession area cannot be transferred unless legallypermitted.6. Shares to be given to individuals, cooperatives, BUMN(State Business Enterprise), BUMD (Village BusinessEnterprise), BUMS (Social Business Enterprise) throughauctions and offers made by the Ministry of Forestry.7. The delineation of working area boundaries must be donewithin 3 months of the permit being issued.8. At least 50% of the plantation should be established within5 years.9. Exercising forest protection and pay the determined feesand compensation.10.Preparing annual, 5 yearly and 100 year work plans.11.Cooperating with the local cooperatives at most within 1year after the permit is issued; such as share holding andcooperation in aspects of operation (planting, logging, etc.)12.The permit may be revoked as an administrative sanctionby the government. The holder of permit should still exerciseits financial obligations and all the regulations,since the government has no responsibility for the obligationsof the permit holder to third parties.13.Administrative sanctions may be in form of temporarysuspension of administrative services, a one-year suspensionof field activities or revoking the permit entirely after3 warnings, each given with the space of 30 days.290

Application of FSC Principles 2 & 3 in Indonesia: Obstacles and Possibilities14.Reduction of working area up to 20% may be done if thepermit holder leases its operation to other party, does notre-plant according to the work plan or does not exercisecredible financial management.15.Revocation of permit is an administrative sanction for notdelineating the working area boundaries, no material operationswithin 180 days after the permit is issued, notcooperating with community cooperatives, not paying thedetermined fees, or collecting forest resources not includedin the permit. Concerning violations related to illegal loggingand mining within the working area and transferringthe permit of exploitation to other party, the permit maybe revoked without prior warning.16.For companies that have obtained their HPH through theprevious procedures, the obligation and rights would notbe altered until the old permit has expired.291

Photo: Sawit Watch Doc.

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Zerner, Charles1990 Community Rights, Customary Law and the Law ofTimber Concessions in Indonesia’s Forests: LegalOptions and Alternatives in Designing the Commons.Ms.1992 Indigenous Forest-Dwelling Communities inIndonesia’s Outer Islands: Livelihood, Rights andEnvironmental Management Institutions in the Eraof Industrial Forest Exploitation. Paper for ForestSector Review, World Bank, Washington DC.End Note1LEI requires the setting up of a forum konsultasi daerah toresolve local disputes. Case studies carried out for this investigationdid not encounter these fora. A study should bemade of their functioning to determine if they are worthy ofand wider applicability as an interim mechanism for use atthe local level that could compensate for the current lack ofa formal regulatory framework that recognizes, and whichcan enforce, customary rights.2With an appropriate three chambered structure for participationand voting, or preferably with a fourth chamber for indigenouspeoples, and with votes being limited to FSCmembers.3A ‘strong’ interpretation of Principle 2 suggests that localcommunities’ customary rights should be ‘legally established’(see for example the Brazilian standards which requirethat such rights be ‘regularized’ which in the case ofMil Madeira meant titling of community lands). A ‘weak’interpretation of Principle 2 suggests that it is only forestmanagers’ rights that need be ‘legally established’.4CPA, SKEPHI, APPEN and TWN statements to FSC found-314

ing meeting in Toronto. See also Upton and Bass 1995:148-9.5In Malaysia however indigenous peoples have felt obligedto withdraw from the process owing to the lack of progressmade in addressing their rights.6Smartwood 2001.7DTE 2002; New Scientist, ‘Logged out: Indonesia’s forestsare disappearing at an alarming rate’, 2 March 2002.8FWI/GFW 2002; DTE 2002.9SMERU 1998a, b; DTE 2002; FWI/GFW 2002.10FWI/GFW 2002; DTE 2002. As this study shows, however,definitions of what is or is not ‘legal’ and ‘illegal’ are notat all clear in Indonesia.11Indonesian NGOs demanded a logging ban in the mid-1980sand first called for a revocation of the concession system in1998 (DTE:2000).12Letter from FSC to certification bodies.13Rezende de Azevedo 2001:1.14Based on http://www.fscoax.org/principal.htm with amendmentsand clarifications by the authors15LEI 1999 Guideline 99 - Sustainable Production ForestManagement Certification System.16LEI 1999 Guideline 55 – Resolution Guideline to AppealAgainst the Certification Decision.17‘FSC and the ILO Conventions: May 2002’ emphasis added(FSC 2002). Some staff in FSC Secretariat have since disputedthis interpretation however.18MacKay 2002.19The following countries have ratified ILO Convention 169:Bolivia, Brazil, Colombia, Costa Rica, Denmark, Ecuador,Fiji, Guatemala, Honduras, Mexico, Netherlands, Norway,Paraguay, Peru and Venezuela. The Soviet Union also endorsedthe Convention in 1989 but the Russian Federationhas yet to inform the ILO of its adherence to the Conven-315

tion. The following countries have ratified ILO Convention107 but not yet the new Convention: Angola, Argentina,Bangladesh, Belgium, Cuba, Dominican Republic, Egypt,El Salvador, Ghana, Guinea-Bissau, Haiti, India, Iraq,Malawi, Pakistan, Panama, Portugal, Syrian Arab Republicand Tunisia.20Bennett 1978; see also Culhane 1999; for a more detailedassessment of ILO Convention 169 see MacKay 2001a21MacKay 2001b.22Human Rights Committee, General Comment 23, Article27 (1994): In, Compilation of General Comments and GeneralRecommendations Adopted by Human Rights TreatyBodies, U.N. Doc. HRI\GEN\1\Rev.1 at 38 (1994).23Concluding observations of the Human Rights Committee:Australia. 28/07/2000. CCPR/CO/69/AUS. (ConcludingObservations/Comments), at para. 10.24General Recommendations of the Committee on the Eliminationof Racial Discrimination XXIII(51) concerning IndigenousPeoples. Adopted at the Committee’s 1235 th meeting,on 18 August 1997, CERD/C/51/Misc.13/Rev.4 citedin Kambel and MacKay 1999.25MacKay 2001a26Ibid.27Concluding Observations by the Committee on the Eliminationof Racial Discrimination : Australia. 24/03/2000.CERD/C/56/Misc.42/rev.3. (Concluding Observations/Comments), at para. 9.28ITTO 1989; WWF 1996; IUCN 1996; EC 1998; WCPA1999; International Alliance 1997; WCD 2000.29Upton and Bass 1995:xx.30BCVFC 1998.31The Sami are considered to be descendants of Finno-Ugricspeaking peoples thought to have inhabited northernScandinavia ever since the withdrawal of the continuous316

ice sheets that covered the area during the Wurm glaciationup until about 7000 BC. The Sami are officially accepted asan indigenous people. The domestication of reindeer astransport animals is thought to have occurred many hundredsof years ago but the domestication of entire herdsapparently only occurred in the C16th in response to theimposition of taxation regimes and notions of private property,as the Swedish State gradually established itself. Similartransformations have been reported for the Nenets andEvenki peoples of Siberia (Anderson 2000; Balzer 1999;Golovnev and Oshorenko 1999).32Johansson 1998; TRN 1999.33Johansson 1998; TRN 1999; Meek 2001.34SGS cited in Meek 2001:18.35For a general overview of forest certification processes inCanada see Elliott 2000:144-162. An alternative nationalforest certification standard developed by the Canadian StandardsAssociation has been criticised for not adequatelyrecognizing indigenous peoples’ rights and for weak participatorymechanisms (Ibid:152).36Smartwood 2000.37Meek 2001:19.38Brody 1981.39The exception is the Nisga’a who negotiated a settlementin 1998.40Stevenson and Peeling 2000:3.41The group went through various stages from being an informalgrouping in 1996, to becoming an ‘Interim SteeringCommittee for BC in 1998, to finally emerging as anelected 8-member, four chamber Steering Committee in1999.42The Canadian Constitution gives the Provincial governmentauthority over forestry issues, but entrusts mattersrelating to ‘Indians’ and ‘Indian lands’ to the Federal Gov-317

ernment. Although the Provincial government is not amember of the working group, resolution of land mattersis required for compliance with Principles 2 & 3. Thegovernment’s interpretation and application of the lawsis thus crucial to a satisfactory result.43For more detailed treatments see MacKay 2001; Culhane1998; Bennett 1976.44MacKay 2001:18.45Stevenson and Peeling 2000:40.46FSC-BC 2002:9.47FSC-BC 2002: 28-29.48FSC-BC 2002: 18.49FSC-BC 2002:48-50.50FSC-BC 2002:18.51FSC-BC 2002:10.52Rezende de Azevedo 2001 and Rezende de Azevedo pers.comm. 4 March 2002.53Rezende de Azevedo 2001:20.54Rezende de Azevedo 2001:20.55In the Caribbean such peoples are referred to as ‘Maroons’.56This phrase has been lifted from Article 10c) of the Conventionon Biological Diversity. The suppression of theterm ‘peoples’ is consonant with Brazilian Governmentdemands in international forest-policy negotiations andhas potentially negative implications regarding recognitionof Brazilian indigenous peoples’ right to self-determination.57It is not always self-evident why these standards are differentbut most are explained by the different laws whichregulate logging and plantation activities in Brazil (seebelow).58FSC Brazil 2001 and 2002. Translations by the author.59FSC Brazil 2001 and 2002 translations by the author.318

60WRM 2001.61Rezende de Azevedo 2001.62Counsell and Loraas 2002.63The Ministry of Justice and Human Rights has drafted abill for the ratification of these instruments which is to bepresented to Parliament shortly.64In ratifying the CERD, the DPR placed a reservation onrecognition of Article 22 but this will not affect indigenouspeoples’ rights to prior and informed consent whichflow from Article 5 of CERD: MacKay Pers. Comm.. 22/02/2002.65ADB 2001.66FSC 2002.67E/CN.4/Sub.2/1986/7. Anomalously, the FSC’s glossaryincludes a previous definition of indigenous peoples usedby the UN Working Group on Indigenous Populations:“The existing descendants of the peoples who inhabitedthe present territory of a country wholly or partially atthe time when persons of a different culture or ethnicorigin arrived there from other parts of the world, overcamethem and, by conquest, settlement, or other meansreduced them to a non-dominant or colonial situation;who today live more in conformity with their particularsocial, economic and cultural customs and traditionsthan with the institutions of the country of which theynow form a part, under State structure which incorporatesmainly the national, social and cultural characteristicsof other segments of the population which arepredominant.”68AITPN 1999.69Daes 1996b.70Gray 1995; Thornberry 1996; Kingsbury 1995; 1998.71Alcorn and Royo 2000; earlier estimates have noted 300ethnic groups speaking 250 languages (Colchester319

1986a:89).72Colchester 1986a.73Colchester 1986a:91;74Colchester 1995:63; cf Colchester 1986a.75DEPSOS, Internal Memorandum 24 October 1975 citedin Colchester 1986a:93.76Persoon 1985.77Colchester 1986b.78And before its creation, the Ministry of Agriculture.79Colchester 1986a; Safitri and Bosko 2001:17.80Roedy 1996; Rahail 1996.81Safitri and Bosko 2001:16.82Li 1999.83Safitri and Bosko 2001:17.84Li 1999.85Wignyosubroto 1990: 39-43..86Soemardjan 1981; Zakaria 2000; Sirait, Kusworo & Fay2001.87The term terpencil literally means ‘made remote’, ‘isolated’or ‘desolated’ and carries connotations of backwardness,of being removed from civilized life. ‘Cut off’ mightbe a better gloss.88Interview with Drs. M. Natsir AB, Drs Afrinaldi MSi.,Pino Kasubdit PSDM, DPKAT, 15 May 2002. DEPSOS2001a provides a breakdown by province and kabupaten,giving a total of 1,159,000 in the 23 provinces where ‘socialmapping’ has been carried out.89Badan 2000; DEPSOS 2001a, 2001b, 2001c, 2002a.90DEPSOS 2002b.91DEPSOS 2002b.92Interview with Drs. M. Natsir AB, Drs Afrinaldi MSi.,Pino Kasubdit PSDM, DPKAT, 15 May 2002.93Colchester 1986.94World Bank 1991.95DTE 1999.320

96Poffenberger 1990; Lynch 1991; Zerner 1992; Lynch andTalbott 1993; cf FWI/GFW 2002:3.97Stone and D’Andrea 2001:125.98Makarim 2002.99FSC 2002.100According to Burns (1999:xi) the Bahasa Indonesia termadat derives from the Arabic ‘adda, ‘which means “hecounted/enumerated/ considered” ’. However, the Boranaof Ethiopia who speak a Kushitic language related toSemitic, the term aadaa has a similarily inclusive sense,variously meaning cultural heritage, appropriatebehaviour, customary usage, tradition, etiquette, ritual andtraditional knowledge. Aadaa is the foundation of Boranaidentity (Bassi 1996).101Van Hollenhoven (1918 and 1931) in Holleman 1981; TerHaar 1948; Hooker 1978; Burns 1989; Lev 2000.102Ter Haar 1948.103Hooker 1978:1.104Lev 2000:41-3.105Hooker 1978: 2-3; Burns 1989; Lev 2000:37, 46.106Lev 2000:51.107Hooker 1978:62.108Barber and Churchill 1987:50.109Burns 1999.110Barber and Churchill 1987:49. cf F & K Von Benda-Beckman 1999.111Cf Burns 1989; 1999.112Hak ulayat is not a term held in common by all peoples inIndonesia. It derives from the Minangkabau of Sumatraand has since been used as a generic term in Bahasa Indonesia(the Indonesian common tongue) to apply to indigenousconcepts of collective rights in land in all partsof Indonesia. Concepts that correspond to theMinangkabau concept of hak ulayat are found widelythroughout the archipelago. It is now a legal category.321

(see also Burns 1999:92 for a discussion).113In Holleman 1981.114Ter Haar cited in Wright 1999.115Burns 1999:19; Plant nd.116Burns 1989.117Ihromi 1999118Burns 1989:9.119F&K von Benda-Beckman 1999; ADB 2001:21.120Culhane 1998; Mackay in Colchester 2001.121Wright 1999:18. In a recent study the Centre for InternationalEnvironment Law has characterised these Indonesiancustomary tenures as forms of ‘community-basedproperty rights’ (Lynch and Harwell 2002).122Barber, Johnson and Hafild 1994:16.123Synthesised from Sellato 1994.124Synthesised from Dove 1985a.125The Province of Bengkulu and a great part of westerncoastal area of Lampung was once under British colonialrule. The area was later handed over the Dutch in exchangefor another area.126Momberg, Atok & Sirait 1996; Bappeda-Watala-FF 2000;Nadapdap, Tjitradjaya and Mundarjito 1995)127Nadapdap, Tjitradjaya and Mundarjito 1995.128Kusworo 2000.129Michon et al in Zerner (ed) 1999.130Dephut et al 1998131Nadapdap, Tjitradjaya and Mudarjito, 1995; de Foresta,Kusworo, Michon and Djatmiko 2000.132Wright 1999:iii-iv.133Moniaga 1991.134Barber and Churchill 1987:15-16; Moniaga 1991.135Based on Barber and Churchill 1987:20-23; Wright 1999:6-12; Plant nd; ADB 2001. As noted, customary conceptsof tenure are quite different from those recognized in ‘positivelaw’.322

136Barber and Churchill 1987:17; Wright 1999:12-13. Accordingto Article 58, the BAL also overrides all priorland legislation ‘contrary to the spirit’ of the BAL. Theoretically,a vast number of colonial regulations on land,which may not be contrary to the BAL thus remain inforce. As far as we can determine, no assessment of theseregulations has, however, ever been carried out.137Moniaga 1991:11. Belief in one God is a requirement ofIndonesian citizenship and Indonesian law only recognisesfive religions – Islam, Catholicism, Protestantism, Buddhismand Judaism. (Hinduism, prevalent on Bali, wasonly recognised by Presidential Decree in 1962). The basisfor adat in indigenous religious belief is thus weakenednot strengthened by this provision.138Plant nd.139Hooker 1978:114.140Gautama 1995:154141Wright 1999:24.142Hooker 1978.143Butcher 1988.144Colchester 1986b; World Bank 1994/5.145Wright 1999:19.146Wright 1999:14 (and see Ibid.14-15).147Safitri and Bosko 2001:para. 38.148Cited in Wright 1999:84.149Wright 1999:85.150Wright 1999:31.151Barber and Churchill 1987:111.152Wright 1999:85.153Budi Harsono cited in Wallace, Parlindungan andHutagalung 1997: 6.3.154Wright 1999:88155Wright 1999:90.156Sumardjono 2001: Ruwiastuti 1999.157ADB 2001:21.323

158Wright 1999:88.159M Sumadjono ‘Land Policy Reforms’ Kompas 18 September1998.160Barber and Churchill 1987:25-26.161World Bank 2000:3.162World Bank 2000:3.163World Bank 2000:1-2 emphasis added.164The number of kabupaten keeps changing. There were268 in 1999.165World Bank 2000.166Moniaga 1991:14.167Previous analyses have assumed that the BAL does notapply in ‘forests’ (eg Barber and Churchill 1987:120) butthere appears to be no legal basis for this limitation of theBAL.168Barber and Churchill 1987:35.169ADB 2001; Zerner 1990:27; Barber and Churchill 1987.170The BFL actually delegates authority over forests to theMinister, who was, until 1983, the Minister for Agiculture.A separate Department of Forestry with its own CabinetlevelMinister was only established in 1983.171Moniaga 1991.172Zerner 1990:25. These estimates of numbers of forest residentshave since been increased (see section 3.1).173Barber and Churchill 1987:45.174Colchester 1986b.175DTE 1990176Barber and Churchill 1987:54.177ADB 2001.178Fay, Sirait and Kusworo 2000.179As stated in Forestry Law 41/1999, Article 5:(1) According to its status, twotypes of forest are determined:a). state forest, and b). private forest(2) State forest as referred to in paragraph (1) point a,324

can be in the form of “adat” forest.(3) Government shall determine the status of forest as referredto in paragraph (1) and paragraph (2); and adatforest shall be determined as long as it exists in realityand its existence is recognised.(4) If during its development, concerned customary communitiesare no longer existing, the management right ofthose “adat” forests shall be returned to government.Article 67:(1) Customary law community, as long as it exist andrecognised shall have the rights to:a.collect forest products for daily needs of concerned communities;b.undertake forest management in accordance with prevailingcustomary laws which is not contradicting thelaws; andc.be empowered for improving their welfare.(2) Confirmation of existence and abolishment of customarylaw community as referred to in paragraph (1) shallbe stipulated in Local Regulation.(3) Further provisions as referred to in paragraph (1)and paragraph (2), shall be regulated by a GovernmentRegulation.180Fay and Sirait 2002.181Moniaga 1991:13.182Successive legislation modified these procedures includingOfficial Decision No 579/1978 of the Ministry ofAgriculture, General Directive of Forestry No. 3183/1978,Decision of the Minister of Forestry 399/1990, Decisionof Minister of Forestry 400/1990, Decision of Minister ofForestry 634/1996, Decision of Minster of Forestry 635/1996, Decisions of Minister of Forestry 31/2001 and 70/2001. The broad direction of these decisions aresummarised in the table.325

183ICRAF, 2001, unpublished, Policy Memo to BupatiLampung Barat on the Decree of Minister of Forestry No.31/2001 and No. 70/2001184Fay, Sirait and Kusworo 2000. Ahmad.185Exact figures are not yet available as three provinces haveyet to complete the negotiation of new State Forest designation.186And see Santoso Harry 2002. Rasionalisasi kawasanHutan di Indonesia; Kajian Keadaan Sumber Daya Hutandan Reformasi Kebijakan. Badan Planology Dephut-ICRAF-WB187DepHut-DFID-USAID-ICRAF 2001, Proceeding ofWorkshop on Lands conflict in State’s Forest Area November12-13/ 2001, Novotel, Bogor.188Fay, Sirait and Kusworo (2000) recommended two alternativesby which between 50 to 80 million hectares beexcised from State forest lands189World Bank 2002. Rationalization of State’s Forest Area190Peluso 1992:45 ff.191PT. Perhutani (Persero), 2002. Annual Report 2001; Fay1994 in Simon et al (ed), 1994.192Perum Perhutani 1976, Perum Perhutani Proceeding Meeting13-15 Dec 1984; Perhutani Annual Report 1986;Perum Perhutani Annual Report 1999; PT Perhutani(persero) annual Report 2001; Statistik Perum Perhutani1996-2000.193Perum Perhutani, 1976, Report of Task Force Team forAgrarian Problem/Forest Area in Central and East Java.194Anyonge and Nugroho 1996:5.195The 35 largest HPH occupy 24.9 million hectares of productionforest.196Nawir & Calderon draft 2001.19714 HTI concessions were revoked in October 2002 (WartaKota 12 November 2002) and a further 13 HTI conces-326

sions were revoked on 22 November 2002 (SuaraPembaharuan 23 November 2002). The companies wererequired to reurn the land and assets to the state and repayany debts to MoF within 30 days. Of 10 companieswhich brought their cases to the court (PTUN), 8 companieswere given injunctions delaying the execution letter,while another 2 did not (Kompas 30 November 2002).198Perhutani Annual Report 2002199Up to now there has not been any new HTI Decree issuedby the procedure; preconditions, right and obligation asset in the Governmental Regulation no.34/2002, thus therights and obligations are derived from the GovernmentalRegulation.200Anyonge and Nugroho 1996:11.201Anyonge and Nugroho 1996:102-103.202Anyonge and Nugroho 1996:12.203“Forest for People’s Welfare” (Anon. 2001)..204DPHKM 2001: 32 (Table 1 as corrected in errata).205DEPHUT 2001.206DPHKM 2001: 34 (Table 3 as corrected in errata).207Interview with Ibu Erna Rosdiana, Forest Engineer, Directorateof Community Forest Development, Ministry ofForestry and Estate Crops, 15 May 2002.208The implication of GR 24/1997 is that ‘customary land’does indeed provide the basis for the recognition of a proprietaryright in land. recognised209All such concessions would also be invalid in terms ofPrinciple 1 which requires adherence to relevant nationallaws.210The exact number of ‘native communities’ was then, andis now, unknown (Fay, Sirait and Kusworo 2000).211Cited in Lynch and Harwell 2002: 26.212Kahin and Kahin 1995.213O’Rourke 2002:4.327

214Lynch and Harwell 2002:27.215Lynch and Harwell 2002:27.216The desa became the village level unit of colonial administrationin Java in the early 19 th century (Burns 1999).217Wignijosoebroto 1994; Jatiman 1995:36.218Jatiman 1995.219Roedy 1996220Safitri and Bosko 2001:39.221‘Administrative village consensus association’.222Lynch and Harwell 2002:30.223Budiardjo 1986. cf. O’Rourke 2002:9.224Lynch and Harwell 2002:30.225A contentious term which has not been well defined.226Cf Ribot 2002.227IFW/GFI 2002; DTE 2002.228Eghenter 2000; 2002.229Sirait 1997.230DTE 2002.231O’Rourke 2002:150.232Budiardjo, Nugroho and Reksodiputro 1998:157-9.233Jakarta Post 30 July 2002.234Budiardjo, Nugroho and Reksodiputro 1998:159.235Crouch 1978; ICG 2002; Down to Earth Newsletter 55(November 2002).236As a para-statal company PP has three objectives; 1.)managing forest lands for soil and water conservation innaitonal interest 2.) employment and income generatingfor the rural poor 3.) profitable timber production (Fay inSimon et al 1994).237SmartWood 2001.238SmartWood 2000.239Smartwood notes that efforts were made by PP to excludesacred sites, particularly gravesites, from harvesting.240Clearly this Constitutional provision is open to various328

interpretations. The villagers interpret this provision tomean that benefits should flow to the local communities.241SGS 2000.242PT SGS International Certification Services Indonesia,Buku I, Laporan Hasil Penilaian Lapangan UnitManagemen PT.Diamond Raya Timber Di KabupatenBengkalis Propinsi Riau, Jakarta 2000243Overseas Development Administration, today renamedDfID (Department for International Development).244SGS 2000.245SGS 2000:19. These meetings were carried out after themain assessment. SGS (2000:8) notes ‘The local governmentfacilitated these and a general memorandum of understandingwas drawn up between each individualcommunity and the concession. Individuals within thecompany are identified to liaise with the communities andthere are clear systems for communication.246SGS 2000:36.247SGS 2000:19.248Counsell and Loraas 2002.249SGS 2001:3.250SGS 2000:18-19. At the time that SGS Qualifor carriedout its assessment of DRT the relevant indicators for itsgeneric standards were the following. (The indicators wererevised in 2002.) 2.2.1 Local communities, or other stakeholders,who have recognised legal or customary tenureuse rights have been identified. 2.2.2 All holders of suchrights are aware of current and proposed managementactivities that may affect their use rights. 2.2.3 There isevidence that free and informed consent to managementactivities affecting use rights has been given by affectedparties. 2.3.1 There are records of all previous and ongoingdisputes over tenure and use rights. 2.3.2 Appropriatemechanisms are employed to resolve disputes, in-329

cluding legal requirements and internal procedures. 2.3.3There is commitment to resolution of on-going disputes.251SGS Qualifor’s study also notes a tradition of small-scaletimber extraction in area (SGS 2000:8) but this is notaddressed in the assessments of Principles 2&3.252Personal names have been removed to protect the personalsecurity of informants.253Respecting this sense of grievance, the team decided itwould be inappropriate to interview the company afterthe community visits. Company officials were interviewedfor the other three case studies.254The 2000 Social Responsibility Report.see http//WWW/homedepot.com255Notary Act #43/1988 on the Tenure Agreement; NotaryAct #131/1988 on change of tenure agreement; NotaryAct #62/1988 on timber concession agreement (PerjanjianPengelolaan Hutan).256PT Intraca Hutani Lestari, is a joint venture HTI concessionowned by of PT Intraca and PT Inhutani. The companyreceived a non-commercial loan of ReforestationFunds from the MoF. This company was revoked in October2002 by the Mof due to its financial and technicalproblems (Kompas, 30 November 2002257Interview with Kadishutbun (Kepala Dinas HutanPerkebunan) Malinau District and Mr. Soedarsono inSamarinda 27 July 2002. This information contradictsPTIM’s claim that it has secured a long term tenure agreementof 75 years, which is far longer than the 20-yeartenure usually granted to concessionaires.258Such as LHP, LAKB, RKT, DR, IHH, PKB.259Overlay TGHK 1994 and Concession Area: Sub BiphutTarakan 1999: Laporan TBT Inhutani 1 No. 1333/1998;Sesayap Sub District Letter no 522/348/EK/V/1998.260Based on the 35 year cycle, supposedly each year PT330

Inhutani should only be allowed to cut 1/35 of the productionforest. However, by 1995 the unlogged areas wasalready down to only 24.4%.261Statement to community workshop 24 July 2002.262BMAB 1993; Abot 2002.263Interviews with Berusu and Punan community membersin Malinau, Sesua, Rian and Sekatak 24-26 th July 2002.264Mamung and Abot 2000.265Punan and Berusu have separate overlapping land claimsin the western part of the concession.266This investigation was not able to check BPN landcadasters to ascertain the existence or otherwise of registeredindividual property rights in the area.267Interview with villager from Sekatak 25 July 2002.268Villagers note however that most of these disputes havebeen settled in accordance with customary law, whichmost of the Javanese machine operators employed byPTIM feel obliged to respect.269This is a very high figure for such an offence.270Public testimony given by village members to ‘ParticipantsWorkshop’, 16 December 2002, PKBI, Jakarta.271UPT Intag - at the time.272East Kalimantan Governor’s letter # 522/8737/Proda.2.2/EK, dated on 17 October 2000.273(Pemungutan Hasil Hutan Kayu pada Hutan Milik,Hutan Rakyat dan Hutan Adat.274These permits are locally known as IPK (local cuttingpermits) or HPHH/IPPK.275A further complication arises from the fact that Bulungandistrict has passed another local regulation (Perda) givingthe bupati authority to issue small concession rights(up to a maximum 50.000 hectares) for 20 years to forestrycompanies. Many companies, including previousHPH owners have put themselves forward to secure such331

licences.276Details provided at a public presentation by PTIntracawood on February 26, 2002.277Nawir and Calderon 2001.278Based on the 1984 delineation exercise (TGHK).279Sub-district military post.280Law No 5/1979 was repealed through the so-called RegionalAutonomy Act 22/1999, but the relationships betweenthe local government officials and village leadersis only changing slowly.281Kibas 2000.282Nawir & Calderon 2001.283By comparison oil palm companies generally pay compensationof between Rp 60,000 to Rp. 120,000 per hectarefor lost crops and their land then becomes State land.284Suntana et al. 2001; LEI 2001; LEI 2002a; LEI 2002b;Suharjito 2002; Suntana 2002.285See Nussbaum 2002 for a discussion.286Smartwood 2000.287Smartwood 2000:9,10,18.288SFDP/PPHK 2001.289FSC 1998:subject 2.18 (emphasis added).290FSC 2002.291Qualifor Programme Main Assessment Checklist (2000).292SmartWood Generic Guidelines for Assessing Forest Management(2000).293World Bank 2000:2.294Moniaga 1993; Safitri, Kusworo and Bediona 1997;Wignyosubroto 1999; Laudjeng et al. 2000; Fauzi 2001.295The preceding four paragraphs derive substantially froma seminar presentation by Upik Djalins and MubariqAhmad on 16 May 2002 on the topic of ‘NGO WorkingGroup on Land Reform-Natural Resources Management(Pokja Ornop PA-PSDA) Initiative and Implementation332

of TAP MPR IX/2001 on Agrarian and Natural ResourcesGovernance Reform’.296World Bank 2000:2-3.297Burns 1999:129, 227.298DfID 1999: 2 vols.299Technically the ‘KPHP project’ was conceived as two subprojects– Senior Management Advisory Team and ProvincialLevel Forest Management - of the ‘UK TropicalForest Management Programme’ which included threeother sub-projects in Forest Research, Forest Training andForest Conservation.300PP 69/1996 Chapter II Appendix 2-6; RTRWP OrientationChapter III-Depkimprasiwil-Dirjen Penataan Ruang2002.301Authors’ translation. The perda thus considers hak ulayatto be much more than a proprietary interest in land andrecognises it as implying a measure of community sovereigntyover resources based on the exercise of customarylaw and the autonomous functioning of customary institutions.302Kabupaten Lebak 2001.303Kabupaten Lebak 1990.304Barber, Johnson and Hafild 1994:17.305The BFL does allow for communities to be accorded amanagemebt right (pengelolaan Hutan Adat) but regulationsand procedures for permitting the exercise this rightdo not exist.306A call for a suspension of this kind is not unprecedented.Temporary suspensions of certification have all occurredin New Zealand, USA and Canada, without jeopardisingFSC processes.307LEI requires the setting up of a forum konsultasi daerahto resolve local disputes. Case studies carried out for thisinvestigation did not encounter these fora. A study should333

e made of their functioning to determine if they are worthyof wider application as an interim mechanism thatcould compensate for the current lack of a formal regulatoryframework that recognizes, and which can enforce,customary rights.308With an appropriate three chambered structure for participationand voting, or preferably with a fourth chamberfor indigenous peoples, and with votes being limitedto FSC members.309A ‘strong’ interpretation of Principle 2 suggests that localcommunities’ customary rights should be ‘legally established’(see section 2.5.4 for the example of the Brazilianstandards which require that such rights be ‘regularized’and which, in the case of Mil Madeira, meanttitling of community lands). A ‘weak’ interpretation ofPrinciple 2 suggests that it is only forest managers’ rightsthat need be ‘legally established’. If the FSC decides toadopt the ‘weak’ interpretation, it should be understoodthat this is contrary to its decision to operate in conformitywith the requirements of the ILO Conventions.310Cooperatives are collective economic ventures which isnon-profit or minimum-profit in nature and focuses mainlyon ensuring the welfare of its members through variouseconomic-related services, such as soft loans, etc.311At the time this study was being completed, no new orrenewed HPH had been given out subject to these newregulations. It is planned, that in the future HPH wouldbe granted or renewed through a selection process conductedby government (Department of Forestry) based onthe criteria and indicators of the Sustainable Managementof Natural Forest (PHAL) accordingly to the Decree no4795/2002. Thus the elaboration of right and obligationwould be derived from the stipulations contained in theGovernmental Regulation no.34/2001 and not from the334

copy of HPH Decree or FA.Presidential Decree No 84/2000 amending Presidential DecreeNo 49/ 2000.Ministerial Decree no 49 of 1999 concerning the Establishmentof Team for Preparation and Implementation Lawno 22 0f 1999 and Law no 25 of 1999.Ministerial Decree no 48 of 1999 concerning the Preparationand Implementation of Law no 22 of 1999 and Lawno 25 of 1999.Presidential Decree no 52 of 2000 concerning CoordinationTeam of Implementation Follow-Up of Law no 22 of 1999and Law no 25 of 1999.Presidential Decree No 16 of 2000 concerning Distributionof PBB Revenue.PP No 17 of 2000 concerning Regional Loan.PP No 106 of 2000 concerning the Management and Responsibilityof finance and implementation and de-concentrationand appointment of support.PP no 105 of 2000 concerning the Management and Responsibilityof Regional financePP no 104 of 2000 of Balance Fund.PP no 59 of 2000 of Financial Right of Head of Region.PP no 84 of 2000 concerning Organizational Guideline onRegional System.Presidential Decree no 151 concerning the amendmentof Presidential Decree no 49 of 2000.Presidential Decree No 49 of 2000 concerning Council ofAutonomy Consideration.Law no 25 of 1999 concerning Finance Balance betweenCentral and Regional governmentPP No. 25 of 2000 concerning Government authority andProvincial authority.Tap MPR No.IV/MPR/2000 Policy Recommendation onImplementing Regional Autonomy335

Law no 22 of 1999 concerning Regional Autonomy.Tap MPR No.XV/MPR/1998 concerning Regional GovernmentAppendixiesFigur 1Forest Designation, Polygon BoundaryDeliniation & Official State ForestDecisionYear1600000001933193919731979198519911997140000000Designate120000000100000000DeliniateHectars80000000600000004000000020000000Decide0336

Map 1Case Study Area in PerhutaniLegendaDisrict CitySub District CitiesDisrict BorderSub-district BorderLocation of the CaseStudy in Jiken subdistricts•Cabak Village•Janjang Village•Nglebur Village•Bleboh VillageSource : MoF Decree 435/Kpts-II/1999Map 2Case Study Area of 8 Village within PT. DRT AreaLegendVillage TerritoryVillage Territoryrecognized by PTDRT (1996)Concession Area ofPT DRTDistrict BorderInsert RiauSource. Forest Watch Indonesia, 2002Source. Dirjen Intag-Dephutbun 1998337

Map 3New State Forest Designation andPT. IM Concession in Bulunganand Malinau DistrictLegendDistrict Concession BorderArea DelineationVillagesConcession AreaTimber Plantation (HTI)Swamp areaConversion ForestProtected ForestProduction ForestLimited Production ForestBukit HillsInsert, Kalimantan TimurSource. Baplan Dephut 2000Map 4Adat Territory in the Border of Bulunganand Malinau DistrictLegendOld villagesRespenInsert KaltimSource. Baplan-Dephut 2000338

Map 5Bulungan District Small Scale Concessioninside the PT.IM Concession AreaLegendsSmall consession in BulunganDistrict borderTimber areaInsert KaltimMalinau Dis.Bulungan Dis.Source. Baplan-Dephut 2000Map 6Overlap area of PT.IM with the Adat TerritoriesLegendInsert KaltimSource. Baplan-Dephut 2000339

Map 7The Bidoih Mayau Customary TerritoryLegendAdat TerritoryVillagesHillsInsert KalbarSource: Villages Workshop 2002Source: Baplan-Dephut 2000Map 8The Bidoih Mayao Costumary Area &The PT. FI AreaLegendPT.FI Working arae acc MoF DecreePT FI Concession Addendum PlanDayak Mayao Customary TerritoryRoadRiverVillagesHillsInsert KalbarSource:Village Workshop 2002; PT FI Working Area; PT FIWorking Area Addendum PlanSource. Baplan-Dephut 2000340

Map 9State Forest Designation andthe PT FI Concession AreaLegendPT FI Concession according theM oF decreeePT FI Concession Addendum PlanDayak Mayao Customary TerritoryNew State Forest Designation,2000Sources: New State Forest Designation Kalbar, 2000;Map of SK PT FI; Peta Rencana Adendum PT FI;Village Workshop 2002Insert KalbarSource; Baplan-Dephut 2000341