The Bamboo and Rattan Sectors in Asia: an Analysis of ... - INBAR

to do replacement planting, and the export bans and other restrictions. Rattan seems
to be particularly interesting to governments looking for ways to increase employment
and income generation. The rattan furniture and handicrafts manufacturing industries
are relatively labor-intensive and have high value addition. From this perspective, it
is attractive to try to retain the value added within the country or province that
produces the raw material. However, rattan furniture and handicrafts products are
bulky, implying high transport costs for finished products, and there are other strong
economic rationales for having centrally located manufacturing for export. Still, several
state governments are experimenting with intra-country export bans on unprocessed
rattan. Sulawesi in Indonesia has had such a ban for several years.
India, Indonesia, Laos and the Philippines all have some rattan-specific policy
instruments. These are licensing systems that give exclusive harvesting rights within
a prescribed area, in return for concession fees and the obligation to pay royalty fees
for rattan harvested. In the Philippines, the system is quite well developed (though
poorly enforced) to encourage replanting in the rattan concessions. Enforcement and
fee collection is done in all cases using transport permits, a system that is notoriously
abused. People transporting rattan are open for extortion by police and forest guards.
In their turn, rattan permit holders circumvent cutting limits by recycling permits
and using other "special operating procedures" (bribes). Corruption of this kind was
reported in all cases.
Any regulation will be ineffective unless it is properly enforced. In the forest
products sector, where so much of the production is geographically dispersed and in
remote areas, proper enforcement is very difficult, if not impossible. Instead, in all
the cases studied, enforcement was focussed on the transportation of raw material.
While practical in theory, the system is susceptible to abuse. As revealed across the
studies, it is in everyone's interest to cheat. For instance, transporters seek through
bribes to reduce the time, inconvenience and costs of obtaining proper permits, and
police and forest checkpoint officers are happy to have some leverage to extract
payments to supplement their salaries. It is safe to say that the current permit system
in Indonesia, the Philippines and India, and to a lesser degree in Laos, is ineffectual
as a tool for resource management and as a tool for collecting payment for resource
rents.
Furthermore, the system does not distinguish between wild rattan that is extracted
from the forest and cultivated/managed rattan. Royalty charges are levied on rattan
on the principle that forest products are a part of the rent accruing to state land. Any
investment by an individual to enhance this production is therefore a subsidy to the
state. In a case such as that of the rattan gardens in Kalimantan, the rattan grown is
essentially an agricultural crop and a 'Forest Product Royalty' for it does not seem
justifiable. Such fees create an additional burden on the producers, and increase the
transaction costs of getting the rattan to the rattan products manufacturers. The
relatively high levels of graft in the system mean that very little of the royalty,
wrongly charged though it may be, actually gets to the state's coffers.
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