Mar 31, 2015 Last Updated 11:48 PM, Mar 23, 2015

A diversity of corruption

A diversity of corruption
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Fiona Downs

An anti-bribery poster at the Ministry of Forestry
Fiona Downs

In September 2011, President Susilo Bambang Yudhoyono dedicated the final years of his presidency to delivering results that will help sustain the forests of Indonesia. Large sums of international funding, under the banner of reducing emissions from deforestation and forest degradation, added momentum to the cause. Many non-government organisations (NGOs), researchers and even government reports claimed that a direct link exists between corruption and deforestation, and so attempts to save the forests are useless unless corruption in Indonesia’s forest sector can be significantly reduced.

Changes to forest regulation and responsibilities since decentralisation have altered the nature of corruption in Indonesia’s forest sector. It now involves different types of activities, done by different actors, with diverse motivations and with complex consequences for forests. The link between any particular bribe or other act of corruption and deforestation may not be as clear as it seems. Most discussions about corruption focus on the behaviour of governments but corruption can also involve the private sector, NGOs and communities.

A battle for control

The history of forest management in Indonesia, particularly during the Suharto era, is one of almost unrestrained corruption, contributing to widespread deforestation and forest degradation. During Suharto’s 32-year rule, the president and his closest allies used public office to secure very profitable timber concessions for the military and their business associates.

The appointment of close associates in key positions within the Ministry of Forestry enabled Suharto to closely control the distribution of profitable timber licences. The politically astute distribution of these licences allowed Suharto to secure and consolidate political support. High rates of illegal logging and clear cutting also went unpunished as close political ties effectively rendered these firms immune from prosecution. The consequence of the system was the highly centralised distribution of benefits, and high rates of deforestation and forest degradation.

When President Suharto resigned from office in 1998, dramatic changes were made to who administered Indonesia’s forests and how they were managed. Under the Law on Regional Autonomy, newly empowered district heads sought to expand their authority and establish independence from Jakarta. For district heads in forested areas timber licenses again become politically and economically important. This was particularly evident in the awarding of the small scale (100 hectare) plantation licences, or IPPKs. In the early post-Suharto period, the distribution of IPPK expanded rapidly. For example, in one district in East Kalimantan, IPPKs went from almost nothing to covering 11,000 hectares in the first six months of 2000. The Ministry of Forestry were quick to try and bring forests back under their control. The Forestry Act was passed in 1999, the same year as the Law on Regional Autonomy, yet it largely ignored the issue of regional authority. Instead, this regulation outlined the roles and functions of the Ministry, in issuing licenses and managing all activity that occurred within the area that is legally zoned as forested land (kawasan hutan). In the following year, a Ministerial Decree revoked the authority of districts to award IPPKs.

This de- and re-centralisation of authority over licensing has resulted in tension between the Ministry and district offices over the authority to manage forest resources, but also an incredibly complex web of bureaucratic process. A single company now requires licences from multiple government departments to engage in legal logging, each of which has a vested interest in retaining some level of control over valuable forest resources. With shared power, the opportunities to abuse that power are also shared, resulting in what is often described as decentralised corruption.

Different kinds of corruption

This more diverse system of corruption can loosely be categorised into two different camps – what Transparency International calls ‘according to the rule’ corruption and ‘against the rule’ corruption. Corruption according to the rule is often associated with payments designed to speed up a legitimate process. This type of corruption includes, for example, a company paying to get an application assessed quickly; payments to get a form signed today instead of next week; payments to get through police checkpoints, despite all the legal transport permits being provided. Even though many government officials deny that these sorts of payments are required, as one company representative observed, these sorts of payments are expected ‘at every desk, in every office’.

While the most obvious justification for these kinds of payments is the complicated and time consuming nature of the bureaucracy, there are other factors which encourage the payment and acceptance of ‘speed money’. Government officials don’t earn very much money, so payments of as little as Rp. 50,000 (A$ 5.26) provide an important income supplement. Not all of these payments are small and, over time, even small payments add up to a lot of money. Even still, from the perspective of companies, it is often more efficient to pay and pass through the process more quickly than wait for applications to be dealt with in due course. While there are certainly negative impacts of this type of corruption, ‘speed money’ does not necessarily cause deforestation or forest degradation. If the outcome is something that the briber could legally do anyway, then whether a payment is made or not does not necessarily influence the result.

This type of corruption stands in contrast to corruption against the rule, where the briber pays up in order to be able to do something that they are not legally entitled to do – for example harvesting and exporting protected timber species. This kind of corruption appears to pose a much bigger risk to forest management because it allows companies to bypass regulations designed to protect forest resources. A case in 2009 saw the conviction of one member of the national parliament (DPR) for accepting over Rp.5 billion in bribes. This money was then distributed to 23 members of parliament in exchange for helping to release land within a protected area in Sumatera for development. Two other members of the DPR were also charged for their role in this case. The deal involved rezoning 1200 hectares of protected mangrove forest, partly to make way for a seaport.

Not so straightforward

Few people would deny that reducing corruption in the forest sector is important, but the link between corruption and deforestation is far from clear. As Transparency International’s categories show, not all types of corruption are the same. At the same time, however, there is no hard and fast rule that guarantees that one kind of corruption is always neutral in terms of the health of Indonesia’s forests and the other kind always destructive.

While Transparency International’s definitions help to categorise different types of payments, cases often do not fit clearly into one box. According to the rule corruption doesn’t just make processes more efficient, it creates inherent conflicts of interest. For example, because government officials who are paid to monitor and assess companies also depend on them for supplementary income, it is difficult to assess the accuracy of reports on legal or illegal forestry activities.

Equally, just because a company may be illegally operating and paying bribes to do so, it does not necessarily mean there has been any significant impact on forest cover. In practice, it depends on which regulations have been bypassed. Many companies do operate illegally within the forest estate of Indonesia, having paid bribes in order to do so. But this may not cause additional deforestation or forest degradation simply because the companies operate on already deforested land, cleared by other companies operating illegally decades before or cleared by a local community for shifting agriculture.

In other words, we can’t just assume that corrupt and illegal practices always cause deforestation or other negative environmental impact. If efforts to address corruption are to be as effective, it’s important to take the time to identify concrete links between particular corrupt relationships and their impact on the forest.

Fiona Downs (fiona.downs@anu.edu.au) is a PhD candidate at the Australian National University, where she is studying poor governance and corruption in the forest sector in Indonesia and Papua New Guinea.


Inside Indonesia 108: Apr-June 2012

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