Sustainable Forest Management

Tropical deforestation is a far-reaching and long-lasting problem in Indonesia. In the past several decades, there has been an effort to reverse its effects (Austin et al., 2018).

Recent research published in the journal Nature shows that conserving and restoring habitats that were degraded by agriculture is key to mitigating climate change impacts and avoiding animal species extinction.  Preserving natural habitats and restoring 30% of the total converted lands would save 71% of animal species from extinction and absorb 465 gigatons of carbon dioxide from the atmosphere (Strassburg et al., 2020).

There are several ways in which forest environments can be restored to sustain large forest areas, conserve biodiversity, and develop a multi-product approach to forest use and management (Asen et al., 2012, Gray, 2022). The attempts in Indonesia have included two main strategies: Ecosystem Restoration Concession and Forest Utilization Concession.

Ecosystem Restoration Concession

Ecosystem Restoration Concession (ERC) or IUPHHK-RE was a type of license applied from 2004 to January 2022 by the Indonesian Ministry of Forestry. The aim was to reverse the high rate of deforestation in Indonesia’s production forests. For the first time, it allowed for managing production forests for restoration purposes, rather than for logging. Although ERC licenses achieved some successful results, they were eventually discontinued due to due to corruption and environmental setbacks.

ERC was introduced as a new market-oriented governmental instrument to counter deforestation processes and restore forest ecosystems. The ERC model looked highly promising for conservation and development organizations, along with state authorities in Indonesia and abroad.
The Indonesian government intended to provide ERC licenses for periods of 60–100 years. The goal during that time was to change forest management strategy from timber harvesting to restoration and maintenance. The licenses had great potential, but the reality in Indonesia was slightly different. Restoration business plans remained largely aspirational, and most concessions made only limited progress toward realizing revenue streams.

There were several forces that impeded the success of ERC licenses. Not all holders were able to follow license-holding rules. Hunting, deforestation, and illegal logging were common. In addition, forest fires caused significant destruction. They destroyed thousands of square kilometers across Indonesia caused by people who were illegally encroaching on the area and clearing it by burning trees (Jong, 2020; Harrison, 2020).

As a result, the Indonesian government changed its strategies.  Indonesia abandoned the ERC concept in January 2022 and replaced it with Forest Utilization Concession. When 2022 began, the Indonesian government revoked 192 permits, which had been governing nearly 2.4 million hectares of land. Those permits authorized logging, mining, and plantation activities- the three main contributors to deforestation. The government revoked the permits, many for administrative violations, to enable more flexibility in how large forest tracks could be used, including sustainable management (Jong, 2022). By replacing ERC permits with the concept of Forest Utilization Concession, the Indonesian government hopes to achieve more successful results.

Forest Utilization Concession (FUC)

Forest Utilization Concession, also known as ‘forest concession,’ involves a contract between a forest owner and another party permitting the harvesting (forest utilization contract) and/or managing (forest management services contracts) of specified resources from a given forest area (Gray, 2022). Investing companies managed by conservation groups, like WWF, TOP, BOSF, and also OURF, will operate permits in ways to generate enough income sustainability to pay for the annual concession fees, so they can create large corridors between such protected forests that would effectively increase the overall size of the protected landscape.

Currently, two main challenges are getting through the bureaucratic permitting process and raising the money to pay for the concession fees and permitting fees. But if they succeed then with tighter control, forest concessions may play a big role alongside other forest policies in achieving sustainable forest management (Gray, 2022).

Asen et al., 2012, Good Business: Making Private Investments Work for Tropical Forests. Tropenbos International, Wageningen, the Netherlands

Austin et al., 2018, What causes deforestation in Indonesia?, Environmental research letter

J.A. Gray, 2022, Forest concession policies and revenue systems country experience and policy chages for sustainable tropical forestry, World Bank Publication

Jong, 2020, Indonesian Environment Ministry ends WWF partnership amid public spat, Mongabay
Jong, 2022, As Indonesia retakes land from developers, conservation is an afterthought, Mongabay

Strassburg et al., 2020, Global priority areas for ecosystem restoration. Nature, 586(7831), 724-729. doi:10.1038/s41586-020-2784-9

This article was researched, written and updated by Veronika Pavlíková, OURF Volunteer.