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3. LITERATURE REVIEW
3.1. Deforestation and Forest Degradation in Indonesia
Indonesia is one of the biologically richest countries, containing almost 10 of world’s remaining tropical forest Mainhardt, 2001. Although it only occupies 1.3
of the worlds land area, some 17 of species on earth are found there. Its forests contain 11 of the worlds plant species, 12 of mammal species, 15 of reptiles
and amphibians and 17 of birds. Borneo alone has at least 3,000 species of trees; 2,000 species of orchids and 1,000 species of ferns: over a third of these plants are
unique to the island. Over 1,400 species of bird have been recorded in Indonesia, 420 of which are endemic. One reason for this high biodiversity is that Indonesia lies on
the Wallace line at the junction of two major biogeographical zones. To the west of Bali, including the island of Borneo, species are similar to those occurring in
mainland Asia; to the east of Bali, flora and fauna typical of Australia are found such as eucalyptus trees and marsupials. Indonesias forests are a centre of genetic diversity
for many important food and economic crops including tropical fruits, bamboo, rattan, orchids and timber. They also provide a wide range of commercially valuable
products such as timber, fruits, vegetables, nuts, spices, medicines, perfumes, seed oils, fodder, fibres, dyes, preservatives and pesticides. Over 6,000 plant and animal
species are used by Indonesian communities in their everyday lives Down to Earth,
2002. 3.1.1. The threat to biodiversity: Deforestation Forest Degradation
The two main drivers of deforestation in Indonesia are: 1. Unsustainable timber extraction, especially widespread illegal logging; and
2. Forestland conversion for agricultural expansion, including associated forest fires.
Unsustainable timber extraction is a direct consequence of Indonesia’s excessive industrial wood processing capacity. This over-capacity is a result of pervasive rent-
seeking and corruption linked to the Suharto regime. During Suharto’s 32-year authoritarian rule, forest policy sought to maximize the timber output, government
revenues, and private wealth. Much of the resources rents were captured by a small
28 group of well-connected businessmen who influenced policy and ignored sustainable
forest management regulations Down to Earth, 2002; Brown, 1999. Recent GOI data reveal that the forests can sustainably supply only between 30 to 50
percent of the timber currently being processed. Data indicates that in 1997 the aggregate round wood consumption of the three major wood industries was
approximately 55 million cubic meters m
3
. By contrast, Indonesias Ministry of Forests and Estate Crops’ MoFEC statistics indicate that Indonesia’s official log
supply for 1997 was 26 million m
3
, which is 29 million m
3
below the volumes estimated to have been consumed by the nation’s wood processors Sheng, 2001.
The imbalance between sustainable raw material supply and industrial wood processing capacity is a major driver of illegal logging. In November 2000, provincial
forestry officials in Bengkulu stated that 48,000 of conservation forest in the province had been damaged by illegal logging. In addition to the illegal logging, large numbers
of timber concession-holders are known to routinely violate sustainable forest management regulations by over-harvesting and failing to cultivate plantations as
required by law Down to Earth, 2002. The second significant driver of deforestation is forestland conversion, predominantly
for agricultural expansion. Currently, the largest commercial force behind land conversion is palm oil Down to Earth, 2002. The conversion of forestlands to oil
palm plantations, coupled with the associated practice of setting fires for land clearing, makes palm oil a key element in the deforestation equation. At the root of
this threat to Indonesia’s forest are the government’s land-use allocation processes that have been assessed by both Indonesian and foreign observers as inappropriate,
corrupt, and conflict-ridden.
3.2. Forest and Logging Concession Implementation
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