August 24, 2015 Print

Photo credit: Wakx, license CC-BY-SA-2.0

When resources are located on public commons, they become subject to a perverse incentive structure that can lead to consistent depletion over time. Governments often pass laws with the intention of reining in overconsumption of resources extracted from public land, but government officials at the national level lack the proper incentive structure and knowledge of local conditions to manage public and common goods. Such is the case with the forests of Indonesia, which hold environmental and commercial significance not just for the country itself, but also for the rest of the world.

Atlas Network partner Center for Indonesian Policy Studies (CIPS) examined this question of forest ownership and management in a recent policy paper, “Forest Ownership and Management in Indonesia.” Indonesian forests are owned by the national government, which has largely failed to manage the forests sustainably or classify forest resources accurately. Despite the government’s efforts to prevent logging concessions in 2011, the country lost 840,000 hectares of forests in 2012, and has seen annual deforestation levels increase at an alarming rate. Recently, Indonesia issued a ruling requiring private logging companies to grant their forest concessions to the management of local communities. This has been controversial, with private companies saying it will hurt business despite the fact that it would provide local communities with resources to improve their livelihoods.

After examining forest management policies around the world, CIPS determined that “chances of sustainable, long-term forest management improve when the ownership and management of forest resources remain with local communities.” The study recommends further delegation of resource management power to local governments, community co-ops, and private firms, where there exist stronger incentives to manage forests well. Once local communities have held long-term access to resources through property rights, the study explains, “they become confident enough to widen their time horizon and to invest in sustainable forestry practices.”

The question of forest governance is difficult, considering the complexities of involvement by various overlapping government jurisdictions and the incentives they each face. A simple solution for sustainability simply does not exist. CIPS has developed a set of policy recommendations based on both the existing Indonesian system of forest classification and case studies from successful forest-managing countries like Nepal, where a third of the population is involved in a successful forest management program:

  • For-profit businesses should be allowed to build and manage eco-tourism facilities in conservation forests, which will support the preservation of ecosystems and bio diversity.
  • For the sustainable management of protection forests, usufructuary rights should be granted to local communities, allowing them to manage these forests and giving them limited rights to access forest resources.
  • Production forests should be handed over to local communities or be privatized. The national government should move away from approaching those forest areas as a source of revenues and allow these resources to support local income generation and growth.

Read the full CIPS study, “Forest Ownership and Management in Indonesia: Reducing Deforestation by Strengthening Communal Property Rights.” (PDF copies available in both English and Indonesian.)                                                   

Read “African symposium examines how states mismanage common goods.”