V. Results of Changes in Timber Concession Distribution: 1997/1998Page 1 | 2C. Raw material shortfall of timber groupTable 5.5 Ranking of groups by net raw material supply, 19971998
D. National raw material shortfall
Table 5.6 Implications for national supply of timber, 1997/1998
Notes regarding the foregoing table:
Total number of HPHs, total area of HPHs, and total estimated production of HPHs are a major subject of this study, and the means of calculating these figures are discussed at length in the methodology section of this report. The figure for total area of HPHs in this table differs from that given in Table 4.3 because the figure in this table was independently derived, while the figure in Table 4.3 is a Department of Forestry figure.
Figures for total production from land clearing come from Departemen Kehutanan, Direktorat Jenderal Pengusahaan Hutan, Direktorat Bina Pengusahaan Hutan, 1998.
Figures for total number of HPH-linked mills and total licensed capacity of HPH-linked mills are a major subject of this study, and the means of calculating these figures are discussed at length in the methodology section of this report.
Estimated production of HPH-linked mills is derived by taking the licensed capacity of HPH-linked mills and multiplying that figure by 0.75. This multiplier, in turn, is derived by averaging two other numbers, ITFMP's in-house rule of thumb for the minimum capacity at which plymills here can operate while still maintaining profitability (90 percent, or 0.9), and the minimum capacity at which sawmills can operate and still maintain profitability (60 percent, or 0.6). The author has taken note of other sources suggesting that the country's mills are operating at less than 75 percent of licensed capacity. For example, the chairman of the Indonesian Forestry Society (MPI) said in a recent interview that mills in Indonesia now operate at levels closer to 30 to 40 percent (Jakarta Post 1998). ITFMP is not only skeptical of claims that HPH-linked mills are operating at below 75 percent of licensed capacity, but found in a recent study (ITFMP 1999) that the nations mills are operating at an average of 80 percent of licensed capacity. This study assumes that HPH-linked mills continue to operate at 75 percent of licensed capacity so that an important variable is held constant across time, which aids in making comparisons.
Total number of non-HPH-linked mills and total licensed capacity of non-HPH-linked mills comes from "Industri Pengolahan Kayu Hulu Tidak Terkait HPH," on pages 131-178 of Departemen Kehutanan, Direktorat Jenderal Pengusahaan Hutan, Direktorat Pemanfaatan dan Peredaran Hasil Hutan 1997, or the data underpinning ITFMP 1999, whichever was higher. Further interrogation of these figures shows them to be accurate to within 1.4 percent. An early reviewer of this study expressed concern that, due to the widespread cancellation of HPHs, there would be an overlap between HPH-linked mills and non-HPH-linked mills. However, the data in this study has been tested for seven provinces, one each in Sumatra, Java, Kalimantan, Nusa Tenggara, Sulawesi, and all of Maluku and Irian. From a total of 108 HPH-linked mills in these seven provinces, only two were double-listed as non-HPH-linked mills. From a total licensed roundwood capacity of 9,298,020 m3 for HPH-linked mills in the seven provinces tested, only 132,000 m3 of that capacity, or 1.4 percent, was double listed as also being assigned to non-HPH-linked mills.
Total estimated production of non-HPH-linked mills is derived by taking the licensed capacity of non-HPH-linked mills and multiplying that figure by 0.6, or 60 percent, the minimum capacity at which ITFMP believes a sawmill can operate and still maintain profitability. Nearly all of the non-HPH linked mills are sawmills, not plywood mills. Hence, no plywood multiplier is used.
Balance is obtained by taking the sum of total estimated production of HPHs and total production from land clearing and subtracting from that number the sum of the total estimated production of HPH-linked mills and non-HPH-linked mills.
The foregoing table gives the most up-to-date view possible of the supply and demand situation facing Indonesia's plymill and sawmilling industries for a number of reasons. First, land clearing is taken into consideration, although it is assumed that all the wood obtained through land clearing is used by plymills and sawmills, and not by the fast-growing pulpmill sector. Second, licensed but non-HPH linked plymills and sawmills are also taken into account. Third, it is no longer assumed that the country's plymills and sawmills are operating at full licensed capacity, but rather at the minimum possible level to remain profitable. As a result, a far more realistic estimate of the amount of illegal logging necessary to feed the country's plymill and sawmill sector has been derived. As discussed at the beginning of this section, the total area of Indonesia's active timber concessions has declined by about a sixth, from 62 million to 51 million hectares. The actual production of the country's concessions has declined by about the same rate, falling from 18 million m3 to 16 million m3. Another notable development is that the output from clear cutting the country's conversion forest doubled in the period from when the baseline results were tabulated. In 1994, only 5 million m3 per year of Indonesia's official timber supply came from land clearing. But in 1997, that figure had risen to 10 million m3 per year. What four years ago could be dismissed as the exception has now nearly become the rule. 40 percent of the country's legal supply of timber now comes from land clearing. The implications of this fact are staggering. If forest clearing continues to increase at its current rate of growth, in about one year a greater proportion of the nation's official wood supply will come from forest clearing than from selective felling. An entire generation of foresters whose paradigm for forestry in Indonesia was sustainable selective felling will have to adopt a new paradigm, terminal clear-cutting. Some have taken encouragement from the fact that starting in April, 1999 the Department of Forestry agreed to temporarily freeze the reclassification of the nation's forest lands into areas designated for conversion to HTIs, crop plantations (such as oil palm), transmigration sites, and the like. This decision is to be applauded. However, there is still a very large loophole which allows for clear-cutting to continue. While the reclassification of new lands to conversion status has been frozen for the time being, clear-cutting of old lands already designated for conversion has not been banned. Included among the lands on which clear-cutting is still allowed to proceed are over 6 million hectares of virgin forest in a single Indonesian province, West Irian (FAO 1996: 10). A recent synopsis of reforms agreed to by the Department of Forestry agrees to a moratorium on "alteration of main land use patterns within state forest areas." But conversion via clear-cutting is now and has for many years been a main land use pattern in state forests areas, and hence can be presumed to be proceeding as normal, notwithstanding the moratorium. No one knows how many palm oil and industrial timber plantations have been grandfathered in under this flexible arrangement. The Department agreed to provide a list of all such companies, but failed to do so. While debate will continue over whether the Department lived up to its agreement to freeze the conversion of forest lands, and whether the agreement was worded in sufficiently clear and meaningful way, these issues are being overshadowed by a new development. Under the rubric of "integrated resource management," a draft ministerial decree is pending to allow concessionaires to convert up to 40 percent of their HPHs into plantations. If approved, this new decree will open the door to clear-cutting in Indonesia on an order of magnitude never before seen in Indonesia. One final piece of evidence that clear cutting has become an accepted norm for Indonesian forestry is that industrial timber plantations (HTI) license holders now comprise a special membership group of the Indonesian Timber Concessionaire's Association (APHI 1998a). Sixty-three HTIs – most of whom receive annual licenses to clear fell the forests on the lands under their jurisdiction – are members of APHI. HTI companies like to emphasize their tree planting, not their tree-felling, functions. But the jury is still out on whether HTIs will be able to fill the void left by the disappearance of Indonesia's natural forests. Department of Forestry figures show that wood planted in (as opposed to clear-cut from) HTIs was responsible for less than 1 ˝ percent of the country's official timber harvest in 1998. HTIs have so far replanted only 25 percent of the lands under their control, or 1.9 million out of 7.6 million hectares (Direktorat Penyiapan Pengusahaan Hutan 1998). Early this year, the Department of Forestry finally started to publish figures on roundwood produced from land clearing. But as recently as last year, Statistik Kehutanan Indonesia 1996/1997, saw fit to publish full-page, province-by-province statistical breakdowns on such topics as "Gully Plug Development," "Silk Yarn Production," and "Bee Honey Production," while failing to differentiate between roundwood harvested from natural forests, and that originating from land clearing. As a result, last year's forestry statistics listed all log production by province as a single undifferentiated category in a single table on a single page. This omission by the Department created the false impression that the country was producing on the order of 25-30 million m3 from selectively logging its natural forests, when in fact that number was only 18 million m3 at the time of the baseline study, and is only 16 million m3 now. The figures on total roundwood production from land clearing cited in this report come from internal, unpublished documents (Departemen Kehutanan, Direktorat Jenderal Pengusahaan Hutan, Direktorat Bina Pengusahaan Hutan 1995 and 1998). These same figures were published in Statistik Kehutanan Indonesia Tahun 1997/1998 retroactive to 1994, but only for Indonesia in the aggregate, with no breakdown by province. Since the completion of our baseline study a few years ago, the minimum possible output of HPH-linked plymills and sawmills has shot up from 31 million m3/year to 35 million m3/year, or a total of 4 million m3/year. In short, the raw material consumption of the country's plymill and sawmill sector continues to grow. In spite of the fact that assumptions made in this report generally give the industry the benefit of the doubt -- by earmarking all wood production from HPHs and land clearing for plymills and sawmills, and assuming those mills operate at the minimum possible level -- we nevertheless reached the inescapable conclusion that since the baseline study was carried out, the amount of illegal logging necessary to meet the needs of the sawmill and plymill industry has remained constant at 20 million m3/year. The ITFMP has also produced a more comprehensive estimate of the extent of illegal logging in the Indonesian forest products sector as a whole. This estimate includes the pulp and paper sector, which is difficult to understand because of the complex issue of waste paper imports. Although still in draft form, the report concludes that illegal logging is 32.6 million m3 per year. The Department of Forestry has begun its own attempts to estimate the amount of legal logging (and therefore, by a process of elimination, illegal logging). Its efforts are summarized in the following table. Table 5.7 Variation among figures given by the Direktorat Pengusahaan Hutan (Directorate of Forest Utilization) on Indonesian roundwood production, 1997/1998
On the more-well-informed end of the scale are the figures gathered by the Direktorat Bina Pengusahaan Hutan. These figures conform exactly with those published in Statistik Pengusahaan Hutan Tahun 1997/1998, and suggest that the country's total official supply of timber is in the order of 29 million m3/year (Direktorat Bina Pengusahaan Hutan 1998). On the less-well-informed end of the scale are those figures given by the former Direktur Pemanfaatan dan Peredaran Hasil Hutan (PPHH). In an interview, he overestimated by 80 percent the total production of roundwood from the annual harvesting blocs (RKTs) of the nation's timber concessions. The former Direktur PPHH also overestimated the total output from the country's industrial timber plantations by 1,600 percent, saying that the country's annual output of industrial roundwood was 7 million m3/year, when the real figure is less than half a million (Jakarta Post 1999c). Page 1 | 2
September 7, 1999
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