DISCUSSION Prosiding INAFOR III 2015 FullIssue low rest

Bogor, 21-22 October 2015 154 HTI companies are held by foreign capital. Furthermore, some companies have held plural licences as a group. For example, PT. Arara Abadi, PT. Finnantara Intiga, and PT. Wirakarya Sakti, which are large HTI licence holders, all belong to Sinar Mas Forestry group. Table 3 shows which company groups hold HA and HTI licences. As of December 2010, Sinar Mas Forestry group accumulated about 2.3 million ha 35 licences of HTI area; subsequently Riau Andalan Pulp Paper group accumulated about 1.2 million ha 28 licences. Kayu Lapis Indonesia group accumulated 1.45 million ha 7 licences of HA area; subsequently Alas Kusuma group accumulated 1.16 million ha 10 licences. According to the Indonesia Forestry Statistics Kementerian Kehutanan, 2012a, as of 2010, there were 304 HA licences approximately 24.69 million ha and 218 HTI licences approximately 8.98 million ha. Based on this data, as of 2010, 28.6 of total HA area about 7.06 ha was accumulated by 10 company groups, and 39.0 of total HTI area 3.5 million ha was accumulated by only two company groups i.e., Sinar Mas Forestry group and Riau Andalan Pulp Paper group. It was also apparent that accumulation of forest land by company group progressed more in HTI areas than in HA areas.

4. DISCUSSION

Almost all IUPHHK licences were granted in the Outer Islands, and those areas were mainly designated for HA and HTI. The HA areas in Kalimantan region particularly in East Kalimantan province and Papua region particularly in Papua and West Papua province collectively accounted for 80 of the total HA area. Meanwhile, the four provinces of East Kalimantan, West Kalimantan, Riau, and South Sumatera collectively accounted for 70 of the total HTI area. The reason why the licences in Papua HA, Kalimantan HA and HTI and Sumatera HTI region are issued differently is because the progress of forest transition of each region are different. Papua region has undistributed forest, Kalimantan region has forest frontiers and Sumatra region has forest and agriculture mosaics see Kanninen et al., 2008. Currently, although HA licences account for 70 of the total IUPHHK area, those HA licences are on a declining trend. By contrast, HTI licences are increasing. It is expected that this trend will continue and that Indonesian forestry structure will convert from harvesting forestry in natural forests to plantation forestry with artificial reforestation. Unlike with HA licences, foreign capital can enter the HTI business through investment in Indonesian private companies Forestry Minister Regulation No.50 in 2010, Article 3, Section 3. Thus, it is also assumed that entry of foreign capital into state forest areas will further increase. On the other hand, there are also concerns that those transnational capital flows lead to less than optimal land tenure and land-based production systems. Therefore, it is important that the Ministry of Forestry establish new regulations to prevent the bad impacts of transnational capital flows on land tenure and land-based production systems. Many convertible production forests are located in Papua province and Riau province. Therefore, it is expected that agriculture, forestry HA and HTI, bio-energy production, and REDD+ will compete with each other for land use and that land grabs will continue in Papua province and Riau province. Classified by area, most HA and HTI licences were for holdings of less than one hundred thousand ha; the licences for more than two hundred thousand ha represented fewer than 10 of holdings. However, it was found that few companies were holding large-scale forest land. Furthermore, there was no significant change in the area granted per HTI licence before and after the Suharto regime. However, HA licences for holdings of more than one hundred thousand ha that were issued under the Suharto regime have significantly decreased, and the licences for holdings of less than one hundred thousand ha have become a majority. Therefore, it is assumed that political regulation has applied to issuance of large-scale HA Bogor, 21-22 October 2015 155 licences. On the other hand, some companies have been holding plural licences as a group. As of 2010, 28.6 of total HA area licences were accumulated by 10 company groups, and 39.0 of total HTI area licences were accumulated by only two company groups. The accumulation of forest land by company group progressed more in HTI than in HA holdings. HTI licences tended to see greater accumulation by company group than HA licences because HTI companies own capital-intensive pulp and paper mills in their company groups. It is assumed that securing stable supply of raw materials to mills is one of the factors why HTI companies acquire forest land.

5. CONCLUSION